Title: Webber v. Olsen

State: oregon

Issuer: Oregon Supreme Court

Document:

FILED:  April 6, 2000
IN THE SUPREME COURT OF THE STATE OF OREGON

LORENE K. WEBBER,as personal 
representative on behalf of the 
Estate ofBelden R. Webber, 
deceased,
Respondent on Review,
	v.
GEORGENE A. OLSEN,aka Georgene A. Webber,
	Petitioner on Review.
_________________________________________________________________
LORENE K. WEBBER,fka Lorene K. Piper,KENNETH R. WEBBER, STEVAN G. WEBBER, MICHAEL T. WEBBER,
Plaintiffs-Appellants,	
      v.
GEORGENE A. OLSEN,fka Georgene A. Webber,and ANTHEM LIFE INSURANCE COMPANY,a Texas corporation, 
Defendants-Respondents.
(CC 96-3537-L-I, 94-1788-E-2; CA A98055, A98078; SC S46063)

	En Banc
	On review from the Court of Appeals.* 
	Argued and submitted October 13, 1999.
	Timothy E. Brophy, of Brophy, Mills, Schmor, Gerking &
Brophy, LLP, Medford, argued the cause for petitioner on review. 
With him on the brief was Mark Weaver.
	Matthew Sutton, of Kellington, Krack, Richmond, Blackhurst &
Sutton, LLP, Medford, argued the cause for respondent on review. 
With him on the brief was Douglas J. Richmond.
	LEESON, J.
	The decision of the Court of Appeals in CA A98055 is
reversed.  The judgment of the circuit court in CA A98055 is
affirmed.
	*Appeal from Jackson County Circuit Court.
	 157 Or App 585, 971 P2d 448 (1998).
LEESON, J.
The issue in this action for breach of contract is
whether the trial court erred in granting defendant's motion for
summary judgment on plaintiff's claims for breach of an implied
duty of good faith and fair dealing and breach of an implied
promise to notify in a stipulated decree of dissolution of
marriage. (1)  Defendant moved for summary judgment on various
grounds, including that a stipulated judgment is not a contract
on which a breach of contract action may be maintained.  The
trial court granted defendant's motion and entered a judgment
dismissing plaintiff's claims.  The Court of Appeals reversed. (2) 
Webber v. Olsen, 157 Or App 585, 971 P2d 448 (1998).  For the
reasons that follow, we reverse the decision of the Court of
Appeals and affirm the judgment of the trial court.
On review of the summary judgment in this case, we view
the facts in the light most favorable to plaintiff, the nonmoving
party, to determine whether defendant is entitled to judgment as
a matter of law.  Jones v. General Motors Corp., 325 Or 404, 420,
939 P2d 608 (1997).  The facts are not disputed.  Defendant
Georgene Olsen and decedent Belden Webber were married to one
another for approximately 26 years.  During that time, decedent
had named defendant as the beneficiary of the proceeds of a life
insurance policy that decedent had held, which contained a death
benefit of approximately $78,000 at the time decedent died.  In
1988, defendant and decedent entered into a stipulated judgment
of dissolution of marriage.  However, they did not enter into a
separate property settlement agreement.  Under the judgment,
defendant received the parties' house in Talent, Oregon.  The
judgment also provided that decedent would maintain defendant as
the primary beneficiary of the life insurance policy and that
defendant would leave the house to decedent in her will. 
Additionally, the judgment provided:
	"If [defendant] sells, mortgages, or in any way no
longer has any interest in said property, then
[decedent's] obligation to list [defendant] as the
primary beneficiary under the insurance policies shall
terminate." 
	In January of 1990, defendant sold the house.  She did
not inform decedent that she had sold it, but the sale was
recorded in the real property records for Jackson County. 
Decedent married plaintiff in 1991.  Decedent did not discover
that defendant had sold the house until a few days before his
death in 1993.  When decedent died, defendant still was the
primary beneficiary on decedent's life insurance policy, and she
became entitled to the proceeds.
	Plaintiff, as the personal representative of decedent's
estate, brought this action for breach of contract.  Plaintiff's
complaint alleged that defendant and decedent had "agreed in the
[judgment]" that, if defendant sold the house, then decedent no
longer would be required to name her as the beneficiary of the
insurance policy.  (Emphasis added.)  Plaintiff's complaint also
alleged that "[t]he [judgment] carried with it an implied
covenant" that both defendant and decedent would act in good
faith "to effectuate the reasonable expectations of the parties
thereunder."  (Emphasis added.)  Finally, plaintiff's complaint
alleged that "[i]mplicit in the terms of the [judgment] is an
obligation of the defendant to notify the decedent in the event
she sold the property."  (Emphasis added.)  According to
plaintiff's complaint, defendant breached her implied promise to
notify decedent when she sold the house without notifying
decedent, and she breached the terms of the implied covenant and
by claiming the proceeds of the life insurance policy even though
she had sold the house before decedent died.
	Defendant responded that a stipulated judgment is not a
contract on which an action for breach of contract may be
maintained and that defendant and decedent had not entered into a
separate property settlement agreement that would support
plaintiff's breach of contract action.  According to defendant, 
plaintiff's sole remedy was under the judgment.  As noted, the
trial court agreed with defendant, granted her motion for summary
judgment, and entered a judgment in her favor.
	The Court of Appeals reversed.  In that court's view,
defendant and decedent had entered into a separate property
settlement agreement that supported plaintiff's claim for breach
of contract:
"Whether or not a separate document exists that
embodies a contractual agreement between the parties
does not determine whether the parties entered into a
stipulated property settlement agreement." 
Webber, 157 Or App at 596.  Having held that defendant and
decedent had a separate, albeit unwritten, property settlement
agreement, the Court of Appeals further held that "the alleged
obligation in question here is one involving a future act other
than the payment of money."  Id. at 595.  That court also held
that a genuine issue of material fact existed as to whether the
settlement agreement included a good faith obligation on
defendant's part to notify decedent of the sale of the house. 
Id. at 596-97.  Accordingly, it held that the trial court had
erred in granting defendant's motion for summary judgment on
plaintiff's breach of contract claim, and it remanded the case to
the trial court.  We allowed defendant's petition for review.
	As a preliminary matter, we note that parties to a
dissolution of marriage may and often do enter into separate
agreements regarding the terms of the dissolution.  Generally, if
the parties ask the trial court to incorporate all or part of
their agreement into the judgment, and the trial court agrees to
do so, then the parts of the agreement that are incorporated into
the judgment merge into the judgment.  See, e.g., Rigdon v.
Rigdon, 219 Or 271, 276, 347 P2d 43 (1959) (separate property
settlement agreement merged into judgment).  The trial court is
not required to incorporate into the judgment agreements that are
"unfair to one or the other of the parties."  McDonnal and
McDonnal, 293 Or 772, 778, 652 P2d 1247 (1982).  As a matter of
law, agreements that call for the performance of future acts
other than the payment of money do not merge into the judgment. 
See, e.g., Carothers v. Carothers, 260 Or 99, 102, 488 P2d 1185
(1971) (so stating). (3) 
	In this case, the parties concede that defendant and
decedent did not enter into a separate property settlement
agreement.  None of the above-emphasized portions of plaintiff's
complaint for breach of contract points to or relies on a
property settlement agreement.  Thus, the issue is not whether
defendant and decedent had entered into a property settlement
agreement that would support plaintiff's action for breach of
contract, or whether such an agreement can be implied from their
stipulations.  Rather, the issue is whether a stipulated judgment
of dissolution also is a contract upon which an action for breach
of contract may be maintained.
	Defendant argues that a stipulated judgment "should be
treated the same as a judgment entered after trial."  She
contends that, if the Court of Appeals' decision is allowed to
stand, then it will "give rise to claims for breach of contract
whenever one of the parties to a judgment violates the terms of
the judgment."  Plaintiff responds that "a negotiated, stipulated
judgment is no different from any other contract."  That is, it
is negotiated, it manifests the parties' mutual assent to the
terms of their agreement, and the exchange of rights and
obligations provides the necessary consideration.  She concludes
that, "since a stipulated judgment is fundamentally no different
than any other contract, a party thereto has the same basic
remedies as a party to any other contract."
	This court never has held that a stipulated judgment is
both a judgment and a contract such that both contractual
remedies and remedies under the judgment are available to a party
that is dissatisfied with the other party's performance under the
terms of the judgment.  For the following reasons, we decline to
do so here.
	A stipulated judgment has the same effect as a judgment
that is entered after a trial on the merits of a claim.  See
Hartung v. Unander et al, 224 Or 165, 173, 355 P2d 738 (1960) (so
stating).  A judgment sets out a trial court's final
determination of a matter.  ORCP 67 A.  After a court has entered
a judgment, the law provides specific remedies that are available
under the judgment.  Those remedies include seeking to modify the
judgment or to be relieved of the terms of the judgment under the
provisions of ORCP 71; enforcing the judgment through contempt
proceedings, ORS 33.015 to ORS 33.155; and seeking a declaration
of the parties' rights and duties under the judgment, ORS 28.010. 
Some remedies that are available under a judgment resemble
remedies that are available under a contract, such as fraud,
mutual mistake, or absence of consent.  Compare Westfall v.
Wilson, 255 Or 428, 431, 467 P2d 966 (1970) (so stating), with
Webb v. Culver, 265 Or 467, 470, 509 P2d 1173 (1973) (contract
may be reformed based on fraud).  However, no Oregon statute or
opinion of this court of which we are aware allows a party to
bring an action for breach of contract for a violation of a
judgment.  Plaintiff offers no reason why a stipulated judgment
of dissolution of marriage should be treated differently from any
other stipulated judgment, and we can think of none.
	To the contrary, our cases establish that a stipulated
judgment of dissolution of marriage is distinct from a contract
because, "when a claim arising from a contract is held to have
merged into a judgment, a party cannot maintain an action on the
contract for those claims, but may enforce the judgment only[.]" 
Barrett and Barrett, 320 Or 372, 378, 886 P2d 1 (1994).  It
follows that contractual remedies are not available under the
judgment itself.  If parties who are dissolving their marriage
wish to retain contractual remedies as well as the remedies that
are available under the dissolution judgment, then they may do so
by entering into an agreement and identifying which, if any, of
the terms of their agreement they wish to have the court
incorporate into the judgment and which terms they wish to have
survive as separate agreements.  See Esselstyn v. Casteel et al,
205 Or 344, 355-56, 286 P2d 665 (1955) (contract remedies
available for breach of property settlement agreement not
incorporated into judgment).
	In this case, defendant and decedent agreed only to a
stipulated judgment, and plaintiff's breach of contract action
alleges violations of implied terms of that judgment.  Because a
violation of a term of a judgment does not give rise to an action
for breach of contract, the Court of Appeals erred in reversing
the trial court's grant of defendant's motion for summary
judgment.
	The decision of the Court of Appeals in CA A98055 is
reversed.  The judgment of the circuit court in CA A98055 is
affirmed.

1. 	The term "judgment," as used in the Oregon Rules of
Civil Procedure, includes decrees and is the proper term for "the
final determination of the rights of the parties in an action[.]" 
See ORCP 67 A ("judgment" includes decrees); State ex rel
Costello v. Cottrell, 318 Or 338, 340 n 2, 867 P2d 498 (1994)
("judgment" proper term).  Accordingly, in this opinion, we use
the term "judgment," rather than the term "decree" that was used
by the Jackson County Circuit Court.

2. 	The trial court consolidated this breach of contract
action with a separate declaratory judgment action brought by
plaintiffs Lorene Webber, Kevin Webber, Stevan Webber, and
Michael Webber.  The declaratory judgment action sought a
declaration that the plaintiffs were entitled to the proceeds of
two life insurance policies held by decedent Belden Webber.  The
trial court and the Court of Appeals resolved the issues in both
actions.  Defendant has petitioned for review of the Court of
Appeals' decision in the breach of contract action only.

3. 	The Court of Appeals questioned the continuing
viability of the future acts exception to the merger doctrine,
Webber, 157 Or App at 595, and the parties have briefed the
merits of that issue at length before this court.  However, in
light of our disposition, we do not reach that issue in this
case.