Opinion ID: 3207074
Heading Depth: 2
Heading Rank: 1

Heading: Partial Settlement Agreement

Text: As described above, plaintiffs and Stayton entered into a partial settlement agreement five days before the commencement of trial. In overview, the agreement required plaintiffs to dismiss their negligence claim against Stayton, guaranteed plaintiffs a payment from Stayton of at least $1.5 million, capped Stayton’s potential liability at $2 million, and required Stayton to pursue its indemnity claim against Weyerhaeuser, providing plaintiffs with any proceeds from that claim in excess of $2 million.3 3 The agreement states in its entirety: “1. In the event of a verdict, net of plaintiffs’ comparative fault, in favor of plaintiffs against Stayton Builders Mart in an amount less than $1.5 million, 622 Rains v. Stayton Builders Mart, Inc. On the first day of jury selection, Weyerhaeuser made the following motions related to the partial settlement agreement: (1) to dismiss plaintiffs’ claims against Stayton because the agreement eliminated adversity between them and, therefore, their dispute was no longer justiciable; (2) to limit Weyerhaeuser’s liability to $2 million because the only claim made directly against Weyerhaeuser was Stayton’s indemnity claim and Stayton’s liability was capped at $2 million; (3) to admit the agreement in evidence at trial; and (4) to give the jury a cautionary instruction. The trial court agreed to give the jury a cautionary instruction, the content of which raised no objections from Weyerhaeuser. But the trial court denied Weyerhaeuser’s remaining motions. Weyerhaeuser appealed the trial court’s rulings denying its motion to dismiss plaintiffs’ claims or in the event of a defense verdict, Stayton Builders Mart will pay plaintiffs the sum of $1.5 million. Stayton Builders Mart will be free to collect any amount it is awarded in its contribution or indemnity claims from third-party defendant. “2. In the event of a net verdict in excess of $ 1.5 million, Stayton Builders Mart will pay the amount of the verdict up to $2 million. Any excess over $2 million that is recovered by Stayton Builders Mart on its indemnity or contribution claims against third-party defendant Weyerhaeuser, if any, shall be paid to the plaintiffs. “3. In exchange for the defendant entering into this High–Low Agreement, the plaintiffs agree to dismiss their negligence claims against Stayton Builders Mart, Inc. “4. Both plaintiffs and Stayton Builders Mart agree not to appeal the jury verdict on plaintiffs’ claim against Stayton Builders Mart. Stayton Builders Mart retains the right to appeal the jury verdict on its third-party indemnity and contribution claims. “5. Stayton Builders Mart agrees to pursue its indemnity claim based upon strict liability against third-party defendant through trial to verdict. “6. In the event of an appeal by third-party defendant that could affect Stayton Builders Mart’s obligations under this Agreement, Stayton Builders Mart and its insurer will pay the sum of $1.5 million within 60 days after the jury verdict. The potential obligation of Stayton Builders Mart and its insurer for the remaining $500,000 will then be determined by the ultimate outcome of the appeals process, pursuant to the terms of this Agreement. “7. Should any disputes arise out of the interpretation or implementation of the terms of the Agreement, the parties agree that the matter shall be referred back to Eric B. Lindauer as Mediator with full authority to resolve the disputes, either through mediated resolution, or, in the event that a settlement cannot be reached between the parties, the Mediator shall have the authority to arbitrate the issue, which would be final and binding on both parties.” Cite as 359 Or 610 (2016) 623 against Stayton and denying its motion to admit the partial settlement agreement in evidence. The Court of Appeals affirmed those rulings, which Weyerhaeuser now challenges before this court. Before addressing those justiciability and evidentiary issues, we note that the parties frame their arguments as if they hinge on different characterizations of the partial settlement agreement. Weyerhaeuser contends that the agreement is a “Mary Carter agreement.” Under a Mary Carter agreement, the settling defendant remains in the lawsuit but obtains some financial interest in the success of the plaintiff’s claims against the non-settling defendant. The settling defendant’s financial interest is often based on an inverse relationship to the non-settling defendant’s financial interest in the lawsuit: The more money the non-settling defendants are required to pay the plaintiff, the less money the settling defendant will be required to pay. See Grillo v. Burke’s Paint Co., 275 Or 421, 425 n 1, 551 P2d 449 (1976) (explaining nature of such agreements). Plaintiffs, however, contend that the partial settlement agreement is not a Mary Carter agreement but is, instead, a “high-low agreement.” Under a high-low agreement, “ ‘a defendant agrees to pay the plaintiff a minimum recovery in return for the plaintiff’s agreement to accept a maximum amount regardless of the outcome of the trial.’ ” Rains, 264 Or App at 643 n 6 (quoting Black’s Law Dictionary 797 (9th ed 2009)). The Court of Appeals declined to characterize the agreement as either a Mary Carter agreement or a high-low agreement, noting that “the agreement has aspects consistent with each label.” Rains, 264 Or App at 643. Instead, the Court of Appeals concluded that “the precise label is not material in this case; it is the substance of the agreement that drives our analysis.” Id. We agree with the Court of Appeals’ framing of the matter. There is no reason to treat the two terms as describing mutually exclusive categories of settlement agreements. Both terms are flexible enough to allow for overlap. There are no rules of justiciability or evidence that are specific to Mary Carter agreements or high-low agreements. Agreements falling within those categories may implicate 624 Rains v. Stayton Builders Mart, Inc. issues of justiciability and admissibility differently depending on their specific terms and the factual and legal context of the cases in which they arise. Ultimately, our analysis requires applying the appropriate legal standards to the particular partial settlement agreement and the specific factual and legal context of this case.
For a controversy to be justiciable: (1) “the interests of the parties to the action are adverse” and (2) “the court’s decision in the matter will have some practical effect on the rights of the parties to the controversy.” Brumnett v. PSRB, 315 Or 402, 405, 848 P2d 1194 (1993); see also Brown v. Oregon State Bar, 293 Or Or 446, 449, 648 P2d 1289 (1982) (describing a justiciable controversy as “an actual and substantial controversy between parties having adverse legal interests” that “results in specific relief through a binding decree”).4 Weyerhaeuser’s motion to dismiss plaintiffs’ claims against Stayton was made orally following an off-the-record colloquy between the attorneys and the trial court. When it moved to dismiss, Weyerhaeuser stated: “Because they had entered into a Mary Carter Agreement with the plaintiffs, it’s Weyerhaeuser’s position that there is no longer a justiciable controversy between those parties; that instead, we believe that they are essentially working in concert. Stayton Builders Mart has agreed to pay $1.5 million in this case. “And if a plaintiffs’ verdict is received, then Stayton Builders Mart is going to be paid $1.5 million. They stand to gain $1.5 million by the verdict in this case. Because of that damage setting, we believe that dismissal is appropriate.” The trial court rejected Weyerhaeuser’s argument and concluded that plaintiffs and Stayton retained adverse 4 We recently held that courts have constitutional authority to adjudicate “public actions or cases involving matters of public interest,” even when the court’s decision will not have a practical effect on the parties’ rights. See Couey v. Atkins, 357 Or 460, 520, 355 P3d 866 (2015) (so stating). Because the arguments in this case relate to the adversity requirement in a private action, no party argues that our decision in Couey changes the manner in which the trial court should have considered the issue of justiciability. Cite as 359 Or 610 (2016) 625 interests with respect to a potential judgment against Stayton falling within the range of the $1.5 million minimum and $2 million cap. The Court of Appeals reached a similar conclusion: “[T]he agreement did not absolutely establish Stayton’s potential financial exposure. Instead, it set up a range of liability for Stayton that, at least on some level, maintained an adversarial position between the parties. The remaining adversity was that every dollar above $1.5 million that the jury awarded to plaintiff against Stayton, up to a maximum of $2 million, equaled an additional dollar that Stayton had to pay to plaintiffs.” Rains, 264 Or App at 647-48. Weyerhaeuser argues that the trial court and the Court of Appeals erred in failing to consider the extent to which the partial settlement agreement affected Stayton’s incentives in litigating the case. According to Weyerhaeuser, before entering the partial settlement agreement, Stayton had an incentive to defend itself against plaintiffs’ claims and seek to minimize any damage award for plaintiffs. In other words, minimizing plaintiffs’ recovery minimized Stayton’s liability. But, Weyerhaeuser argues, after entering the partial settlement agreement, Stayton had an interest in establishing its own liability as well as that of Weyerhaeuser. According to Weyerhaeuser, the agreement created that incentive by requiring Stayton to pay at least $1.5 million regardless of the jury’s verdict, while allowing Stayton to recoup that payment through its indemnity claim against Weyerhaeuser. Stayton could recover its payment to plaintiffs only if it proved its indemnity claim against Weyerhaeuser. And Stayton could prove its indemnity claim only if it proved that both it and Weyerhaeuser were liable for plaintiffs’ injuries. Eclectic Investment, LLC v. Patterson, 357 Or 25, 33, 346 P3d 468, opinion adh’d to as modified on recons, 357 Or 327, 354 P3d 678 (2015) (describing the elements of common-law indemnity). Further, Weyerhaeuser insists, not only did Stayton have an interest in establishing its own liability, but it also had an interest in maximizing plaintiffs’ recovery. If 626 Rains v. Stayton Builders Mart, Inc. plaintiff recovered less than $1.5 million—for example, $70,000—then Stayton could recover a maximum of $70,000 from Weyerhaeuser on its indemnity claim, leaving Stayton to pay the remaining portion of the $1.5 million itself. So, according to Weyerhaeuser, Stayton had an incentive for plaintiffs to receive a damage award of at least $1.5 million to cover the entire amount that Stayton already had agreed to pay plaintiffs. And, because the partial settlement agreement capped Stayton’s liability at $2 million, exposing Stayton to an additional $500,000 in liability, Weyerhaeuser asserts that Stayton’s interest in an award of at least $1.5 million outweighed any interest that it had in avoiding the additional liability it might incur if plaintiffs obtained a very large damage award. In other words, Stayton would prefer that plaintiffs obtain a $7 million judgment rather than a $70,000 judgment. Weyerhaeuser maintains, based on that analysis, that Stayton’s interests were completely aligned with plaintiffs’ interests, thus defeating justiciability. According to Weyerhaeuser, a justiciable controversy does not exist “when a settling defendant’s strongest pecuniary interest under a Mary Carter agreement is to maximize the recovery for the plaintiff at trial.” The problem with Weyerhaeuser’s argument is that the standard it proposes is not grounded in this court’s precedents. And Weyerhaeuser’s proposed standard, focusing on the settling defendant’s “strongest” interest, implicates a difficulty that Weyerhaeuser fails to resolve—namely, that a party may have interests pulling in different directions, each contingent on uncertain future events. How a party resolves those competing interests is not always a matter of logic, but will often turn on strategic decisions that are based on how the party views the strengths and weaknesses of the parties’ respective positions in a case. As noted, Weyerhaeuser discounts the $500,000 that separates Stayton’s minimum exposure of $1.5 million and its maximum exposure of $2 million, by positing that Stayton would prefer a large plaintiffs’ judgment, such as $7 million, to a small plaintiffs’ judgment, such as $70,000. But that is true only if Stayton sufficiently valued its odds of Cite as 359 Or 610 (2016) 627 prevailing on its indemnity claim against Weyerhaeuser—a claim that Weyerhaeuser contested at trial. If Stayton lost on its indemnity claim, then a $7 million plaintiffs’ judgment would require Stayton to pay up to the cap under the partial settlement agreement, $2 million. That payment would be $500,000 beyond the $1.5 million Stayton already owed plaintiffs under the partial settlement agreement. But, assuming again that Stayton lost on its indemnity claim, a $70,000 plaintiffs’ verdict would cost Stayton nothing. Of course, Stayton would still owe plaintiffs the $1.5 million under the partial settlement agreement, but Stayton would owe that amount regardless of whether plaintiffs prevailed on their claims or whether Stayton prevailed on its indemnity claim.5 Thus, Weyerhaeuser’s argument is premised on the assumption that Stayton would prevail on its indemnity claim, even though Weyerhaeuser was attempting to defeat that claim. We conclude, consistent with the views of the trial court and the Court of Appeals, that the $500,000 difference between Stayton’s minimum and maximum litigation exposure preserved the requisite adversity between plaintiffs and Stayton, even though Stayton’s own evaluation of its likelihood of prevailing on the indemnity claim might have affected how it valued the risk of having to pay that $500,000. At most, the expected cost to Stayton of a large plaintiffs’ judgment would be reduced by its perception of its chances of prevailing on the indemnity claim. So if Stayton thought it had a 50 percent chance of prevailing on its indemnity claim, it might value the risk of a large plaintiffs’ judgment at $250,000. And, if Stayton thought it had a 90 percent chance of prevailing, then it might value the risk of a large plaintiffs’ judgment at $50,000. The point is that as long as Stayton’s indemnity claim remained unadjudicated, Stayton would prefer a judgment in favor of plaintiffs for $1.5 million over a judgment in favor of plaintiffs for $2 million. Plaintiffs’ interests, however, ran in the other direction. All other things being equal, 5 As a result, the $1.5 million is a sunk cost and the proper measure of Stayton’s incentives is the extent to which it would be subject to liability beyond that $1.5 million. 628 Rains v. Stayton Builders Mart, Inc. plaintiffs would prefer a $2 million judgment to a $1.5 million judgment. That was sufficient to establish the adversity required for justiciability. Attempting to avoid that conclusion, Weyerhaeuser relies on the dissenting opinion by then-Judge Landau in Bocci v. Key Pharmaceuticals, Inc., 158 Or App 521, 974 P2d 758 (1999), decision vac’d, 332 Or 39 (2001), a case in which an evenly divided Court of Appeals split with respect to the justiciability of a plaintiff’s claims after the plaintiff entered into a Mary Carter agreement with a defendant. In Bocci, the plaintiff brought claims on behalf of a patient who had become incapacitated by a toxic condition resulting from the interaction of two prescribed medications. Id. at 523. The plaintiff brought claims against the patient’s doctor, who had failed to diagnose the condition, and the manufacturer of one of the medications, who had failed to provide warnings about the potential problem. Id. The doctor then crossclaimed against the drug manufacturer for negligence and fraud. Id. Prior to trial, the plaintiff and the doctor entered into a Mary Carter agreement. Id. at 527. Under that agreement, the plaintiff agreed not to enforce a judgment against the doctor and the doctor agreed to pay the plaintiff $1 million. Id. at 527-28. Of that sum, $200,000 was paid in cash and $800,000 was paid in the form of a loan, the repayment of which depended on the amount that the plaintiff obtained in a judgment against the non-settling defendant, the drug manufacturer. Id. The more money the plaintiff obtained against the drug manufacturer, the more money the plaintiff would repay the doctor, thus decreasing the doctor’s net exposure under the settlement agreement. Id. Ultimately, if the plaintiff obtained $3 million from the drug manufacturer, then the plaintiff would repay the doctor the entire $800,000 loan. Id. The trial court denied the drug manufacturer’s motion to dismiss the doctor as a defendant after concluding that the dispute between the plaintiff and the doctor remained justiciable. Id. at 529. A jury found in favor of the plaintiff against both the doctor and the drug manufacturer, and it found in favor of the doctor against the drug manufacturer. Id. at 527. Cite as 359 Or 610 (2016) 629 The drug manufacturer appealed. Because it was equally divided, the Court of Appeals affirmed the trial court without a majority opinion. The concurring judges insisted that the trial court properly found adversity because the plaintiff and the doctor disputed whether the doctor was at fault. Id. at 529. But in dissent, Judge Landau concluded that the plaintiff had no incentive at trial to prove that the doctor was at fault because doing so would only decrease the award that the plaintiff could obtain against the drug manufacturer. Id. at 556 (“If plaintiff established at trial that Edwards was negligent, the percentage of fault that the jury assigned to Edwards would only lessen any recovery from Key. Thus, plaintiff’s sole objective at trial was to establish Key’s—not Edwards’s—liability.”). And, in fact, the plaintiff dismissed his claims against the doctor after the presentation of evidence and before the case was submitted to the jury. Id. Weyerhaeuser argues that this case resembles Bocci and asks this court to adopt the analysis of the dissenting opinion. Without deciding how the justiciability issue in Bocci should have been resolved, we note only that this case is unlike Bocci, even though both cases involve elements of a Mary Carter agreement.6 In Bocci, the dissent’s analysis turned not on the fact that the agreement was a Mary Carter agreement, but on the conclusion that the agreement eliminated any incentive at all for the plaintiff to prosecute his claim against the settling defendant, the doctor. Id. at 556. The doctor agreed to pay the plaintiff a fixed sum of $200,000 plus a variable amount on a sliding scale between zero and $800,000. The sliding scale went up or down depending on the plaintiff’s recovery against the non-settling defendant. Thus, proving the doctor’s fault could not have increased either the fixed or the variable amount. Instead, proving the doctor’s fault created the potential of decreasing the variable amount by allocating some of the damage award to the doctor and reducing the plaintiff’s recovery against the non-settling defendant. 6 This court vacated the decision of the Court of Appeals in Bocci and remanded the case for consideration in light of new case law on the standards for awarding punitive damages. Bocci v. Key Pharmaceuticals, Inc., 332 Or 39, 40, 22 P3d 758 (2001). This court never addressed the justiciability of the dispute in Bocci. 630 Rains v. Stayton Builders Mart, Inc. That is not true in this case. As an initial matter, Stayton and Weyerhaeuser were jointly and severally liable for plaintiffs’ damage award. Thus, establishing Stayton’s fault would not detract from plaintiffs’ award; it merely would provide plaintiffs with a second source of recovery if they were unable to prove that Weyerhaeuser was at fault. The partial settlement agreement made Stayton a more limited source of recovery because of the $2 million cap. Nevertheless, as noted above, plaintiffs would prefer a larger recovery against Stayton rather than a smaller one even though the larger recovery would add, at most, $500,000 to the amount that plaintiffs could recover from Stayton. Plaintiffs would rather have that $500,000 than not have it. Thus, unlike the plaintiff in Bocci, plaintiffs in this case had an incentive to prosecute their claims against Stayton. Accordingly, we conclude that there was sufficient adversity between plaintiffs and Stayton to maintain the justiciability of their dispute, and we affirm the trial court’s denial of Weyerhaeuser’s motion to dismiss. 2. Admissibility of the partial settlement agreement Weyerhaeuser also assigns error to the trial court’s ruling denying Weyerhaeuser’s request to admit the partial settlement agreement in evidence at trial. According to Weyerhaeuser, that alleged error is prejudicial and justifies reversing the judgments entered against it in favor of plaintiffs and Stayton. Because plaintiffs and Stayton argue that Weyerhaeuser failed to preserve some of the arguments that it now makes, we review the procedural history of this issue in further detail. As noted above, on the first day of jury selection, Weyerhaeuser made four oral motions to the trial court. After presenting its arguments on the justiciability and damages issues, Weyerhaeuser presented its arguments on the evidentiary proffer: “The third point that was raised was that Weyerhaeuser would like to make use of the Mary Carter Agreement during the course of the presentment of evidence. We believe the jury has a right to know of this agreement. They have a right to know the terms of this agreement. Cite as 359 Or 610 (2016) 631 They also have a right to know that it’s insurance that’s paying these terms as opposed to Stayton Builders Mart, a small, local lumber yard. “The Oregon Rule of Evidence, I believe it’s 811,[7] dealing with the presentment of insurance information, details that you can only discuss insurance—you cannot discuss insurance in front of a jury when it’s being used to show liability or negligence. But there are exceptions to that. Exceptions include a discussion of prejudice and other such things. “The concern is that in typical cases where a defendant has insurance, a plaintiff would use that against the defendant and essentially show the jury, well, don’t worry about this defendant, whether they can pay. They have got insurance. And that heightens the likelihood that a jury would find negligence. In this case, it’s different. “In this case, the jury will be left with the impression that this small, local lumber yard is potentially on the hook for a very large settlement. And they might think differently as to how to deal with the apportionment of damages if they were under that false impression. “The true impression is that the money is being paid by a very large insurance company in Ohio, and the jury has a right to know that. And it is not within the exclusion as detailed in Oregon Rules of Evidence.” On the fourth issue—whether to give the jury a cautionary instruction about the agreement—Weyerhaeuser noted that the trial court had already given such an instruction to most of the jury pool. When Weyerhaeuser completed its arguments on all four issues, the trial court heard opposing arguments from plaintiffs and Stayton on the justiciability and damages issues and denied those motions. Next, the court returned to the question whether the settlement agreement would be admitted in evidence. Weyerhaeuser’s counsel stated, “I think the final point was just whether that agreement was going to be admissible for any purpose during the course of trial.” The court never heard arguments from plaintiff or Stayton in opposition to Weyerhaeuser’s motion. Instead, the 7 In fact, it is Oregon Rule of Evidence 411. 632 Rains v. Stayton Builders Mart, Inc. court rejected the proffer, relying on the Court of Appeals decision in Bocci: “And as I understand the Bocci case, a copy of which was provided to me earlier   . Based upon the ruling in Bocci, the Court would be consistent with that ruling and say that the terms of the agreement and the fact that insurance is involved would not be admissible at trial.” On appeal, Weyerhaeuser challenged that ruling. The Court of Appeals rejected that assignment of error. According to the Court of Appeals, Weyerhaeuser offered the agreement to inform the jury of Stayton’s insurance coverage and improperly influence the jury’s allocation of fault and calculation of damages, which, according to the Court of Appeals, violated OEC 411. Rains, 264 Or App at 651 (“The trial court did not err by excluding the agreement on the basis that such an offer was improper under OEC 411.”). Weyerhaeuser had further argued to the Court of Appeals that, beyond the insurance information, the agreement should have been admitted for the purpose of showing Stayton’s bias toward plaintiffs, thereby undermining the credibility of Stayton’s witnesses. With respect to those proffered grounds, the Court of Appeals faulted Weyerhaeuser for not offering a redacted copy of the agreement that omitted the insurance information: “Where a party attacks the exclusion of an exhibit that contains some irrelevant material, that party has ‘the burden of excising the irrelevant portions of the exhibit to preserve the claimed error.’ ” Id. at 651 (quoting Fazzolari v. Portland School Dist. No. 1J, 78 Or App 608, 614, 717 P2d 1210 (1986), aff’d on other grounds, 303 Or 1, 734 P2d 1326 (1987)). Regardless, the Court of Appeals concluded that Weyerhaeuser had failed to preserve its arguments based on bias and credibility because the arguments that Weyerhaeuser had made to the trial court had focused exclusively on the relevance of the agreement’s insurance information. Id. at 653-54. Moreover, the Court of Appeals interpreted the scope of the trial court’s ruling more narrowly than Weyerhaeuser. Weyerhaeuser claimed that the trial court’s pretrial ruling Cite as 359 Or 610 (2016) 633 precluded it from presenting arguments or cross-examining witnesses based on the agreement. The Court of Appeals pointed out, however, that the trial court itself informed the jury that plaintiffs and Stayton had settled and that the jury could use that fact only “ ‘as it might bear on the issues of credibility or believability of the witnesses who testify.’ ” Id. at 654. As a result, the Court of Appeals concluded that the trial court had not precluded Weyerhaeuser from relying on the agreement insofar as it might be relevant to Stayton’s bias and the credibility of its witnesses. On review, the parties essentially reprise the arguments before this court that they made in the Court of Appeals. We begin with Weyerhaeuser’s argument that the Court of Appeals erred by upholding the trial court’s exclusion of the partial settlement agreement under OEC 411. OEC 411 states, “(1) Except where lack of liability insurance is an element of an offense, evidence that a person was or was not insured against liability is not admissible upon the issue whether the person acted negligently or otherwise wrongfully. “(2) Subsection (1) of this section does not require the exclusion of evidence of insurance against liability when offered for another purpose, such as proving agency, ownership or control, or bias, prejudice or motive of a witness.” OEC 411. Evidence is relevant if it has a “tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” OEC 401. In this case, lack of liability insurance is not an element of any claim at issue. As a result, the trial court could not admit evidence tending to establish that Stayton had liability insurance if Weyerhaeuser offered the evidence for the purpose of proving that Stayton “acted negligently or otherwise wrongfully.” OEC 411(1). Thus, to the extent that Weyerhaeuser offered the agreement to show that its references to insurance bore on the issue of Stayton’s fault, the trial court did not err in excluding the agreement from evidence on that ground. 634 Rains v. Stayton Builders Mart, Inc. But, the trial court could have admitted the agreement—including its references to liability insurance— if Weyerhaeuser had offered that evidence for a permissible purpose. OEC 411(2). Weyerhaeuser had argued before the trial court that the agreement was relevant to defeat the inference that Stayton was a small company that—in contrast to Weyerhaeuser—would find it difficult to pay a large damage award. However, whether a damage award against Stayton would be paid by a large and well-heeled company or a small company was not a fact of legal consequence—i.e., a material fact—in this case. As a result, the partial settlement agreement was irrelevant, and thus inadmissible, for that purpose. See State v. Cunningham, 337 Or 528, 536, 99 P3d 271 (2004) (holding that relevancy determinations present questions of law). As noted, the only remaining ground for admitting the agreement that Weyerhaeuser has asserted is that it was relevant to show Stayton’s bias and to attack the credibility of its witnesses. And, as further noted, the Court of Appeals rejected that argument as unpreserved. Rains, 264 Or App at 654. We now turn to that issue. To preserve a claim of error with respect to excluded evidence, “the substance of the evidence [must have been] made known to the court by offer or was apparent from the context within which questions were asked.” OEC 103(1)(b). “One method of making an offer of proof is by question and answer. It also is acceptable, however, for a party’s counsel to state what the proposed evidence is expected to be.” State v. Phillips, 314 Or 460, 466, 840 P2d 666 (1992). We review the sufficiency of Weyerhaeuser’s proffer by considering whether the offer fulfilled the purposes that underlie the preservation requirement. See State v. Stevens, 328 Or 116, 122, 970 P2d 215 (1998) (“[I]n considering whether an objection at trial raised the ‘issue’ being advanced on appeal, an appellate court must view the facts in light of the purposes of fairness and efficiency that underlie the requirement.”). “One purpose of an offer of proof is to assure that appellate courts are able to determine whether the ruling was erroneous.” State v. Olmstead, 310 Or 455, 461, 800 P2d 277 (1990). “Another purpose of an offer of proof Cite as 359 Or 610 (2016) 635 is to assure that the trial court can make an informed decision. An offer of proof permits the parties to raise additional arguments, if appropriate, and gives the court an opportunity to reconsider its ruling and correct any error.” Id. The parties dispute whether Weyerhaeuser suffi- ciently informed the trial court that it wanted to use the agreement to establish Stayton’s bias and to attack the credibility of Stayton’s witnesses. Before discussing the insurance information in the partial settlement agreement, Weyerhaeuser told the trial court, “The third point that was raised was that Weyerhaeuser would like to make use of the Mary Carter Agreement during the course of the presentment of evidence. We believe the jury has a right to know of this agreement. They have a right to know the terms of this agreement.” Weyerhaeuser insists that those statements sufficiently raised the issues of bias and witness credibility. As noted above, the evidentiary issue was the third of four issues that Weyerhaeuser raised in its oral motions, all related to the partial settlement agreement. The first concerned justiciability and was premised on the claim that the partial settlement agreement provided Stayton with the motivation to help plaintiffs establish Weyerhaeuser’s liability. The fourth motion sought a cautionary jury instruction on the partial settlement agreement. Weyerhaeuser appeared to find acceptable the instruction that the trial court had given earlier that day, which informed the jury pool of the partial settlement agreement and stated that jurors could consider the fact of the settlement only for the purposes of assessing the bias and credibility of the witnesses. Given that context, it is not wholly implausible to read the sentences quoted above as indicating that Weyerhaeuser intended to use the partial settlement agreement during the presentation of evidence because it believed that the jury had a right to know that the agreement created financial incentives for Stayton to assist plaintiffs. But that impression of Weyerhaeuser’s focus—as a continuation of earlier arguments focused on bias and motive—ignores other context indicating that Weyerhaeuser was offering the agreement to show that Stayton had 636 Rains v. Stayton Builders Mart, Inc. insurance coverage. After stating that the jury had a right to know the terms of the agreement, Weyerhaeuser devoted the remainder of its argument to discussing how the jury could make use of the fact that a large company would likely pay Stayton’s liability. The closest Weyerhaeuser came to referring to bias and credibility is when its counsel stated that OEC 411 does not prohibit offering evidence of insurance information to establish “prejudice.” But in the context of Weyerhaeuser’s argument, the reference to “prejudice” referred to Weyerhaeuser’s concern that the jury would improperly base its verdict on sympathy for the smaller company, Stayton. Because, in offering the partial settlement agreement in evidence at trial, Weyerhaeuser did not apprise the trial court that the agreement—appropriately redacted— was independently relevant to show Stayton’s bias and to attack the credibility of Stayton’s witnesses, and because the agreement was inadmissible for the purposes that Weyerhaeuser did assert before the trial court, we conclude that the trial court did not err in excluding it from evidence.