Court Opinion

ID: 9543860
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:49:57.072198+00
Date Added: 2024-06-11T15:11:20.086630
License: Public Domain

ARMSTRONG, J.,
dissenting.
The majority concludes that the parol evidence rule bars Triad from seeking to prove its claim for indirect and delay costs for removing rock in excess of the amount specified in the parties’ original construction contract. It reaches that conclusion on the ground that the change orders that addressed the direct cost of removing that rock would have addressed Triad’s right to seek indirect and delay costs for that work if the parties had intended such a right to survive execution of the change orders.
The majority is wrong. Given the terms of the original contract, there was no reason for the parties to believe it necessary to include language in the change orders to preserve Triad’s right to seek a further contract adjustment for additional rock removal costs. That right existed in the original contract, so there was no reason to mention it in the change orders. Therefore, the contractual right that Triad seeks to enforce is not one that would naturally have been included in the change orders and, hence, it is not one that the parol evidence rule bars Triad from seeking to prove.
Article 27 of the original contract provides the mechanism by which equitable adjustments to the contract are to be made to address conditions that differ from those specified in the contract. The article provides that the Oregon Department of Fish and Wildlife’s engineer will
“promptly investigate the conditions, and if he finds that such conditions do so materially differ [from those specified in the contract] and cause an increase or decrease in the *120cost of, or the time required for, performance of this Contract, an equitable adjustment shall be made and the Contract modified in writing accordingly. * * * Adjustments for such conditions shall be made in accordance with Article 28 of [the Contract].”
Article 28 provides, in turn, that equitable
“[adjustments for changes or changed conditions covered in Article 26 and 27 will be made on the basis of agreement of the parties: Provided, that if the parties fail to agree on the amount of an increase in the cost of performance of the Contract, the adjustment shall be on the basis of force account * * (Emphasis in original.)
Under those provisions, the parties envisioned that changed conditions would lead to changes in the original contract by negotiated agreement. If the parties failed to reach such an agreement with regard to an increase in the cost of the contract, there was a mechanism to address that failure.
Consistent with those provisions, the parties negotiated an agreement on the increased direct cost of removing the additional rock that Triad had encountered. According to Triad’s evidence, they postponed trying to reach agreement on all of the consequences of the additional rock excavation, because they could not reasonably determine at that time what they would be. There was no reason to recite that fact in the change orders, however, because the original contract already provided that further adjustments could be made by agreement. In fact, if the parties had intended the change orders to foreclose any right of Triad to seek a further adjustment for rock excavation beyond the direct excavation costs stated in the change orders, they would have had to say that in the change orders, because the original contract gives Triad the right to seek such an adjustment.
The change orders confirm that understanding. They simply recite the changes that the parties had agreed to make; they do not state that the parties had agreed that there would be no further changes as a result of the additional rock excavation.
Moreover, contrary to the majority’s suggestion, see 144 Or App at 115-16, the statement in the change orders *121about maintaining the original 335-day contract term supports my interpretation of the change orders. Each change order states that the “completion time will not increase and [will] remain at 335 days as a result of this change order.” All that means is that the change orders do not change the completion time under the contract, which is to say that the parties have not agreed to change the completion time as a result of the additional rock excavation. Significantly, however, the change orders do not say that the parties have agreed that the additional rock excavation will not result in a change in the completion time of the contract. That means that the change orders affect only what they addressed, which is the parties’ agreement on the direct cost to remove the additional rock. Any other effect of the additional rock excavation is subject to adjustment under the terms of the original contract.
Of course, the parties never reached an agreement on those effects beyond the agreement embodied in the change orders. The department sought summary judgment below on the ground that the parties’ failure to reach agreement on additional costs due Triad for rock excavation precluded recovery of those costs. The trial court denied that motion, however, and the department does not challenge that ruling on appeal. Consequently, we need not decide whether Triad can prevail on its claims in the face of the department’s rejection of Triad’s effort to obtain a further equitable adjustment for the indirect and delay costs of the additional rock excavation.
Because of its decision on the parol evidence issue, the majority does not reach the alternative ground on which the trial court dismissed Triad’s claims, which is that the change orders constitute an accord and satisfaction of the parties’ dispute over the additional rock excavation. An accord and satisfaction occurs when a debtor tenders a payment on the condition that the creditor accept it in discharge of an unliquidated debt, and the creditor accepts the payment on that condition. Fiedler v. Bowler, 117 Or App 162,165,843 P2d 961 (1992).
At the time the parties executed the change orders, there was no disputed claim or unliquidated debt. The contract was executory. The change orders merely addressed *122certain terms under which the parties had agreed to continue performance of it. Under those circumstance, the department was not a debtor on an unliquidated debt that the change orders discharged. See Fiedler, 117 Or App at 165. Consequently, the change orders cannot constitute an accord and satisfaction.
If the foregoing issues are addressed in the manner that I believe that they should be, it follows that the trial court erred in granting summary judgment to the department on Triad’s claims. Therefore, I respectfully dissent from the majority’s decision to affirm the dismissal of Triad’s claims.