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Air Rescue Systems Corp. v. Lewis

Court of Appeals of Oregon

June 6, 2018

AIR RESCUE SYSTEMS CORPORATION and Brim Equipment Leasing, Inc., Plaintiffs,
v.
Linda LEWIS, Defendant-Appellant. and Burl BRIM, Plaintiff-Respondent,

          Argued and submitted September 26, 2017

          Jackson County Circuit Court 15CN02970; Ronald D. Grensky, Judge.

          Michael E. Rose argued the cause for appellant. With him on the briefs was Creighton & Rose, P.C.

          Joseph E. Kellerman argued the cause for respondent. On the brief were Melisa A. Button and Hornecker Cowling LLP.

          Before DeHoog, Presiding Judge, and Egan, Chief Judge, and Aoyagi, Judge.

         Case Summary:

         Defendant appeals from a judgment holding her in contempt of court for violating an oral settlement agreement with plaintiffs. The parties read the terms of their oral settlement agreement into the record in open court with the intention of later reducing it to writing. The parties were unable to agree on a form of written settlement agreement and, in the meantime, defendant violated the oral agreement. On plaintiffs' motion, the trial court entered judgment against defendant for "willful contempt of the Settlement Agreement that was put on the record." Defendant appeals. Held: The trial court erred in holding defendant in contempt for violating the oral settlement agreement. Reading the oral settlement agreement into the record in open court did not give it the effect of a court order or, in these circumstances, otherwise render it an appropriate basis for holding defendant in contempt of court.

         Reversed.

         [292 Or.App. 295] AOYAGI, J.

         Defendant appeals a contempt judgment. Plaintiffs brought a civil action against defendant, and later filed this separate but related contempt action. The parties eventually reached an oral settlement agreement regarding their outstanding disputes, the terms of which they read into the record in open court. The parties intended to reduce their oral agreement to writing but failed to do so. Meanwhile, according to plaintiffs, defendant violated the oral agreement. On plaintiffs' motion, the trial court held a contempt hearing, after which it entered a judgment against defendant for "willful contempt of the Settlement Agreement that was put on the record on December 3." We agree with defendant that the trial court lacked authority to hold her in contempt for violating the settlement agreement. Accordingly, we reverse.

         The relevant facts are undisputed and largely procedural. Plaintiff Brim is an individual residing in Jackson County, and the other plaintiffs are corporations with which Brim is affiliated. Defendant is an individual residing in Alaska. In connection with a personal dispute, defendant began making negative statements about plaintiffs on the internet and elsewhere. Plaintiffs brought a civil action against defendant for defamation, intentional interference with economic relations, and false light. Plaintiffs sought both damages and injunctive relief.[1]

         In June 2015, defendant stipulated to entry of a preliminary injunction in the civil action. Defendant was enjoined from making any new communications to third parties about plaintiffs and from publishing any statements about plaintiffs on the internet, via email, or otherwise. In October 2015, plaintiffs filed this contempt action, seeking to have defendant held in contempt for violating the preliminary injunction. The trial court held a hearing on the matter on December 3, 2015.

         During a recess at the hearing, the parties reached an oral settlement agreement to resolve both the civil action [292 Or.App. 296] and the contempt matter. Counsel notified the court of the settlement after recess, and plaintiffs' counsel read the terms of the settlement into the record, with some clarifications by defendant's counsel. Essentially, the parties agreed that they would prepare a written settlement agreement, including mutual releases, and that, in conjunction with that agreement, defendant would stipulate to a permanent injunction and plaintiffs would stipulate to dismissal of their claims. The court would retain jurisdiction to enforce the permanent injunction through contempt proceedings. Both Brim and defendant personally affirmed on the record that they agreed to be bound by the settlement terms as represented to the court. Defendant, through counsel, also agreed to begin removing her negative online postings about plaintiffs because, as plaintiffs' counsel put it, there was "no reason for delay on that."

         Near the end of the proceeding, the trial court pointedly told defendant, who had not been entirely cooperative with proceedings up to that juncture, that it would not look favorably on her trying to get ...


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