Financial Indem. Co. v. Bevans

• Decision Date: 06 February 1979
• Docket Number: No. 76-2731-L-3,76-2731-L-3
• Citation: 38 Or.App. 369,590 P.2d 276
• Parties: FINANCIAL INDEMNITY COMPANY, a Washington Corporation, Respondent, v. Russell D. BEVANS, Sentry Insurance Company, William A. Mansfield, Defendants, and Bernard Howser and Evelyn Howser, Appellants. ; CA 10959.
• Court: Oregon Court of Appeals

Page 276

590 P.2d 276

38 Or.App. 369

FINANCIAL INDEMNITY COMPANY, a Washington Corporation, Respondent, v. Russell D. BEVANS, Sentry Insurance Company, William A Mansfield, Defendants and Bernard Howser and Evelyn Howser, Appellants.

No. 76-2731-L-3; CA 10959.

Court of Appeals of Oregon.

Submitted on Record and Briefs Nov. 27, 1978.

Decided Feb. 6, 1979.

Bernard Howser and Evelyn Howser, filed the briefs pro se for appellants

John L. Hilts, Medford, filed the brief for respondent.

Before SCHWAB, C. J., and TANZER, RICHARDSON and ROBERTS, JJ.

TANZER, Judge.

Financial Indemnity Corporation brought a subrogation claim against its insureds, appellants Bernard and Evelyn Howser, following payment of personal injury protection funds to them and their subsequent recovery in an action against the tort-feasor. Named as additional defendants in the subrogation action were Russell Bevans, who was the Howsers' attorney in the personal injury case, and William Mansfield, who was the Howsers' attorney prior to Bevans. The Howsers, appearing In propria persona, filed a counterclaim against Financial Indemnity. On December 6, 1977, the court entered an order dismissing the action based upon a stipulation and motion. The stipulation was not signed by the Howsers personally but was signed on their behalf by Nick Chaivoe as attorney for the Howsers. The motion and stipulation were based in turn on two forms of release.

On April 4, 1978, the Howsers personally moved, pursuant to ORS 18.160, to set aside the stipulation, order and the mutual release. Their supporting affidavit alleged that Chaivoe had not been authorized to represent them, that no notice of substitution of counsel had ever been filed, and that the mutual release was ineffective according to its stated terms because it was not signed by all the parties. The circuit court denied the motion without a hearing. The record discloses no other appearance by Chaivoe.

The Howsers appeal the order denying their motion to set aside the order of dismissal, relying upon ORS 18.160, which provides:

"The court may, in its discretion, and upon such terms as may be just, at any time within one year after notice thereof, relieve a party from a judgment, decree, order or other proceeding taken against him through his mistake, inadvertence, surprise or excusable neglect."

Although the disposition of these motions is committed to the court's discretion, that discretion is controlled by fixed legal principles. See Nieminen v. Pitzer, 281 Or. 53, 573 P.2d 1227 (1978), and Hiatt v. Congoleum Industries, 279 Or. 569, 569 P.2d 567 (1977).

A judgment or decree entered by consent of the parties is in the nature of a

contract approved or adopted by the court. The authority of the court to approve a purported agreement between the parties depends upon the validity of the agreement. In this case the agreement arises out of two sets of documents: the stipulation and motion for dismissal, and the mutual releases. We first examine the validity of the releases.

THE MUTUAL RELEASES

A mutual release is an agreement in which each party agrees to release the other from certain claims. Whether any particular release gives rise to enforceable rights depends on whether it constitutes a valid contract. The threshold contract inquiry is whether there was an offer and acceptance of the same terms.

Here there were two forms of release upon which the stipulation was based. The first was a general release of all claims between all parties to the release, each in return for the other. The plaintiff and defendant insurance companies, the Howsers, Bevans and Mansfield were all named in the body and there was a signature blank for each of them. All but Mansfield's signature appear on it.

The second release is in the same terms of general release except that it is between Mansfield and plaintiff only, and it expressly "reserves" to Mansfield "the right to proceed against other defendants in said case," namely the Howsers and Bevans.

An acceptance must not vary the terms of the offer, Wagner v. Rainier Mfg. Co., 230 Or. 531, 371 P.2d 74 (1962), I. e., that all parties to a contract must agree to the same...