Kleiner v. Randall

• Decision Date: 08 July 1982
• Docket Number: No. 79-08-7666,79-08-7666
• Citation: 58 Or.App. 126,647 P.2d 956
• Parties: Walter KLEINER, Appellant, v. Frank A. RANDALL and Dale C. Dooley, doing business as Associated Farm & Cattle Co.; and FMA Financial Corporation, doing business as FMA Leasing Company, a Utah corporation, Respondents, Western Water Wells, Inc., an Oregon corporation, Defendant. ; CA A20949.
• Court: Oregon Court of Appeals

Page 956

647 P.2d 956

58 Or.App. 126

Walter KLEINER, Appellant, v. Frank A. RANDALL and Dale C. Dooley, doing business as Associated Farm & Cattle Co.; and FMA Financial Corporation, doing business as FMA Leasing Company, a Utah corporation, Respondents Western Water Wells, Inc., an Oregon corporation, Defendant.

No. 79-08-7666; CA A20949.

Court of Appeals of Oregon.

Argued and Submitted Jan. 13, 1982.

Decided July 8, 1982.

James N. Westwood, Portland, argued the cause for appellant. With him on the briefs were Fredric A. Yerke and Miller, Nash, Yerke, Wiener & Hager, Portland.

Milo Pope, Mount Vernon, argued the cause for respondents. With him on the brief were Wendell Gronso, Burns, for respondents Frank A. Randall and Dale C. Dooley and Dean E. Miller and Gigray, Miller, Downen & Weston, Caldwell, Idaho, and Kilpatricks & Pope, Mount Vernon, for FMA Financial Corp.

Before RICHARDSON, P. J., and THORNTON and VAN HOOMISSEN, JJ.

RICHARDSON, Presiding Judge.

Plaintiff, purchaser of real property under two land sale contracts, brought this suit for declaratory relief against sellers Randall and Dooley, who are partners in Associated Farm and Cattle Co. (Associated), and against sellers' assignee FMA Leasing Co. (FMA). ¹ During trial the parties entered into a stipulated settlement. After plaintiff unsuccessfully moved to withdraw the stipulation, the court entered a decree. Appealing the decree, plaintiff contends, first, that the stipulation should have been withdrawn because the parties were mutually mistaken as to the effect of their agreement, and, second, that the decree as entered was improper because it was inconsistent with the terms of the stipulation. We reverse.

In March, 1978, plaintiff contracted to purchase approximately 3640 acres of land in Harney County from Associated. The contract contained detailed payment terms among its lengthy provisions. It also noted that FMA and others held mortgages on the land. The contract provided that FMA was to be paid from plaintiff's annual payments "to obtain a complete release of all mortgages and liens" held by FMA on the property. The contract also provided that Associated was to pay the other mortgages in full and obtain releases of the land prior to the May 1, 1984, payment. Other terms of this contract are not relevant to this appeal.

In April, 1978, plaintiff and Associated entered into a second land sale contract concerning plaintiff's purchase of an additional 960 acres of land. This contract also included detailed payment terms. The terms of the second contract were virtually identical to the first contract, although FMA was not a mortgagee of the new parcel. However, Associated was still obligated to pay off the other mortgages prior to the May 1, 1984, payment.

At about the same time these contracts were made, Randall and Dooley borrowed $101,000 from plaintiff's brother, Eugene Kleiner. He is not a party to this case, and the loan was not directly related to the land sale contracts. At the time this action was commenced, Randall and Dooley were in default on the obligation.

Plaintiff did not make the annual payments due May 1, 1979, on the two contracts, although he did make payments directly to the mortgagees on Associated's underlying obligations. In August, 1979, plaintiff filed suit, alleging that defendants were in default under the contracts. ² Plaintiff sought specific enforcement of the contracts and credits against the balances he owed under the contracts for loss of crops and other claims. Defendants counterclaimed for specific enforcement.

The case came to trial in August, 1980. On the third day of trial the parties announced in open court that they had reached a settlement. The terms of the stipulated settlement were recited. The trial judge then asked each of the parties if he understood the terms of the stipulation and agreed to be bound by them. Plaintiff, Randall, Dooley, and FMA's vice president each answered affirmatively, and the judge accepted the stipulation.

The agreement required plaintiff to pay into escrow, in a lump sum, the overdue May 1, 1979, and May 1, 1980, contract payments, less credit for the payments plaintiff had made directly on Associated's obligations. The agreement also credited plaintiff with approximately $183,000 against the principal balance of the first contract. It stated that, under these terms, plaintiff would be required to pay "approximately" $337,379 into escrow, with instructions to the escrow agent to pay out as follows: first, $210,000 to FMA; then an amount to make current Associated's other obligations; and, finally, the balance to plaintiff's brother toward payment of Randall's and Dooley's loan. Plaintiff's brother would receive a share, along with FMA, of subsequent payments made by plaintiff under the contracts. The agreement amended the two contracts in other ways not relevant here and otherwise affirmed them.

Shortly after the stipulation was entered, plaintiff realized that the stipulated payment plan would not be sufficient to repay Randall's and Dooley's debt to his brother and Associated's mortgage to FMA. Plaintiff's calculations, checked by a certified public accountant, indicated that both Eugene Kleiner and FMA would be left with substantial outstanding balances at the time plaintiff's contract obligations were completely paid.

Counsel for FMA responded to plaintiff's calculations. Although not concurring with the calculations, he nonetheless acknowledged that there was apparently too little money to pay everyone in full and suggested that the parties meet to discuss the matter further. Subsequently, plaintiff, his counsel, and counsel for FMA met, but the results of that meeting are unclear from the record. Shortly thereafter, counsel for FMA prepared a decree and submitted it to the court. Plaintiff moved to withdraw the stipulation on the ground of mutual mistake of fact as to the effect of the agreement. Plaintiff also opposed FMA's proposed decree, because it was grounded on the parties' mutual mistake and, in addition, it materially varied the terms of the stipulation by requiring a larger initial payment.

The court heard arguments from plaintiff, Associated and FMA, and the parties submitted numerous affidavits. The court denied plaintiff's motion and entered the decree. ³

Plaintiff first assigns as error the denial of his motion to withdraw the stipulation. He first contends: "Where parties to litigation have consented to a judgment or decree, but one party withdraws his consent before entry of judgment, the court has no power to enter the judgment." Plaintiff moved to withdraw the stipulation prior to entry of the decree. However, plaintiff, as well as defendants, had consented to the stipulation in open court after its terms had been read into the record. We find no basis in Oregon law for plaintiff's argument. To the contrary, by agreeing to the stipulation the parties entered into a binding contract. Entry of the decree was merely a formality. As the Supreme Court stated long ago:

" * * * Consent excuses error, and ends all contention between the parties. It leaves nothing for the court to do but to enter what the parties have agreed upon, and when so entered the parties themselves are concluded. From such a decree there is no appeal * * *." Schmidt v. Oregon Mining Co., 28 Or. 9, 25, 40 P. 406, 40 P. 1014, 52 AS 759 (1895).

The stipulated settlement, agreed to in open court, is a contract and cannot be set aside except on grounds adequate to justify the rescission of a contract. Nieminen v. Pitzer, 281 Or. 53, 57, 573 P.2d...