Oregon Case Law Update: High-Low Settlement Agreements Do Not Necessarily Resolve Dispute

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Oregon Case Law Update: High-Low Settlement Agreements Do Not Necessarily Resolve Dispute

From the desk of Jeff Eberhard: A high-low settlement agreement is a settlement in which the settling defendant agrees to pay a minimum amount and the plaintiff agrees to accept a maximum amount regardless of the outcome at trial.  In this case, a non-settling defendant sought to have the settling defendant dismissed from the case on the grounds the settling defendant no longer had adverse interests to the plaintiff.  Also at issue is the application of the cap to noneconomic damages after Horton v. OHSU, a landmark case discussed in our recent updates, indicating this may be among the first cases to evaluate the recently revived tort cap (see our prior updates on Horton for more on the cap).

Claims Pointer: The Oregon Supreme Court held that the high-low agreement did not require dismissal of the settling defendant because its interests remained sufficiently adverse to the plaintiffs’.  However, the analysis does indicate that a high-low agreement could be structured in such a way as to eliminate adverse interests, which could result in dismissal of the settling defendant or disclosure of the agreement to the jury.

Rains v. Stayton Builders Mart, Inc., 359 Or 610 (2016)

Five Star Construction (Five Star) hired Kevin Rains (Kevin) and his partner to construct a barn, and it purchased grade No. 2 wood boards from Stayton Builders Mart, Inc. (Stayton) for the project.  At least one board manufactured by Weyerhaeuser Company (Weyerhaeuser) was defective because it contained a large knot that compromised its integrity.  During construction, Kevin was standing on the defective board 16 feet above the ground when it broke, causing him to fall to the ground and rendering him paraplegic.

Kevin and his wife, Mitzi Rains (Mitzi), quickly settled their claims against Five Star.  Kevin brought negligence and products liability claims against Stayton, and Mitzi brought a loss...

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