DeCair v. DeCair

DEITS, J.

Wife appeals from a judgment for husband for $14,812, which represents the amount owed on an expired judgment in favor of husband. She assigns error to the trial court’s determination that, before the judgment expired, an oral agreement was made between husband and wife to pay the total amount of the judgment and that husband’s part performance of that agreement avoids the effect of the statute of frauds, making the agreement enforceable. ORS 41.580. We affirm.

This case arises out of a dissolution judgment that was entered on June 18, 1982. That judgment awarded wife the family home, subject to a hen held by husband in the amount of $15,000 plus interest at 10 percent per year to be paid within five years from the date of the dissolution judgment or when the house was sold, whichever occurred first. Over the next five years, wife made no payments to husband, nor did she sell the house. In August, 1987, the parties met to discuss the situation. Husband testified that he promised not to foreclose the lien in exchange for wife’s agreement to make an initial payment of $3,000 and monthly payments of $500 thereafter until the amount of the judgment was paid in full.

After payingthe $3,000 and two $500 payments, wife told husband that she could not afford monthly payments in that amount. Husband then agreed to accept not less than $125 per month under the agreement. That amount was equal to the amount of interest accruing on the judgment. From November, 1987, until June, 1992, wife made monthly payments to husband in amounts that ranged from $125 to $300. Wife terminated the payments when she determined that husband had failed to renew the judgment and that, as a consequence, the judgment had expired. ORS 18.360(1); ORS 107.126a).¹

Thereafter, husband filed in the dissolution proceeding a “petition for supplemental relief.” In his petition, he sought to invoke the equitable jurisdiction of the court by requesting that the court order the property sold and that he be paid from the proceeds the amount that wife owed him or, alternatively, that he be awarded a judgment in that amount. Wife filed a response denying that husband was entitled to relief and alleging that, because the judgment had expired, the obligation imposed by it was no longer viable. Husband replied, alleging that wife should be estopped from claiming that the judgment was unenforceable and that wife would be unjustly enriched if she is able to avoid her obligation. Following trial, the court entered judgment for husband for the amount owed,² ruling, in part, that:

“4. There was an oral contract entered into between the parties and [wife] agreed to pay on the $15,000 provision in the divorce decree until it was paid in full.

“5. There was sufficient partial performance by the parties to make the contract enforceable.

“6. [Wife] should be estopped from asserting her defense that the judgment was not renewed as such would constitute unjust enrichment.”

Wife assigns each of those rulings as error.³ We review de novo.⁴ ORS 19.125(3).

On appeal, wife first argues that she and husband did not enter into an oral agreement in 1987. In her brief to this court, she says:

“The facts in the record are inadequate to support the existence of an agreement or contract between the parties herein for the payment of the $15,000.00 provision in the divorce decree. * * * Mere discussions between two parties do not produce a contractual relationship unless those discussions result in a meeting of the minds on all essential terms. Thus, conversations between a debtor and creditor regarding payment of an existing debt do not, without more, amount to an enforceable contract between the parties.” (Citations omitted.)

According to wife, the payments that she made to husband were pursuant to the divorce decree, and were not based on any separate agreement with husband.

At the hearing, husband testified that he understood that he

‘ ‘was entitled to force the payment [of the judgment] to [sic] a legal process and I suggested to her that she pay off the lien from cash reserves, take out a second mortgage and pay off the lien or sell the house and pay off the lien. She indicated to me if there was any way possible, she didn’t want to sell the house, that she couldn’t pay the $15,000 plus the $7,500 accrued interest, and so in lieu of bringing the issue of her selling the house to satisfy the lien, the judgment, we entered into a verbal agreement that included her making substantial and regular periodic payments to me until the total judgment was satisfied.”

Only husband and wife testified at the trial. Because the trial court had the opportunity to see and hear the witnesses as they testified, we will give considerable weight to that court’s findings when the testimony, or the inferences to be drawn from it, are in dispute. Seitz v. Albina Human Resources Center, 100 Or App 665, 674, 788 P2d 1004 (1990). In order to reach the result that it did, the trial court must have believed husband’s testimony on the issue of whether an oral agreement was made in 1987. Moreover, at the end of the five-year period, there was no existing agreement or court order for the payment of the judgment on an installment basis. Thereafter, the parties embarked on a course of conduct that supports husband’s testimony and that demonstrates an agreement that husband would not force the sale of ■wife’s house in exchange for wife’s installment payments on the judgment amount. We agree with the trial court on this issue.

Wife also contends that there was no consideration to support an oral agreement. As of June 19,1987, husband had the right to enforce the hen and require the house to be sold. Husband’s continued forbearance of the exercise of that right after that date constitutes consideration for the agreement. See Reid-Strutt, Inc. v. Wagner, 65 Or App 475, 479, 671 P2d 724 (1983). Accordingly, we reject wife’s argument about lack of consideration.

Wife next argues that, even if there was an oral agreement, it was not enforceable because she agreed only to pay a sum that she was already legally obligated to pay. In his complaint, husband alleged that the oral agreement was for wife to make monthly payments “until the hen amount was paid in full.” At the hearing, he testified that

‘ ‘in lieu of forcing the issue of her selling the house to satisfy the lien, the judgment, we entered into a verbal agreement that included her making substantial and regular payments to me until the total judgment was satisfied.

* * * *

“It was my understanding that I would do nothing to force the issue because it was a separate contract between [wife] and myself.” (Emphasis supplied.)

Husband also testified that he was unaware that the judgment would expire after 10 years or that he could renew the judgment, and that those issues were not discussed at the time that he and wife entered the agreement. Wife testified that she told husband, “I’ll pay you as long as I owe it to you. ’ ’ When asked by husband’s counsel what that meant, the following exchange took place:

‘ ‘ [Wife] Well, I would make him payments on the judgment until the judgment — well, if he didn’t renew it.

“Q You claim he only owed you money as long as he had the judgment?

“A He knew about it.

“Q It was your idea you only owed him the money until the judgment was renewed?

“A I had all intentions that he would renew it. [Husband] is very efficient.”

After hearing the testimony of the two witnesses, the trial court found that wife “agreed to pay on the $15,000 provision in the divorce decree until it was paid in full.” Because the testimony is in direct conflict and we have no independent basis for judging the credibility of either witness, we give considerable weight to the trial court’s finding of fact on the issue of the parties’ intent. We find, as did the trial court, that wife agreed to make payments on the amount in the dissolution judgment until that amount was paid in full. As such, her obligation was distinct from the obligation imposed by the judgment and was unaffected by the expiration of that judgment.⁵

Finally, wife argues that, even if there was an oral agreement creating a new obligation on her part, that agreement was unenforceable because it failed to comply with the statute of frauds. ORS 41.580 provides, in part:

“(1) In the following cases the agreement is void unless it* * * is in writing and subscribed by the party to be charged, or by the lawfully authorized agent of the party; evidence, therefore, of the agreement shall not be received other than the writing, or secondary evidence of its contents in the cases prescribed by law:

“(a) An agreement that by its terms is not to be performed within a year from the making.”

Husband does not contest that the agreement could not have been performed within a year; however, he argues, and the trial court found, that the agreement was enforceable because the parties had partially performed their obligations under the agreement. The doctrine of part performance provides that

“ ‘the terms of an oral agreement will be enforced (1) if there is conduct corroborating and unequivocally referable to the oral agreement sufficient to satisfy the policy of the statute designed to minimize peijured claims and the opportunities for fraud, and (2) if there are equitable grounds for enforcing the contract whether those grounds are found in facts establishing the basis for a true estoppel or in facts justifying the avoidance of unjust enrichment or relief from fraud.’ ” Stevens v. Good Samaritan Hosp., 264 Or 200, 207, 504 P2d 749 (1972) (quoting Luckey v. Deatsman, 217 Or 628, 633, 343 P2d 723 (1959)). (Emphasis supplied.)

As to the first requirement, here, wife made 59 monthly payments to husband, and husband did not exercise his right to foreclose. Neither party disputes that husband knew that he was entitled to full payment of the amount of the judgment and that husband expressed interest in receiving that payment. In view of those facts, as well as -wife’s acknowledgement that she was not required to make monthly payments under the terms of the dissolution judgment, wife’s payments and husband’s forbearance were unequivocally referable to the oral agreement. Additionally, equitable grounds exist to justify the enforcement of the oral agreement. See Martin v. Allbritton, 124 Or App 345, 351, 862 P2d 569 (1993). As of August, 1987, husband was entitled to exercise his right under the judgment to foreclose on the property. In contrast to what often occurs in dissolution cases, husband was willing to forego his right to an immediate satisfaction of the lien so that wife would not lose the home. To penalize husband for this action would be inequitable and would result in wife’s unjust enrichment.

Affirmed.

1 ORS 18.360(1) provides:

“Whenever, after the entry of a judgment, a period of 10 years elapses, the judgment and any docketed or recorded lien thereof shall expire. However, before the expiration of 10 years the circuit or district court for the county in which the judgment originally was entered, on motion, may renew the judgment and cause a notation in the register and the judgment docket indicating the renewal of the judgment to be made. The renewed judgment and any lien thereof expire 10 years after entry of the renewed judgment. If the judgment is renewed, the judgment creditor or the agent of the judgment creditor, may cause to be recorded in the County Clerk Lien Record of any other county in this state a certified copy of the renewed judgment or a lien record abstract. Execution may issue upon the renewed judgment until the judgment expires or is fully satisfied.”

ORS 18.360 was amended by Oregon Laws 1993, chapter 716, section 1, and Oregon Laws 1993, chapter 763, section 6. Those amendments are not at issue in this case.

ORS 107.126(1) provides:

“Except as otherwise provided in ORS 18.360(2), no order, judgment or decree for the future payment of money in gross or in installments, entered under ORS 107.095 or 107.105, shall continue to be a lien on real property for a period of more than 10 years from the date of docketing of such order, judgment or decree unless it is renewed as provided in ORS 18.360(1).”

2 A court acting in equity may award damages in lieu of equitable relief. See, e.g., Frankland v. City of Lake Oswego, 267 Or 452, 517 P2d 1042 (1973).

3 Because of our disposition of the first two issues, we need not address the third.

4 Before trial, wife argued that husband’s claims were for monetary damage rather than equitable relief and, therefore, she was entitled to a jury trial. The trial court, noting that the petition was filed as part of the parties’ dissolution and that the requested relief was equitable, denied wife’s request. Wife does not assign that ruling as error and, on appeal, she asserts that our standard of review is de novo. We accept her assertion without necessarily approving the propriety of the filing of this proceeding as part of the dissolution proceeding.

5 The dissent concludes that husband’s own testimony is contrary to the trial court’s finding that the agreement created a new obligation and that husband viewed the judgment lien as the underlying obligation. We disagree with that argument for two reasons. First, as quoted above, husband testified that he considered the agreement to be a “separate contract” from the judgment. Second, and more importantly, the dissent reaches its conclusion only by placing undue emphasis on husband’s use of the words “judgment” and “lien” in his testimony. Husband did make repeated references to wife “paying the judgment” and “satisfying the lien”; however, in the light of husband’s pleadings that wife would make payments until the “lien amount was paid in full,” we read his testimony as referring to the amount of the judgment or lien. As wife readily admits, “[a]n agreement to pay a debt in full involves a new promise, as the promise is affirming that payment will be made even if the judgment expires and the debt is no longer owed.”

The dissent unfairly assumes, without any evidence to support the assumption, that a lay person such as husband understood the legal ramifications of the term “judgment” and used the term specifically because of what that term means. It is undisputed that the origin of the debt was the judgment; thus, we would expect that the parties’ testimony about the separate oral agreement would include references to the terms used in the judgment. Those references, however, do not necessarily establish that the judgment was the obligation underlying the oral agreement. The distinction between “paying on a judgment” and “paying the total amount of a judgment” is a technical one that could easily escape recognition, even by those familiar with the often precise application of legal terminology. By holding husband responsible for such a subtle distinction, the dissent would reach an unreasonable and inequitable result.