In McDowell Welding & Pipefitting, Inc. v. U.S. Gypsum Co., a subcontractor brought a breach of contract action against an owner and general contractor. The defendants denied the subcontractor’s allegation and asserted an affirmative defense alleging that the subcontractor had released its claims in a settlement agreement. The defendants also counterclaimed for specific performance of the settlement agreement. In response to the defendants’ motion, the trial court agreed to bifurcate the trial and try the defendants’ counterclaim first. The trial court then denied the subcontractor’s request for a jury trial.
The Oregon Supreme Court upheld the trial court’s decision to deny the subcontractor’s request for a jury trial. According to the Oregon Supreme Court, the defendants’ counterclaim was an executory accord claim that would have been tried to an Equity Court when the Oregon Constitution was adopted in 1859. Therefore, the subcontractor had no constitutional right to a jury trial. The Supreme Court defined “executory accord” as “an agreement for the future discharge of an existing claim by substituted performance.” Because the defendants had not yet paid the settlement agreement, nor alleged that the underlying obligation had been extinguished, the Supreme Court reasoned that the settlement agreement constituted an executory accord. McDowell Welding & Pipefitting, Inc. v. U.S. Gypsum Co., 2008 WL 4249397 (Or. Sept. 18, 2008).