Id.See also Richard A. Lord, 27 Williston on Contracts § 70.49, 347-48 (4th ed. 2003) (reformation appropriate under "gross negligence" standard if party "is entitled to such relief" based on consideration of facts "both in light of personal action taken and as a matter of equity"). Similarly, in Pioneer Resources, LLC v. D. R. Johnson Lumber Co. , 187 Or. App. 341, 342, 68 P.3d 233 (2003), the Court of Appeals exhaustively reviewed its own and this court’s reformation cases. The court observed that the concept of "gross negligence" "is innately circumstantial and elastic," and after examining earlier cases, concluded:
However, the antecedent agreement need not be a complete, independently binding agreement. Pioneer Resources, LLC v. D. R. Johnson Lumber Co. , 187 Or. App. 341, 367, 68 P.3d 233, rev. den. , 336 Or. 16, 77 P.3d 319 (2003) ; see also Restatement § 155 comment a ("The prior agreement need not, however, be complete and certain enough to be a contract."). Even an antecedent agreement that encompasses a single term in a contract may support reformation.
A claim for reformation of a contract requires proof of three elements: (1) an antecedent agreement to which the contract can be reformed; (2) a mutual mistake or a unilateral mistake on the part of the party seeking reformation coupled with inequitable conduct by the other party; (3) the party seeking reformation was not grossly negligent. Jensen v. Miller, 280 Or. 225, 228–29, 570 P.2d 375 (1977); Pioneer Resources, LLC v. D.R. Johnson Lumber Co., 187 Or.App. 341, 364, 68 P.3d 233,rev. den.,336 Or. 16, 77 P.3d 319 (2003). The elements of reformation must be proved by clear and convincing evidence.
Our review is de novo, but, to the extent that the trial court's factual findings were based on the credibility of witnesses, we give "substantial weight" to those findings. Pioneer Resources, LLC v. D.R. Johnson Lumber Co., 187 Or App 341, 343, 68 P3d 233, rev den, 336 Or 16 (2003). Consistently with that standard of review, we find the facts as follows: In 1997, defendant planned to construct a new taxiway — the north taxiway — at Salem's McNary Field, using federal and local funding sources.
Although we are not bound by the trial court's findings, "we give substantial weight to [its] findings where, as here, those findings hinge on the resolution of conflicting testimony and the credibility of the witnesses." Pioneer Resources, LLC v. D.R. Johnson Lumber Co., 187 Or. App. 341, 343, 68 P.3d 233, rev den, 336 Or. 16 (2003) (citation omitted). The trial court's findings can be summarized as follows: Defendant Nustura is the personal representative of the estate of her father, Laszlo Szender. Plaintiff and Szender became friends in the late 1980s.
As such, they “are a species of settlement agreement and ... favored by the law.” Pioneer Res., LLC v. D.R. Johnson Lumber Co., 187 Or.App. 341, 356 (2003).
Any prior agreement need not be legally binding. Pioneer Res., LLC v. D.R. Johnson Lumber Co., 187 Or. App. 341, 367-78 (2003). The parties must, however, "have previously reached a complete mutual understanding with respect to all of the essential terms of their agreement."
Plaintiff does not allege that Doré misled her about the release portion of the agreement. Pioneer Resources, LLC v. D.R. Johnson Lumber Co., 187 Or. App. 341, 358, 68 P.3d 233, 243 (2003) (so long as the release itself was not product of fraud, fraud in the inducement does not preclude enforcement of a release). I reject plaintiff's argument that I should look to statute of limitations law to determine when plaintiff's claims arose, whether before or after she discovered the fraud.
With respect to the third requirement, the party seeking reformation bears the burden of proving the lack of gross negligence. Pioneer Resources, LLC v. D. R. Johnson Lumber Co. , 187 Or. App. 341, 372, 68 P.3d 233, rev. den. , 336 Or. 16, 77 P.3d 319 (2003). Wilcher argues that TAS's proof of all three requirements was deficient, and, thus, the trial court erred in reforming the deed of trust.
"Releases are a species of settlement agreement and, as such, are favored by the law." Pioneer Resources, LLC v. D. R. Johnson Lumber Co., 187 Or App 341, 356, 68 P3d 233, rev den, 336 Or 16 (2003). "Nevertheless, under limited circumstances, enforcement of a release may be barred if the release was the product of misrepresentation or unconscionable conduct."