## Facts

- A nurse (“Doe”) asserted sexual-harassment claims arising from her employment and pursued relief through a union grievance and a state administrative complaint against her employer (Kaiser), a physician, and an affiliate.
- Counsel for Kaiser and counsel for Doe arranged mediation to resolve the claims.
- At the mediation, the parties negotiated through a mediator in separate rooms; Doe communicated with the mediator and her attorney and did not directly negotiate with the opposing side.
- Kaiser’s attorneys conveyed adverse information about Doe’s workplace conduct and the possibility of discipline if she continued employment; Doe’s attorney relayed that information to her.
- Later that day, attorneys reached a proposed settlement that included monetary payment, Doe’s voluntary resignation, an agreement not to seek reemployment, confidentiality, and arbitration.
- Doe initially asked for additional time to consider the proposal, but Kaiser communicated that the offer would remain open only that day.
- Doe authorized her attorney to accept if no improved offer emerged; her attorney later communicated acceptance to Kaiser’s counsel and stated to the mediator and Doe that the case was settled.
- Within days, Doe attempted to withdraw, refused to sign a written settlement, and asserted that any verbal agreement was made under “extreme duress.”
- Kaiser filed an action seeking declaratory relief and specific performance to enforce the asserted oral settlement, including its arbitration provision.
- The trial court entered judgment for Doe, reasoning that no binding agreement existed without a signed writing and also crediting Doe’s duress position.
- On appeal, the court reversed the judgment; on reconsideration, it corrected language identifying the party entitled to declaratory relief and modified the remand instructions in light of nonparties to the broader settlement.

## Issues

1. Whether the parties formed a binding oral settlement at mediation despite contemplation of a later written instrument.
2. Whether Doe’s claimed “extreme duress” invalidated her acceptance of the settlement terms.
3. Whether declaratory relief could proceed and what form of remand was proper when other alleged settlement participants were not joined in the action.

## Decision

- The appellate court reversed the trial court’s judgment that no agreement existed due to the absence of a signed writing.
- It held that the parties reached a valid and enforceable oral settlement based on objective manifestations of assent at the close of mediation.
- It rejected the argument that the anticipated written agreement was a condition precedent to contract formation.
- It declined to treat Doe’s asserted pressure and same-day deadline as legal duress sufficient to avoid the agreement on the record presented.
- On reconsideration, the court corrected its earlier statement to reflect that Kaiser (not Doe) was entitled to declaratory relief as to the oral settlement’s enforceability.
- On reconsideration, the court remanded for further proceedings rather than directing entry of a specific declaratory judgment, given concerns raised about additional alleged settlement participants who were not parties to the action.

## Legal Principles

- Settlement agreements are contracts and may be enforced when the parties mutually assent to all material terms.
- Contract formation turns on objective manifestations of assent; later regret or undisclosed reservations do not negate a formed agreement.
- The fact that parties anticipate reducing an agreement to writing does not prevent enforcement of an oral agreement unless the parties clearly conditioned enforceability on execution of the writing.
- A signed writing is not required to enforce a settlement absent an applicable statute or an express agreement that signature is required for formation.
- Claims of duress require wrongful or unlawful coercion; hard bargaining, adverse disclosures, and time-limited offers in settlement negotiations are not alone sufficient.
- Appellate courts may correct dispositive language on reconsideration and adjust remand instructions while preserving the substantive holding on contract enforceability.

## Conclusion

The court held that an enforceable oral settlement was formed at mediation because Doe, through counsel, objectively manifested assent to all material terms, and neither the lack of a signed writing nor the asserted negotiation pressure defeated formation; the matter was remanded for further proceedings consistent with that holding.


Kaiser Foundation Health Plan of the Nw. v. Doe, 903 P.2d 375 (Or. Ct. App. 1995)