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James v. Clackamas County

Summarized by: 

Date Filed: 04-11-2013
Case #: S059680
Balmer, C.J. for the Court; Kistler, J.; Walters, J.; Linder, J.; Brewer, J.; and Baldwin, J.
Full Text Opinion: http://www.publications.ojd.state.or.us/docs/S059680.pdf

Contract Law: A contract right to payment from a specified fund ceases to exist when that right is contingent upon money contained in that fund and that money is exhausted.

James appealed the Court of Appeals decision relieving Clackamas County (the "County") of paying James certain retirement benefits.  James, a retired Lieutenant in the Clackamas County Sheriff’s Department, received retirement benefits under a collective bargaining agreement negotiated with the County in 1985.  The agreement conditioned benefits upon the presence of appropriations in a specified county fund.  When the specified fund contained insufficient revenue to support retiree’s current benefits under the CBA, the county negotiated a new contract with the union.  James sued for breach of contract, arguing the condition nullifying 1985 contract had not been meet. The trial court agreed with James, but the Court of Appeals reversed.  The Oregon Supreme Court held the condition nullifying the 1985 contract had been meet because the specified fund did not have enough money to support the current cost of benefits to retirees.  Affirmed.