Background
Shane Anthony Lewis, an adult in the custody of the Oregon Department of Corrections, sued three ODOC employees for breach of contract. His third amended complaint alleged that the employees violated ODOC’s Code of Ethics, that the code was incorporated into their employment contracts, and that he was entitled to enforce those contracts as a third-party beneficiary.
The employees moved to dismiss under ORCP 21 A for failure to allege ultimate facts sufficient to state a claim. The trial court granted the motion, concluding that the Code of Ethics was not a contract, was not incorporated into the employees’ contracts, and did not support Lewis’s claimed third-party-beneficiary status. On appeal, Lewis challenged the court’s conclusions about incorporation and asserted that it improperly relied on information outside the pleadings.
The Court’s Holding
The Oregon Court of Appeals affirmed. Assuming without deciding that Lewis preserved his arguments and that ODOC’s Code of Ethics was incorporated into the employees’ contracts, the court held that his complaint did not allege sufficient ultimate facts showing that ODOC and the employees intended to confer a contractual right on him.
Lewis alleged that he was a creditor beneficiary and that ODOC intended prisoners, including him, to benefit from the employees’ promises. The court characterized those assertions as legal conclusions rather than well-pleaded facts demonstrating the contracting parties’ intent. Because an incidental benefit does not permit a third party to enforce a contract, the complaint failed to state a breach-of-contract claim.
Key Takeaways
- A third-party beneficiary must plead ultimate facts showing that the contracting parties intended to confer an enforceable contractual right on that person.
- A bare assertion that the parties intended the plaintiff to benefit is a legal conclusion and does not satisfy Oregon’s pleading standard.
- The court affirmed without deciding whether the Code of Ethics was incorporated into the employees’ contracts or whether Lewis preserved his appellate arguments.
Why It Matters
The decision underscores that people who benefit from a government employment policy or contract are not necessarily entitled to enforce it. A claimant must allege facts supporting an intent to create contractual rights for that claimant, not merely an expectation that employees’ compliance will benefit a broader group.
The opinion is a nonprecedential memorandum opinion under ORAP 10.30 and may be cited only as that rule permits.