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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: September 21, 2018

Claims Barred by Release

On September 12, 2018, the Second Department issued a decision in Miller v. Brunner, 2018 NY Slip Op. 06008, holding that claims were barred by a release, explaining:

A release is a contract, and its construction is governed by contract law. A release that is complete, clear, and unambiguous on its face must be enforced according to the plain meaning of its terms. A valid general release will apply not only to known claims, but may encompass unknown claims, including unknown fraud claims, if the parties so intend and the agreement is fairly and knowingly made. A signed release shifts the burden of going forward to the plaintiff to show that there has been fraud, duress or some other fact which will be sufficient to void the release.

Here, the release broadly covers, inter alia, all claims by the plaintiffs against the defendants predating the release. Contrary to the plaintiffs’ contention, the terms of the release clearly and unambiguously bar the first cause of action in the amended complaint, which is asserted against Anmuth and alleges a breach of the January 28, 2014, agreement. In addition, the plaintiffs failed to sufficiently allege each of the elements of fraud in the inducement, which would be required in order to set aside the release. Accordingly, the Supreme Court should have granted that branch of the defendants’ motion which was, in effect, pursuant to CPLR 3211(a)(1), (5), and (7) to dismiss the first cause of action of the amended complaint insofar as asserted against them.

(Internal quotations and citations omitted).

Among the things people typically do to resolve a legal dispute is agree to release any legal claims they may have against each other. As this decision shows, a release is a contract like any other and will be enforced even if a party later comes to regret releasing its claims. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client face a situation where you are unsure whether you have released claims.

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