General Release Failed to Prevent Future Third-Party Personal Injury Claim For Contribution and Indemnification
In Salewski v. Music, 2017 N.Y. App. Div. LEXIS 3513 (3d Dep't May 4, 2017), the Appellate Division, Third Department, found that a general release was insufficient to prevent a subsequent third-party action by the releasor against the releasee, seeking contribution and indemnification arising out of the same auto accident. This case gives rise to a valuable lesson on how to appropriately structure a release that involves only some of multiple individuals involved in an accident.
In 2013, the Salewski defendant/third-party plaintiff was involved in an auto accident with the third-party defendants, which resulted in a personal injury action brought by the defendant (plaintiff at the time) against the third-party defendants (defendants at the time). That case settled in 2014, and the defendant executed a standard general release in favor of the third-party defendants.
After the settlement, in April 2015, the Salewski plaintiff (defendant’s wife and a passenger in his vehicle at the time of the 2013 accident) commenced the action against her husband for the injuries she sustained. Consequently, and despite having executed a general release in the prior settled lawsuit, the defendant commenced a third-party action in the Salewski case seeking contribution and indemnification. The third-party defendants moved to dismiss the third-party complaint pursuant to CPLR 3211(a)(5) based upon the general release. Supreme Court granted the motion, holding that the release barred the third-party action. The Third Department reversed.
Applying contract law, the Third Department noted that absent fraud, duress, illegality or mistake, an unambiguous release acts as a complete bar to an action on a claim that is the subject of the release. The Court further noted, however, that if the release is limited to a specific claim, it will apply only to that claim.
The Court cited a number of standard provisions contained in the release at issue, but each were tied to the subject accident and the corresponding injuries sustained by the defendant. The Court stated, “[t]he fact that there are multiple references to the term ‘injuries’ indicates an unambiguous intention to limit the release’s application only to the personal injuries suffered by defendant in the incident. We further find this language to be a clear and unambiguous expression of the parties’ intention that the release applies only to claims related to defendant’s injuries.” Consequently, claims beyond defendant’s personal injuries, such as for contribution/indemnification arising out of another party’s injuries (i.e., his wife’s), were not released, and the third-party action survived.
The lesson for the personal injury defense attorney is clear – carefully review any proposed general release, and if necessary, broaden the scope to include any and all claims of any nature whatsoever in relation to the injuring event (including for contribution/indemnification). Conversely, a plaintiff’s attorney representing a party who may be subject to a subsequent lawsuit arising out of the same accident may want to mimic the Salewski release and ensure it is sufficiently narrowly tailored to the injuries at issue, so as to preserve any future claims for contribution/indemnification.
If you require further information regarding the content of this Legal Alert, please contact either of the Co-Chairs of the Torts & Products Liability Defense Practice Area, Thomas J. Drury, at (716) 858-3845 or firstname.lastname@example.org, or Matthew J. Larkin, at (315) 425-2805 or email@example.com.