Is This Release Ambiguous, Or Not?

Abdulla v Gross,

124 AD3d 1255 [4^th Dept., 2015]

The release in this case had two, seemingly inconsistent, clauses. According to the first, it covered everything “from the beginning of the world.” According to the second, it covered one specific occurrence. Is either of the clauses controlling, or is the release ambiguous?

Plaintiff had two successive accidents in her home, and sued her landlord on the first. The parties reached a settlement, and counsel for the defendant thought it encompassed both accidents. The court held that the language of the release indicated otherwise, however, and so plaintiff’s action on the second accident was not barred.

Plaintiff’s first accident was in June of 2009, and her second on September 5 of the same year. As noted, she sued on the first accident only, but of course the second accident came up during disclosure, and defendant obtained disclosure on the injuries arising from it. The injuries were in fact related, with the plaintiff alleging that the September accident exacerbated the injuries sustained in June.

A settlement was reached in June of 2011, but plaintiff failed to send a release and stipulation of settlement until October 23, 2012. The “General Release” had in fact been executed by plaintiff in December of 2011. The defendant accepted the release and stipulation, paid on the settlement and filed the stipulation of discontinuance.

What counsel for the defendant did not know was that on the very last day of the limitations period, on September 5, 2012, the plaintiff had started a second action, based on the second accident. Defendant moved to dismiss the second action based on the release, arguing that the settlement was intended by the parties to encompass both accidents.

Since the result turns on the language of the release, we need to consider it.  As noted, it contains two seemingly inconsistent clauses, one general and one specific. As set forth by the Appellate Division:

“In relevant part, the release stated that defendant, in exchange for providing plaintiff with the agreed-upon settlement amount, was ‘released and forever discharged . . . from all manner of actions, causes of action, suits, . . . claims and demands whatsoever’ that plaintiff ‘ever had, now has or which [her] successors and assigns, heirs, executors or administrators, hereafter can, shall or may have for, upon or by reason of any matter, cause or thing whatsoever from the beginning of the world to the day of the date of those present . . . More specifically, for injuries sustained in a slip and fall incident which occurred on June 3, 2009, in the City of Lackawanna, County of Erie and State of New York.’ “

Interpretation of the language of a release follows the law of contracts, and the principle of interpretation here is the well-established one of ejusdem generis, or the idea that the specific terms limit the scope of the general terms. This makes sense, since if the general, unlimited clause is held to be controlling, the specific, limited clause would become superfluous.

Applying this principle leads to the conclusion that the release is not ambiguous at all, and releases the defendant only from claims arising from the first accident. That being the case, extrinsic evidence as to the parties’ intent becomes irrelevant.

The motion to dismiss was therefore held to have been properly denied, and the action on the second accident goes forward.