Arbitration & Mediation

Poorly Worded Release Can't Be Enforced on Summary Judgment

By Christopher B. Hopkins, Esq.

General releases, by their nature, are intended to be broad. Ironically, they can be quite dangerous in that respect. No law school that I know of teaches how to write releases nor the interplay between contracts and torts. So lawyers must either get on-the-job training or, worse still, fall into the unacceptable habit of robotically using the firm's standard form without further thought.

Be careful who you are releasing, especially when there is a potential contribution claim out there. That's the message in Soncoast Community Church of Boca Raton, Inc. v. Travis Boating Center of Florida, Inc. While that suit has all of the signs of one that should be settled, it does provide some guidance to the rest of us when we craft settlement agreements.

The underlying dispute is not well-described but is also not all that relevant. Essentially, an unnamed set of plaintiffs sued Soncoast and settled. In the general release at issue, the plaintiffs extinguished all claims against any and all persons, firms, corporations and legal entities of any type whatsoever. THEN, the release went on to say that the plaintiffs had to cooperate with Soncoast's to-be-filed contribution claim against Travis. Oops. The question became whether the general release (releasing the world) actually was broad enough to release Travis (and you and me) thus leaving no basis for a contribution claim.

While the Panel's opinion (Polen, Warner, and Taylor) did not say so, our own exegesis suggests that one of the lawyers used a form general release and then tacked on the custom-tailored contribution savings clause without releasing that the form released the world.

Regardless, the conflict between the "releasing the world" provision and the "contribution savings" clause was enough for the Fourth District to hold that there was a contractual ambiguity, and thus a question of fact, which was not appropriately resolved by summary judgment.

Take away lesson: if you are going to revise a form, make sure the custom tailored additions still sync with the rest of the document.

Full post as published by Florida Arbitration Law on May 29, 2008 (boomark / email).