Second Department Finds Release Binding Despite Plaintiff’s Claim About Not Understanding The English Language

• Posted on: Aug 23 2021

By Jeffrey M. Haber

When a party releases another from claims or the threat of claims, he/she is giving up the right to sue the other in connection with the subject of the release.¹ A release effectively eliminates all claims against another that are possessed by the party giving the release. It does not matter whether the releasor knew of the claims at the time that he/she gave the release, so long as “the parties so intend and the agreement is ‘fairly and knowingly made.’”²

If “the language of a release is clear and unambiguous, the signing of a release is a ‘jural act’ binding on the parties.”³ Thus, a release may not be invalidated unless the challenging party can demonstrate any of “the traditional bases for setting aside written agreements, namely, duress, illegality, fraud, or mutual mistake.”⁴ 

“Although a defendant has the initial burden of establishing that it has been released from any claims, 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.’”⁵ “A plaintiff seeking to invalidate a release due to fraudulent inducement must ‘establish the basic elements of fraud, namely a representation of material fact, the falsity of that representation, knowledge by the party who made the representation that it was false when made, justifiable reliance by the plaintiff, and resulting injury.’”⁶ 

When a party releases a fraud claim, he/she may later challenge that release as fraudulently induced only if he/she can identify a separate fraud from the subject of the release.⁷ As the Court of Appeals observed in Centro, “[w]ere this not the case, no party could ever settle a fraud claim with any finality.”⁸

The foregoing principles were highlighted in Ivasyuk v. Raglan, 2021 N.Y. Slip Op. 04706 (2d Dept. Aug. 18, 2021) (here).

Ivasyuk involved a personal injury action in which the plaintiff allegedly fell from a six-foot ladder while performing work at a property that was being renovated. Plaintiff allegedly injured himself when he fell from the ladder.

Plaintiff, and his wife suing derivatively, commenced the action against defendants, asserting causes of action for, inter alia, violations of Labor Law §§ 240(1), 241(6), and 200, and common-law negligence. One of the defendants moved for, among other things, summary judgment dismissing the complaint insofar as asserted against it. In part, defendant argued that it was entitled to judgment as a matter of law on the basis that, prior to the commencement of the action, plaintiff executed a release in favor of defendant for all claims arising out of the subject accident. The motion court, inter alia, denied the motion. 

On appeal, the Appellate Division, Second Department reversed and granted summary judgment in favor of defendant.

The Court found that defendant established its entitlement to judgment by demonstrating that the plaintiff released it from any claims made by the plaintiff with regard to, inter alia, the accident.⁹ Among other proof, said the Court, defendant provided a copy of the release, “which clearly and unambiguously stated that [plaintiff] was releasing [defendant] from, inter alia, all actions, causes of action, and suits.¹⁰ 

The Court rejected plaintiff’s argument that he did not understand the terms of the release because it was in English. “A person who does not understand the English language is not automatically excused from complying with the terms of a signed agreement, since such person must make a reasonable effort to have the agreement made clear to him or her,” said the Court.¹¹ The Court found that deposition testimony demonstrated that before signing the release, the terms of the release were explained to plaintiff.¹² 

Takeaway

A “release is … a species of contract” that “is governed by the same principles of law applicable to other contracts.”¹³ In Ivasyuk, the facts showed that the terms of the release were clear and unambiguous. Under the principles of contract interpretation, the release was found to be binding on the plaintiff. Also, since the plaintiff was unable to demonstrate duress, illegality, fraud, or mutual mistake, the Court declined to set aside the release.¹⁴

Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP.

This article is for informational purposes and is not intended to be and should not be taken as legal advice.

1. Centro Empresarial Cempresa S.A. v América Móvil, S.A.B. de C.V., 17 N.Y.3d 269, 276 (2011) (“Generally, a valid release constitutes a complete bar to an action on a claim which is the subject of the release.”).
2. Id.,quoting Mangini, 24 N.Y.2d at 566-567.
3. Booth v. 3669 Delaware, 92 N.Y.2d 934, 935 (1998), quoting Mangini v McClurg, 24 N.Y.2d 556, 563 (1969).
4. Mangini, 24 N.Y.2d at 563.
5. Centro, 17. N.Y.3d at 276, quoting Fleming v. Ponziani, 24 N.Y.2d 105, 111 (1969).
6. Id., quoting Global Mins. & Metals Corp. v. Holme, 35 A.D.3d 93, 98 (1st Dept. 2006).
7. Bellefonte Re Ins. Co. v. Argonaut Ins. Co., 757 F.2d 523, 527-28 (2d. Cir. 1985).
8. 17 N.Y.3d at 276.
9. Slip Op. at *2.
10. Id.
11. Id. (citations omitted).
12. Id. (citation omitted).
13. Schuman v. Gallet, Dreyer & Berkey, L.L.P., 180 Misc. 2d 485, 487 (N.Y. Co. 1999), aff’d, 280 A.D.2d 310 (1st Dept. 2001).
14. Toledo v. W. Farms Neighborhood Hous. Dev. Fund Co., Inc., 34 A.D.3d 228, 229 (1^st Dept. 2006).