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Who Did I Release? A Reminder On Drafting Settlement Agreements With Specificity

The recently settled legal battle between Prince Andrew and Virginia Giuffre has been plastered all over the news. In short, Ms. Giuffre initiated a lawsuit in the United States District Court for the Southern District of New York alleging Prince Andrew sexually abused her when she was underage and being trafficked by the late Jeffrey Epstein. While the parties recently settled the case for a substantial sum, Prince Andrew initially attempted to get out of the lawsuit via a motion to dismiss, arguing in part, that a 2009 settlement agreement between Ms. Giuffre and Epstein (the “Epstein Release”) released Prince Andrew from liability. Specifically, the Epstein Release included very broad terms, referring to any person “who could have been included as a potential defendant” in the action between Ms. Giuffre and Epstein. Of course, Prince Andrew took the position that he was among those potential defendants as identified in the Epstein Release.

In the January 12, 2022 opinion of Judge Lewis Kaplan of New York’s Southern District, he wrote that the language in the Epstein Release was ambiguous as to whether it released Prince Andrew from legal action by Ms. Giuffre, and as such, the case against Prince Andrew could continue. In what some would say was a prudent move, Prince Andrew settled with Ms. Giuffre soon thereafter.

For legal practitioners, Prince Andrew’s recent proceedings should serve as a reminder to thoughtfully prepare settlement agreements and to be cognizant of who, specifically, is released by its terms. The specificity required in a settlement agreement is jurisdiction-dependent and typically codified by state.

At common law, it did not matter what the agreement stated as to who was released, as the “unity of discharge” doctrine provided that the discharge of one tortfeasor constituted a discharge of all other joint tortfeasors when there is a single cause of action arising from the same tort.[1] As one can imagine, the “unity of discharge” doctrine was severely criticized and many jurisdictions, though not all, have enacted legislation based on the Uniform Contribution Among Tortfeasors Act[2] (“UCATA”), which abolished the common law rule. Connecticut, Massachusetts, New Hampshire and Rhode Island, among others, have each developed their own version of the UCATA.

In Connecticut, Gen. Stat. §52-572(e) provides that “[a] release by the injured person, or his legal representative, of one joint tortfeasor does not discharge the other tortfeasors unless, and only to the extent, the release so provides.” Interpreting the phrase “unless, and only to the extent, the release so provides,” Connecticut courts look to intent. The effect of the release depends upon the contracting parties’ intent regarding the release of other potentially liable parties.[3]

Massachusetts courts, interpreting Mass. Gen. Law c. 231B, § 4, also focus on the parties’ intent as to identification of releasees. Section 4 provides, in part, “[w]hen a release or covenant not to sue or not to enforce judgment is given in good faith to one of two or more persons liable in tort for the same injury: . . .  It shall not discharge any of the other tortfeasors from liability for the injury unless its terms so provide. . . .” The Supreme Judicial Court found that the language of the statute did not require that discharged tortfeasors be specifically mentioned in the release, but also that the legislature did not intend for general release forms to be “interpreted as discharging all unnamed joint tortfeasors who did not contribute to or participate in the settlement in the absence of any proof that the parties who negotiated the release so intended.”[4]

New Hampshire Rev Stat § 507:7-h provides that “[a] release or covenant not to sue given in good faith to one of 2 or more persons liable in tort for the same injury discharges that person in accordance with its terms and from all liability for contribution, but it does not discharge any other person liable upon the same claim unless its terms expressly so provide.” “The intent to release the defendant from liability must be ‘clearly and specifically indicate[d].’”[5]

Lastly, Rhode Island Gen. Law §10-6-7 also includes the key “so provides” language, stating that “[a] release by the injured person of one joint tortfeasor, whether before or after judgment, does not discharge the other tortfeasors unless the release so provides[.]” As with the other states mentioned, Rhode Island courts focus on the parties’ intent as well. A “general release discharges unnamed joint tort-feasors only if parties to release intended that result[.]”[6]

The drafting of a vague and ambiguous release could have potentially longstanding and devastating effects, as Ms. Giuffre has learned. No matter which side of the “v” you find yourself, legal practitioners must be keenly aware of the language used in settlement agreements to ensure the intended parties are released from liability.

[1] Cram v. Town of Northbridge, 410 Mass. 800, 801 (1991).

[2] Section 4 of the Uniform Contribution Among Tortfeasors Act (1955 Rev.) provides in relevant part: “When a release … is given in good faith to one of two or more persons liable in tort for the same injury or the same wrongful death: “(a) It does not discharge any of the other tortfeasors from liability for the injury or wrongful death unless its terms so provide….” 12 U.L.A. 98 (1975).

[3] Sims v. Honda Motor Co., 225 Conn. 401, 403 (1993).

[4] Cram, 410 Mass. at 804.

[5] Jenks v. New Hampshire Motor Speedway, Inc., 2010 WL 830244, at *3 (D.N.H. Mar. 3, 2010) citing Barnes v. New Hampshire Karting Ass’n, Inc., 128 N.H. 102, 107 (1986).

[6] McInnis v. Harley-Davidson Motor Co., 625 F. Supp. 943, 957 (D.R.I. 1986) (concluding that, “if faced with this stock release containing boilerplate verbiage purporting to acquit ‘all persons, firms or corporations,’ the Rhode Island courts would examine the intentions of the parties to the release with the aid of extrinsic evidence.”)

 

About The Author

Kaitlin Kelly Smith

Kaitlin is a member of the firm’s litigation group, defending both individuals and businesses in a variety of civil matters in… Read More

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