Prior Settlement that Included Future Claims Not Enough to Grant Motion for Summary Judgment Supreme Court of New York, Appellate Division, August 29, 2017

Plaintiffs Mason South and his wife filed suit under the Jones Act against several defendants, including Texaco, alleging his mesothelioma developed as a result of exposure to asbestos containing products for which defendants were responsible. Mr. South served as a merchant marine for 37 years. Texaco moved for summary judgment arguing that suit was precluded by a prior release signed by the plaintiff in an earlier lawsuit from 1997. Specifically, Mr. South had released Texaco from “all bodily and/or personal injuries, sickness or death” from asbestos exposure including “the long term effects of exposure.” The plaintiff opposed Texaco’s motion for summary judgment arguing that the settlement did not bar his claim for mesothelioma pursuant to a section of the Federal Employers’ Liability ACT (FELA). Section 5 of FELA requires strict scrutiny of release according to the plaintiff. The release had no effect on the instant claim since the plaintiff did not have mesothelioma at the time he released Texaco from his 1997 claim. Relying on two federal cases, the trial court denied the motion. Texaco appealed.

On appeal, the court analyzed the two cases, noting the split between federal circuits for the standard. In Babbitt, the court found a release valid when it reflects a “bargained for settlement of a known claim for a specific injury, as contrasted with an attempt to extinguish potential future claims the employee might have arising from injuries known or unknown by him.” As for the Wicker case, the court concluded that a plaintiff was “specifically aware of the known risks” and prohibited boilerplate language from being enforceable. In its analysis, the court pointed out that Texaco bore the burden as this was a case in brought in admiralty. Applying the Wicker standard, the court found that the release would be not be applicable because it did not mention the plaintiff was waiving claims for mesothelioma. The court went on to “tease” out the plaintiff’s intent when he signed. The 1997 complaint was vague as to whether the plaintiff suffered from an asbestos related disease. Rather, the 1997 complaint made general exposure allegations. Therefore, the chance of the plaintiff actually contracting an asbestos related disease was not contemplated by him when the release was signed. Accordingly, the denial of the motion was affirmed.

However, a strong dissent followed the opinion. A dissent was filed arguing that the Texaco had met its burden. Here, the language of the release illustrated that the plaintiff understood that exposure “could result in future injuries and diagnoses.” Additionally, the dissent noted that the 1997 settlement served as a compromise in a case where the adversaries were represented by counsel.

Read the full decision here.

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