Summary
stating that the "meaning and coverage of a release depends on the controversy being settled"
Summary of this case from National Helicopter v. the City of New YorkOpinion
April 15, 1996
Appeal from the Supreme Court, Westchester County (Silverman, J.).
Ordered that the order is affirmed, with costs.
During a period of approximately thirteen years from 1979 to 1992, the appellants operated a gasoline service station in New York County pursuant to various sublease and franchise agreements with the respondents. In December 1991, the respondent Getty Petroleum Corporation commenced a summary proceeding in Civil Court to evict the appellants for nonpayment of rent. On February 4, 1992, the nonpayment proceeding was settled by a handwritten stipulation of settlement which required the appellants to vacate the premises by February 29, 1992, and to pay Getty Petroleum Corporation over $100,000 in back rent. In the stipulation, the parties agreed to mutually release each other from "any claim or cause of action", but acknowledged that except for the terms of the stipulation, "neither party has any claims against the other". Over two years later, the plaintiffs, who own the service station property, commenced this action against Getty Petroleum Corporation and its predecessors in interest, alleging that petroleum which leaked from Getty's underground storage tanks contaminated their land. Getty Petroleum Corporation and its codefendants in turn instituted a third-party action against the appellants and the appellants moved for summary judgment contending that the stipulation executed in the nonpayment proceeding released them from all claims arising during their occupancy of the premises.
Contrary to the appellants' contention, the Supreme Court properly denied their motion for summary judgment. While a release is a "jural act of high significance" which may not be treated lightly ( Mangini v. McClurg, 24 N.Y.2d 556, 563; see also, Liling v. Segal, 220 A.D.2d 724; L K Holding Corp. v Tropical Aquarium, 192 A.D.2d 643), it is equally well settled that the meaning and coverage of a release depends on the controversy being settled, and that a "release may not be read to cover matters which the parties did not desire or intend to dispose of" ( Cahill v. Regan, 5 N.Y.2d 292, 299; Blank v. Blank, 222 A.D.2d 851; Lefrak SBN Assocs. v. Kennedy Galleries, 203 A.D.2d 256). At bar, it is undisputed that the respondents and the appellants were unaware of the property damage caused by petroleum leakage at the time they settled the summary nonpayment proceeding and, indeed, at the end of the release paragraph of the stipulation, they acknowledged that they had no other claims against each other. Viewed in its entirety, it is clear that the release was intended only to settle matters related to the nonpayment proceeding and was not intended to release the appellants from potential liability for environmental damage to the property. Under these circumstances, the Supreme Court properly concluded that the stipulation of settlement did not release the appellants from the claims asserted in the third-party complaint. Balletta, J.P., Santucci, Krausman and Florio, JJ., concur.