Case Name: BOLLING FEDERAL CREDIT UNION, Appellant, v. CUMIS INSURANCE SOCIETY, INC., Appellee
Court: District of Columbia Court of Appeals
Jurisdiction: District of Columbia
Decision Date: 1984-03-21
Citations: 475 A.2d 382
Docket Number: No. 83-926
Parties: BOLLING FEDERAL CREDIT UNION, Appellant, v. CUMIS INSURANCE SOCIETY, INC., Appellee.
Judges: Before FER Associate Jud; REN, PRYOR and TERRY, es.
Reporter: West's Atlantic Reporter, Second Series
Volume: 475
Pages: 382–389

Head Matter:
BOLLING FEDERAL CREDIT UNION, Appellant, v. CUMIS INSURANCE SOCIETY, INC., Appellee.
No. 83-926.
District of Columbia Court of Appeals.
Argued Feb. 7, 1984.
Decided March 21, 1984.
John C. Morrison, Washington, D.C., with whom Paul A. Kiefer, Washington, D.C., was on briefs, for appellant.
F. Joseph N appellee. salon, Washington, D.C., for
Before FER Associate Jud; REN, PRYOR and TERRY, es.

Opinion:
PRYOR, Associate Judge:
This case involves the proper construction of a release from liability. The trial court ruled upon cross-motions for summa-appellee's favor, and dis-nt's complaint with preju-m ry judgment missed appelk dice. We conclude that there was no genuine issue of ma court did not e appellee, pursu a matter of la\ Aerial fact, and that the trial err in awarding judgment to lant to Super. Ct.Civ.R. 56, as w. Hence, we affirm.
Appellant (Billing) is a credit union regulated by federa law, see 12 U.S.C. § 1751-95j (1982), which conducts business in the District of Columbia. Appellee (Cumis) is a Wisconsin corporation- which also does business here. In 1972, the parties executed a "Discovery Bond" which provided indemnification upon Bolling's proof of loss, for losses resulting from, inter alia, failure by any Bolling em ployee "to well and faithfully perform his duties."
In 1979, Boling presented Cumis with claims for dociimented losses of over one million dollars. The claims stemmed from nearly seven hundred demonstrably unrecoverable loans, which were made by Boll-ing's agents as$ertedly in derogation of the organization's policy. Rather than commit the resources necessary to investigate these claims and defend a resultant lawsuit, Cumis offered a settlement. Bolling agreed, signed a release dated February 7, 1980, and accepted payment of $250,000. The release, waiving all claims as of the execution date, is reproduced in the margin.
In late 1981 and early 1982, Bolling returned to Cumis with claims for losses arising from an additional twenty-four unrecoverable loans made by the same employees responsible for the losses previously at issue. Indeed, seventeen of the twenty-four loans had been declared in default before the release was signed. Cumis refused to indemnify Bolling for these losses, claiming that such compensation had been waived by the release.
Bolling sued to collect, and has argued throughout these proceedings that although the twenty-four delinquent loans were made prior to February 7, 1980, they had not been charged off as losses before then, and consequently were not covered by the release as "claims of any kind or character which Bolling [had] or may have [had] against Cumis" as of the release date. Cumis contends contrarily that the present claims are barred by the release, which was drafted and intended to preempt any and all claims stemming from transac tions occurring prior to the release date. Our reading of the release persuades us that Cumis is essentially correct that the plain language determines the outcome here. The language of the release is sufficiently clear to preclude, under parol evidence principles, the use of extrinsic evidence to probe the parties' intentions. Because there were no genuine issues of material fact, the trial court was confronted with a straightforward legal question. We agree with the trial judge that Cumis was entitled to judgment as a matter of law. Super.Ct.Civ.R. 56(c).
A release is a form of contract. The parties' intentions are paramount to construction of the instrument. Saslaw v. Rosenfeld, 148 A.2d 311, 312 (D.C.1959); see generally Couch On INSURANCE 2d § 60:18 (Rev. ed. 1983). If the release is facially unambiguous, we must rely solely upon its language as providing the best objective manifestation of the parties' intent. Couch, supra, § 60:20; see, e.g., Saslaw, supra, 148 A.2d at 312; Locafrance U.S. Corp. v. Intermodal Systems Leasing, Inc., 558 F.2d 1113, 1114 (2d Cir.1977).
The present release provides that Cumis is not liable "for all claims of any kind or character which Bolling has or may have against Cumis to the date of this release ., including but not limited to all matters relating to Civil Action No. 13573-79 -" Addressing the question of intent, Bolling contends that the parties understood that there could be no "claim" prior to a determination of the loss suffered. Under Super.Ct.Civ.R. 56, the trial court was bound to entertain all favorable inferences from Bolling's pleadings and supporting documents before granting summary judgment in Cumis' favor, McCoy v. Quadrangle Development Corp., 470 A.2d 1256 at 1258 n. 3 (D.C.App.1983), but the language of the release renders Boll-ing's assertions immaterial to the outcome, even if true.
The release does not solely encompass claims for accrued or imputable losses, as determined by Bolling's accounting department. It expressly releases Cumis from "all claims of any kind or character" (emphasis added). Compare Wells v. Rau, 129 U.S.App.D.C. 253, 256, 393 F.2d 362, 365 (1968). Moreover, the release covers claims "which Bolling has or may have " (emphasis added) as of the execution date. Recognizing that we should "construe the contract as a whole so as to give meaning to all of the express terms," Washington Metropolitan Area Transit Authority v. Mergentime Corp., 200 U.S.App.D.C. 95, 97, 626 F.2d 959, 961 (1980), the language in the release must necessarily be read to encompass losses of which Bolling had knowledge, as well as those which existed but were not yet identified, at the time the release was signed.
In support of its position Bolling also argues, relying heavily upon Fidelity and Deposit Co. of Maryland v. President and Directors of Georgetown College, 483 F.Supp. 1142 (D.D.C.1980), and Russell Gasket Co. v. Phoenix of Hartford Insurance Co., 512 F.2d 205 (6th Cir.1975), that the claims at issue were not, as a matter of law, claims as of the date of the release because actúa losses were unknown at that time and t, "claim" can only be for an actual, documented loss. We are not persuaded by this argument.
The cases relied upon by Bolling address whether a claim was presented in timely fashion in light of the applicable statutes of limijtation. In such a context— statutory preclusion of a bona fide claim— it is reasonable to conclude, as the courts did in those instances, that a claim, which stems from thje insured's discovery of a loss, does not arise before the insured has had an opportunity to determine the extent of the loss suffered. See Fidelity and Deposit Co., supra, 483 F.Supp. at 1147; Russell Gasket Co., supra, 512 F.2d at 208 (applying Ohio aw).
These clses are inapposite because the context he^ is not statutory preclusion of a valid claim, but voluntary waiver thereof. When it signed the release, Boll-ing knew that I at least seventeen of the twenty-four loajns had been declared in default. On the facts of this case, we think it reasonable to conclude that Bolling should have realized that the agents responsible for these (and jiearly seven hundred additional) bad loans may well have made others. Surely Bolling, which had complete access to its own corporate records, had the responsibility to make at least a cursory check of those records prior to signing a broadly-worded release. See Consolidated Rail Corp. v. Hudson Cement Corp., 518 F.Supp. 1116, 1117 (S.D.N.Y.1981); cf. Randolph v. Ottenstein, 238 F.Supp. 1011, 1014 (D.D.C.1965) (insurance company had no independent knowledge of plaintiffs injuries), affd, 122 U.S.App.D.C. 414, 355 F.2d 839 (1966). In the circumstances of this case, where there is neither allegation nor evidence of fraud, duress, or inequality of bargaining power between the parties, see id., 238 F.Supp. at 1013, Bolling may not have known the extent of its losses when it signed the release agreement, but it did have the means to articulate and bargain for appropriate language of reservation, if that was its intent. See Johnson, Drake & Piper, Inc. v. United States, 209 Ct.Cl. 313, 329-31, 531 F.2d 1037, 1047 (1976).
Terminology similar to that selected by the parties here has been construed consistently by courts as providing for nothing less than a general release. See, e.g., Saslaw, supra, 148 A.2d at 312; Locafrance, supra, 558 F.2d at 1114; Garrett v. Heisler, 149 Ga.App. 240, 241, 253 S.E.2d 863, 865 (1979). There is no reason to reach a contrary conclusion today. See Ran dolph, supra, 288 F.Supp. at 1013. The judgment is
Affirmed.
. Cumis refusejd to indemnify these claims based upon its construction of the Discove-" Bond. Bolling filed suit in 1979 to com] payment.
.
RELEASE
WHEREAS) CUMIS Insurance Society, Inc. ("CUMIS") issued a bond number CPC 09992 dated January 11, 1972, with various endorsements and renewals, to Bolling Federal Credit Union ("Bolli: ig");
WHEREAS, Bolling has made various claims under the bond for losses allegedly resulting from the unfaithful performance of its employees;
WHEREAS, CUMIS and Bolling have agreed to con promise the losses allegedly incurred by Bolling;
THE PARTIES THEREFORE AGREE:
In consideration of the sum of two-hundred and fifty thoulsand dollars ($250,000) paid by CUMIS to Bolling, receipt of which is acknowledged, Bolling hereby RELEASES, ACQUITS AND FOREVER DISCHARGES CUMIS Insurance Society, Inc., its agents, servants and employees, for all claims of any kind or character which Bolling has or may have against CUMIS to the date of this release under the above referenced bond, its endorsements and renewals, including but not limited to all matters relating to Civil Action No. 13573-79 filed in the Superior Court of the District of Columbia.
IN WITNESS WHEREOF, Bolling Federal Credit Union has affixed its seal by an authorized officer on this the 7[th] day of February, 1980.
The release was signed by Bolling's president and notarized.
. Cumis also defended this action by arguing that even if the release did not bar indemnification for the twenty-four loans, the terms of the Discovery Bond itself precluded recovery. Cu-mis further questioned whether Bolling adequately established that malfeasance of duty by its employees caused the losses of which Bolling complains. In light of our holding, we do not address these defenses.
. The trial court issued its judgment from the bench, without accompanying opinion. Therefore, it is not apparent whether the court relied upon its construction of the release, or bond, in reaching a decision. This does not preclude our affirmance based upon the reasons stated herein, however, because the court reached the proper result. See Marinopoliski v. Irish, 445 A.2d 339, 340 (D.C.1982); United States v. Garrett, 720 F.2d 705 at 710 (D.C.Cir.1983).
. An affidavit filed by a Bolling official stated that the parties established through negotiations, during the pendency of the 1979 litigation, that a "loss" only accrued after the account had been charged off as such by Bolling's accountants.
. It is for this reason that we disagree with our dissenting colleague. He perceives that it is a genuine issue of fact whether each loss was or should have been written off as such by the release date. In our view, the general language used by the parties anticipates and renders irrelevant the issue of when the losses did or should have accrued.
. This is a case where neither the pleadings nor the evidence established that the sheer number of loans made bV the malfeasant agents precluded Bolling's investigation, or that additional potential losses wfere undiscoverable at the time the release was signed for some other reason. The trial court vyas not bound to entertain such possibilities. McCoy, supra, at 1258 n. 3. During oral argument, counsel for Bolling indicated that in addition i.o the nearly seven hundred bad loans expressly covered by the settlement and release, the instant twenty-four loans were the only others suspect. This underscores our belief that the language used by the parties manifested an intent to effect a general release.
. The record doe access to Bolling' s not reveal that Cumis had any ⅛ records.
. Bolling's reference to Murphy v. S-M Delaware, Inc., 95 Ill.App.3d 562, 51 Ill.Dec. 42, 420 N.E.2d 456 (1981), does not convince us that the general release in our case cannot bar claims which were unknown at the time the release was signed. 'Illinois law holds that contracting parties may not release each other from unknown claims, even through the use of very broad language to that effect. Pennwalt Corp. v. Metropolitan Sanitary Dist. of Greater Chicago, 368 F.Supp. 972, 979 (N.D.Ill.1973) (citing Todd v. Mitchell, 168 Ill. 199, 48 N.E. 35 (1897)). The law in our jurisdiction is otherwise. See Sas-law, supra; Randolph, supra, 238 F.Supp. at 1014-15 (criticizing Illinois law); see generally Couch, supra, § 60:70.