Opinion ID: 658820
Heading Depth: 1
Heading Rank: 6

Heading: specific vs. general release

Text: 27 Vitkus next contends that under Illinois law, his general release of all claims and financial obligations was limited as a matter of law to the specific claims enumerated in the Release. He asserts that because the Release specified wage and wrongful termination claims, it only discharged claims of that nature. 8 We believe that this argument relies on a misconception of Illinois law. 28 It is true that several intermediate Illinois appellate courts have held that when a release contains words of general release in addition to recitals of specific claims, the words of general release are limited to the particular claim to which reference is made. See Carona v. Illinois Central Gulf R. Co., 203 Ill.App.3d 947, 148 Ill.Dec. 933, 936, 561 N.E.2d 239, 242 (1990); Ahn Bros., Inc. v. Buttitta, 143 Ill.App.3d 353, 97 Ill.Dec. 620, 624, 493 N.E.2d 102, 106 (1986); Beauvoir v. Rush-Presbyterian-St. Luke's Med. Center, 137 Ill.App.3d 294, 92 Ill.Dec. 110, 116, 484 N.E.2d 841, 847 (1985); Robinson v. United States, 408 F.Supp. 132, 136-37 (N.D.Ill.1976) (applying Illinois law). However, the Illinois Supreme Court has limited this rule, holding that the scope of a general release is restricted to specific claims contained in the release agreement where the releasing party was unaware of other claims. Farm Credit Bank of St. Louis v. Whitlock, 144 Ill.2d 440, 163 Ill.Dec. 510, 513, 581 N.E.2d 664, 667 (1991). Where the parties are aware of an additional claim at the time of the signing of a general release, Illinois courts have given effect to the general release language of the agreement to release that claim as well. Id. (citing Frank Rosenberg, Inc. v. Carson Pirie Scott & Co., 28 Ill.2d 573, 192 N.E.2d 823, 825-26 (1963)); Perschke v. Westinghouse Elec. Corp., 111 Ill.App.2d 23, 249 N.E.2d 698, 702 (1969); Cwik v. Condre, 4 Ill.App.2d 380, 124 N.E.2d 612, 614 (1954)). In Farm Credit Bank, the court found the release to be ambiguous as to whether the parties intended, by means of a general release which made specific reference only to other claims, to release an unspecified claim of which they had knowledge. Thus, the court remanded to permit the trier of fact to determine whether the parties intended to include the unspecified claim in the release. Id. Thus, Farm Credit boils down to a holding that the trier of fact must determine whether the parties intended to discharge an unspecified claim under an ambiguous release. 9 29 We believe that an Illinois court would apply the Farm Credit rule to the release of obligations as well as to the release of accrued claims; that is, where the parties are aware of an additional, unspecified obligation at the time of signing the release, an Illinois court would give effect to general release language which releases all financial obligations to release the unspecified obligation as well. Frank Rosenberg, 192 N.E.2d at 826 (holding that a release that discharged all claims that might arise under a contract--other than two specified claims--discharged all obligations under the contract other than the two claims specifically excluded from its operation). Indeed, the purpose of the rule limiting the scope of general releases has been stated broadly enough to apply to releases of obligations as well as claims. As one Illinois court noted, the courts limit the effect of a general release so that it would not cover a matter about which the releasing party knew nothing at the time the release was signed. Perschke, 249 N.E.2d at 702. 30 We find the instant case to be analogous to Farm Credit. At the time he signed the Release, Vitkus was aware of both Beatrice's promise to maintain directors and officers' liability insurance for six years after the merger date and of the clauses in Beatrice's By-laws and the Merger Agreement providing for indemnification. Yet he signed a release containing general language discharging claims that could easily encompass the indemnity and insurance obligations on which he bases his claims in this case. We therefore hold that, under Illinois law, the scope of the Release should not be restricted as a matter of law to the more specific claims or obligations enumerated in the Release. That brings us to the factual matter of the parties' intent. 31