Opinion ID: 782512
Heading Depth: 1
Heading Rank: 4

Heading: Enforceability of the Release Between Camiolo and State Farm

Text: 62 Camiolo argues that the District Court erred in granting summary judgment for the State Farm defendants. He contends that the District Court's conclusion that the release was enforceable and barred his claims was reached without any legal analysis of the terms of the release. He submits that an examination of [the] actual wording of the Release readily reveals that it does not `on its face' preclude anything but claims relating to State Farm's pre-settlement handling of Camiolo's property damage claim. We disagree. 63 We have considered the language of the release, mindful that 64 A long line of Pennsylvania cases has held that a release covers only those matters which may be fairly said to have been within the contemplation of the parties when the release was given. Accordingly, the general words of the release will not be construed so as to bar the enforcement of a claim which has not accrued at the date of the release. 65 Restifo v. McDonald, 426 Pa. 5, 230 A.2d 199, 201 (1967) (citations omitted). Thus, under Pennsylvania law, releases must be strictly construed so as to avoid the ever present possibility of overreaching. Id. at 201. This does not mean, however, that parties are precluded from contracting for the release of claims which have not accrued, for `[i]t is well settled that where the terms of a release and the facts and circumstances existing at the time of its execution indicate the parties had in mind a general settlement of accounts, the release will be given effect according to its terms.' Id. at 202 (quoting Brill's Estate, 337 Pa. 525, 12 A.2d 50, 52 (1940)); see also Buttermore v. Aliquippa Hospital, 522 Pa. 325, 561 A.2d 733, 735 (1989) (Parties with possible claims may settle their differences upon such terms as are suitable to them.). 66 In interpreting a release, a court must be mindful that Pennsylvania's general rule ... is that the intention of the parties must govern, but this intention must be gathered from the language of the release. Three Rivers Motors Co. v. Ford Motor Co., 522 F.2d 885, 892 (3d Cir.1975). Accordingly, the effect of a release is to be determined by the ordinary meaning of its language. Republic Ins. Co. v. Davis Systems of Pittsburgh South, Inc., 543 Pa. 186, 670 A.2d 614, 615 (1995). 67 Here, the release is indeed broad, discharging not only Camiolo's property damage and breach of contract claims, but also extra-contractual damages and claims. The term extra-contractual damages and claims was not limited to a bad faith claim, which is typically initiated by an insured against an insurer who has disputed that a loss is covered by its policy. See 42 Pa.C.S.A. § 8371. Instead the term extra-contractual damages and claims as defined by the release is sweeping, encompassing claims 68 for personal injury and emotional distress, and for any damages which may develop at some time in the future, and for any damages relating to the claims handling in connection with this matter, including claims for bad faith, and for any and all unforeseen developments arising out of the incident[.] 69 By specifically discharging any claims for personal injury and emotional distress, the release barred Camiolo's state law claims alleging false arrest, false imprisonment, assault and battery, and intentional and negligent infliction of emotional distress. His claims of bad faith under 42 Pa.C.S.A. § 8371 and violation of the Unfair Trade Practices and Consumer Protection law are similarly barred by the specific release of any damages relating to the claims handling in connection with this matter. 70 Because the release explicitly discharges causes of action relating to the claims handling in connection with this matter, it also precluded Camiolo's RICO claim, which was based on State Farm's continued dispute of coverage by having Paul Camiolo indicted for insurance fraud in an attempt to have the consideration paid for the release returned via a criminal case[.] The language releasing claims for any damages which may develop at some time in the future  and for any and all unforeseen developments arising out of the [fire] also precluded Camiolo's § 1983 claim, which alleged constitutional violations based on allegedly unreasonable investigations which led to Camiolo's arrest and detention. 71 Camiolo argues that the release cannot bar his RICO, civil rights and state law claims against State Farm because those causes of action did not accrue until several months after the settlement of his insurance action, when he was arrested and detained pending trial. He relies on the principle set forth in Restifo that [a] release will not be construed so as to bar the enforcement of a claim which has not accrued at the date of the release. 230 A.2d at 201. He fails to recognize, however, that while a release of this nature is disfavored, it is not precluded as a matter of law. Restifo, 230 A.2d at 202 (recognizing that a release indicating that the parties had in mind a general settlement of accounts ... will be given effect according to its terms). Here, there is no need to construe the release because its plain language indicates an intent to effect a global release, settling all accounts between the parties. This very point was acknowledged by Camiolo in his brief submitted to the District Court in opposition to the summary judgment motion in which he declared that he entered into the release intending to obtain his peace. He wanted an end to his litigation with State Farm and move on with his life. The release's very terms accomplish that goal, providing for the discharge of not only claims for any damages which may develop at some time in the future,  but also claims for any and all unforeseen developments arising out of the incident referred to above[.] 72 Camiolo further contends that the release cannot be interpreted as a bar to his claims in this action because a release under Restifo may preclude only those matters which may fairly be said to have been within the contemplation of the parties when the release was given. 230 A.2d at 201. He points out that his arrest and detention did not occur until several months after he executed the release. This argument is not persuasive. As the District Court observed, Camiolo knew that he was under investigation by the grand jury when he executed the release, and he settled the initial suit so that the proceeds would be available to finance his defense in the criminal case. Despite these known circumstances, the parties inserted no limiting language into the release nor did they provide any exceptions. 12 Instead, the release included a broad provision discharging any and all actions, causes of actions, claims, demands or damages ... and for any damages which may develop at some time in the future, and ... for any and all unforeseen developments arising out of the fire. The breadth of this language compels the conclusion that Camiolo, who was represented by counsel, intended to settle not only his pending civil suit but all other possible claims against State Farm. Accordingly, we will not disturb the District Court's March 28, 2001 order granting summary judgment in favor of the State Farm defendants. 73