Opinion ID: 1133718
Heading Depth: 3
Heading Rank: 1

Heading: The Purpose of the Payment

Text: The separation agreement Shook signed contains language that releases and discharges Alyeska ... from any and all claims ... arising from [Shook's] employment. [2] Alyeska argues that the release covers Shook's AWHA claim, because it is a claim arising from Shook's employment. [3] According to Alyeska, the release language is unambiguous; it argues that Alyeska paid Plaintiff over $140,000 in return for his promise not to sue Alyeska over anything relating in any way to his employment. Shook maintains that, in construing the release, the court should consider extrinsic evidence of the parties' intentions regarding the AWHA claim. In his superior court affidavit, Shook affined that he had not previously asserted any AWHA claims and had not discussed with Alyeska the waiver of such claims before he signed the agreement. He argues that a question of fact remains about whether he expected or intended to relinquish his AWHA claims. He also asserts that, because he and Alyeska could not have settled their AWHA claims without court approval, he would not have expected the release to cover them. The question whether the release encompassed Shook's AWHA claims is relevant to deciding whether Alyeska is entitled to offset any part of the severance payment against Shook's AWHA claims. Alyeska does not argue that the release is an absolute bar to Shook's claims. The superior court found no indication that the parties contemplated Shook's possible AWHA claims, and found no reasonable relationship between the severance payment and Alyeska's potential liability under the AWHA. The court concluded that the severance payment was not paid to settle a specific overtime claim. [4] We interpret contracts so as to give effect to the reasonable expectations of the parties. [5] We give effect to a broad release even if the parties did not specifically list all of their possible claims. For example, in Martech Construction Co. v. Ogden Environmental Services, Inc., [6] we noted the broad language of a release executed by an equipment supplier and subcontractor. [7] The parties there purported to release each other fully, finally, and completely from all liability for whatever damage, known or unknown, arising from or relating to the subject contract. [8] We characterized the agreement as a complete washing of the hands between the parties using as soap blatantly broad language to cover all possible causes of action. [9] We therefore found it irrelevant that, at the settlement negotiations, the parties had never discussed the equipment that became the subject of the dispute: The broad language used implies that claims not specifically contemplated are settled. [10] Similarly, we give effect to the broad language of indemnity agreements, even as against the indemnitee's own negligence. [11] We have, however, refused to enforce indemnification agreements that would tend to promote a breach of duty to the public safety. [12] The agreement Shook signed purports to release Alyeska from any and all claims (other than claims for the payments provided for under this AGREEMENT), liabilities, demands and causes of action, known or unknown, ... arising from [Shook's] employment or as a result of this separation of employment. The parties' broad language reveals an intention to resolve all possible claims arising from Shook's employment; any claims not specifically reserved must be considered settled by the agreement. [13] Shook does not argue that settlement of employment-related claims falls into the public duty exception articulated in State v. Korean Air Lines. [14] We read that exception to be limited to public safety, an interest of little or no pertinence here given the primary legislative purposes of the AWHA. [15] In any event, the question for us is not whether to give effect to the release, but whether the release language reveals why Alyeska paid Shook over $140,000. The agreement recites receipt of consideration for the release. Shook's affidavit does not assert that he understood that the release would not encompass AWHA claims; it asserts only that he never had any discussion with anyone from Alyeska that he was waiving AWHA claims by signing the agreement. Absent any evidence of a reservation of Shook's AWHA claim, we must conclude that he accepted the severance payment in consideration for his release of all of his employment-related claims, including any potential AWHA claim. It is significant that Shook has not claimed that he has any employment-related claim other than his AWHA claim, or that he was aware of any other claim when he accepted the payment. We therefore conclude that the payment was intended to encompass any AWHA claim Shook had.