Opinion ID: 6986358
Heading Depth: 1
Heading Rank: 2

Heading: Certified Question II

Text: IF FLORIDA LAW APPLIES, DOES THE RELEASE IN THESE SETTLEMENT AGREEMENTS BAR PLAINTIFFS’ FRAUDULENT INDUCEMENT CLAIMS? The second certified question must still be answered with respect to Morningstar, PBG, and Country Joe. The nurseries contend that the language used in the releases restricts their effect to actions arising directly from the use of DuPont’s allegedly defective product. DuPont, however, contends that the releases are sufficiently broad to bar the nurseries’ fraudulent inducement claims. Generally, Florida courts enforce general releases to further the policy of encouraging settlements. Numerous Florida cases have upheld general releases, even when the releasing party was unaware of the defect at the time the agreement was executed. See Hardage Enters., Inc. v. Fidesys Corp., N.V., 570 So.2d 436 (Fla. 5th DCA 1990) (enforcing a general release even though the party discovered the negligence after executing the release); Braemer Isle Condominium Ass’n, Inc. v. Boca Hi, Inc., 632 So.2d 707 (Fla. 4th DCA 1994) (enforcing general release although party did not discover alleged defects until after executing the release). More importantly, other courts have recognized this principle even in the face of a fraudulent inducement claim. For example, in Kobatake v. E.I. DuPont De Nemours & Co., 162 F.3d 619, 625 (11th Cir.1998), the court held that the “execution of such all-encompassing releases prohibits [plaintiffs] from suing defendants [for fraudulent inducement].” Similarly, the court in Cemiglia held that the release in a marital settlement agreement barred subsequent attacks based on fraud. 8 Cerniglia, 679 So.2d at 1164. Likewise, the court in Dresden v. Detroit Macomb Hospital Corp., 218 Mich.App. 292, 553 N.W.2d 387 (1996), construed a release for “any and all” causes of action as barring a fraudulent inducement claim. Other courts, however, have interpreted releases narrowly. For example, although the release at issue in Hold v. Manzini, 736 So.2d 138, 141 (Fla. 3d DCA 1999), discharged the party from claims “upon or by reason of any matter, cause or thing whatsoever, from the beginning of the world to the day of these presents,” the court held that the release did not bar any claims accruing after the date of execution. Similarly, the court in Floyd v. Homes Beautiful Construction Co., 710 So.2d 177, 178 (Fla. 1st DCA 1998), addressed an agreement releasing the party from “any claim or cause of action presently existing, whether known or unknown, including but not necessarily limited to the [1986 civil suit].” In construing the release, the court stated, “It is not apparent from the four corners of the release what ‘claims’ the parties intended to release.” Id. at 179. The court further noted that it was unclear whether the modifying language “presently existing” bars a cause of action relating to a defect in existence at the time of execution of the release, but unknown to the parties; or rather, whether that modifying language limits the release to causes of action fully accrued at the time of execution. Id. Likewise, the court in Quarterman v. City of Jacksonville, 347 So.2d 1036 (Fla. 1st DCA 1977), narrowly interpreted seemingly broad language in a release. The Quarterman release discharged the parties identified in the release and “any and all other persons ... who might be liable of and from any and all actions.” Id. at 1037 n. 1. Notwithstanding this language, the court admitted parol evidence to determine whether the release discharged potential defendants who were not expressly listed in the release. See id. at 1039. Thus, the courts’ willingness to enforce general releases is not absolute. Rather, enforcement is premised upon the assumption that the released claims are those that were contemplated by the agreement. In the instant case, the nurseries emphasize that the Morningstar, PBG, and Country Joe agreements only released claims they had “by reason of the use or application of DuPont Benomyl products.” (Morningstar Agreement at 1; PBG Agreement at 1; Country Joe Agreement at 1). DuPont, however, focuses on the broad release language: DuPont is discharged “from any and all claims, actions, causes of action, including consequential damages, demands, rights, damages, costs, losses, and any other liability or expense of whatsoever kind, which the undersigned ... now has or may or shall have by reason of the use of or application of DU PONT BENOMYL products.” (Mornings-tar Agreement at 1; PBG Agreement at 1; Country Joe Agreement at 1). Similar to the Cemiglia and Kobatake agreements, the nurseries’ releases cover “any and all claims ... of whatsoever kind.” Nevertheless, the “any and all claims ... of whatsoever kind” is qualified later with the statement “shall have by reason of the use of or application of [Ben-late].” The fraudulent inducement claim does not arise from the use or application of Benlate. Thus, the seemingly broad language does not bar the nurseries’ present claims. Unlike the nurseries’ releases, the Cer-niglia agreement specifically precluded the claims that were being asserted. In Cemiglia, the fraud claim was based on nondisclosure of financial assets; however, the parties relinquished “all claims of whatever nature ... to any assets/property ... of whatever kind.” Cerniglia, 679 So.2d at 1164 n. 4. The nurseries’ releases, by contrast, do not specifically preclude fraudulent inducement claims. Despite the use of general language in Floyd, the court identified ambiguity in the statement “presently existing, whether known or unknown.” Floyd, 710 So.2d at 178. Similarly, the general language in the Morn-ingstar, PBG, and Country Joe releases is circumscribed by the specific language limiting the released claims to those pertaining to the “use or application of [Benlate].” Although the language in the Quarter-man case releasing “any and all other persons” was more general than the releases at issue, the court was still reluctant to construe the release broadly. Certainly, the restrictive Quarterman approach is warranted here where the releases are significantly narrower in scope. Further, while the court in Dresden enforced a release for “any and all” causes of action that could have arisen out of the original claim or in any matter related to the releasing party, that release was far more general than the Morningstar, PBG and Country Joe agreements. The limitation in the nurseries’ releases distinguishes Dresden from the instant case. Likewise, the release in Hardage discharged the party from liability “for or because of any matter or thing done, omitted, or suffered to be done ... and in any way directly or indirectly arising out of the ... agreement ... and all of the transactions and occurrences above-described.” Hardage v. Fidesys Corp., N.V., 570 So.2d 436, 437 (Fla. 5th DCA 1990). Unlike the Morningstar, PBG, and Country Joe releases, the Hard-age release barred claims that arose directly or indirectly out of the agreement. This “indirect” aspect of the Hardage release demonstrates the breadth that is lacking in the nurseries’ releases. In short, the provision in the Morningstar, PBG, and Country Joe releases that limits the released claims to those accruing “by reason of the use or application of [Ben-late]” is not sufficiently broad to bar the present fraudulent inducement claims. DuPont maintains that the nurseries’ claims are entirely dependent on their use of Benlate because the misrepresentation claim concerns the value of the original claim and the damages sought are necessarily dependent on their use of Benlate. Although DuPont’s alleged misrepresentation of the value of the nurseries’ claims may be construed as relating to the product liability claims, this argument is unpersuasive because there is an inherent disconnection between inducement into settlement and pursuit of the original claims. As the Matsuura court acknowledged, broadly interpreting the releases is “a project doomed to failure, since, as many a curbstone philosopher has observed, everything is related to everything else.” Matsuura, 166 F.3d at 1010 (quoting California Div. of Labor Standards Enforcement v. Dillingham Constr., N.A., Inc., 519 U.S. 316, 335, 117 S.Ct. 832, 136 L.Ed.2d 791 (1997) (Scalia, J., concurring)). In sum, we hold the Delaware choice-of-law provision in the settlement agreements governs the Mazzoni, JMG, Foliage and Castleton releases because the plaintiffs chose the remedy of damages and thereby ratified the agreement. Because there was no choice-of-law provision in the Morningstar, PBG, and Country Joe settlement agreements, those releases are governed by Florida law, and Florida law does not bar the nurseries’ fraudulent inducement claims. 9 Accordingly, we answer the first certified question, as amended, in the affirmative and the second certified question in the negative with regard to the plaintiffs subject to Florida law. It is so ordered. HARDING, C.J., and SHAW, WELLS, ANSTEAD, PARIENTE and LEWIS, JJ., concur.