Opinion ID: 2996093
Heading Depth: 2
Heading Rank: 1

Heading: Indiana Contract Law

Text: We first consider the appellants’ argument that the releases they signed are invalid under Indiana contract law. Under Indiana law, a valid release bars any subsequent lawsuit on the claims covered by the release. McWaters v. Parker, 995 F.2d 1366, 1370 (7th Cir. 1993) (citing Lechner v. Reutepohler, 545 N.E.2d 1144, 1147 (Ind. Ct. App. 1989)). It is not disputed that the language of the releases at issue here, if valid, would cover and bar the claims asserted by Gonzalez and Holland against the officers. Instead, the appellants argue that the releases are invalid. “Under Indiana law, release agreements are to ‘be interpreted in the same manner as any other contract document, with the intention of the parties regarding the purpose of the document governing.’ ” Deckard v. Gen. Motors Corp., 307 F.3d 556, 562 (7th Cir. 2002) (quoting Huffman v. Monroe County Cmty. Sch. Corp., 588 N.E.2d 1264, 1267 (Ind. 1992)). Indiana law requires that a release be supported by consideration to be valid. Bogigian v. Bogigian, 551 N.E.2d 1149, 1151 (Ind. Ct. App. 1990) (citing Pope v. Vajen, 22 N.E. 308 (Ind. 1889) and Gates v. Fauvre, 8 No. 02-1514 74 N.E. 155 (Ind. App. 1918)). In addition, the parolevidence rule prohibits courts from considering evidence outside the four corners of an agreement unless the terms of that agreement are ambiguous. Deckard, 307 F.3d at 563; Thomas v. Thomas, 577 N.E.2d 216, 219 (Ind. 1991) (“When a contract is unambiguous, the intent of the parties should be determined by the language employed in the document.” (citations omitted)). In this case, Gonzalez and Holland argue that the language of the releases clearly indicates that they were not supported by consideration. They note that both releases state on their faces that “ZERO ($0.00)” was the “sole consideration” given for the release of claims, and that Indiana’s parol-evidence rule prohibits a court from taking notice of any facts beyond this language. We cannot say, however, that the terms of these release agreements are clear and unambiguous. Certainly, it is not clear why Gonzalez and Holland, counseled by their attorney, would enter into an agreement that would be unenforceable from the beginning. The fact that these releases were drafted to indicate that “ZERO ($0.00)” was given as consideration—a curious statement given that “nothing” generally is not “given” as consideration—suggests that the term was meant to reflect something else, not that the agreements were invalid from the outset. Most likely, the “ZERO ($0.00)” consideration term was included to reflect the fact that no monetary consideration was given in exchange for the releases. But at the very least, this term creates an ambiguity in the release agreements that requires the use of parol evidence to interpret the agreements in such a way as to give full effect to the intentions of the parties. Even when viewed in a light most favorable to the nonmoving parties, the evidence here clearly shows that the releases signed by Gonzalez and Holland were supNo. 02-1514 9 ported by consideration. They bargained for and received dismissal of the criminal charges against them in exchange for their release of any claims they had against the arresting officers or the city. Consideration need not be monetary; the dismissal of criminal charges was certainly something of value to Gonzalez and Holland, especially in light of Gonzalez’s concern for his job as a Chicago police officer. Cf. Dye v. Wargo, 253 F.3d 296, 301 (7th Cir. 2001) (finding a release of § 1983 claims valid under Indiana law because although the § 1983 plaintiff “did not get cash for his settlement . . . he did receive value (avoidance of any debt that might hang over him after prison)”). The city lived up to its end of the bargain by consenting to the dismissal of the criminal charges; Gonzalez and Holland cannot now claim that they’re not bound to live up to theirs. We find that the release-dismissal agreement here was a valid contract, supported by adequate consideration, under Indiana law.