Court Opinion

ID: 9606806
Source: CourtListenerOpinion
Date Created: 2023-08-22 02:52:42.709806+00
Date Added: 2024-06-11T15:06:46.221959
License: Public Domain

EDMONDS, J.,
dissenting.
In this case, plaintiffs attorney suggested and drafted the language of a release which the majority holds does not preclude a claim for fraud in the inducement. As a result, it allows plaintiff to escape the consequences of the plain meaning of the release and sue on a claim that he has released. Also, the majority seeks to distinguish the release in this case from the release agreement in Lindgren v. Berg, 307 Or 659, 772 P2d 1336 (1989), as the basis for its holding that it was error to grant summary judgment to defendants. It says:
“Unlike in Lindgren, [the] language [of the release] does not explicitly allocate the risk of misrepresentation or nondisclosure in inducing the agreement. In the absence of explicit language, plaintiff is entitled to seek rescission * * 120 Or App at 267. (Emphasis in original.)
The majority is wrong on all counts. The release in this case explicitly refers to “any and all claims * * * whether known or unknown, now existing” as of the date of the agreement. Summary judgment is inappropriate on the record in this case, only if the claim of fraud in the inducement is not covered by the terms of the release. Necessarily, for plaintiff to prevail, the agreement would have to be ambiguous or expressly preserve the right to sue for fraud in the inducement. Whether an agreement is ambiguous depends on whether it is capable of more than one interpretation. Oakridge Cablevision v. First Interstate Bank, 65 Or App 640, 673 P2d 532 (1983). This agreement released “any and all claims.” There is nothing ambiguous about that language and it encompasses a claim of fraud by its terms. Because the release is capable of only one meaning and the uncontradicted evidence shows that the alleged misrepresentations were made before the release was executed, plaintiffs *270claims in this litigation are barred by a mutually bargained-for release, and defendants are entitled to summary judgment.
Moreover, the majority’s holding is inconsistent with our and the Supreme Court’s holding in Lindgren. In that case, like this case, the parties were involved in joint business transactions and executed an agreement for one party to sell his interest in certain projects to the other. As part of the stock sale agreement, the parties executed a release agreement that provided, in part:
“[Plaintiffs] do hereby release * * * [defendants] * * * from any and all actions, causes of action, claims, damages or demands for damages, * * * which [plaintiffs] ever had or now has or later may have arising out of or in any way related to [various transactions] * * *, violation of any federal, state or other securities law, fraud, nondisclosure, misrepresentation, [plaintiffs] or Global’s participation in any partnership with [defendants] in their capacity as managing joint venturer of any partnership [plaintiffs] or Global’s relationship to [defendants] in their capacity as shareholders, officers or directors of Global, or [plaintiffs] or Global’s relationship to Berg or Crosswhite or Rumpakis in any capacity whatsoever.” 307 Or App at 659. (Emphasis in original.)
The defendant assigned as error the denial of its motion for a directed verdict on the basis of the release. We reversed. 89 Or App 514, 749 P2d 1212 (1988). On review, the Supreme Court affirmed. It said:
“Parties to a contract, particularly parties who, as here, are represented by lawyers in negotiating and drafting the contract, should be allowed to allocate the actual risks of the contract as they see fit. The likelihood of a misunderstanding between parties is greatly reduced where each party is represented by a lawyer.
“Applying the law to the facts in this case, the record shows that each of the parties received independent legal advice with regard to their rights and to the advisability of entering into the settlement agreement and release. Their lawyers participated in negotiating and drafting the agreement and release. * * * The agreement and release, which are clear and unambiguous on their face, record the terms of exchange as negotiated by the parties. The broadly worded release expressly encompasses claims arising from ‘fraud, non-disclosure, [or] misrepresentations,’ all transactions *271related to the Mall, and all relationships between plaintiffs and Berg.
“[The release] covers claims of which plaintiffs might not have been aware, even claims for undisclosed fraud. The active participation of plaintiffs’ lawyer in negotiating and drafting the agreement and release and reviewing them with plaintiffs before plaintiffs signed them, undercuts plaintiffs’ argument that Berg fraudulently induced the release. We decline to hold, as plaintiffs urge, that a party who is represented by a lawyer in a commercial transaction may never release another party from claims for undisclosed fraud.
“We hold that the release plaintiffs signed bars them from litigating whether the release itself was induced by Berg’s fraud.” 307 Or at 665. (Emphasis in original; footnote omitted.)
In the light of the holding in Lindgren and the express language of the release written by plaintiffs lawyer, the majority’s assertion that plaintiff is entitled to seek rescission because the release agreement does not “explicitly allocate the risk of misrepresentation or nondisclosure in inducing the agreement” is not supported by the facts or the law. The express language of the agreement precludes the majority’s conclusion. The release of “ALL” claims means “ALL.”
Also, the majority holds that plaintiffs receipt of payments under the non-compete agreement, which was part of the bargain of the parties in their effort to disentangle their business affairs, is not a waiver of the right to rescind the stock sale agreement. The majority circumvents the proposition of law that an agreement cannot be rescinded in part1 unless part of the agreement is divisible and supported by independent consideration. It holds that, “[depending on the intent of the parties, the agreement may or may not be severable.” 120 Or App at 269. The uncontroverted evidence in the summary judgment record is that contemporaneously with the stock sale agreement, the non-compete agreement was executed as “part of the same transaction.” In his affidavit, plaintiff takes the unequivocal position that the non-*272compete agreement is binding and enforceable.2 Based on that evidence, plaintiff cannot maintain an action that seeks rescission of only part of the transaction as a matter of law.
I dissent.
Richardson, C. J., and Riggs, J., join in this dissenting opinion.

 See Pickinpaugh v. Morton, 268 Or 9, 18, 519 P2d 91 (1974).

 In his affidavit in response to defendants’ motion for summary judgment, plaintiff says, “I have received and continue to receive periodic payments under the agreements. * * * I cannot engage in work as a competitor because I am bound by the terms of the non-competition agreement.”