Court Opinion

ID: 9731686
Source: CourtListenerOpinion
Date Created: 2023-08-26 15:54:24.838103+00
Date Added: 2024-06-11T15:10:03.514251
License: Public Domain

JUSTICE O’MALLEY, specially concurring in part and dissenting in part: I dissent from the part of the majority’s opinion that affirms the trial court’s judgment granting the joint venturers’ motion to dismiss Krilich’s third-party complaint seeking indemnification. I believe that the motion to dismiss raised issues of fact that are inappropriate for summary resolution under section 2 — 619 of the Illinois Code of Civil Procedure (735 ILCS 5/2 — 619 (West 2000)). Also, I believe that the majority has misapplied the standards governing interpretation of release agreements. The majority believes it is “plain” that the release “generally extinguished the joint venturers’ obligation to indemnify one another for claims that ‘may’ exist against the joint venture and which arise out of any joint venture matter or transaction occurring before September 24, 1998.” 334 Ill. App. 3d at 575. The obvious implication of this interpretation is that the release does not apply to transactions of the joint venture occurring after September 24, 1998. The record shows, however, that September 24, 1998, was the date the joint venture was dissolved by order of the trial court. Therefore, there could not have been any business of the joint venture occurring after September 24, 1998. To include in the release any reference, implicit or explicit, to business of the joint venture occurring after September 24, 1998, would have been needless because there could be no such business. To include in the release a provision impliedly excluding claims related to such business would have been absurd because there can be no liability in the first instance for impossible events. But this oddity is precisely what the majority ascribes to the parties. The majority fails to consider a circumstance surrounding the execution of the release that completely undercuts its view that the central distinction in the release is between business of the joint venture occurring before and after the execution of the release. In my view, September 24, 1998, is a cutoff date that relates not to the business of the joint venture (because there could be no business of the joint venture after September 24, 1998) but to the bringing of claims. The release, in my view, bars only claims (based on partnership business) brought after September 24, 1998, that were known to the parties when the release was signed. The case law on the interpretation of releases is well established: “ ‘[N]o form of words, no matter how all encompassing, will foreclose scrutiny of a release [citation] or prevent a reviewing court from inquiring into surrounding circumstances to ascertain whether it was fairly made and accurately reflected the intention of the parties.’ ” Carlile v. Snap-on Tools, 271 Ill. App. 3d 833, 839 (1995), quoting Ainsworth Corp. v. Cenco, Inc., 107 Ill. App. 3d 435, 439 (1982). Exculpatory agreements releasing parties from future liability are not favored. Stratman v. Brent, 291 Ill. App. 3d 123, 137 (1997). Such agreements are strictly construed against the benefitting party and “ ‘must spell out the intention of the parties with great particularity.’ ” Stratman, 291 Ill. App. 3d at 137, quoting Scott & Fetzer Co. v. Montgomery Ward & Co., 112 Ill. 2d 378, 395 (1986). Our supreme court has provided specific guidelines for the interpretation of general releases like the one at issue here: “Where the releasing party was unaware of other claims, Illinois case law has restricted general releases to the specific claims contained in the release agreement. [Citation.] However, where both parties were aware of an additional claim at the time of signing the release, courts have given effect to the general release language of the agreement to release that claim as well. [Citations.]” Farm Credit Bank of St. Louis v. Whitlock, 144 Ill. 2d 440, 447 (1991). A court reviewing a release “will not interpret generalities so as to defeat a valid claim not then in the minds of the parties.” Martin v. Illinois Farmers Insurance, 318 Ill. App. 3d 751, 764 (2000). “Where there are only words of general release, the courts will restrict the release to the thing or things intended to be released ***.” Carlile, 271 Ill. App. 3d at 839. I have not concluded, as the majority asserts, that the joint venturers “did not anticipate Bongi’s claims before executing the release.” 334 Ill. App. 3d at 575. Rather, I believe, as I explain below, that what the parties intended in drafting the release was an issue of fact inappropriate for summary resolution under section 2 — 619. First, however, I disagree with the majority over the applicable legal standards. The majority concludes that the release applies to Krilich’s claim because “Krilich and the other joint venturers considered the possibility that claims such as Bongi’s might be brought against the joint venture” after the release was executed. 334 Ill. App. 3d at 576. However, the fact that the parties “considered the possibility that claims such as” the claim allegedly released would be brought will not by itself pull that claim within the sway of the release. A claim not in existence when a release is signed is not extinguished absent a clear expression of intent to that effect. Chubb v. Amax Coal Co., 125 Ill. App. 3d 682, 686 (1984). “[A] general release does not apply to an unspecified claim if the releasing party is unaware of such claim when executing the release.” Myers v. Health Specialists, S.C., 225 Ill. App. 3d 68, 75 (1992); accord Whitlock, 144 Ill. 2d at 448 (“[a] general release is inapplicable to unknown claims”). Where a general release is claimed to have extinguished a claim not specified in the release, Illinois courts determine not whether the parties considered the possibility that a third party might bring claims akin to the claim brought but whether that particular claim was in the minds of the parties when the release was executed. See Carlile, 271 Ill. App. 3d at 839-40 (release agreement signed when plaintiff terminated his dealership agreement with defendant did not apply to fraud claim based on defendant’s alleged misrepresentations about the viability of a dealership during negotiations because plaintiff did not contemplate fraud claim when he signed the release but considered the unprofitability of the dealership to be entirely his own fault); Myers, 225 Ill. App. 3d at 75 (release agreement, which purported to release defendant, plaintiffs employer, from “all claims” that plaintiff “now has” or “ever had” prior to the date of the release based on “any employment contract” with defendant, constituted a mere “general release” that was inapplicable to plaintiffs claim for insurance coverage based on incident occurring during plaintiff’s employment; the claim was “unknown but discoverable” at the time the release was signed). We have all seen releases that are carefully worded as to bring within their sway all present and future claims whether known or unknown. Even such sweeping language (which, I emphasize, is not present in the release at issue) is not dispositive, for “ ‘no form of words, no matter how all encompassing, will foreclose scrutiny of a release’ ” (Carlile, 271 Ill. App. 3d at 839, quoting Ainsworth, 107 Ill. App. 3d at 439). The close scrutiny of a release is especially appropriate where a party seeks the benefit of a release that purportedly extinguishes liability between numerous members of a joint venture, as is the case here. Joint ventures are governed by partnership principles. In re Johnson, 133 Ill. 2d 516, 526 (1989). As in a partnership, every member of a joint venture can be held hable to a third party for acts of the other joint venturers done in the course of the enterprise. Fentress v. Triple Mining, Inc., 261 Ill. App. 3d 930, 940 (1994). A release of “all claims,” as the agreement at issue purports to effect, would entail a release of claims for contribution and indemnification. So, for example, did William Lange (who received $49,910.26 when the assets of the joint venture were distributed upon dissolution) intend to foreclose his right to seek indemnification from Krilich (who received $736,756.48 upon dissolution) in the event some third party such as Bongi chose at some time in the future to hold Lange solely hable for some unknown claim arising from the activities of the joint venture occurring prior to September 24, 1998? The majority points to no surrounding circumstances that would make such an intention rational. Krilich’s receipt of substantially greater assets upon the joint venture’s dissolution than any other joint venturer is a circumstance that suggests a rational reason why Krilich might agree to release the other joint venturers, but there is no circumstance surrounding the agreement that suggests a rational reason why the other joint venturers would release Krilich from liability. The joint venturers’ motion to dismiss was brought under section 2 — 619 and, in my view, raised issues that precluded dismissal under that section. A motion to dismiss pursuant to section 2 — 619 should be granted if, after construing the pleadings and the supporting documents in the light most favorable to the nonmoving party, the trial court finds that no set of facts can be proved upon which relief could be granted. Owens v. McDermott, Will & Emery, 316 Ill. App. 3d 340, 344 (2000). A section 2 — 619 motion to dismiss affords a defendant a means of obtaining a summary disposition when the plaintiffs claim can be defeated as a matter of law or on the basis of easily proved issues of fact. McGee v. State Farm Fire & Casualty Co., 315 Ill. App. 3d 673, 680 (2000). The questions on review of a dismissal under section 2 — 619 are whether a genuine issue of material fact exists and whether the defendant is entitled to a judgment as a matter of law. Nowak v. St. Rita High School, 197 Ill. 2d 381, 389 (2001). Illinois courts repeatedly have characterized section 2 — 619 motions as similar to summary judgment motions. See Feldheim v. Sims, 326 Ill. App. 3d 302, 310 (2001) (citing numerous cases reflecting similarity of treatment). Accordingly, because “summary judgment is particularly inappropriate where the inferences which the parties seek to have drawn deal with questions of motive, intent and subjective feelings and reactions” (Raprager v. Allstate Insurance Co., 183 Ill. App. 3d 847, 859 (1989)), I believe that the trial court’s dismissal of Krilich’s complaint was inappropriate because the interpretation of the release agreement involved questions of intent — specifically, whether the parties knew of Bongi’s claim when they executed the general release but intended nonetheless to release that claim as well.