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Philip Morris USA, Inc., et al. v. Beatrice Skolnick, Case No. 4D13-4696 (4th DCA)

In Skolnick, a jury found for the plaintiff and awarded compensatory damages on claims of negligence and strict liability, and found for the defense on claims of fraudulent concealment and conspiracy. The Fourth District reversed, confronting what it described as a novel issue in an Engle case.

In 2004, the plaintiff executed a settlement agreement, with a release and covenant not to sue, in a separate class action arising from her husband’s lung cancer, the same injury at issue in the subsequent tobacco case. The plaintiff had joined separate class action suit in 2002, and it involved claims against Verizon and other defendants for the operation of the Sylvania Plant, which was 500 meters from the plaintiff’s home and allegedly emitted toxins into the surrounding environment, contaminating the air, soil and water, resulting in various injuries including the plaintiff’s husband’s lung cancer. The class settled in 2004, and the plaintiff recovered $60,000. The settlement agreement acknowledged that the class action concerned the “operations of and alleged emissions and discharges from a facility that manufactured nuclear fuel elements from approximately 1952 until 1966.” The release signed by the plaintiff released, among other things, all claims asserted or that could have been asserted in the class case. Those released included not only the named parties, but also “any other tortfeasors, whether joint or concurrent and whether now known or unknown” for the losses or injuries alleged or at issue in the class claim.

Years later, in the tobacco suit, the tobacco defendants moved for summary judgment arguing that the plaintiff’s claims were barred because the plaintiff had agreed not to sue “other tortfeasors” for the same loss or injury alleged in the prior class action, which included the plaintiff’s husband’s lung cancer. Noting that the tobacco claims and the prior class claims were “totally different,” the trial court denied the tobacco defendants’ motion, and the case proceeded to trial.

On appeal, the Fourth District found that the prior release barred the plaintiff’s negligence and strict liability claims against the tobacco defendants. Applying the law of New York, where the prior class claim settled, the court noted that in “construing an unambiguous release or covenant not to sue, effect must be given to the intent of the parties as indicated by the language employed.” The court further noted that a release which purports to excuse a party from responsibility for misconduct is subject to the closest of judicial scrutiny. Further, under New York statutory law, a release or covenant not to sue given to one tortfeasor will not discharge other tortfeasors liable for the same injury unless the terms of the release expressly so provide. Where the language of a release is general, and does not identify specific defendants, there are three approaches to interpreting the “expressly so provides” statutory language: the flat bar rule, the specific intent rule, and the intent rule. New York follows the flat bar rule, which means that “a general release discharging all other parties who might be liable for damages in addition to a named tortfeasor is sufficient to release a joint tortfeasor not named or specifically identified in the release.”

Applied to this case, the Fourth District found that there was no dispute that the prior class defendants sought to wipe their hands clean of further litigation with that action. The release referenced other tortfeasors, whether joint or concurrent, who were to be released from suits for losses or injuries alleged in that class case. The Fourth District found that inclusion of such language in the release was an effort by the prior class defendants to avoid future contribution or apportionment claims. The Fourth District explained the principles of contribution and apportionment under New York law, and explained that the prior class defendants could potentially have faced future contribution or apportionment claims against them by concurrent tortfeasors, such as tobacco companies. The court cited an Eighth Circuit appellate opinion that stated that the “defendant who originally procures the release gains nothing if the plaintiff can sue other joint or concurrent tortfeasors. In such a case, the original defendant is left open to claims for contribution and/or indemnity and may wind up having to litigate the case anyway.” Therefore, the plaintiff’s prior release served to bar her claims for negligence and strict liability against the tobacco companies, who were concurrent tortfeasors with the prior class defendants.

The Fourth District additionally ruled that the prior release did not bar the plaintiff’s claims for fraudulent concealment and conspiracy against the tobacco companies, because New York public policy precludes an exculpatory clause from applying to intentional torts. Therefore, the Fourth District reversed the judgment in favor of the plaintiff on the negligence and strict liability claims.

The Fourth District also reversed the judgment entered against the Plaintiff on the intentional tort claims, finding that the trial court gave the incorrect jury instruction based on the now overturned Hess ruling.

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