This Blog has written frequently about the substance and scope of general releases.[1] In New York, “a valid release constitutes a complete bar to an action on a claim which is the subject of the release.”[2] If “the language of a release is clear and unambiguous, the signing of a release is a ‘jural act’ binding on the parties.”[3] For this reason, “[a] release should never be converted into a starting point for … litigation except under circumstances and under rules which would render any other result a grave injustice.”[4]
“Although a defendant has the initial burden of establishing that it has been released from any claims, a signed release ‘shifts the burden of going forward … to the [plaintiff] to show that there has been fraud, duress or some other fact which will be sufficient to void the release.’”[5] “A plaintiff seeking to invalidate a release due to fraudulent inducement must ‘establish the basic elements of fraud, namely a representation of material fact, the falsity of that representation, knowledge by the party who made the representation that it was false when made, justifiable reliance by the plaintiff, and resulting injury.’”[6]
A party that releases “a fraud claim may later challenge that release as fraudulently induced only if it can identify a separate fraud from the subject of the release.” Id. (citation omitted). “Were this not the case,” observed the Court of Appeals, “no party could ever settle a fraud claim with any finality.” Id.
“‘A party may move for judgment dismissing one or more causes of action asserted against [it] on the ground that … the cause of action may not be maintained because of … [a] release.’”[7] “In resolving a motion to dismiss pursuant to CPLR 3211(a)(5), ‘the plaintiff’s allegations are to be treated as true, [and] all inferences that reasonably flow therefrom are to be resolved in his or her favor.’”[8]
In Schneier v. Clermont York Assoc., LLC, 2025 N.Y. Slip Op. 04498 (2d Dept. July 30, 2025) (here), the foregoing principles were before the Appellate Division, Second Department.
Schneier involved a putative class action brought on behalf of “opt out members of” a prior class action, entitled Gerard v. Clermont York Assoc. LLC, commenced in the Supreme Court, New York County, under Index No. 101150/10 (the “prior class action”), against defendant, inter alia, to recover damages for certain rent overcharges. The prior class action was settled by an agreement dated May 20, 2019 (the “settlement agreement”). Plaintiff was a member of the prior class. The settlement agreement was approved by the Supreme Court by judgment dated August 26, 2020, and contained a general release barring every class member “who [did] not timely and properly opt out” of the settlement agreement from asserting “all … claims[ or] causes of action … of any nature whatsoever … arising at any time on or before entry of the [judgment] that are based upon or related to, or arise out of, in whole or in part, the facts, transactions, events, occurrences, acts, or failures to act that were or could have been alleged” in the prior class action by a class member. The settlement agreement further provided that a class member could opt out of the settlement by sending a written request for exclusion from the settlement by first-class mail postmarked by a certain date.
In Schneier, Plaintiff moved, inter alia, pursuant to Article 9 of the Civil Practice Law and Rules (“CPLR”) for class certification and, in effect, pursuant to CPLR 3126 to impose discovery sanctions. Defendant opposed the motion and cross-moved pursuant to CPLR 3211(a) to dismiss the complaint as barred by the release. In an order entered April 1, 2024, the Supreme Court denied plaintiff’s motion and granted defendant’s cross-motion. Plaintiff appealed.
The Second Department affirmed.
The Court held that defendant “met its initial burden of establishing that the instant action was barred by the release.”[9] The Court found that, “in support of its cross-motion, the defendant submitted,” inter alia, evidence sufficient to support dismissal of the action.[10] This evidence included “the settlement agreement containing the release, which, by its terms, barred the action against defendant for those class members in the prior class action who did not opt out of the settlement in the manner required by the settlement agreement” and “evidence that the plaintiff, who was a class member, received the requisite notice of the settlement agreement and its opt out provision but failed to opt out of the settlement in the manner required by the settlement agreement.”[11]
The Court noted that “[i]n opposition, the plaintiff failed to show that there [had] been fraud, duress, or some other circumstance that would be sufficient to set aside the release.”[12] The Court rejected plaintiff’s argument that she was relieved of the settlement agreement’s opt-out provision by the Governor’s executive orders during the pandemic: “Contrary to the plaintiff’s contention, she was not relieved of the opt out requirements of the settlement agreement by virtue of the toll provided by Executive Order (A. Cuomo) No. 202.8 (9 NYCRR 8.202.8) and the subsequent orders extending that order, issued by the Governor in response to the COVID-19 public health crisis.”[13] Accordingly, concluded the Court, “the Supreme Court properly granted the defendant’s motion pursuant to CPLR 3211(a) to dismiss the complaint as barred by the release.”[14]
Takeaway
A “release is … a species of contract” that “is governed by the same principles of law applicable to other contracts.”[15] Therefore, in the absence of duress, illegality, fraud, or mutual mistake, a release will not be set aside.[16]
In Schneier, the release language at issue was expansive and released “all … claims[ or] causes of action … of any nature whatsoever … arising at any time on or before entry of the [judgment] that are based upon or related to, or arise out of, in whole or in part, the facts, transactions, events, occurrences, acts, or failures to act that were or could have been alleged” in the prior class action by a class member. For the Second Department (and the Supreme Court), such language was broad enough to cover the claims asserted in plaintiff’s complaint.
Since the release barred the action, and plaintiff failed to plead fraud, duress, mistake, or illegality, the Second Department affirmed dismissal of the complaint.
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Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP. This article is for informational purposes and is not intended to be and should not be taken as legal advice.
[1] We have written numerous articles addressing releases and their bar on subsequent actions involving the released subject matter. To find such articles, please see the BLOG tile on our website and search for “release”, “general release”, or any other commercial litigation issue that may be of interest you.
[2] Global Minerals & Metals Corp. v. Holme, 35 A.D.3d 93, 98 (1st Dept. 2006).
[3] Booth v. 3669 Delaware, Inc., 92 N.Y.2d 934, 935 (1998) (quoting Mangini v. McClurg, 24 N.Y.2d 556, 563 (1969)). See also Centro Empresarial Cempresa S.A. v. AmÉrica MÓvil, S.A.B. de C.V., 17 N.Y.3d 269, 276 (2011).
[4] Id. (internal quotation omitted).
[5] Centro Empresarial Cempresa, 17 N.Y.3d at 276 (“A release may be invalidated, however, for any of the traditional bases for setting aside written agreements, namely, duress, illegality, fraud, or mutual mistake”) (internal quotation marks and citation omitted) (quoting Fleming v. Ponziani, 24 N.Y.2d 105, 111 (1969)).
[6] Id. (quoting Global Mins. & Metals Corp. v. Holme, 35 A.D.3d 93, 98 (1st Dept. 2006)).
[7] Davin v. Plymouth Rock Assur. Co. of N.Y., 227 A.D.3d 862, 863 (2d Dept. 2024) (quoting CPLR 3211(a)(5)).
[8] Id. at 863-864 (quoting Sacchetti-Virga v. Bonilla, 158 A.D.3d 783, 784 (2d Dept. 2018)).
[9] Slip Op. at *2.
[10] Id.
[11] Id. (citations omitted).
[12] Id. (citations omitted).
[13] Id. (citations omitted)
[14] Id.
[15] Schuman v. Gallet, Dreyer & Berkey, L.L.P., 180 Misc. 2d 485, 487 (Sup. Ct., N.Y. County 1999), aff’d, 280 A.D.2d 310 (1st Dept. 2001). See also Ivasyuk v. Raglan, 197 A.D.3d 635, 636 (2d Dept. 2021).
[16] Toledo v. W. Farms Neighborhood Hous. Dev. Fund Co., Inc., 34 A.D.3d 228, 229 (1st Dept. 2006).
