The underlying case involved allegations of breach of contract regarding intellectual property. After protracted litigation, there was a settlement agreement; the agreement included a broad release clause, which stated in part: “. . . do hereby irrevocably and unconditionally release and forever discharge each other and each of their respective past, present, and future affiliates, successors, predecessors, assignees, transferors, heirs, executors, administrators, members, directors, officers, shareholders, partners, principals, agents, employees, servants, attorneys, accountants, corporate parents, and corporate subsidiaries, of and from any and all past, present, and future claims, demands, causes of action, rights, violations of any law or rule including those relating to or concerning breach of contract, breach of warranty, damages, compensation, loss of services, expenses and attorney’s fees, arbitration and/or court cost, any costs, whether or not contingent, unliquidated or unmatured, known or unknown, present or future, actual or prospective or otherwise, ascertained or severally or jointly with any other person(s). . .” In the current case, the defendant, who is a stranger to the underlying settlement, claims entitlement to protection of the broad release. The trial court granted summary judgment in favor of strangers to the underlying contract, and the Court of Appeal reversed, stating several provisions of the underlying settlement agreement are not easily reconciled with its seemingly broad release language and that the subsequent conduct of the contracting parties also appears inconsistent with an intent to extend the release to unaffiliated third parties. (Epic Communications, Inc. v. Richwave Technology, Inc. (Cal. App. Sixth Dist.; June 23, 2015) 237 Cal.App.4th 1342 [188 Cal.Rptr.3d 844].)Summary Judgment, Granted To Defendant Based On A Broad Release In An Underlying Action To Which Defendant Is A Stranger, Reversed.
The underlying case involved allegations of breach of contract regarding intellectual property. After protracted litigation, there was a settlement agreement; the agreement included a broad release clause, which stated in part: “. . . do hereby irrevocably and unconditionally release and forever discharge each other and each of their respective past, present, and future affiliates, successors, predecessors, assignees, transferors, heirs, executors, administrators, members, directors, officers, shareholders, partners, principals, agents, employees, servants, attorneys, accountants, corporate parents, and corporate subsidiaries, of and from any and all past, present, and future claims, demands, causes of action, rights, violations of any law or rule including those relating to or concerning breach of contract, breach of warranty, damages, compensation, loss of services, expenses and attorney’s fees, arbitration and/or court cost, any costs, whether or not contingent, unliquidated or unmatured, known or unknown, present or future, actual or prospective or otherwise, ascertained or severally or jointly with any other person(s). . .” In the current case, the defendant, who is a stranger to the underlying settlement, claims entitlement to protection of the broad release. The trial court granted summary judgment in favor of strangers to the underlying contract, and the Court of Appeal reversed, stating several provisions of the underlying settlement agreement are not easily reconciled with its seemingly broad release language and that the subsequent conduct of the contracting parties also appears inconsistent with an intent to extend the release to unaffiliated third parties. (Epic Communications, Inc. v. Richwave Technology, Inc. (Cal. App. Sixth Dist.; June 23, 2015) 237 Cal.App.4th 1342 [188 Cal.Rptr.3d 844].)