Claims And Issues

SETTLEMENT UNDER SEAL IN ARKANSAS.

In Chaichian v. Sentinel Ins. Co. Ltd., No. 1:16-cv-01026, 2017 WL 4899232 (W.D. Ark. October 3, 2017) (Bryant, USMJ), a U.S. Magistrate Judge was confronted with three motions concerning settlement of the case.

First, the facts at the time the USMJ confronted these three motions.  The plaintiff, proceeding pro se or without a lawyer, signed a so-called "release agreeement" which set out the parties' settlement terms.

The "release agreement" was filed under seal.

The plaintiff was paid the money set out in the release agreement.

The plaintiff thereafter refused to sign a proposed stipulation of dismissal which the defendants had written for her.

The defendants' proposed stipulation of dismissal was also filed under seal.

The USMJ reviewed the sealed documents and then decided the three  motions.

One of the motions was filed by the pro se plaintiff.  She asked to enforce what she said was her settlement agreement with Sentinel Insurance Co. and SWBC Insurance Services, the only two defendants remaining at the time.

The second of the three motions confronting the USMJ was the defendants' motion to enforce "actual settlement."

The third and final motion which the USMJ confronted in that case was the defendants' motion to strike the first motion, i.e., to strike the pro se plaintiff's motion to enforce settlement agreement.

He granted the defendants' motion to strike the plaintiff's motion to enforce settlement, "because," he said, "Plaintiff's motion contains confidential information and is otherwise unmerited.

We will never know what was actually in the sealed materials, only what the USMJ said about them and in a footnote he remarked how careful he was not to reveal confidential information.

At no time did the U.S. Magistrate Judge report, let alone recommend, that any part of this secret material might not be confidential or that some or all of it might not merit sealing it from public view.

Nonetheless, he read the secret material, kept it sealed, announced his report and recommendation, and included a recommendation that the plaintiff's case be dismissed with prejudice.

To be continued with the U.S. District Judge's order approving the USMJ's Report and Recommendation on Insurance Claims and Bad Faith Law Blog.

Dennis Wall is currently at work on his fifth book, which will address how concealed evidence and secret settlements take our money, foreclose on our homes, and change our lives.

Please Read The Disclaimer.  ©2017 by Dennis J. Wall.  All Rights Reserved.

"To set aside a pre-litigation release based on fraud"

An adjuster obtained a general release from his company's policyholders before they sued for their injuries under their own policy.  They were injured in an auto accident.  The person who caused the accident was also insured with their same carrier.

Unfortunately for the policyholders, they do not speak English and they signed the general release which, in English of course, barred all their claims on the policy.  They signed because they understood that it was their receipt for a claims check the adjuster gave them.  They sued the carrier anyway, alleging fraud in the way in which their carrier's adjuster obtained the general release.

The trial judge entered summary judgment in favor of the carrier.  He held that the general release means what it says and the policyholders' claims against the company are all released.  As for the policyholders not being able to read or understand the true contents of the release before they signed it, the trial judge found as a fact that the policyholders' English-speaking daughter had been present or perhaps available by telephone when the release was presented and signed, and that whether she was present in person or by telephone, that she advised her parents on what was in the release and in either event there could be no fraud as a result of her 'availability'.

On appeal, the Pennsylvania Superior Court reversed the summary judgment and remanded for a jury trial on the issue of fraud.  That was their first and foremost ground for reversal:  Fraud is an issue of fact and in this case the issue of fraud-in-the-release was a jury question which precludes summary judgment for the carrier.  The appellate court listed many cases decided over the course of centuries in which the Pennsylvania Supreme Court has held that fraud not only prevents a document from barring claims but that fraud is a jury question in cases like this one.

As for the English-speaking daughter advising her parents-policyholders on the contents of the release before they signed it, the appellate court reviewed the record and found that the evidence was not in dispute that the policyholders' daughter was not even present when her parents signed the release of the insurance company and that she was available by telephone at work, briefly, and the release was not even mentioned in the conversation with her mother at that time  (as if being on the telephone was the same as being present to read the release to her parents in any case).

So, to summarize, under Pennsylvania law fraud is a bar to immunity under a release.  Under the facts of this particular case, if the policyholders' English-speaking daughter was not even in the same room as the release when her parents signed the carrier's release then, simply stated, she could not have advised them about it.  The case is Del Pielago v. Orwig, No. 156 MDA 2016, 2016 WL 6835558 (Pa. Super. Ct. November 21, 2016).

Please Read The Disclaimer.  ©2016 by Dennis J. Wall.  All Rights Reserved.

TOO SCARED TO TRY: FEDS BEG WALL STREET TO SETTLE …

…All the Big Cases.

This article is being posted simultaneously on Insurance Claims Bad Faith Law Blog and on Insurance Claims and Issues Blog.

HSBC was accused by the Federal Government of what amounts to laundering money for terrorists.  The Feds settled the HSBC matter although they had good chances of success if they went to trial against HSBC and especially against many of its officers and employees.  What trial lawyer would not want to have the prosecution side of a case against terrorists and their sympathizers?  Apparently the Feds.  See Gretchen Morgenson in her "Fair Game" column published in this morning's Sunday New York Times, "A Bank Too Big to Jail" (posted Online on July 15, 2016), which you can also post in your browser at http://www.nytimes.com/2016/07/17/business/a-bank-too-big-to-jail.html?ref=business&_r=0.  Ms. Morgenson's column features an unofficial report released by Republican staffers of the U.S. House Financial Services Committee without the Committee's approval.  Although obviously partisan, it appears that this investigative report offers a lot of actual evidence and not just opinions.

For example, after the Feds decided not to take the HSBC case to trial, they wanted so much to settle with HSBC that they offered immunity from prosecution to HSBC's officers and employees if only HSBC would settle.  The HSBC settlement apparently offers a lesson in settling on unfavorable terms.  Anyone who has ever settled a case knows that once the other side of a negotiation knows that your side wants to settle badly, that is exactly how your side will almost certainly end up settling, which is badly.

Please Read The Disclaimer.  © by Dennis J. Wall.  All Rights Reserved.  

"INSURANCE CLAIMS AND ISSUES," THE BOOK: COMING IN 2016!

 

 Storm Clouds lined up over the Gulf of Mexico.  Photograph and text copyright 2015-2016 by Dennis J. Wall.

I am hard at work on an anthology of the best blogs from "Insurance Claims and Issues."  The anthology I submit to my publisher will keep all hyperlinks intact, including links to the Insurance Claims and Bad Faith Law blog.  When articles posted on Insurance Claims and Bad Faith Law blog are important to the anthology of "Insurance Claims and Issues," I am including them in the anthology too.

As each previously posted article is updated, the posted articles will remain just as available here as they always have been.  New articles will benefit from me being better informed and better equipped to discuss future insurance claims and issues.

I have contracted with Thomson Reuters (West Publishing Company to those fortunate to have the experience) to publish "Insurance Claims and Issues," the Book, in the late Spring or early Summer of 2016.  Best wishes to everyone for a joyous and Happy New Year!

Please Read The Disclaimer.  ©2016 by Dennis J. Wall, author of "Insurance Claims and Issues" (forthcoming Thomson Reuters 2016).  All rights reserved.

Related articles

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THE ALI RESTATEMENT PROJECT OF THE LAW OF LIABILITY INSURANCE.

Majority Holds No Negligence Cause of Action by Insured Against I.A.

NO SUCH THING AS "DERIVATIVE" ACTION BARRED BY SOMEONE'S SETTLEMENT.

 

 Image of Indiana State House, by Library of Congress.

In Foster v. Principal Life Insurance Co., No. 14-3203, 2015 WL 7567512 (7th Cir. November 25, 2015), the Seventh Circuit reversed a District Judge's grant of a defendant's motion to dismiss.  The District Court ruled that the plaintiff's claim was "derivative" of a claim alleged in an earlier lawsuit which was settled.  The Seventh Circuit held that this ruling was made up and further that there was no bar to the instant claim on any recognized or recognizable ground:

On appeal, Foster contends that his claim against Principal was not derivative of his earlier claims against Pace. He notes that the district court cited no legal doctrine underlying its finding that the claim was barred as “derivative,” and so he postulates various legal bases on which the court might have relied, such as res judicata and collateral estoppel. Foster maintains, and we agree, that the requirements of res judicata and collateral estoppel cannot be met under the facts presented here. Indeed, Principal does not attempt to defend the district court's rationale that the claim was “derivative” and conceded at oral argument that neither res judicata nor collateral estoppel apply in these circumstances. Nor is there any indication that Principal was somehow released by the terms of Foster's confidential settlement agreement with Pace and Pace employees in the earlier litigation.

Foster v. Principal Life Insurance Co., No. 14-3203, 2015 WL 7567512, at *4 (7th Cir. November 25, 2015).  Sometimes the best offense is a good offense, as in this case.  After they dismantled the spurious "derivative" ground for the District Judge's ruling to bar Mr. Foster's claim, Mr. Foster's attorneys set out every possible valid reason for the District Judge's ruling and then dismantled them each and all in turn, one by one.

And Principal's lawyers in this case acted with integrity, too, in their behavior shown in the Court's opinion quoted above.

To say again, sometimes the best offense is a good offense.

 Please Read The Disclaimer.  ©2015 by Dennis J. Wall, author of Litigation and Prevention of Insurer Bad Faith (3d ed. Thomson Reuters West in 2 Volumes, with 2015 Supplements).  All rights reserved.  Listen to a special podcast of "Litigation and Prevention of Insurer Bad Faith" here.

Related articles

Res Judicata, Specifically Claim Preclusion, And How To Dismiss A Borrower’s Post-Foreclosure Case

And So, Shall a Magistrate Lead Them to Fairness?

RELEASES DON'T ALWAYS RELEASE Continued.

The effects of Releases are explored in an article published on Insurance Claims and Bad Faith Law Blog on April 9, 2013, "MISCONDUCT INDUCING FHA INSURED MORTGAGES LITIGATION ALLOWED DESPITE SETTLEMENT AGREEMENT".

          The District Court in the case of National Heritage Foundation, Inc. v. Philadelphia Indemnity Insurance Co., 2012 WL 5331570 *1 (E.D. Va. October 25, 2012), concisely described the question presented in that case and the Court's resolution of it, as follows:

   In this diversity insurance dispute, plaintiff insured makes certain claims for coverage and indemnification under policies issued by defendant insurer, while defendant insurer contends, at this stage, that the claims are barred by a release plaintiff signed in settlement of an earlier lawsuit between the parties. At issue therefore, on cross motions for summary judgment, is the scope of the release. For the reasons that follow, the release, properly construed, bars some, but not all of plaintiff's claims, and thus the parties' summary judgment motions must each be granted in part and denied in part.

       In that decision, a previous Settlement Agreement with a Release barred the Policyholder's recovery from its Directors' and Officers' Insurer of the Policyholder's claimed defense costs incurred in certain prior claims, but did not bar recover of settlement amounts paid by the Policyholder.   National Heritage Foundation, Inc. v. Philadelphia Indemnity Insurance Co., 2012 WL 5331570 *5-*7 (E.D. Va. October 25, 2012).

       The moral of drafting Releases:  Be careful what you Release, or you may not get it.

Please Read The Disclaimer.

INSURED'S PRE-LOSS WAIVER OF RIGHTS IN CONSTRUCTION CONTRACTS: ...

...  IMPAIRMENT OF SUBROGATION TOO?

             When a Policyholder makes an agreement in setting up a Construction Project, by which the Policyholder waives its rights against the other party in the event that the construction results in damage to the Policyholder, does this pre-loss waiver of the Policyholder's rights and remedies also automatically impair the Subrogation Rights of the Insurance Company?

            In two recently decided cases in two different States, involving two different sets of construction contract documents, two Courts answered this question the same way.

            In the case of Federal Insurance Co. v. Woodruff Constr., Inc., 2012 WL 594588 *2 (Iowa Ct. App. November 29, 2012), the Court construed "standard boilerplate provisions concerning property insurance from the American Institute of Architects (AIA) Document A201."  This case presents an issue confronted by many Courts called upon to interpret this standard construction contract language, and the Court in this case used decidedly nonstandard language to describe that issue:  "The fighting issue before us is the extent of the waiver set forth in the construction contract."  Federal Insurance Co. v. Woodruff Constr., Inc., 2012 WL 594588 *1 (Iowa Ct. App. November 29, 2012).  [Emphasis added.]

            More precisely, the question before this Court is a recurring one:

Does the waiver language apply only to damages to "the Work" or to any damages covered by insurance "applicable to the Work"?

Federal Insurance Co. v. Woodruff Constr., Inc., 2012 WL 594588 *1 (Iowa Ct. App. November 29, 2012).

            The waiver-of-subrogation language is expressly set forth in the standard AIA Document, and it was quoted by the Court in this case:

            The Owner and Contractor waive all rights against (1) each other and any of their subcontractors, sub-subcontractors, agents and employees, each of the other, and (2) the Architect, Architects' consultants, separate contractors described in article 6, if any, and any of their subcontractors, sub-subcontractors, agents and employees, for damages caused by fire or other causes of loss to the extent covered by property insurance obtained pursuant to this Section 11.4 or other property insurance applicable to the Work, except such rights as they shall have to proceeds of such insurance held by the Owner as fiduciary....  The policies shall provide such waivers of subrogation by endorsement or otherwise. A waiver of subrogation shall be effective as to a person or entity even though that person or entity would otherwise have a duty of indemnification, contractual or otherwise, did not pay the insurance premium directly or indirectly, and whether or not the person or entity had an insurable interest in the property damaged.

Federal Insurance Co. v. Woodruff Constr., Inc., 2012 WL 594588 *1 (Iowa Ct. App. November 29, 2012).  [Emphasis by the Court.]  The Iowa Court of Appeals joined the majority view of this language and held that this language contains a waiver which applies to damages covered by "other property insurance applicable to the Work".        

           Federal sued certain contractors in Subrogation over damages on this construction project and its Property Insurance Policy was "other property insurance applicable to the work."  The contractors were granted Summary Judgment against Federal's Subrogation Claims by the Trial Court in this case accordingly, and the Appellate Court affirmed.

            In the second such recent case, a Florida Appellate Court also confronted a pre-loss waiver of rights by the Policyholder-Insured in a construction contract.  In that case, the rights were waived concerning repairs to a condominium:  Landmark American Insurance Co. v. Santa Rosa Beach Development Corp. I, 2012 WL 5971204 *1 (Fla. 1st DCA November 30, 2012).  Although the Insurance Company referred to the pre-loss agreements as a "release" and the Court used the same word in its opinion in this case, the agreements pretty clearly outlined a pre-loss waiver and not a post-loss release.  Whether a "waiver" or a "release," however, the language was the same and was treated the same in both the Trial Court and Appellate Court.

            Two Hurricanes, Ivan in 2004 and Dennis in 2005, struck the Condominium.  Beach Colony claimed both times that its damages were covered under its Landmark Policy.  Both times, Landmark denied the Claims on the ground that "the water damage was caused" by the repair of "stucco exterior siding" on Condominium buildings.  Landmark American Insurance Co. v. Santa Rosa Beach Development Corp. I, 2012 WL 5971204 *1 (Fla. 1st DCA November 30, 2012).  Apparently weary of making Insurance Claims, Beach Colony sued Landmark for alleged Breach of the Insurance Contract.  In turn, Landmark filed third-party claims against the repair contractors.

            The Trial Court granted the Contractors' Motions for Summary Judgment based on the following language quoted by the Appellate Court from the repair construction contract:

4.... Upon the execution and delivery of such warranties, Association, either for itself or in any representative capacity, shall proceed directly against the manufacturer and applicator in the event any claim arises with respect to the sufficiency or adequacy of such repairs, or otherwise arising out of or relating to such repairs in any way, and shall make no claim against Developer or Contractor with respect thereto.

 * * *

 7. Subject to Developer's compliance with the requirements of this Agreement ... Association, either for itself or in any representative capacity will not sue or seek any relief whatsoever against Developer or Contractor ... for the conditions which Developer undertakes herein to correct, provided that the repairs undertaken herein by Developer brings such conditions into full compliance with the statutory warranties of Developer and Contractor [.] (Emphasis added).

Landmark American Insurance Co. v. Santa Rosa Beach Development Corp. I, 2012 WL 5971204 *2 (Fla. 1st DCA November 30, 2012).  [Emphasis added by the Court.]  As Landmark's third-party Subrogation Claims were based on defects in the repairs of the Condominium, and as the language of the contract documents quoted above "covered the same matters that were the subject of Landmark's third party action," the Florida Appellate Court affirmed the Trial Court's Summary Judgments entered in favor of the repair contractors against Landmark's Subrogation Claims.  Landmark American Insurance Co. v. Santa Rosa Beach Development Corp. I, 2012 WL 5971204 *3 (Fla. 1st DCA November 30, 2012).

         Two cases presented two different sets of construction documents, but the same issue:  Did the Policyholder's-Insured's waiver of rights and remedies in the construction documents also waive the Insurance Carrier's Subrogation rights?  The Courts in both cases effectively answered the same way, which is that the Insurance Carrier had no rights of Subrogation under the circumstances.  Only one of the Judges, however, expressly noted that this ruling has implications for the Insurance Coverage Issue of whether this apparent impairment-of-Subrogation rights "may have breached" the Insurance Contract and possibly bar Coverage.  See Landmark American Insurance Co. v. Santa Rosa Beach Development Corp. I, 2012 WL 5971204 *3 (Fla. 1st DCA November 30, 2012)(Makar, J., specially concurring).

Emily Holbrook linked to Insurance Claims and Issues Blog last week in the Cavalcade of Risk #171 on her Risk Management Monitor Blog.  Here is a link to the November 7, 2012, post, "Computer Models Doing Good After Hurricane Sandy?  Not so Much."        

Please Read The Disclaimer. 

Release of All Claims, Insurance Claims: Deepwater Horizon.

  The Associated Press has released a copyrighted report that the Attorneys General of Alabama, Florida, Louisiana and Mississippi "are urging oil spill victims to consult lawyers before accepting final payments from a $20 billion compensation fund and agreeing not to sue BP."  Associated Press, "4 State AGs Urge Spill Victims to Get Lawyers" (Washington Post Online, Saturday, December 18, 2010).

   As was previously posted here, BP is requiring more of an agreement than simply not suing BP even if people experience additional harm after they sign BP's Release form.  BP is requiring people and businesses who accept final payments to give Releases in which they agree also not to sue anyone else responsible for the Gulf Oil Well Disaster.  (It appears that BP, far from ending all litigation, wants to pursue Indemnity and Contribution Claims against the potentially responsible parties who do not help to fund BP's settlements.)  It is an open question, apparently, whether this Release of All Claims would include the Claimants' own Insurance Companies as well as the Insurance Companies of the parties released.

   In the meantime, the website of the outgoing Florida Attorney General has not caught up with this latest development.  However, that website contains a useful pdf presentation, "Deepwater Horizon:  The OPA Claims Process and the Gulf Coast [BP's] Claims Facility".

Handling Catastrophe Claims and Exclusions which may apply to Catastrophe Claims, like those resulting from the Gulf Oil Well Disaster, are addressed by Dennis J. Wall under the available Case and Statute Law in Chapters 2 and 7, "CATClaims:  Insurance Coverage for Natural and Man-Made Disasters" (Thomson Reuters West, 2010 Supplements).

   Please Read The Disclaimer.

Remember the Poor, now and all Year long!

 

  

 

 

MORE: BP's Catastrophe Settlements: Contribution, Indemnity Claims Coming Against Nonsettling Defendants.

   And Their Liability Insurance Companies.  This updates a post published here on Friday, August 20, 2010.

   Reports continue to be published about questions and concerns regarding conditions of the BP Catastrophic Settlements Fund.  In order to receive any part of the reported "$20 Billion" in that Fund, people and businesses must among other things Release all Claims against nonparties other than BP.  See James C. McKinley, Jr., "Details Faulted in Plan to Pay Oil Spill Claims/Critics Say BP Benefits" p. A1, col. 1 (New York Times Nat'l ed., Saturday, August 21, 2010).

   Soon the reporting may include a focus on the real apparent motivation of BP behind this particular condition on its payment of Catastrophic Settlement money:  To preserve BP's Contribution and Indemnity Claims against the nonsettling potential Defendants.

   And to lay the foundation for Claims against their Liability Insurance Companies.

Dennis Wall is Co-Author of the leading book on Insurance Coverage for Catastrophe Claims, "CATClaims:  Insurance Coverage for Natural and Man-Made Disasters" (West Publishing Company 2008; 2010 Supplement in process).  Mr. Wall will be a featured speaker on several panels which will address the BP Oil Spill Catastrophe.  On September 15, 2010, he will be a featured speaker on a panel addressing "BP Oil Spill Damages Claims:  The Coverage Predicates" at the September 15, 2010 Seminar of the Insurance Law Committee sponsored by the Orange County Bar Association in Orlando, Florida.   Mr. Wall will speak on a panel at the American Conference Institute's Bad Faith Litigation Conference in Orlando, Florida on November 30, 2010 on "Dealing With Catastrophic Disasters:  How to Properly Investigate and Handle Overwhelming Claims".

Please Read The Disclaimer.

BP's Catastrophic Settlements: Contribution, Indemnity Claims Coming Against Nonsettling Defendants.

   And Their Liability Insurance Companies.

   A previously unreported condition of settling with BP for sums paid out of its infamous "$20 Billion Settlement Fund" has just been reported:  Settling Claimants will have to waive their Claims and Causes of Action against nonsettling potential Defendants.  These nonsettling potential Defendants include the owner of the Deepwater Horizon rig and virtually every other corporation that had a role in causing the deaths of 11 people and many alleged Damages to many other people and businesses.  See Ian Urbina, "BP Settlements Likely to Shield Top Defendants/Lawsuit Waiver is Seen" p. A1, col. 1 (New York Times Nat'l ed., Friday, August 20, 2010).

   A law professor in Tennessee is quoted in the article as suggesting that BP is requiring a waiver as to all nonsettling parties because BP wants to prevent them from making claims against BP.  Perhaps.  Another motivation is suggested by reality.

   It is central to every concept of Contribution and Indemnity both, that in order to recover on such Claims a settling party must plead and prove that it -- in this case, BP -- has paid more than its fair share of the loss, up to all of the loss (and very often, in the case of indemnity, also that it was made vicariously liable by the actions or omissions of the nonsettling defendants).  In this reality, BP is introducing the concept of whether it is acting in Good Faith in setting the conditions on its "settlement fund".  In any case, it is clear that BP is acting proactively to secure its own Claims for Contribution and Indemnity against other potential Defendants. 

   And, by doing that, to trigger the Liability Insurance Coverages of those other potential Defendants.

Dennis Wall is Co-Author of the leading book on Insurance Coverage for Catastrophe Claims, "CATClaims:  Insurance Coverage for Natural and Man-Made Disasters" (West Publishing Company 2008; 2010 Supplement in process).  Mr. Wall will be a featured speaker on several panels which will address the BP Oil Spill Catastrophe.  On September 15, 2010, he will be a featured speaker on a panel addressing "BP Oil Spill Damages Claims:  The Coverage Predicates" at the September 15, 2010 Seminar of the Insurance Law Committee sponsored by the Orange County Bar Association in Orlando, Florida.   Mr. Wall will speak on a panel at the American Conference Institute's Bad Faith Litigation Conference in Orlando, Florida on November 30, 2010 on "Dealing With Catastrophic Disasters:  How to Properly Investigate and Handle Overwhelming Claims".

Please Read The Disclaimer.

Who Fleeced the Fiduciaries? AIG's "Unknown Claims" Release ...

... Could be Worthless Paper.

   This post continues issues under exploration begun on Wednesday, June 30, 2010 in a post entitled, "Fed Demanded Secret Waiver Immunity by AIG:  Bad Faith Too?"

   In a stunning revelation, two highly respected New York Times reporters recently wrote that AIG gave a secret Release to its counterparties who received 100 cents on the dollar in Federal Taxpayer Money during the Great Bailout.  See Louise Story and Gretchen Morgenson, "Documents on Bailout of A.I.G. Show How Big Banks Benefited" p. A1, col. 1 (New York Times Nat'l ed., Wed., June 30, 2010).  They expressed concern that AIG's secret Release might include fraud claims and all other grounds for getting that money back.  Their concerns, though of legitimate concern to  nonlawyers, are almost certainly misplaced.

   I had a very hard time finding the Release provision in question.  This is not unusual, perhaps, since those who did not release the documents until after they received a Congressional subpoena, did not intend to make it simple to find, exactly.

  I finally found the Release provision on the New York Times web site, although that was not easy, as I say.  There is a link to it in this passage from third page of the online version of the New York Times article:

The legal waiver barring A.I.G. from suing the banks was not in the original document that regulators circulated on Nov. 6, 2008 to dissolve the insurer’s contracts with the banks. A day later a waiver was added but the Congressional documents show no e-mail traffic explaining why that occurred or who was responsible for inserting it. The New York Fed declined to comment.

However when I found it I could not print it at first.  Having printed it -- I still do not know how -- I cannot link to it, but I can reproduce it here from very tiny print (so if there are errors in transcription, that is one of the reasons why):

  (b) Releases.

***

   (ii) With effect from and including the Termination date and in consideration of the mutual representations, warranties and covenants contained in this Termination Agreement and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged by each of the parties), each of AIG-FP and AIG, Inc., for good and valuable consideration, the sufficiency of which it hereby acknowledges, forever releases the Counterparty (including all of its past and present parent companies, subsidiaries, divisions, affiliates, joint ventures, predecessors, successors, transferees, assigns, subrogees, insurers, co-insurers, reinsurers, servants, attorneys, partners, principals, members, directors, officers, employees, stockholders, owners, representatives and anyone claiming by or through them) from any and all Claims and Unknown Claims of any nature whatsoever that AIG-FP or AIG, Inc. ever had, now has or can, shall or may have, by reason of any matter, cause or thing occurring from the beginning of the world to the Termination Date that arises out of or in any way relates to the CDS Transactions.  For the avoidance of doubt AIG-FP is not releasing any Claims or Unknown Claims related to any derivative transaction other than the CS Transactions.

***

   (v)  "Unknown Claims" means any claim that the Counterparty AIG-FP or AIG, Inc. does not know or even suspect to exist in its favor at the time of this Termination Agreement, which, if known, may have affected its decision to enter into this Termination Agreement.  The parties understand that they may have suffered damages that are unknown to them at present and that they may suffer unknown damages in the future.  The parties acknowledge that any actions taken in consideration of this Termination Agreement are intended to and in fact do release and discharge any and all claims, whether known or unknown, suspected or unsuspected, contingent or noncontingent, which now exist or have existed upon any theory of law or equity, regardless of whether or not the law recognizes the existence of such claims or rights of actions [sic] as of the date of this Termination Agreement.

[Emphasis added.]

   This language is certainly broad.  See in particular the underscored language in the above quotation from AIG's secret Release.  It is also a legal over-reach.

   To begin with, by its own terms it is limited in effect to "claims or rights of" action "as of the date of this Termination Agreement."  This is reinforced by the underscored language in the Release that it is effective "from and including the Termination Date".   It has been held that similarly "unambiguous language of the release does not include [a] bad faith claim" accruing after the end-date set forth in the Release.  Plumbing Service Co. v. Travelers Casualty & Surety Co., Download Plumbing Service Co. v. Travelers Casualty and Surety Co. (Fla. 5th DCA Case No. 5D06.1586, Opinion Filed Aug. 24, 2007)(NO CHARGE FOR ACCESS) also published as 962 So. 2d 1056, 1056-58 (Fla. 5th DCA 2007)(subscription required to access Southern Second).  In that case, in which prevailing principles of document interpretation were applied to a purported Release of commercial claims, it was held that a sub-subcontractor's Statutory Bad Faith Claim against a surety under Fla. Stat. § 624.155, was not thereby released.  The Florida Court held that under the clear language of the Florida Statute, the Bad Faith Claim did not accrue against the surety until the time expired for the surety to cure any alleged violation which the sub-subcontractor set forth in its statutorily required Civil Remedy Notice of Insurer Violation.

   Moreover, the language of "Unknown Claims" is over-reaching.  The language of that definition is broad, obviously intentionally so, but it is not likely to be given literal effect as a matter of law prevailing almost everywhere in this country:  "That is, for the Releases to be valid, they must have been knowingly and voluntarily made and procured in good faith."  Allapattah Services, Inc. v. Exxon Corp., 188 F.R.D. 667, 685 (S.D. Fla. 1999), aff'd with opinion, 333 F.3d 1248 (11th Cir. 2003), aff'd in other part with opinion, 545 U.S. 546, 125 S. Ct. 2611 (2005)(subscription required to access these reporters).  In the Exxon case, the Federal District Judge examined the similar legal requirements applicable to such Releases under the Uniform Commercial Code and in the laws of Arkansas, California, Colorado, Florida, Indiana, Maryland, Montana, Nevada, New Jersey, New Mexico, Pennsylvania, Tennessee, and Washington State.  Exxon, 188 F.R.D. at 683 & n. 25.

   The validity and effect of the secretly kept AIG Release of Counterparties, which was unearthed by New York Times reporters Louise Story and Gretchen Morgenson, are unlikely to be accepted at face value by the Courts in the United States.

Please Read The Disclaimer.