Plaintiff had settled a federal action she had commenced against the City of New York [NYC] and her employer, the New York City Administration for Children's Services [ACS]. The settlement agreement specifically provided that Plaintiff was settling any and all claims related to her pleadings in the federal action in consideration of her receipt of a payment in the amount of $50,000.
The release provided that Plaintiff was "releasing any and all claims related to the allegations in the pleadings in the federal action, as well as any right or claim under the Federal Age Discrimination in Employment Act", and "any and all other liability, claims or rights of action that may exist or arise up to and including the date" the release was executed.
However, at the time Plaintiff executed the release of her claims in the federal action, Plaintiff had an action pending in a New York State Supreme Court alleging NYC had violated §8-107(1)(a) of the New York City Human Rights Law because it denied Plaintiff a reasonable accommodation for her disabilities, which were allegedly connected to a work-related accident.
NYC moved to have a New York State Supreme Court dismiss Plaintiff's pending state action under color of the party's federal settlement agreement. Supreme Court denied NYC's motion and NYC appealed the ruling.
The Appellate Division unanimously affirmed the Supreme Court's decision, explaining that the settlement documents concerning Plaintiff's federal action, when read as a whole, established that the parties intended the release "to be limited to the recital of claims stated in the release", namely, claims that could have been brought in connection with Plaintiff's federal employment discrimination action, or under the Age Discrimination in Employment Act, provided such a claim arose prior to the execution of the release.
In the words of the Appellate Division:
"The settlement agreement is properly read in conjunction with the release, particularly where the release expressly refers to the settlement agreement. That agreement settles only the claims in the federal action" and "makes no mention of the claims in the instant state action, although it was pending at the time".
Further, the Appellate Division's decision notes the claims in the two actions were unrelated.
Click HERE to access the Appellate Division's decision posted on the Internet.