Release; “Releasors”; Principle that the roles of independent contractor & agent are not mutually exclusive; Scope of a release; Binding effect on a nonsignatory; AFSCME Council 25 v Wayne Cnty; Disregarding a corporate entity; Glenn v TPI Petroleum, Inc; Applicability of a “carveout” in the release

Holding that plaintiffs’ claims were barred by a Settlement Agreement and Release (SAR), the court reversed the trial court’s denial of defendants’ summary disposition motions. Plaintiffs asserted tort claims stemming “from defendants’ handling of a water-loss insurance claim at a building owned by” a nonparty (Village Plaza). Plaintiff-Cambridge, an LLC, is a holding company whose sole member is plaintiff-Michael. A year before this action was filed, “Michael, acting on behalf of Village Plaza, negotiated” the SAR with defendant-Cincinnati Insurance. The court held that the “plain language of the release shows that Village Plaza intended plaintiffs and their claims against defendants to be within its scope. The release was not limited to claims Village Plaza may have against Cincinnati, but claims ‘releasors’ may have against Cincinnati and the other listed ‘releasees.’ In relevant part, ‘releasors’ was defined to include Village Plaza’s ‘agents.’” As the release did not define “agent,” the court considered dictionary definitions. It determined that plaintiffs “were Village Plaza’s agents and, therefore, fell under the definition of ‘releasors.’ The agent and principal relationship between plaintiffs and Village Plaza is made abundantly clear by the record.” While plaintiffs asserted they were “independent contractors” rather than Village Plaza’s agents, the court noted these roles are not mutually exclusive. “Plaintiffs’ management contract obligated Cambridge to render its services to Village Plaza faithfully and diligently and provided Cambridge with the authority to enter contracts on Village Plaza’s behalf. The management contract also supports that plaintiffs are Village Plaza’s agent.” Next, the court concluded that their claims fell within the scope of the release, which broadly applied “to any and all claims, known or unknown; past, present, or future; that a releasor may have directly or indirectly related to the insurance claim. This includes claims of bad faith or unfair practices and claims in contract, tort or otherwise.” As to the fact that plaintiffs were nonsignatories of the SAR, the court found there was “a closeness in proximity between Village Plaza and Cambridge that necessitates the imposition of a veil-piercing/alter ego theory.” Remanded for dismissal of plaintiffs’ claims with prejudice.