How does a release work and what are its limits?  This is the question that Avnet, Inc. v Deloitte Consulting LLP  2019 NY Slip Op 33026(U)
October 11, 2019 Supreme Court, New York County Docket Number: 653146/2019 Judge: Jennifer G. Schecter answers in great detail.  The opinion comes with extensive and fascinating footnotes.  They are too extensive to reprint here, but well worth the read.

“In 2008, the parties entered into a Master Services Agreement govemmg
consulting work performed by Deloitte for Avnet (Dkt. 29 [the MSA]). For each consulting matter, the parties would enter into a separate Work Order (see id. at 2-3). The MSA provides that all litigation “based on or arising out of’ it must be brought in New York and that the MSA “and each Work Order, and all matters relating to [the MSA ]” are governed by New York law (id. at 15 [emphasis added]).

Beginning m 2013, the parties executed Work Orders governmg Deloitte’s
development and implementation of a software platfonn known as “Project Evolve” (see Dkt. 38). That system went live on April 4, 2016. It was riddled with problems. Avnet claims that Deloitte was at fault. However, rather than litigate, on September 7, 2016, the ‘parties executed a settlement agreement in which Avnet released all of its claims against Deloitte – both known and unknown – relating to Project Evolve (Dkt. 28 [the Settlement Agreement]). The Settlement Agreement is governed by New York law (id. at 4).”

“Shortly after executing the Settlement Agreement, the parties executed a Work Order governing Deloitte’s attempts to fix the system. In March 2017, Avnet terminated Deloitte and decided it would abandon Project Evolve as soon as an alternative system could be implemented.
On May 28, 2019, Avnet commenced this action against Deloitte. In its
complaint, it asserts 13 causes of action. The first six concern Deloitte’s work on Project Evolve through August 1, 2016: 1 (1) fraud; (2) constructive fraud; (3) fraudulent inducement; ( 4) breach of contract and breach of the implied covenant of good faith and fair dealing; ( 5) professional negligence; and ( 6) ‘violation of New York General Business Law (GBL) § 349. The remaining seven causes of action, number~d here as in the complaint, concern Deloitte’s conduct after August 1, 2016: (7) fraud; (8) constructive fraud; (9) fraudulent inducement . of the Settle~nent Agreement and post-Settlement
consulting work; (10) breach of contract (the MSA and Work Orders) and breach of the implied covenant of ‘good faith and fair dealing; (11) professional negligence; (12) violation of GBL § 349; and (13) unjust enrichment.

Deloitte moves to dismiss, arguing that: (1) the first six causes of action are barred by the Settlement Agreement; (2) Avnet does not plead a viable claim for fraudulent inducement of the. Settlement Agreement or any post-Settlement Agreement work; (3) none of the claims based on Delditte’ s post-Settlement conduct are viable; and ( 4) in the
alternative, all of the post-Settlement Agreement work claims (;ir e duplicative of the express breach of contract claim pleaded in the tenth cause of action.”

“”It is well established that a valid release constitutes a complete bar to an action on a claim which is the,subject of the release” (Global Minerals & Metals Corp. v Solme, 35 AD3d 93, 98 [1st Dept 2006]). If “the language of a release is clear and unambiguous, the signing of a release is a ‘jural act’ binding on the parties” (Booth v 3669 Delaware,·
Inc., 92 NY2d 934, 935 [1998]). “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” (Centro Empresarial Cempresa S.A. v Am. Movil, S.A.B. de C. V, 17 NY3d 269, 276 [2011]). Significantly, “a release may encompass unknown
claims, including unknown fraud claims, if the parties so intend and the agreement is ‘fairly and knowingly made”‘ (id.,, quoting Mangini v McClurg, 24 NY2d 556, 568 [1969]). . ‘)

The Settlement ~Agreement released Deloitte from “any and an claims . . . or actions or causes of action of every nature and. description,” including both “known and unknown” claims relating to Project Evolve. This includes an claims for breach of the MSA and the pre-settlement Work Orders and any rel~ted tort and statutory claims, Avnets’ contention that alleged fraud committed by Deloitte in conjunction with its presettlement work on Project Evolve is beyond the scope of the release is baseless. A release of all unknown claims includes fraud claims whose basis was not· yet known to the plaintiff at the time of the release (see Centro, 17 NY3d at 277). That is the essence of a release of unknown claims.”

Read on in the original for footnotes 1-4

Email this postTweet this postLike this postShare this post on LinkedIn
Andrew Lavoott Bluestone

Andrew Lavoott Bluestone has been an attorney for 40 years, with a career that spans criminal prosecution, civil litigation and appellate litigation. Mr. Bluestone became an Assistant District Attorney in Kings County in 1978, entered private practice in 1984 and in 1989 opened…

Andrew Lavoott Bluestone has been an attorney for 40 years, with a career that spans criminal prosecution, civil litigation and appellate litigation. Mr. Bluestone became an Assistant District Attorney in Kings County in 1978, entered private practice in 1984 and in 1989 opened his private law office and took his first legal malpractice case.

Since 1989, Bluestone has become a leader in the New York Plaintiff’s Legal Malpractice bar, handling a wide array of plaintiff’s legal malpractice cases arising from catastrophic personal injury, contracts, patents, commercial litigation, securities, matrimonial and custody issues, medical malpractice, insurance, product liability, real estate, landlord-tenant, foreclosures and has defended attorneys in a limited number of legal malpractice cases.

Bluestone also took an academic role in field, publishing the New York Attorney Malpractice Report from 2002-2004.  He started the “New York Attorney Malpractice Blog” in 2004, where he has published more than 4500 entries.

Mr. Bluestone has written 38 scholarly peer-reviewed articles concerning legal malpractice, many in the Outside Counsel column of the New York Law Journal. He has appeared as an Expert witness in multiple legal malpractice litigations.

Mr. Bluestone is an adjunct professor of law at St. John’s University College of Law, teaching Legal Malpractice.  Mr. Bluestone has argued legal malpractice cases in the Second Circuit, in the New York State Court of Appeals, each of the four New York Appellate Divisions, in all four of  the U.S. District Courts of New York and in Supreme Courts all over the state.  He has also been admitted pro haec vice in the states of Connecticut, New Jersey and Florida and was formally admitted to the US District Court of Connecticut and to its Bankruptcy Court all for legal malpractice matters. He has been retained by U.S. Trustees in legal malpractice cases from Bankruptcy Courts, and has represented municipalities, insurance companies, hedge funds, communications companies and international manufacturing firms. Mr. Bluestone regularly lectures in CLEs on legal malpractice.

Based upon his professional experience Bluestone was named a Diplomate and was Board Certified by the American Board of Professional Liability Attorneys in 2008 in Legal Malpractice. He remains Board Certified.  He was admitted to The Best Lawyers in America from 2012-2019.  He has been featured in Who’s Who in Law since 1993.

In the last years, Mr. Bluestone has been featured for two particularly noteworthy legal malpractice cases.  The first was a settlement of an $11.9 million dollar default legal malpractice case of Yeo v. Kasowitz, Benson, Torres & Friedman which was reported in the NYLJ on August 15, 2016. Most recently, Mr. Bluestone obtained a rare plaintiff’s verdict in a legal malpractice case on behalf of the City of White Plains v. Joseph Maria, reported in the NYLJ on February 14, 2017. It was the sole legal malpractice jury verdict in the State of New York for 2017.

Bluestone has been at the forefront of the development of legal malpractice principles and has contributed case law decisions, writing and lecturing which have been recognized by his peers.  He is regularly mentioned in academic writing, and his past cases are often cited in current legal malpractice decisions. He is recognized for his ample writings on Judiciary Law § 487, a 850 year old statute deriving from England which relates to attorney deceit.