Espinoza v. Westside Supermarket LLC
- Sidney Stein
- 1:21-cv-08368
- U.S. District Court · Southern District of New York
- 4
In Espinoza v. Westside Supermarket, Judge Gary Stein denied approval of a revised settlement because its release remained too broad.
The parties to the settlement, including Angel Espinoza, Westside Supermarket LLC, and the other defendants, must either submit another revised settlement agreement or indicate that they will continue litigating.
What happened
Angel Espinoza and Westside Supermarket LLC asked the court to approve a revised settlement agreement. The court had previously rejected their original agreement because its release was too broad and did not apply mutually.
The revised agreement narrowed the categories of claims that Espinoza would release and added a release for defendants’ related claims. But the agreement still broadly defined the released claims and used the word “including,” which expanded rather than limited the release.
Judge Gary Stein denied approval of the revised settlement. The parties were directed to file another revision by July 15, 2024, or submit a joint letter saying they intended to continue litigating.
The detailed version
- Espinoza v. Westside Supermarket LLC · No. 1:21-cv-08368
- Sidney Stein
- July 1, 2024
Background
The parties submitted a revised Settlement Agreement and Release for court approval. The court had rejected their initial settlement agreement in an order dated May 20, 2024, because its release provision was overbroad and non-mutual.
The revised agreement removed the initial agreement’s long list of broad categories of claims released by the plaintiff. It instead identified three narrower categories involving wages, other compensation, and matters related to or arising from the lawsuit. The revised agreement also included a release by the defendants of claims they had against the plaintiffs relating to claims arising from the lawsuit.
Court’s analysis
The court concluded that the revised release still did not accomplish the parties’ apparent goal of limiting the plaintiff’s release to the three specified categories. Paragraph 3(B) broadly defined “Claims” as all claims the plaintiff had or claimed to have against the released parties and then stated that those claims included claims arising under or relating to the three categories. The court explained that “including” is generally understood as expanding, rather than limiting, a list. As a result, the agreement still effectively created a general release.
The court identified a possible correction: deleting the phrase “including those claims” from Paragraph 3(B). The court said that this change would limit the release to the three categories listed in clauses (i), (ii), and (iii).
Although the agreement contained a severability clause—a provision addressing what happens if part of an agreement is unenforceable—the court found that the clause did not authorize the court to revise Paragraph 3 itself. The clause instead contemplated that the plaintiff would promptly sign a separate legal and enforceable release. The parties therefore had to correct the agreement and resubmit it.
Ruling
The court DENIED approval of the Revised Settlement Agreement. It directed the parties, by July 15, 2024, either to file a further revised settlement agreement with Paragraph 3 modified consistently with the order or to submit a joint letter stating that they intended to continue litigating the action. The court stated that, if the identified change were made, it would find the release provision fair and reasonable. It also noted that the other relevant, non-release provisions had already been approved in the May 20 order.
Effect
The ruling withheld approval of the revised settlement and required another filing or a notice that litigation would continue. The opinion does not state the underlying claims beyond references to wages, compensation, and matters related to the lawsuit.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.