Release Can Cover Unknown Claims

On April 2, 2024, the First Department issued a decision in FPG Maiden Lane, LLC v. Bank Leumi USA, 2024 NY Slip Op. 01777, holding that a release can cover unknown claims, explaining:

The second cause of action, for fraudulent inducement against BL-USA, should have been dismissed for two reasons. First, like the fraud-based claims in the previous complaint, the fraud claim asserted in the second cause of action of the amended complaint is duplicative of the breach of contract claims. Second, the claim is barred by section 14 of the third amendment to the parties’ building loan agreement, which provides that plaintiff FGP Maiden Lane, LLC

“hereby irrevocably and unconditionally acknowledges and agrees . . . that (a) as of the Amendment Date [March 13, 2020], it has no . . . causes of action, rights, claims or demands of any kind or nature whatsoever against . . . any Lender, any loan participant . . . or any of their respective Affiliates, including, without limitation, any usury or lender liability claims or defenses, in any such case arising out of or relating to the Loans or the Loan Documents, and (b) to the extent that any claim as described above should in fact exist as of the Amendment Date, including, without limitation, any usury or lender liability claim or defense, such claim is hereby fully, finally, unconditionally and irrevocably released, waived and discharged.”

The foregoing language constitutes a release of any claim that arose at or before the time of the execution of the release, even if the claim was not discovered until after the execution.

(Internal citations omitted).

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