Claimants' rights are extinguished by execution of allegedly-unintended Release
In Jack v. Hastings, the Court of Appeals upheld the Grand Traverse County Ciruit judge's dismissal of a follow-up contract claim brought by the owners of a condominium against their insurer. The condo owners had suffered a substantial water damage claim and received a $34,000.00 payout by its own insurer. The owners then pursued a negligence claim to recover more fully for their damages and achieved a settlement of an additional $180,000.00 from the at-fault party. The owner then attempted to pursue a contract action against its own insurer, to recover the remainder of his damages.
The reviewing judges confirmed that the owner's execution of the original Release in the negligence case--even though it involved only a third-party and not the owners' insurer--operated to the benefit of the owners' insurer, since it relinquished "all claims arising,...from the freezing water loss". The attorneys for the owners argued that a release of Hastings Insurance was not intended by either the owners or the third-party negligence defendant when the release was executed. For more than a decade, however, the Michigan Supreme Court has held that the parties' intention in this situation is irrelevant: the release will be interpreted according to its strict language and its intent cannot be modified by "parol evidence." [I.e., oral testimony about what the parties' intended.]