release might cover Crestar's claims against its own former counsel. Peoples, Berger, and Unity apparently recognized this possible interpretation of the language, and explicitly excluded disputes with their counsel from the Release's coverage; Crestar did not. The clear implication is that "all other persons" is a broad provision sweeping in outside parties, and only those not to be swept in were expressly excluded.
Crestar argues that the phrase "all other persons" simply adds to the list of people or entities associated with the releasing parties. Under this reading, "all other persons" means "all other persons in a similar relationship to the releasors as their parents, subsidiaries, affiliates, officers, directors, shareholders, agents, servants, employees, successors, and assigns." The trouble with this argument is that it makes the explicit exclusion of claims against Gottfried and National entirely unnecessary, contravening the familiar rule that all provisions of contracts should, if possible, be given effect. See J.E. Faltin Motor Transportation, Inc. v. Eazor Express, Inc., 273 F.2d 444 (3d Cir. 1959). In addition, as mentioned above, the more natural reading of the sentence is that the parties and their privies (the releasors) are releasing the parties and their privies (the releasors again), as well as all other persons. If the drafters had intended to release only other persons associated with the parties, they would more naturally have written "and all other such persons."
For these reasons, I find that S&K were within the class of persons released by the General Mutual Release.
What Claims Are Released
I turn then to the issue of what claims are within the scope of the General Mutual Release. The release covers "all . . . causes of action, . . . claims and demands arising directly or indirectly out of the claims made in [Civil Action No. 91-7990] or which could have been asserted in the Civil Action, whether in law or in equity." I find that (1) the claims against S&K arise directly or indirectly out of the claims in the Peoples action, and (2) that they could have been asserted in that action.
The first of these inquiries is one of causation: whether the claims against S&K were caused directly or indirectly by the claims in the Peoples action. It seems clear that the answer is "yes." Borrowing some familiar tests from tort law, it is apparent that the claims alleged in the Peoples action were both the cause in fact and the proximate cause of the S&K action.
The cause-in-fact test is straightforward: but for the alleged fraudulent acts of Peoples, Unity, Scheier, Chowdhury, and Stewart, Crestar presumably would not have purchased the Gottfried mortgage, and so would have had no occasion to hire S&K to foreclose on this mortgage.
There is a like ground for concluding that the damages stemming from S&K's alleged malpractice were proximately caused by the acts alleged in the Peoples action. S&K's actions (or inaction) can be seen as a form of negligent rescue: the acts alleged in the Peoples action put Crestar in a position where it needed assistance in stanching its losses; it turned to S&K for this assistance, and its damages allegedly were exacerbated. In analogous situations, where a plaintiff's injuries are physical rather than financial, tortfeasors are routinely held to have proximately caused damages stemming from negligent rescue. See Restatement (Second) of Torts § 457 ("If the negligent actor is liable for another's bodily injury, he is also subject to liability for any additional bodily harm resulting from normal efforts of third persons in rendering aid which the other's injury reasonably requires, irrespective of whether such acts are done in a proper or a negligent manner.") S&K's actions here were likewise "normal efforts of third persons in rendering aid which [Crestar's] injury reasonably required." By analogy, it is proper to say that the damages allegedly caused by S&K had their proximate origin in the claims alleged in the Peoples action, and therefore that the S&K action arose directly or indirectly from the Peoples action.
Crestar could also have asserted its claims against S&K in its Peoples action. The Federal Rules of Civil Procedure authorize joinder of multiple defendants,
if there is asserted against them jointly, severally, or in the alternative, any right to relief in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question of law or fact common to all defendants will arise in the action.
Fed. R. Civ. P. 20(a). Crestar's right to relief from S&K arose out of the Peoples transaction in that, as discussed above, but for the Peoples transaction, Crestar would not have acquired the Gottfried mortgage and had need of foreclosure counsel. The terms of the Gottfried mortgage and the value of the Paoli property when sold by Crestar are common questions of fact in the Peoples and S&K actions, because both are necessary for computing damages in the respective actions. For these reasons, Crestar could have joined S&K in the Peoples action, and added its claims against S&K as Count XIX.
See. e.g., McNeil v. American Export Lines, Inc., 166 F. Supp. 427, 428 (E.D. Pa. 1958) (holding that two defendants were properly joined under Rule 20 where plaintiff's injuries, sustained while he was under the employ of one defendant, were aggravated while he was employed by the other defendant).
The one case cited by Crestar in support of its argument that the Release does not cover its claim against S&K is of no assistance here. The release at issue in Harrity v. Medical College of Pennsylvania Hospital, 439 Pa. Super. 10, 653 A.2d 5 (Pa. Super. Ct. 1994), allocatur denied, Table, No. 0168, E.D. Alloc., June 21, 1995, was limited to claims "for which suit was brought" in a former action. Id. at 10. The Superior Court found that the release only applied to the specific claims brought in the earlier action. The language in the General Mutual Release at issue in this case is significantly more sweeping in describing which claims are released.
Having concluded that, by the terms of the General Mutual Release, Crestar has released S&K from liability for its alleged malpractice, I turn to Crestar's alternative argument that this result stemmed from an accident or mistake and should therefore not be enforced. See Republic Insurance Co. v. Paul Davis Systems of Pittsburgh South, Inc., 670 A.2d 614, 615 (Pa. 1995) ("'However improvident their agreement may be or subsequently prove for either party, their agreement, absent fraud, accident or mutual mistake, is the law of their case.'") (quoting Buttermore v. Aliquippa Hospital, 522 Pa. 325, 561 A.2d 733, 735 (Pa. 1989) (emphasis added). In support of this assertion, Crestar provides three affidavits: one by Sterling Edmunds, Jr., its Executive Vice President, who signed the release; one by Tina Nugent, the lawyer representing Crestar in its lawsuit against Peoples; and one by Richard K. Doty, counsel for Audrey Scheier in the Peoples action. The two attorneys' affidavits state that the parties to the Peoples settlement negotiation did not discuss whether non-signing parties would be covered by the Release. All three affidavits state that the affiant did not personally intend that the Release include Crestar's action against S&K within its scope, and that if the Release is construed to cover non-signing parties, then such releasing language was included by accident and mistake.
In response, S&K offers affidavits of Joseph B. Mayers, counsel for Roy Chowdhury in the Peoples lawsuit, and Mark C. Clemm, counsel for Peoples and Jay Berger. Mr. Mayers states that the terms of the General Release were subject to negotiation and that it is his practice to insist upon releasing language sufficient to protect his clients from claims of contribution or indemnity. Mr. Clemm makes the same assertions, and adds that his intent in preparing the initial draft of the General Mutual Release was to obtain as broad a release as possible.
A party asserting mutual mistake must show that a mistake was made by all parties to the release. See 8 Pennsylvania Law Encyclopedia § 84 ("A mutual mistake is one common to both or all parties . . ."). Cf. Miller v. Houseworth, 387 Pa. 346, 127 A.2d 742, 744 (Pa. 1956) ("A person who seeks to rectify a deed on the ground of mistake must establish, in the clearest and most satisfactory manner, that the alleged intention to which he desires it to be made conformable continued concurrently in the minds of all parties down to the time of its execution.") (citations omitted). In addition, "reformation of the release would require a showing of . . . mutual mistake by clear, precise, and convincing evidence." Wolbach v. Fay, 488 Pa. 239, 412 A.2d 487, 488 (Pa. 1980).
Crestar has not made any assertion that all of the parties to the General Mutual Release were mistaken as to its legal effect; it has only asserted that some of the parties were mistaken. Moreover, S&K have provided sworn affidavits indicating that at least three of the parties to the Release were not mistaken as to its meaning. There is therefore no genuine issue of material fact warranting the denial of summary judgment. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986) ("In such a situation, there can be no 'genuine issue of material fact,' since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial.") See also Smith v. Thomas Jefferson University Hospital, 424 Pa. Super. 41, 621 A.2d 1030, 1032 (Pa. Super. Ct.), allocatur denied, 631 A.2d 1009 (1993) (upholding judgment on the pleadings against a claim of mutual mistake where appellant failed to adduce evidence of a mistake on the part of the other party to a release).
For the foregoing reasons, S&K's motion for summary judgment will be granted. An appropriate order accompanies this memorandum.
Pursuant to the memorandum accompanying this order, it is hereby ORDERED that:
1. The Stipulation between plaintiff and defendants to amend defendants' affirmative defenses to set forth the affirmative defense of release, dated January 12, 1996, is APPROVED.
2. Upon consideration of Defendants', Gerald Shapiro, Esquire, David Kreisman, Esquire and Shapiro & Kreisman's Motion for Summary Judgment, and Plaintiff's response thereto, defendants' motion for summary judgment is GRANTED.
Louis H. Pollak, J.
September 12, 1996