Search by Case Name
Search by Case Number
Search by Keyword

#2087

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF KANSAS

In Re:

AMERICAN FREIGHT SYSTEM, INC.,

DEBTOR(S)

CHAPTER 11

NO. 88-41050-11

AMERICAN FREIGHT SYSTEM, INC.,

PLAINTIFF(S),

v.

ELECTROLERT, INC.,

DEFENDANT(S)

ADV. NO. 90-7402



ORDER DENYING MOTION FOR SUMMARY JUDGMENT

This proceeding is before the Court on a summary judgment motion filed by defendant Electrolert, Inc. American Freight System, Inc. (AFS), the plaintiff-debtor, appears by counsel Kurt Stohlgren. Defendant Electrolert, Inc., appears by counsel Bruce J. Clark. The Court has reviewed the relevant pleadings and is now ready to rule.

On September 9, 1986, Electrolert sued AFS and another company in an Ohio state court over a lost or destroyed shipment of goods. Two third-party defendants were added and the case was removed to federal district court. The parties reached a settlement and the case was dismissed on December 9, 1987. They signed a mutual release which indicated their dispute had arisen out of shipments of Electrolert's goods that were carried by AFS and the other company to the third-party defendants.

On July 20, 1990, AFS sued Electrolert to recover charges allegedly owed for thirty-five freight shipments. Thirty-one of these shipments were apparently transported before Electrolert filed its Ohio lawsuit. The other four were probably transported at least before AFS executed the mutual release on November 24, 1987. Electrolert contends the release bars AFS's suit.

Electrolert points to certain language in the release that states the parties were releasing not only all the claims actually asserted in the suit but also any "that could have been asserted in the action . . . by any party against any of the other parties hereto." Since Federal Rule of Civil Procedure 18(a) permits a party asserting a claim to join all other claims it has against an opposing party, this language in the release could be interpreted to mean the parties are releasing all existing claims they might have, whether related to the lawsuit or not. However, the Court agrees with AFS that this interpretation is so broad that it would render a significant portion of the other language in the release superfluous. The language in the paragraph that begins at the bottom of page one and ends about the middle of page two indicates that the parties were releasing all claims "arising out of the shipment of goods that formed the basis of" the suit which were or could have been asserted. The Court believes the more reasonable interpretation of the document is that it was intended to release only those unasserted claims that arose out of the same transactions or occurrences as the claims that were asserted, and not to release totally unrelated claims.

Consequently, Electrolert's motion for summary judgment must be denied. At a hearing on Septemer 28, the parties were informed the Court would review the motion and, if necessary, allow trial of the proceeding to be held during the week of November 14. The Clerk should now schedule the trial for that time.

IT IS SO ORDERED.

Dated at Topeka, Kansas, this _____ day of November, 1994.













__________________________________

JAMES A. PUSATERI

CHIEF BANKRUPTCY JUDGE

 

Search by Case Name
Search by Case Number
Search by Keyword