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Publication of Defamatory Information - Settlement Dos and Don'ts
by Sam Ott, BOL Guru
The Fifth Circuit Court of Appeals issued an opinion on June 11, 2002 which demonstrates that a settlement agreement and release may not save you from liability if your settlement agreement and release are not tightly drafted and you continue to engage in the objectionable conduct which gave rise to the dispute in the first place.
The case of Young v. Equifax Credit Information Services, J. C. Penney Co. and Credit Bureau of Lake Charles involved a Penney charge account that was fraudulently opened in the name of the plaintiff. The account became delinquent and appeared on the plaintiff's credit report that was reported by Penney to the other defendants. The plaintiff filed suit and prior to judgment reached settlements with each of the defendants. The parties executed releases and each defendant paid the plaintiff a sum of money.
The current case concerns allegations that defamatory information was not removed from the plaintiff's credit report and continued to be distributed by the defendants after the date of the settlement agreements.
The Court reviewed other legal aspects of the case in addition to the text of the releases contained in the settlement agreements and ultimately held that language of one release precluded the plaintiff from recovery even though the publication of the information continued.
The same language appeared in the Equifax and Credit Bureau releases. The Penney release contained additional language that in the opinion of the Court made a significant difference.
The Equifax/Credit Bureau release stated:
[Young] does hereby release, acquit and forever discharge Credit Bureau of Lake Charles, Inc. and Equifax Credit Information Services, their agents, employees, insurers, successors, assigns and attorneys, of and from any and all actions or cause of action whatever, which he now has or may hereafter have arising out of the occurrence as set forth in the above mentioned suit . . .
The Penney release stated:
James Young releases, acquits, discharges, and covenants to hold harmless J.C. Penny [sic] Co., Inc. . . . from any and all actions, causes of action, . . . and claims of every type, and also any injuries or damages not now known or which may later develop, all resulting from the alleged theft of his identity relative to the allegedly erroneous and/or fraudulent extension of credit in his name . . .
The Court noted that neither form of release required the defendants to delete the information regarding the plaintiff from their respective records. In addition the Equifax/Credit Bureau release only covered actions arising out of the occurrence mentioned in the initial lawsuit. The Court held that the release did not cover any subsequent publications of information and instructed the lower court to consider the plaintiff's claims against both Equifax and the Credit Bureau.
On the other hand the Court held the Penney release did cover all claims and injuries that resulted from the theft of the plaintiff's identify and therefore did cover the subsequent publication of the erroneous information.
The moral is: If you are entering into a settlement agreement make sure that the release language is broad enough to cover any and all future claims that may arise from whatever transaction that is the subject of the dispute. In addition, make sure that the action or inaction that led to the dispute does not reoccur!
First published on BankersOnline.com 6/12/02
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