Consolidated Rail Corp. v. HUDSON CEMENT CORP.

• Decision Date: 04 May 1981
• Docket Number: 79 Civ. 6523 (KTD).
• Citation: 513 F. Supp. 910
• Parties: CONSOLIDATED RAIL CORPORATION, Plaintiff, v. HUDSON CEMENT CORPORATION, a Division and/or Subsidiary of Colonial Sand & Stone Co., Inc., Defendant.
• Court: U.S. District Court — Southern District of New York

513 F. Supp. 910

CONSOLIDATED RAIL CORPORATION, Plaintiff, v. HUDSON CEMENT CORPORATION, a Division and/or Subsidiary of Colonial Sand & Stone Co., Inc., Defendant.

79 Civ. 6523 (KTD).

United States District Court, S. D. New York.

May 4, 1981.

Michael J. Siris, New York City, for plaintiff; Meyers, Tersigni, Kaufman, Debrot, Feldman & Gray, New York City, Jacques L. Debrot, New York City, of counsel.

Beck, Halberg & Williamson, New York City, for defendant; Herbert B. Halberg, New York City, of counsel.

MEMORANDUM & ORDER

KEVIN THOMAS DUFFY, District Judge:

Plaintiff instituted this breach of contract action seeking to recover amounts allegedly due and owing from the defendant for delivery of 23 rail car shipments of coal to the defendant at Kingston, New York. Plaintiff now moves for summary judgment and to dismiss the defendant's affirmative defense which is based on a general release given to the defendant by the plaintiff. The defendant has cross-moved for summary judgment on the basis of the general release.

Since the plaintiff's motion for summary judgment presents such a myriad of factual questions, there is some question as to whether it was made in good faith. It is sufficient, however, merely to deny that motion and not reach such collateral determinations.

The question which is determinative of this case is purely a question of law: whether the general release voluntarily given to the defendant by plaintiff is valid and binding.

A bit of history is necessary for an understanding of the issue. All of the waybills on which the present action is based were issued between May and November, 1977, and total $18,646. At about the same time, the defendant apparently was disputing certain other charges totaling $81,675.62, allegedly due plaintiff. As a result of this latter dispute, plaintiff instituted an action in this court with the identical caption as this case and bearing the docket number 78 Civ. 1495 (MP) hereinafter referred to as the "prior action". That action was settled at least by April 23, 1979, when Charles J. Drennan, Assistant Credit Manager—Legal Accounts, signed a general release on behalf of the plaintiff and in favor of the defendant. While it is unclear as to the exact amount paid by the defendant in settlement of the prior action, it is clear that it was substantially less than the amounts the plaintiff claimed were due under the applicable tariffs.

Charles J. Drennan now claims that at the time he signed the general release, neither he nor his department knew of the alleged charges which form the basis of the present complaint. There is no doubt that Consolidated Rail Corporation hereinafter "Con Rail" knew of these charges. There can be no dispute that Mr. Drennan should have at least inquired as to the possibility of the claims between the parties. There is no dispute that Mr. Drennan knew the effect of a general release.

Con Rail (and Mr. Drennan) also claim that the general release given in the prior action is void as against public policy.

The plaintiff argues:

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