| Nelson v Lattner Enters. of N.Y. |
| 2013 NY Slip Op 05367 [108 AD3d 970] |
| July 18, 2013 |
| Appellate Division, Third Department |
| Andrea K. Nelson, Appellant, v Lattner Enterprises ofN.Y., Doing Business as McDonalds, et al., Respondents. |
—[*1] Seyfarth Shaw LLP, New York City (Mary E. Ahrens of counsel), for LattnerEnterprises of N.Y. and another, respondents. Bond, Schoeneck & King, PLLC, Albany (Nicholas J. D'Ambrosio Jr. of counsel),for McDonald's Corporation, respondent.
Spain, J. Appeal from an order of the Supreme Court (Lebous, J.), entered April 5,2011 in Broome County, which granted defendants' motions to dismiss the complaint.
Plaintiff, a restaurant manager from 2002 to 2007 for defendant Lattner Enterprisesof N.Y., a franchisee of defendant McDonald's Corporation, alleges that her supervisor,defendant Douglas Lattner, repeatedly subjected her to sexual harassment. She claimsthat she reported the harassment to corporate employees of McDonald's Corporation,which aided and abetted the harassment by failing to warn her of Lattner's predilectionfor sexual harassment and by failing to take action. On December 10, 2007, at a meetingwith Lattner and another supervisor, plaintiff signed a handwritten settlement agreementby which she agreed to leave her employment and release all claims arising fromLattner's alleged harassing conduct, which was not admitted, in exchange for a severancepayment and medical benefits. Shortly thereafter, plaintiff signed a typed "[s]ettlement[a]greement and [r]elease" (hereinafter the release agreement) which, among [*2]other things, comprehensively releaseddefendants[FN*] from all liability for any claims or potential causes of action under any federal, state orlocal law against them arising from her employment by Lattner Enterprises up until itseffective date of December 14, 2007, in consideration of "14 weeks and 5 days" ofseverance pay of $18,688.10 and medical benefits. Plaintiff was paid the full severanceand her medical benefits were continued as agreed.
Plaintiff's subsequent sex discrimination complaint against Lattner and LattnerEnterprises was dismissed by the State Division of Human Rights in 2009 based upon theconclusion that, by signing the release agreement, plaintiff had voluntarily waived anyclaim that she may have under the Human Rights Law (see Executive Law§ 296), which the Equal Employment Opportunity Commission adopted indismissing her complaint under title VII of the Civil Rights Act of 1964. Plaintiff thencommenced this action in December 2009, again alleging unlawful sexual harassmentand sex discrimination (see Civil Rights Act of 1964, tit VII [42 USC §2000e et seq.]; Executive Law § 296). Supreme Court thereafter granteddefendants' motions to dismiss the complaint based upon the release agreement and forfailure to state a cause of action (see CPLR 3211 [a] [5], [7]). On plaintiff'sappeal, we affirm.
Plaintiff contends that the releases she signed are not valid because they wereprocured under duress; she alleges that the first agreement was signed in a coerciveatmosphere in which Lattner told her that she had to sign it in order to leave the meeting,and that she signed the second release agreement because, when she contactedMcDonald's Corporation to indicate that she would not sign it, counsel for McDonald'sCorporation advised her that she was already bound by the first agreement and that, if shereentered their property, she would be guilty of trespass. On these motions to dismiss,"the complaint is liberally construed, the facts alleged [in the complaint and anysubmission submitted in opposition to the dismissal motions] are accepted as true,plaintiff[ is] accorded every favorable inference and the court determines only whetherthe facts alleged in the complaint 'fit within any cognizable legal theory' " (Lazic v Currier, 69 AD3d1213, 1213-1214 [2010], quoting Leon v Martinez, 84 NY2d 83, 87-88[1994]; see 511 W. 232nd Owners Corp. v Jennifer Realty Co., 98 NY2d 144,151-152 [2002]).
Under contract law, a signed release that is clear and unambiguous and knowinglyand voluntarily entered into is binding on the parties unless cause exists to invalidate iton one of the [*3]recognized bases for setting asidewritten agreements, including illegality, fraud, mutual mistake, duress or coercion (see Centro Empresarial CempresaS.A. v AmÉrica M�vil, S.A.B. de C.V., 17 NY3d 269, 276 [2011];Booth v 3669 Delaware, 92 NY2d 934, 935 [1998]; Appel v Ford MotorCo., 111 AD2d 731, 732 [1985]). A party such as plaintiff seeking to void a writtencontract on the ground of duress must meet her burden of demonstrating "(1) threats ofan unlawful act by one party which (2) compel[ ] performance by the other party of anact which it had a legal right to abstain from performing" (Chase Manhattan Bank v State ofNew York, 13 AD3d 873, 874 [2004]; see Centro Empresarial CempresaS.A. v AmÉrica M�vil, S.A.B. de C.V., 17 NY3d at 276). Here, evenassuming, as plaintiff alleges, that she was under duress when she signed the firstagreement at the supervisor's meeting, she asserts no facts from which it could beconcluded that her subsequent act of signing the release agreement was made underduress or involuntarily. The advice of McDonald's Corporation's counsel that she wasalready bound to the first agreement did not constitute "threats of an unlawful act"(Chase Manhattan Bank v State of New York, 13 AD3d at 874). Notably, it isundisputed that the release agreement advised her in bold type to consult an attorney, shewas afforded 21 days in which to consider it and consult counsel, she was advised thatshe could revoke it up to seven days after signing it, and she does not allege any factsfrom which it could be found that her free will or opportunity to consult counsel wereimpeded or effectively precluded in exercising her decision to sign the agreement (seeStiso v Inserra Supermarkets, 179 AD2d 878, 879-880 [1992], lv denied 80NY2d 757 [1992]; see also Gohar v Albany Hous. Auth., 288 AD2d 657, 658[2001]; Finserv Computer Corp. v Bibliographic Retrieval Servs., 125 AD2d765, 766 [1986]; Bormann v AT & T Communications, Inc., 875 F2d 399, 403[2d Cir 1989], cert denied 493 US 924 [1989]). Thus, plaintiff's bare allegationsare "insufficient to state a cause of action to set aside the release [agreement] upon theground that it was procured by duress" and, having not satisfied her burden, she is boundby that release agreement (Cramer v Newburgh Molded Prods., 228 AD2d 541,542 [1996], lv denied 89 NY2d 803 [1996]).
Moreover, contracts executed under duress are, at most, voidable and not void and,by accepting and retaining the benefits of the second agreement for almost two years andnot timely repudiating it, plaintiff affirmed or ratified that agreement, which is bindingand no longer voidable on the grounds of duress, which objections are waived (seeAustin Instrument v Loral Corp., 29 NY2d 124, 130 [1971]; Foundry Capital Sarl vInternational Value Advisers, LLC, 96 AD3d 620, 620-621 [2012]; Philips S. Beach, LLC v ZCSpecialty Ins. Co., 55 AD3d 493, 493 [2008], lv denied 12 NY3d 713[2009]; Cappelli Enters., Inc. vF&J Cont. Food Corp., 16 AD3d 609, 610-611 [2005]; Chase ManhattanBank v State of New York, 13 AD3d at 874; Napolitano v City of New York, 12 AD3d 194, 195[2004]). Indeed, "[p]laintiff's argument that the release [agreement] was executed underduress is belied by the fact that [she was] paid [severance and received benefits] for[signing the release agreement] and a party cannot claim that it was compelled to executean agreement under duress while simultaneously accepting the benefits of the agreement"(Foundry Capital Sarl v International Value Advisers, LLC, 96 AD3d at620-621). "Therefore, consistent with the public policy favoring enforcement ofsettlements, the release [agreement that] plaintiff signed should be enforced according toits terms, and plaintiff's claim[s] [were properly] dismissed" (Booth v 3669Delaware, 92 NY2d at 935 [citations omitted]).
Lahtinen, J.P., McCarthy and Egan Jr., JJ., concur. Ordered that the order is affirmed,with one bill of costs.
Footnote *: In the releaseagreement, plaintiff expressly released, and agreed not to sue, Lattner and LattnerEnterprises as well as "any other . . . firms, or entities. . . liable or who might be claimed by [plaintiff] to be liable. . . with respect to any and all of [plaintiff's] causes of action, potentialcauses of action, suits [or] disputes . . . which in any way results from,arises out of, or pertains to [plaintiff's] employment[,] alleged . . . sex [or]age . . . discrimination, [or] sexual harassment . . . by Lattneroccurring prior to the [e]ffective [d]ate" (emphasis added). This language clearlyencompasses McDonald's Corporation, a third-party beneficiary of the agreement (see Mandarin Trading Ltd. vWildenstein, 16 NY3d 173, 181-182 [2011]; State of Cal. Pub. Employees'Retirement Sys. v Shearman & Sterling, 95 NY2d 427, 434-435 [2000]), andplaintiff does not argue otherwise.