Epic Communications, Inc. v. Richwave Technology, Inc.

In this case we are again called upon to determine whether a defendant is entitled to the protection of a broad release clause contained in a settlement agreement to which the defendant is a stranger. In Rodriguez v. Oto (2013) 212 Cal.App.4th 1020, 1023 [ 151 Cal.Rptr.3d 667 ] (Rodriguez), we held that language unambiguously releasing “ ‘all persons’ ” from liability was on its face an objective manifestation of intent to extend the release to third parties, and thus entitled a stranger to summary judgment in the absence of countervailing evidence. While acknowledging that this result could present troubling questions of policy, we found it dictated by basic principles of contract law. Critically, however, the release in that case was unambiguous within its four corners, and no cogent reason was presented to question its literal accuracy as an expression of the parties’ intent. Here, in contrast, several other provisions of the settlement agreement containing the release clause are not easily reconciled with its seemingly broad language. The subsequent conduct of the contracting parties also appears inconsistent with an intent to extend the release to unaffiliated third…