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ENVIRONMENTAL CONSULTANTS: DID A GENERAL RELEASE BAR CLAIMS RELATED TO ALLEGED WETLAND DELINEATION ERRORS?

December 28, 2012

Category: Arkansas Environmental, Energy, and Water Law

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Author: Walter G. Wright Riverbend Community, LLC, et al v. Green Stone Engineering, LLC, 2012 Del. LEXIS 547 (October 17, 2012) addressed whether a general release barred various claims for an alleged mistake in a wetlands delineation. Riverbend Community, LLC and Parkway Gravel ("Riverbend") jointly owned a parcel of land ("Property") which they intended to develop into residential real estate. A prior owner had obtained a jurisdictional delineation from the United State Army Corps of Engineers which identified federal wetlands on the Property. Riverbend retained Green Stone Engineering, LLC pursuant to a contract prior to purchasing the Property. The contract required Green Stone to perform various tasks associated such as site evaluation and regulatory review, wetlands restoration conceptual design, wetlands enhancement conceptual layout, and regulatory meetings and presentations. The parties subsequently signed a second contract which required Green Stone to provide design services for the site and roadways, stormwater collection conveyance systems, the sanitary sewer systems, the water supply piping systems, the stormwater management plans, the sediment and erosion control plans, and the landscape plans. Green Stone subcontracted with JCM Environmental, Inc. to flag additional federal waters and wetlands on the Property. Green Stone also prepared to submit a plan to various city and county agencies that depicted the various wetlands areas. The Supreme Court of Delaware opinion states that the plans did not indicate that the wetlands were connected and that any construction on an onsite Causeway might interfere with protected wetlands. The opinion further indicates that based on Green Stone's depictions, Riverbend proceeded. Green Stone subsequently left the project and would not release its work product unless Riverbend executes a "release." The release stated in relevant part:

Fox Chase Realty, LLC ("FCR") for and in consideration of the sum of Ten Dollars ($10.00) and other good and valuable consideration, the receipt of which is hereby acknowledged, for itself and its successors, and assigns hereby remises, release, [sic] acquits, and forever discharges Green Stone Engineering, LLC and its respective agents, officers, employees, representatives, successors and assigns and any and all other persons, associations, and/or corporations, whether herein referred to or not, ("Releasees"), of and from all known or unknown, suspected or unsuspected, past, present, and future claims, demands damages, interest, penalties, legal fees and all other actions, third-party actions, causes of action, or suites [sic] at law or in equity, including claims for contribution and/or indemnity or/of whatever nature, for or because of any matter or thing done, omitted, or suffered to be done, on account of or arising from Green Stone's use or reliance upon any plans, engineering calculations, drawings, specifications, surveys or any other work product of any nature whatsoever produced by Green Stone Engineering, LLC in connection with professional engineering services provided Fox Chase Realty, LLC for the Riverbend at Old New Castle project (the "Work Product"). This document further confirms FCR's receipt of all Work Product produced [by] Green Stone Engineering, LLC on behalf of Joseph L. Capano, Sr. and FCR. This release is made with advice of counsel or after knowingly declining advice of counsel.

The United States Army Corps of Engineers subsequently issued two Cease and Desist Letters against Riverbend because of the work in wetlands. The Delaware State agency also filed a complaint. Riverbend alleged it could not sell houses, and a lender foreclosed and purchased the Property at a sheriff's sale. Riverbend sued Green Stone for breach of contract, professional negligence, and simple negligence. Green Stone argued in a summary judgment motion that the general release barred all claims. The Delaware Appellate Court upheld a trial judge's holding that the release is unambiguous because it "clearly states" that Riverbend "remiss[es], release[s], acquits and forever discharges" Green Stone "from all claims in connection with services provided for the Old New Castle Subdivision." The Appellate Court held that considering the release as a whole, it unambiguously constituted a general release. A copy of the opinion can be downloaded below.
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