Inter-Reco Inc. v. Lake Park 175 Froehlich Farm LLC and CLK-HP Froehlich Farm LLC

106 A.D.3d 955 (2d Dept. 2013).  We won the reversal of a Supreme Court order denying a motion to dismiss a complaint which sought the return of the tenant’s security deposit, based on the defense of a “release” contained in stipulation of settlement of a prior landlord-tenant proceeding.  In so holding, the Appellate Court recognized that “public policy favors the enforcement of settlements, and the release is ‘a jural act of high significance without which the settlement of disputes would be rendered all but impossible.’ Generally, a valid release constitutes a complete bar to an action on a claim which is the subject of the release, and should not ‘be converted into a starting point for renewed litigation.’”  In rejecting the tenant’s argument, the Court further concluded that “contrary to the plaintiff’s contention, the terms of the release clearly and unambiguously encompass this action inasmuch as plaintiff’s claim to the disputed security deposit is contingent upon the terms of the subject lease.”