Family Dollar Stores of Rhode Island, Inc. v. Justin B. Araujo
20-163
R.I.Apr 14, 2022Background
- Justin Araujo was injured at work on January 17, 2012 and received workers’ compensation benefits intermittently thereafter.
- On September 12, 2014 Araujo’s counsel notified Family Dollar of a constructive-discharge/disability-discrimination claim (HIV-related) and intent to file with the Rhode Island Commission for Human Rights.
- On September 23, 2014 Araujo executed a settlement with Sedgwick (on behalf of Family Dollar) and signed a release for $20,000 that (a) expressly released his workers’ compensation claims and (b) stated it waived “any other claims” against his employer, including claims with the Rhode Island Commission for Human Rights and federal agencies.
- On November 28, 2014 Araujo filed a charge of discrimination with the Rhode Island Commission for Human Rights alleging discriminatory acts ending February 12, 2014.
- Family Dollar sued in Superior Court for a declaratory judgment (and breach) seeking a ruling that the release barred Araujo’s discrimination charge; the Superior Court found the release ambiguous and granted summary judgment to Araujo based on extrinsic evidence of intent.
- The Rhode Island Supreme Court reversed, holding the release unambiguous and that it waived all claims Araujo could make against Family Dollar, including the RICHR charge; judgment for Family Dollar was ordered.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of the release | The Release’s plain language waived all claims Araujo could make, expressly listing RICHR and other agencies. | The Release is ambiguous and did not (or was not intended to) waive the known discrimination claim. | Release unambiguous; waived all claims against employer, including RICHR charge; Superior Court erred. |
| Use of extrinsic evidence | No extrinsic evidence is needed if the contract is unambiguous; the Release stands on its face. | Extrinsic evidence shows parties did not intend to release the discrimination claim. | Because the Release is unambiguous, extrinsic evidence should not alter its meaning. |
| Applicability of Farr (Aetna v. Farr) | Farr is distinguishable—there the release omitted other claims; here the Release expressly mentions other claims and RICHR. | Farr supports inferring ambiguity from omission of a known claim in a release. | Farr distinguished; no omission here because the Release lists “other claims” and RICHR. |
| Appropriateness of summary judgment | Family Dollar entitled to summary judgment as a matter of law given the unambiguous release. | A factual dispute exists about intent, so summary judgment for Family Dollar was improper. | Summary judgment for Araujo was improper; the court should have entered judgment for Family Dollar. |
Key Cases Cited
- Young v. Warwick Rollermagic Skating Ctr., 973 A.3d 553 (R.I. 2009) (broad release can cover disability claim that arose from the workplace injury)
- Aetna Cas. & Sur. Co. v. Farr, 594 A.2d 379 (R.I. 1991) (omission of reference to a known claim in a release can create ambiguity requiring factfinding)
- Sturbridge Home Builders, Inc. v. Downing Seaport, Inc., 890 A.2d 58 (R.I. 2005) (contract ambiguity is a question of law; agreement viewed in its entirety)
- Nelson v. Ptaszek, 505 A.2d 1141 (R.I. 1986) (plain, unambiguous release language controls meaning without extrinsic evidence)
- Roadepot, LLC v. Home Depot, U.S.A., Inc., 163 A.3d 513 (R.I. 2017) (language of a contract is best evidence of parties’ intent)