By: Raed (Ray) Abboo
Trial & Appellate Attorney
December 1, 2025
Refining Settlement Release Language: Practical Takeaways from the McPherson case
Last week's published Court of Appeals decision in McPherson v. Alten Homes concerning Res Judicata (Docket No. 368756), also underscores a potential issue in civil litigation in the insurance law context: release language that is either too narrow or too loosely drafted invites future risk.
In McPherson, the plaintiff’s first lawsuit, filed only against an individual shareholder, was dismissed because the defendant was not the proper party. A subsequent action was then filed against the corporation and its contractors. The trial court dismissed the second case on res judicata grounds, but the Court of Appeals reversed, holding that there was no true privity between the individual and the corporate or contractor defendants. The COA determined the earlier dismissal did not shield those additional parties under res judicata.
Although McPherson arose in the res judicata context, the broader principle is instructive. When releases or dismissals do not expressly include all potentially exposed parties, litigants risk renewed or parallel litigation. The doctrine of “substantial identity of interests” remains an important and powerful defense tool, but even strong doctrines work best when supported by clear, comprehensive release language.
Organizations should routinely evaluate whether their settlement agreements, hold-harmless provisions, and release templates adequately identify and protect all relevant parties, including contractors, subsidiaries, officers, agents, and insurers. Precision on the front end is far less costly than addressing gaps after litigation has resurfaced, especially for keeping costs down. If release language is not drafted carefully and broadly enough, future litigation may claw back the same insurer into future costly litigation.
To keep costs and fees to a minimum and to ensure your agreements provide true finality, contact our Managing Attorney, Raed (Ray) Abboo, Esq. at [email protected]. We are available to assist with defending your next case, or helping to install safeguards for avoiding it altogether.
Trial & Appellate Attorney
December 1, 2025
Refining Settlement Release Language: Practical Takeaways from the McPherson case
Last week's published Court of Appeals decision in McPherson v. Alten Homes concerning Res Judicata (Docket No. 368756), also underscores a potential issue in civil litigation in the insurance law context: release language that is either too narrow or too loosely drafted invites future risk.
In McPherson, the plaintiff’s first lawsuit, filed only against an individual shareholder, was dismissed because the defendant was not the proper party. A subsequent action was then filed against the corporation and its contractors. The trial court dismissed the second case on res judicata grounds, but the Court of Appeals reversed, holding that there was no true privity between the individual and the corporate or contractor defendants. The COA determined the earlier dismissal did not shield those additional parties under res judicata.
Although McPherson arose in the res judicata context, the broader principle is instructive. When releases or dismissals do not expressly include all potentially exposed parties, litigants risk renewed or parallel litigation. The doctrine of “substantial identity of interests” remains an important and powerful defense tool, but even strong doctrines work best when supported by clear, comprehensive release language.
Organizations should routinely evaluate whether their settlement agreements, hold-harmless provisions, and release templates adequately identify and protect all relevant parties, including contractors, subsidiaries, officers, agents, and insurers. Precision on the front end is far less costly than addressing gaps after litigation has resurfaced, especially for keeping costs down. If release language is not drafted carefully and broadly enough, future litigation may claw back the same insurer into future costly litigation.
To keep costs and fees to a minimum and to ensure your agreements provide true finality, contact our Managing Attorney, Raed (Ray) Abboo, Esq. at [email protected]. We are available to assist with defending your next case, or helping to install safeguards for avoiding it altogether.