The opinion of the court was delivered by: WOLIN
Defendants' motion for summary judgment presents this court with the issue of whether a certain letter written by plaintiff, Ellie Gordon, to defendant bank constitutes a release as to the claims asserted by plaintiffs Gary and Sarah Wolkowitz and Mark and Ellie Gordon (collectively, the "Plaintiffs"), in their Second Amended Complaint dated as of November 17, 1986. The crux of defendants' motion is that Ellie Gordon acted as agent for the Plaintiffs and thereby agreed for Plaintiffs to release any claims against the bank arising from certain investments in exchange for an extension of repayment of their outstanding debt to the bank.
Plaintiffs are two married couples and Ellie Gordon and Sarah Wolkowitz are sisters; they are also business associates. In 1980, Ellie Gordon was advised by stockbroker Herman Epstein that Plaintiffs ought to invest in an oil and gas limited partnership known as Continental IV.
In December, 1980, Plaintiffs went to Mr. Epstein's office where Mark Gordon and Gary Wolkowitz each invested $ 150,000 in Continental IV. Immediately thereafter, and in the company of Mr. Epstein, Plaintiffs traveled to a branch office of Garden State National Bank, a predecessor of defendant Fidelity Union Bank, for the purpose of securing loans to pay for their new investments.
While at the bank, Plaintiffs allege that they confirmed the bank's opinion of the investment by conversing with defendant, Gary Flaker, a Vice President of the bank.
Approximately one year later, in October, 1981, Ellie Gordon and Sarah Wolkowitz each invested another $ 100,000 in Continental IV and each financed their investment through further loans from Fidelity Union Bank. In total, each couple borrowed $ 250,000 from the bank, and the last note signed by each couple, dated December 12, 1983, was for $ 240,000.
Mr. Jaffe [Plaintiffs' attorney] has spoken to Council [sic] for the Bank and it appears to be agreed that the proposal to pay $ 5,000 a quarter on principle [sic] and interest in full for the year 1984 would be acceptable. We have enclosed such.
Thereafter it would be subject to renegotiation. We agree to execute release of any claims concerning Continental IV to the bank and this arrangement will be kept confidential from any investors in Continental IV.
I hope all is well with you.
As noted in the letter, Plaintiffs remitted the reduced quarterly loan payment; they did so ...