J & J Farmer Leasing, Inc. v. Citizens Insurance Co. of America

At issue is whether a covenant not to sue a party is indistinguishable from a release and, thus, results in a bar to suits against a covenantee’s tortfeasor by a covenantee’s assignee. The Court of Appeals concluded that the instruments are indistinguishable and, accordingly, that a covenantee’s assignee (the covenantor) would be barred in a suit against the tortfeasor. We disagree and vacate that part of the judgment. The Court of Appeals correctly concluded for other reasons that the covenantor was not released. Yet the Court unnecessarily relied on a misapplication of Frankenmuth Mut Ins…