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Shifting Risk of Injury and Liability: How I Learned to Love the Exculpatory Clause

Shifting Risk of Injury and Liability: How I Learned to Love the Exculpatory Clause

Even in situations where a duty may be owed, valid exculpatory clauses in agreements between parties can operate to shift the risk of injury and liability from one contracting party to another.  Yes that is correct, under certain circumstances in situations where a defendant’s negligence may have resulted in a plaintiff’s injury, the right language in a contract between the parties can be utilized to avoid liability and obtain a favorable ruling from a judge.  This article will discuss what an exculpatory clause is, the standards by which they are judged, and how courts in Florida interpret those clauses when making decisions regarding liability.

What is an Exculpatory Clause?

An exculpatory clause is a contract provision that relieves one party from liability for injuries and/or damages suffered by the other party.  These clauses appear in contracts involving a myriad of various industries including but not limited to: fitness, recreation, residential/commercial leases, transportation services, as well as travel and entertainment industries.  Although exculpatory clauses are not favored in the law, they may operate to absolve a defendant from liability arising out of his or her own allegedly negligent acts.[1]

What Does Florida Law Say About Exculpatory Clauses Generally?

Public policy disfavors exculpatory contracts because they relieve one party of the obligation to use due care and shift the risk of injury to the party who is probably least equipped to take the necessary precautions to avoid injury and bear the risk of loss.[2]  Conversely, Florida law also recognizes the strong public policy favoring enforcement of contracts.  Given conflicting policy considerations, unambiguous exculpatory contracts are enforceable unless they contravene public policy as a general rule.[3]

What Must an Exculpatory Clause Contain to be Enforceable?

So what does it mean for an exculpatory clause to be unambiguous and thereby enforceable?  In Sanislo v. Give Kids the World[4], the Florida Supreme Court addressed and resolved a then-existing conflict within Florida’s district courts regarding what specific language, if any, was required to be contained in an exculpatory clause in order for the clause to be considered enforceable.

In Sanislo, the parents of an ill child filed a negligence action against the defendant, a non-profit organization which provided free vacations to seriously ill children and their families at its resort village.  As part of the application process for the vacation, the parents filed out and signed a form which contained language releasing the defendant from any liability for any potential cause of action.  The clause, however, did not specifically mention a release from the defendant’s own negligence.  After the family arrived at the defendant’s property, the parents again signed a liability release form.[5]  While at the resort, the family participated in a horse-drawn wagon ride.  Plaintiff, the child’s mother, was injured when a wheelchair lift attached to the wagon collapsed.  Plaintiff brought suit against the defendant alleging negligence.

Regarding the required contents of a valid clause, the Court held an exculpatory clause is unambiguous where the intention to be relieved from liability was made clear and unequivocal and the wording was so clear and understandable that an ordinary and knowledgeable person will know what he or she is contracting away.[6]  The majority in Sanislo, determined the agreement at issue clearly conveyed the defendants would be released from any liability, for damages, losses, or injuries due to transportation, food, lodging, entertainment, and photographs. In so holding, the Court upheld the exculpatory clause as an effective bar to the plaintiff’s negligence action.

Notably, the Court rejected previously held rulings that an exculpatory clause needed to contain express language releasing an accused party of its own negligence or negligent acts, in order to be a bar to a negligence action.[7]  The Court also explicitly rejected a bright-line rule requiring the use of so-called “magic words” necessary to deem an exculpatory clause valid.[8]

How Court’s In Florida Have Interpreted the Unambiguous Standard

“Where the intention to be relieved from liability was made clear and unequivocal and the wording was so clear and understandable that an ordinary and knowledgeable person will know what he or she is contracting away” is admittedly a high standard to meet.  Though it is one which is factually specific to the language of the clause and the circumstances surrounding the injury, courts have been willing to affirm favorable outcomes for defendants seeking to enforce the contractual provisions.

Recently in Casasanta v. Salishare[9], Florida’s First District Court of Appeal affirmed a trial court’s summary judgement in favor of a defendant landlord whose tenant sued after a fence on the property fell on the plaintiff causing injury.  The plaintiff executed a lease acknowledging she had independently inspected and examined the premises, was fully satisfied with the conditions of the cleanliness and repair, waived the right to any claims or actions against the landlord, and stipulated she was leasing the property “as-is”.  Based on the language in the lease, the court held in executing those terms, plaintiff waived her claim against the landlord for failing to safely maintain, inspect and repair a dangerous fence.

Conversely, in a recent split opinion, Fesnedo v. Porky’s Gym III, Inc.[10], a Florida district court reversed summary judgment in favor of a defendant, holding various paragraphs in the relevant contract were inconsistent, and therefore the exculpatory clause was not unambiguous and enforceable.  In Fesnedo, a gym member sued the gym after he sustained serious injuries when he was knocked unconscious by another customer using the gym.  A clause in the plaintiff’s agreement with the gym stated, “you assume full responsibility for any risk of bodily injury, death or property damage due to the negligence of any of the clubs or otherwise while you are on the premises occupied by any of the clubs.  Both the majority and the dissent, acknowledged this language demonstrated a waiver of liability for any negligence of the defendant.  However, the majority found other provisions in the contract created ambiguity or confusion for a reasonable reader, rendering the exculpatory clause unenforceable.[11] The dissenting opinion acknowledged the agreement was not a model of perfect drafting. However, despite some overlap, the paragraphs with which the majority took offense were separate and distinct provisions from the relevant exculpatory clause and otherwise consistent.

Takeaway

When drafted precisely, an exculpatory clause in the hands of a skilled defense attorney can be a valuable tool to defending against claims for damages.  Utilizing the language of the relevant contractual provision and applying it to Florida’s judicial precedent, an exculpatory clause in your, or your insured’s contract could be used to shift the risk of injury and liability, resulting in a favorable outcome.

 

[1] Ivey Plants, Inc. v. FMC Corp., 282 So. 2d 205 (Fla 4th DCA 1979).

[2] Applegate v. Cable Water Ski, L.C., 974 So. 2d 1112, 1114 (Fla. 5th DCA 2008) (citing Cain v. Banka, 932 So. 2d 575, 578).

[3] Id.

[4] Sanislo v. Give Kids the World, 157 So. 3d 256 (Fla. 2015).

[5] Both forms stated in pertinent part that the plaintiff released the defendant from any liability whatsoever in connection with the preparation, execution and fulfillment of the vacation.  The scope of the release included, but was not limited to: damages or losses encountered in connection with transportation, food, lodging, medical concerns, entertainment, photographs and physical injury.

[6] Id. at 271.

[7] Id. at 271,

[8] Id. at 270.

[9] Casasanta v. Salishare 296 LLC, 2019 WL 1613591, (Fla. 1st DCA, April 16, 2019).

[10] Fresnedo v. Porky’s Gym III, Inc., 2019 WL 1781295 (Fla. 3d DCA April 24, 2019).

[11] The same reasoning was also used to defeat exculpatory clauses in Murphy v. Young Men’s Christina Ass’n of Lake Walkes, Inc., 974 So. 2d 565 (Fla. 2d DCA 2008) and UCF Athletics Ass’n Inc., v. Plancher, 121 So. 3d 1097 (Fla. 5th DCA 2013).

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