by Reb Gregg and Catherine Hansen-Stamp

Florida case emphasizes the need to carefully craft participant agreements or other documents that include language seeking a release of liability for your organization’s negligence, considering a court’s strict reading of that language.

In Murphy v. Young Men’s Christian Association of Lake Wales, 2008 Fla. App. LEXIS 2035, Elizabeth Murphy, an adult, suffered injuries while using exercise equipment at a YMCA and filed suit against them. Ms. Murphy (plaintiff) claimed that the YMCA had negligently failed to inspect, maintain and repair the equipment, and that that was the cause of her injuries. Plaintiff had signed a membership application before using the YMCA which contained the following language: “I understand that even when every reasonable precaution is taken, accidents can sometimes still happen. Therefore…..I release the (YMCA)….”. Further into the paragraph, the applicant states: “I understand that this release includes any claims based on negligence…”.

The YMCA claimed that the Membership Agreement release language barred plaintiff’s claim for negligence, and that therefore, her lawsuit should be dismissed before trial. Plaintiff argued that the release was not clear, because the “reasonable precaution” language could be interpreted as being inconsistent with the YMCA’s release of negligence – that is, the YMCA agreed it would NOT be negligent, and then asked to be released if it WAS

The Court agreed to dismiss the case before trial (granted “summary judgment”) in favor of the YMCA. The Plaintiff appealed to the Florida Court of Appeals.

The Appeals Court agreed with plaintiff and reversed the lower court ruling, refusing to dismiss the case on the strength of the release language. The Court noted that under Florida law, release provisions are not favored by the courts, must be “strictly construed against the party claiming to be relieved of liability” and must be “so clear…that an ordinary…party will know what he is contracting away”. The Court concluded that the YMCA clearly promised to “take every reasonable precaution” against accidents, and that a “reasonable reader” might conclude that the release covered only claims that were unavoidable even though every reasonable precaution had been taken.

The case was sent back to the trial court for “further proceedings”.

Commentary:

Courts, as noted in this case, are reluctant to enforce agreements containing release (often referred to as exculpatory or liability “shifting”) language. To do so contradicts the notion, firmly embedded in this country’s tort laws, that folks who suffer a loss are entitled to be compensated for that loss. The other side of the argument is that folks are entitled to contract as they see fit, even if the the contract offends some notions of fair play. A few states, including Louisiana, Montana and Virginia will not enforce an individual’s agreement to release his or her right to recover for future negligence. However, the vast majority of states do allow such agreements.

Every jurisdiction has its own criteria for determining the enforceability of release language. Note that in Murphy, the release language was included in a ‘Membership Agreement.’ We commonly see release language in a larger agreement – what we have called a ‘participant agreement’ – containing additional language discussing the activities, risks and other pertinent information. It may be entitled ‘Acknowledgement and Assumption of Risks & Release and Indemnity Agreement’ or something similar. A participant agreement can inadvertently create contradictions similar to those present in the Murphy case: “we have chosen our contractors with care” for example, or “we guarantee you a safe and fun experience”.

Because release language attempts to shift liability already allocated under the law, courts in most jurisdictions will carefully scrutinize these agreements and enforce them only on a case by case basis. Courts will look to both the basic requirements of contract law, and law regarding releases, in judging enforceability. Generally, a release, must be clear in its intent, voluntarily and fairly entered into, involve parties who are competent to contract (age, mental acuity, etc.), and include terms that do not offend state public policy. Many states, for example, do not allow a parent or legal guardian to release a minor’s rights to recover for negligence, or allow an individual to release their right to recover for recklessness, or willful, wanton or intentionally wrongful conduct (to be discussed in future publications). As in all matters legal, consult with qualified counsel in your state regarding the laws that affect your program’s strategies for protection from claims.

Consistent with the prevailing ‘tough’ approach to releases, we have seen courts consider carefully whether the activity and risk which caused the loss were actually covered by the document – or, perhaps more succinctly, whether the loss was reasonably contemplated by the participant as within the scope of what he or she had agreed to release. As a result, programs should take care in describing the activities and potential risks, so the injured participant cannot claim: “Gee, that never occurred to me”. Keep in mind that a document cannot contain every possible contingency, and ‘catch-all’ language can be used in a thoughtful and appropriate way. Work with legal counsel familiar with your state’s law to address these issues.

Reflecting now on the Murphy case, discussed above: The activities and risks may appear to have been adequately covered, but the language of the release actually PROMISED, or strongly suggested, a level of care (“every reasonable precaution”) that contradicted the apparent intent of the release language – to be excused for NOT acting reasonably (that is, for acting negligently). The promise of reasonable care, the Court reasoned, eliminated the risk of unreasonable care (negligence). This internal contradiction (“how can you promise to do something and then ask to be forgiven if you don’t fulfill your promise?”) provides a perfect set-up for a court already disposed to disallow a release. If one were to try to reconcile the two provisions it might be appropriate, the Court notes, to interpret the release language as covering only losses that were unavoidable in spite of “reasonable precautions”. Obviously, this interpretation narrows considerably, the intent of the program to protect itself from claims of negligence.

Take-aways:

• Examine your participant agreement to determine if it contains language which might be interpreted as a promise to meet a certain standard of behavior that is inconsistent with your effort to be released from claims of negligence. If there is this type of inconsistency, your release language may be ineffective.
• Work with experienced legal counsel who is familiar with the law in your jurisdiction, to assess this and other important aspects of your participant agreement.

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