More often than not, customers/clients of certain businesses such as fitness centers, equestrian centers, etc. are required to sign Waiver and Release Agreements as a prerequisite for using the facility. These agreements generally state that the signing party is waiving any and all rights to sue the facility for injuries resulting in any loss or damage and forever gives up any claims or demands on account of injury to the Member’s person or property, including injury leading to the death of a member caused by negligence. These “liability release provisions” are known as exculpatory provisions and are often part of a longer membership agreement.
At first blush, such agreements certainly appear to be so one-sided so as to make them invalid on public policy grounds. Yet, courts have generally found that the furnishing of, for example, gymnasium or health spa services, is not an activity of great public importance nor of a practical necessity. Even though such releases are presented as a “take it or leave it” agreement, courts have also opined that a “private business” is under no obligation or legal duty to accept a plaintiff as a member or patron (subject to anti-discrimination laws). But yet, having consented to do so, the private business has right to insist upon such terms as deemed appropriate. See, e.g., Hussein v. LA Fitness International, LLC, 2013 IL App (1st) 121426 (1st Dist. 2013), a recent Illinois case discussed below.
The law of waiver/release contract law varies from state to state, ranging from strict interpretations of contract language states to states with fairly lenient interpretations of contract language. Florida (and Illinois) courts have generally interpreted the language of exculpatory clauses in a moderate to lenient fashion wherein the clauses will generally be upheld providing certain wording is present.
A recent decision out of Florida’s Fifth District Court of Appeal drives home the point that waiver/release provisions must still meet certain requirements under Florida law to be acceptable under the law despite the moderate/lenient stance taken by Florida courts. In Gillette v. All Pro Sports (Case No. 5D12-1527, FLA, 5th DCA), the recreational facility defendant was a cart rental and track facility. The plaintiff claimed that an employee had negligently increased the go-cart’s speed during a race, causing her to lose control of her go-cart crash and crash into the railing. The trial court granted summary judgment in favor of the defendant by finding that the Waiver and Release from Liability for Go Carts and Track signed by the plaintiff was enforceable.
The Gillette Court, citing several Florida cases, stated that “[c]lauses that purport to deny an injured party the right to recover damages from another who negligently causes injury are strictly construed against the party seeking to be relieved of liability. To be effective, the wording of such clauses must be so clear and understandable that an ordinary and knowledgeable person will know what she or he is contracting away.” The last paragraph of the agreement at issue in Gillette stated in part:
I have read this waiver and release in its entirety. I understand that I am assuming all the risk inherent in operating and/or riding Go Karts on the track. I understand that it is a release of all claims that I may have against any released part [sic]. I understand that this is the entire agreement between me and any released party and that it cannot be modified or changed in any by the representation or statements by any released party or by me.
The actual numbered provisions of the Agreement never expressly stated that the signers were waiving/releasing the facility operator from any negligence claims arising from its own conduct. Instead the Agreement focused on the conduct of the signer by stating “[the signer] has the necessary skill and will exercise the responsibility necessary to operate the Go Karts and navigate the course safely.” Another provision focused on the conduct of other drivers by stating “[t]he Go Karts are controlled by individual drivers, who are capable of making mistakes and intentionally causing harms to others.”
The Gillette Court found that by not expressly stating that the release included the defendant’s own negligence, the document, when considered in its totality, did not clearly indicate that the negligence “of the sort here was intended to be within the scope of the release.”
Surely the Gillette defendant intended to have negligence claims within the scope of the release. Unfortunately for the defendant, the release was unclearly worded. It is also likely that the plaintiff would have signed even a clearly written release since most customers at recreational facilities, fitness centers, etc. do not anticipate getting hurt and wish to utilize the services offered. Let us compare the Gillette release with a typical fitness club release and waiver of liability such as the one at issue in Hussein v. LA Fitness International, LLC, the Illinois case referenced above.
IMPORTANT: RELEASE AND WAIVER OF LIABILITY AND INDEMNITY. You hereby acknowledge and agree that Member use of L.A. Fitness’ facilities, services, equipment or premises involves risks of injuries to persons and Member assumes full responsibility for such risks. Member hereby releases and holds L.A. Fitness harmless from all liability to Member for any loss or damage, and forever gives up any claim or demands therefore, on account of injury to Member’s person or property, including injury leading to the death of Member, whether caused by the active or passive negligence of L.A. Fitness or otherwise to the fullest extent permitted by law, while Member is in, upon, or about L.A. Fitness premises or using any L.A. Fitness facilities, services, or equipment. See Hussein v. LA Fitness International, LLC. Our emphasis.
The Hussein plaintiff was injured and rendered a quadriplegic while using gym equipment at an L.A. Fitness facility in Chicago. While acknowledging that the results of the case were “harsh”, the Illinois Appellate Court held that the exculpatory court was enforceable because while such clauses are un-favored and scrutinized, they are nonetheless enforceable when reasonably drafted to clearly identify the risk associated with the release such that the releasing party can comprehend the risks of injury resulting from such a clause. The Hussein case actually involved the application of Minnesota law since the L.A. Fitness Membership Agreement stated that Minnesota law would apply under any legal dispute. The outcome would have been the same under Illinois law according to the Illinois Appellate Court.
What is the take home point from the Gillette decision when viewed relative to the recent L.A. Fitness case out of Illinois? First, the release agreement in the Hussein case would most likely also have been upheld by Florida courts because it specifically referred to negligence claims against L.A. Fitness. It is important to remember, however, that some courts have found that exculpatory clauses do not relieve a fitness center of its own negligence. For example, in Zipusch v. L.A. Workout, Inc., 155 Ca. App. 4th 1281 (Cal. Ct. 2007), a California Appellate Court held that the exculpatory clauses did not apply wherein the plaintiff claimed to have been injured from a sticky substance leftover on a treadmill. That is, the treadmill had been negligently maintained by L.A. Fitness for use by its business invitees. As stated above, the law of waiver/releases varies from state to state and it is important for a business to understand the law of the state(s) where it intends to conduct business.
Second, the wording must not be unclear or ambiguous regarding just what rights the signer is giving up and must be worded in simple, understandable terms. The Gillette agreement was actually quite well written without legalese. The problem with the agreement, however, was that it was legally deficient in stating what rights the signer was actually waiving or giving up.
Other considerations for drafting a sound Release and Waiver of Liability Agreement include the following. Exculpatory agreements should never attempt to disclaim responsibility for “gross negligence” or other outrageous conduct. They should disclaim responsibility for negligence.
It is also recommended that the first sentence of the release agreement start with the words “[i]n consideration of being allowed to participate in, use the facilities, etc. . . .” Attorneys from their law school years will remember that the parties to an agreement are each exchanging something of value. The consideration received from, for example, the recreational facility in an exculpatory agreement, is the promise not to sue while the consideration received by the participant is the right to participate, use the facilities, etc.
As with the above L.A. Fitness excerpt from its Membership Agreement, it is further recommended that that the waiver/release should have a phrase releasing the organization from negligence to “the fullest extent permitted by law.” This phrase serves as a “severability clause” wherein the court could strike any phrases that are contrary to state law while leaving the rest of the waiver/release intact.
The foregoing recommendations are merely a snapshot of what should be included in a Release and Waiver of Liability Agreement. It is axiomatic, as the Hussein Court stated, that exculpatory clauses can have harsh results. On the other hand, most signers of such agreements really do not give much thought to the legal rights they are giving up. Nevertheless, such agreements, if drafted correctly, will more often than not be upheld, even in states with the most stringent standards for evaluating exculpatory clauses.
Given the potential costly impact of an unenforceable waiver/release agreement upon a business, it is recommended that the drafting party of any contract containing exculpatory clauses consult legal counsel to ensure compliance with the individual jurisdictional requirements where the contract will be enforced. It may be appropriate also to include choice of law provisions as did the release/waiver agreement at issue in the Hussein case. An ounce of prevention can be worth a pound of cure when it comes to ensuring that any business contract, whether it contains an exculpatory clause or not, is properly drafted.
THIS BLOG IS NOT LEGAL ADVICE AND YOU SHOULD NOT CONSIDER IT AS SUCH. IT IS FOR INFORMATION PURPOSES ONLY. IF YOU ARE CONSIDERING AN ACTION THAT MAY HAVE LEGAL CONSEQUENCES, YOU SHOULD CONSULT WITH AN ATTORNEY OF YOUR CHOOSING.
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