New Supeme Court case on exculpatory clauses

A contract says what it means and means what it says—with respect to exculpatory contracts, at least. Indeed, in Sanislo v. Give Kids the World, Inc., 2015 WL 569119 (Fla. 2015), the Florida Supreme Court had before it the issue of whether the plaintiffs were barred from recovering under a negligence theory in a personal-injury action in which an agreement containing the following language had been executed:

I/we hereby release [the defendant] and all of its agents, officers, directors, servants, and employees from any liability whatsoever in connection with the preparation, execution, and fulfillment of said wish, on behalf of ourselves, the above named wish child and all other participants. The scope of this release shall include, but not be limited to, damages or losses or injuries encountered in connection with transportation, food, lodging, medical concerns (physical and emotional), entertainment, photographs and physical injury of any kind . . . .

I/we further agree to hold harmless and to release [the defendant] from and against any and all claims and causes of action of every kind arising from any and all physical or emotional injuries and/or damages which may happen to me/us . . . .

The Fifth District Court of Appeal had held that the plaintiffs’ action was barred and certified that its decision was in conflict with other District Courts of Appeal decisions dating back to 1980.[1] The Sanislo court approved the Fifth District’s decision and expressly disapproved the decisions that held to the contrary.

The plaintiffs argued that the exculpatory contract was ambiguous because it did not contain express language releasing the defendant for its own negligence and was thus ineffective to bar the action. The argument was based on a series of Florida Supreme Court cases that analyzed similar issues in the context of indemnity contracts, University Plaza Shopping Center, Inc. v. Stewart, 272 So. 2d 507 (Fla. 1973), and its progeny. In those cases, the Court held that an indemnity provision does not indemnify a party for damages resulting from his own negligence if the provision is stated in general terms, e.g., “any and all claims.” The plaintiffs invited the Court to draw an analogy between an indemnity contract and the exculpatory contract before it because both contracts achieve the same result: the abdication for responsibility for one’s own negligence. But the Court was concerned more with the means (the purposes of the contracts) than with the ends and declined to accept the plaintiffs’ invitation.

The purpose of an indemnity contract is to reduce the risk of exposing the indemnitee to liability for damages caused to an unknown third party. Thus, it would not be apparent to an indemnitor that he agreed to indemnify a party for its own negligence based on language like “any and all claims.” In that the purpose of contract interpretation is to give effect to the parties’ intention, an indemnity contract must contain specific language protecting the indemnitee from liability solely caused by his own “negligence” or “negligent acts.”

The purpose of an exculpatory contract, on the other hand, is to deprive one of the contracting parties of his right to recover damages caused by the negligent act of the other contracting party. As that is the intention of the parties to an exculpatory contract, the absence of the terms “negligence” or “negligent acts” does not render the contract ineffective; the contract need only demonstrate a clear and understandable intention to be relieved from liability so that an ordinary and knowledgeable person will know what he is contracting away. And because the agreement at issue in Sanislo “clearly conveys that [the defendant] would be released from any liability, including negligence, for damages losses or injuries,” the Court held that the plaintiffs’ action was barred. (There is also a public-policy exception to this rule; however, the plaintiffs did not argue that the exculpatory contract was void because it is against public policy.)

Although a great case for the defense bar, it should be noted that the Sanislo court “stressed that [its] holding is not intended to render general language in a release of liability per se effective to bar negligence actions.” That said, one should always consider including the terms “negligence” or “negligent acts” in exculpatory contracts.

Levine v. A. Madley Corp.
, 516 So. 2d 1101, 1103 (Fla. 1st DCA 1987); Van Tuyn v. Zurich Am. Ins. Co., 447 So. 2d 318, 320 (Fla. 4th DCA 1984); Goyings v. Jack & Ruth Eckerd Found., 403 So. 2d 1144, 1146 (Fla. 2d DCA 1981); Tout v. Hartford Acc. & Indem. Co., 390
So. 2d 155, 156 (Fla. 3d DCA 1980).