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Florida Supreme Court: Negligence Release Does Not Require Express Language
Practical Law Legal Update 9-600-4139 (Approx. 6 pages)
Florida Supreme Court: Negligence Release Does Not Require Express Language
by Practical Law Commercial
| Published on 13 Feb 2015 • Florida, USA (National/Federal) |
The Supreme Court of Florida held in Sanislo v. Give Kids the World, Inc. that an exculpatory clause is not ambiguous and unenforceable simply because it does not contain express language releasing a defendant from liability for his own negligence or negligent acts.
On February 12, 2015, the Supreme Court of Florida held in Sanislo v. Give Kids the World, Inc. that an exculpatory agreement is not ambiguous and unenforceable merely because it does not contain express language releasing a defendant from liability for his own negligence or negligent acts ( (Fla. Feb. 12, 2015)). The court's decision disapproves of earlier Florida District Courts of Appeal decisions that have held that an exculpatory clause is only effective to bar a negligence action if it clearly states that it releases a party from liability for his own negligence.
Background
This case is based on an action that Stacy Sanislo brought against Give Kids the World, Inc. (GKW) after being injured on vacation at the company's resort village. Sanislo claimed her injuries were caused by GKW's negligence.
Before vacationing at GKW's resort, Sanislo signed two documents that released GKW "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 her.
Before trial, GKW filed a motion for summary judgment and argued that the two releases precluded Sanislo's action for negligence. The trial court denied this motion and Sanislo ultimately prevailed at trial.
After the trial, GKW appealed to Florida's Fifth District Court of Appeal and again argued that the two releases precluded Sanislo's claim. The Fifth District reversed the trial court's denial of summary judgment and held that the exculpatory clauses releasing GKW from liability barred the negligence action even though they lacked a specific reference to "negligence" or "negligent acts." The Fifth District's decision conflicted with decisions in every other Florida District Court of Appeal that an exculpatory clause can bar a negligence action only if it clearly states that it releases a party from liability for his own negligence (see Levine v. A. Madley Corp., 516 So.2d 1101 (Fla. Dist. Ct. App. 1987) (First District); Van Tuyn v. Zurich Am. Ins. Co., 447 So.2d 318 (Fla. Dist. Ct. App. 1984) (Fourth District); Goyings v. Jack & Ruth Eckerd Found., 403 So.2d 1144 (Fla. Dist. Ct. App. 1981) (Second District) and Tout v. Hartford Accident & Indem. Co., 390 So.2d 155 (Fla. Dist. Ct. App. 1980) (Third District)).
Outcome
The Supreme Court of Florida affirmed the Fifth District's decision and held that GKW's releases barred Sanislo's negligence action even though the releases did not contain express language releasing GKW from liability for its own negligence or negligent acts. The court rejected the view that an exculpatory clause can bar a negligence action only if it expressly states that it releases a party from liability for his own negligence.
However, the court also reiterated that exculpatory clauses are:
- Generally disfavored by public policy.
- Enforceable only if they are unambiguous, meaning that the intention to be relieved from liability is made clear and unequivocal and the wording is so clear and understandable that an ordinary and knowledgeable person will know what he is contracting away.
In reaching its holding, the court examined:
- Its own precedent about indemnification clauses (see Relationship to Indemnification Clauses).
- Other states' laws about the enforceability of exculpation clauses (see Out-of-State Precedent).
Relationship to Indemnification Clauses
Under the Florida Supreme Court's precedent, an indemnity agreement can indemnify the indemnitee for his own negligence or negligent acts only if the agreement contains a specific provision protecting the indemnitee from liability caused by his own negligence. However, the court found that precedent inapplicable to this case and rejected Sanislo's argument that the same rule should apply to exculpation provisions. Although both indemnification and exculpatory provisions are risk-shifting devices, Florida courts recognize a distinction between the two:
- Indemnification provisions typically shift the entire loss or damage the indemnified party incurs to the responsible party who should bear the cost because it was that party's wrongdoing for which the indemnified party is held liable.
- Exculpatory provisions shift the risk of injury and deprive one of the contracting parties of her right to recover damages suffered due to the negligent act of the other contracting party.
The court reasoned that specificity for negligence actions is necessary in indemnification provisions because the risk is shifted to an innocent third party who should be made aware if it is accepting liability for both its negligence and the indemnitee's negligence. Florida courts generally look unfavorably on a party's attempt to make an innocent third party pay for its wrongful conduct. Therefore, specificity is required in indemnification provisions to prove that is what the parties intended to do. The court did not find a similar necessity in release agreements. Releasing a party from liability does not result in shifting liability to an innocent party, therefore specificity to prove intent is not required.
For more information on drafting indemnification provisions, see Practice Note, Indemnification Clauses in Commercial Contracts and Drafting and Negotiating an Indemnification Clause Checklist.
For more information on risk shifting tools, see Practice Note, Risk Allocation in Commercial Contracts.
Out-of-State Precedent
The court surveyed decisions from across the country and identified four different standards for determining whether language in an exculpatory clause clearly and unequivocally releases a party from liability for negligence:
- Standard 1: An exculpatory clause will be given effect if the agreement clearly and unambiguously expresses the parties' intention to release a party from liability for his own negligence by:
- using the words "negligence" or "negligent acts;" and
- specifically including injuries definitely described as to time and place (see, for example, Wright v. Loon Mountain Recreation Corp., 663 A.2d 1340 (N.H. 1995)).
- Standard 2: A specific reference to negligence is not required if the clause clearly and specifically indicates an intent to release the defendant from liability for a personal injury caused by the defendant's negligence (see, for example, Seigneur v. Nat'l Fitness Inst., Inc., 752 A.2d 631 (Md. Ct. Spec. App. 2000)).
- Standard 3: A specific reference to negligence is not required if protection against negligence is the only reasonable construction of the contract (see, for example, Am. Druggists' Ins. Co. v. Equifax, Inc., 505 F. Supp. 66 (S.D. Ohio 1980)).
- Standard 4: A specific reference to negligence is not required if the hazard experienced was clearly within the contemplation of the provision (see, for example, Blide v. Rainier Mountaineering, Inc., 636 P.2d 492 (Wash. Ct. App. 1981)).
Despite these four different standards, most courts agree that a release will not cover negligence if it neither specifically refers to negligence nor contains any other language that could relate to negligence. The court agreed with the majority of states that have held that express use of the word "negligence" or "negligent acts" is not necessary. The court determined that the parties intended to include negligence in the exculpation agreements based on the agreements' particular language and what it would convey to an ordinary and knowledgeable person.
After reviewing GKW's two releases, the court ultimately held that their clear and unequivocal language released the company from any liability, including negligence, without having to explicitly mention GKW's negligence or negligent acts.
Practical Implications
This decision aligns Florida with the majority of states by holding that an exculpatory agreement does not necessarily need to include express language to bar actions for negligence.
However, to avoid confusion and future conflict about the scope of an exculpatory clause, parties should draft the clause with as much specificity as possible. Even though this is not a requirement in many states, including Florida, parties should specifically address negligence to avoid having a court interpret their contract contrary to their intent. Most courts will address whether contract parties intended to bar certain claims in an exculpation agreement based on the particular language of the contract and the meaning it would convey to a person of ordinary intelligence.
For more information on exculpatory provisions, see Practice Note, Negligence, Gross Negligence and Willful Misconduct.