Business Transaction Newsletters – July 2017

EXCULPATORY CLAUSES CAN PROTECT ENTITY FROM LIABILITY

In the case of Gibson v. YMCA of Middle Tennessee, the Court upheld the validity of an exculpatory clause, or sometimes referred to as a release agreement by a person filling out a Membership Application.  In the YMCA case, Gibson fell and sustained injuries when she tripped on an alleged uneven or cracked sidewalk approximately twenty feet from the entrance of the Rutherford County YMCA.  Prior to her visit when she was injured, Gibson signed a Membership Application for membership to the YMCA.  In pertinent part, the YMCA Membership Application read:

I do hereby waive and release and forever discharge the YMCA and its officers, agents, employees, volunteers, representatives, directors, and others from any and all responsibility or liability for injuries or damage resulting from participation in such activities or programs for my use of such facilities, equipment or machinery, even if such damage or injury results from a negligent act or omission.

The Court of Appeals reversed the Trial Court and ruled in favor of the YMCA, writing that exculpatory agreements, such as the one signed by Gibson, have long been enforceable in Tennessee.  These agreements are analyzed under the doctrine of express assumption of the risk, which refers to an express release, waiver, or exculpatory clause by which one party agrees to assume the risk of harm arising from another party’s negligence.  In Tennessee, express assumption of the risk is a complete defense to liability.  The Court further wrote that exculpatory agreements are contractual, and courts look to the plain meaning of the words in the document to ascertain the party’s intent.  Because the Trial Court did not find ambiguity in the exculpatory agreement and found that Gibson was using the facilities as contemplated by the parties, summary judgment was appropriate in favor of the YMCA.

MY RECOMMENDATION:   Although the Court of Appeals upheld the exculpatory clause in the YMCA case, sometimes these clauses are not upheld by the Courts. In my letter dated September 30, 2015, I wrote about the Stewart case, where the Tennessee Court of Appeals held the exculpatory clause in that case was not valid for reasons of public policy.

Yours very truly,

RAINEY, KIZER, REVIERE & BELL, P.L.C.

William C. Bell, Jr., Attorney at Law