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Exculpatory Clauses MUST be Clear and Unequivocal

Posted by David Adelstein on June 08, 2019
Trial Perspectives / Comments Off on Exculpatory Clauses MUST be Clear and Unequivocal

I am not telling you anything you do not already know, but it is important to read and appreciate the documents you sign. Likewise, it is important to give due consideration to the documents you prepare or have prepared that you want another to sign.  Such documents are intended to have legal effect.

By way of example, in Fresnedo v. Porky’s Gym III, Inc., 44 Fla. L. Weekly D1029a (Fla. 3d DCA 2019), the plaintiff sued his gym in negligence claiming he was injured by another person in the gym after this other person attacked him.  The gym relied on a waiver and release document the plaintiff signed in order to become a gym member claiming the plaintiff released it of all liability. 

A waiver and release clause in a document is referred to as an exculpatory clause.

Exculpatory clauses, such as the one at issue here, 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.  In addition, courts are required to read such clauses in pari materia, giving meaning to each of its provisions, to determine whether the intention to be relieved was made clear and unequivocal in the contract, such that an ordinary person would know what he was contracting away. 

Fresnedo, supra (internal quotations and citations omitted).

The court analyzed the entire waiver and release document (since it was reviewed in pari materia with the other clauses in the document) and determined that the exculpatory clause (waiver and release) did NOT clearly and unequivocally waive the gym’s liability for the type of negligence alleged by the plaintiff in his complaint.  In particular, the waiver and release was not unequivocal that it released the gym if the plaintiff was injured from an altercation with another person at the gym. 

Had the waiver and release clause in the document been clear and unequivocal, the plaintiff would probably be out of luck in his suit against the gym.  The fact that the gym’s waiver and release was not clear gave the plaintiff the ability to bypass the waiver and release and sue the gym for negligence.

 

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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A General Release is Not Absolute

Posted by David Adelstein on May 27, 2019
Trial Perspectives / Comments Off on A General Release is Not Absolute

General releases, unfortunately, are not absoluteA recent ruling from the Third District Court of Appeal in Falsetto v. Liss, 44 Fla. L. Weekly D1340d (Fla. 3d DCA 2019) confirms this point, although, candidly, I have mixed feelings regarding this ruling.   

In this case, the Court held that the term “unknown” in a general release is not synonymous with the term “unaccrued;” thus, a release of an unknown claim does not mean a release of an unaccrued claim.  In theory, this makes sense since a future claim should not be barred.  It is one thing if the facts giving rise to the claim occurred AFTER the execution of the release such that the release does not cover circumstances arising from these facts.  It is another if the facts giving rise to the claim occurred BEFORE the execution of the release.  In the latter case, such claims should be included by virtue of the general release which is the reason why the word “unknown” is included, at least in my opinion.  The Court, however, found differently.

In Falsetto, parties entered into a release that included the release of past and present claims, “known and unknown.”  This is common language in a general release. 

A subsequent dispute arose between the parties and one of the parties counter-sued for fraud based on facts that occurred prior to the date in the release. The party, however, claimed it did not learn about the facts surrounding the fraud until the subsequent lawsuit. The Court held that because a fraud claim “accrues” when the last element occurs or “when the plaintiff knew, or through the exercise of due diligence should have known, of the facts constituting the fraud,” there was a factual issue as to when the fraud claim accrued.  Falsetto, supra (internal citation and quotation omitted).   Accordingly, the party asserting the fraud argued that while the facts may have taken place before the date in the general release, it did not know or learn about the fraud until after-the-fact–the fraud did not accrue until the party learned of the fraud.  The other party is now forced to argue that the party “knew or should have known” about the fraud, which in my opinion, results in a watering down effect of a general release. With a general release, the parties are looking for closure through the date of the release. This closure becomes difficult if the word “unknown” is going to be cast aside if a claim, such as fraud, did not accrue until after-the-fact based on a party learning of the fraud, even though the facts predate the release.

The safe play now is to add the phrase “known or unknown and accrued or unaccrued” in the general release to avoid this issue.   But, in fairness, this language also creates problems because a release through a set date should not operate to bar claims that occur after the release and no party should realistically want a release to be broadly construed to release a future claim that did not arise until after the release. 

 

 

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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