Use of Contracts to Avoid Responsibility in Tort

People and businesses have attempted to avoid responsibility for wrongful acts for all recorded history. Adam blamed Eve.1 Eve blamed the serpent.2 The Nuremberg defense is frequently offered as an explanation or rationalization for misconduct in both the government and private sectors.3

And, not surprisingly, the advent of the written contract brought forth efforts to both memorialize and legalize the prospective limitation on one’s responsibility for his, her or its wrongful acts, even in the event of injury or death.

The validity of exculpation clauses varies from state to state, circumstance to circumstance.4 Courts construing the clauses are forced to engage in judicial funambulism confronting “a natural tension between [ ] public policy that favors allowing parties to have freedom to contract and the public policy that disfavors allowing a party to escape the consequences of the party’s negligence.”5 Until recently, the Tennessee Supreme Court had not provided us with guidance on the issue since 1992.6

The need for further examination on exculpation clauses arose in Copeland v. Healthsouth/Methodist Rehabilitation Hospital, LP,7 where the court was called upon to evaluate the enforceability of an exculpation clause in a patient transportation contract. Mr. Copeland was a knee transplant patient. HealthSouth, his hospital, contracted with MedicOne Medical Response Delta Response Inc. (MedicOne), to provide transportation for Mr. Copeland from the hospital to his orthopedic surgeon’s office. As Mr. Copeland was getting into the medical van to return to the hospital, he fell and was injured. He filed suit against MedicOne and the hospital.

MedicOne invoked the exculpation provisions8 in the nine-paragraph contract that Mr. Copeland signed earlier that day when he first got into the van, and moved for summary judgment on the exculpation clause. The trial judge granted MedicOne’s motion and the Court of Appeals affirmed.

Justice Sharon G. Lee wrote for a unanimous court. She and her colleagues examined the history of exculpation clauses in Tennessee and determined, “after considering the totality of the circumstances and weighing the inequality in the relative bargaining power of the parties, the lack of clarity of the exculpatory language, and the public policy and public interest implications …,”9 the clause was invalid.

The six-factor test announced in Olson v. Molzen10 was gone,11 replaced by these nonexclusive factors: (1) relative bargaining power of the parties; (2) clarity of the exculpatory language, which should be clear, unambiguous and unmistakable about what the party who signs the agreement is giving up; and (3) public policy and public interest implications. “The totality of the facts and circumstances of each case will dictate the applicability of and the weight to be given to each of these factors.”12
The court went on to offer several detailed paragraphs of how each factor should be applied,13 followed by the application of the facts in Copeland to the new test.14 The discussion on the “disparity of bargaining power” factor is particularly insightful15 and reflects a firm understanding of how the modern-day marketplace for services (and quasi-services) truly functions.

Candidly, this 44-page opinion cannot be properly summarized in the space provided for this column. Suffice it to say, Copeland impacts the potential enforceability of almost every exculpation clause in every nonrecreational setting16 (and maybe those in purely voluntary and recreational settings, too).

Copeland puts a new burden on personal injury and wrongful death lawyers — plaintiff and defense — to critically examine exculpation clauses and determine whether they are enforceable. Enforceability will often depend on the facts, so careful analysis will be required to identify relevant information. Skill will be needed to properly and timely place those facts in the record.

Copeland also provides an opportunity for lawyers who advise businesses to reach out to their clients and encourage them to re-evaluate the enforceability of exculpation clauses in their consumer contracts, redrafting them as appropriate. The decision also gives rise to the need for risk-assessment, implementation of injury and loss avoidance measures, and evaluation of the adequacy of liability insurance coverage.
Copeland is an excellent example of the beauty of the common law.

JOHN A. DAY is a trial lawyer with offices in Brentwood, Murfreesboro and Nashville. In his personal life, he tried to bargain with businesses to eliminate exculpatory provisions from consumer contracts offered to him. He has never been successful. Many years ago, to keep his blood pressure down, he stopped reading them.

1. Genesis 3:12 (“And the man said, The woman whom thou gavest to be with me, she gave me of the tree, and I did eat.”)
2. Genesis 3:13 (“And the Lord God said unto the woman, What is this that thou hast done? And the woman said, The serpent beguiled me, and I did eat.”)
3. Also called the “superior orders plea,” the defense of “I was just following orders” was made famous during the Nuremberg trials against certain military and political leaders of Nazi Germany.
4. Cases are collected in the text and footnotes cited in Copeland v. Healthsouth/ Methodist Rehabilitation Hospital, LP, 565 S.W.3d 260, 270 fn 13 – 275 fn. 20 (Tenn. 2018).
5. Copeland v. Healthsouth/ Methodist Rehabilitation Hospital, LP, 565 S.W.3d 260, 265 (Tenn. 2018).
6. Olson v. Molzen, 558 S.W.2d 429, 431 (Tenn. 1977) (leading case developing factors for determining whether exculpatory clause violated public policy; declared effort of doctor to limit liability to patient concerning a medical procedure was void as against public policy); and Crawford v. Buckner, 839 S.W.2d 754, 756 (Tenn.1992) (exculpatory clause protecting residential landlord from a negligence action filed by a tenant declared unenforceable); There was one more recent opinion, Stewart v. Chalet Village Properties Inc., (Tenn. 2009) (remanding case to trial court to apply appropriate factors and determine whether short-term residential real estate lease was valid to prevent tenant from maintaining personal injury claim), but it was designated “not for publication.”
7. 565 S.W.3d 260 (Tenn. 2018).
8. This is how the court described the clause: “The exculpatory language provided that Mr. Copeland was releasing MedicOne from any and all claims arising from or in any way associated with any transportation services provided by MedicOne.” Id. at 264. The broad language even waived claims arising from gross negligence and willful misconduct. Id. at 277.
9. 565 S.W.3d at 278-79.
10. 558 S.W.2d 429, 431 (Tenn. 1977).
11. Olson was not expressly overruled. However, seven cases of the Court of Appeals were. 565 S.W.3d at 274.
12. 565 S.W.3d at 274. The court went on to say “[t]he factors need not be weighed equally in any given case ­— rather, the analysis should involve balancing each of these considerations given the facts and circumstances surrounding the formation of the agreement. In addition, we hold that there is no ‘professional services criterion’ that restricts application of this analysis to contracts for professional services.” Id.
13. Id. at 274-76.
14. Id. at 276-79.
15. Id. at 276.
16. The court expressly recognized that Mr. Copeland’s need for medical transport distinguished his case “from those involving purely voluntary or recreational activities, which generally do not affect the public interest or raise public policy concerns.” 278. Note the inclusion of the word “generally.”

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