The California Court of Appeal issued a recent opinion holding that a waiver of liability did not violate public policy when it was signed in consideration for room and board, and spiritual support for substance abuse. The court examined the benefits of upholding the waiver, particularly for organizations that provide help to the public and need to be able to conduct themselves without fear of potential litigation. In conclusion, the court rejected the plaintiff’s allegations that the waiver went against public policy.
In His Steps Christian Recovery Home, Inc. (IHS) is a nonprofit organization that provides regulations-based support and residential recovery for adults with drug- and alcohol-related problems. The IHS home was not subject to licensure by the Department of Alcohol and Drug Programs.
Robert Murphy entered the program in 2010 and signed a Waiver of Liability. Mr. Murphy needed a California identification card from the Department of Motor Vehicles (DMV) to apply for assistance. David Lee Richardson, an employee of IHS, drove Mr. Murphy to the DMV in a van registered to an IHS board member. On their way, Mr. Richardson ran a red light and caused an accident. Mr. Murphy suffered injuries and spent three days in the hospital receiving treatment.
Mr. Murphy brought a negligence claim for personal injuries against IHS, Mr. Richardson, and the estate of a former IHS board member. The trial court found that Mr. Murphy’s waiver was an express assumption of risk and that it barred the action. They granted summary judgment in favor of the defendants. Mr. Murphy then appealed the judgment.
On appeal, Mr. Murphy argued that the trial court erred in granting summary judgment. He claimed that the release from liability was void as contrary to public policy because rehabilitation related to drug and alcohol is a matter of great public interest. He also contended that the scope of the waiver was ambiguous and that the car accident was unrelated to the purpose and object of the release.
The court turned to the validity of the waiver and stated the rule that contracts that exempt parties from responsibility for their fraud or willful injury to others are against the policy of the law. Six characteristics, set forth in a California Supreme Court case called Tunkl. v. Regents of University of Cal. (1963), 60 Cal.2d 92, 96, help to determine whether an attempted waiver of liability violates public policy: (1) it is a business-related waiver more suitable for public regulation; (2) it concerns a public service; (3) the party holds himself out as performing the service for the public; (4) there is an advantage to the party seeking exculpation; (5) there is no option to obtain protection against negligence for a reasonable fee; and (6) the person is under the control of the seller and subject to the risk of carelessness by the seller.
It is not against public policy for a private party, for consideration, to voluntarily shoulder a risk that the law would have placed upon the other party.
The court stated that IHS did not conduct business of a type thought suitable for public regulation. It was not a drug or alcohol treatment facility, but instead it was a spiritual support and a home for those recovering from abuse problems. Second, IHS did not provide services of great importance to the public, and third, IHS did not hold itself out as a service for members of the public. In other words, the public could not qualify for IHS services by falling within certain standards.
Some of the six characteristics were satisfied, including that Mr. Murphy was under the control of and subject to the carelessness by IHS. In terms of bargaining strength, IHS had more than Mr. Murphy, who was homeless at the time he entered the program, but because of the nonessential character of the services provided by IHS, the bargaining strength and control of IHS did not rise to the level of other circumstances set forth in the Tunkl public interest exception.
The court stated that the transaction between Mr. Murphy and IHS was similar to those in which courts have found waivers of negligence liability for nonessential activities that benefit the public. An example of one case was a waiver signed by seniors participating in YMCA recreational activities. Upholding a waiver like this benefits the public by allowing these activities to take place without the risks and potential costs of litigation. Here, the relationship between Mr. Murphy and IHS was similar to that between the YMCA and the seniors. The IHS liability waiver facilitated religious activities, as did the waiver that facilitated YMCA activities for seniors. The court stated that these waivers do not transform the parties’ “purely private agreement into a matter of general public interest.”
Turning to the policy benefits of upholding the waiver, the court stated that religious recovery homes such as IHS might not be able to support their outreach efforts without limiting their liability. The public benefits from these waivers. The court also stated that no public policy opposes transactions in which one party provides consideration for the other to shoulder a risk that would have been placed on the other party. Mr. Murphy voluntarily released IHS from any negligence liability, and in return, IHS provided room and board, as well as religious guidance.
In their opinion, the court also rejected Mr. Murphy’s allegation that the waiver was ambiguous. It released IHS from liability for negligence under the circumstances specifically underlying Mr. Murphy’s negligence claim. The waiver clearly expressed the intent of the parties. Furthermore, the scope of the waiver included the circumstances surrounding the car accident. Mr. Richardson was driving Mr. Murphy, in a van registered to an IHS board member, to the DMV to apply for a card to receive public assistance. Here, the alleged negligent act was reasonably related to the purpose and object for which the agreement was signed: Mr. Murphy’s participation in the IHS sober living home and religious program.
The court affirmed the judgment of the trial court.
At Sharifi Firm, our car accident attorneys provide guidance and representation to clients seeking compensation for injuries suffered in an accident. Call us today for a free consultation at 866-422-7222.
More Blog Posts:
California Court Limits Insurance Coverage When One Collision Was Proximately Caused by Two Negligent Acts, Southern California Injury Lawyer Blog, November 30, 2015
California Court of Appeal Holds Release of Liability Bars Negligence Action in Kickboxing Class Injury, Southern California Injury Lawyer Blog, October 25, 2015