Release of Liability Was Complete Defense against Personal Injury Claim
On September 23, 2020, the Iowa Court of Appeals issued an opinion considering whether a release of liability waiver was a binding and enforceable contract. After a passenger of a semi-tractor was injured in an accident, she sought damages against the owner of the vehicle for the injuries sustained. The court affirmed that the waiver signed by the passenger was a valid release of her claims.
A passenger of a semi-tractor was injured when the vehicle stalled and the driver, her husband, lost control of the vehicle. The husband was employed by V&M Farms, a sole proprietorship, and was working in that capacity when the semi-tractor accident occurred. The passenger brought this lawsuit against the owner of the company claiming that the owner did not properly maintain the vehicle and failed to properly train her husband to handle the “unusual situation.”
In his answer, the owner claimed that the passenger had signed a waiver releasing all liability and filed a motion for summary judgment. The passenger claimed the release to be unenforceable. The lower court granted the owner’s motion and dismissed the lawsuit. The passenger appealed.
Waivers for Release from Liability
In 2012, the passenger signed a waiver which released the trucking company from “any and all claims, liability, rights, actions, suits, and demands […] that Passenger may have…” The waiver also stated that the company would “not pay any amount of any accident, injury, loss, or damage arising out of or related to Passenger riding in the equipment.” On appeal, the passenger raised several arguments concerning the validity of the release.
Lapse in Employment
First, the passenger claimed a two-month break in her husband’s employment at V&M Farms terminated the release agreement. In 2013, the husband left V&M Farms and spent two months working for another company. The husband then returned to V&M Farms in his original position. The passenger argued that termination of employment severs all agreements between the employee and employer. The court, hesitant to accept that argument, found it to be irrelevant to the current case. The waiver was an agreement between the passenger and the owner, not the employee and the owner. The release did not contain any sort of expiration date and was not dependent on the husband’s employment. Therefore, the husband’s brief termination of employment did not sever the waiver agreement.
The passenger also argued that the release went against public policy and was therefore unenforceable. Specifically, the passenger claimed allowing the release to be enforceable allowed the owner to circumvent federal regulation and state law requiring vehicle insurance.
Generally, waivers releasing a party from negligence are enforceable and not contrary to public policy. A private party’s right to contract will not be limited on the grounds of public policy unless “the preservation of the general public welfare imperatively so demands.” Baker v. Stewarts’ Inc., 433 N.W.2d 706, 707 (Iowa 1988). The court found that allowing a spouse to accompany her husband while employed as a truck driver does not require an exception to this rule. Additionally, the passenger did not claim that the owner did not have vehicle insurance. Whether the owner possessed vehicle insurance did not affect whether the passenger waived her rights to recover damages due to negligence when she signed the release.
Lack of Signature
The passenger also argued the waiver was unenforceable because the other employee who signed the release did not have the authority to do so on behalf of the owner. The court found that there was no requirement that the owner actually sign the release. The statute of frauds did not require the owner to sign the release and there was no agreement that the release would only be binding if both parties signed.
Secondly, the court found that even if a signature was required, the passenger’s actions showed she acquiesced to the agreement. By riding in the semi-tractor, the release became a contract as if both parties had signed.
The passenger next argued the agreement was both procedurally and substantively unconscionable. A contract can be unconscionable both in how it is made and in the terms set forth of the agreement. The court found the agreement was not unconscionable. While this release was likely presented as a “take-it-or-leave-it” situation, the passenger was under no obligation to accept agreement. The half-page release was straightforward and did not contain any confusing terms or fine print. While the passenger did not read the release before signing, there was no evidence the owner had the upper hand in the agreement or used that power to pressure the passenger into signing the waiver.
The court also found the agreement was not substantively unconscionable. There was nothing unfair about the agreement. Additionally, the passenger was not required to ride along with her husband and the owner was under no obligation to allow her to do so.
The passenger’s final argument was that the terms of the release regarding the duration, the party released, and the types of liability released were ambiguous. The court found that while the release did not contain an expiration date, it was not ambiguous because the release did not require one. The terms released the owner from liability anytime the passenger chose to ride along with her husband.
The passenger also argued that the release only applied to the owner of the company, not the company itself. The owner used the unrecorded trade name, V&M Farms, in the release. If a party does not record the trade name when signing a lease, the contract is still enforceable. A person may be sued under a trade name. Therefore, the court found that the release was still valid.
Relying on Sweeny v. City of Bettendorf, the passenger argued that the causes of action covered under the release were ambiguous. See 762 N.W.2d 873 (Iowa 2009). Generally, a waiver must notify the person signing they are releasing all claims for future acts or negligence. In Sweeny, a student was injured by a flying baseball bat during a field trip to a city parks and recreation game. In that case, the Court considered whether the permission slip to attend the field trip and signed by a parent was an enforceable release for personal injury claims against the city. The Court found the permission slip referred only to “accidents” and did not give notice the signor was waiving potential claims of negligence.
In the current case, while the waiver from liability did not contain the word “negligence,” the terms were still clear and unequivocal. The document stated the passenger would release the owner from “any and all claims, liability, rights, actions, suit, and demands.” Therefore, the court affirmed that the waiver was a binding and enforceable contract releasing the passenger’s claims against the owner.
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