Not Good Enough: The Minnesota Supreme Court Requires More Specificity in Exculpatory Clauses

December 6, 2022 / CM Reports / Writing and Speaking

By Paul V. Esposito

What was the greatest single advance in human history? Some might say the discovery of how to create and harness fire. After all, raw meat can get nasty in short order. Others might argue that it was the discovery of the wheel. It made doable what otherwise could be impossible.

But there’s a pretty good argument that the greatest advancement was the formation of language. It allowed human interaction to extend beyond grunting or pointing. As words became common, it allowed for understanding and direction among peoples. Language allowed civilization to move forward.

In the law, language is huge. The meaning of words used in contracts is often at the center of disputes. In resolving them, courts interpret words as they are popularly understood. It provides the best explanation of what people were thinking about when they agreed to them.

Recently, the Minnesota Supreme Court struggled over how to treat the words “any and all” in an exculpatory clause. The Court’s split decision will impact the language of those clauses going forward. Justice v. Marvel, LLC, 2022 Minn. LEXIS 369.

Facts

Michelle Sutton took her seven-year-old son Justice to a friend’s venue birthday party. Pump It Up Parties, owned by Marvel LLC, provided an inflatable amusement park area for kids’ events. Before entering, Michelle signed a waiver of liability specifically naming herself and Justice. Michelle agreed to:

[R]elease and hold harmless MARVEL, LLC . . . from and against any and all claims, injuries, liabilities or damages arising out of or related to our participation in any and all Pump It Up programs, activities, parties, the use of the play area and/or inflatable equipment.

Michelle acknowledged the “inherent risks” of using the area and equipment; she “knowingly and freely assume[d] all such risks, both known and unknown.” She also agreed that she was signing in consideration of receiving permission to enter the play area.

 Justice fell off an inflatable object and hit his head on the carpeted concrete floor. He sustained severe head and brain injuries. On turning 18, Justice sued Marvel for negligently failing to pad the floor. The district court granted Marvel’s motion for summary judgment because the waiver was unambiguous and did not violate public policy. The court of appeals agreed. Although finding the release overly broad by including claims of “intentional, willful or wanton acts,” it noted that Justice only pled a negligence claim.

Analysis

The Supreme Court majority saw in the case an issue of first impression: does an exculpatory clause release all claims of liability without specifically mentioning negligence? The majority held that the strict construction rule governing indemnity clauses also applies to exculpatory clauses. Contract language need not mention the word “negligence” but “must use specific express language that ‘clearly and unequivocally’ states the contracting parties’ intent.” Treating the clauses similarly was appropriate because both shift responsibility and so are disfavored under the law.

Looking at Michelle’s waiver, the majority agreed that “Justice’s negligence claim is definitionally under the umbrella of ‘any and all claims.’” But it held that the issue is whether, despite its unambiguity, the waiver “specifically provide[d]” that it released Marvel from liability for negligence. Finding no such provision, the majority held the waiver insufficient.

The dissent had no problem with the Court’s law on indemnity clauses.

But the dissent disagreed that it should equally apply to exculpatory clauses. Unlike with an indemnity clause, injured persons who previously signed exculpatory clauses agreed to assume the risk of injury to themselves. But unlike with an exculpatory clause, an indemnitor’s liability can cover injuries to people in addition to the indemnitor. So, treating the two clauses differently is warranted.

Analyzing Michelle’s waiver, the dissent found no ambiguity. “‘[A]ny and all’ means ‘any and all.’” The risk of ignoring unambiguous language is that it deprives parties what they bargained for. The problem goes well beyond Justice and Marvel. The “any and all” language is often used in waivers covering recreational activities—of which Minnesota has many. Less sophisticated parties, unaware of the “magic words” needed for a release, will mistakenly rely on the “any and all” language to their loss.

Learning Point: Words are most valuable when they provide understanding. In the court of appeals, Justice admitted that the waiver “plainly releases [Marvel] from every possible tort claim.” The court of appeals agreed. Even the Supreme Court majority recognized that “any and all claims” definitionally includes negligence. That sounds like there was a common understanding. It’s what will make the majority opinion so frustrating to businesses like Marvel: commonly understood language is not good enough.

That said, the opinion is Minnesota law when dealing with exculpatory clauses. Those clauses should be reviewed for requisite specificity.

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