Florida’s Fourth District Court of Appeal opined yesterday that Florida has a “clear” public policy prohibiting the use of exculpatory clauses to avoid claims of strict products liability despite the fact that no Florida court had ever determined such a policy existed. Relying upon federal and non-Florida precedent, the Court ruled against the Defendant which was seeking to avoid liability arising from the sale of a motorcycle.

In Harrell v. BMS Partners LLC dba Broward Motorsports, the Plaintiff purchased a motorcycle from a local retailer and “shortly afterwards” crashed it after the front end began to “wobble, thrash, and violently turn…” He sued the retailer under various theories of negligence and strict liability.

The sales contract included an exculpatory clause which included the following:

[I] RELEASE BMS FOR ANY LIABILITY OR
RESPONSIBILITY IN ANY WAY FOR PERSONAL INJURY
OR DEATH, OR OTHER DAMAGES TO ME INCLUDING
PROPERTY DAMAGES, OR MY FAMILY HEIRS, OR
ASSIGNS WHICH MAY OCCUR FROM MY OPERATION
OR OWNERSHIP OF THE MOTORCYCLE I AM
PURCHASING FROM BROWARD MOTORSPORTS
WHICH MAY BE DUE OR IN PART TO HAVE BEEN
CAUSED BY THE NEGLIGENCE OR GROSS
NEGLIGENCE OF BROWARD MOTORSPORTS…

We add the emphasis to the key phrases. While the Court agreed that “any liability” and “in any way” was broad, the second part of the sentence limits the release to negligence. For that reason, the Court held, “[t]hus, by their own choice of language, the parties agreed the exculpatory clause would only release claims sounding in negligence.” Obviously, the Court could have stopped there.

However, the Court went further to find that exculpatory clauses in general cannot apply to strict products liability claims because it “contravenes public policy.” That said, the Court’s own proof has to stretch to find that a policy exists despite the fact that no other Florida court, in approximately 50 years, agrees such a policy exists. Here’s the Court’s reasoning:

Back in 1976, the Florida Supreme Court (a significantly different court than we have now) recognized strict products liability as a cause of action and noted that the cost of damage resulting from such products should be borne by the makers and sellers of the products, rather than the injured persons. Note, however, the Court did not find this was a public policy nor did it use those words. Since 1976, no Florida state court has addressed that point or used those words.

Twelve years later, a federal court cited to that 1976 case and, according to the Harrell court, “implicitly” recognized a public policy even though that court also did not use the words. So the closest we have to a designation of a statewide public policy is a subjectively-described “implicit” finding. However, since 1988, no court has picked up on that thread either.

From there, the Harrell court turns to a 1970 Arizona case (so… pre-dating even Florida’s 1976 case) for reliance and then quotes other Florida cases which do not say that strict products liability is a public policy (quick side note, what may have been public policy 3,000 miles away fifty years ago does not seem like a good indicator of contemporary public policy in Florida). The Harrell court then simply declares:

The [1976] decision and its progeny therefore reflect a clear public
policy to protect consumers from injuries caused by unreasonably
dangerous products placed on the market by manufacturers and retailers.

(emphasis added).

The Harrell court then draws comparisons between the (common law) strict products liability torts and various statutory claims in order to buttress their conclusion that public policy applies. Comparing these apples-and-oranges, the court concludes:

It follows logically, then, that an exculpatory clause purporting to absolve a retailer of liability from strict
liability in tort for injuries caused by defects in products it places on the
market likewise violates public policy.

(emphasis added).

Conclusion

We have discussed exculpatory clauses before and how they, on their face, are “disfavored” and must be written in a way that overcomes more hurdles than most contract clauses. For example, in this prior post, we discuss another Fourth District Court of Appeal case, Diveston Merlien v. JM Family Enterprises, Inc. et al. (2020), which upheld an employment agreement. We also covered how the same court, in 2019, approved an exculpatory clause in Vignaraj Munsami Pillay v. Public Storage, Inc. Finally, we also discussed another 2019 case, Lazaro Fresnedo v. Porky’s Gym III, Inc., in which the overly-wordy exculpatory clause was hoisted by its own petard.

Here, the Fourth District could have stopped at its initial stage of analysis where it found that the second part of the exculpatory clause limited the first part. Instead, the Court plowed ahead and, to our reading, engaged in some creative geometry proofing to uncover this previously-unknown but “clear” public policy.

Bottom line: as we wrote back in 2020:

“do not just cut and paste the foregoing into your contract and think you are protected. It needs to fit with the other language of your agreement. This is critically important. You need to ensure defined terms are correct, the scope is accurate, and that you are covering risks which are specific to you. A good lawyer should be able to do this for a few hundred dollars. Enforcing an exculpatory clause and ended a lawsuit against you is worth a few hundred dollars now.“

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