Will a Rhode Island court enforce this clause capping or excluding our liability for our own negligence?
Yes, if the intention is clearly and unequivocally expressed, except where the claim is personal injury caused by a defective product the drafter put into the stream of commerce, where it is unenforceable as a matter of law. Rhode Island Hospital Trust National Bank v. Dudley Service Corp. states the rule: “We conclude that it is not violative of public policy for individuals to limit liability for their own negligence through an exculpatory-indemnification clause”, and the price of that freedom is clarity: “A contract will not be construed to indemnify the indemnitee against losses resulting from his or her own negligent acts unless the parties' intention to hold harmless is clearly and unequivocally expressed in the contract.” On those facts the Court held “the limitation-of-liability provisions contained in the lease agreement are not violative of public policy and are enforceable as written.” A hard dollar cap works the same way and Rhode Island will enforce a brutal one: in Ostalkiewicz v. Guardian Alarm a burglar-alarm contract capped liability at the greater of six monthly service charges or $250, the alarm was never programmed, the robbery loss was pleaded at $491,147, and the jury was instructed it could award no more than $360 on the contract and negligence counts, because “in the circumstances of this case the limitation of liability was not violative of public policy, nor was it unconscionable.” The limit on all of this is Ruzzo v. LaRose Enterprises: “we hold that as a matter of law, manufacturers, sellers, or lessors who enter a defective product into the stream of commerce cannot disclaim liability for personal injuries arising out of their own negligence”, and a strict-liability claim is outside the contract altogether: “Ruzzo's strict liability cause of action is independent of the contract, and therefore any contractual provisions, agreements or disclaimers are unenforceable with respect to this claim.”
The trap
Rhode Island reads the clause against the drafter but does not demand magic words, and the two halves of that are easy to get backwards. The strict-construction half is in Di Lonardo v. Gilbane Building Company: “while a distinction exists between an exculpatory provision and an indemnity provision, in both cases the law in this state requires a strict reading against the party seeking to be exonerated.” The other half is Crowther v. Mariner Square Condominium Ass'n, where a snow-removal contract said only “[w]e are not responsible for injuries sustained by slipping on ice” and the Court held that “Although the exculpatory language used here is not so specific as in other cases, the intent to hold Quality Landscaping harmless in this type of situation is clear.” The Rhode Island cap's real weak point is the claim it is not drafted to cover: in Ostalkiewicz the same cap that held the contract and negligence counts to $360 did not stop the fraud count going to a jury that “rendered a verdict in favor of C.J. … on the fraud count for the amount of $491,147”, and the Court held only that a negligent-misrepresentation claim “would be subject to the limitation of liability clause in the contract”. It never decided whether the cap reaches fraud. Do not read that $491,147 as money recovered: the Court affirmed the $360 judgment on the contract and negligence counts and ordered “a new trial for C.J. alone on the fraud count”. Two Rhode Island statutes are reached for here and neither does what a drafter expects. § 6-34-1 voids a construction covenant “purporting to indemnify the promisee … against liability for damages … proximately caused by or resulting from the negligence of the promisee”: that is a promise to pay for someone else's negligence, and on its words it does not reach a clause capping or excluding the promisor's own liability to the counterparty. § 9-19-12.1 does void a release: “No person, firm, or corporation whose interest is adverse to that of a person receiving personal injuries as a result of a tortious act shall negotiate any contract … to release the person, firm, or corporation from liability, within thirty (30) days from the date of the tortious act”, and such a release “shall be voidable at the option of the releasor upon restoration of the consideration”, but by its own words it governs a settlement negotiated after the injury, not a liability clause agreed before anything happens.
17 authorities
- case605 A.2d 1325Rhode Island Hospital Trust National Bank v. Dudley Service Corp.R.I.decided 1992read it at the source ↗
The words that state the rule
We conclude that it is not violative of public policy for individuals to limit liability for their own negligence through an exculpatory-indemnification clause.
- case605 A.2d 1325Rhode Island Hospital Trust National Bank v. Dudley Service Corp.R.I.decided 1992read it at the source ↗
The words that state the rule
A contract will not be construed to indemnify the indemnitee against losses resulting from his or her own negligent acts unless the parties’ intention to hold harmless is clearly and unequivocally expressed in the contract.
- case605 A.2d 1325Rhode Island Hospital Trust National Bank v. Dudley Service Corp.R.I.decided 1992read it at the source ↗
The words that state the rule
In the circumstances of this case we conclude that the limitation-of-liability provisions contained in the lease agreement are not violative of public policy and are enforceable as written.
- case520 A.2d 563Ostalkiewicz v. Guardian Alarm, Division of Colbert's Security Services, Inc.R.I.decided 1987read it at the source ↗
The words that state the rule
We are of the opinion that in the circumstances of this case the limitation of liability was not violative of public policy, nor was it unconscionable.
- case520 A.2d 563Ostalkiewicz v. Guardian Alarm, Division of Colbert's Security Services, Inc.R.I.decided 1987read it at the source ↗
The words that state the rule
In respect to the directing of a verdict on the issue of negligent misrepresentation, we are of the opinion that assuming without deciding that a separate or a distinct action might be brought for negligent misrepresentation, it would be subject to the limitation of liability clause in the contract and thus would come within the damages already awarded on the contract and negligence counts.
The words that state the rule
we hold that as a matter of law, manufacturers, sellers, or lessors who enter a defective product into the stream of commerce cannot disclaim liability for personal injuries arising out of their own negligence.
The words that state the rule
We conclude that Ruzzo’s strict liability cause of action is independent of the contract, and therefore any contractual provisions, agreements or disclaimers are unenforceable with respect to this claim.
The words that state the rule
It should be noted that while a distinction exists between an exculpatory provision and an indemnity provision, in both cases the law in this state requires a strict reading against the party seeking to be exonerated.
The words that state the rule
Although the exculpatory language used here is not so specific as in other cases, the intent to hold Quality Landscaping harmless in this type of situation is clear.
- statuteR.I. Gen. Laws § 6-34-1enactment date not established
The words that state the rule
purporting to indemnify the promisee, the promisee’s independent contractors, agents, employees, or indemnitees against liability for damages arising out of bodily injury to persons or damage to property proximately caused by or resulting from the negligence of the promisee, the promisee’s independent contractors, agents, employees, or indemnitees, is against public policy and is void
- statuteR.I. Gen. Laws § 9-19-12.1enactment date not established
The words that state the rule
No person, firm, or corporation whose interest is adverse to that of a person receiving personal injuries as a result of a tortious act shall negotiate any contract, written or oral, or any settlement to release the person, firm, or corporation from liability, within thirty (30) days from the date of the tortious act. Any contract settlement or release obtained in violation of this section shall be voidable at the option of the releasor upon restoration of the consideration.
The words that state the rule
The contract states that “[w]e are not responsible for injuries sustained by slipping on ice.” The trial justice correctly concluded that the clause covers the present situation and that Quality Landscaping was not responsible for indemnifying Mariner Square for plaintiffs injuries.
- case520 A.2d 563Ostalkiewicz v. Guardian Alarm, Division of Colbert's Security Services, Inc.R.I.decided 1987read it at the source ↗
The words that state the rule
The jury rendered a verdict in favor of C.J. on the breach of contract and negligence counts for the amount of $360 and also rendered a verdict in favor of C.J. on the fraud count for the amount of $491,147.
- case520 A.2d 563Ostalkiewicz v. Guardian Alarm, Division of Colbert's Security Services, Inc.R.I.decided 1987read it at the source ↗
The words that state the rule
For the reasons stated, the plaintiffs’ appeal is denied in part and sustained in part. All orders of the trial justice are affirmed, save his order granting a new trial on the contract and negligence counts (1, 2, and 3). The papers in the case may be remanded to the Superior Court with directions to enter judgment for C.J. in the amount of $360 on the foregoing counts and for a new trial for C.J. alone on the fraud count.
The words that state the rule
The appeal of the third-party plaintiff is sustained, the judgment entered below is reversed, and the cause is remanded to the Superior Court for further consideration.
The words that state the rule
For all these reasons the appeal of Mariner Square is denied and dismissed, the judgment appealed from is affirmed, and the papers of the case are remanded to the Superior Court.
The words that state the rule
Thus, we conclude that the motion justice committed error when he enforced the disclaimer provision against Ruzzo’s negligence claims and entered summary judgment on that basis.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.