Collision Course

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Schipper v. Dahl Trucking, Inc. (Minnesota-UNPUBLISHED)
(Two Truckers Collide; Waiver and Release Precluded Negligence Claim Against Trucking Company; Issue of Loss of Consortium Claim Remanded; Waiver and Release Protections for Trucking Company Employee Unclear)

The plaintiff Doug Schipper and his wife were residents of Minnesota. Schipper owned a company called Midwest Cargo, which owned and operated a truck. Schipper entered into a written agreement with defendant Dahl Trucking, Inc., an Iowa corporation headquartered in Minnesota, to provide freight transportation. The contract contains the following provision:

9. THE CONTRACTOR EXPRESSLY WAIVES ANY CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION AGAINST CARRIER AS A RESULT OF THE DEATH OR INJURY OF CONTRACTOR OR CONTRACTOR’S EMPLOYEES IN CONNECTION WITH THE PERFORMANCE OF CONTRACTOR OR THE CONTRACT AND FURTHER AGREES TO HOLD CARRIER HARMLESS AND INDEMNIFY CARRIER FORM [sic] SUCH CLAIMS.

The contract also required Schipper to maintain business-liability insurance, and it provided that it “shall be governed by the Laws of the State of Iowa and Minnesota, both as to interpretation and performance.”

Thereafter, Schipper and defendant Chad Jongbloedt, an employee of Dahl Trucking who was a resident of Minnesota, were both hauling freight, when they were involved in a collision. Schipper was injured and filed a lawsuit against Dahl and Jongbloedt, alleging negligence. Schipper’s wife also filed a claim for loss of consortium. The parties filed cross-motions for summary judgment, and the district court granted defendants’ motion based upon the waiver and release provisions. The plaintiffs appealed.

The court recognized that under Minnesota law, it was well-settled that contracting parties could protect themselves from liability through exculpatory clauses, although such clauses are not favored in the law and are strictly construed against the benefiting party. Exculpatory clauses are enforceable if they (1) are not ambiguous; (2) do not purport to protect against intentional, willful, and wanton acts; and (3) do not contravene public policy.

In challenging the exculpatory clause on appeal, the plaintiffs argued that it was ambiguous. Specifically, the plaintiffs contended that the exculpatory provision did not cover liability for the defendant’s own negligence conduct. However, the court disagreed, noting that Schipper waived “any claim, demand, action, or cause of action” against Dahl Trucking that arose “in connection with the performance of contractor or the contract.” According to the court, that clause necessarily included a negligence claim against Dahl Trucking so long as it related to “the performance of contractor or the contract.”

Plaintiffs also argued that the exculpatory clause was contrary to public policy. In determining whether a clause violates public policy, Minnesota courts consider (1) whether there is a disparity in the parties’ bargaining power such that one party lacks the ability to negotiate the terms, or the elimination, of the exculpatory clause and (2) the type of service that is provided by the benefiting party. A court will find disparity of bargaining power when (1) a service is necessary or is unavailable elsewhere; (2) there is a compulsion to participate; and (3) there is no opportunity to negotiate. Plaintiffs argued that the “relationship of employer and independent contractor created a disparity in bargaining power.” However, the court concluded that there is no evidence of a disparity of bargaining power.

Plaintiffs also argued that the exculpatory clause violated public policy because Dahl Trucking provides a “public and essential” service. In support of this claim, they pointed to the fact that the trucking company was subject to government regulation. However, the court explained that simply because a business is regulated is not alone sufficient to establish that the business provides a “necessary or public service.” Moreover, plaintiffs did not show that the trucking company service was a practical necessity.

The lower court had determined that by signing the agreement, Schipper had not only waived and released Dahl Trucking, but had also waived and released Jongbloedt, as its employee. the lower court stated that by including the exculpatory clause in the contract, “Dahl Trucking meant to absolve itself of liability based on its own conduct as well as the conduct of others.” Since a company can only act through its employees, the lower court reasoned that the exculpatory clause necessarily applied to claims against company employees. However, the lower court cited no legal authority for its conclusion. On appeal, the court explained that plaintiffs had filed claims against Jongbloedt individually, not as an agent of Dahl Trucking for the purpose of establishing respondeat-superior. Since the exculpatory clause did not expressly waive and release Dahl Trucking’s employees, the court on appeal was unable to determine the basis for the lower court’s ruling with regard to Jongbloedt. Therefore, the issue was remanded to the lower court for clarification or reconsideration.

Finally, plaintiffs argued that the lower court erred by applying Minnesota law to the loss of consortium claim. The laws of Iowa and Minnesota are in conflict in terms of whether a loss of consortium claim is an independent claims or whether it is derivative of the underlying claim, such that it could be waived and release by the injured spouse. Reviewing Minnesota’s choice of law authorities, the court on appeal concluded that the lower court had failed to adequately apply the analysis. As a result, that issue was also remanded to the lower court for clarification.

In the end, the court affirmed the granting of the trucking company’s motion for summary judgment based upon the waiver and release as it applied to the injured driver’s claim. However, the court remanded the case for a proper determination of the choice of law regarding the loss of consortium claim and regarding the application of the waiver and release to the claim filed by the trucking company’s employee.

NOTE: Jurisdictions throughout the United States address the issue of loss of consortium differently. Some jurisdictions find that a consortium claim is an independent claim not reliant upon the underlying claim of the injured spouse. In those circumstances, even where a court enforces a valid and effective waiver and release and express assumption of the risk agreement barring the claim of an injured participant in a recreational activity, the recreational facility or organizer may still face potential liability as it relates to the claims of the spouse. In many, if not most, scenarios it is not practical for the facility or organizer to obtain a signed agreement from both a participant and his or her spouse. Choice of law provisions in these types of agreements can be an effective tool, mandating the application of law from a favorable jurisdiction. Of course, the jurisdiction set forth in a choice of law provision cannot be arbitrarily selected. There must be some reasonable connection between the activity or participants and the jurisdiction selected.

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