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November 1, 2010
By John S. Yodice
Last month’s column on flight instructor liability stirred a more general question about the effectiveness of so-called “liability release forms” (sometimes called “covenants not to sue” and “exculpatory agreements”) that purport to protect against the liability that could result from the operation of a general aviation aircraft (“ Pilot Counsel: Instructor Liability Still a Concern,” October 2010 AOPA Pilot).
We have tried to track the “effectiveness” cases and report them to you as they develop. What has remained relatively constant over the years is the potential for an aircraft owner’s and pilot’s liability. What has not remained constant is the effect given to such agreements by the courts. That has run in cycles. The effect has even varied among states, since tort law is a matter of state law—but even in the most liberal states, it seems to have been cyclical. Here are some illustrative cases.
At one extreme we have a decision of the Alaska Supreme Court that refused to give effect to a “covenant not to sue and indemnity agreement.” The Alaskan court struggled mightily to find a reason to avoid the intended effect of what appeared to be a well-drafted agreement. The Alaskan court went to great lengths to construe the language “any loss, damage, or injury to my person or my property” to be ambiguous and unenforceable because it did not specifically mention “death.” I believe that even if the word death had been included, this result-oriented court would have found another reason to void the parties’ agreement. This case is a perfect illustration of the general legal principle that exculpatory agreements are not favored by the courts and are strictly construed against the party they are intended to protect.
At the other extreme we have an Illinois case that demonstrates a cycle toward a more favorable result. This case arose from a midair collision that occurred during an aerobatic practice session. Two aircraft in formation collided, causing one to crash, killing the pilot. A lawsuit was brought by the estate of the deceased pilot seeking damages for the death of the pilot. The principal defendants were the pilot of the other colliding aircraft, who survived the crash, and the flight team members. There were others, including the flight team corporation. The case raises a number of complex legal issues, but I mention only one—the effect of an exculpatory agreement signed by the deceased pilot.
An Illinois trial court and an appellate court gave the intended effect to the exculpatory agreement, releasing the individual defendants from liability for the pilot’s death. While the appeal court gave due recognition to the general rule that “exculpatory agreements are not favored and are strictly construed against the party they benefit” it nevertheless ruled that they are not against public policy as a matter of law, and that “parties may allocate the risk of negligence as they see fit” so long as certain conditions are met. “An exculpatory agreement will be enforced if: (1) it clearly spells out the intention of the parties; (2) there is nothing in the social relationship between the parties mitigating against enforcement; and (3) it is not against public policy.”
Here is another: A father and his daughter decided to take a sightseeing flight over the Santa Barbara, California, area in a Waco biplane. As is its usual business practice, the sightseeing company offering these flights required its customers to sign a “High Risk Activity Release, Waiver and Assumption of Risk Agreement.”
Prior to their flights, the father and daughter signed the form. On the last of the flights, the Waco lost power and had to make an emergency landing. In the landing the father and daughter were injured (the extent of the injuries was not reported). The inevitable lawsuit followed. In the suit a California trial and appellate court ruled against the father and daughter. However, the appellate court did offer important qualifications. It did indicate that the release would not be a bar to a suit for “gross” negligence, fraud, or a willful wrong (which has been the general rule over the years). And the court did indicate that a release of liability for future ordinary negligence could be void on public policy grounds depending on the overall transaction with special emphasis on the importance of the underlying service or program, and the relative bargaining relationship of the parties. In this case, what the court called a recreational airplane ride where the riders were given time to consider what they were signing, and were offered a refund if they did not sign, did not raise those kinds of public policy considerations.
So, in retrospect, a liability release form could be effective, if we can overcome the sometimes difficult problem of asking for one.
John S. Yodice and his staff provide general legal services to AOPA and its affiiiated organizations.
AOPA’s legal counselor John S. Yodice will present two forums at Aviation Summit. He will present “FAR Refresher” on Thursday, November 11 and “What Every Pilot Should Know About FAA Enforcement” on Friday, November 12. See the website for more information.
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