Litigation Alert: Recent Decision Highlights Important of Properly Drafted Waivers

Attorneys: Guolee, Terrence F.

A recent decision of the Illinois First District Appellate Court provides an interesting look at the effects of exculpatory agreements (waivers) and the assumption of risk defense. In Evans v. Lima Lima Flight Team Inc., No. 1-05-3423 (decided April 24, 2007), the court affirmed in part and reversed in part an appeal from a case involving the death of a pilot who belonged to a flight club that engaged in formation flying.

In summary, the decision found that the waivers releasing members of signatory organizations from liability for injuries resulting from formation flying, and citing risks inherent in that activity, is valid, enforceable and effective to release individual defendants from wrongful death lawsuit. However, the court also held that the defendant flight club was not entitled to summary judgment, as it was not a signatory to the agreement. Moreover, even in the area of formation flying - something all would agree is a dangerous endeavor - the Court held the flight club was not entitled to claim implied assumption of risk as a matter of law.

The plaintiff, executor of the estate of a deceased pilot, appealed from orders of the circuit court granting summary judgment in favor of the defendants, Lima Lima Flight Team, Inc. (Lima Lima) and various of its individual members on the plaintiff's claims of negligence. Among other arguments, the defendants cross-appealed from orders of the circuit court denying their motion for summary judgment based on the defense of assumption of the risk.

Plaintiff sought damages for the death of Keith Evans following an October 1, 1999 airplane crash during a practice session with Lima Lima, a Chicago-based formation flight team. Lima Lima performs for air shows throughout the country in restored World War II era aircraft. Evans and the other pilots were flying in a six-aircraft "delta formation," performing a maneuver known as a "pop-top break," when a plane flown by one of the individual defendants and the plane piloted by Evans came into contact with each other, damaging Evans' aircraft and causing it to crash. Evans was killed instantly.

Plaintiff brought claims against the individual defendants and Lima Lima pursuant to the Wrongful Death Act (740 ILCS 180/0.01 et seq. (2000)), and a survival action under section 27-6 of the Probate Act (755 ILCS 5/27-6 (2000)). The defendants then filed a motion for summary judgment premised upon the doctrine of assumption of the risk, which the circuit court denied. Thereafter, the defendants filed a motion for summary judgment on all survival claims, asserting that Evans died instantly. The circuit court granted the motion. Finally, the individual defendants moved for summary judgment on the remaining Wrongful Death Act claims, relying upon an exculpatory agreement signed by Evans on July 3, 1999.

The exculpatory agreement stated, in relevant part:

RELEASE/HOLD HARMLESS

The undersigned Holder/Applicant of/for the __X__ Wingman, ___ Leader, ___ Check Pilot Formation Qualification Card hereby acknowledges, and attests to that he/she is an active member of at least one of the signatory organizations listed below. As an active member of one of the signatory organizations, I hereby agree to be familiar with, and abide by, the Guidelines, Rules and Regulations established by the Confederation of Signatory Organizations known as F.A.S.T. *** I further recognize that formation flight training and formation flying is inherently dangerous wherein there is a possibility of injury or death, and in consideration of my acceptance of this Formation Qualification Card/Evaluation, issued by participating Signatory Organizations I, for myself, my heirs, executor, administrators, and assigns do hereby release and forever discharge the Signatory Organizations listed below each and every one of them and F.A.S.T., its members, employees, suppliers, agents or representatives of and from any and all claims, demands, losses, or injuries incurred or sustained by me as a result of instruction, training, attending, participating in, practicing for, traveling to and from activities involving formation flights.

***
F.A.S.T. (A Corporation to be Formed)

Signatory Organizations (Holder/Applicant must check all applicable organizations):
(1) ___E.A.A. Warbirds of America,
(2) ___Confederate Air Force, Inc.,
(3) ___North American Trainer Association,
(4) ___T-34 Association, Inc.,
(5) ___Canadian Harvard Aircraft Association.

In reviewing the release, the court noted that "The T-34 Association option" was circled by the decedent. The circuit court then considered the language of the exculpatory agreement, as well as an affidavit by one of the individual defendants in which he averred that he and the other pilots were members of "F.A.S.T." at the time of the accident. Based on this, the circuit court granted the individual defendants' motion for summary judgment, finding that the exculpatory agreement was specific and definite enough to release them from liability for Evans' death.

Lima Lima filed a subsequent motion for summary judgment, maintaining that its liability was solely predicated upon the acts of the individual defendants and that, because all claims against the individual pilot defendants had been dismissed, it was entitled to summary judgment as a matter of law. The circuit court granted Lima Lima's motion for summary judgment, and the plaintiff appealed. Lima Lima and the individual defendants also filed a cross-appeal in which they challenged the circuit court's denial of their motion for summary judgment based upon the defense of assumption of a known risk.

The Appellate Court first addressed the issues raised by the plaintiff's appeal, where plaintiff argued that a genuine issue of material fact existed on the question of whether the exculpatory agreement signed by Evans effectively released the individual defendants from liability for negligent conduct.

In affirming the summary judgment in favor of the individual defendants, the court noted that "exculpatory agreements are not favored and are strictly construed against the party they benefit," but that "parties may allocate the risk of negligence as they see fit, and exculpatory agreements do not violate public policy as a matter of law."

In general, the Court noted an exculpatory agreement will be enforced if:
it clearly spells out the intention of the parties;
there is nothing in the social relationship between the parties militating against enforcement; and
it is not against public policy.
Plaintiff made no argument that the social relationship between Evans and the individual defendants militated against enforcement of the exculpatory agreement. Rather, plaintiff argued both that the language of the agreement did not clearly reflect the intention of the parties and that the agreement was contrary to public policy.

On this, plaintiff argued that the exculpatory agreement did not specifically name Lima Lima, nor its individual members, and, thus, the document was too indefinite to extinguish the individual defendants' liability. Rejecting this argument, the Court noted that an exculpatory agreement need not specifically name the individuals to which it applies. Rather, the exculpatory agreement may designate a class of beneficiaries covered under the agreement. Based on this, the Court found that through the waiver Evans had agreed to:

... release and forever discharge the Signatory Organizations listed below each and every one of them and F.A.S.T., its members, employees, suppliers, agents or representatives...

Accordingly, the Court read the exculpatory agreement to include pilots who are "members" of F.A.S.T. As such, and after rejecting various evidentiary arguments (not the focus of this article), the Court held it was proper for the trial court to rely upon the affidavit identifying all of the individual defendants as members of F.A.S.T. at the time of the accident. Consequently, the Court found the individual defendants were clearly included within the class of beneficiaries covered by the agreement and were, thus, "entitled to its protection."

Plaintiff also argued that the exculpatory agreement did not clearly and specifically exonerate the individual defendants from injuries caused by their negligent conduct, arguing that the language of the agreement, namely a release "from any and all claims" incurred as a result of participating in activities involving formation flying, was too broad and vague to notify Evans of the types of conduct from which he was releasing the individual defendants. In rejecting this argument, the Court noted that the exculpatory agreement warned that formation flying is "inherently dangerous" and exempted members of F.A.S.T. from "any and all claims" sustained as a result of participating in activities involving such flying.

The Court also rejected plaintiff's argument that the reference to the inherent dangers of formation flying demonstrates that the exculpatory agreement does not apply to negligent conduct. On this, plaintiff argued that "inherently dangerous" only refers to:

... that type of danger which inheres in the instrumentality or the condition itself at all times thereby requiring special precautions to be taken with regard to it to prevent injury and does not mean danger which arises from mere casual negligence with regard to it under the particular circumstances. (Emphasis added in original.)

On this, the Court held that the definition of "inherently dangerous" is used to determine whether to impose strict liability for ultrahazardous activities or vicarious liability for the acts of independent contractors, and, therefore, was inapplicable to this case. Rather, all that was required is that exculpatory agreements contain clear, explicit, and unequivocal language referencing the type of activity, circumstance, or situation that it encompasses and for which the plaintiff agrees to relieve the defendant from a duty of care. Moreover, the parties need not to have contemplated the precise occurrence which results in injury. Rather, the injury need only fall within the scope of possible dangers ordinarily accompanying the activity and, therefore, reasonably contemplated by the parties.

The Court did note that "[w]hether an injury accompanies a certain activity is ordinarily a question of fact, precluding summary judgment." However, it also found that, as a matter of law, Evans' death fell within the scope of possible dangers ordinarily accompanying formation flying, namely a collision with another aircraft. As such, the Court found the exculpatory agreement clearly exempted members of F.A.S.T. from "any and all claims" sustained by Evans as a result of participating in activities involving formation flying and was not rendered unenforceably vague and rejected plaintiff's contention that the language in the exculpatory agreement did not clearly and specifically exonerate the individual defendants from liability for their alleged negligent conduct.

Plaintiff's next effort to escape the release's language was to argue that the exculpatory agreement violated public policy because it exonerated the individual defendants for injuries caused by their "unlawful conduct." Specifically, plaintiff argued that the pilot of the plane that crashed into Evan's plane violated certain Federal Aviation Regulations which required him to "see and avoid" Evans' aircraft and follow mandated "right-of-way" rules. As such, plaintiff claimed that the exculpatory agreement should not be enforceable.

The Court found this argument "not well taken," stating that, even assuming that there was a violation of the Federal Aviation Regulations and that the violation caused the collision, enforcement of the exculpatory agreement at issue would not violate public policy. On this, the Court reasoned that violations of the Federal Aviation Regulations are treated only as a breach of duty in a negligence action and enforcing the exculpatory agreement would not endanger the public's safety.

In particular, the Court noted that the exculpatory agreement only released other formation pilots and certain organizations from liability, and the pilots would still be subject to liability for injuries suffered by members of the general public or for property damage resulting from their negligent conduct. Therefore, the incentive to maintain proper operating procedures would remain. The Court then affirmed the entry of summary judgment for the individual defendants based on the exculpatory agreement.

The Court next turned to plaintiff's argument that the circuit court erred in granting summary judgment in favor of Lima Lima because the complaint alleged independent acts of negligence on Lima Lima's part.

First, the Court rejected defendants' argument that the amended complaint merely sought to impose liability on Lima Lima based upon the actions of the individual defendants, and, because the individual defendants have been dismissed, Lima Lima would also be entitled to dismissal. On this, the Court found that where independent negligent acts have been alleged directly against the principal, the principal may still be liable although the agents have been dismissed.

In particular, the plaintiff contended that the complaint asserted claims directly against Lima Lima based on its alleged failure to have a prepared method of operation for aborting a maneuver if visual contact was lost; its failure to properly instruct the pilots on procedures to follow upon loss of visual contact; and its alleged failure to alert pilots regarding the proper procedures that day.

Plaintiff further argued these claims were not based on a claim of vicarious liability and were supported by testimony from an expert. The expert's opinions included that Lima Lima's manual was inadequate in failing to provide specific guidance to pilots in the event of emergency situations, including a procedure during a loss of visual contact. The expert also opined that Lima Lima's lack of emergency procedures was a contributing factor in the accident which caused Evans' death.

Based upon the allegations of individual negligence on the part of Lima Lima, the Court held that factual questions remained as to whether Lima Lima was negligent in failing to develop and implement a procedure upon the loss of visual contact and whether its alleged independent negligence was a proximate cause of Evans' death. The Court then held that the circuit court erred in granting summary judgment in favor of Lima Lima based solely on the dismissal of the individual defendants.

The Court then turned to Lima Lima's cross-appeal, where defendants argued that the circuit court improperly denied Lima Lima's motion for summary judgment based upon the doctrine of assumption of risk. In addressing this question, the Court noted that, traditionally, courts have classified the doctrine of assumption of the risk into three categories:

express assumption of the risk;
primary implied assumption of the risk; and;
secondary implied assumption of the risk.

The Court then described the three categories of risk, as follows:

An express assumption of the risk is found where an individual has explicitly agreed, in advance, to relieve another of a legal duty owed to him or her. A primary implied assumption of the risk exists where the conduct of the parties indicates that an individual has implicitly consented to encounter an inherent and known risk, thereby excusing another from a legal duty which would otherwise exist. Finally, secondary implied assumption of the risk occurs where the defendant's negligence created a danger that was apparent to the injured party, who nevertheless voluntarily chose to encounter it.

Applying these categories to Lima Lima's liability, the Court first noted that "secondary implied assumption of the risk" functions in a similar manner as contributory negligence, and the introduction of comparative fault abolished this doctrine and it no longer operates as a complete bar in negligence actions. Thus, this category was found to be no help to Lima Lima at the motion stage.

Next, the Court held that, as there was no written contract signed by Evans exculpating Lima Lima from liability, the exculpatory agreement signed by Evans only applied to the individual defendants. Lima Lima thus could not rely on the doctrine of express assumption of the risk to relieve it of any duty owed to Evans.

Finally, the Court turned to the doctrine of primary implied assumption of the risk. In discussing this, the Court noted that primary implied assumption of the risk requires that the injured party knew of the specific risk which caused his or her injury. Moreover, whether a particular risk was appreciated is a question of fact.

The Court then observed that, as the plaintiff alleged that the collision was caused in part by Lima Lima's failure to develop and implement a proper procedure in the event that visual contact was lost, it could not say as a matter of law that Evans - despite participating in formation flying - was aware of and accepted the risk that Lima Lima's emergency procedures were possibly inadequate. Thus, the Court held that there remained questions of fact as to whether Lima Lima's alleged failure to provide sufficient emergency procedures was a risk that Evans assumed. Consequently, the Court concluded that the circuit court erred in granting Lima Lima's motion for summary judgment.

Review of this decision is important, as it demonstrates the specificity needed in the drafting of a waiver or exculpatory agreement to properly protect a person or business. Indeed, the different treatment afforded to the individual defendants named in the waiver at issue - versus the treatment afforded Lima Lima that was not listed in the release is instructive. Lima Lima must now litigate whether plaintiff's decedent assumed risks in formation flying absent protections of a release. This documents how drafting errors in a release can come back and haunt when an accident occurs.

The decision is also very important in limiting the effect the defense of assumption of risk can have in litigation. Short of an express written waiver, assumption of risk appears to be ineffective as a defense at the motion stages of litigation. Certainly, it can be said that if there is a question of fact as to the assumption of risk in the area of formation flying, it is very unlikely that defendants will be able to escape liability on motion in cases where accidents occur as a result of more routine "terrestrial" activities. Indeed, plaintiffs should easily be able to point to particular limited areas of risk and claim they were not aware of that particular risk in order to get a case before a jury. At that point, all the risk of liability is on the defendant - or, possibly, the defendant's lawyer who failed to properly protect his client when the release was drafted!

* * *

Terrence Guolee is a shareholder in Querrey & Harrow's Commercial Litigation Practice Group. His practice includes defense of catastrophic injury claims, insurance coverage claims, attorney billing disputes, municipal liability, defense of class action claims and claims involving insurance claims handling processes.

Querrey & Harrow lawyers have ample experience drafting releases and contractual documents in order to protect against liability from future accidents. If you have questions regarding you or your company's protections against the threat of litigation, or generally about the article above, please contact Mr. Guolee at 312-540-7544 or via This email address is being protected from spambots. You need JavaScript enabled to view it..

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