Saturday, August 13, 2011

Pre-injury release as bar to subsequent lawsuit


Release is an affirmative defense. Tex. R. Civ. P. 94. The effect of a release like the one at issue in this case “is to relieve a party in advance of responsibility for its own negligence.” Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 507 (Tex. 1993). “It operates to extinguish the claim or cause of action as effectively as would a prior judgment between the parties and is an absolute bar to any right of action on the released matter.” Id. at 508.

Because a pre-injury release of a party's “own negligence is an extraordinary shifting of risk, [the Texas Supreme Court] has developed fair notice requirements which apply to these types of agreements.” Id. To constitute fair notice, a release must satisfy the requirements of conspicuousness and the express negligence rule. Storage & Processors, Inc. v. Reyes, 134 S.W.3d 190, 192 (Tex. 2004); Dresser, 853 S.W.2d at 508. Whether a provision provides fair notice is a question of law for the courts. Dresser, 853 S.W.2d at 509.
The business and commerce code's standard for conspicuousness applies to our determination of whether a release is conspicuous. Mickens v. Longhorn DFW Moving, Inc., 264 S.W.3d 875, 879 (Tex. App.-Dallas 2008, pet. denied) (citing Dresser, 853 S.W.2d at 510-11). It states:

(10) “Conspicuous,” with reference to a term, means so written, displayed, or presented that a reasonable person against which it is to operate ought to have noticed it. Whether a term is “conspicuous” or not is a decision for the court. Conspicuous terms include the following:
(A) a heading in capitals equal to or greater in size than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same or lesser size; and
(B) language in the body of a record or display in larger type than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same size, or set off from surrounding text of the same size by symbols or other marks that call attention to the language.

Tex. Bus. & Com. Code Ann. § 1.201(10) (West 2009). The test for the court is “whether attention can reasonably be expected to be called to [the provision].” Mickens, 264 S.W.3d at 879 (quoting Littlefield v. Schaefer, 955 S.W.2d 272, 275 (Tex. 1997)); Sydlik v. REEIII, Inc., 195 S.W.3d 329, 332-33 (Tex. App.-Houston [14th Dist.] 2006, no pet.). 
The express negligence rule states that if a party intends to be released from its own future negligence it must express that intent in clear, unambiguous terms within the four corners of the contract. Reyes, 134 S.W.3d at 192; Sydlik, 195 S.W.3d at 333. The purpose of “the express negligence rule is to require scriveners to make it clear when the intent of the parties is to exculpate” a party for that party's own negligence. Atlantic Richfield Co. v. Petroleum Pers., Inc., 768 S.W.2d 724, 726 (Tex. 1989). Language that specifically refers to “any negligent act of [the released party]” may be sufficient to define the parties' intent. Id.
SOURCE: Dallas Court of Appeals - 05-10-00146-CV - 8/11/11

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