• Key point 10-16.6. A release form is a document signed by a competent adult that purports to relieve a church from liability for its own negligence. Such forms may be legally enforceable if they are clearly written and identify the conduct that is being released. However, the courts look with disfavor on release forms, and this has led to several limitations, including the following: (1) release forms will be strictly and narrowly construed against the church; (2) release forms cannot relieve a church of liability for injuries to minors, since minors have no legal capacity to sign such forms and their parents' signature does not prevent minors from bringing their own personal injury claim after they reach age 18; (3) some courts refuse to enforce any release form that attempts to avoid liability for personal injuries on the ground that such forms violate public policy; and (4) release forms will not be enforced unless they clearly communicate that they are releasing the church from liability for its negligence.
* An Ohio court ruled that an indemnification clause in a "facility use agreement" required a charity that used a nonprofit camp to reimburse the camp for any legal judgments or settlements arising out of injuries occurring at the camp. A child ("Kyle") attended a week-long summer camp for childhood cancer patients sponsored by the American Cancer Society (ACS) at a Girl Scouts campground. Children were not charged a fee for attending the camp. The campground in question is owned by a regional entity of the Girl Scouts, and is frequently used by other groups for a fee pursuant to a "facility use agreement." At the time of the camp that Kyle attended there were 92 campers, 28 counselors, and 10 camp staff members on the premises. The Girl Scouts provided the horses to camp participants. While engaged in horseback riding at the camp, Kyle was involved in an accident that resulted in serious injuries. He died from his injuries a few months later. His parents sued the Girl Scouts, claiming that it was responsible for Kyle's death on the basis of its negligence. The Girl Scouts filed a cross claim against the ACS. Kyle's parents eventually settled all their claims out of court against both organizations. The Girl Scouts then sued the ACS, seeking a refund of its share of the settlement and payment of its attorneys' fees. The Girl Scouts relied on provisions in the facility use agreement that obligated the ACS to defend the Girl Scouts in the event of any claim, and "indemnify" the Girl Scouts for any judgment or settlement it paid as a result of injuries occurring during the use of the campground by the ACS. A trial court ruled in favor of the Girl Scouts, and ordered the ACS to pay the entire settlement amount plus an additional $120,000 of attorneys' fees incurred by the Girl Scouts in defending against the lawsuit. The ACS appealed.
The court began its opinion by noting that indemnification "is the right of a party, who has been compelled to pay what another should have paid, to require reimbursement. It arises from a contract, either express or implied." That is, an indemnification clause is a clause obligating one party to pay any judgment or settlement assessed against another party. Such clauses are usually included in facility use agreements, and specify that organizations using the landowner's property must indemnify the landowner against any expenses incurred as a result of accidents occurring on the property. The ACS insisted that the indemnification provision in the facility use agreement did not apply to Kyle's injury because horseback riding was "outside the scope" of this provision. The indemnification clause stated:
ACS agrees to indemnify, defend, and hold [the Girl Scouts] harmless from and against any and all claims, damages, demands, actions, duties, causes of action, judgments, costs, (including attorney fees), controversies and liabilities whether known or unknown, fixed or contingent, arising out of contract, tort or otherwise, in law or in equity, asserted by third parties (including but not limited to ACS participants) for damage to person or property, including but not limited to, consequential or incidental damages arising out of or related to: (a) ACS's failure to perform any and all of its obligations or liabilities under the Agreement or under any other agreement; (b) CF's use of the camp facility; (c) the negligent, willful or intentional acts/omissions of ACS or any of its agents, employees, invitees, or licensees; (d) the failure of ACS or any of its agents, employees, invitees or licensees to comply with all applicable federal, state and local laws, ordinances, statutes, regulations and rules, including but not limited to discrimination laws, the Americans with Disabilities Act (ADA) and environmental laws.
ACS claimed that horseback riding was not a "use" of the camp, but rather was a "service," and therefore the indemnification clause did not apply. The court disagreed, "The plain language of [the agreement] states that ACS agrees to indemnify and hold [the Girl Scouts] harmless from and against any and all claims … asserted by third parties for damage to person or property …. Giving the language [its] commonly understood meaning, we conclude that [it] contemplates indemnification by ACS for claims asserted by third parties, including its participants such as the decedent herein, for injuries to decedent's person which are related to ACS's use of the camp facility …. Horseback riding by ACS participants is within ACS's use of the camp facility. Therefore, the indemnification provision is applicable."
ACS also claimed that the indemnification clause was an attempt by the Girl Scouts to avoid liability for its own negligent acts, and was therefore unenforceable as against public policy. The court noted that "an agreement may exculpate a person from negligence only where the language doing so is clear and unambiguous." ACS insisted that the facility use agreement "does not contain clear and unambiguous language indemnifying the Girl Scouts for its own negligence." Again, the court disagreed. It noted that "exculpatory clauses" that seek to avoid liability for one's own negligence are not necessarily contrary to public policy so long as they are clear and unambiguous, and the parties have roughly the same bargaining power. The court concluded that the Girl Scouts and ABS were both "sophisticated long-standing corporations" equal in bargaining position, and therefore the indemnification clause was enforceable. The court conceded that the clause did not specifically mention "negligence," but it did identify "any and all" claims relating to ACS's use of the camp, whether the negligence was perpetrated by Girl Scouts or not.
The ACS argued that Kyle's accident was caused by the Girl Scouts' "willful and wanton misconduct," and so the indemnification clause did not apply. The court agreed that "one may not contractually relieve oneself for responsibility for acts constituting willful and wanton misconduct." It concluded that the evidence was not adequate to determine if the Girl Scouts engaged in such conduct, and so it sent the case back to the trial court for further consideration.
Application
. This case demonstrates the legal significance of indemnification clauses. Churches that use the property of another organization for recreational or any other use are sometimes asked to sign a facility use agreement, and church leaders are often surprised to learn that the church is responsible for any costs incurred by the facility owner during the church's use of its facility even if those costs are a result of the facility's own negligent acts. The court in this case acknowledged that indemnification clauses cannot relieve a facility owner of liability for its willful and wanton conduct. This is a common limitation recognized in many states. But, willful and wanton conduct is a difficult standard to prove, which means that in most cases a church will be called upon to pay any damages associated with injuries occurring during its use of another facility, even if those injuries were caused by the negligence of the facility owner. Weiner v. American Cancer Society, 2002 WL 1265575 (Ohio 2002).
© Copyright 2003 by Church Law & Tax Report. All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Church Law & Tax Report, PO Box 1098, Matthews, NC 28106. Reference Code: m58 c0503
