In Harrell v. BMS Partners, LLC, No. 4D22-121, 2022 Fla. App. LEXIS 7439 (4th DCA Nov. 2, 2022), the Florida’s Fourth District Court of Appeals has held that an exculpatory clause purporting to absolve a retailer of liability from strict liability in tort for injuries causes by defects in products it places on the market violates public policy.
The facts are as follows: Charles Randolph Harrel (the Plaintiff) purchased a Suzuki brand motorcycle from BMS Partners, LLC (the Defendant). The signed sales contract contained the following exculpatory language:
“releasing BMS from any liability or responsibility for personal injury, or death or damages to property… of which any damages caused by his ownership or by the negligence of BMS…taking motorcycle means expressly assuming risk of Danger that may be associated with the operation of the motorcycle on the streets… Indemnify and hold Harmless BDS from any and such claims or causes of action by whomever and whenever presented… I am aware that this is a release of liability and a contract between myself and BMS…”
Shortly, after receiving the motorcycle, the Plaintiff was involved in an accident and sustained serious bodily injuries. Plaintiff proceed to sue for negligent assembly, servicing, setting up, repair and/or inspecting the motorcycle, but more importantly, the Plaintiff sued Defendant as a seller in the stream of commerce under strict products liability and negligent produce liability arising out of manufacturing, design, defect and failure to warn of those defects. The Plaintiff included three strict product liability counts, as well as three negligent product liability counts but failed to add Suzuki as a defendant.
Breaking down the exculpatory clause. the court noted that while the Plaintiff agreed to release the Defendant for any liability or responsibility in any way for personal injury or death in the first sentence, the second sentence contained language limiting the scope of the release to claims which may be due or in part to have been caused by the negligence or gross negligence of D. Therefore, the count found that the parties agreed the exculpatory clause would only release liabilities sounding in negligence.
The court analyzed the current state of the law that as a matter of public policy, rather than contractual understanding, a duty should be placed on the manufacturers to warrant the safety of their products. The court found that it logically follows that an exculpatory clause purporting to absolve a retailer of liability from strict liability in tort for injuries causes by defects in products it places on the market violates public policy as a result.
The court rejected the Defendant’s assertion that the Plaintiff could still sue Suzuki ( the manufacturer) and this would therefore not violate public policy. The court found that as a retailer, the Defendant is within the motorcycle’s distributive chain and thus cannot insulate itself from strict liability in tort merely because the Plaintiff has other potential remedies available.
While this case is not “earth shattering”, it does reiterate the burdens retailers have in defending against strict liability claims for products they do not manufacture. We are beginning to see distribution contracts where the manufacturer is attempting to hold retailers solely responsible for defending these claims. We have successfully negotiated distribution contracts that remove these terms of the contract, as well as more fairly distribute the risk between those in the manufacturing/production/distribution/retail chain.
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