State Appeals Court Rules on Exculpatory Agreements

By Doug Stevens & Catherine Hansen-STAMP

Caplan & Earnest

In Stone v. Life Time Fitness, Inc., et al., the Colorado Court of Appeals issued a published opinion in which it declined to enforce what the court termed “exculpatory clauses” contained in a “Member Usage Agreement” signed by a club member (the clauses the court referred to were actually one that included exculpatory language seeking to release the Life Time Fitness health club from liability and the other an acknowledgment and acceptance by the signer of “inherent risks” and later an assumption of “all risk of injury…”).

The member had filed a lawsuit against the gym in Denver District Court after she was injured in the club’s locker room when she tripped on a hair dryer cord. The Court of Appeals decision reversed the trial court’s summary judgment order enforcing the exculpatory language and dismissing the plaintiff’s Premises Liability Act claim against the gym.

Case Summary

In its opinion, the Court of Appeals does not suggest that exculpatory agreements (in this context, agreements seeking a “release” or “waiver” of future negligence claims) will no longer be enforceable for claims against recreational providers. To the contrary, long-standing Colorado law approving enforcement of properly drafted exculpatory agreements remains unchanged. Specifically, the Stone court applied the four-pronged test set forth by the Supreme Court in its 1981 opinion, Jones v. Dressel.

Under Jones, a court must consider four factors in determining whether an exculpatory agreement is valid: the existence of a duty to the public; the nature of the service performed; whether the contract was fairly entered into; and whether the intention of the parties was expressed in clear and unambiguous language.

To read this story and other complete articles featured in the March 6, 2017 print edition of Law Week Colorado, copies are available for purchase online.