Baker Pacific Corp. v. Suttles

• Decision Date: 25 May 1990
• Docket Number: No. A043155,A043155
• Citation: 220 Cal.App.3d 1148,269 Cal.Rptr. 709
• Parties: BAKER PACIFIC CORP., Plaintiff and Respondent, v. Thomas M. SUTTLES et al., Defendants and Appellants.
• Court: California Court of Appeals Court of Appeals

Page 709

269 Cal.Rptr. 709

220 Cal.App.3d 1148

BAKER PACIFIC CORP., Plaintiff and Respondent, v. Thomas M. SUTTLES et al., Defendants and Appellants.

No. A043155.

Court of Appeal, First District, Division 2, California.

May 25, 1990.

Certified for Partial Publication ^*.

Review Denied Aug. 30, 1990.

Martin M. Horowitz, Oakland, Fritz Wollett, McCartin & Wollett, Albany, for plaintiff and respondent.

Allen, Matkins, Leck, Gamble & Mallory, Dwight L. Armstrong, Steven C. Ellingson, Irvine, for defendants and appellants.

BENSON, Associate Justice.

This action raises the questions of whether the trial court abused its discretion in denying a motion to set aside a default and whether a release form which an employer required to be signed by asbestos removal workers as a condition of employment violates public policy or is otherwise contrary to law. Finding that the trial court did not abuse its discretion in denying the motion to set aside the default, we shall nevertheless reverse the judgment because the release form tendered to the workers as condition of employment violated the statutory prohibition of Civil Code section 1668.

I STATEMENT OF THE CASE

Baker Pacific Corporation is a licensed asbestos abatement and remediation contractor. Appellants, Thomas Suttles and Ralph Runkel, are two individuals who had been employed by Baker Pacific on various asbestos removal projects prior to October 1987. On October 26, 1987, Baker Pacific entered a contract with Metropolitan Life Insurance Company for the removal of asbestos from an office building owned by Metropolitan located at 425 Market Street, San Francisco, California. As an express condition precedent to awarding the contract to Baker Pacific, Metropolitan required Baker Pacific's employees to read and sign a written Certificate of Workers' Release form.

Baker Pacific employs asbestos removal workers on a project-by-project basis as needed. Prior to October 26, 1987, appellants had been employed by Baker Pacific on asbestos removal projects. On October 26, 1987, appellants were on layoff status with Baker Pacific. During the last part of October 1987, Baker Pacific offered work to appellants on the Metropolitan job but appellants refused to sign the release claiming the release violated California and federal public policy. Metropolitan would not permit Baker Pacific to employ appellants for work in its building.

The release form provided that in consideration of appellants' employment by Baker Pacific and in consideration of the sum On May 11, 1988, the court entered a declaratory judgment holding that the release was valid.

of one dollar, appellants would waive certain rights. Appellants were required to acknowledge they understood the dangers of working with asbestos and to warrant they have not been disabled by asbestosis or any other cancer disease. The portion of the release pertinent to this appeal reads as follows: "I knowingly assume all risks in connection with potential exposure of asbestos and I do hereby covenant not to sue, and to release and forever discharge Building Owner, Owner's Professional Consultant, independent testing laboratory or engineers employed by the Building Owner or Owner's Professional Consultant, and all of their directors, officers, employees, nominees, personal representatives, affiliates, successors, and assigns for, from and against any and all liability whatsoever, at common law or otherwise, except rights which the undersigned may have under the provision of the applicable workmen's [sic] compensation laws. Except as specifically set forth herein I hereby waiver [sic] and relinquish any and all claims of every nature which I now have or may have or claim to have which are in any way, directly or indirectly, related to exposure to asbestos and asbestos-containing materials." (Emphasis added.)

A timely appeal followed. ¹

II DISCUSSION

A., B. ^**

C. Whether the Release is Valid

The trial court entered judgment declaring in relevant part that "... the Release is not void as against public policy or otherwise; and [that Baker Pacific's] compliance with Metropolitan's requirement that its employees execute the Release is not contrary to law...." Appellants contend this decision is contrary to law in that it violates Civil Code sections 3513 and 1668 ² and because the terms of the agreement are unconscionable in an adhesion contract. In the trial court and on appeal, appellants rely on an opinion letter issued by the Legislative Counsel of California which found the release to be unenforceable. Appellants also read the release as waiving their rights against Baker Pacific in violation of sections 2801 and 2804 of the Labor Code.

Baker Pacific replies the release is not contrary to public policy since "... no public policy opposes private, voluntary transactions in which one party, for a consideration, agrees to shoulder a risk which the law would otherwise have placed upon the other party...." (Tunkl v. Regents of University of California (1963) 60 Cal.2d 92, 101, 32 Cal.Rptr. 33, 383 P.2d 441.) Baker Pacific argues that in exchange for voluntarily signing the release, the employees obtained high-paying jobs while also retaining recourse for injuries against their employer and other potential third parties such as the manufacturer of protective equipment they wear. Baker Pacific asserts this situation is markedly different from that of the plaintiff in Tunkl who had no choice but to sign the hospital's release form in order to obtain necessary medical treatment. ³

Lastly, Baker Pacific points out that the release specifically excepts any rights "For it to be valid and enforceable, a written release exculpating a tortfeasor from liability for future negligence or misconduct must be clear, unambiguous and explicit in expressing the intent of the parties. If a tortfeasor is to be released from such liability the language used 'must be clear, explicit and comprehensible in each of its essential details. Such an agreement, read as a whole, must clearly notify the prospective releasor or indemnitor of the effect of signing the agreement.' " (Madison v. Superior Court (1988) 203 Cal.App.3d 589, 598, 250 Cal.Rptr. 299; citation omitted.) "Whether a contract provision is clear and unambiguous is a question of law, not of fact." (Ibid.) Our review of the release dictates the conclusion that the agreement is clear and unambiguous. It provides: the employees "knowingly assume all risks in connection with potential exposure of asbestos"; it releases Metropolitan "from and against any and all liability whatsoever, at common law or otherwise"; and it waives "any and all claims of every nature ... related to exposure to asbestos." It is hard to imagine a clearer or broader release. There can be no doubt that this release includes a release of Metropolitan for its "own fraud, or willful injury to the person or property of another, or violation of law, whether willful or negligent" as proscribed in Civil Code section 1668. Indeed, as we earlier noted, Baker Pacific does not argue the release should be read to exclude release of liability for conduct proscribed by section 1668 as does our dissenting colleague. Baker Pacific asserts the release "... is precisely the type of 'private, voluntary transaction' contemplated by the Tunkl court, and the Release thus cannot be contrary to public policy."

the employees may have against their employer under the worker's compensation law and therefore it does not violate the provisions of the Labor Code which prohibit waiver of those rights.

"Traditionally, the law has looked carefully and with some skepticism at those who attempt to contract away their legal liability for the commission of torts. This general policy of the common law found legislative expression early in California history with the enactment of Civil Code section 1668. This section made it clear a party could not contract away liability for his fraudulent or intentional acts or for his negligent violations of statutory law. However, a contract exempting from liability for ordinary negligence is valid where no public interest is involved and where no statute expressly prohibits it. (Gardner v. Downtown Porsche Audi (1986) 180 Cal.App.3d 713, 716-171 .)" (Nunes Turfgrass, Inc. v. Vaughan-Jacklin Seed Co., Inc. (1988) 200 Cal.App.3d 1518, 1534, 246 Cal.Rptr. 823.)

Here, the broad release clearly includes a release from liability for fraud and intentional acts and thus on its face violates the public policy as set forth in Civil Code section 1668. The trial court erred in determining the release was "not void as against public policy or otherwise."

Baker Pacific also maintains that even if the release were found to contravene public policy, its compliance with Metropolitan's requirement that its employees sign the release as a condition of employment would not be contrary to law since if the release were of no force or effect, then Baker Pacific's action would be of no force and effect and thus could not be contrary to law. We find this argument circular and unintelligible. Since we have determined the release as proffered is violative of section 1668, it follows that requiring prospective employees to sign an illegal agreement as a condition of employment is contrary to law.

Our dissenting colleague, while seeming to acknowledge the language of the release sufficiently broad so as to exclude liability for fraud, wilful injury, and wilful or negligent Here, the damage is already done. Because two workers have refused to execute a written release of liability, the terms of which would necessarily include release of liability for fraud, wilful injury or violation of law (negligent or wilful), they have been denied an employment opportunity. In short, the release has already been applied illegally by conditioning employment on the execution of a contract containing terms violating the statutory law of this state.

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