New Light Co., Inc. v. Wells Fargo Alarm Services, A Div. of Baker Protective Services, Inc.

Decision Date10 May 1994
Docket NumberNo. A-92-694,A-92-694
Citation516 N.W.2d 260,2 Neb.App. 828
CourtNebraska Court of Appeals
PartiesThe NEW LIGHT COMPANY, INC., doing business as the Great Wall Restaurant, Appellant, v. WELLS FARGO ALARM SERVICES, A DIVISION OF BAKER PROTECTIVE SERVICES, INC., and General Electric Company, Jointly and Severally, Appellees.

Syllabus by the Court

1. Contracts: Liability: Public Policy. Where parties in a commercial relationship have voluntarily agreed to an exculpatory contractual provision that unconditionally releases one party from liability for any damages resulting to the other party, and where there is no evidence of a disparity in bargaining power between the parties, there is no justification on grounds of public policy for a court to void the exculpatory provision.

Kile W. Johnson, Barlow, Johnson, Flodman, Sutter, Guenzel & Eske, Lincoln, and Marvin J. Monroe and Jeffrey R. Learned, Denenberg, Tuffley & Jamieson, P.C., Southfield, MI, for appellant.

Michael G. Connery and Diana J. Vogt, Kutak Rock, Omaha, for appellee Wells Fargo.



The New Light Company, Inc. (New Light), appeals the trial court's decision granting summary judgment in favor of Wells Fargo Alarm Services (Wells Fargo). Wells Fargo installed a fire protection system in a restaurant owned by New Light. New Light sued Wells Fargo and General Electric Company as jointly and severally liable defendants for damages sustained by the restaurant as a result of a fire. Wells Fargo moved for summary judgment on the grounds that an exculpatory clause in its contract with New Light released Wells Fargo from any liability for the damages sustained. (The action against General Electric is pending.) We affirm because the exculpatory clause of the contract releases Wells Fargo from any liability for damages to New Light's restaurant.


On July 1, 1983, Wells Fargo and New Light entered into a contract for a fire detection On January 7, 1989, a fire broke out at The Great Wall. The system provided by Wells Fargo did not detect the fire and did not communicate a warning signal. The fire spread, and the restaurant suffered extensive damage before the fire was discovered and extinguished.

and protection system for The Great Wall Restaurant, owned by New Light. Pursuant to the contract, Wells Fargo would design, install, maintain, and monitor the system. On October 6, 1988, the parties renewed the contract.

In its petition, New Light alleged, among other things, that the restaurant sustained approximately $623,000 in damages because of Wells Fargo's gross negligence or wanton and willful misconduct in installing the fire protection system. New Light cited a defect in the wiring of the system and the failure of Wells Fargo to install detection equipment in the basement-level clothes dryer room where the fire started.

Wells Fargo moved for summary judgment based on an exculpatory clause set out in paragraph D of both the original contract and the renewal agreement of October 1988. In the October 1988 renewal agreement, paragraph D is set out in boldface type and capital letters. It reads in pertinent part as follows:

D. It is understood and agreed by [New Light] that Wells Fargo Alarm is not an insurer; ... if [New Light] desires insurance, [New Light's] insurance will be obtained from an insurance company in such amount as [New Light] shall deem necessary to protect its interests. [New Light] does not and will not seek indemnity from Wells Fargo Alarm against any damages or losses caused by hazards to [New Light's] property. Wells Fargo Alarm makes no warranty, expressed or implied, that the systems it installs or the services it furnishes will avert or prevent occurrences, or the consequences therefrom, which the systems and services are designed to detect. [New Light] agrees that Wells Fargo Alarm shall not be liable for any of [New Light's] losses or damages, irrespective of origin, to person or to property, whether directly or indirectly caused by performance or nonperformance of any obligation imposed by this agreement or by negligent acts or omissions of Wells Fargo Alarm, its agents or employees.

(Emphasis supplied.) (Citations omitted.) In its response to the motion for summary judgment, New Light argued, among other things, that enforcement of the exculpatory clause would constitute a violation of public policy.

The trial court did not articulate its reasons for granting Wells Fargo's motion for summary judgment. Based on Wells Fargo's motion and New Light's response, we conclude that the court determined as a matter of law that the exculpatory language in paragraph D of the contract released Wells Fargo from any liability.


We reach only one of New Light's assignments of error, as it is dispositive of this appeal. New Light argues that the trial court erred in granting the motion for summary judgment because a provision in a contract exculpating a party from liability for gross negligence or wanton and willful misconduct constitutes a violation of public policy.


Where there is no genuine issue as to any material fact or as to the ultimate inferences to be drawn therefrom and the moving party is entitled to judgment as a matter of law, summary judgment should be granted. Neb.Rev.Stat. § 25-1332 (Reissue 1989); Hillie v. Mutual of Omaha Ins. Co., 245 Neb. 219, 512 N.W.2d 358 (1994); Plambeck v. Union Pacific RR. Co., 244 Neb. 780, 509 N.W.2d 17 (1993); Mayer v. Howard, 220 Neb. 328, 370 N.W.2d 93 (1985).

In appellate review of a summary judgment, the court views the evidence in the light most favorable to the party against whom the judgment is granted and gives such party the benefit of all reasonable inferences deducible from the evidence. Hillie v. Mutual of Omaha Ins. Co., supra; VonSeggern

v. Willman, 244 Neb. 565, 508 N.W.2d 261 (1993).


A party is bound to the terms it has agreed to in a contract. Guaranteed Foods v. Rison, 207 Neb. 400, 299 N.W.2d 507 (1980). If the contents of an agreement are unambiguous, the document is not subject to interpretation and construction, and the intention of the parties to the document must be determined from the contents of the document. Albee v. Maverick Media, Inc., 239 Neb. 60, 474 N.W.2d 238 (1991). Parties are bound by the terms of the contract even though their intent may be different from that expressed in the agreement. Rumbaugh v. Rumbaugh, 229 Neb. 652, 428 N.W.2d 500 (1988). Construction of an unambiguous contract provision is solely a question of law. Spittler v. Nicola, 239 Neb. 972, 479 N.W.2d 803 (1992); Newman v. Hinky Dinky, 229 Neb. 382, 427 N.W.2d 50 (1988). A contract which is written in clear and unambiguous language is not subject to construction and must be enforced according to its terms. Elson v. Pool, 235 Neb. 469, 455 N.W.2d 783 (1990).

Wells Fargo argues that the exculpatory clause is unambiguous and not subject to interpretation; therefore, it must be enforced according to its terms. New Light concedes that a party can be contractually exculpated from liability for ordinary negligence, see Oddo v. Speedway Scaffold Co., 233 Neb. 1, 443 N.W.2d 596 (1989), and that the exculpatory clause before us is not ambiguous. New Light argues that the exculpatory language in paragraph D cannot release Wells Fargo from liability for gross negligence or wanton and willful misconduct because such a release would be unconscionable. According to New Light, the conduct in this case so far exceeds ordinary negligence that, in the interest of public policy, the court should not permit such conduct to be exculpated by contractual agreement.

New Light argues that the issue of whether a party can contractually exculpate itself from liability for gross negligence or wanton and willful...

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