Winterstein v. Wilcom

• Decision Date: 10 August 1972
• Docket Number: A-W,No. 43,43
• Citation: 293 A.2d 821,16 Md.App. 130
• Parties: Roland C. WINTERSTEIN et ux. v. William E. WILCOM t/a 75-80 Drag-ay.
• Court: Court of Special Appeals of Maryland

Page 130

16 Md.App. 130

293 A.2d 821

Roland C. WINTERSTEIN et ux. v. William E. WILCOM t/a 75-80 Drag-A-Way.

No. 43.

Court of Special Appeals of Maryland.

Aug. 10, 1972.

Alan Edgar Harris, and Edward F. Seibert, Baltimore, for appellants.

Daniel W. Cagan, Baltimore, with whom was Adelberg, Rudow & Blanton, Baltimore, on the brief, for appellee.

Argued before MORTON, ORTH, and MOYLAN, JJ.

ORTH, Judge.

I

'REQUEST AND RELEASE

I, the unersigned, hereby request permission to enter the premises of 75-80 DRAG-A-WAY, PIT AREA, STAGING AREA, and participate in auto timing and acceleration runs, tests, contests and exhibitions to be held this day. I have inspected the premises and I know the risks and dangers involved in the said activities, and that unanticipated and unexpected dangers may arise during such activities and I assume all risks of injury to my person and property that may be sustained in connection with the stated and associated activities, in and about the premises.

In consideration of the permission granted to me to enter the premises and participate in the stated activities, and in further consideration of the provisions of a insurance medical plan, I do hereby, for myself, my heirs, administrators and assigns, release, remise and discharge the owners, operators, and sponsors of the said premises, of the activities, of the vehicles, and of the equipment therein, and their respective servants, agents, officers, and officials, and all other participants in the stated activities of and from all claims, demands, actions, and causes of action of any sort, for injuries sustained by my person and/or property during my presence in said premises and participation in the stated activities due to negligence or any other fault.

I represent and certify that my true age is stated below, and if I am under the age of 21 years, I do represent and certify that I have the permission of my parents and/or guardians to participate in the stated activities, and that they have full knowledge thereof.

I certify that my attendance and participation in the stated activities is voluntary, and that I am not, in any way, the employee, servant, or agent of the owners, operators or sponsors of the premises and the activities therein.

I HAVE READ AND UNDERSTAND THE FOREGOING REQUEST AND RELEASE.

In Witness Whereof, I have hereunto set my hand and seal. . . .'

The effectiveness of this document to hold harmless WILLIAM A. WILCOM, trading as 75-80 Drag-A-Way, defendant-appellee (Wilcom), is the crux of the case before us. ROLAND C. WINTERSTEIN and BARBARA WINTERSTEIN, his wife, plaintiffs-appellants (Winterstein), claim that it is void as against public policy and not 'conclusively binding upon them as their intentional and unreasonable exposure to danger, which (Wilcom) knew or had reason to know.' Wilcom asserts it was a binding contract relieving him of responsibility for damages in accordance with its terms. The lower court agreed with Wilcom and so do we.

II

The case arose by the filing of an action in tort by Winterstein against Wilcom in the Circuit Court for Frederick County. damages to his property occasioned by that Wilcom was in possession of real property at the junction of Maryland State routes 75 and 80. On the property he operated a business called 75-80 Drag-A-Way. Automobile timing and acceleration runs were conducted on two racing lanes. Wilcom's employees were in a tower to watch 'for any hazards on the track,' in the pits to inspect participating vehicles prior to each run, and at the end of the course to time the run. Roland Winterstein saw an advertisement of the runs and on 9 June 1967 went to the track to participate in speed contests in the 'C gas class.' He paid the stated fee. Near the end of his run his car 'hit a cylinder head approximately 36 long, 6 wide and 4 high, weighing approximately 100 pounds * * * which was not visible to him when he commenced the race' but was visible to Wilcom's employees in the tower. He lost control of his car, jumped a ditch, drove up an embankment and turned over. He sustained 'serious, painful and permanent injuries.' The declaration claimed that the crash and resulting injuries were due solely to the negligence of Wilcom and specified acts of omission and commission demonstrating that Wilcom had been careless. Roland Winterstein claimed $75,000. The second count was a joint claim by Roland and Barbara Winterstein for $35,000 for damages and losses to their marital relationship.

Wilcom pleaded the general issue. He then requested in writing an admission that two documents attached as exhibits to the request were genuine. Maryland Rule 421 a. Each was entitled 'REQUEST AND RELEASE', read as above set out, was dated 9 June 1967 and was witnessed by Wilcom. One, stamped No. 176, bore the signature under seal of Roland Winterstein and the other, stamped No. 177, bore the signature under seal of Barbara Winterstein. No response was served within the time prescribed by Rule 421 b 1, and therefore under Rule 421 b 2 the genuiness of the documents was deemed to be admitted. Thereafter Wilcom moved for a summary judgment in his favor. Rule 610. Upon the Motion and Memorandum of Points and Authorities, no answer having been filed and no hearing requested, the court by its order entered summary judgment in favor of Wilcom 'with respect to each and every count', and dismissed the action with prejudice, all costs to be paid by Winterstein. Winterstein appealed.

III

The first question is whether the releases were void as against public policy.

Eastern Ave. Corp. v. Hughes, 228 Md. 477, 180 A.2d 486, was concerned with a clause in a lease providing that the landlord would not be liable for injury to the person of the tenant or damages to his property. ¹ The court upheld the validity of the clause, following what it found to be the great weight of authority, namely that exculpatory clauses are valid. It noted, at 480, that 'the only state in which an exculpatory clause has been held invalid as against public policy appears to be New Hampshire.' However, it observed that in some states, subsequent to a judicial decision upholding such claims, the legislature had enacted statutes invalidating some types of exculpatory clauses. The General Assembly of Maryland apparently responded to the observation. But it voided as against public policy only exculpatory clauses in agreements between landlord and tenant, ch. 124, Acts 1964, leaving the law otherwise as it stood. ²

The General Rule of Law Regarding Exculpatory Clauses

In the absence of legislation to the contrary, the law, by the great weight of authority, is that there is ordinarily no public policy which prevents the parties from contracting as they see fit, as to whether the plaintiff will undertake the responsibility of looking out for himself. 'It is quite possible for the parties expressly to agree in advance that the defendant is under no obligation of care for the benefit of the plaintiff, and shall not be liable for the consequences of conduct which would otherwise be negligent.' Prosser, Law of Torts, 3rd Ed. (1964) § 67, p. 456. In other words, the parties may agree that there shall be no obligation to take precautions and hence no liability for negligence.

Exceptions to the General Rule

There is a proviso to the general rule. The relationship of the parties must be such that their bargaining be free and open. When one party is at such an obvious disadvantage in bargaining power that the effect of the contract is to put him at the mercy of the other's negligence, the agreement is void as against public policy. The proviso is applicable on this basis between employer and employee.

It is also against public policy to permit exculpatory agreements as to transactions involving the public interest, as for example with regard to public utilities, common carriers, innkeepers and public warehousemen. Prosser feels that there has been a definite tendency to expand the exception raised by the proviso to other professional bailees who are under no public duty but deal with the public, such as garagemen, owners of parking lots, and parcel checkrooms, because the indispensable need for their services deprives the customer of all real equal bargaining power. He finds decisions divided as to other private bailees for hire, the decision likely to turn upon the extent to which it is considered that the public interest is involved. Id., at pp. 457-458.

Generally, exculpatory agreements otherwise valid are not construed to cover the more extreme forms of negligence-wilful, wanton, reckless or gross. Nor do they encompass any conduct which constitutes an intentional tort. Id., at p. 459. And, of course, it is fundamental that if an agreement exempting a defendant from liability for his negligence is to be sustained, it must appear that its terms were known to the plaintiff, and 'if he did not know of the provision in his contract and a reasonable person in his position would not have known of it, it is not binding upon him, and the agreement fails for want of mutual consent.' Id., at p. 458.

Transactions Affected with a Public Interest

Because an exculpatory provision may not stand if it involves the public interest, see 175 A.L.R. 8 (1948), our inquiry turns to what transactions are affected with a public interest. In Tunkl v. Regents of the University of California, 60 Cal.2d 92, 383 P.2d 441, 32 Cal.Rptr. 33 (1963) the Supreme Court of California, in bank, found that in placing particular contracts within or without the category of those affected with a public interest, the courts have revealed a rough outline of that type of transaction in which exculpatory provisions will be held invalid. 'Thus the attempted but invalid exemption involves a transaction which exhibits some or all of the following characteristics. It concerns a business of a type generally thought suitable for public regulation. The party seeking...