Tennessee Supreme Court Clarifies Law Regarding Releases From Liability

December 20, 2018

The Tennessee Supreme Court has revised the factors for courts to consider when deciding the enforceability of a release of liability signed by someone before participating in an activity or obtaining a service.

In Tennessee, parties may enter into agreements, often referred to as exculpatory agreements, in which a party agrees not to pursue a negligence claim for potential injuries against another party. In 1977, the Tennessee Supreme Court adopted a list of six factors for courts to consider when deciding whether to enforce exculpatory agreements. These factors, however, have proven rather inflexible, are used by only a handful of other state courts, and have not been consistently applied by courts in Tennessee.

In a case brought by Frederick Copeland against MedicOne Medical Response Delta Region, Inc. (MedicOne), the Supreme Court adopted a new set of factors for courts to consider when deciding the enforceability of an exculpatory agreement. While Copeland was recovering from knee surgery at HealthSouth Rehabilitation Hospital North Memphis, the hospital arranged for MedicOne, a medical transportation company, to take him to a doctor’s appointment. Before leaving the hospital, MedicOne’s driver required Copeland to sign an agreement that, in part, released MedicOne from any liability. After the appointment, Copeland fell as he was getting into MedicOne’s van. He sued MedicOne, and MedicOne moved to dismiss the case based on the language in the agreement releasing it from liability. A Shelby County Circuit Court and the Court of Appeals ruled that the release was enforceable and barred Copeland’s claim against MedicOne.

The Tennessee Supreme Court agreed to hear the case to clarify and restate the law for courts to rely on when deciding the enforceability of exculpatory agreements. In an unanimous opinion authored by Justice Sharon G. Lee, the Court held when considering whether to enforce such a release, a court should consider all the facts and circumstances of the case and these factors: (1) the bargaining power of the person signing the release; (2) whether the language in the release clearly states what the person who signs it is giving up; and (3) public policy and public interest implications.

Here, after applying these factors, the Court held that the release was not enforceable because Copeland did not have equal bargaining power with MedicOne when he signed the release, the language of the release was unclear and overly broad, and the release involved an activity with important public interest implications. Thus, the Court held that the release did not prevent Copeland from suing MedicOne.

Oral arguments for this case were heard as part of the Court’s S.C.A.L.E.S. (Supreme Court Advancing Legal Education for Students) project at Lipscomb University during the American Legion Auxiliary Volunteer Girls State program. To read the unanimous opinion of the Court in Frederick Copeland v. HealthSouth/Methodist Rehabilitation Hospital, L.P., authored by Justice Sharon G. Lee, please visit the Opinions section of tncourts.gov.