No. 85-350 INTHE SUPREMECOURT OF THE STATEOF MONTANA 1986

LINDAJ. MILLER, Plaintiff andAppellant,

FALLONCOUNTY,CECIL P. MILLER, DAVIS TRANSPORT, INC., and PREFAB TRANSIT CO., Defendants and Respondents.

APPEAL FROM: District Courtof the SixteenthJudicialDistrict, Inand for the County ofFallon, TheHonorableA. B. Martin, Judgepresiding. COUNSELOF RECORD: ForAppellant: Lucas & Monaghan;A. Lance Tonn argued,Miles City, Montana For Respondent: Anderson, Edwards & Molloy; DonaldW. Molloy argued forMiller, Billings,Montana Anderson, Brown Law Firm; Steven J. Harman argued for DavisTransport,Billings, Montana Moulton LawFirm; SidneyR. Thomas argued for Prefab Transit, Billings,Montana DenzilR. Young, Baker,Montana Calvin J. Stacey, Billings,Montana ForAmicus Curiae: Rossbach & Whiston for Rosina Woodhouse, Missoula, Montana Sandall,Cavan, Smith,Howard & Grubbs;W. Corbin Howard for Audrey D. Noone,Billings,Montana

Submitted: March 14,1986 Decided: June 26, 1986

Filed: 

### JUfl

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## 65986Mr. Justice Frank B. Morrison, Jr. delivered the Opinion of the Court.

Linda J. Miller appeals judgment of the Sixteenth Judicial District Court, County of Fallon, which granted summary judgment to defendants, Cecil P. Miller (Miller)

## , Davis Transport, Inc. (Davis)

## , and PreFab Transit Co.

(PreFab)

# . We reverse. Linda Miller (appellant)was injured in a one vehicle truck accident. Her husband, Cecil Miller, an independent truck driver, was the driver of the truck. Miller had entered into a contract for serviceswith PreFabonAugust 3, 1982. As part of that contract,Miller delivered a load of mobile home frames from Elkhart, Indiana, to Belgrade, Montana. Thedeliverywasmade November 2, 1982. Appellant accompanied her husband on the trip. They stayed in Belgrade, Montana, the night of November 2. The next day, Miller, on behalf of PreFab, entered into a contract with Davis whereby Miller agreed to haul a load of lumber from Townsend, Montana, to Minnesota for Davis. The accident occurred November 3, 1-982,while the Millers were traveling to Minnesota. Appellantwas thrown from the truck and is now aparaplegic. She filed an action March 22, 1984, against Fallon County, alleging negligent design of a roadway; Miller, alleging negligent, careless and unlawful operation of a vehicle; Davis, alleging vicarious liability for Miller's negligence; and PreFab, alleging vicarious liability for Miller's negligence. The vicarious liability actions are premised on allegations that Millerwas the employeeofDavis and/or PreFabat the time of the accident. Miller, Davis and PreFab filed motions for summary judgment on the basis of interspousal tort immunity. PreFabadditionally sought summary judgment on the basis of the following pre-injury release form signed by appellant on September 12,1981: Application to travel withmy husband.

Furthermore, in the event of an accident or other manner wherein I may lose my life,be injured, or in anyway contribute to the injury or loss of life to another, I hereby waive any rights whatsoever against Pre-Fab Transit Co. for what otherwise might be its liability and agree that Pre-Fab Transit Co., its agents, employees and contractors are to be held harmless in all respects by virtue ofmy being apassenger in said vehicle. The motions were briefed and argued. Thereafter, the District Court granted the motions for summary judgment on the basis of interspousal tort immunity. The pre-injury release was also held to support PreFab'smotion. Following Rule 54(b),M.R.Civ.P., certification, a notice of appealwas timely filed. The following issues are raised: 1. Whether the District Court committed reversible error in granting summary judgment in favor ofMiller on the basis of the defense of interspousaltort immunity? 2. Whether the District Court committed reversible error in granting summary judgment in favor of Davis and PreFab on the basis of its finding that the defense of interspousal tort immunity is available to a spouse's employer? 3. Whether the District Court committed reversible

error by granting summary judgment to PreFab on the basis of

awaiver given to PreFabby appellant. THEDOCTRINEOF INTERSPOUSALTORT IMMUNITY 

## - - The doctrine of interspousal tort immunityderives from the common law. When Montana became a state, it adopted the

common law of England as "the rule of decision in all the courts of this state." Section 1-1-109,MCA. The doctrineof interspousal tort immunity is a creature of courtdecision and subject to change by the courts. Fernandez v. Romo

(Ariz. 1982), 646 P.2d 878, 880. Brooks v. Robinson (1nd. 1972)

## , 284N.E. 2d 794, 797. This Court has previously refused to abolish the doctrine of interspousal tort immunity. Conley v. Conley

(1932)

## , 92Mont. 425, 15 P.2d 922;Kelly 

### v. ~illiams(1933)

## , 94 Mont. 19, 21 P.2d 58; State ex rel. Angvall v. District Court (1968), 151 Mont. 483, 444 P.2d 370; and State Farm Mutual Automobile Ins. Co. 

### v. Leary (1975)

## , 168 Mont. 482, 544 P.2d 444. However, judicial modification of the common law is sometimes required to prevent great injustice or to insure that the common law is consonant with the changing needs of society. Digby v. Digby (R.I. 1978), 388 A.2d 1. In fact, "[tlhe strength and genius of the common law lies in its ability to adapt to the changing needs of the society it governs." Brooksv. Robinson, 284N.E.2d at 797. Thedoctrine of staredecisis isnot an impenetrablebar to conforming common law to the needs of a dynamic and evolving culture: This Court recognizes that courts may have previously fashioned a rule of immunity fromwrongdoing,having adopted a posture at an earlier date in response to what appeared to be desirable then as a matter ofpolicy; yetwhen it later appears to be unsound within a given context,especially when the reasons upon which the immunity is based no longer exist, it remains within the domain of the judiciary to reject the applicability of such a rule. Lunav. Clayton (Tenn. 1983), 655 S.W.2d 893, 897. The historical reasons for retention of immunity are: 1) unity--the common law concept that husband and wife are

one person; 2) family harmony; and 3) the possibility of fraud and collusion. These reasons no longer dictate such aharsh and absolute result. See Tobias, Interspousal Tort Immunity inMontana, 47Mont.L.Rev. 23 (1986). The concept of unity originated at a time when a woman relinquished her rights as an individual when she married. The "supposed unity" of husband and wife, which serves as the traditional basis of interspousal disability,isnot a reference to the common nature or loving oneness achieved in a marriage of two free individuals. Rather,this traditional premise had reference to a situation, coming on from antiquity, in which a woman's marriage for most purposes rendered her a chattel of her husband. Freehe v. Freehe (Wash. 1972), 500 P.2d 771, 773. The concept of unity is outmoded and has been significantly eroded by both statutoryand case law. Family harmony will not be destroyed by the filing of a lawsuit. If a family is sound, itwillmost likely survive the legal action. A weak family bond cannotbe strengthened by our judicial system. [Ilt is difficult to perceive how any law barring access to the courts for personal injuries will promoteharmony. If thiswere avalid sociological consideration, the Legislature could orchestrate even greater harmony by abolishing the statute giving the right to divorce. Coffindaffer 

### v. Coffindaffer (W.Va. 1978), 244 S.E.2d 338,

The destruction of family harmony is even less of a concern because of insurance. A spouse is normally not seeking redress against the other spouse,but rather spouse's insurance carrier. See Fernandez, 646 P.2d at 881-882. In Transamerica Insurance Co. 

### v. Royle (Mont. 1983), 656 ~.2d 820, 40 St.Rep. 12,we recognized the effect of insurance on suits against parents by their minor children. The same rationale applies here. "The existence of liability insurance prevents family discord and depletion of family assets in automobile negligence cases 

# .. . (citations omitted)." Royle, 656 P.2d at 823, 40 St.Rep. at 16.Our decision in Royle, 656 P.2d at 823-824, 40 St.Rep at 16, is also instructive concerning the problems of fraud and collusion. The possibility of fraud and collusion exists throughout all litigation. One of the many functions of a judge or jury is to determine the facts of the case, including the potentially collusive aspect of the parent-child or interspousal relationship. Thus, the possibility of fraud or collusion is not sufficientreason to warrant continued reliance on interspousal tort immunity. The defense is abolished in Montana. Previous decisions to the contrary,cited above,are overruled. The abolition of the doctrine of interspousal tort immunity renders unnecessary consideration of whether the doctrine is available to the allegedly-negligent spouse's employer. THE EFFECTS

## -- OF THE PRE-RELEASE FORM More than a yea-r prior to the accident, appellant requested and received permission from PreFab to ride with her husband on interstate trips. In return, PreFab insisted that she sign a document entitled "ApplicationtoTravel with My Husband"which states inpertinentpart: Furthermore in the event of an accident or other manner wherein I may lose my life,be injured, or in anyway contribute to the injury or loss of life to another, I hereby waive any rights whatsoever aqainst 

## re-Fab Transit 

## --- Co. for what otherwise might 

### - be 

## - its liability 

## - and agree that Pre-Fab Transit 

## -- Co., its agents, employees and contractors are &g

## be held harmless in all respects virtue 

## - -- of %being apassenger in saidvehicle. (Emphasis 

### - - -- supplied.) The trial judge held that this waiver absolves PreFab from any liability with respect to appellant. On appeal, appellant contends the waiver is unenforceable because it is againstpublic policy.The waiver constitutes a private contract between private individuals. Generally,private parties are allowed to contractaway liability fornegligent acts if the interest of the public is not involved and the contracting parties stand on equal footing. Checkley v. Illinois Central Railroad Co. (Ill. 1913), 100 N.E. 942; Haynes v. County of Missoula (1973), 163 Mont. 270, 279-280, 517 P.2d 370, 376- See also Speiser,Krause and Gans,TheAmerican Law of Torts,

A different resulthas obtainedwhere a facility or service is offered as a matter of convenience-- rather than one of necessity. In such instances, if the user assumes a risk of loss, there appears to be no basis for holding the exculpatory provision invalid on the ground that the parties were in an unequal bargaining position inasmuch as the user isunder no compulsion to accept the offer of serviceor its terms. However, the fact that the waiver is a private contract is not determinative in this case. We must also decide whether the waiver is in violation of § 28-2-702,MCA,which states: Contracts which violate policy of the law 

## - exemption from responsibility. A11 contractswhich have for their object,directly or indirectly, to exempt anyone from responsibility for his own fraud,forwillful injury to theperson orproperty of another, or for violation of law, whether willful or negligent, are against thepolicy of the law. This Court has never before had occasion to interpret the statute. It was adopted verbatim from California in

Montana follows the rule of statutory construction that where a statute is adopted from a sister state, it is ordinarily presumed that the legislatureborrows the constructionplaced upon it by the highest court of the state fromwhich it is borrowed, although such construction isnotbinding upon this Court. (Citationsomitted.) Lawrence v. Harvey (1980), 186 Mont. 314, 321, 607 P.2d 551, 556. We therefore find the interpretation of the statutebythe California Supreme Court in Tunkl v. Regents of University of California (Cal. 1963), 383 P.2d 441, 32 Cal.Rptr. 33, to be persuasive. Consistent with that decision,we hold that the words "his own" qualify the term "fraud",as well as the terms "willful injury to the person

or property of another" and "violation of law, whether willful or negligent". Next we must determine whether "his own" includes the employer as well as the employee. In Tunkl, supra, the California court held that its equivalent statute applies equally to a "corporation's 'own1 liability and vicarious liability resulting from negligence of agents." 383 P.2d at 448, 32 Cal.Rptr. at 40. Likewise,we hold that our statute applies to a corporation's vicarious liability. To summarize, S 28-2-702, MCA, is interpreted to mean that no person or corporationmay contract to exempthimself

or itself fromresponsibility forhis, its or its employee's:

(1) fraud; (2) willful injury to the property or person of another; (3)negligentorwillful violation of law. But, what is meant by the term "violation of law, whether willful or negligent?" The California Supreme Court has not resolved this question. However, the legal meaning of the terms contained in the phrase is undisputed. Law consists of constitutions, Wickham v. Grand River Dam Authority (Okl. 1941), 118 P.2d 640, 643; statutes and case law, Erie Railroad Co. 

### v. Tompkins (1938), 304 U.S. 64, 78, 58 S.Ct. 817, 822, 82 L.Ed. 1188, 1194; as well as common law, Fenn v. Holme (1859), 62 U.S. 481, 486, 21 How. 481, 486, 16 L.Ed. 198, 200. Thus, pursuant to the clear and unambiguous language of S 28-2-702, MCA, an entity cannot contractually exculpate itself from liability forwillful or negligent violations of legal duties,whether they be rootedin statutes or case law. We therefore determine the statute has application in this setting. The dissent contends that S 28-2-702, MCA, invalidates only those waivers which affect the public. This contention is contrary to the specific words of the statute. The statute itself states that any contract which exempts anyone from responsibility for fraud, willful injury or the willful

or negligent violation of law, is against the policy of the law. Nothing in the statute limits its application to contracts which involve the public interest. Thus, even a waiver which constitutes a private contractbetween private individualsis invalid,and inviolation ofpublic policy, if it seeks to exempt one from liability for those actions specified in the statute. Contrary to PreFab's allegations, Congress has not preempted this area of law by enacting the Interstate Commerce Act. The relevant statute is 49 U.S.C. S 10722(d)(2) (1982),which states inpertinent part: A common carrier providing transportation subject to the jurisdiction of the Commission 

# ... may provide transportation without charge for officers and employees (andtheir families) of that carrier, another carrier (byexchangeofpasses or tickets), or a telegraph, telephone,or cable company. This section allows PreFab to provide free transportation to certain specified individuals, including appellant. Itdoes not regulate the liability which potentially accompanies the provision. Therefore, Montana is free to legislate with respect to the liability incurred. Eisenman Seed Co. v. Chicago,Milwaukee, St.Paul and Pacific Railroad (1973)

## , 161 Mont. 197,203, 505 P.2d 81, 84. Finally,again contrary to PreFab's allegation, Illinois law should not control. We recognize that the contract between PreFab and Miller originated in Illinois. However,S 28-2-702, MCA, delineates the types of contracts Montana will refuse to recognize regardlessof their origin. We remand this cause to the trial court. If liability is found based upon a willful or negligent violation of law, the waiver as it pertains to PreFab, Davis and Miller violates S 28-2-702,MCA, andmay not be relied onby any of the threedefendants. Reversed and remanded.

We Concur: d

JusticesMr. Justice Fred J. Weber dissentsas follows:

I concur with themajority opinion and its abolition of the doctrine of interspousal tort immunity. Idissent from its conclusionwith regard to thepre-release form. Idisagree with the majority conclusion that a negligent violation of law by PreFab, Davis or Miller constitutes a violation of 5 28-2-702,MCA, so that the waiver may not be relied on. The majority opinion points out that this Court has

never had occasion to interpret5 28-2-702,MCA, and further points out that the statute was adopted verbatim from California in 1895. Themajority then concludes that the interpretation of the statute by the California Supreme Court in Tunkl is persuasive. Unfortunately the rationale of the majority opinion actually is strikingly different from the rationale in Tunkl. The majority concludes that under 5 28-2-702, MCA, an entity cannot contractually exculpate itself from liability for negligent violations of legal duties whether they are rooted in statutes or case law. Tunkl approached the same code section with an entirely different rationale. Tunkl emphasized that the code section had been interpreted in various ways by California cases, some strictly,

some very liberally so that the authority for Tunkl under California cases was limited. Tunkl did emphasize that all of the California cases consistently held that the exculpatory provision of the code section would stand only if the public interest was involved. Tunkl then set forth a number of factors to be considered in determining whether or not the public interest was effected by the release agreement. Included are such factors aswhether it is a businesswhich is suitable for public regulation; whether a party is performing a service of great importance to the public which is practically necessary to the public; whether a party is willing to perform this forany member of thepublic; whether there is an essential nature of services being performed and

a decisive advantage inbargaining strength; whether there is superior bargaining power and a standardized adhesion contract; and whether aparty isplaced under the control of the party to be exculpated. Clearly the present case does not set forth facts justifying the application of the public interest rule under Tunkl. In otherwords, if the rationale of Tunkl were applied in the present case, the holding would be contrary to the majority opinionhere. In Tunkl the California court distinguished private voluntary transactions from public interest cases and stated: While obviously no public policy opposes private, voluntary transactions in which one party, for a consideration,agrees to shoulder a riskwhich the law would otherwise have placed upon the other party, the above circumstances pose a different situation. Tunkl, 383 P.2d at 446. This Court applied the rationale of Tunkl in Haynesv. County ofMissoula (1973),163Mont. 270, 517 P.2d 370. Even though this Court was interpreting 

### 5 28-2-702,MCA, it followed the public interest rationale of Tunkl and quoted extensively from Tunkl. In addition, this Court in Haynes referred to the provision in Restatement, Contracts, 5 575 making an exemption from liability illegal if a party is charged with the duty of public service, and the bargain relates to negligence in the performance of any part of its duty to the public, forwhich it has received or beenpromised compensation. Without going intoHaynes in any
more detail, it is clear that this Court adopted the public interest rationale of Tunkl. I therefore concludethat neither Tunkl nor Haynes is authority for the position taken in the present majority opinion. I dissent from the primary conclusion of the majority opinion that an entity cannot contractually exculpate itself from liability for either willful or negligent violations of legal duties whether they are rooted in statutes or in case law, under the provision of 5 28-2-702, MCA. As I look at this statutewhich was enacted by ourMontana Legislature in 1895, I note that it addresses contracts which are against the policy of the law of this state. Section 28-2-702,MCA, states that all of the following contracts are against the policy of Montana: contracts which exempt anyone from responsibility for fraud, willful injury to person orproperty,

or violation of law, whether willful or negligent. It is clear that in order to discourage anyone exempting himself for his own fraud, such a provision is appropriate. In a similarmanner, it is appropriate to eliminate an exemption for willful injury to person or property. This leaves the last portion which is the violation of law,whether willful

or negligent. Again there is a clear policy apparent in a prohibition which applies towillful violation of law. That element is not present in this case. This leaves only the question of the negligentviolation of law. I conclude that negligent torts were not contemplatedby this section. I invite the attentionof our Montana Legislature to the majority opinion in order that it may determine if it approves of the interpretationof 5 28-2-702,MCA.Mr. Justice L. C. Gulbrandson joins in the foregoing dissent of Mr. Justice Fred. J. Weber.

Justice 

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