Opinion ID: 387302
Heading Depth: 2
Heading Rank: 1

Heading: Post-Delivery Negligence

Text: 23 Varig contends that Judge McGovern failed to follow proper rules of contract construction in holding that the exculpatory clause exempted Boeing from liability for post-delivery negligence. Varig further urges that even if the court were correct in its reading of the exculpatory clause, under California law the question of the parties' intent with respect to that clause was a question of fact for the jury. Such an issue, it is argued, precludes summary judgment.
24 Varig included in its complaint a cause of action based upon Boeing's alleged negligent failure to warn of the fire hazard following delivery of the aircraft. Varig contends that post-delivery negligence is not excused by the exculpatory clause. In making this claim, plaintiff is forced to confront the broad language of the clause: (B)uyer hereby waives ... any obligation or liability of Boeing arising from tort .... Under California law, upon which Varig relies, (i)f the language used be broad enough, an actor may disclaim liability for negligence of any type. 2 Delta Airlines, Inc. v. Douglas Aircraft Co., 238 Cal.App.2d 95, 101, 47 Cal.Rptr. 518, 522 (1965). Accord, Tokio Marine v. McDonnell Douglas Corp., 617 F.2d 936, 940 (2d Cir. 1980) (applying California law, language broad enough to include claim for post-delivery negligence). 25 Varig argues that two of the provisions of the Boeing-Seaboard contract, each excusing Boeing from liability incurred after delivery, would be redundant if the exculpatory clause were intended to cover post-delivery negligence. It argues that the exculpatory clause by implication applies only to negligent acts committed prior to delivery of the aircraft. We disagree. 26 Nothing on the face of the contract contravenes Judge McGovern's conclusion that the phrase buyer ... waives ... any obligation ... arising from tort ... means what it says. The two provisions relied upon by Varig have no bearing on the scope of the clause. The first relates to patent infringement, a subject unrelated to post-delivery negligence. The second requires a subsequent purchaser to indemnify Boeing for any claims arising from flight training by Boeing employees. This provision is not superfluous because it requires the subsequent purchaser to indemnify Boeing against suits by third parties. The exculpatory clause merely protects Boeing from suit by the subsequent purchaser. 27 Varig further advances the presence of a third contract provision as indicating a limit on the exculpatory clause. This provision requires Boeing to issue regular service bulletins covering design changes in its 707 aircraft. We see no logic in the argument that this requirement indicates an intent to limit the scope of the exculpatory clause.
28 In granting summary judgment without considering evidence of the parties' intent beyond the four corners of the contract, Judge McGovern apparently relied on the special master's conclusion that such evidence was barred under Washington's parol evidence rule. The law in Washington is that the intent of the parties is irrelevant when the terms of a contract are unambiguous. Grant County Constructors v. E. V. Lane Corp., 77 Wash.2d 110, 459 P.2d 947, 954 (1969). See Barclay v. City of Spokane, 83 Wash.2d 698, 521 P.2d 937, 938-39 (1974). We have held the exculpatory clause unambiguous. Thus, if the district court properly held Washington law controlling, there is no merit to plaintiff's argument that summary judgment was improper because the intent of the parties presented a question of fact for the jury. Varig contends, however, that California law is controlling and that under the decisions of that state, the intent of the parties created a question of fact. 3 29 We agree with the district court that Washington law should determine the relevance of Boeing's and Seaboard's intent. Varig argues that information revealing Boeing's and Seaboard's understanding of the exculpatory clause is crucial to its case. This is so because, in agreeing to adopt the exculpatory provision, Varig maintains that it released Boeing from potential liability only to the extent contemplated by Boeing and Seaboard. In light of this reasoning, it is difficult to perceive plaintiff's rationale for looking to California's parol evidence rule. 30 Boeing and Seaboard agreed that their contract would be governed by Washington law. Especially where a party to a contract is represented by counsel, we may attribute to it knowledge of the law. Boeing and Seaboard intended, therefore, that if they were successful in drafting an unambiguous document, the face of that document would be the sole source of information regarding their agreement. Varig does not contend that it renegotiated the exculpatory provision. Rather, it argues that the scope of the provision it adopted is identical to that provision's original scope. We can only understand the original scope of the exculpatory provision by respecting the original parties' intent that it be governed by Washington law. 31 We have previously noted the lack of ambiguity in the exculpatory clause. By its plain terms, it was broad enough to encompass claims arising out of post-delivery negligence. We thus find no error in the district court's refusal to permit factual inquiry into Boeing's and Seaboard's intent.