Opinion ID: 1310349
Heading Depth: 1
Heading Rank: 6

Heading: waiver clause is unenforceable

Text: Although the question has not yet been addressed in Nebraska, we are persuaded that blanket waivers of liability in warehouse contractssuch as that in the written agreement between BVC and NFOare unenforceable under § 7-204. There is no doubt that the contract containing the waiver clause at issue here is a warehouse contract. Compare Neb.Rev.Stat. § 88-526(6) (Reissue 1987) (defining warehouseman) with Neb. U.C.C. § 7-102(1)(h) (Reissue 1992) (defining warehouseman) and § 7-102(f) (defining goods). Hence, § 7-204 controls whether the waiver clause is enforceable. In pertinent part, § 7-204 states: (1) A warehouseman is liable for damages for loss of or injury to the goods caused by his failure to exercise such care in regard to them as a reasonably careful man would exercise under like circumstances but unless otherwise agreed he is not liable for damages which could not have been avoided by the exercise of such care. (2) Damages may be limited by a term in the warehouse receipt or storage agreement limiting the amount of liability in case of loss or damage, and setting forth a specific liability per article or item, or value per unit of weight, beyond which the warehouseman shall not be liable. (Emphasis supplied.) Statutory language is to be given its plain and ordinary meaning absent anything to the contrary; thus, an appellate court will not resort to interpretation to ascertain the meaning of statutory words which are plain, direct, and unambiguous. Popple v. Rose, 254 Neb. 1, 573 N.W.2d 765 (1998). Although official comments to the Uniform Commercial Code, Neb. U.C.C. §§ 1-101 through 10-104 (Reissue 1992 & Supp.1993), are not binding, they are persuasive in matters of interpretation. Omaha Pollution Control Corp. v. Carver-Greenfield, 413 F.Supp. 1069 (D.Neb.1976), disapproved on other grounds, Mann v. Weyerhaeuser Co., 703 F.2d 272 (8th Cir.1983). The stated purpose of § 7-204 in the official comment to that statute is to eliminate controversy surrounding contractual limitations on liability by setting forth conditions under which such could be done. Moreover, the components of a series or collection of statutes pertaining to a certain subject matter may be conjunctively considered and construed to determine the intent of the Legislature so that different provisions of the act are consistent, harmonious, and sensible. In re Invol. Dissolution of Battle Creek State Bank, 254 Neb. 120, 575 N.W.2d 356 (1998). In setting out the purpose of the Uniform Commercial Code, § 1-102(3) declares that the provisions of those statutes may be varied by agreement, except as otherwise provided in the code and except that the obligations of good faith, diligence, reasonableness and care ... may not be disclaimed by agreement. Additionally, § 7-202(3) allows a warehouse keeper to insert in the receipt any terms that conform with the provisions of the Uniform Commercial Code and do not impair [the warehouse keeper's] duty of care as prescribed by § 7-204, and renders ineffective any contrary provisions. Taken together, these statutes reveal the legislative intent behind § 7-204, which was to provide the sole mechanism by which a warehouse keeper could contractually diminish exposure to liability or limit damages for negligence in an agreement to store a customer's goods. We are also impressed that the consensus approach of other jurisdictions is to void waivers of liability that do not strictly conform to § 7-204. See, Butler Mfg. Co. v. Americold Corp., 835 F.Supp. 1274 (D.Kan.1993) (striking down warehouseman's blanket waiver for ordinary negligence); Fireman's Fund Am. Ins. Co. v. Capt. Fowler's Marina, Inc., 343 F.Supp. 347 (D.Mass.1971) (voiding boat-storage agreement's blanket exculpatory clause); Allstate Ins. Co. v. Winn. Co. Fair Ass'n, 131 Ill.App.3d 225, 475 N.E.2d 230, 86 Ill.Dec. 233 (1985) (reversing lower court's finding that provision waiving all liability was enforceable); Hearst Corp. v. Bonded Services, Inc., 124 Misc.2d 455, 476 N.Y.S.2d 733 (N.Y.Sup.1984) (holding waiver of liability void for lack of opportunity to obtain increased valuation). Nonetheless, other jurisdictions are quite willing to uphold damage-limiting clauses in warehouse contracts when such clauses conform to the terms of statutes very similar or identical to § 7-204. See, International Nickel Co. v. Trammel Crow Distrib., 803 F.2d 150 (5th Cir.1986) (upholding clause that limited damages to 100 times base storage rate for nickel); Sanfisket, Inc. v. Atlantic Cold Stor. Corp., 347 So.2d 647 (Fla.App.1977) (upholding clause that limited damages to 50 cents per pound of shrimp); Keefe v. Bekins Van & Storage Co., 36 Colo.App. 382, 540 P.2d 1132 (1975) (upholding clause limiting damages to 10 cents per pound per article of household goods); Dunfee v. Blue Rock Van & Storage, Inc., 266 A.2d 187 (Del.Super.1970) (upholding clause limiting damages to 60 cents per pound per article up to $1,000). Because the above approach is sensible and consistent with Nebraska's legislative intent, we hold that a warehouse contract may reasonably limit a warehouse keeper's damages by setting forth a specific liability per article, item, or unit of weight, but may not disclaim or waive liability entirely under § 7-204. BVC maintains that the written agreement with NFO complied with § 7-204 in this manner insofar as it set forth a specific liability per article or item. In other words, BVC claims that the phrase lesser than grade # 2 corn and moisture content higher than 15.0% represents an article or item. The flaw in this reasoning is that BVC's waiver clause did not limit damages for such an article or item; instead, it eliminated liability which is exactly what the plain language of § 7-204 prohibits. Therefore, the waiver clause in BVC's contract was unenforceable.