Court Opinion

ID: 9758194
Source: CourtListenerOpinion
Date Created: 2023-08-28 23:15:14.841273+00
Date Added: 2024-06-11T07:28:47.790653
License: Public Domain

NANCY STEFFEN RAHMEYER, Presiding Judge,
dissenting in part and concurring in part.
I respectfully dissent from the majority’s opinion that Paragraph 27 is unambiguous, but concur in the majority’s opinion that Paragraph 27 does not preclude Appellant’s claims against McCormack. In light of Lewis v. Snow Creek, Inc., 6 S.W.3d 388 (Mo.App. W.D.1999), I would find Paragraph 27 of the apartment lease to be ambiguous because its general language would include intentional torts and other causes of action which one may never use to exonerate oneself from future liability.
On October 6, 2004, while Deanna Milli-gan (“Appellant”) was a tenant living on the second floor of an apartment building owned by Chesterfield Village GP, LLC, d/b/a Chesterfield Village Apartments, LP (“Respondent”), the building was destroyed by a fire and she was injured when she fell to the ground while trying to save herself and her two children by escaping her second-story apartment through a bedroom window. Appellant was forced out her window by the fire because, two days before, the breezeway between her apartment and the exit route became blocked with boxes and other materials from a new tenant. These boxes were not moved for the two days before the fire and completely blocked ingress and egress until the time of the fire. Appellant alleges that these boxes and other packing material not only blocked her escape route, but also that they contributed to the cause of the *624fire. The failure to unblock the breezeway was a violation of the City’s fire code and the express policy of Respondent. The allegations of landlord’s negligence are that the landlord failed to maintain a clear path of ingress and egress from Appellant’s apartment, which contributed to the injuries Appellant incurred while trying to flee her burning apartment.
The majority opinion finds the exculpatory clause was not ambiguous based upon the “test” adopted by the Missouri Supreme Court in Warren v. Paragon Technologies Group, Inc., 950 S.W.2d 844 (Mo. banc 1997), which held, in order to release a party from its own negligence, the language of the exculpatory clause must be “ ‘clear, unambiguous, unmistakable, and conspicuous.’ ” Id. at 845 (quoting Alack v. Vic Tanny International of Missouri, Inc., 923 S.W.2d 330, 337 (Mo. banc 1996)). As discussed in the majority opinion, the court in Lewis analyzed whether an exculpatory clause found in a ski rental form established an express assumption of risk.1 The court found that the exculpatory clause in Lewis used “general language” which would include “intentional torts, gross negligence or any other cause of action not expressly listed.” Lewis, 6 S.W.3d at 394. “‘[TJhere is no question that one may never exonerate oneself from future liability for intentional torts or for gross negligence, or for activities involving the public interest.’ ” Id. (quoting Alack, 923 S.W.2d at 337). The court concluded that, based upon Alack, an exculpatory clause that “ ‘purports to relieve a party from any and all claims but does not actually do so is duplicitous, indistinct and uncertain.’ ” Id. (quoting Alack, 923 S.W.2d at 337). When there is “duplicity, indistinctness, or uncertainty in the meaning of the words used in the contract” an ambiguity arises. Rodriguez v. General Acc. Ins. Co. of America, 808 S.W.2d 379, 382 (Mo. banc 1991). Lewis, “[i]n addition,” found that the exculpatory clause in the ski rental form was not “conspicuous,” as required by Alack, and therefore was invalid. Lewis, 6 S.W.3d at 394-95. The court then stated that the language of the exculpatory clause was “not ‘unambiguous’ or ‘conspicuous,’ and thus [did] not meet the standard of Alack.” Id. at 395.
Based upon these two alternative holdings, the majority states that the “ambiguity discussion was unnecessary to the holding, and Lewis does not say a clause can satisfy Alack’s future negligence requirements, yet automatically fail under plaintiffs Point I reasoning.” In fact, that is exactly what Lewis stated. Its first holding is that the general language in the exculpatory clause, specifically, that it purports to exonerate future liability for “any claim” including a claim which one may never exonerate future liability for, makes it ambiguous. Id. at 394. The fact that its alternative second holding is that the exculpatory clause is also invalid because it was not conspicuous does not render its other holding meaningless.
When there are alternative holdings each is authoritative. Woods v. Interstate Realty Co., 337 U.S. 535, 537, 69 S.Ct. 1235,, 93 L.Ed. 1524 (1949); Holt v. State, 494 S.W.2d 657, 659 (Mo.App.St.L.D.1973); see also Jones v. Ladriere, 108 S.W.3d 736, 739 n. 2 (Mo.App. E.D.2003); Buatte v. Schnuck Markets, Inc., 98 S.W.3d 569, 574 n. 1 (Mo.App. E.D.2002); City of St. Louis v. Riverside Waste Management, L.L.C., *62573 S.W.3d 794, 806 n. 5 (Mo.App. E.D.2002). The court in Holt stated:
It is well settled that when a court bases its decision on two or more distinct grounds, each is as authoritative as the other and neither is obit[e]r dictum. This rule is the only reasonable inference to be drawn from alternative holdings. Unless all the alternatives are to be considered authoritative, how is one to pick which is the rule of law and which is dictum?
Holt, 494 S.W.2d at 659 (internal citations omitted).
Based upon Lewis and Alack, I would find the exculpatory clause in Paragraph 27 of the lease to be ambiguous as the release purports to absolve the landlord of all actions intended and unintended. We look to the lease contract principles to determine whether the contract is ambiguous. An ambiguity arises when, from the four corners of the contract alone, it appears that “ ‘the terms are susceptible of more than one meaning so that reasonable persons may fairly and honestly differ in their construction of the terms.’ ” Eveland v. Eveland 156 S.W.3d 366 (Mo.App. E.D.2004) (quoting Chehval v. St. John’s Mercy Medical Center, 958 S.W.2d 36, 38 (Mo.App. E.D.1997)). Moreover, we look only to the language in the provision to determine if it is ambiguous. Little v. American States Ins. Co., 179 S.W.3d 433, 439-41 (Mo.App. S.D.2005) (where the court found a contract provision to be ambiguous because its meaning could not be determined within the boundaries of the contract). Here, the provision in question is a waiver of liability that states:
27. WAIVER OF LIABILITY
Lessee hereby agrees that Lessor shall not be liable to Lessee, his family, guests, invitees, servants, or others[2] for injury to or death of any person or pet, nor for loss or damage to property (including the property of Lessee) occurring in or about the Leased Premises from any cause whatsoever, even if the cause or damages or injuries are alleged to be the fault or caused by the negligence or carelessness of the Lessor.
As a reviewing court, this Court must determine, solely from the four corners of the contract, whether this provision is susceptible to more than one meaning, and is therefore ambiguous. Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129, 132 (Mo. banc 2007). In making that determination, we apply the meaning which would be attached to those terms by an ordinary person of average understanding. McCormack Baron Mgmt. Serv., Inc. v. Am. Guar. & Liab. Ins. Co., 989 S.W.2d 168, 171 (Mo. banc 1999). The plain meaning of the terms “any cause whatsoever” could include not only “negligence,” as listed, but also intentional torts and matters involving the public interest, which are decidedly non-releasable liabilities. Therefore, the provisions are susceptible to more than one meaning and they are ambiguous.
Through hypothetical, the majority opinion illustrates its view that the exculpatory provision cannot be ambiguous because Appellant’s only claim is that of negligence and there is no ambiguity with regards to negligence. What the majority fails to accomplish, however, is a proper review of this contract’s construction. As previously stated, the terms of a contract are reviewed first, within the four corners for ambiguities. Then, where, as here, ambiguities are present, the court should look *626outside the contract to determine a parties intent. Instead, the majority begins outside the contract with Appellant’s negligence claim and works backward.
This case clearly illustrates the fact that if you start at the end you will, of course, be able to identify one clear meaning; however, a proper review of contract construction is meant to start at the beginning and make sure there is only one path to the end result. Interpreting this contract from beginning to end reveals that the “waiver of liability” provision is subject to more than one meaning and is therefore ambiguous.
The Warren court adopted the ambiguity test directly from Alack, which dealt with an exculpatory clause in a health club membership. The Alack court was presented with the question of whether or not the specific exculpatory clause in question was ambiguous. Alack, 923 S.W.2d at 332. The Warren court, citing Alack, found that exculpatory clauses in private contracts are not void as against public policy, but did not review the public policy implications as applied to a residential lease. Warren, 950 S.W.2d at 845. The affir-mance was without any discussion of the different policy concerns that absolutely exist between a residential lease and a health club membership. Instead, an analysis designed to test exculpatory clauses in private contracts was applied to a different kind of contract with no further inquiry into the public policy issues that clearly exist in these two very different situations, although the Warren court did note that release of future negligence is disfavored and should be strictly construed. Id. The majority opinion of this Court makes the same inquiry and observes obvious policy implications of allowing exculpatory clauses in residential leases. The present case is an appropriate case to revisit the policy implications of allowing landlords to shirk their responsibility to act in a responsible and non-negligent manner towards tenants.
Covenants that relieve parties of future negligence are not void 'per se as against public policy, yet this rule does not apply in cases involving gross negligence, fraud, unequal bargaining power, or a public interest. Kansas City Stock Yards Co. v. A. Reich & Sons, 250 S.W.2d 692, 698 (Mo.1952) (overruled in part on other grounds by Gateway Chemical Co. v. Groves, 338 S.W.2d 83, 87 (Mo.1960)) (upholding an exculpatory clause in a commercial lease where the landlord accepted lower rent in exchange for the tenant’s release of the landlord from any liability). Therefore, if the contract does not involve the public, but rather private parties, then no public interest exists, and no public policy can be violated. Id.; see also Rock Springs Realty, Inc. v. Waid, 392 S.W.2d 270, 272 (Mo.1965). Neither this Court, nor the Warren court, however, considered whether aresi-dential lease in fact involves a public or a private interest.
Missouri courts have chosen to review the validity of exculpatory clauses through a strict review of the language involved. As mentioned previously, the intention to release one from his or her negligent acts must be clearly expressed in plain terms that are “clear, unambiguous, unmistakable, and conspicuous.” Even more specifically, the Missouri Supreme Court chose to require the words “negligence,” “fault,” or an equivalent to be used in the exculpatory clause. A different approach has come from those states which have recognized that the use of exculpatory clauses necessarily challenges the principles of freedom to contract and common law requirements that a person be accountable for their own bad acts. See e.g. Stanley v. Creighton Co., 911 P.2d 705, 706 (Colo.App.1996).
*627Specifically, alternative approaches include considerations of whether the contract involves a public interest, whether the contract was entered into fairly, the relative bargaining power of the parties, the practical necessity of the item contracted for, whether the transaction causes one party to be under the control of the party making him vulnerable to his carelessness, whether there is legislative policy against it, and whether a significant number of people are forced to use the service. See generally Id. (considering whether the subject matter concerned a type of duty affecting the public interest and the circumstances of the specific contract, the court held that the exculpatory clause in a residential lease was void on grounds of public policy); Lloyd v. Service Corp. of Alabama, Inc., 453 So.2d 735, 738 (Ala.1984) (declined to follow by Warren, 950 S.W.2d at 845) (using a five-part test to determine the public policy issue, which included: (1) whether the service provided by the contract is of public necessity; (2) whether a significant number of people are forced to use the service; (3) whether the transaction places one party under the control of the other and makes him vulnerable to the other’s carelessness; (4) whether the bargaining power of the parties is equal; and (5) whether there is a legislative policy against unconscionable contracts); Crawford v. Buckner, 839 S.W.2d 754, 757 (Tenn.1992) (applying a six-part test stating, “ ‘[i]t is not necessary that all be present in any given transaction, but generally a transaction that has some of these characteristics would be offensive’ (1) whether the contract concerns a business suitable for public regulation; (2) whether the service provided is of public importance and public necessity; (3) whether the party holds himself out to provide this service for anyone who seeks it, or who meets established standards; (4) whether the party invoking exculpation has more bargaining power because of the nature of the service provided; (5) whether, because of superior bargaining power, the party presents the public with a standardized adhesion contract and makes no provision allowing the public to obtain protection against negligence; and (6) whether the person or property is placed under the control of the seller, subject to risk of carelessness by the seller) (quoting Olson v. Molzen, 558 S.W.2d 429 (Tenn.1977)); Garretson v. United States, 456 F.2d 1017, 1020-21 (9th Cir.1972) (upholding an exculpatory clause because the service rendered was not essential to the public welfare or convenience); Boucher v. Riner, 68 Md. App. 539, 514 A.2d 485, 491 (Md.Ct.Spec.App.1986) (upholding an exculpatory clause because parachute lessons are not of practical necessity).
While many other approaches exist, it is possible to reassess this topic within the confines of established Missouri law. Here, the basis for allowing the use of exculpatory clauses in residential leases stems from the idea that residential leases are essentially private contracts; however, it is unrealistic to ignore the present day realities of the landlord-tenant relationship. There is rarely a negotiation in a private residential lease where bargains and concessions occur until an agreement is reached. A tenant does not negotiate to pay more and bargain for extra protection from his landlord’s negligence. See Crawford, 839 S.W.2d at 758 (noting that the average tenant is faced with a “take it or leave it” contract). Commonly, the lease contains boilerplate language and will now contain additional language releasing the landlord from any responsibility to act in a prudent careful manner.
We no longer live in an era of the occasional rental of rooms in a private home or over the comer grocery. In the relatively short span of 30 years the *628public’s use of rental units in this state has expanded dramatically. In the past 10 years alone, in the state of Washington, there has been an increase of over 77,000 rental units. It takes no imagination to see that a business which once had a minor impact upon the living habits of the citizenry has developed into a major commercial enterprise directly touching the lives of hundreds of thousands of people who depend upon it for shelter.
Thus, we are not faced merely with the theoretical duty of construing a provision in an isolated contract specifically bargained for by [o]ne landlord and one tenant as a purely private affair[ ]. Considered realistically, we are asked to construe an exculpatory clause, the generalized use of which may have an impact upon thousands of potential tenants.
McCutcheon v. United Homes Corp., 79 Wash.2d 443, 486 P.2d 1093, 1097 (Wash.1971).
It takes no imagination to see that, when a tenant signs a lease, he has become vulnerable to the carelessness of the landlord, the person who is literally charged with the protection of the roof over a tenant’s head. By allowing exculpatory clauses to save landlords from responsibility from their own negligence, we are putting tenants at risk. See Lewis v. Biegel, 204 S.W.3d 354, 357-58 (Mo.App. W.D.2006) (where tenant alleges that landlord is negligent in repairing an elevator because landlord has no mechanical expertise and his incomplete repair of the brake system caused the elevator to fall on two separate occasions while tenant was inside); Shannon v. Welch, 858 S.W.2d 748, 751-53 (Mo.App. W.D.1993) (affirming an award of damages to a mobile home tenant for losses resulting from fire, which landlord caused by negligent repair of a water heater); Kilmer v. Browning, 806 S.W.2d 75, 79-80 (Mo.App. S.D.1991)(holding that landlord was negligent where a 20-year-old man died from carbon monoxide poisoning and evidence was overwhelming that the condition which caused the death was the collapse of the venting system that was under the control of the landlord); Norwood v. Lazarus, 634 S.W.2d 584, 587-88 (Mo.App. E.D.1982) (holding that landlord was liable for negligence where tenant’s child was injured when he ingested lead-based paint on landlords’ premises); Stoeppelman v. Hays-Fendler Const Co., 437 S.W.2d 143, 148 (Mo.App.St.L.D.1968) (holding that landlord was negligent where tenant was injured leaving the premises and fell into a trench left open during a period of construction, with no warnings, extra lighting, barriers, or prior notice of the danger); Taylor v. Hitt, 342 S.W.2d 489, 495-96 (Mo.App.St.L.D.1961) (holding landlord was negligent in allowing existence of a 15-inch square depression in area of basement which landlord knew was to be used by several tenants for washing clothes and that negligence was the proximate cause of injury sustained by a tenant when she fell near such depression.); Harrison v. Roberts, 800 S.W.2d 40, 44 (Mo.App. W.D.1990) (holding landlord negligent where the dangerous and defective condition of one part of the porch gave rise to a duty to inspect the rest of the porch, and tenant was injured when railing on porch gave way and tenant fell). According to the United States Census Bureau, in 2006, of the 2,285,280 occupied housing units in the state of Missouri, 671,063, or 29.36% are renter occupied. This accounts for 1,467,592 people that are living in rental units and are affected by the potential carelessness and negligence of their landlords.
Before this Court relieves landlords of their long-held obligation to use reasonable care, a meaningful review of the various *629policy considerations should be taken. Currently, landlords are protected from liability to tenants for dangerous conditions existing on leased premises, -with exceptions, from liability for personal injury to third persons occurring on leased property. There are at least four exceptions to the general rule:
(1) where the landlord had superior knowledge of a dangerous condition not discoverable by his tenant and he fails to warn of said condition; (2) where the injury occurs in an area over which the landlord retains actual control; (3) where the landlord is responsible for premises maintenance and repair or (4) where the landlord leases for a “public use” premises that are in a dangerous condition.
Lammert v. Leseo Auto Sales, 936 S.W.2d 846, 849 (Mo.App. E.D.1996). These four exceptions can be viewed as the four protections that tenants can count on; however, the application of the exculpatory clause effectively obliterates this minimum protection.
“[Tjhere is no question that one may never exonerate oneself from future liability for intentional torts or for gross negligence, or for activities involving the public interest.” Alack, 923 S.W.2d at 337. There is public interest in the protection of thousands of residential tenants across the State of Missouri, and the protection of the established common law of landlord-tenant law. Moreover, there is public interest in protecting the freedom to contract in a setting that provides for equal bargaining powers and the power to bargain for and protect ones personal rights and interests. The state has recognized a basic need for landlords to act in a reasonable manner by creating regulations and ordinances designed to maintain a minimum safety level. Here, there was a city ordinance, which landlord was alleged to have violated, that required the landlord to maintain a clear ingress and egress. The landlord’s failure to comply with this ordinance would require him to pay a fine to the city as punishment. Yet, as a result of the majority opinion, while the city will recover for the landlord’s misbehavior, the injured tenant will be left without recourse. Moreover, how can a contract provision in conflict with established law not be considered contrary to public policy? Given the obvious public policy implications of the residential lease, I would agree that one may never exonerate themselves from activities involving the public interest and that the residential leasing market is such a public interest; therefore, the exculpatory clause in the residential lease should be found void.

. This case is different from Lewis because here the issue is whether the exculpatory clause operated as a release of liability and in Lewis the issue was whether the exculpatory clause established an express assumption of risk; however, the analysis as to the validity of the exculpatory clause remains the same in each circumstance.

. The grossly overbroad scope of this waiver is apparent from its attempt to exclude liability to "family, guests, invitees, servants, or others” via a contract to which they are not parties and, in all likelihood, is unknown to them.