Court Opinion

ID: 6775945
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:49:56.886049+00
Date Added: 2024-06-11T16:02:48.154589
License: Public Domain

Cook, J.,
dissenting. I respectfully dissent. In arriving at its conclusion that Dry Hole owed Weiss a duty of care, the majority has overlooked the exculpatory clause in the governing lease agreement designed to cover this exact situation. Two of the appellant’s four assignments of error relate directly to the validity of the exculpatory clause. Further, considering that the trial court cited the exculpatory clause as an independent basis for its grant of summary judgment in favor of Dry Hole, and the appellate court affirmed that determination, the majority’s analysis of the case on appeal is incomplete.
The exculpatory clause in question states:
“Lessees further agree to give to the one residence to be built on the subject property closest to the well head, gas not to exceed 200,000 cubic feet per annum, for domestic use provided the owner thereof furnishes the gas meter, the piping and installation to the well head at their expense and will continue to maintain the meter and installation in good working order to the standards acceptable to NEWBURY EXPANSION GAS & OIL PROJECT [Dry Hole]. * * * Owner further covenants and agrees that his taking and use of gas shall be wholly at his own risk, the NEWBURY EXPANSION GAS & OIL PROJECT not be held liable for any accident or damage caused thereby * *
It is not a novel concept that courts should give effect to exculpatory clauses executed by parties with relatively equal bargaining power. As far back as 1906, this court considered a similar exculpatory clause and determined that it was enforceable. Mansfield Mut. Ins. Co. v. Cleveland, Cincinnati, Chicago & St. Louis RR. Co, (1906), 74 Ohio St. 30, 77 N.E. 269, paragraph one of the syllabus. To avoid the force of the exculpatory clause, however, appellant cites two reasons why Dry Hole’s disclaimer of liability should not be given effect in this case.
First, appellant argues that the exculpatory clause is ambiguous and therefore its terms are unenforceable. While some courts have held exculpatory clauses unenforceable for ambiguity (see Collins v. Click Camera & Video, Inc. [1993], 86 Ohio App.3d 826, 621 N.E.2d 1294; Orlett v. Suburban Propane [1989], 54 Ohio App.3d 127, 561 N.E.2d 1066), no such ambiguity is present in the exculpatory clause under consideration.
Appellant argues that the contract language requiring the lessor to “maintain the meter and installation in good working order to the standards acceptable to [Dry Hole]” creates an ambiguity when read in conjunction with the disclaimer of liability. Appellant concludes that it would be unconscionable to permit Dry Hole *280to control installation and maintenance of the gas delivery system, while allowing it to avoid responsibility for injury caused by those acts.
By its clear terms, the lease provision absolves Dry Hole of all liability related to the residence owner’s taking of the gas, while giving Dry Hole the right to determine whether the residence owner has maintained the meter and installation in “good working order” as required under the provision. This allocation of rights and obligations is not inconsistent and does not create an ambiguity.
Neither is this arrangement substantively or procedurally unconscionable. Contrary to the suggestion of appellant, the lease did not force the owner to relinquish control of the installation and maintenance of the gas delivery system. Instead, it simply permitted Dry Hole to set a floor for maintenance of the system, below which the owner could be required to take remedial action. Nothing in the contract would have prevented the owner from maintaining the system above any safety or efficiency floor set by Dry Hole.
Moreover, it is apparent from a reading of the lease that Dry Hole received a disclaimer of liability as part of a bargained-for exchange. The lease provisions were negotiated between Weiss’s predecessor in interest, Thomas & Thomas Development Company, and Dry Hole. Nothing suggests that the bargaining power of these parties was disparate.
The lease allowed up to 200,000 cubic feet of gas per year for use in a dwelling built on the subject property. Dry Hole, however, contracted to avoid responsibility for installation and maintenance of the gas delivery system or for any accident or damages resulting from use of the gas. This is not a situation such as that confronted by the appellate court in Orlett v. Suburban Propane, where the supplier of a dangerous product attempted to disclaim its liability for negligence without any attendant benefit to the purchaser. Instead, Weiss, as owner of the residence named in Dry Hole’s lease, was not charged for the use of gas taken from the well head. As part of the value given for the cost-free gas, however, Weiss was required to extract the gas at his own expense and peril. •
Appellant also argues that the exculpatory language in the lease should be voided because Dry Hole failed to exercise “any care whatsoever toward [a]ppellant.” This statement is premised on Dry Hole’s recusal from involvement in the installation and maintenance of Weiss’s gas delivery system. As authority for its argument, appellant cites to that portion of Richard A. Berjian, D.O., Inc. v. Ohio Bell Tel. Co. (1978), 54 Ohio St.2d 147, 158, 8 O.O.3d 149, 155, 375 N.E.2d 410, 416, where the court stated:
“Although a limitation-of-liability clause for damages caused by one’s own negligence may be valid and enforceable, it is ineffective where the party to the contract seeking protection under the clause has failed to exercise any care whatsoever toward those to whom he owes a duty of care.”
*281A thorough reading of Richard A. Berjian, D.O., Inc., and review of the authorities it cites, however, reveals that a “failure to exercise any care whatsoever,” as discussed in that case, relates to willful or wanton misconduct, not a negligent failure to act. Appellant evinces no action by Dry Hole that could conceivably rise to the level of willful or wanton misconduct. Accordingly this argument too must fail.
Finally, I believe it worthy of explanation why Dry Hole should not be held to the general rule that prohibits a public utility from limiting its liability for damages resulting from its negligence. See, e.g., N.W. Graham & Co. v. W.H. Davis & Co. (1854), 4 Ohio St. 362, 377; Telegraph Co. v. Griswold (1881), 37 Ohio St. 301; Richard A. Berjian, D.O., Inc., supra. While Dry Hole engages in a business common to several public utilities (the natural gas business), it is not a public utility and does not engage in the type of activity necessitating a prohibition against its use of exculpatory clauses.
As stated in Richard A. Berjian, D.O., Inc., at 154, 8 O.O.3d at 152-153, 375 N.E.2d at 414, the reason for the general prohibition is that public utilities are granted monopolies to provide specific services and, therefore, should not be entitled to use their premium bargaining power to “dictate unfair or oppressive terms and conditions with customers who have no choice but to accept the conditions along with service.” Because Dry Hole is not a monopoly and, in fact, negotiated this lease obligating itself to provide gas to the entire development at a savings rate of fifteen percent below East Ohio Gas’s residential market rate, the reasons for limiting a public utility’s freedom of contract are not present here. Unlike a public utility, Dry Hole did not enjoy a status that would have prohibited Thomas & Thomas Development Company from utilizing another provider of natural gas.
Because the appellant advances no meritorious legal argument to reverse the appellate court’s affirmance of summary judgment in favor of Dry Hole on the exculpatory clause issue, I would affirm.
Moyer, C.J., and Lundberg Stratton, J., concur in the foregoing dissenting opinion.