In a decision handed down Dec. 20, 2018, the Tennessee Supreme Court adopted a new standard for determining the legality of exculpatory clauses. [Copeland v. HealthSouth/Methodist Rehabilitation Hospital, LP, 565 S.W.3d 260 (Tenn. 2018)] The Court ruled that the five factors that it had identified in Olson v. Molzen, 558 S.W.2d 429 (Tenn. 1977) were still valid but expanded the factors to be considered to a “totality of the circumstances” test, in its first look at exculpatory clauses in 25 years. I handled the appeal at the request of Memphis colleague David Gordon. The Plaintiff, Frederick Copeland, 77 years old, was in a rehab hospital in Memphis a couple of days after knee replacement surgery. The hospital called a wheelchair van to transport him to see his doctor for his first post-surgery visit. The wheelchair van company required Mr. Copeland to sign an exculpatory agreement as a condition for the transportation. Unfortunately, the driver did not assist Mr. Copeland when he tried to get into the van and Mr. Copeland fell, resulting in a very serious injury, including ruining his new artificial knee. The wheelchair van company defended by arguing that Mr. Copeland had signed away his right to sue when he signed the exculpatory agreement. The trial court accepted the wheelchair van’s argument and dismissed the case, holding that the exculpatory clause was good and valid, barring Mr. Copeland’s suit. We appealed to the Tennessee Court of Appeals which unfortunately affirmed the trial court’s decision.
We then filed an application for permission to appeal to the Tennessee Supreme Court. The jurisdiction of Supreme Court is generally by permission only. In other words, there is no right to appeal; you can only appeal if the Court grants permission. If the Court thinks that the case will advance the development of Tennessee law, it will grant permission to appeal and then hear the case. Otherwise the decision of the Court of Appeals is the final decision. The Supreme Court accepts very few decisions for appeal. In this case we were fortunate in that the Court did accept the case for review. The question presented was a classic contest between two well-established legal principles: freedom of contract versus the public policy against allowing a party to escape the consequences of his own negligence in the context of a contract of adhesion. With permission to appeal in hand, we filed new briefs followed by oral argument in the Supreme Court. But this was no ordinary oral argument. It was held at Girls’ State at David Lipscomb University in Nashville as part of the Court’s S.C.A.L.E.S program, the program where the Court holds argument at places other than its usual courtroom to educate high school students about the judicial branch of government. https://www.tncourts.gov/programs/scales-project That meant that the argument was held in an auditorium full of several hundred high school girls, which added another dimension to the already tense atmosphere of arguing in the Supreme Court. But all went well in the oral argument and the Court ultimately handed down its decision reversing both the trial court and the Court of Appeals, ruling that the exculpatory clause was invalid and unenforceable, replacing the Olson v. Molzen five-factor analysis with a standard of the consideration of the “totality of the circumstances.” The Court held that exculpatory clauses in contracts for recreational or non-essential activities like sky-diving, motorcycle racing, aerial sight-seeing, white-water rafting and riding mechanical bulls were enforceable, but that exculpatory clauses in contracts for essential services, like hospital or medical treatment, or transportation for hospital or medical treatment, were not enforceable.