Plaintiff Found to Have Released Personal Injury By Signing a Business Termination Agreement

In the case of Werner v. 1281 King Associates, LLC, No. 1725 MDA 2023 (Pa. Super. Nov. 13, 2024 Panella, P.J.E., Lane, J., and Stevens, P.J.E.) (Op. by Stevens, P.J.E.), the court affirmed a trial court’s sustaining of Preliminary Objections by Defendants based upon a claim that the Plaintiffs had released the Defendants from liability in this tort litigation under an agreement that the Plaintiff had executed which terminated the parties’ business relationship.

According to the Opinion, the Plaintiffs filed a negligence action against the Defendants based upon injuries sustained by the Plaintiff at a property owned by the Defendants. The Plaintiff was injured when the leg of his pants caught on a jagged edge of a ramp provided for delivery drivers and caused him to fall and suffer a hip fracture which required surgery.

According to the Opinion, prior to the accident, the Plaintiff had entered into an independent distributor agreement in which the Plaintiff was designated as the exclusive distributor for the Defendants’ products in a particular territory.

After the accident, the parties entered into a termination, release, consent, and arbitration agreement that allowed the Plaintiff to assign his distribution rights to another party in return for the termination of his distribution agreement.

That termination agreement contained a comprehensive release clause that provided that the Plaintiff release the Defendants “from any and all actions, causes of action, claims… and compensation of any nature whatsoever…. in any way arising out of, relating to, or having any connection with the Distributor Agreement."

When this personal injury lawsuit was filed, the Defendants filed Preliminary Objections asserting that the Plaintiff’s negligence case should be dismissed because of the release clause in the business termination agreement.

The trial court found that the release clause was clear and unambiguous and and served to preclude the Plaintiff from also pursuing the personal injury claims at issue.  The Superior Court agreed.

On a procedural level, the Superior Court noted that the Plaintiffs had waived any arguments that the Defendants had improperly raised the doctrine of release by way of Preliminary Objections by virtue of the Plaintiff’s failure to file Preliminary Objections to these Preliminary Objections.

Turning to the merits of the Defendants' request for a dismissal, the Superior Court agreed that the release language was unambiguous and that the language showed the intent of the parties to release the Defendants from any claims with any causal connection to the Distributor Agreement or the Plaintiff’s role as a distributor or party. The Superior Court noted that the Plaintiff would not have been on the property or injured but for his duties to fulfill his contractual obligations under the Distributor Agreement.

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Source: “The Legal Intelligencer State Appellate Case Alert.” www.law.com (Dec. 3, 2024).

Post-Injury Waiver of Liability Agreement Allowed to Stand (For the Most Part)

In the case of Pavlak v. Coolican, No. 21-CV-3060 (C.P. Lacka. Co. May 25, 2022 Nealon, J.), Judge Terrence R. Nealon of the Lackawanna County Court of Common Pleas addressed issues related to a post-injury Release/Settlement as compared to a pre-injury exculpatory agreement.

By way of background, the Plaintiff in this matter, who had dental implants inserted and later removed by the Defendant dentist, executed a “refund of money and release of liability” agreement under which the dentist refunded the Plaintiff’s earlier payment for the implant procedures in exchange for a General Release from liability or any claim related to those dental services.

In this matter, the Plaintiff commenced a declaratory judgment action asserting that the refund/release Agreement was unenforceable as being in violation of Pennsylvania public policy and due to the lack of supporting consideration.

The Plaintiff’s public policy argument was based upon the provision in the agreement which prohibited the Plaintiff from filing an administrative complaint with the State Board of Dentistry.

The court found that this provision barring the Plaintiff from filing a Complaint or providing additional information to the State Board of Dentistry was void as being against clearly expressed public policy as set forth under The Dental Law found at 63 P.S. §122,123.1, and the corresponding regulations which are intended to protect the health, safety, and welfare of the public.

However, Judge Nealon found that the invalid provision of this agreement was not an essential part or primary purpose of the Refund and Release Agreement and that, as such, that invalid provision could be severed from the remaining terms.

The court then found that the remaining terms of the agreement, including the Release from liability in exchange for the refund of the money, were indeed enforceable. The court found that, since the dentist was not legally obligated to refund the Plaintiff’s prior payment, the dentist experienced the required detriment in order to provide consideration to support this agreement.

As such, the court granted the Motion for Judgment on the Pleadings to the extent that it sought a judicial determination that the provision barring the Plaintiff from filing an administrative complaint was unenforceable on public policy grounds. However, the Motion for Judgment on the Pleadings was denied in all other respects and the agreement was otherwise allowed to stand.

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Source of Image:  Photo by Nick Fewings on www.unsplash.com.