Liability Releases: Rental Agreements

Huverserian v. Catalina Scuba Luv, Inc., (Second District, May 26, 2010) —Cal.Rptr. 3d —-, 2010 WL 2089663, 10 Cal. Daily Op. Serv. 6573

The heirs of a man who died when he ran out of air while scuba diving near Catalina Island filed an action for wrongful death against the business which had rented the dive equipment to the decedent and his son for the day. The defendant moved for summary judgment, asserting that exculpatory language in the rental agreement provided a full defense. In the form rental agreement signed by the decedent, there was a lengthy liability release which was preceded by bolder underlined print which stated: “Equipment rental agreement, liability release and assumption of risk of scuba & snorkel gear for boat dives or multiple day rentals”.

Although it was undisputed that the decedent and his son did not rent the equipment for a boat dive or multiple day rental, the trial court found the exculpatory language provided a complete defense. However, the court of appeal reversed, holding that a person renting equipment for a single day could have reasonably concluded that the language did not apply:

“The exculpatory language releasing respondent from liability expressly is limited to “boat dives or multiple day rentals.” The rental here does not fall into either category, and therefore the exculpatory language is inapplicable and provides no defense upon which summary judgment may be based.

Respondent offers an argument that would rewrite the agreement to exclude its language limiting the release by characterizing it as a caption, and not part of the agreement. We disagree with this interpretation of the agreement. The relevant language is not a mere caption, but an integral part of the exculpatory paragraph, emphasized in boldface and underlined. A person reading the rental agreement who is neither a boat diver nor multiple day rentor could reasonably conclude that the exculpatory language following the limiting language did not apply to him or her.
. . .
Here, the broad release language follows the enumeration of boat divers and multiple day renters as the classes of persons to whom it applies. Under this principle, respondent’s suggestion that the exculpatory language applied to all renters is not reasonable.
. . .
As we have observed, a person renting equipment for a single day, not to be used on a boat dive, would read the emphasized language and reasonably determine that it did not apply to him or her, and conclude that by signing the agreement, he or she had only agreed to the rental terms with no release of liability intended.

Finally, even if it could be said some ambiguity lurked in the wording of the clause, that fact would not support summary judgment. As the Cohen court observed, “ ‘To be effective, such a release “must be clear, unambiguous, and explicit in expressing the intent of the subscribing parties.” ‘ “ (Cohen, supra, 159 Cal.App.4th at p. 1485.) An ambiguous exculpatory clause does not satisfy this requirement.”