236 N.C. App. 278
N.C. Ct. App.2014Background
- Hyatt rented storage Unit No. 816 from Mini Storage on the Green under a written rental agreement that disclaimed landlord liability for personal injuries on the premises.
- While closing the unit’s roll-up door in July 2008, the door stuck, then came off its tracks and struck Hyatt, causing head injuries.
- Mini Storage had contracted with David B. Smith in 2005 to build Building No. 8 (which included Unit 816); Smith later assigned the contract to John Royall/Royall Commercial Contractors, who completed the work.
- Hyatt sued for negligence and related warranty/contract claims against Mini Storage and Smith (and others); other claims were dismissed, leaving Hyatt’s personal-injury claim against Mini Storage and a related claim against Smith.
- The trial court granted summary judgment for Mini Storage (July 18, 2013) based on the exculpatory clause in the rental agreement, and for Smith (Aug. 21, 2013) based on Smith’s assignment of the construction contract to Royall; Hyatt appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the rental agreement’s liability disclaimer exculpates Mini Storage from negligence for Hyatt’s injuries | The clause is not sufficiently explicit to be an enforceable exculpatory clause | The clause clearly and unambiguously waives landlord liability for personal injuries on the premises | Court: Clause is clear, exculpatory, enforceable; summary judgment for Mini Storage affirmed |
| Whether public policy or unequal bargaining power voids the exculpatory clause | The clause should be invalidated as contrary to public interest or due to unequal bargaining power | Self-storage is not extensively regulated; Hyatt had alternative facilities and read the contract | Court: Fortson exceptions (statute, public interest, inequality) do not apply; clause enforceable |
| Whether Smith remains liable to Hyatt after assigning his construction contract to Royall | Assignment of Smith’s contract doesn’t relieve Smith from liability to third parties | Assignment transferred performance to Royall; Smith’s remaining liability is to Mini Storage, not to a third-party plaintiff | Court: Smith may remain liable to Mini Storage as assignor, but not to Hyatt (a stranger); summary judgment for Smith affirmed |
| Whether the "completed and accepted work" doctrine or other contract-law principles save Hyatt’s claim against Smith | Hyatt contends doctrines/contract principles could impose third-party liability on Smith | Cases and statute cited govern assignor liability to the contracting party, not to third parties | Court: Doctrines/authorities do not establish Smith’s liability to Hyatt; summary judgment affirmed |
Key Cases Cited
- Hall v. Sinclair Ref. Co., 242 N.C. 707 (N.C. 1955) (exculpatory clauses strictly construed but enforceable unless public duty or policy prevents enforcement)
- Fortson v. McClellan, 131 N.C. App. 635 (N.C. Ct. App. 1999) (exceptions to enforcement: statute, inequality of bargaining power, substantial public interest)
- Winkler v. Appalachian Amusement Co., 238 N.C. 589 (N.C. 1954) (examples of indemnity/exculpatory language found insufficient to bar negligence claims)
- Rose v. Vulcan Materials Co., 282 N.C. 643 (N.C. 1973) (assignor remains liable to the original contracting party absent novation)
- Blackburn v. Carbone, 208 N.C. App. 519 (N.C. Ct. App. 2010) (summary judgment standard review and procedure)