Obsessions in Time v. Jewelry Exchange Venture

Third District Court of Appeal
State of Florida
Opinion filed May 9, 2018.
Not final until disposition of timely filed motion for rehearing.
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No. 3D16-2620
Lower Tribunal No. 15-12254
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Obsessions in Time, Inc., et al.,
Appellants,
vs.
Jewelry Exchange Venture, LLLP,
Appellee.
An Appeal from the Circuit Court for Miami-Dade County, Rosa I.
Rodriguez, Judge.
Mansfield, Bronstein & Stone, LLP, and David Stone, Gary N. Mansfield,
Ariane Wolinsky (Fort Lauderdale), for appellants.
Stok Folk + Kon, and Robert A. Stok and Natasha Shaikh, for appellee.
Before SALTER, EMAS and LINDSEY, JJ.
EMAS, J.
Appellants, Obsessions in Time, Inc. and Marc Shaffman (“Obsessions”),
appeal the trial court’s order dismissing their third amended complaint with
prejudice. Because we conclude the exculpatory clause in the lease agreement is
ambiguous and unenforceable, we reverse the order of dismissal.
FACTS AND PROCEEDINGS BELOW
In May 2009, Obsessions leased a booth from Jewelry Exchange Venture,
LLLP (“Jewelry Exchange”) to sell classic watches and other valuable items.
Jewelry Exchange provided a master safe in which Obsessions had the option to
store their valuable items. The lease agreement, prepared by Jewelry Exchange,
required that all valuables must be in the vault within one hour of closing. In
addition, paragraph 37 of the lease states in relevant part as follows:
In making this lease, it is hereby agreed that lessor does not assume
the relations and duty of bailee and shall not be liable for any loss or
damage to the contents of the vault within the premises caused by
burglary, fire, or any cause whatsoever, but that the entire risk of such
loss or damage is assumed by the lessee. The lessor shall not be liable
for any delay caused by failure of the vault doors to lock, unlock or
otherwise operate and the sole liability of the lessor hereunder is
limited to the exercise of ordinary care to prevent the opening of said
vault or boxes contained therein by any person other than lessee or the
authorized agent of the lessee.
Obsessions alleged that an employee of Jewelry Exchange allowed an
unauthorized individual to access and remove Obsessions’ items, which were
stored in the master safe, resulting in a loss in excess of $2 million. Obsessions
filed suit and, following several amendments, the operative Third Amended
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Complaint asserted claims against Jewelry Exchange for breach of contract (Count
VIII) and negligence (Count IX). Jewelry Exchange moved to dismiss the Third
Amended Complaint and, following a hearing, the trial court granted the motion
and dismissed these claims with prejudice.1 The trial court later denied
Obsessions’ motion for rehearing, and this appeal followed.
ANALYSIS
We review de novo an order granting a motion to dismiss for failure to state
a cause of action. Morin v. Fla. Power & Light Co., 963 So. 2d 258, 260 (Fla. 3d
DCA 2007).
On appeal, Obsessions contends that, contrary to the trial court’s
determination that the exculpatory clause in the lease agreement is clear and
unambiguous, the clause is in fact ambiguous, and thus, unenforceable. We agree.
As the Florida Supreme Court has observed:
Public policy disfavors exculpatory contracts because they relieve one
party of the obligation to use due care and shift the risk of injury to
the party who is probably least equipped to take the necessary
precautions to avoid injury and bear the risk of loss.
1 The trial court’s order dismissed with prejudice all claims against Jewelry
Exchange and was therefore an appealable partial final judgment. See Fla. R. App.
P. 9.110(k) (providing: “If a partial final judgment totally disposes of an entire case
as to one party, it must be appealed within 30 days of rendition”). Obsessions also
sued the individual who allegedly stole the items from the safe, Michael Fisher,
and his company, Timepiece Collection, LLC, alleging nine additional counts. The
claims against those defendants were dismissed without prejudice, and remain
pending below in a subsequently-filed Fourth Amended Complaint.
3
Sanislo v. Give Kids the World, Inc., 157 So. 3d 256, 260 (Fla. 2015) (citations
omitted).
Because exculpatory provisions are viewed with disfavor, “Florida law
requires that such clauses be strictly construed against the party claiming to be
relieved of liability.” Sunny Isles Marina, Inc. v. Adulami, 706 So. 2d 920, 922
(Fla. 3d DCA 1998). To be enforceable, the language of the exculpatory provision
must be clear, unambiguous and unequivocal:
Exculpatory clauses are unambiguous and enforceable where the
intention to be relieved from liability was made clear and unequivocal
and the wording was so clear and understandable that an ordinary and
knowledgeable person will know what he or she is contracting away.
Sanislo, 157 So. 3d at 260-61. See also Gayon v. Bally’s Total Fitness Corp., 802
So. 2d 420, 421 (Fla. 3d DCA 2001) (the wording of an exculpatory clause must be
so clear and understandable that “an ordinary and knowledgeable person will know
what he is contracting away”).
The exculpatory provision in the instant case fails to meet this standard. The
lease agreement provides in relevant part:
In making this lease, it is hereby agreed that lessor does not assume
the relations and duty of bailee and shall not be liable for any loss or
damage to the contents of the vault within the premises caused by
burglary, fire, or any cause whatsoever, but that the entire risk of
such loss or damage is assumed by the lessee. The lessor shall not
be liable for any delay caused by failure of the vault doors to lock,
unlock or otherwise operate and the sole liability of the lessor
hereunder is limited to the exercise of ordinary care to prevent
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the opening of said vault or boxes contained therein by any person
other than lessee or the authorized agent of the lessee.
(Emphasis added).
As can be seen, these two highlighted and juxtaposed portions create an
ambiguity:
- The lessor “shall not be liable for any loss or damage to the contents of
the vault within the premises caused by burglary, fire, or any cause
whatsoever . . . .”
- “[T]he sole liability of the lessor hereunder is limited to the exercise of
ordinary care to prevent the opening of said vault or boxes contained
therein by any person other than lessee or the authorized agent of the
lessee.
Although the first provision plainly appears to relieve Jewelry Exchange of
any liability, the second provision plainly appears to impose liability should
Jewelry Exchange fail to exercise ordinary care to prevent unauthorized access to
the vault and boxes. These two provisions within the same paragraph of the lease
agreement are not reconcilable, and render the exculpatory clause unclear,
equivocal and ambiguous. We also conclude, following our review of the entire
lease agreement, that none of its remaining provisions renders this conflicting
language clear, unequivocal or unambiguous.
In Adulami, 706 So. 2d at 922, this court affirmed the trial court’s order
finding an exculpatory clause ambiguous and unenforceable. Sunny Isles Marina
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owned and operated a marina and dry storage facility. Id. at 921. Adulami and
other plaintiffs owned boats and stored them at Sunny Isles Marina pursuant to a
boat storage agreement. Id. A fire broke out at the facility, causing damage to
several boats, including Adulami’s. Id. Adulami and other boat owners filed
insurance claims, alleging that the fire was the result of Sunny Isles’ improper
installation, maintenance, and use of a portable battery charging system aboard one
of the boats. Id. Sunny Isles filed a declaratory judgment action, seeking a
determination that it was relieved of all liability based upon the exculpatory clause
contained in the boat storage agreement entered into with the boat owners. Id.That exculpatory clause provided in pertinent part:
7. RISK OF LOSS. The assigned space shall be occupied at the
sole risk of the Owner. Owner agrees that the Marina is not the insurer
of the Boat.... The Marina shall not be liable in any way for any loss
or damage sustained by Owner or anyone claiming by, through or
under Owner which arises out of any cause not attributable to the
willful gross negligence of the Marina, nor shall the Marina be liable
for any loss or damage to the Boat, its equipment or property stored
thereon, due to fire, theft, vandalism, collision, Marina equipment
failure, wind storm, rain, hurricane or other casualty loss. Personal
property aboard the Boat is stored at the sole risk of Owner for loss
from any cause.
8. INDEMNIFICATION. The Owner hereby waives any right it
has to claim any damages or other loss or liability from the Marina, its
employees or agents arising out of any accident, fire, or other casualty
about the Marina, whether the same results from any act or neglect
of the Marina or any occupant, invitee, guest or other persons in
or about the Marina.
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Owner agrees to indemnify the Marina against all claims,
actions, liability and damages, including attorney's fees, whether
claimed by the owner, its guests, family, employees, agents or other
third parties, arising out of the Owner's possession and use of the
storage space and other facilities of the Marina.
Owner agrees to indemnify the Marina from and against any
claim, suit, loss, liability or costs, including attorney's fees, arising out
of, or resulting from, any use, operation or occupancy of the Boat by
Owner or anyone claiming by, through or under Owner.
Id. (Emphasis added.)
In affirming the trial court’s dismissal of Sunny Isles’ declaratory action, we
noted the manifest ambiguity when reading paragraphs seven and eight in pari
materia, and held the exculpatory clause was unenforceable:
On the one hand, section seven of the Sunny Isles boat storage
agreement purports to absolve Sunny Isles of liability for any actions
except willful gross negligence. On the other hand, paragraph eight of
the agreement purports to absolve Sunny Isles from any form of
negligence (be it simple or gross).
Further, not only do paragraphs seven and eight conflict with
each other, we also note a fatal ambiguity within paragraph seven's
language. This paragraph first says that Sunny Isles is not liable for
any loss not attributable to its willful gross negligence, but it also says
that Sunny Isles is not liable for any loss due to fire, theft, vandalism,
collision, etc. Thus, if there was damage to property due to, for
example, theft, and that theft was caused by the willful gross
negligence of Sunny Isles, it is unclear which clause of that sentence
in paragraph seven would prevail; the one which says Sunny Isles can
be liable, or the one which says Sunny Isles cannot be liable. The next
sentence of paragraph seven, which states that personal property
aboard the boat is stored at the sole risk of the owner for loss from any
cause, creates a similar ambiguity.
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Because of the ambiguity caused by the conflict of paragraphs
seven and eight, and the internal conflict within paragraph seven, we
find that an ordinary and knowledgeable party would not know what
he or she is contracting away in this regard.
Id. at 922.
In Murphy v. Young Men’s Christian Association of Lake Wales, Inc., 974
So. 2d 565 (Fla. 2d DCA 2008), Murphy brought a personal injury action, alleging
negligence against the YMCA. The trial court entered summary judgment in favor
of the YMCA based upon a membership application signed by Murphy, purporting
to release YMCA from all liability and all claims, including those based on
negligence. Id. at 566. That release provided in pertinent part:
I am an adult over 18 years of age and wish to participate in Lake
Wales Family YMCA activities. In addition I give my children
permission to participate in Lake Wales Family YMCA activities. I
understand that even when every reasonable precaution is taken,
accidents can sometimes still happen. Therefore, in exchange for the
YMCA allowing me to participate in YMCA activities, I understand
and expressly acknowledge that I release the Lake Wales Family
YMCA and its staff members from all liability for any injury, loss
or damage connected in any way whatsoever to my (or my children's)
participation in YMCA activities, whether on or off the YMCA's
premises. I understand that this release includes any claims based
on negligence, action or inaction of the Lake Wales Family YMCA,
its staff, directors, members and guests. I have read and am
voluntarily signing this authorization and release.
Id. (emphasis added).
The Second District reversed, finding the exculpatory clause ambiguous and
unenforceable:
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We recognize that the waiver in the instant case does specifically state
that the YMCA is not liable for “any claims based on negligence.”
However, the waiver also suggests that the YMCA will take “every
reasonable precaution” against accidents. Confusion results from the
juxtaposition of the “every reasonable precaution” provision with the
provision for the release of “any claims based on negligence.” A
reasonable reader might be led to believe that the waiver of liability
extends only to claims for injuries that were unavoidable “even when
every reasonable precaution” had been taken by the YMCA. In light
of the “every reasonable precaution” language, the waiver does not
clearly and unequivocally release the YMCA from liability and is
therefore not enforceable.
Id. 568-69.
In Brooks v. Paul, 219 So. 3d 886 (Fla. 4th DCA 2017), the Fourth District
similarly reversed a summary judgment upon a finding that the exculpatory clause
contained in a release form was ambiguous. In Brooks, plaintiff filed suit alleging
her doctor and other medical providers were negligent during a spinal fusion
surgery. Defendants moved for summary judgment based upon an exculpatory
clause in the release executed by plaintiff prior to surgery. That clause read:
As of January 1, 2003, Dr. Michael D. Paul, and the professional
corporation of MacMillan, Paul and Burkarth, P.A., also known as
Treasure Coast Neurosurgery, will not carry any medical malpractice
insurance. Being of sound mind and sound body, I hereby
acknowledge this fact and agree not to sue Dr. Michael D. Paul, or
the professional corporation of MacMillan Paul and Burkarth, P.A.
for any reason. My reason for doing this is that I realize that Dr.
Michael D. Paul and his staff will do the very best to take care of
me according to community medical standards.
Id. at 887 (emphasis added).
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The trial court entered summary judgment in favor of the defendants. The
Fourth District reversed, holding that “[t]he third sentence, which qualifies the first
two sentences, creates an ambiguity. Indeed, if the defendants intended to be
released from their own negligence, it begs the question as to why the third
sentence is included in the release.” Id. at 891.
Turning to the instant case, if (as appellee urges) the exculpatory clause was
intended to relieve lessor/appellee from all liability for loss or damage, regardless
of its nature or cause, it begs the question of why that same clause would include
this phrase: “the sole liability of the lessor hereunder is limited to the exercise of
ordinary care to prevent the opening of said vault or boxes contained therein by
any person other than lessee or the authorized agent of the lessee.” As our sister
court observed in construing a similarly ambiguous exculpatory clause:
By their own choice of language, appellees agreed to take reasonable
precautions to assure [the child’s] safety. This duty to undertake
reasonable care expressed in the first part of the provision would be
rendered meaningless if the exculpatory clause absolved appellees
from liability. We cannot ignore this language because all terms of a
contract provision must be read as a whole to give every statement
meaning. Construing the exculpatory clause as a whole, appellees’
release from liability rests on their exercise of reasonable care to
ensure [the child’s] safety and good health. Whether appellees
fulfilled this duty is a factual question which the trial court must
resolve.
Goyings v. Jack & Ruth Eckerd Found., 403 So. 2d 1144, 1146 (Fla. 2d
DCA 1981), disapproved on other grounds by Sanislo, 157 So. 3d at 271.
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CONCLUSION
In a single clause, Jewelry Exchange purported to absolve itself of all
liability for loss or damage while at the same time agreeing that its “sole liability”
was “limited to the exercise of ordinary care to prevent the opening of the vault by
any person other than lessee or the authorized agent of the lessee.” As in Murphy,
Brooks and Goyings, this latter provision would be rendered meaningless if we
were to construe the exculpatory clause to absolve Jewelry Exchange of all
liability. We hold that the exculpatory clause is ambiguous: While purporting to
relieve Jewelry Exchange of all liability, the exculpatory clause concurrently
imposes a duty upon Jewelry Exchange to exercise ordinary care to prevent the
unauthorized opening of the vault or boxes, and potential liability if Jewelry
Exchange failed to exercise such care. Thus, the trial court erred in entering its
final order of dismissal with prejudice.2
We reverse the final judgment of dismissal and remand this cause to the trial
court for further proceedings consistent with this opinion.
2Because we reverse the trial court’s order on this ground, we need not address the
other arguments raised on appeal.
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