Leidy v. Deseret Enterprises, Inc.

PRICE, Judge,

dissenting:

I would affirm the lower court’s grant of judgment on the pleadings in favor of Deseret Enterprises, Inc., d/b/a Body Shop Health Spa (Deseret). I would also affirm the lower court’s decision denying the request of Kathy Ann Robinson, a spa employee, for judgment on the pleadings.

Although this case presents unfortunate circumstances for the Leidys, I feel that the exculpatory clause of the membership agreement, which Mrs. Leidy signed, precludes any recovery for alleged negligent treatment at defendant health spa.

Judgment on the pleadings, under Pa.R.C.P. No. 1034, "may be granted in cases which are so free from doubt that a trial would clearly be a fruitless exercise." Bath v. Central-Penn National Bank of Philadelphia, 423 Pa. 373, 378, 224 A.2d 174, 178 (1966). After a careful review of the pleadings, I feel that the instant case presents such a situation.

No material facts are in issue. Mrs. Leidy went to Deser-et on her doctor’s advice. It is established that the physician recommended a specific exercise program for Mrs. Leidy. In order to participate in Deseret’s program, Mrs. Leidy signed a membership agreement, a copy of which was attached to the complaint. Mrs. Leidy suffered physical injury and discomfort due to Deseret’s alleged negligent conduct.

In answer to the Leidy’s complaint in trespass and as-sumpsit, Deseret asserted that Mrs. Leidy, by way of the membership agreement, had: (1) acknowledged that Deseret made no medical recommendations to her; (2) waived any claims or damages that might arise from use of Deseret’s facilities and services; (3) released Deseret from all actions that might arise from negligent acts during treatment.¹ The Leidys replied that Mrs. Leidy could not anticipate improper treatment by Deseret. In addition, they averred that the “terms of waiver, discharge or release . are unconscionable, made without consideration, made for the benefit of Defendant on the form prepared by Defendant and are an unlawful anticipatory attempt by Defendant to relieve itself from its own negligence and from breach of its own contract.”

Although contracts limiting liability for negligence are not favored by the law, Crew v. Bradstreet Co., 134 Pa. 161, 19 A. 500 (1890), they have been held valid and enforceable by our courts. The criteria for determining such a clause valid are: (1) it must not contravene public policy; (2) it must be a contract between persons relating exclusively to their private affairs; (3) each party must be a free bargaining agent, not simply one adhering to a contract which he is powerless to alter, with no other alternative than to reject the transaction completely. Employers Liability Assur. Corp. v. Greenville Business Men's Assn., 423 Pa. 288, 291-92, 224 A.2d 620, 622-23 (1966). The Leidys have not at any time denied the validity of the exculpatory clause by asserting nonconformance with the criteria set forth.

This case presents a situation similar to that confronted by the Pennsylvania Supreme Court in Keil v. Good, 467 Pa. 317, 356 A.2d 768 (1976). In Keil, the plaintiffs requested specific performance of an oral contract for the sale of land. The defendants filed a counterclaim and new matter, which contained an averment that the complaint should be dismissed due to the statute of frauds. Subsequently, the defendants filed a motion for judgment on the pleadings. The court noted that the plaintiffs would have to respond to new matter to avoid judgment on the pleadings. If the plaintiffs responded to the statute of frauds averment, however, entry of judgment on the pleadings could still occur.

Whether or not such a result is required will depend upon the factual allegations contained in plaintiff's complaint and in plaintiff's answer to defendant's ``new matter.' If in their complaint, or in their answer to defendant's ``new matter,' plaintiffs allege no facts which, if proven, would take the alleged oral contract for the sale of real estate outside the bar of the Statute of Frauds, then clearly a trial would be a ``fruitless exercise,' and entry of judgment on the pleadings in favor of defendant would be proper. Keil v. Good, supra 467 Pa. at 322, 356 A.2d at 771.

The court vacated the judgment entered by the court below because the plaintiffs had alleged that the defendants executed a deed to the property. The defendants denied execution of the deed, thereby framing a factual issue. Ultimately, the statute of frauds defense could be negated; therefore, judgment on the pleadings was improper.

In this case, Deseret raised the defense of waiver in new matter, to which the Leidys replied. As in Keil v. Good, supra, determining whether judgment on the pleadings^is proper

“will depend upon the factual allegations contained in plaintiff’s complaint and in plaintiff’s answer to defendant’s ‘new matter.’ If in their complaint, or in their answer to defendant’s ‘new matter,’ plaintiffs allege no facts which, if proven [would negate the exculpatory clause’s validity], then clearly a trial would be a ‘fruitless exercise,’ and entry of judgment on the pleadings in favor of defendant would be proper.” Id. 467 Pa. at 322, 356 A.2d at 771.

The majority cites Phillippe v. J.H. Rhoads, Inc., 233 Pa.Super. 503, 336 A.2d 374 (1975), at great length. In that case, the majority of this court affirmed an order granting judgment on the pleadings. Again, the appellants challenged the validity of an exculpatory clause, but failed to allege any facts which would establish its unenforceability.

"While appellants aver that they were in an inferior bargaining position with this appellee, they do not allege that they could not deal with another in the business . . Further, appellants fail to aver that either they or appellee had not benefitted from the contract relations which had existed one with the other.” Id. 233 Pa.Super. at 507, 336 A.2d at 376.

In this case, although the Leidys generally aver the clause’s unconscionability, they do not assert that the clause contravenes public policy or that it concerns matters outside the private affairs of those contracting. They do not contend that the parties were not free bargaining agents. Plaintiffs have thus alleged no facts which challenge the validity of the clause which Deseret relies upon. Under the Keil standard, judgment on the pleadings would be appropriate.

In addition, we recognized in Phillippe that "an agreement or instrument which reduces legal rights which would otherwise exist is strictly construed against the party asserting it and must spell out with the utmost particularity the intention of the parties." Id. 233 Pa.Super. at 507, 336 A.2d at 376, quoting Galligan v. Arovitch, 421 Pa. 301, 303, 219 A.2d 463, 465 (1966). There, as here, even reading the clause in the light most favorable to the appellants Leidy, the language is not ambiguous. I would therefore affirm judgment on the pleadings in Deseret's favor.

Turning to Ms. Robinson’s appeal from the lower court’s denial of judgment on the pleadings, we are faced with a unique question—whether an exculpatory clause entered into by the employer, Deseret, may be relied upon by the employee in a negligence action. Because the majority found the case not to be appropriate for judgment on the pleadings, it did not consider the merits of the Leidys’ claim that the clause, if valid on the face of the pleadings, does not inure to Ms. Robinson’s benefit. Although I have uncovered no Pennsylvania case directly on point, it is my view that if Ms. Robinson was acting within the scope of her employment, the contract should be read to protect her from liability also. A general proposition is stated in 53 Am. Jur.2d Master and Servant, § 408 (1970):

“[Wjhere a valid agreement is entered into between an employer and a third person, exculpating the employer from liability to such third person for negligence, an employee is ordinarily entitled to the same exculpation as his employer, even though he is not expressly named as a beneficiary of such exculpation.”

The Restatement (Second) of Agency § 347 (1958) similarly provides:

“(2) Where, because of his relation to a third person, a master owes no duty, or a diminished duty, of care, a servant in the performance of his master’s work owes no greater duty, unless there has been reliance by the master or by a third person upon a greater undertaking by the servant.”

If the employee is acting within the scope of his employment, thereby carrying out the performance of services for which the customer has contracted not to hold the employer liable for negligence, the only reasonable corollary is that the employee—agent is likewise excused. Contrariwise, if the employee is acting outside the scope of employment, she cannot rely on the contract provision's exculpation of the employer. As the employee would not then be serving the customer as the employer’s agent, the employee could not defend on the basis of that agency. Further, because the clause does not exculpate Ms. Robinson individually from liability for negligence and because the provision must be strictly construed, by acting outside the scope of her employment, Ms. Robinson would be precluded from relying on the contract provision altogether. The open question of whether Ms. Robinson was or was not acting within the scope of her employment is thus crucial to a determination of her liability for alleged negligence. I would therefore affirm the lower court’s denial of Ms. Robinson’s request for judgment on the pleadings.

WATKINS, President Judge, and VAN der VOORT, J., join in this opinion.

1 . These statements simply paraphrase the content of the exculpatory clause of the agreement.