For the second time in seven days, the Supreme Court this week held a contractual damages limitation violated Civil Code section 1668, which provides, “All contracts which have for their object, directly or indirectly, to exempt any one from responsibility for his own fraud, or willful injury to the person or property of another, or violation of law, whether willful or negligent, are against the policy of the law.”
In the most recent case, Whitehead v. City of Oakland, the court’s unanimous opinion by Justice Kelli Evans concluded a release and waiver of liability a bicyclist had signed didn’t prevent him from suing the City of Oakland for injuries he suffered because of the City’s alleged breach of its statutory duty under the Government Code to maintain a safe roadway for public use. “[A]n agreement to exculpate a party for future violations of a statutory duty designed to protect public safety is against the policy of the law under Civil Code section 1668 and is not enforceable,” the court said.
The court found it key that the bicyclist has alleged the breach of a specific statutory duty. The opinion says the “violation of law” that section 1668 precludes from contractual negation does not “encompass[ ] the common law as well as positive law.”
The opinion is signed by all seven justices, but Justice Leondra Kruger filed a concurrence. She wrote to explain more fully why the court’s Tunkl v. Regents of University of California (1963) 60 Cal.2d 92 decision doesn’t get Oakland off the hook and to emphasize that “section 1668 clearly does not invalidate every anticipatory release of liability where liability is based in some part on statutory law.”
The court didn’t mention its opinion last week in New England Country Foods v. Vanlaw Food Products holding that a contract provision “limit[ing] . . . damages for willful injury to the person or property of another is invalid” under section 1668. There’s no mention of that case presumably because the opinion isn’t final yet.
The release doesn’t sink the plaintiff’s case, but the court says the primary assumption of risk defense is still available to the City on remand.
The court reversed the First District, Division Three, Court of Appeal’s belatedly published opinion.
