Frederick Copeland v. Healthsouth/Methodist Rehabilitation Hospital, LP
565 S.W. 3d 260 (2018)
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Rule of Law:
To determine the enforceability of an exculpatory agreement, a court must consider the totality of the circumstances, weighing three non-exclusive factors: (1) the relative bargaining power of the parties, (2) the clarity of the exculpatory language, and (3) public policy and public interest implications.
Facts:
- Frederick Copeland was a patient at HealthSouth Rehabilitation Hospital recovering from knee replacement surgery.
- HealthSouth contracted with MedicOne Medical Response to provide transportation services for its patients.
- On December 2, 2014, a MedicOne driver arrived to transport Copeland to a follow-up appointment with his orthopedic surgeon.
- Before leaving the hospital, the driver required Copeland to sign a pre-printed document containing an agreement that released MedicOne from any and all claims related to the transportation services.
- The hospital, not Copeland, was financially responsible for MedicOne's transportation charges.
- After the appointment, while getting back into the MedicOne van, Copeland lost his footing on the running board, fell, and sustained injuries.
Procedural Posture:
- Frederick Copeland sued MedicOne for negligence in the Shelby County Circuit Court (trial court).
- MedicOne filed a motion to dismiss, or in the alternative, for summary judgment, based on the exculpatory agreement.
- The trial court treated the motion as one for summary judgment and granted it in favor of MedicOne, finding the agreement enforceable.
- Copeland (as appellant) appealed to the Tennessee Court of Appeals.
- The Court of Appeals (intermediate appellate court) affirmed the trial court's judgment.
- Copeland was granted permission to appeal to the Supreme Court of Tennessee (the state's highest court).
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Issue:
Is an exculpatory agreement releasing a medical transportation company from all liability for its own negligence enforceable when signed by a patient immediately before a medically necessary transport arranged by a third-party hospital?
Opinions:
Majority - Justice Sharon G. Lee
No, the exculpatory agreement is unenforceable as a matter of law. An exculpatory agreement's validity hinges on a totality of the circumstances analysis that balances the parties' relative bargaining power, the clarity of the waiver's language, and public policy considerations. Here, the agreement is unenforceable because of the significant disparity in bargaining power between MedicOne and Copeland, a hospital patient facing the choice of signing or forgoing necessary medical care. Furthermore, the agreement's language was overly broad and ambiguous, purporting to release MedicOne from liability for 'any and all claims... of any kind whatsoever.' Finally, enforcing such a release against a hospital patient needing essential transportation for medical care violates public policy, which protects vulnerable individuals in situations implicating the public interest.
Analysis:
This case establishes a new, more flexible standard in Tennessee for evaluating exculpatory agreements, replacing the rigid six-factor 'Olson' test with a three-factor totality of the circumstances approach. The decision explicitly overrules prior case law that limited such public policy scrutiny to contracts for professional services, thereby broadening the application of the test to all types of exculpatory clauses. This shift makes it more difficult to enforce standard 'take-it-or-leave-it' liability waivers, particularly against vulnerable individuals or in contexts involving essential services, and signals a greater judicial willingness to invalidate contracts of adhesion on public policy grounds.
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