Case Summary: Broderick, et al. v. Apartment Management Consultants, L.L.C
Posted on Aug. 29, 2012

Can I put in a contract a provision that limits my liability to the most extreme circumstances?  The Utah Supreme Court considered these provisions, which are called exculpatory clauses, in the case Broderick, et al. v. Apartment Management Consultants, L.L.C.

Many contracts contain what are called exculpatory clauses.  These are provisions which seek to limit the liability of one party, even where that party acts negligently, but they cannot limit liability when one acts grossly negligent.  The difference between ordinary negligence and gross negligence is the degree of inattention.   Under the law, a person acts “negligently” when she does not behave as a “reasonably prudent person under similar circumstances” or fails to use reasonable care.  In comparison, gross negligence involves conscious or voluntary disregard for care or safety.  Gross negligence is considerably harder to prove, and therefore if an exculpatory clause is enforceable, it is a powerful mechanism to protect the party that it favors.

The Broderick case started when an arsonist set a fire at an apartment complex in Ogden.  After their property was damaged, a group of the tenants brought suit against the property manager arguing that the management company was negligent because it did not have a functional fire alarm system, did not have security personnel, left in the stairwell a couch, which served as the ignition for the fire, did not warn prospective tenants that the building did not have fire blocking, and did not provide adequate access to the firefighters.   If proved, these actions amount to ordinary negligence but probably not gross negligence. 

The property management company defended the lawsuit by pointing to an exculpatory clause in the tenants’ contracts.   In this case, the Supreme Court did not definitely rule whether landlords may include exculpatory clauses in their leases in general, but it ruled in this particular case that the landlords’ arguments were not sufficient to defend itself on that basis.  This case will continue to a settlement or a trial.

The attorneys in Jones Waldo’s corporate and real estate departments are available to assist you in determining whether to include an exculpatory clause in your contracts, and if so how.  The Jones Waldo litigation department can assist in resolving the issue of whether an exculpatory clause may be enforceable.   Likewise, Jones Waldo’s appellate practice group has a long history of successfully representing clients in the Utah and federal appellate courts. 

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kathleenAttorney Kathleen McDonald

Kathleen is a shareholder at Jones Waldo.  She specializes in litigation with a particular emphasis on appeals and commercial litigation.  Kathleen has written or argued appeals in the Tenth Circuit, the Utah Court of Appeals, and the Utah Supreme Court.  Kathleen specializes in construction, environmental, civil rights, and commercial litigation.

Kathleen received her law degree with honors from the University of Arizona in 2004.  She received her undergraduate degree from Oberlin College.  Kathleen has unusually well-rounded legal experience; in law school, Kathleen clerked with an in-house corporate attorney and worked in government.  She also clerked at the Utah Court of Appeals.  

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Kathleen volunteers a significant amount of time each week with a variety of community programs including the Tracy Aviary, the Bennion Center and Friends of Animals.

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