Didn’t Waive Gross Negligence

Van Voris was taking an aikido course at Chop Shop when he was injured during demonstration of a jiu-jitsu technique.  Van Voris sued Chop Shop for negligence and gross negligence.  Chop Shop moved for summary judgment based on its defense of pre-injury release from a one page “Release and Waiver of Liability and Indemnity Agreement.”  Chop Shop argued that the waiver barred the negligence claims, and that the gross negligence claim was inseparable from the negligence claim.

The court of appeals found that the one-page release met the fair notice requirements for purposes of releasing Chop Shop from liability for its own negligence.  The release was sufficiently conspicuous, and the language was specific and expressed the intent of exculpating Chop Shop. However, the court found that the waiver did not release the gross negligence claims and did not preclude proof of claims for negligence and actual damages.  The court pointed to Texas’s strong public policy prohibiting pre-injury releases of negligence, heightened concerns involving gross negligence and exemplary damages, and the distinct elements for proving negligence and gross negligence.  Thus, the court of appeals reversed the summary judgment against Van Voris regarding his gross negligence claims, and affirmed as to the negligence claims.

Van Voris v. Team Chop Shop, No. 05-11-01370-CV

RTKL Associates v. Transcontinental Realty Investors, Inc., No. 05-11-00786-CV

RTKL, an architecture firm, worked for Woodmont Investment Co., a real estate developer.    In a prior case, Woodmont sued RTKL, seeking a declaratory judgment that it did not owe RKTL its remaining fees because the services agreement between the parties was invalid. That case settled for $700,000, with $140,000 to be paid to RTKL up front and the rest to be paid to it in monthly installments of $10,000.  As the parties negotiated the settlement, it was determined that the entity paying the settlement would be Woodmont TCI Group XIII, LP (“XIII”), another Woodmont-related entity that developed one of the properties for which  RTKL provided services.  Several months after the settlement agreement was signed, however, XIII filed for bankruptcy.

When RTKL realized the XIII had no cash to pay the settlement it sued TCI (XIII’s parent) for fraud and breach of the settlement agreement.  TCI moved for summary judgment on the breach of contract claim, which the trial court granted, and the jury found in TCI’s favor on the fraud claim.  RTKL appealed the denial of summary judgment.   The Court of Appeals examined the language of the release entered into as part of the settlement and found that TCI, as XIII’s parent, fell within its terms.  It then found that the release included the claim related to the settlement agreement.  Accordingly, the court affirmed the trial court’s summary judgment decision.

RTKL Associates v. Transcontinental Realty Investors, Inc., No. 05-11-00786-CV