Law School Case Brief
Johanns v. Minn. Mobile Storage, Inc. - 720 N.W.2d 5 (Minn. Ct. App. 2006)
Parties to a contract may, without violation of public policy, protect themselves against liability resulting from their own negligence. The Minnesota Supreme Court has recognized the validity of exculpatory clauses in certain circumstances although they are not favored in the law. They are strictly construed against the benefited party. If the clause is either ambiguous in scope or purports to release the benefited party from liability for intentional, willful, or wanton acts, it will not be enforced.
Defendant, Minnesota Mobile Storage, is a franchisee of PODS, which does the accounting, builds the storage units, and provides supplies for its franchisees. Plaintiffs Craig and Mary Johanns signed a rental agreement with defendant to lease the unit, and paid for the first month by check. The agreement addressed the owner's liability for negligence, limited damages that the owners could recover for negligence to $5,000, and, among other provisions, included an exception to the exculpatory provision for willful violations of law. The Johanns packed the unit, and the brought the unit to its storage facility. Neither PODS nor defendant received any further payments from the Johanns. Minnesota Mobile Storage, who had a statutory lien under the Minnesota Liens on Personal Property in Self-Service Storage Act, Minn. Stat. § 514.972 (2004), against the personal property stored in the facility for unpaid rent, eventually enforced the lien and sold the Johanns' property at an auction for $1,305. When the Johanns learned of the sale, they sued Minnesota Mobile Storage on a variety of claims. The district court granted summary judgment on most of the claims, but allowed the breach-of-contract and bailment claims to proceed to trial. At the trial, the parties presented evidence, in relevant part, regarding the circumstances concerning the failure to make payments, notices allegedly sent to the Johanns, and the auction. The jury and the district court found for the Johanns and Defendant Minnesota Mobile Storage appealed.
Does enforcement of an unambiguous, valid partial exculpatory clause contravene public policy?
The appellate court reversed and remanded because (1) the parties' rental agreement was an unambiguous, valid partial exculpatory contract; (2) the language of the Act was unambiguous and permitted rental agreements that provided limited liability for, but not total exemption from, damages caused by the facility's negligence; (3) the district court did not reach the issue of whether the facility's acts were intentional, which would make the exculpatory clause unenforceable due to a willful violation of law; and (4) the Johanns failed to present specific legal arguments to support their claim that the district court erred in granting summary judgment on several other claims.
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