NEWS
Release and indemnity agreements may be invalid
Posted: Saturday, September 02, 1995
When an owner or a trainer signs an application to stable a horse or enter a horse into a race, the owner, sometimes unknowingly, is also signing a "Release and Indemnification Agreement."
These agreements serve two purposes. First, the agreement releases the track and its employees from any liability resulting from negligent conduct, which is the failure to exercise the care of a reasonable person, or possibly even intentional conduct. Second, the agreement holds the owner or trainer liable for any claims asserted against the track arising from negligence or, in some cases, even the intentional conduct of the track.
These agreements have a potential crippling effect on owners or trainers. Under these agreements, the owner or trainer is precluded from recovering from the track any damage, or injuries caused by the track or its employees. Furthermore, the owner can be forced to pay for claims asserted against the track arising out of the conduct of the track or its employees even when the owner or trainer is in no way at fault.
Release and Indemnification Agreements, found together or independently, are common to many industries, and they have received considerable attention by the various state courts. Although courts discourage the release of someone from liability for personal injury caused by that person's negligence, Release and Indemnity Agreements have usually been held enforceable under the premise of protecting the freedom to contract.
The enforceability of a Release and Indemnity Agreement depends on the type of conduct to which the track attempts to apply the agreement. Some states, such as Kentucky, have ruled that these agreements may release the track and its employees from liability for ordinary and gross negligence, but not for wanton or willful negligence. Other courts have disagreed as to whether or not these agreements should be permitted to release liability for gross negligence.
The difference between the types of negligence, ordinary and gross, that may be released, and the type of negligence, wanton or willful, that may not be released is one of degree. The Release and Indemnity Agreement will state which types of conduct the agreement applies to, or it may state that the track is released and indemnified from liability arising from "any" conduct. When a Release and Indemnity Agreement attempts to relieve the track of liability arising from conduct other than merely ordinary or gross negligence, the agreement will not generally be enforced by the courts. As a result, the track will be held liable for its negligent or intentional conduct, and the owner or trainer will not be forced to pay for any claims asserted against the track.
A change to the current status of Release and Indemnity Agreements may arise from the Kentucky Racing Commission. The commission recently began to study these agreements to determine whether or not they are within the commission's power to regulate. Until such time as the commission reaches a decision, owners and trainer should be aware that these Release and Indemnity Agreements are present in most stall application agreements, stakes nomination agreements, race conditions, and race entry blanks at most tracks. However, all of these Release and Indemnity Agreements may not be enforceable unless properly drafted by the various tracks.
Denise H. McClelland is an attorney with the firm of Frost & Jacobs in Lexington, Kentucky.
