Opinion
No. 1-675 / 01-0005.
Filed March 13, 2002.
Appeal from the Iowa District Court for Polk County, ROBERT J. BLINK, Judge.
Plaintiff, a student at Iowa State University, appeals from the summary judgment entered in favor of the State in his personal injury action to recover for injuries he sustained in a car accident while returning from a solar car-racing event. AFFIRMED.
Brian L. Wirt and Daniel M. Weddle of Davis, Brown, Koehn, Shors Roberts, P.C., Des Moines, for appellant.
Thomas J. Miller, Attorney General, and Joanne Moeller, Assistant Attorney General, for appellee.
Heard by MAHAN, P.J., and MILLER and HECHT, JJ.
Andrew Earhart appeals from the summary judgment entered in favor of the State of Iowa on his personal injury action in which he sought to recover for injuries allegedly sustained in an automobile accident. We conclude the district court correctly determined Earhart contractually released his claims against the State and therefore affirm.
I. Factual Background and Proceedings.
While a student at Iowa State University (ISU) in the College of Engineering in 1997, Andrew Earhart and Karla Abrahamson were members of Team PrISUm, a university-sponsored group which designs, builds, and races solar-powered vehicles at an annual event known as the SunRayce. From April 25 through April 27, 1997, Team PrISUm members drove to Mesa, Arizona, for a qualifying event. The team traveled to the event in two vehicles, a donated Winnebago and an ISU-owned van that towed the team's trailer.
On April 28, team members began their return trip to Ames from Mesa and team members took turns driving the vehicles. At approximately 7:15 a.m. on April 29, team member David Stutzman took his turn driving the van, while Earhart and Abrahamson rested. Around 8:00 a.m., the trailer began swaying from side to side and caused Stutzman to lose control of the van. The van went off the road and struck a fence line.
Earhart and Abrahamson filed a personal injury action in Story County District Court against Stutzman. The district court granted summary judgment in favor of Stutzman concluding (1) Earhart and Abrahamson failed to exhaust their administrative remedies by first filing their claims with the State Appeal Board, and (2) releases signed by Earhart and Abrahamson served to waive their claims.
Earhart and Abrahamson next brought this action in Polk County District Court against ISU, the Board of Regents, and the State of Iowa. ISU and the Board of Regents filed a motion to dismiss, and the plaintiffs voluntarily released them. The State subsequently moved for summary judgment, contending plaintiffs had contractually released the State from liability for their injuries. The district court granted the motion, concluding the voluntarily signed releases unambiguously waived all claims relating generally to the plaintiffs' participation in Team PrISUm activities. Earhart appeals from this ruling.
II. Standard of Review.
This court reviews summary judgment rulings for correction of errors of law. Iowa R. App. P. 6.4. When the facts pertinent to the issues raised in the summary judgment motion are undisputed, our only task on appeal is to decide whether the district court correctly applied the law when it granted the defendants' motion. Sanford v. Manternach, 601 N.W.2d 360, 363 (Iowa 1999).
III. The Releases.
Team members were required to sign two different release and waiver of liability documents. The first release, which Earhart signed at one of the first Team PrISUm meetings during the 1996-97 school year, provides in pertinent part as follows:
This affects any rights you may have if you are injured or otherwise suffer damages while participating in any activity in conjunction with activities sponsored by Team PrISUm.
I, (name) hereby release, waive, discharge and covenant not to sue Team PrISUm, the State of Iowa, the Board of Regents of the State of Iowa, Iowa State University, and any of the officers, servants, agents and employees of the above-mentioned entities (hereinafter referred to as RELEASEES) for any liability, claim and/or cause of action arising out of or related to any loss, damage or injury, including death, that occurs as a result of my participation in the above-described activities.
I agree to indemnify and hold harmless the RELEASEES whether injury is caused by my negligence, the negligence of the RELEASEES or the negligence of any third party. . . .
The second release, which Earhart signed shortly before leaving for the SunRayce qualifier in Mesa, reads as follows:
It may affect any rights you may have if you are injured or otherwise suffer damages while participating in SunRayce '97 sponsored by Team PrISUm.
I, (participant) hereby release, waive, discharge and covenant not to sue Team PrISUm, the State of Iowa, the Board of Regents of the State of Iowa, Iowa State University, and any of the officers, servants, agents and employees of the above-mentioned entities (hereinafter referred to as RELEASEES) for any liability, claim and/or cause of action arising out of or related to any loss, damage or injury, including death, that occurs as a result of my participation in the above-described activities.
I agree to indemnify and hold harmless the RELEASEES whether injury is caused by my negligence, the negligence of the RELEASEES of the negligence of any third party. . . .
In moving for summary judgment, the State contended no genuine issue of material fact remained and that these releases clearly and unambiguously served to waive any claims Earhart had relating to the accident that occurred while returning from the Mesa competition. The district court agreed and dismissed the action against the State.
On appeal, Earhart contends: (1) summary judgment was inappropriate because the language of the releases is ambiguous; and (2) the releases are contrary to public policy, and therefore unenforceable. The State counters that the doctrine of issue preclusion bars Earhart from disputing the validity of the releases, in that he failed to appeal from the Story County ruling granting summary judgment in favor of David Stutzman, the driver of the van.
IV. Issue Preclusion.
We first address the State's contention Earhart is barred by the doctrine of issue preclusion from relitigating the effect and coverage of the releases. Issue preclusion bars relitigating in a subsequent action issues raised and fully litigated in a prior action. Bascom v. Joseph Schlitz Brewing Co., 395 N.W.2d 879, 881 (Iowa 1986). For issue preclusion to be applicable, four prerequisites must be met: (1) the issue concluded must be identical; (2) the issue must have been raised and litigated in the prior action; (3) the issue must have been material and relevant to the disposition of the prior action; and (4) the determination made of the issue in the prior action must have been necessary and essential to the resulting judgment. Buckingham v. Federal Land Bank Ass'n, 398 N.W.2d 873, 875 (Iowa 1987).
We conclude Earhart is not precluded from relitigating the validity of the releases. A review of the Story County summary judgment ruling reveals the only substantive issue reached with regard to the releases was whether they violated public policy. The court held they did not. It was not asked to decide, and therefore did not address, whether the terms of the releases were unambiguous as to the scope of activities contemplated by the parties. Accordingly, Earhart is not precluded from attacking the district court's finding here that the releases unambiguously served to waive all the claims he now asserts.
We also conclude the Story County ruling does not preclude Earhart from asserting the releases are unenforceable because they violate public policy. After the Story County District Court determined the parties failed to exhaust administrative remedies, it lacked the authority to address the public policy issue. See Keokuk County v. H.B., 593 N.W.2d 118, 122 (Iowa 1999) (noting a court lacks the authority to entertain a particular case when administrative remedies have not been exhausted). Thus, the public policy issue was not properly litigated in the Story County action and Earhart is not precluded from raising it again in this litigation.
V. Interpretation of the Releases.
The releases signed by Earhart are a contract, and their enforcement is governed by principles of contract law. See Stetzel v. Dickenson, 174 N.W.2d 438, 439 (Iowa 1970). Where, as here, the dispute centers on the meaning of certain lease terms, we engage in the process of interpretation, rather than construction. See Fausel v. JRJ Enters., Inc., 603 N.W.2d 612, 618 (Iowa 1999) (noting interpretation is process of determining meaning of contract terms while construction is process of determining legal effect of such terms).
The primary goal of contract interpretation is to determine the parties' intentions at the time they executed the contract. See Hartig Drug Co. v. Hartig, 602 N.W.2d 794, 797 (Iowa 1999). Interpretation involves a two-step process. First, from the words chosen, a court must determine "what meanings are reasonably possible." Walsh v. Nelson, 622 N.W.2d 499, 503 (2001). In so doing, the court determines whether a disputed term is ambiguous. Id. A term is not ambiguous merely because the parties disagree about its meaning. Hartig Drug Co., 602 N.W.2d at 797. A term is ambiguous if, "after all pertinent rules of interpretation have been considered," "a genuine uncertainty exists concerning which of two reasonable interpretations is proper." Id.
Here, Earhart claims the releases are ambiguous because, among other reasons, the releases do not specifically define the phrases "while participating in," "activities sponsored by Team PrISUm," or "any activity in conjunction with." He urges that a reasonable person could conclude the releases refer only to injuries that occur during a race or while designing and building the team's solar-powered car.
We agree with the district court that the terms of at least the first release are not ambiguous and that the release's application to the undisputed facts of this case warranted summary judgment in favor of the State. By its terms, the first release applies to "any rights [the signer] may have if [the signer is] injured or otherwise suffer damages while participating in any activity in conjunction with activities sponsored by Team PrISUm." (Emphasis added.) Further, it releases the State from "any liability, claim and/or cause of action arising out of or related to any loss, damage or injury . . . that occurs as a result of my participation in the above-described activities." We conclude this broadly inclusive language can only reasonably be read to release the State from liability for injuries suffered, as here, during travel returning from officially sanctioned Team PrISUm events in a vehicle provided for the team's use.
The phrase "participating in any activity in conjunction with activities" must mean more than strictly driving or building the vehicle. Otherwise, had the parties simply meant to cover such a narrow range of activities as driving and building, the document could have simply released the State from liability for injuries suffered "while participating in any activity sponsored by Team PrISUm." We cannot ignore the qualifier, "activity in conjunction with." That language can only reasonably be interpreted to expand the universe of covered activities to include things beyond simply racing or building the car. One definition of the word "any" is "all." See Webster's Ninth New Collegiate Dictionary 93 (1986). Read in that light, the release expansively covers injuries suffered while "participating in [all] activity in conjunction with activities" sponsored by Team PrISUm.
In addition, it was clear to all that Team PrISUm required the team to travel, along with its support vehicle, equipment, and race car, to various locales, some quite distant from Ames. Transportation of team members along with the team vehicle was a necessary concomitant to racing. Team member Allan Ihlefeld stated in an affidavit that members were not allowed to "travel with the team unless this waiver is signed." Another Team PrISUm member, Karla Abrahamson, testified in a deposition that some travel was indeed a requirement for team membership and that it was "understood" that in order to race in the SunRayce, members had to travel with the team to the qualifiers. Even team members who had no expectation of driving the solar-powered vehicle were required to sign the releases. Finally, we note there is no evidence in the summary judgment record that Earhart, or any other team member, believed when signing the releases that the releases, in fact, only covered injuries sustained while building or racing the vehicle. These factors support the district court's conclusions.
While the release may not have expressly detailed the specific set of circumstances in which Earhart was injured, we find such specificity unnecessary. See Korsmo v. Waverly Ski Club, 435 N.W.2d 746, 749 (Iowa Ct.App. 1988) ("The parties need not have contemplated the precise occurrence which occurred as long as it is reasonable to conclude the parties contemplated a similarly broad range of accidents.").
Pursuant to the unambiguous language of the first release, we conclude injuries sustained during travel from an official race while in the team vehicle constitute participation in "any activity in conjunction with activities sponsored by Team PrISUm." The broadly stated release language is inconsistent with Earhart's argument that "participation," as used in the releases, can only refer quite specifically to the actual racing or building of the vehicle. We therefore conclude that the first of the two releases was unambiguous and covered the injuries and damages claimed by Earhart in this case.
VI. Public Policy.
Earhart further asserts the district court erred in holding the releases do not violate public policy. Contracts that contravene public policy will not be enforced. Walker v. American Family Mut. Ins. Co., 340 N.W.2d 599, 601 (Iowa 1983). However, this "power to invalidate a contract on public policy grounds must be used cautiously and exercised only in cases free from doubt." DeVetter v. Principal Mut. Life Ins. Co., 516 N.W.2d 792, 794 (Iowa 1994).
We conclude the district properly held the releases in question do not violate the public policy of the State of Iowa. Our supreme court has repeatedly held that contracts exempting a party from its own negligence are enforceable, and are not contrary to public policy. See Huber v. Hovey, 501 N.W.2d 53, 55 (Iowa 1993); Bashford v. Slater, 96 N.W.2d 904, 909 (1959). Earhart's participation in Team PrISUm was clearly voluntary in nature. Participation was not a prerequisite to graduation. The student members of Team PrISUm clearly enjoyed personal benefit and enjoyment from their participation. We therefore affirm the district's conclusion on this issue.
VII. Conclusion.
The first release executed by Earhart is not ambiguous. We affirm the district court's conclusion that injuries claimed by Earhart during travel from the Mesa competition were sustained while participating in an activity in conjunction with Team PrISUm activities. We further conclude, consistent with prior decisions of our supreme court, the release did not violate the public policy of the State of Iowa. We therefore affirm the district court's ruling on the State's motion for summary judgment.
AFFIRMED.