Yes, Virginia, Indemnity Agreements in Marina Contracts ARE Enforceable
Jean and Rick Jones owned a 44 foot Sea Ray that they docked at Joys Marina in Hampton, Virginia. In May of 2012, Mr. Jones filed suit in state court as the result of a personal injury he suffered when disembarking from the vessel.
Counsel for the marina reminded Mr. Jones that he signed a slip rental agreement in 2011 agreeing to name the marina as an additional insured on his P&I policy and releasing and indemnifying the marina with respect to personal injury claims. The agreement was renewed in 2012, only this time, it was signed by Jean Jones because her husband was out of town when the time came to renew the agreement.
In response, counsel for Rick Jones made a number of arguments, including that he was not bound by the agreement because his wife (a joint owner of the vessel) was not authorized by him to sign the agreement, and because the agreement was not enforceable under Virginia law.
Joys Marina then filed an admiralty action against Jean Jones in federal court asking the court to find that she had breached the slip rental agreement because she failed to have the marina named as an additional insured on the P&I policy, and also declaring that she was obligated to indemnify the marina for the personal injury claim brought by her husband.
Mrs. Jones first moved to dismiss on several grounds, the chief one being the slip rental agreement was not a maritime contract. The court had little trouble in dispensing with this claim, and after discovery, cross-motions for summary judgment were filed.
In granting summary judgment for the marina, the court found that Mrs. Jones had authority to sign the contract for her husband AND for herself, and so she was bound by the contract. The court next found that Mrs. Jones breached the contract because she failed to name the marina as an additional insured on the P&I policy and because she refused to indemnify the marina for her husband’s claim. Marina One Inc. d/b/a Joys Marina, Inc. v Jones, 2015 WL 1538226 (E.D. Va. April 3, 2015).
The operative language in the indemnity agreement reads as follows:
Notwithstanding any other provisions of this Agreement, lessee expressly releases the Marina and agrees to hold the Marina harmless for any and all claims for injury or death … unless such liability, damage or expense is due to the gross negligence or willful misconduct of the Marina.
Counsel for Mrs. Jones argued that the pre-accident release and indemnity agreement were not enforceable because Virginia law does not permit pre-accident releases and indemnity agreements. Counsel further argued that clause was not in all caps or in bold type, both of which have been important in some Virginia state court decisions. The federal court, however, held that regardless of what Virginia law may provide, admiralty law DOES permit pre-injury release and indemnity agreements without any special font or type-face requirements. Citing prior authority, the court said:
This exculpatory clause is enforceable as it is ‘expressed clearly, entered into freely by parties of equal bargaining power, and [does] not provide for a total absolution of liability [by the marina].’ (Citation omitted).
The court’s ruling notwithstanding, the state court litigation by Rick Jones continues, and the P&I carrier has denied coverage for the claim against Jean Jones. We can only imagine the dinnertime conversation in the Jones household….. (In the interests of full disclosure, we are counsel for the marina).