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Yang v. Voyagaire Houseboats8/4/2005
noted in our discussion of the enforceability of the exculpatory clause, Voyagaire is a resort that provides a public service by furnishing sleeping accommodations to the public. Consequently, it is appropriate to treat Voyagaire as an innkeeper for purposes of determining the enforceability of the indemnification clauses. As a matter of public policy, innkeepers cannot shift liability for their own negligence onto the guests they have a duty to protect. It makes no difference that the guests are sleeping on a houseboat rather than in on-land sleeping accommodations. Therefore, we conclude that the indemnification clauses in the houseboat rental agreement, which purport to require Xiong to indemnify Voyagaire for Voyagaire's negligence, violate public policy and are unenforceable.
Considered in a broader context, it would be unfair to hold a private individual liable for the negligence of a business that resulted in serious injuries to several people, particularly where the individual was not warned about the specific risks involved--in this case, the risks of carbon monoxide exposure. Moreover, as a practical matter, shifting liability to a private individual like Xiong likely would result in the loss of compensation to injured parties. See Lee & Lindahl, supra, ยง 20:4 (explaining that unlike an exculpatory clause, "an indemnity agreement does not deny compensation to the party injured, but instead determines who will bear the loss"). Voyagaire has not cited a court decision from anywhere in the country that has enforced an indemnification clause under similar circumstances. Instead, " he modern trend is to not enforce indemnity agreements of this type (where the indemnitee holds an innocent party liable for its own negligence) on public policy grounds." Madsen v. Wyo. River Trips, Inc., 31 F. Supp. 2d 1321, 1325 (D. Wyo. 1999) (refusing to enforce an indemnification clause in an agreement for a river rafting trip, stating that the "unprecedented attempt to hold a private citizen to an indemnity contract for a service that he himself purchased will not stand").
We conclude that the exculpatory and indemnification clauses in the houseboat rental agreement are unenforceable on public policy grounds. We hold that the district court erred when it granted summary judgment. Accordingly, we remand to the district court for further proceedings consistent with our decision.
Reversed and remanded.
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