Chief Judge Stephen Dillard, Georgia Court of Appeals (Photo: John Disney/ALM)

In a ruling the prevailing lawyer said could lead to a “dramatic effect” on premises liability litigation, the Georgia Court of Appeals ruled a provision in a residential lease limiting the time a tenant can sue to one year applies to any sort of claim, including personal injury claims that would otherwise fall under the state’s two-year statute of limitations.

The May 1 opinion said that, under Georgia law, parties are free to sign away “numerous and substantial rights,” and its provisions are enforceable unless prohibited by statute or public policy.

The plaintiffs attorney, Atlanta solo Matthew Gebhardt, said he thinks the trial and appellate court adopted too narrow of a reading on existing case law.

I was unable to find any case law limiting someone’s right to bring an action outside the scope of the contract,” Gebhardt said.

“It would be different if the lease said, ’You waive your rights to sue us for anything,’ but the fact that she’s a resident doesn’t impact her ability to bring a personal injury suit,” he said.

“I think they made new law,” said Gebhardt, who plans to ask the court to reconsider its ruling and, if necessary, appeal to the Georgia Supreme Court.

The attorney for the defendant apartment complex, Freeman Mathis & Gary partner Jacob Daly, disagreed that the decision is a departure from precedent.

“Georgia law has long recognized the freedom of parties to contract unless prohibited by statute or public policy,” said Daly via email. “More specifically, the appellate courts have held for more than 150 years that a statutory limitations period may be shortened by contract, so the decision of the Court of Appeals reflects a specific application of a longstanding principle.”

Even so, said Daly, “if management companies begin incorporating shortened limitations provisions in their lease agreements, there could be a dramatic effect on premises liability litigation.”

The case involved an elderly tenant in Morrow who slipped on a crumbling section of curb in the apartments’ common area. She ultimately needed knee replacement surgery on both legs, Gebhardt said.

Pamela Langley filed a personal injury suit against the complex’s owner, MP Spring Lake LLC, in Clayton County Superior Court nearly two years after her fall.

Among its defenses, Spring Lake pointed to Paragraph 33 in Langley’s lease, which stated: “To the extent allowed by law, resident also agrees and understands that any legal action against management or owner must be instituted within one year of the date any claim or cause of action arises and that any legal action filed after one year from such day shall be time barred as a matter of law.”

Langley raised several arguments in response, including asserting that the clause was ambiguous and that it only applied to actions related to the contract’s terms, not to an unrelated personal injury claim.

Ruling on summary judgment, Judge Robert Mack found in favor of Spring Lake and declared Langley’s suit to be time-barred.

Langley appealed, arguing that Mack’s ruling was “erroneous because a contractual limitation period, such as the one at issue, should not apply to claims that do not arise out of the agreement in which it is contained,” the opinion said.

In upholding Mack, Court of Appeals Chief Judge Stephen Dillard, with the concurrence of Judges Sara Doyle and Amanda Mercier, wrote that there was no ambiguity in the contract’s provision.

“Thus, the one-year contractual limitation period encompassed by Langley’s lease with Spring Lake was applicable to any action, not just those which arose from breaches of the agreement,” Dillard wrote.

“Although the language of the limitation-on-actions provision is broad and does not explicitly specify that it includes personal injury actions, it nevertheless encompasses any legal action that Langley might have instituted against the owner or management of her apartment complex.

Gebhardt said that, taken to its logical conclusion, the appellate opinion affords blanket immunity to anyone who places such a requirement into a contract.

“What if she’s driving in downtown Atlanta and a maintenance man for the apartments hits her?” Gebhardt asked. “She can’t sue? It doesn’t make any legal or logical sense to me.”

He said Langley never noticed the contract’s provision.

“There’s probably one person in 100 who actually read their lease agreements,” he said.

Anne Tucker, an associate professor at Georgia State University College of Law who teaches contracts, said the opinion means “blanket restrictions on liability for all types of claims can be written into a contract, even in contracts that are not normally subject to negotiation, like a landlord-tenant contract.

“The court even states explicitly that there is no barrier to including any type of claim,” she said. 

The appellate panel properly zeroed in whether there was any ambiguity in the contract, Tucker said, but “there may be room to differ as to the interpretation. The court looked at the word ‘any’ and said, ‘We will apply that to mean any cause of action.’”  

“The Court of Appeals says there’s nothing in Georgia law that says you can’t do this; it’s not a really a departure from existing law, but it may be an expansion,” said Tucker. “I don’t think there was a green light before this decision; I think this a green light.”

Tucker said many lawyers are likely to use that green light.

“If your job is to reduce liability or to contain exposure, you would absolutely want to include a statute of limitations on any type of claim,” she said.

Glass & Robson partner James Robson, who is not involved in the litigation but reviewed the appellate briefs and opinion, said he was alarmed by the ruling.

“This could and likely will have far-reaching implications for a number of injured people as virtually all corporate defendants will now seek to include similar provisions in their contracts,” said Robson. He speculated that daycare centers, gyms, hospitals, nursing homes and trampoline parks might try to limit their exposure by limiting the time a suit can be filed or even capping damages a party can seek.

“It’s a scary decision,” Robson said.