79 Wn.2d 443, WILLIAM JAMES McCUTCHEON et al., Petitioners, v. UNITED HOMES CORPORATION, Respondent DOUGLAS R. FULLER et al., Petitioners, v. UNITED HOMES CORPORATION, Respondent
[No. 41612. En Banc.      Supreme Court      July 8, 1971.]
WILLIAM JAMES McCUTCHEON et al., Petitioners, v. UNITED
                     HOMES CORPORATION, Respondent. DOUGLAS R. FULLER et al., Petitioners, v. UNITED HOMES
                          CORPORATION, Respondent. «*»

Basic to the entire discussion is the common law rule that one who leases a portion of his premises but retains control over the approaches, common passageways, stairways and other areas to be used in common by the owner and tenants, has a duty to use reasonable care to keep them in safe condition for use of the tenant in his enjoyment of the demised premises. Schedler v. Wagner, 37 Wn.2d 612, 225 P.2d 213, 230 P.2d 600 (1950); Restatement (Second) of Torts § 360, at 250 (1965). The landlord is required to do more than passively refrain from negligent acts. He has a duty of affirmative conduct, an affirmative obligation to exercise reasonable care to inspect and repair the previously mentioned portions of the premises for protection of the lessee. W. Prosser, Handbook of the Law of Torts §38, at 183, § 80, at 471 (2d ed. 1955); F. Harper, A Treatise on the Law of Torts § 68, at 158, § 79, at 197, § 82, at 207, §103, at 236 (1933); F. Harper and F. James, 2 The Law of Torts § 27.17, at 1516 et seq. (1956).

It is readily apparent that the exculpatory clause was inserted in defendant's form "Month to Month Rental Agreement" to bar its tenants from asserting actions for personal injuries sustained through the landlord's own negligence. It was adopted to negative the result of the lessor's failure to comply with its affirmative duty to the tenants.

The defendant asserts that a lessor may contract, in a

446 McCUTCHEON v. UNITED HOMES CORP. [July 1971
79 Wn.2d 443, 486 P.2d 1093

rental agreement, to exculpate itself from liability to its lessee, for personal injuries caused by lessor's own negligence. 49 Am. Jur. 2d Landlord and Tenant § 869, at 837 (1970). It contends such exculpatory clauses are not contrary to public policy because the landlord-tenant relationship is not a matter of public interest, but relates exclusively to the private affairs of the parties concerned and that the two parties stand upon equal terms. Thus, there should be full freedom to contract. 49 Am. Jur. 2d Landlord and Tenant § 870, at 839 (1970); Annot., 175 A.L.R. 8, 86 (1948). Defendant suggests there is additional case support in this jurisdiction by citing Broderson v. Rainier Nat'l Park Co., 187 Wash. 399, 60 P.2d 234 (1936) and Griffiths v. Broderick, Inc., 27 Wn.2d 901, 182 P.2d 18, 175 A.L.R. 1 (1947).

The impact of Broderson and Griffiths shall be dealt with summarily. Broderson was overruled by this court subsequent to the Court of Appeals' decision in this case. See Baker v. Seattle, 79 Wn.2d 198, 484 P.2d 405 (1971). Griffiths deals strictly with the validity of a contract of indemnity and is not in point.

[1] The importance of "freedom of contract" is clear enough. However, the use of such an argument for avoiding the affirmative duty of a landlord to its residential tenant is no longer compelling in light of today's multifamily dwelling complex wherein a tenant merely rents some space with appurtenant rights to make it more usable or livable. Under modern circumstances the tenant is almost wholly dependent upon the landlord to provide reasonably for his safe use of the "common areas" beyond the four walls demised to him. Quinn and Phillips, The Law of Landlord-Tenant, 38 Fordham L. Rev. 225, 231 (1969).

As early as 1938 Williston recognized that while such exculpatory clauses were recognized as "legal", many courts had shown a reluctance to enforce them. Even then, courts were disposed to interpret them strictly so they would not be effective to discharge liability for the consequences of negligence in making or failing to make repairs.

July 1971] McCUTCHEON v. UNITED HOMES CORP. 447
79 Wn.2d 443, 486 P.2d 1093

6 Williston, A Treatise on the Law of Contracts § 1751C, at 4968 (Rev. ed. 1938). In § 1751B, at 4965, the author said:

A promise not to sue for the future damage caused by simple negligence may be valid. Such bargains are not favored, however, and, if possible, bargains are construed not to confer this immunity. (Footnotes omitted. Italics ours.)

The key to our problem is found in Restatement of Contracts § 574, at 1079 (1932) which reads:

A bargain for exemption from liability for the consequences of negligence not falling greatly below the standard established by law for the protection of others against unreasonable risk of harm, is legal . . . (Italics ours.) In other words, such an exculpatory clause may be legal, when considered in the abstract. However, when applied to a specific situation, one may be exempt from liability for his own negligence only when the consequences thereof do not fall greatly below the standard established by law.

[2] In the landlord-tenant relationship it is extremely meaningful to require that a landlord's attempt to exculpate itself, from liability for the result of its own negligence, not fall greatly below the standard of negligence set by law. As indicated earlier, a residential tenant who lives in a modem multi-family dwelling complex is almost wholly dependent upon the landlord for the reasonably safe condition of the "common areas". However, a clause which exculpates the lessor from liability to its lessee, for personal injuries caused by lessor's own acts of negligence, not only lowers the standard imposed by the common law, it effectively destroys the landlord's affirmative obligation or duty to keep or maintain the "common areas" in a reasonably safe condition for the tenant's use.

When a lessor is no longer liable for the failure to observe standards of affirmative conduct, or for any conduct amounting to negligence, by virtue of an exculpatory clause in a lease, the standard ceases to exist. In short, such a clause destroys the concept of negligence in the

448 McCUTCHEON v. UNITED HOMES CORP. [July 1971
79 Wn.2d 443, 486 P.2d 1093

landlord-tenant relationship. Neither the standard nor negligence can exist in abstraction.

It is no answer to argue that the rental agreement relates exclusively to the "personal and private affairs of two parties on equal footing" and thus is "not a matter of public interest." Such a concept had its origin in contracts entered into between indemnitors and indemnitees. Woodbury v. Post, 158 Mass. 140, 33 N.E. 86 (1893); Perry v. Payne, 217 Pa. 252, 66 A. 553 (1907). The theory was first carried from indemnity contracts into the landlord-tenant relationship by the Pennsylvania Supreme Court's rather cursory consideration of mere dicta in Perry v. Payne, supra. In Cannon v. Bresch, 307 Pa. 31, 35, 160 A. 595 (1932),«1» the court first used the language now relied on by defendant, applying it to an exculpatory clause concerned with property damage arising out of a lease for business purposes:«2»

It is a contract between persons conducting a strictly private business and relates entirely to their personal and private affairs, and so cannot be opposed to public policy. It would seem to be a matter of no interest to the public or the State. See Arensberg, Limitation by Bailees and by Landlords of Liability for Negligent Acts, 51 Dick. L. Rev. 36 (1946).

The foregoing cases and their progeny actually form the basis for the so-called "majority rule" cited in 49 Am. Jur. 2d Landlord and Tenant § 870, at 839 (1970) and Annot., 175 A.L.R. 8, 83-92 (1948). It is safe to say, however, that there is no true majority rule. There are only numerous conflicting decisions, decisions concerned with contracts of indemnity, cases relating to property damage under business leases, and a disposition of the courts to emasculate