New York Law Review

Lebron v. New York City Transit Authority, 44 N.Y.2d 782 (1978): Enforceability of Exculpatory Clauses in Employee Transit Passes

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The New York Law Review

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44 N.Y.2d 782 (1978)

An exculpatory clause in a free transit pass provided to an employee as part of their compensation is not enforceable against the employee, but such a clause is enforceable if the pass is a mere gratuity; the burden of proof as to whether the pass was a gratuity rests on the transit authority.

Summary

Margaret Lebron sued the New York City Transit Authority (NYCTA) for injuries sustained while riding as a passenger. Lebron was riding on a free pass. The pass contained a clause exempting the NYCTA from liability. The trial court instructed the jury that the exculpatory clause was binding if the pass was a gratuity but not if it was part of Lebron’s compensation. The jury found for the NYCTA. The Court of Appeals reversed, holding that the NYCTA failed to prove the pass was a gratuity, thus the jury verdict may have erroneously been based on the exculpatory clause. The case was remanded for a new trial.

Facts

Margaret Lebron was injured while riding as a passenger on the New York City Transit Authority (NYCTA). Lebron was riding on a free pass provided to her. The free pass contained a provision exempting the NYCTA from liability for injuries sustained by the pass holder.

Procedural History

Lebron sued the NYCTA for negligence. The trial court instructed the jury regarding the free pass and its exculpatory clause, stating it was binding if the pass was a gratuity but not if it was part of Lebron’s compensation. The jury found in favor of the NYCTA. Lebron appealed to the Appellate Division, which considered evidence outside the trial record and affirmed the lower court’s decision. Lebron then appealed to the Court of Appeals.

Issue(s)

Whether the trial court erred in instructing the jury regarding the enforceability of the exculpatory clause in Lebron’s free pass. Whether the NYCTA met its burden to prove that the free pass was a gratuity.

Holding

No, because the NYCTA failed to present evidence that the pass was a gratuity. The Court of Appeals found no evidence in the record to support that the pass was issued as a gratuity and noted that NYCTA’s counsel admitted as much during the trial.

Court’s Reasoning

The Court of Appeals focused on the trial court’s instruction to the jury regarding the free pass. The court stated that the burden rested on the NYCTA to prove the pass was a gratuity. Absent such proof, the exculpatory clause would not be binding. The court found that the NYCTA failed to meet this burden, noting, “We find no evidence in the record that the pass had been issued as a gratuity — indeed defendant’s counsel admitted as much on trial.” Because the jury’s verdict for the NYCTA might have been based on the erroneous belief that the exculpatory clause was valid, the Court of Appeals reversed and remanded for a new trial. The Court also noted that the Appellate Division improperly considered evidence outside of the trial record.

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