I have adviced my client that the Floor joist on their sub floor are not correct for Tile installation. I provided all the necessary information and they client said they will take the risk and have the tile installed anyway and sign documentation releasing me of my liablity. Can they still sue me?
I see a few issues.
If the subfloor is not on the ground floor, and the subfloor fails and causes bodily injury or property damage, you could still be liable to any individuals who suffer damages from the failure. Or even on the ground floor if the defect in the subfloor causes the tile to fail and create a tripping hazard, you could be potentially liable for injuries. You could mitigate this risk with liability insurance and an indemnity agreement from the owner, but that will not completely relieve you from all potential liability and in particular for a catastrophic injury. The owner's acceptance of the work could give you a defense under the accepted work doctrine. But there are several factors that could affect application of this defense.
Similarly, failure of the subfloor and tile could cause damage to the work of another contractor. Your agreement with the owner would not preclude liability to another contractor. But you could mitigate this risk as above with liability insurance, an indemnity provision and the accepted work doctrine.
There is a risk that the agreement the owner is willing to sign may not be enforceable. Some agreements purporting to relieve a party from its own negligence may not be enforceable. And agreements that are unconscionable are not enforceable, which requires showing extremely one-sided terms and hidden or coerced terms. Unconscionability likely isn't a huge barrier since the owner is expressly willing to release the potential liability.
Even if you have an agreement relieving you of liability, there is nothing stopping the owner from suing you. The agreement would provide a good defense. But you would still likely incur significant attorney's fees. You might be able to recover your attorney's fees expended if the agreement contains an attorney's fees provision.
Make sure that the agreement is broad enough to cover all potential issues that might arise from the incorrect subfloor and not just the obvious issues, such as warranty issues affected by the subfloor.