Outline for Starting a New Outdoor Recreation Business

Updated June 4, 2020

Not every business will follow this outline; however, it provides some basic ideas on when and why you need legal advice to protect your business.

Check back as this page will be updated with new ideas and articles.

Year 1

  1. Create Limited Liability Company for your business: Because the cost of starting an LLC in most states is minimal, start one immediately and start using the name to provide notice that you are doing business as an LLC. See Starting Your Outdoor Recreation Business: Entities and Taxation

For more information about entity options see: Starting Your Outdoor Recreation Business: Entities and Taxation

  1. Unless you want your business to be a non-profit business, then set up a non-profit corporation.
  2. Even if you expect to go public at a later time, an LLC provides the most protection immediately.
    1. Start the LLC in your own state. If you need to later, you can move the LLC or start another LLC or corporation in a state that might have better laws than your state, such as Delaware.
      1. Compare the cost of starting an LLC in your home state $50-$100 to Delaware, $750.00
  1. Apply for the necessary permits to operate on the land you want to be using.
    1. Inquire with the land managers if there are permits available.
    2. Find out how to apply for a permit and the requirements
    3. Determine if you can get a permit.
    4. Make friends with the person in charge of permits.
  2. Apply for Insurance for your business

    I can provide you with a list of insurance carriers who specialize in Outdoor Recreation Insurance. Email me at mailto:jhmoss@gmail.com?subject=I’m interested in your list of insurance brokers Include your name and contact information and a little about your business.

    1. Basic business liability policy
      1. This provides protections you might need such as someone falling at your office, advertising liability, etc.
    2. Specialty risk policy for your outdoor activity
      1. This provides the protection for the specific activity you want to do.
        1. Make sure it provides coverage for SAR costs.
    3. Commercial Automobile policy
      1. If you are going to transport people, this policy will probably be your most expensive policy so purchase it only when you need it.
  3. Write a Risk-Management Plan
    1. Probably one page long. Any longer and you are writing a plan for attorneys to sue you.
    2. You cannot write a plan that covers every risk you, your employees and your guests are going to encounter. So don’t try.
    3. What you can do is take an ICS course, online, and learn how write a plan that deals with what to do, what you have and who to contact rather than trying to decide how to put out a fire.

    For more on this subject see: Creating Your Risk-Management Plan

  4. Identify classes and education needed by you and your employees for the programs you will be running/teaching/instructing. (Certification is not the key; education is. See Basics of the Article are Good – But it confuses certification, accreditation and most importantly standards.)
    1. First Aid Classes
      1. Dependent upon the distance from Emergency Medical Services
      2. Dependent upon the first aid supplies you can carry.
      3. Dependent upon the injuries you guests & employees may incur.
      1. This is a critical skill set, knowledge and practice to operate on my lands in the US.
    2. Technical Classes (Examples)
      1. Swift Water Rescue
      2. Top Rope
      3. Mountaineering Guide
    3. Classes required by a State of Federal Licensing Agency. (Examples)
      1. Child Care
      2. Health Department Food Preparation
    4. Educational classes(Examples)
      1. Flora, Fauna & Ecosystem training for the area you will be operating.
  5. Create your marketing campaign and social media presence
  6. Contact me to write a release for you.

    Send an email to jhmoss@gmail.com and request the form to fill out to complete a release for your business. Please provide contact information and information about your business.

    1. The release will be based on:
      1. What you intend to do.
      2. On whose land you intend to do it.
      3. The guests you want work with.
      4. The state where you intend to work.

    For information on how to use your release see: Releases: Using it Properly

  7. Apply for any state license you need to operate.
    1. Travel Agent License
    2. Transportation license
    3. Outfitter and/or guides licenses
  8. Identify Trade Associations & join.

For more on this see: Why you should always be a member of the trade association that represents the activity you provide?

  1. Hire a CPA

Year 2-3

  1. Determine if you need additional Limited Liability companies.
    1. Separate LLC’s for each state you may be operating in.
    2. Separate LLC for the assets you have.
      1. Each piece of Real Estate should be located in its own LLC.
      2. All vehicles should be in a transportation LLC.
    3. Separate LLC’s for each Federal, State or Local Permit
      1. Alternatively, you can keep the permits in your name.

    For more information on this subject see: Why would you create more than one Limited Liability Company for your business?

    Call me to discuss these options and which one is best for you:
    Schedule an Appointment

  2. Write the necessary contracts to operate the different LLC’s
    1. Owner ship of the LLC’s for the different states you are operating in.
    2. Lease Agreements for real estate you are operating on.
    3. Contracts for hiring transportation services for your guests and employees
  3. Review your insurance policies every two years to make sure your coverage is adequate, and you are paying the proper premium.
  4. Create a risk management training program with local Fire, EMS, Law Enforcement and SAR.
  5. Start running background checks on new employees
    1. Do this every year if you are dealing with minors?
  6. Identify State and Local marketing associations and determine the value to your business.
  7. Further Develop Your Marketing Plan
    1. Adjust your marketing plan for the customers you are receiving.
    2. Develop social media presence
    3. Develop a referral program
    4. Develop a local community marketing program
  8. Develop vehicle maintenance programs
  9. Develop equipment maintenance and replacement programs
  10. Hire bookkeeper or payroll firm that works with your CPA.

Year 3-5

  1. Check to see if your release needs updated.
  2. Run background checks on all employees each year.
  3. Develop in-house training programs
    1. First Aid as needed by:
      1. Your Clientele
      2. Your area of operations
      3. Your permit or licenses
  4. Develop a managerial training program
  5. Set up additional LLC’s for holding assets and separating risk
    1. Each parcel of land should be set up in a separate LLC.
      1. Each parcel of land should have a lease agreement with the entity or business using it.
    2. Each high-risk asset should be placed in a separate entity.
      1. Transportation
        1. Each transportation entity should have its own agreement.
    3. Travel Agency
      1. If you are booking more than trips, separate this off to a separate LLC and set it up as a separate travel agency.
  6. Develop equipment and asset replacement plan

Years 5-10

  1. Look at moving assets into a Limited Liability Limited Partnership for greater protection
  2. Look at who is going to take over your business.
    1. Start to create an exit plan
  3. Create Insurance deductible account and fund
    1. Raise your deductible based on the amount of money you have been able to place in the insurance deductible account.
      1. This amount should be a minimum of five times your deductible, possible ten times.
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Releases: Using it Properly

Seven-Part Program to Build a Release to Defend your Business/Program/Activity

Releases are also known as “waivers” or “covenants not to sue.” They are also called “allocation of risk” or “transference of risk” documents. Whatever the name, they are an agreement between two parties as to who will assume the cost of injury prior to the injury.

Another type of document called an “Assumption of Risk” document does not provide the complete extent of legal defenses a release provides. However, in states that do not allow the use of a release, or if you are dealing with minors, an assumption of the risk agreement is your best defense. You need to know the difference, know when to use which one and when to combine the two.

A properly written release, which includes assumption of the risk language, used in conjunction with a well-thought-out marketing plan, and post-accident follow-up can stop lawsuits. Your release or waiver is not the only document you need to build a wall of protection around your business or educational program, but it is the most important. The other two are a legal entity protecting your business like an LLC and insurance.

Why include “marketing plan” in a risk-management memo? Because:

Releases will be different for the type of business you run. An outfitter, a business where guides accompany the trip, will have a different release from a livery or canoe rental business where a canoe or equipment is rented for the day. Activities where parents accompany children and maintain control and supervision over children will be different from either an outfitter or a livery release. Some releases may be simple notices of those risks which the participants need to be aware of and those campground rules which are designed to prevent injuries.

Your release will also be different based on the activity, the state where the release will be used, the age of your participants and the risks you want them to assume. No release, if it is to be effective, is going to be like any other release.

You need to understand what type of operation you have, not only from your perspective, but also from your participant’s point of view. What you see as normal or fun may scare your participants. Always look at your world through their eyes.

Releases for product liability issues are a different type of release entirely.

First Line of Defense

The first document your client reads or sees should start the process of preparing the client for the risk, and the fact that he or she will be assuming the risk of the activity. Most times this will be your brochure, marketing letter course catalog or website. Emphasize in these that your company uses a release, and that customers must sign the release before they can participate in an activity or trip. You might want to state there is the possibility that guests can be injured or die during the trip, and that you are not responsible for their injuries or their lost or destroyed personal property. This opening information is the first brick in your wall of protection.

You don’t want an injured guest suing you stating that if they knew about the risk and the release, they would not have gone on the trip or attended your activity.

Second Line of Defense

The next step is to ensure that the release is given to your customers as soon as possible. This may not be possible with walk-in business. However, you should always make the attempt. Put your release on your website so your guests can review it if they go to your website.

Make sure your release and the other documents you use, do not create a conflict or a lawsuit. Do not make promises you cannot keep about the safety of the trip or activity. Doing so can make your release a worthless piece of paper. This can happen if you do not answer questions about your release, or you answer the questions incorrectly. Your staff should also be trained to answer questions correctly and adequately represent the risks involved.

If your release is for a product being purchased, then the release should be given to the customer as you are preparing the product for sale. Give the customer plenty of time to read the release and ask any questions. Placing your release on your website in advance so they can read it, then eliminates the argument, the signor did not have enough time to read and understand the release.’

If you can’t provide the release to a purchaser of your product in advance, then provide an incentive for them to sign the release after they purchase the product. Extend the warranty or send them something that qualifies as consideration to provide value for signing the agreement.

Defense Three: Train your staff in your release

Tell your staff to hand the release to the client with the front up. Ask them to read both sides of the agreement and sign and complete the backside.

If a guest asks if the release is valid, say yes. Tell them the release is significant in keeping your costs down by keeping your insurance at a reasonable amount. A release identifies who is going to pay for any injuries or damages in advance so you do not have to spend time and money litigating this issue later.

Defense Four: Assumption of the Risk

Every release should outline the risk associated with that particular activity. Saying something is dangerous is not enough. You need to specify many of the actual risks for the activity. Remember most of the customers interested in your trip or activities are excited because they have never participated in a trip like yours. As such they may also have no idea what the risks of the activity. They may want to compare your activity to the last thrilling experience they had, an amusement park. You need to explain those risks to them. Many companies do this in a “safety talk.” Educational institutions do this at pre-trip meetings or briefings. Trying to impress a jury with what was said in a meeting or on the side of a river can be daunting. Your release can help prove your clients knew and understood the risk they were about to undertake.

Rental agreements can be interpreted several different ways by the courts. If you believe you are running a pure rental operation, your documents can be significantly different from a rental operation the courts consider an outfitter. Review your operation with your attorney to make sure your attorney understands your business and which interpretation the courts will apply.

Assumption of Risk – Defense Five and Your First Step Your Risk-Management Program

If you have the opportunity to use a release, then the following information will be included in your release and incorporate the risks of the activity to be assumed by your guest. If you do not have the opportunity to use a release because of state law, then you will be using an assumption of risk document.

Assumption of Risk is a legal defense that can be used to win a lawsuit or substantially reduce the damages of a lawsuit. It may also be the only line of defense with minors. As such Assumption or Acknowledgment of the Risk (ASSUMPTION OF THE RISK) plays an important role in your business.

The legal effect and how an assumption of the risk and Contributor Negligence is used in the Courtroom are substantially different. However, from a non-lawyer perspective, there is little difference between the doctrines.

Contributory Negligence is an argument based upon the facts at trial where the jury decides if the Plaintiff’s or injured parties actions contributed to his injuries. If the Plaintiff knew about the risks and still acted or refused to act causing his injuries, he contributed to his injuries, and his damages are reduced by his percentage of his contribution to his injury. Assumption of Risk is used here because the idea is well defined by the words. In addition, when your clients truly know and understand the risk, they are less likely to be injured, let alone start a lawsuit.

Assumption of Risk must be proved by you to win a lawsuit. You will need to prove that your client knew and understood the risk they were about to undertake. Not only must they know which things were dangerous; they needed to know how dangerous. For example, most people know traveling to third-world countries may be dangerous. However, do most Americans really understand you can die from what Americans would consider a minor illness or injury. Medical care in Third-World countries can be substandard to the care someone would receive in America. Consequently, this two-step knowledge can be difficult to prove in some instances. It requires an affirmative set of actions to move this knowledge and understanding to the level necessary to win a lawsuit.

Most of us identify the obvious risk of a sport. Water activities we identify drowning, rock climbing we understand falling, and winter camping, freezing. However, a substantial amount of the injuries’ Outdoor Recreation arise away from the main activity. Side hikes while rafting are the major cause of injuries in the Grand Canyon. A large percentage of the injuries in rock climbing occur when items fall on the climber, or they fall hiking to the climb. Study the injuries you clients receive and make sure the most common, no matter how trivial, are listed in your assumption of risk document or release, as well as the most horrendous.

The easiest way to prove your clients knew and understood the risk is to put that information in writing and have your clients acknowledge they read those risks in the document. Some states require the information concerning the risk to be a component of a release. As such, your release should always contain language outlining the risks of the activity. Judges frequently comment on the fact the injury sustained by the Plaintiff was specifically identified in the release or assumption of risk document.

Remember that any document or video your clients read or view can be used to prove they understood the risks. Your release, promotional information, pictures in the office or videos are important. To prove the clients knew and accepted the risk several companies or industries have developed videos to show to clients before they undertake the activity. A video has proven to be extremely important in preventing possible lawsuits. It is difficult to sue, when the actions that injured the Plaintiff were identified visually and audibly as something not to do. Add to that the release identified the risk and stated the client had seen the video. This is a fairly iron clad wall against an invasion by injured customers. To see examples of these, OARS the whitewater rafting and adventure travel company, has a complete set of videos on the risks of rafting at: http://rec-law.us/NvHtqu

Defense Six: Understand the Risk from Your Client’s Perspective

To prepare your clients for the risk, you need to evaluate the risk in advance. Do this from your client’s perspective, not from your own. Gather information on what the actual risks of the activity are. Ask your insurance company for a list of the claims they have had over the past several years. Look at the accidents you have had over the life of your company, and that may be peculiar to your operation, where you are operating, or your clients. Finally, always include the worst-case scenario in your release, even if that chance is remote such as paralysis, death, mental anguish, or trauma.

You will be able to explain the risks to them, so they understand, not just what you believe are the risks.

Because assumption of risk is a personal question to be examined by the judge and jury, you need to make the knowledge personal. Use the examples included here as a starting point to build a risk statement for your operation.

Defense 7: The Wall is up, Don’t Tear it Down.

Your wall of defense consists of multiple blocks that inform your guests of the risks they are going to undertake and who will pay for any injury they may encounter. The final Defense in your defense wall is how you deal with your guests after they have been injured. If you have done a good job of informing your guests of the risks, then they should be mentally prepared to accept the fact the injury was probably their fault and their responsibility. However, right after an injury is not the time to bring that up.

You want to treat an injured guest the same way you treated them before their injury. Nothing has changed. They are still a guest who can pay your more money for another trip or send you referrals with their good word. Treat them the way you treat everyone. Be attentive, help them and their family. Follow up and remain their friend.

Moss Maxims: Ideas to Remember when dealing with Guests

10 Signs of Great Risk Management    http://rec-law.us/sUzpHT

7 Mistakes Made by People who are called Defendant    http://rec-law.us/stli09

Crisis Response    http://rec-law.us/ul6Nrl

Reasons Why People Sue    http://rec-law.us/uZ5RKR

Ten Commandments of Dealing with People in a Crisis    http://rec-law.us/KoI8Xo

Additional Articles on Why People Sue

It’s Not Money    http://rec-law.us/zxmmqy

Serious Disconnect: Why people sue.    http://rec-law.us/wm2cBn

Why do people sue? Not for the money.    http://rec-law.us/A0866T

A Church wants to apologize and the insurance company for the church panics. What else would you expect a church to do?    http://rec-law.us/zI0FUI

Great article on why some corporate apologies fall short and they are not sincere    http://rec-law.us/xb1uVb

Her life is permanently changed, but she really wants an apology    http://rec-law.us/yHjVn0

Make sure you understand what the other side is saying    http://rec-law.us/1b5m1mt


Poorly written release in Massachusetts stop lawsuit for falling off a horse during riding lessons.

Release used poor language and was hidden within an application to learn to ride.

Markovitz v. Cassenti, 56 N.E.3d 894, 90 Mass.App.Ct. 1102 (2016)

State: Massachusetts , Appeals Court of Massachusetts

Plaintiff: Joanne Markovitz

Defendant: Christine Cassenti

Plaintiff Claims: Negligence

Defendant Defenses: Release

Holding: For the Defendant

Year: 2016

Summary

A release stopped a negligence claim for falling off a horse in Massachusetts. The plaintiff had been riding with the stable for more than a year and had been riding this horse for over a month when she fell off. She argued the Massachusetts Equine Liability Act allowed her to sue. The court said not, the release stopped her lawsuit and her arguments about the Massachusetts Equine Liability Act were incorrect.

Facts

On July 16, 2009, the plaintiff filled out and signed an application for riding lessons at Chrislar Farm. In that application, she wrote that she had six months of riding experience in 2001 and that she wanted to continue to learn to ride. The form contained a section entitled ” RELEASE,” which stated: ” I, the Club member/Student (or parent or guardian) recognize the inherent risks of injury involved in horseback riding/driving and being around horses generally, and in learning to ride/drive in particular. In taking lessons at CHRISLAR FARM or participating in Club activities, I assume any and all such risk of injury and further, I voluntarily release CHRISLAR FARM, its owners, instructors, employees and agents from any and all responsibility on account of any injury I (or my child or ward) may sustain for any reason while on the premises of CHRISLAR FARM or participating in Club activities, and I agree to indemnify and hold harmless CHRISLAR FARM, its owners, instructors, employees and agents on account of any such claim.”

The plaintiff signed the form on the signature line immediately below the release.

Between July of 2009 and September of 2010, the plaintiff took thirty-minute private riding lessons on a regular basis. Between September, 2010, and January, 2011, the plaintiff took one-hour group riding lessons and walked, trotted, and cantered several different horses. On September 3, 2010, the defendants leased a horse named Jolee. Christine Cassenti had known this horse for a long time. The trainer conducting the lessons thought that the horse was ” sweet and did everything you asked her to do.”

The plaintiff first rode Jolee during a ” musical horses” exercise. She then rode Jolee during the next three one-hour group lessons on December 23, 2010, December 30, 2010, and January 6, 2011. At one point during the December 23, 2010, lesson, Jolee went from a trot into a canter and stayed in a circle formation instead of performing a figure eight. Following the instructions from the trainer, the plaintiff slowed down and stopped Jolee. The plaintiff rode Jolee without incident on December 30, 2010, and January 6, 2011.

On January 20, 2011, a year and one-half after the plaintiff began taking lessons at Chrislar Farm, the plaintiff rode Jolee for the fourth time. She noticed that Jolee briefly pinned her ears. After finishing a walk, the plaintiff began trotting Jolee. At one point, Jolee sped up into a faster trot and turned left, causing the plaintiff to lose her balance and fall.

Analysis: making sense of the law based on these facts.

The argument the plaintiff attempted to make was the Massachusetts Equine Liability Act created a duty on the part of the defendants that was not protected by the release. The act listed risks which a rider of a horse accepted. The statute had an exception to that list

“Nothing in subsection (b) shall prevent or limit the liability of an equine activity sponsor, an equine professional, or any other person if the equine activity sponsor, equine professional, or person: ” (1) . . . (ii) provided the equine and failed to make reasonable and prudent efforts to determine the ability of the participant . . . to safely manage the particular equine based on the participant’s representations of his ability.”

The plaintiff argued this created a new duty which the defendant in this case breached.

However the court found the section did not create a new duty, it only allowed a plaintiff to proceed with a negligence claim in certain exceptional situations. Because the release barred negligence claims the plaintiff’s lawsuit was properly dismissed by the courts.

So Now What?

The odd thing about this case is there was no gross negligence claim to get around the release.

However, the were some risks run by the plaintiff that in other states might have caused problems. They were obvious issues by this court because the court raised them in the facts.

  • The form Application for Riding Lessons also contained the release, hidden in the form.
  • The language in the release was weak and did not contain the word negligence.

But for solid law in Massachusetts supporting releases this case in other states would have gone differently.

What do you think? Leave a comment.

Copyright 2020 Recreation Law (720) 334 8529

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If you are interested in having me write your release, fill out this Information Form and Contract and send it to me.

Author: Outdoor Recreation Insurance, Risk Management and Law

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Email: Jim@Rec-Law.US

By Recreation Law    Rec-law@recreation-law.com    James H. Moss

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Outline for Starting a New Outdoor Recreation Business

Updated May 28, 2020

Not every business will follow this outline; however, it provides some basic ideas on when and why you need legal advice to protect your business.

Check back as this page will be updated with new ideas and articles.

Year 1

  1. Create Limited Liability Company for your business: Because the cost of starting an LLC in most states is minimal, start one immediately and start using the name to provide notice that you are doing business as an LLC.

For more information about entity options see: Starting Your Outdoor Recreation Business: Entities and Taxation

  1. Unless you want your business to be a non-profit business, then set up a non-profit corporation.
  2. Even if you expect to go public at a later time, an LLC provides the most protection immediately.
    1. Start the LLC in your own state. If you need to later, you can move the LLC or start another LLC or corporation in a state that might have better laws than your state, such as Delaware.
      1. Compare the cost of starting an LLC in your home state $50-$100 to Delaware, $750.00
  1. Apply for the necessary permits to operate on the land you want to be using.
    1. Inquire with the land managers if there are permits available.
    2. Find out how to apply for a permit and the requirements
    3. Determine if you can get a permit.
    4. Make friends with the person in charge of permits.
  2. Apply for Insurance for your business

    I can provide you with a list of insurance carriers who specialize in Outdoor Recreation Insurance. Email me at mailto:jhmoss@gmail.com?subject=I’m interested in your list of insurance brokers Include your name and contact information and a little about your business.

    1. Basic business liability policy
      1. This provides protections you might need such as someone falling at your office, advertising liability, etc.
    2. Specialty risk policy for your outdoor activity
      1. This provides the protection for the specific activity you want to do.
        1. Make sure it provides coverage for SAR costs.
    3. Commercial Automobile policy
      1. If you are going to transport people, this policy will probably be your most expensive policy so purchase it only when you need it.
  3. Write a Risk-Management Plan
    1. Probably one page long. Any longer and you are writing a plan for attorneys to sue you.
    2. You cannot write a plan that covers every risk you, your employees and your guests are going to encounter. So don’t try.
    3. What you can do is take an ICS course, online, and learn how write a plan that deals with what to do, what you have and who to contact rather than trying to decide how to put out a fire.

    For more on this subject see: Creating Your Risk-Management Plan

  4. Identify classes and education needed by you and your employees for the programs you will be running/teaching/instructing. (Certification is not the key; education is. See Basics of the Article are Good – But it confuses certification, accreditation and most importantly standards.)
    1. First Aid Classes
      1. Dependent upon the distance from Emergency Medical Services
      2. Dependent upon the first aid supplies you can carry.
      3. Dependent upon the injuries you guests & employees may incur.
      1. This is a critical skill set, knowledge and practice to operate on my lands in the US.
    2. Technical Classes (Examples)
      1. Swift Water Rescue
      2. Top Rope
      3. Mountaineering Guide
    3. Classes required by a State of Federal Licensing Agency. (Examples)
      1. Child Care
      2. Health Department Food Preparation
    4. Educational classes(Examples)
      1. Flora, Fauna & Ecosystem training for the area you will be operating.
  5. Create your marketing campaign and social media presence
  6. Contact me to write a release for you.

    Send an email to jhmoss@gmail.com and request the form to fill out to complete a release for your business. Please provide contact information and information about your business.

    1. The release will be based on:
      1. What you intend to do.
      2. On whose land you intend to do it.
      3. The guests you want work with.
      4. The state where you intend to work.
  7. Apply for any state license you need to operate.
    1. Travel Agent License
    2. Transportation license
    3. Outfitter and/or guides licenses
  8. Identify Trade Associations & join.

For more on this see: Why you should always be a member of the trade association that represents the activity you provide?

9. Hire a CPA

Year 2-3

  1. Determine if you need additional Limited Liability companies.
    1. Separate LLC’s for each state you may be operating in.
    2. Separate LLC for the assets you have.
      1. Each piece of Real Estate should be located in its own LLC.
      2. All vehicles should be in a transportation LLC.
    3. Separate LLC’s for each Federal, State or Local Permit
      1. Alternatively, you can keep the permits in your name.

    For more information on this subject see: Why would you create more than one Limited Liability Company for your business?

    Call me to discuss these options and which one is best for you:
    Schedule an Appointment

  2. Write the necessary contracts to operate the different LLC’s
    1. Owner ship of the LLC’s for the different states you are operating in.
    2. Lease Agreements for real estate you are operating on.
    3. Contracts for hiring transportation services for your guests and employees
  3. Review your insurance policies every two years to make sure your coverage is adequate, and you are paying the proper premium.
  4. Create a risk management training program with local Fire, EMS, Law Enforcement and SAR.
  5. Start running background checks on new employees
    1. Do this every year if you are dealing with minors?
  6. Identify State and Local marketing associations and determine the value to your business.
  7. Further Develop Your Marketing Plan
    1. Adjust your marketing plan for the customers you are receiving.
    2. Develop social media presence
    3. Develop a referral program
    4. Develop a local community marketing program
  8. Develop vehicle maintenance programs
  9. Develop equipment maintenance and replacement programs
  10. Hire bookkeeper or payroll firm that works with your CPA.

Year 3-5

  1. Check to see if your release needs updated.
  2. Run background checks on all employees each year.
  3. Develop in-house training programs
    1. First Aid as needed by:
      1. Your Clientele
      2. Your area of operations
      3. Your permit or licenses
  4. Develop a managerial training program
  5. Set up additional LLC’s for holding assets and separating risk
    1. Each parcel of land should be set up in a separate LLC.
      1. Each parcel of land should have a lease agreement with the entity or business using it.
    2. Each high-risk asset should be placed in a separate entity.
      1. Transportation
        1. Each transportation entity should have its own agreement.
    3. Travel Agency
      1. If you are booking more than trips, separate this off to a separate LLC and set it up as a separate travel agency.
  6. Develop equipment and asset replacement plan

Years 5-10

  1. Look at moving assets into a Limited Liability Limited Partnership for greater protection
  2. Look at who is going to take over your business.
    1. Start to create an exit plan
  3. Create Insurance deductible account and fund
    1. Raise your deductible based on the amount of money you have been able to place in the insurance deductible account.
      1. This amount should be a minimum of five times your deductible, possible ten times.

Hillis v. McCall, 2020 Tex. LEXIS 187, 63 Tex. Sup. J. 577

Hillis v. McCall, 2020 Tex. LEXIS 187, 63 Tex. Sup. J. 577

Homer Hillis, Petitioner,

v.

Henry McCall, Respondent

No. 18-1065

Supreme Court of Texas

March 13, 2020

On Petition for Review from the Court of Appeals for the Fourth District of Texas

OPINION

Debra H. Lehrmann Justice

The ferae naturae doctrine limits a landowner’s liability for harm caused by indigenous wild animals on his property. In this premises-liability case arising out of a brown-recluse spider bite, we are asked how the doctrine affects the scope of the landowner’s duty to his bitten invitee. The landowner argues that he owed no duty to the invitee because he was unaware of the presence of brown recluse spiders on his property and he neither attracted the offending spider to his property nor reduced it to his possession. Further, the invitee had actual knowledge of the presence of spiders on the property. The court of appeals held that the property owner failed to conclusively establish the absence of a duty and thus reversed the trial court’s summary judgment in his favor. We agree with the landowner and reverse the court of appeals’ judgment.

I. Background

Homer Hillis owns a bed and breakfast (the B&B) and a neighboring cabin in Fredericksburg, Texas. He used the B&B as a second home until 2012, when he began renting it out, mainly on weekends. Hillis hired a housekeeper to prepare and clean the B&B before guests arrived. That process included utilizing “bug bombs” in the event the housekeeper noticed any pest problems. Thus, as Hillis described it, pest control at the B&B was conducted on an “[a]s needed” basis.

In early 2014, Hillis leased the neighboring cabin on the property to Henry McCall.[ 1] The cabin had no washer or dryer and had only a small refrigerator, so Hillis permitted McCall to use the laundry facilities and larger refrigerator in the B&B. McCall also offered to “open up” the B&B for guests and others needing access, such as electricians and other maintenance workers. According to McCall, Hillis typically called him several days before guests arrived and asked him to perform various tasks.[ 2]

On December 12, 2014, McCall accessed the B&B at Hillis’s request to check the dishwasher and investigate whether the sink was leaking. While checking under the sink for a leak, McCall was bitten by a brown recluse spider, which is a venomous spider found in several states, including Texas.

Before he was bitten, McCall had observed spiders in both the cabin and the B&B on several occasions and had notified Hillis about the general presence of spiders in the B&B.[ 3]According to Hillis, when McCall reported issues with insects or spiders, Hillis would pass along the information to the housekeeper who prepared the B&B for guests. Hillis also averred that customer reviews of the B&B had never complained of insects. Neither Hillis nor McCall had any personal knowledge about the presence of brown recluse spiders on Hillis’s property specifically or in the surrounding area.[ 4] However, Hillis explained that he had read reports on the internet that brown recluse spiders “are habitats [sic] of Texas for a long time, and I assumed they were around my property.” Hillis had heard of people being bitten by brown recluses “elsewhere,” but not on his property.

McCall sued Hillis for negligence under a premises-liability theory, alleging that the presence of brown recluse spiders on Hillis’s property constituted an unreasonably dangerous condition, that Hillis knew or should have known of the condition, that Hillis owed McCall a duty to adequately warn him of the condition or make the property safe, that Hillis breached that duty, and that McCall suffered damages as a result. Hillis filed a motion for summary judgment, arguing that, under the longstanding doctrine of ferae naturae, he owed no duty to McCall with respect to indigenous wild animals that Hillis had neither introduced to nor harbored on the property. The trial court granted the motion, and McCall appealed.

The court of appeals reversed. 562 S.W.3d 98, 106 (Tex. App.-San Antonio 2018). Viewing the evidence in the light most favorable to McCall, the court concluded that “McCall was bitten by a spider in an artificial structure and Hillis knew or should have known of an unreasonable risk of harm posed by the spiders inside the B&B.” Id. Accordingly, the court held that Hillis had failed to establish as a matter of law the absence of a duty to warn or make safe under the doctrine of ferae naturae. Id.

II. Discussion

A. Standard of Review

A trial court’s order granting summary judgment is reviewed de novo. Tarr v. Timberwood Park Owners Ass’n, 556 S.W.3d 274, 278 (Tex. 2018). A party moving for traditional summary judgment has the burden to prove that no genuine issue of material fact exists and that he is entitled to judgment as a matter of law. ConocoPhillips Co. v. Koopmann, 547 S.W.3d 858, 865 (Tex. 2018); see also Tex. R. Civ. P. 166a(c). “When reviewing a summary judgment, we take as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant’s favor.” Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005) (citations omitted).

B. Premises Liability and Ferae Naturae

“A claim against a property owner for injury caused by a condition of real property generally sounds in premises liability.” Occidental Chem. Corp. v. Jenkins, 478 S.W.3d 640, 642 (Tex. 2016). When the claim is based on the property owner’s negligence, the threshold question is whether the owner owed a duty to the injured person. See Brookshire Grocery Co. v. Goss, 262 S.W.3d 793, 794 (Tex. 2008). “The existence of a duty is a question of law for the court to decide from the facts surrounding the occurrence” at issue. Walker v. Harris, 924 S.W.2d 375, 377 (Tex. 1996).[ 5] Further, the duties owed by a landowner in a premises-liability case “depend upon the role of the person injured on his premises.” Rosas v. Buddies Food Store, 518 S.W.2d 534, 535 (Tex. 1975). When the injured person qualifies as an invitee, [ 6] as McCall did, [ 7] then as a general rule the landowner owes a “duty to make safe or warn against any concealed, unreasonably dangerous conditions of which the landowner is, or reasonably should be, aware but the invitee is not.” Austin v. Kroger Tex., L.P., 465 S.W.3d 193, 203 (Tex. 2015); see also United Scaffolding, Inc. v. Levine, 537 S.W.3d 463, 471 (Tex. 2017) (landowner’s duty to an invitee is to “use ordinary care to reduce or eliminate an unreasonable risk of harm created by a premises condition which the owner . . . knows about or in the exercise of ordinary care should know about” (citation omitted)). In line with that rule, the duty does not extend to warning the invitee of hazards that are open and obvious. Austin, 465 S.W.3d at 204.

Notwithstanding the general rule regarding the duty a premises owner owes to invitees, we have approached the scope of the duty differently in some circumstances. For example, we have held that a premises owner generally has no duty to protect invitees from the criminal acts of third parties on the owner’s property, but we recognize an exception “when the owner knows or has reason to know of a risk of harm to invitees that is unreasonable and foreseeable.” Del LagoPartners, Inc. v. Smith, 307 S.W.3d 762, 767 (Tex. 2010); see also Austin, 465 S.W.3d at 206 (characterizing the duty recognized in Del Lago as an exception to the general rule that a landowner owes no duty to warn an invitee with respect to unreasonably dangerous conditions that are obvious or known to the invitee). Pertinent to this case, we have also recognized that, with certain exceptions, a premises owner generally owes no duty to protect invitees from wild animals on the owner’s property. Union Pac. R.R. Co. v. Nami, 498 S.W.3d 890, 896-97 (Tex. 2016). Under this longstanding doctrine of ferae naturae, such a duty does not exist “unless the landowner actually reduced indigenous wild animals to [his] possession or control,” “introduced nonindigenous animals into the area,” or affirmatively “attract[ed] the animals to the property.” Id. at 897 (citations omitted); see also Nicholson v. Smith, 986 S.W.2d 54, 63 (Tex. App.-San Antonio 1999, no pet.).

The reasoning underlying the doctrine is that wild animals “exist throughout nature” and are “generally not predictable or controllable.” Nami, 498 S.W.3d at 897 (quoting 4 Am Jur. 2d, Animals § 62 (2007)).[ 8] In turn, the mere fact that an indigenous wild animal has crossed a landowner’s property line does not make the landowner better able to protect an invitee than the invitee is to protect himself. Id.; see also Nicholson, 986 S.W.2d at 63 (“Under ordinary circumstances, Texas landowners do not have a duty to warn their guests about the presence and behavior patterns of every species of indigenous wild animals and plants which pose a potential threat to a person’s safety . . . .”). The risk and foreseeability of injury do not outweigh the severe burden and potential consequences of imposing a general duty on a landowner with respect to “indigenous wild animals in their natural habitat, in the normal course of their existence.” Nicholson, 986 S.W.2d at 62; see also Brantley v. Oak Grove Power Co., No. 10-12-00135-CV, 2012 WL 5974032, at *3 (Tex. App.-Waco Nov. 29, 2012, no pet.) (mem. op.) (holding that a landowner owed no duty to a construction worker who was bitten by a spider at a construction site, in part because the spider was “in its natural habitat in the normal course of its existence” and the employer had engaged in no affirmative or negligent acts to draw spiders to the area).

However, courts applying the ferae naturae doctrine have long recognized an additional exception to the general no-duty rule, holding that a landowner: could be negligent with regard to wild animals found in artificial structures or places where they are not normally found; that is, stores, hotels, apartment houses, or billboards, if the landowner knows or should know of the unreasonable risk of harm posed by an animal on its premises, and cannot expect patrons to realize the danger or guard against it.

Nami, 498 S.W.3d at 897 (citing various treatises); see also Overstreet v. Gibson Prod. Co., 558 S.W.2d 58, 61 (Tex. App.-San Antonio 1977, writ ref’d n.r.e.) (noting that a landowner owes no duty to exercise reasonable care to protect invitees from the acts of wild animals on the property “until he knows or has reason to know that the dangerous acts by wild animals are occurring or about to occur”). Under that exception, a duty akin to the general duty owed to invitees under Texas law-that is, a duty to warn of or make safe from an unreasonably dangerous condition about which the owner knows or reasonably should know but the invitee does not-arises with respect to “wild animals found in artificial structures or places where they are not normally found.” Nami, 498 S.W.3d at 897.

We generally agree with the policies underlying imposing such a duty on landowners with respect to wild animals that pose an unreasonable risk of harm inside artificial structures like homes, stores, hotels, and offices. While landowners cannot be held to account for every animal that finds its way inside, particularly small animals like insects and spiders that may easily enter and escape detection, we also do not expect invitees as a general matter to exercise any particular vigilance with respect to wild animals when inside.[ 9] Thus, when a wild animal enters such a structure, and the owner knows or has reason to know about the animal’s presence and the unreasonable risk of harm presented thereby but the invitee does not, it is reasonable to expect the owner to take steps to alleviate the danger or at least warn the invitee of it. See Overstreet, 558 S.W.2d at 61, 63 (holding that a grocery store owner was not liable to a patron who was bitten by a rattlesnake inside the store where nothing in the record suggested that the owner “knew, or had reason to know from past experience, that there was a likelihood that snakes presented a danger to patrons”).[ 10]

Hillis argues that this exception amounts to a “new duty” that places an untenable burden on landowners. We disagree. First, it comports with the general premises-liability duty imposed on landowners with respect to invitees as well as the consistently recognized caveat to the ferae naturae doctrine. Nami, 498 S.W.3d at 897; see also Nicholson, 986 S.W.2d at 62; Overstreet, 558 S.W.2d at 61. Second, the fact that the duty hinges on the owner’s knowledge or reason to know of an unreasonable risk of harm is significant. Unfortunately, many insects and spiders are commonly found indoors. The ever-present possibility that an insect or spider bite may occur indoors does not amount to an unreasonable risk of harm imposing a duty on property owners to guard against or warn of this fact of life. To that end, knowledge of the presence of a harmless indigenous insect or spider does not in and of itself amount to a reason to know of the presence of the kinds of insects or spiders that present a danger to invitees. On the other hand, a property owner who knows or should know of an unreasonable risk that dangerous indoor pests will bite invitees in his particular building has a duty to alleviate the danger or warn of it if the invitees neither know nor should know of the heightened risk. This strikes an appropriate balance between protecting invitees and ensuring that the burden placed on landowners is not unduly onerous.

Having outlined the parameters of the pertinent duty, we turn to its application to the facts of this case.

C. Analysis Viewing the evidence in the light most favorable to McCall, the pertinent facts are as follows: • Hillis’s property is in Fredericksburg, in the Texas Hill Country. • Hillis rented a cabin on the property to McCall and used a residence on the property as a B&B, mainly for weekend rentals. • Hillis conducted pest control in the B&B on an as-needed basis by instructing the housekeeper to set off bug bombs if she saw pests while preparing the B&B for guests. • McCall, an invitee, was bitten by a brown recluse spider inside the B&B while checking under the kitchen sink for a leak. • Brown recluse spiders are indigenous to Texas. • Hillis had read about brown recluse spiders on the internet and knew that they were indigenous to Texas and thus that they could be on his property. • McCall did not know brown recluse spiders were indigenous to Texas. • McCall had seen spiders on several occasions in both the cabin and the B&B. When he saw spiders in the B&B, he would notify Hillis, who passed along the information to the housekeeper who prepared the B&B for guests. • Customer reviews of the B&B had never mentioned insects. • Hillis had no actual knowledge of the presence of brown recluse spiders on his property before McCall was bitten. • McCall had no actual knowledge of the presence of brown recluse spiders on Hillis’s property before McCall was bitten.

On these facts, we hold that Hillis owed McCall no duty as a matter of law, notwithstanding the fact that the injury occurred inside the B&B. McCall’s position is essentially that because Hillis knew spiders had been seen in the B&B, and because he knew brown recluses are found in Texas, he knew or should have known that a dangerous brown recluse spider was in the B&B and thus had a duty to warn McCall.[ 11] We disagree.

First, as noted, knowledge of the general intermittent presence of spiders does not necessarily amount to knowledge of an unreasonable risk of harm, and Hillis had no particular reason to know that brown recluses, or other venomous spiders, were inside the B&B. Although Hillis knew that brown recluses are indigenous to Texas, the record does not show that he had identified or should have identified that the spiders McCall previously reported seeing inside the house presented a danger. Indeed, McCall testified in his deposition that the spiders he had seen in the B&B and reported to Hillis before McCall was bitten were the “[s]ame type of spiders” he had seen in his previous home in Fredericksburg, and nothing in the record indicates that he was referring to brown recluses or to any other type of venomous spider. The record thus conclusively negates a determination that Hillis knew or had reason to know of an unreasonable risk of harm presented by brown recluse spiders inside the B&B.

Further, McCall and Hillis had identical actual knowledge of the presence of spiders on the property: both knew that they had been seen in the B&B periodically, and neither knew of the presence of brown recluses or of other types of venomous spiders.[ 12] According to McCall, Hillis should have warned him that the spiders McCall himself had seen could have been venomous. But it is simply common knowledge that some spiders are venomous and others harmless. We will not impose a duty on a landowner to warn an invitee about something he already knows. See Nami, 498 S.W.3d at 897 (recognizing that imposition of a duty with respect to wild animals inside an artificial structure depends in part on a determination that the invitee cannot reasonably be expected “to realize the danger or guard against it”).

As noted, the existence of a duty is a question of law that depends on the underlying facts. Walker, 924 S.W.2d at 377. Even with respect to wild animals found inside, an owner’s duty to invitees does not extend beyond warning about or making safe from unreasonably dangerous conditions about which the owner knows or has reason to know but the invitee does not. On the record before us, we hold that Hillis negated a duty to McCall as a matter of law.

III. Conclusion

The trial court correctly granted summary judgment for Hillis on McCall’s premises-liability claim. Accordingly, we reverse the court of appeals’ judgment and render judgment that McCall take nothing.

———

Notes:

[ 1] Karen Oringderff, McCall’s common-law wife, was also a tenant. She is not a party to this lawsuit.

[ 2] Hillis disputed this characterization, stating that he typically did not affirmatively request McCall’s assistance with respect to preparing the B&B for guests. Rather, Hillis merely accepted McCall’s offer to help, was “happy that he was willing to do it, and . . . appreciated it.” For summary judgment purposes, we will accept McCall’s version of events.

[ 3] McCall was responsible for pest control in the cabin while Hillis remained responsible for pest control in the B&B.

[ 4] According to the court of appeals, “Hillis admitted in his deposition that he knew there was a population of brown recluse spiders on the property.” 562 S.W.2d 98, 106 (Tex. App.-San Antonio 2018). Neither party references deposition testimony to that effect, and our review of the record revealed no such testimony.

[ 5] We balance several factors in determining whether a duty exists, including the risk, foreseeability, and likelihood of injury weighed against the social utility of the landowner’s conduct, the burden of preventing the injury, and the consequences of placing that burden on the landowner. Greater Hous. Transp. Co. v. Phillips, 801 S.W.2d 523, 525 (Tex. 1990).

[ 6] An invitee is “one who enters on another’s land with the owner’s knowledge and for the mutual benefit of both.” Rosas, 518 S.W.2d at 536.

[ 7] McCall alleged in his petition that he qualified as an invitee when he was bitten, and Hillis conceded as much for purposes of his summary judgment motion. We therefore assume without deciding that McCall was an invitee.

[ 8] We recognized in Nami that insects are treated as wild animals. 498 S.W.3d at 896 (citing Restatement (Second) of Torts § 506 cmt. a (Am. Law Inst. 1977)). We see no reason to treat arachnids differently.

[ 9] In light of these considerations, the fact that the injury occurs in or near any type of artificial structure does not necessarily give rise to the exception. For example, in Brantley, the plaintiff was bitten by a spider while “standing on a concrete slab [at a construction site] with a partial structure and no roof.” 2012 WL 5974032, at *3. The court of appeals, noting testimony that “there were spiders everywhere in the field” at the site, held that the spider that bit the plaintiff was in its natural habitat and no duty was owed. Id. While we cannot anticipate how the doctrine would apply with respect to every type of artificial structure imaginable, we can say that we do not view barns and billboards in the same way as structures like houses, hotels, offices, and retail stores in evaluating the duty owed with respect to wild animals.

[ 10] We need not address whether an additional exception exists when a landowner has actual knowledge of an unreasonable risk of harm presented by a wild animal on his property (even while outside) and the patron neither knows nor reasonably should know of the risk.

[ 11] McCall does not contend that Hillis engaged in any affirmative or negligent acts to draw venomous spiders to the property.

[ 12] The court of appeals did not consider the effect of McCall’s awareness of the presence of spiders inside the B&B on whether Hillis owed him a duty, holding that “Hillis did not assert McCall’s knowledge as a basis for summary judgment [and instead] relied exclusively on the doctrine of ferae naturae to negate the element of duty.” 562 S.W.3d at 100 n.1. We disagree with that narrow characterization of Hillis’s summary judgment motion. In challenging the existence of a duty in that motion, Hillis focused principally on the absence of evidence that he had attracted brown recluses to the property; however, he explicitly referenced McCall’s knowledge as supporting a finding that no duty was owed. Hillis then elaborated on the significance of that knowledge in his reply in support of the motion. We will not ignore the relevant evidence of McCall’s knowledge that Hillis expressly brought to the trial court’s attention in his summary judgment motion and reply.

———


Doherty v. Diving Unlimited International, Inc., 484 Mass. 193, 2020 Mass. LEXIS 134, 140 N.E.3d 394, 2020 WL 949922

Doherty v. Diving Unlimited International, Inc., 484 Mass. 193, 2020 Mass. LEXIS 134, 140 N.E.3d 394, 2020 WL 949922

Margaret C. Doherty, personal representative, [ 1]

v.

Diving Unlimited International, Inc., & others.[ 2]

No. SJC-12707

Supreme Judicial Court of Massachusetts, Essex

February 27, 2020

Heard: October 4, 2019.

Civil action commenced in the Superior Court Department on May 5, 2015. The case was heard by Janice W. Howe, J., on a motion for summary judgment The Supreme Judicial Court on its own initiative transferred the case from the Appeals Court.

Neil Rossman for the plaintiff.

Martin K. DeMagistris for John Golbranson.

Jennifer A. Creedon, for Massachusetts Defense Lawyers Association, amicus curiae, submitted a brief.

John J. Barter, for Professional Liability Foundation, Ltd., amicus curiae, submitted a brief.

Present: Gants, C.J., Lenk, Gaziano, Lowy, Budd, Cypher, & Kafker, JJ.

LOWY, J.

Following a fatal scuba diving accident involving the plaintiff’s decedent in May 2014, the plaintiff, as personal representative of the decedent’s estate, brought a wrongful death action under G. L. c. 229, § 2 against the manufacturer of the “dry suit” that the decedent used on his dive, the individual who supplied the decedent his diving equipment and outfitted him, the company that owned and rented that equipment, and the dive leader, John Golbranson. After the plaintiff had settled with all defendants other than Golbranson, a judge of the Superior Court granted summary judgment in his favor based on the release from liability and covenant not to sue that the decedent signed just before his death. The plaintiff appealed, claiming that the statutory beneficiaries have an independent right to a wrongful death action that the decedent could not have waived. We transferred this case from the Appeals Court on our own motion.

As explained in our opinion in GGNSC Admin. Servs., LLCv.Schrader, 484 Mass., (2020) (GGNSC), released today, we conclude that the beneficiaries of a wrongful death action have rights that are derivative of, rather than independent from, any claim the decedent could have brought for the injuries causing his death. Therefore, the waivers the decedent signed control all claims for his wrongful death. Accordingly, we affirm the grant of summary judgment.

1. Background.

a. Facts.

“In reviewing a motion for summary judgment, we view the evidence in the record in the light most favorable to the nonmoving party.” Meyerv.Veolia Energy N. Am., 482 Mass. 208, 209 (2019). Here, where the plaintiff does not contest on appeal the judge’s determination that the waivers were valid, or that Golbranson was acting as an agent for Diving Unlimited International, Inc. (DUI), the manufacturer of the dry suit that the decedent wore on his dive, we present only the essential facts.

The decedent, who was a certified open-water scuba diver, drowned while participating in a promotional diving equipment event that was sponsored by DUI and held in Gloucester. At this event, where local divers tested DUI’s dry suit, Golbranson was the leader of the dive, overseeing some of the participants.

Prior to participating in the event, the decedent signed two documents. The first was a release from liability which had several subsections that were set forth in all capital letters and underlined, including “effect of agreement,” “assumption of risk,” “full release,” “covenant not to sue,” “indemnity agreement,” and “arbitration.” In capital letters under the subsection titled “effect of agreement,” it said, “Diver gives up valuable rights, including the right to sue for injuries or death.” It also told the decedent to read the agreement carefully and not to sign it “unless or until you understand.” The subsection titled “full release” stated that the decedent “fully release[d] DUI from any liability whatsoever resulting from diving or associated activities,” and the subsection titled “covenant not to sue” stated that the decedent agreed “not to sue DUI for personal injury arising from scuba diving or its associated activities,” and that the decedent’s “heirs or executors may not sue DUI for death arising from scuba diving or its associated activities.”

The decedent also signed an equipment rental agreement which stated, “This agreement is a release of the [decedent’s] rights to sue for injuries or death resulting from the rental and/or use of this equipment. The [decedent] expressly assumes all risks of skin and/or scuba diving related in any way to the rental and/or use of this equipment.”

Golbranson led a group comprised of the decedent and two other divers. During their dive, one of the divers experienced a depleted air supply. Golbranson signaled for the group to surface and to swim back to shore on the surface. Only the decedent resisted, emphasizing his desire to keep diving, thus separating himself from the group that was returning to shore. Shortly thereafter, the decedent surfaced and called for help. The decedent died at the hospital from “scuba drowning after unequal weight belt distribution.”

b. Procedural history.

In her capacity as the decedent’s personal representative, the plaintiff sued for the benefit of the decedent’s statutory beneficiaries. The second amended complaint alleged two counts against Golbranson resulting from his negligence: (1) conscious pain and suffering; and (2) the decedent’s wrongful death under G. L. c. 229, § 2. Golbranson moved for summary judgment, claiming that the release from liability and the equipment rental agreement (collectively waivers) protected him, as an agent of DUI, against any negligence suit or liability. The plaintiff opposed summary judgment, asserting that the waivers did not apply to Golbranson when he was negligent in his individual capacity and that neither waiver would prevent the decedent’s statutory beneficiaries from recovering damages for wrongful death.

The judge determined, and the plaintiff does not contest on appeal, that Golbranson acted as DUI’s agent during the dive. The judge also concluded that the two waivers that the decedent signed prohibited the plaintiff from bringing an action for negligence against Golbranson.[ 3]

As to the wrongful death claim, the judge concluded that G. L. c. 229, § 2, created a right to recovery that is derivative of the decedent’s own cause of action.[ 4] In addition, she concluded that the agreements were valid and, thus, precluded any recovery on behalf of the decedent’s statutory beneficiaries, who had no rights independent of the decedent’s cause of action, which was waived.

2. Discussion.

We review “a grant of summary judgment de novo … to determine whether . . . all material facts have been established and the moving party is entitled to judgment as a matter of law” (quotation and citation omitted). Boston Globe Media Partners, LLCv.Pep’t of Pub. Health, 482 Mass. 427, 431 (2019) .

Given that the plaintiff does not contest the judge’s determinations that the release from liability and the equipment rental agreement are valid and that those waivers covered Golbranson as an agent of PUI, the only issue before the court is whether the statutory beneficiaries in the action for wrongful death have a right to recover damages that is independent of the decedent’s own cause of action. See G. L. c. 229, §§ 1, 2. In GGNSC, 484 Mass. at, we have resolved that issue: our wrongful death statute creates a derivative right of recovery for the statutory beneficiaries listed in G. L. c. 229, § 1. Therefore, we hold that here, the valid waivers signed by the decedent preclude the plaintiff, as his “executor or personal representative,” from bringing a lawsuit under G. L. c. 229, § 2, for the benefit of the statutory beneficiaries.[ 5]

3. Conclusion.

We affirm the judgment of the Superior Court granting Golbranson’s motion for summary judgment.

So ordered.

———

Notes:

[ 1] Of the estate of Gregg C. O’Brien.

[ 2] Nicholas Fazah, EC Divers, Inc., and John Golbranson.

[ 3] As to the conscious pain and suffering claim, the judge found that the waivers negated the plaintiff’s ability to recover, because the decedent clearly had the authority to waive those rights.

[ 4] In her analysis, the judge relied on a decision by a judge of the United States Pistrict Court for the Pistrict of Massachusetts that underlay our opinion in GGNSC. See GGNSC, 484 Mass. at

[ 5] Golbranson devotes much time arguing that the release from liability and the equipment rental agreement negate any duty he may have had to the decedent. We note that the release from liability was limited to “claims concern[ing] ordinary negligence,” Sharonv.Newton, 437 Mass. 99, 110 n.l2 (2002), and Golbranson does not contend that the waivers would have applied to other forms of malfeasance, such as gross negligence, or willful, wanton, or reckless acts. We have “consistently recognized that there is a certain core duty — a certain irreducible minimum duty of care, owed to all persons — that as a matter of public policy cannot be abrogated: that is, the duty not to intentionally or recklessly cause harm to others.” Raffertyv.Merck & Co., 479 Mass. 141, 155 (2018). Specifically, “‘while a party may contract against liability for harm caused by its negligence, it may not do so with respect to its gross negligence’ or, for that matter, its reckless or intentional conduct.” I_d., quoting Maryland Cas. Co. v. NS_TAR Elec. Co., 471 Mass. 416, 422 (2015). Nonetheless, only the decedent’s executor or administrator has the right to bring a cause of action for gross negligence, not the statutory beneficiaries.

———


Why would you create more than one Limited Liability Company for your business?

There are dozens of reasons, read on.

There are dozens of reasons why you would create multiple limited liability companies for your business.

  1. A Limited Liability Company, (LLC), is easy and inexpensive to set up and operate.
  2. Each LLC protects the assets in it.
  3. Each LLC protects the assets of the other LLC’s
  4. Each LLC protects the assets of the parent LLC.
  5. Each LLC makes it harder to sue the parent and other LLC’s
  6. Like not having all of your eggs in one basket, separate LLC’s provide better protection for all of your assets.
  7. If you lose a lawsuit above your insurance limits, only the LLC that was sued is as risk not your other assets, locations or companies.
  8. Each LLC can be taxed a different way.
  9. You can take money out of each LLC a different way.
  10. Setting up different LLC’s for each state you may operate in provides more options for the LLC in that state.
  11. Setting up a different LLC for each state you operate in provides more tax advantages for the LLC in that state.
  12. Overall, you create more barriers to losing your business because of creditors.

And there are many more reasons beyond these twelve.

As an example let’s look at a small outfitter or climbing wall with the following assets:

  • Two locations (leased)
  • Equipment share by both operations
  • Equipment at each operation

You would set up the LLC’s this way probably.


Each separate business operation or real estate address should have it’s own LLC. Any equipment that is used by both LLC’s can be in a separate LLC that is rented to the business LLC’s when needed. The equipment rental company can also be used to buy all equipment and products needed by the operations to get better deals. Any management, operations, etc., are done out of the Parent LLC that owns the other three LLCs. If either businesses gets sued, the assets of the other LLC, the joint Equipment and the management assets are protected from that lawsuit.

If you operate a business that is based on permits you may want a separate LLC for each permit you own.

If you owned land under your businesses, you would want those in separate LLC’s. You can lose the business and start the next day because you still own a lot of the equipment and the land.

There are some negative issues with this type of set up.

The relationship between each LLC and the other LLC’s must be in writing with a proper agreement and proper accounting. That means there needs to be a management contract between the parent company and the different LLCs. There needs to be a rental agreement between the equipment company and the operating LLCs.


If you are an outfitter with this set up, and you transport your guests in vehicles you would want to add a transportation LLC. Your greatest liability is in moving guests to the activity location. Always keep your liabilities separate from your assets.

In this situation, you would need a lease agreement between the Operations and the Real Estate LLCs.


If you start to grow to the point that this gets unwieldy, you can consolidate and combine assets.


Your situation and growth are going to be different and will vary on how well you, and your CPA can work together. Other than increased accounting costs, you will achieve significant protection from any possible lawsuit by using multiple LLCs with little additional work.

If you have a good CPA, you can also have the LLC’s taxed differently to provide different benefits or income to you. You can take money out of some LLC’s as income, some as rent, others as an independent contractor based on how you initially set them up and how they are recognized by the IRS.

One final idea is you may have assets that are so valuable and small that you do not want to keep them in any LLC that could get sued. An example would be a federal permit or concession contract. You could keep those in your own name or in a different LLC that does nothing but leases those permits to your LLC’s. That way, no matter what, you can start again because you have a valid permit.

The final issue might be if you decided to take your company public someday. Contrary to popular belief, incorporating in Delaware is NOT the place to set up your business. Incorporating in Delaware until you have decided to go public has many negatives.

  • People think you are a bigger company, there fore they will sue for more money.
  • The cost of incorporating in Delaware is several times more expensive than most other states.
  • The yearly costs of maintain a corporation in Delaware is expensive.
  • You have to hire a statutory agent in Delaware who adds to your cost.
  • You have to follow Delaware law in running your company or corporation.
  • Your LLC or Corporation will have to follow Delaware laws so you may have to hire an additional attorney.

What if you want to go public someday? Then at that time, create a Delaware corporation. Have that corporation become the owner of all the other LLCs you have created. Now you are a Delaware corporation ready to go public and have delayed the cost of creating a Delaware corporation until you can afford it.


Save your money when you are starting out, start your LLC in the state where you are going to operate so you understand the state laws your LLC will be operating under.

What do you think? Leave a comment.

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