Good Release stops lawsuit against Michigan bicycle renter based on marginal acts of bicycle renter

Duncan, et al., v. Ryba Company, 1999 U.S. Dist. LEXIS 12424

However other states would have found problems with the issues in this case.

A couple was on Mackinac Island Michigan and decided to rent bikes. The plaintiff noticed the seat, and pedals were loose and before leaving asked the shop to fix both. She was assured that both had been fixed by the shop before leaving on their ride.

After a short distance, the plaintiff knew the seat had not been fixed and she and her husband decided to take the bikes back and rent them from somewhere else. As she turned the bike around to go back, she lost control, the brakes failed, and she crashed in front of an oncoming horse drawn carriage. The horse kicked the plaintiff causing her injuries.

The plaintiff and her husband sued the bicycle rental shop. The lower court granted the defendant’s motion for summary judgment, and the case was appealed.

So?

The court first looked at release law in Michigan. To be valid a release under Michigan’s law must be fairly and knowingly made. A release is not valid under Michigan’s law if:

(1) the releasor was dazed, in shock, or under the influence of drugs,
(2) the nature of the instrument was misrepresented, or
(3) there was other fraudulent or overreaching conduct.

The plaintiff first claimed the release was not valid because they were not informed the slips of paper, in other places called deposit slips, where releases. The plaintiff also claimed she did not have her reading glasses. The court interpreted this argument as the plaintiff claimed she did not read the release, and therefore, the release should not be valid. However, the court quickly dismissed this argument with the statement “It is well settled under Michigan’s law that a party’s failure to read release language before signing the document does not invalidate a proper release.” The court also found that for a release to fail because it was not identified as such to the plaintiff would also not work as a defense. However, the court stated the law “the law [does not] require an explanation that the document is a release or waiver of rights.”

For the release to fail, misrepresentation or fraud must be used to induce the plaintiff to sign the release. A simple misrepresentation or fail to explain the release will not void the release. A misrepresentation must be made with the purpose and intent to mislead or deceive the signor. There must be the fraudulent intent to mislead the signor.

The plaintiff then claimed an employee of the defendant said the releases were for the deposit on the bikes. However, the court struck down this argument in two ways.

First the court pointed out if the plaintiff would have read the document, she would have realized it was a release. The release was three sentences, each, which stated the release of liability. The second point was the plaintiffs could not point to the actions of the defendant’s employee as an intentional with the intent to deceive or induce the signature.

The plaintiff argued an amended complaint should be allowed to be filed that alleged the acts of the defendant were grossly negligent. However, the court denied the motion to amend the complaint and thus the gross negligence claim because the plaintiff could not point to anything in the facts that rose to the level of gross negligence.

Gross Negligence under Michigan’s law is defined as “conduct so reckless as to demonstrate a substantial lack of concern for whether an injury results.”

The court also pointed out that even though the bicycle seat was not fixed, the plaintiff continued to ride the bicycle rather than walk the bicycle back to the shop. The acts of the defendant, if the plaintiff continued to ride the bike, could not have been so bad to be grossly negligent.

“Simply labeling negligence allegations as conduct amounting to gross negligence is not enough to satisfy plaintiffs’ burden in this case.”

So Now What?

Although the defendant won this lawsuit, in other states this case might have gone differently.
As I have repeatedly said, make sure your release is clear and evident on its face. Your release should state it is a release or the signor is giving up future legal rights. Don’t hide your release from your clients.
There are also the ethical issues of hiding a release inside documents or identified as something else.

The second issue is telling the plaintiff the bike was fixed when it wasn’t or not fixed correctly. In many jurisdictions, this could have given rise to a misrepresentation and fraud claim that may have won in many jurisdictions.

As much as courts follow the law, the ethics of the situation can always come into play with the judge and will definitely come to play with the jury. The defendant may have the law on their side but can lose because the jury sees what the defendant did as just “not right.”

Treat your customers honestly and you will increase your chances dramatically in staying out of court.

What do you think? Leave a comment.

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