Two releases, same plaintiff’s, same defendants releases cancel each other out and defendant is left with a lawsuit

The health club had a release in its membership agreement and a separate release. The appellate court said the difference in the language created an ambiguity which canceled both releases.

Lotz et al., v. The Claremont Club et al., 2013 Cal. App. Unpub. LEXIS 5748

State: California, Court of Appeal of California, Second Appellate District, Division Two

Plaintiff: Nicholas Lotz (Nicholas) by and through his guardian ad litem Deborah Lotz (Deborah) and Deborah individually (mother)

Defendant: The Claremont Club (Club) and Adam Qasem

Plaintiff Claims: negligence and gross negligence

Defendant Defenses: execution of a release and express assumption of risk, and according to the assumption of risk doctrine. actions did not rise to the level of gross negligence.

Holding: for the plaintiff

Year: 2013

This case concerns dodgeball. A great game when played by kids, a pretty nasty game when one of the players is 18 and all the other players are ten.

The plaintiff was in the health club’s day-care program. While in the program an employee who was not trained in working in the day-care program, at the suggestion of another kid, allowed the kids to play dodgeball. The game was held in a racquetball court and played with the kids. One of employee’s throws a ball hitting the plaintiff smashing his face into the wall where he suffered injuries.

The court continuously pointed out several facts, to the point of becoming monotonous:

·        No one told the mother that the kids would be playing dodgeball

·        Of course if told, the mother post injury stated, she would not have allowed her son to play dodgeball

·        The defendant who through the fateful ball had never had any training in working in the childcare area called the InZone.

·        The defendant had never worked in the childcare.  

·        The club’s written policies stated only racquetball, handball, squash and wall ball could be played in the racquetball court.

·        The defendant violated the Club’s then unwritten policy that supervisors not participate in dodgeball games with the children.

The parents of the plaintiff signed two forms when they enrolled at the club. The first was the membership agreement. The membership agreement had boxes to check for activities that you might be interested in. Dodgeball was not listed as a possible activity. The second agreement was a release. Both documents contained exculpatory language.

The trial court dismissed the plaintiff’s claims based on the release(s) and the plaintiff appealed.

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

The court first reviewed the requirements, in its view, for a valid release under California law.

California courts require a high degree of clarity and specificity in a [r]elease in order to find that it relieves a party from liability for its own negligence.” Thus, “to be effective, an agreement which purports to release, indemnify or exculpate the party who prepared it from liability for that party’s own negligence or tortious conduct must be clear, explicit and comprehensible in each of its essential details. Such an agreement, read as a whole, must clearly notify the prospective releaser or indemnitor of the effect of signing the agreement.”

But “a release need not achieve perfection” to be effective. A release is sufficient if it “‘constitutes a clear and unequivocal waiver with specific reference to a defendant’s negligence

The court found the releases were not “crystal clear.” The court then looked at the issue of ambiguity in contracts.

‘An ambiguity exists when a party can identify an alternative, semantically reasonable, candidate of meaning of a writing. An ambiguity can be patent, arising from the face of the writing, or latent, based on extrinsic evidence.’ The circumstances under which a release is executed can give rise to an ambiguity that is not apparent on the face of the release. If an ambiguity as to the scope of the release exists, it should normally be construed against the drafter.

The defendant club had argued that the release was the valid release for the purposes of the discussion. (How you designate one contract over another is beyond me. The “Parol Evidence” rule specifically prohibits this.) However, the plaintiff argued the membership agreement contained the operative language because it stated:

This Agreement constitutes my sole and only agreement respecting release, waiver of liability, assumption of the risk, and indemnity concerning my involvement in The Claremont Club. Any prior written or oral agreements, promises, representations concerning the subject matter contained in this Agreement and not expressly set forth in this Agreement have no force or effect.

Because this created an ambiguity in the language of the contracts and created a question about which contract superseded the other, there was a triable issue of fact that could not be decided by a motion for summary judgment.

The court then looked at the language in the release and stated:

Beyond the issue of whether the Waiver or the Membership Agreement contained the operative release, appellants demonstrated a triable issue of fact as to whether the language of either document contemplated the type of injuries suffered by Nicholas.

Because the release, the rules, the unwritten policies and the parents had never been informed that their son might play dodgeball the court held the language in the release(s) did not cover the injury. The court stated that playing dodgeball was an undisclosed risk which was not covered by the release.

The court then went through every way, the defendant club or the defendant had violated their own policies.

·        Playing dodgeball in the racquetball court

·        On one supervising the game (a player is not a supervisor?)

The court also found that the release only applied to the child care, and the injury occurred in the racquetball court that was outside of the childcare area. Therefore, there was a triable issue of fact of whether the release protected the defendants from lawsuits of this type.

The court concluded this section of its opinion by stating the evidence:

…offered on summary judgment demonstrated that the Membership Agreement and/or the Waiver did not clearly and explicitly release the Club from liability for Nicholas’s injuries. In view of the ambiguities concerning whether the Membership Agreement or the Waiver applied, whether the language in either document was sufficient to cover the Club’s conduct and whether any release violated public policy, a trier of fact could find that the Club was not released from liability.

Having found at least four reasons why neither release was valid or covered the risks that created the injury the court reviewed the gross negligence claim. The trial court found the injury was an inherent risk of the game and assumption of risk barred the claim and also the gross negligence claim. An injury from an inherent risk could not be gross negligence.

The court defined gross negligence under California law as this court interpreted the law.

California courts define “‘gross negligence'” “as either a ‘”‘want of even scant care'”‘ or ‘”‘an extreme departure from the ordinary standard of conduct.'”‘ Gross negligence “connotes such a lack of care as may be presumed to indicate a passive and indifferent attitude toward results.” In contrast to willful misconduct, gross negligence does not require an intent to do harm or to act with absolute disregard of the consequences.

Backtracking to the issue of playing dodgeball on a racquetball court the court found the club had a policy that prohibited dodgeball on the racquetball court. However, the court found the club knew that dodgeball had been played on the racquetball court and found: “Consistent with the Club’s failure to acknowledge dodgeball as an ongoing activity, it failed to promulgate rules to ensure the game was played safely.” The club also had a rule which stated that supervisors were not to play dodgeball with children, had no training in child care and used an inflated rubber ball for the game as he played it aggressively gave rise to the possibility the actions of the club were grossly negligent.

The last defense the court eliminated was whether assumption of the risk was a defense to the claims of the plaintiff. The court found that because the 18-year-old supervisor played the game, causing the injury, the risk could not be assumed because the defendant had increased the risk over those inherent in the sport. You cannot assume increased risks caused by the defendant who is arguing the defense.

Thus, even though ‘defendants generally have no legal duty to eliminate (or protect a plaintiff against) risks inherent in the sport itself,’ they may not increase the likelihood of injury above that which is inherent.

The court then stated all the ways the two defendants had increased the risk to the plaintiff.

But appellants’ evidence tended to show that the Club and Qasem increased that risk in a number of ways, including by playing on an enclosed racquetball court which was neither intended nor permitted to be used for dodgeball; by selecting rubber balls for the game; by allowing an adult untrained in childcare not only to participate in the game with the children but also to abdicate any supervisory role over them during the game; and by enabling that adult to play aggressively with the children.

The appellate court reversed the trial court and sent the matter back for trial.

So Now What?

This court worked hard to make sure the case was sent back for trial. However, the two poorly written releases gave the court the opportunity to open the door and kick the case back.

Secondly, the defendant club had created rules which it violated. It also admitted to or had rules, which were unwritten that it violated.  

It is bad enough when some third party creates rules that you are forced to live by. It is just dumb to write your own rules and then violated them. It is the classic you have no one to blame but yourself.

If you have rules, and policies provide leeway to allow your staff to think, nothing in life is ever set in stone. Make sure the rules do not conflict with each other and make sure everyone knows the rules and follows them.

At the same time, remember most people can’t memorize a book, even a pamphlet. Your rules need to be written to cover your program and in a way, your staff can remember them and put them to use. Either that or issue every staff person a tablet and make sure they never answer a question without first checking to see if they are violating a rule.

Finally, have one well written release and do not try to write release language into every document, they may cancel each other out leaving you with no defenses.

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