Rental agreement release was written well enough it barred claims for injuries on the mountain at Jackson Hole Mountain Resort in Wyoming

The plaintiff became a quadriplegic after her fall skiing which almost guaranty’s litigation because of the amount of money for past and future medical bills as well as lost wages.

Cunningham v. Jackson Hole Mountain Resort Corporation, 2016 U.S. App. LEXIS 22608

State: Wyoming, United States Court of Appeals for the Tenth Circuit

Plaintiff: Lindy Grace Cunningham; Michael Chad Cunningham

Defendant: Jackson Hole Mountain Resort Corporation

Plaintiff Claims: negligence, premises liability, negligent training and supervision, and loss of consortium

Defendant Defenses: Release

Holding: for the Defendant Ski Area

Year: 2016

This is a simple case, and fairly simple analysis by the Tenth Circuit Court of Appeals. The plaintiff’s rented skis from a ski shop owned by the defendant ski area. The rental agreement included a release. The release specifically stated it covered negligence of the shop and the ski area.

During a January 2013 vacation to Teton Village, Wyoming, Lindy Cunningham rented ski equipment from a JHMR shop located at the base of the resort’s ski area. During the rental process, Mrs. Cunningham signed a rental agreement,….

The plaintiff was injured when she fell skiing and slid into a trail sign. The collision rendered her a quadriplegic.

On January 14, while skiing at JHMR, Mr. Cunningham followed behind Mrs. Cunningham, filming her on his helmet-mounted GoPro camera. Footage from the camera shows Mrs. Cunningham fall toward the right side of the trail, slide, and then collide with a trail sign. The accident severely injured Mrs. Cunningham’s spine, rendering her a quadriplegic.

The plaintiff’s sued for negligence, premise’s liability, negligent training and supervision and loss of consortium. The district court granted a motion for summary judgment filed by the defendant based on the release. The plaintiff appealed the decision to the Tenth Circuit Court of Appeals.

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

The court first looked at the law to be applied to a diversity case. A diversity case is a case in federal court based on the parties living or residing in two different states. Federal court has limited jurisdiction. A federal court can only hear cases involving federal law or federal agencies or a case between two parties from different states.

When a diversity case arises, the law that is applied to the case is the law of the state where the lawsuit was filed. If the state law where the lawsuit was filed does not have case law on the facts as argued, then other state law and federal decisions are used to support the decision.

Because this is a diversity case, we apply the substantive law of Wyoming, the forum state.” Specifically, we “must ascertain and apply state law to reach the result the Wyoming Supreme Court would reach if faced with the same question.” If “no state cases exist on a point, we turn to other state court decisions, federal decisions, and the general weight and trend of authority.”

The court then reviewed the four –part test set out by the Wyoming Supreme Court to determine the validity of a release.

In reaching its determination a court considers . . . (1) whether a duty to the public exists; (2) the nature of the service performed; (3) whether the contract was fairly entered into; and (4) whether the intention of the parties is expressed in clear and unambiguous language. Only exculpatory agreements meeting these requirements are enforceable.

If the release passes all four parts of the test, the release is deemed valid. In looking at the first two factors the court stated that the Wyoming Supreme court had essentially combined them.

In application, the Wyoming Supreme Court has essentially combined the first two factors, stating that “[a] duty to the public exists if the nature of the business or service affects the public interest and the service performed is considered an essential service.”

The plaintiff argued that a public duty did exist because the ski area was located on federal land and was subject to federal regulations. The plaintiff also argued the release was contrary to public policy as set forth in the Wyoming Recreation Safety Act and that it unlawfully barred claims for essential services.

On appeal, the Cunninghams make arguments related to the first three factors by asserting (1) JHMR owes a duty to the public because it operates on United States Forest Service land pursuant to a special use permit and is subject to federal regulation, (2) the release is contrary to public policy as expressed in the Wyoming Recreation Safety Act, and (3) the release unlawfully bars negligence actions arising from essential services such as the provision of emergency medical services at the JHMR clinic.

The court first took note of the fact that none of the arguments raised by the plaintiff had been raised at the trial court level. Consequently, there was no requirement that the appellate court review those issues. Consequently, the court did not look at these issues.

The fourth issue raised by the plaintiffs the court did review. “…whether the release agreement evidences the parties’ intent to abrogate negligence liability in clear and unambiguous language….” Reviewing this argument required close scrutiny of the release and traditional contract principles of looking at the document as a hole. That review also requires looking at the nature of the service provided and the purpose of the release.

This language broadly bars all claims related to Mrs. Cunningham’s use of facilities and services at JHMR. Although the Cunninghams argue their negligence claims should not be barred by this pro-vision, the Wyoming Supreme Court has determined on multiple occasions that exculpatory clauses “clearly and unambiguously” express the parties’ intent to release negligence liability even where the clauses do not mention negligence specifically. We conclude the Wyoming Supreme Court would reach the same result here, where the exculpatory clause expressly emphasizes that it “INCLUDE[S] NEGLIGENCE.”

The court found the language of the release met the requirements of Wyoming law. However, the court did not stop there. The plaintiff also argued the parties mutually misunderstood the release, both believing it only covered the liability issues of renting equipment.

This was broken down into four sub-issues. The release contained hidden exculpatory language, there was an internal conflict in the release; the release was overly broad and there was a mutual mistake. Again, the court shot down these arguments.

The Cunninghams first assert the exculpatory clause was too inconspicuous to be “clear and unambiguous.” We have found no case imposing a “conspicuousness” requirement to exculpatory clauses under Wyoming law. But even assuming enforcement of a sufficiently inconspicuous clause could offend public policy, the release here is not inconspicuous.

While the print is necessarily small, it is readable even in the further-shrunken form presented in the record on appeal. And as the district court observed, “there is nothing to suggest that [Mrs.] Cunningham requested larger print or indicated that she could not read the release.” For these reasons, even if conspicuousness is a requirement under Wyoming law, the release here was conspicuous.

The internal conflict argument was the release was both consistent and inconsistent with the Wyoming Recreational Safety Act. Again, the court found no inconsistency.

The WRSA does not exempt or identify specific inherent risks; it generally defines “inherent risks” as “those dangers or conditions which are characteristic of, intrinsic to, or an integral part of any sport or recreational opportunity.”

The final argument was the issue that the release was overly broad.

First, the Cunninghams argue the release is ambiguous because “it relates to all ‘activities’ and all ‘facilities’ and all ‘premises’ on ‘each and every day’ against a wide array of entities and individuals.” Because the exculpatory clause includes broad language covering all facilities and activities at the resort at any time of year, the Cunninghams conclude “[t]here is no way possible for a person to understand what this clause actually encompasses.”

The court found the release was no different than other releases previously reviewed by the Wyoming Supreme Court.

The release explicitly limits JHMR’s liability for “any and all claims, demands, causes of action, liabilities, actions . . . arising directly or indirectly out of my use of the facilities, ski area or ski lifts at JHMR.” Although this language is broad, there is nothing ambiguous about it. Indeed, the Wyoming Supreme Court rejected an analogous argument when it held that a release from liability for “legal claims or legal liability of any kind whether foreseen or unforeseen” meant precisely what it said and thus clearly barred a plaintiff’s negligence claims.

The mutual mistake argument means neither party thought the release was applied to anything other than renting of ski equipment. This argument was not raised at the trial court level so it was moot at the appellate court.

Finally, the court looked at the argument that the actions of the defendant were willful and wanton. Although not stated, I am assuming this argument was meant to void the release for covering more than simple negligence.

The court first defined willful and wanton under Wyoming Law.

Willful and wanton misconduct is the intentional doing of an act, or an intentional failure to do an act, in reckless disregard of the consequences and under circumstances and conditions that a reasonable person would know, or have reason to know that such conduct would, in a high degree of probability, result in harm to another.

Under Wyoming law willful and want conduct is more aggravated than gross negligence and to prove willful and wanton conduct, there must be a demonstration of a state of mind approaching an intent to do harm.

The court found nothing in the pleadings or any evidence which showed evidence of actions that rose to this level.

Here, there is no evidence from which a reasonable jury could conclude JHMR acted willfully or wantonly when it placed the trail sign with which Mrs. Cunningham collided. It is undisputed that the sign has been in the same spot in substantially the same form for over thirty years. Yet there was no evidence presented that anyone other than Mrs. Cunningham has collided with the sign in that time. Although the Cunninghams’ experts criticized JHMR’s choices in placing and constructing the sign, as the district court concluded, “[a]t best, the alleged failings related to the placement and construction of the sign are negligent, not willful and wanton behavior.”

The Tenth Circuit Court of Appeals upheld the motion for summary judgment and dismissal of the case by the district court.

So Now What?

This case was won by the ski area because the risk manager at the ski area looked outside his or her office. When a ski area, or other resort operations, owns rental, retail and lodging, there are several different places a release can be signed. Making sure that the release covers all the activities offered by the resort can make a big difference as in this case.

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

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Author: Outdoor Recreation Insurance, Risk Management and Law

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