Lhotka v. Geographic Expeditions, Inc., 181 Cal. App. 4th 816; 104 Cal. Rptr. 3d 844; 2010 Cal. App. LEXIS 114

Posted: December 13, 2010 | Author: Recreation Law | Filed under: California, Mountaineering, Release (pre-injury contract not to sue) | Tags: Kilimanjaro, Mount Kilimanjaro, Mountain Climbing, Mountaineering, Mt Kilimanjaro | Leave a comment

Lhotka v. Geographic Expeditions, Inc., 181 Cal. App. 4th 816; 104 Cal. Rptr. 3d 844; 2010 Cal. App. LEXIS 114
ELENA LHOTKA, Individually and as Executor, etc., et al., Plaintiffs and Respondents, v. GEOGRAPHIC EXPEDITIONS, INC., Defendant and Appellant.
A123725
COURT OF APPEAL OF CALIFORNIA, FIRST APPELLATE DISTRICT, DIVISION THREE
181 Cal. App. 4th 816; 104 Cal. Rptr. 3d 844; 2010 Cal. App. LEXIS 114
January 29, 2010, Filed
SUBSEQUENT HISTORY: Review denied by Lhotka (Elena) v. Geographic Expeditions, Inc., 2010 Cal. LEXIS 3320 (Cal., Apr. 14, 2010)
PRIOR HISTORY: [***1]
Superior Court of San Francisco City & County, No. 477496, Patrick J. Mahoney, Judge.

SUMMARY:
CALIFORNIA OFFICIAL REPORTS SUMMARY
The trial court denied a travel company’s motion to compel arbitration of a wrongful death action brought against it by the survivors of a client who died on a hiking expedition. The travel company told participants that they had to sign an unmodified release form to participate in the expedition and that other travel companies had the same requirements. The agreement limited recovery to the amount paid for the trip, required the survivors to indemnify the travel company for its legal costs and fees if they pursued any released claims, and required them to pay half of any mediation fees and to mediate and arbitrate in a city far from their home. (Superior Court of the City and County of San Francisco, No. 477496, Patrick J. Mahoney, Judge.)
The Court of Appeal affirmed, observing that a sliding scale is applied in determining unconscionability so that the more substantively oppressive a term, the less evidence of procedural unconscionability is required to find it unenforceable, and vice versa. Although the activity was nonessential and recreational, the company’s representation that its competitors would insist on the same terms was sufficient to find procedural unconscionability. The one-sided nature of the terms established substantive unconscionability, and the trial court reasonably found under Civ. Code, § 1670.5, subd. (a), that the agreement was so permeated by unconscionability that severing the limitation on damages would not further the interests of justice. (Opinion by Siggins, J., with McGuiness, P. J., and Pollak, J., concurring.) [*817]

HEADNOTES
CALIFORNIA OFFICIAL REPORTS HEADNOTES
^CA(1)(1) Contracts § 13.4—Legality—Enforceability—Unconscionable Contracts—Procedural and Substantive Elements.—Unconscionability includes an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party. Phrased another way, unconscionability has both a procedural and a substantive element. The procedural element requires oppression or surprise. Oppression occurs where a contract involves lack of negotiation and meaningful choice, surprise where the allegedly unconscionable provision is hidden within a prolix printed form. The substantive element concerns whether a contractual provision reallocates risks in an objectively unreasonable or unexpected manner. Under this approach, both the procedural and substantive elements must be met before a contract or term will be deemed unconscionable. Both, however, need not be present to the same degree. A sliding scale is applied so that the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.

^CA(2)(2) Contracts § 13.4—Legality—Enforceability—Unconscionable Contracts—Recreational Activities.—While the nonessential nature of recreational activities is a factor to be taken into account in assessing whether a contract is oppressive, it is not necessarily the dispositive factor. The customer’s ability to walk away rather than sign the offending contract is not dispositive. The availability of similar goods or services elsewhere may be relevant to whether a contract is one of adhesion, but even if it is not an adhesion contract, it can still be found unconscionable. Moreover, in a given case, a contract may be adhesive even if the weaker party can reject the terms and go elsewhere.

^CA(3)(3) Contracts § 13.4—Legality—Enforceability—Unconscionable Contracts—Oppression.—The option not to participate, like any availability of market alternatives, is relevant to the existence, and degree, of oppression. But a court must also consider the other circumstances surrounding the execution of the agreement. Oppression arises from an inequality of bargaining power which results in no real negotiation and an absence of meaningful choice.

^CA(4)(4) Contracts § 13.4—Legality—Enforceability—Unconscionable Contracts—Substantive Unconscionability.—Substantive unconscionability focuses on the one-sidedness or overly harsh effect of a contract term or clause. [*818]

^CA(5)(5) Contracts § 13.4—Legality—Enforceability—Unconscionable Contracts—Arbitration Agreements—Severance of Unconscionable Provision.—A trial court has discretion under Civ. Code, § 1670.5, subd. (a), to refuse to enforce an entire agreement if the agreement is permeated by unconscionability. An arbitration agreement can be considered permeated by unconscionability if it contains more than one unlawful provision. Such multiple defects indicate a systematic effort to impose arbitration not simply as an alternative to litigation, but as an inferior forum that works to the stronger party’s advantage. The overarching inquiry is whether the interests of justice would be furthered by severance.

^CA(6)(6) Contracts § 13.4—Legality—Enforceability—Unconscionable Contracts—Arbitration Agreements.—The trial court, in denying a travel company’s motion to compel arbitration of a wrongful death action brought by the survivors of a client who died on a hiking expedition, identified multiple elements of the agreement that indicated the travel company designed its arbitration clause not simply as an alternative to litigation, but as an inferior forum that would give it an advantage. In addition to limiting the survivors’ recovery, the agreement required them to indemnify the travel company for its legal costs and fees if they pursued any claims covered by the release agreement. These one-sided burdens were compounded by the requirements that the survivors pay half of any mediation fees and mediate and arbitrate in the travel company’s choice of venue, far from their home. It was within the trial court’s discretion to conclude this agreement was so permeated by unconscionability that the interests of justice would not be furthered by severing the damages limitation clause and enforcing the remainder.
[Cal. Forms of Pleading and Practice (2009) ch. 140, Contracts, § 140.25; 2 Crompton et al., Matthew Bender Practice Guide: Cal. Contract Litigation (2009) § 18.19.]
COUNSEL: Rubin, Hay & Gould, Rodney E. Gould; Walsworth, Franklin, Bevins & McCall, Laurie E. Sherwood and Alex F. Pevzner for Defendant and Appellant.
Law Offices of David J. Bennion, David J. Bennion; Law Office of Daniel U. Smith and Daniel U. Smith for Plaintiffs and Respondents.
JUDGES: Opinion by Siggins, J., with McGuiness, P. J., and Pollak, J., concurring.
OPINION BY: Siggins [*819]
OPINION

(GeoEx), appeals from an order denying its motion to compel arbitration of a wrongful death action brought by the survivors of one of its clients who died on a Mount Kilimanjaro hiking expedition. GeoEx contends the trial court erred when it ruled that the agreement to arbitrate contained in GeoEx’s release form was unconscionable. Alternatively, GeoEx contends that if the court correctly concluded the arbitration clause was unconscionable, the court abused its discretion in striking the clause in its entirety rather than severing the objectionable provisions and enforcing the remainder. We find neither point is persuasive, and therefore affirm the order.
BACKGROUND
Jason Lhotka was 37 years old when [***2] he died of an altitude-related illness while on a GeoEx expedition up Mount Kilimanjaro with his mother, plaintiff Sandra Menefee. ¹ GeoEx’s limitation of liability and release form, which both Lhotka and Menefee signed as a requirement of participating in the expedition, provided that each of them released GeoEx from all liability in connection with the trek and waived any claims for liability “to the maximum extent permitted by law.” The release also required that the parties would submit any disputes between themselves first to mediation and then to binding arbitration. It reads: “I understand that all Trip Applications are subject to acceptance by GeoEx in San Francisco, California, USA. I agree that in the unlikely event a dispute of any kind arises between me and GeoEx, the following conditions will apply: (a) the dispute will be submitted to a neutral third-party mediator in San Francisco, California, with both parties splitting equally the cost of such mediator. If the dispute cannot be resolved through mediation, then (b) the dispute will be submitted for binding arbitration to the American Arbitration Association in San Francisco, California; (c) the dispute will be governed [***3] by California law; and (d) the maximum amount of recovery to which I will be entitled under any and all circumstances will be the sum of the land and air cost of my trip with GeoEx. I agree that this is a fair and reasonable limitation on the damages, of any sort whatsoever, that I may suffer. [¶] I agree to fully indemnify GeoEx for all of its costs (including attorneys’ fees) if I commence an action or claim against GeoEx based upon claims I have previously released or waived by signing this release.” Menefee paid $ 16,831 for herself and Lhotka to go on the trip.

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1 The other plaintiffs and respondents are Elena Lhotka, individually and as executor of the estate, and Nicholas Lhotka by his guardian ad litem (also Elena Lhotka).
– – – – – – – – – – – – End Footnotes- – – – – – – – – – – – – –

A letter from GeoEx president James Sano that accompanied the limitation of liability and release explained that the form was mandatory and that, on [*820] this point, “our lawyers, insurance carriers and medical consultants give us no discretion. A signed, unmodified release form is required before any traveler may join one of our trips. [¶] Ultimately, we believe that you should choose your travel company based on its track record, not what you are asked to sign. [***4] … My review of other travel companies’ release forms suggests that our forms are not a whole lot different from theirs.”

After her son’s death, Menefee sued GeoEx for wrongful death and alleged various [**848] theories of liability including fraud, gross negligence and recklessness, and intentional infliction of emotional distress. GeoEx moved to compel arbitration.

The trial court found the arbitration provision was unconscionable under Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83 [99 Cal. Rptr. 2d 745, 6 P.3d 669] (Armendariz), and on that basis denied the motion. It ruled: “The agreement at issue is both procedurally and substantively unconscionable. … The Sano letter establishes that the agreement was presented as a Take It Or Leave It proposition and was also represented to be consistent with industry practice. As a consequence[,] if the plaintiff and decedent wished to go on this trip, they could do so only on these terms. Unconscionability also permeates the substantive terms of the agreement to arbitrate. The problematic terms are the limitation on damages, the indemnity of GeoEx, the requirement that GeoEx costs and attorneys’ fees be paid if suit is filed related to certain claims, [***5] splitting the costs of mediation, the absence of an agreement on the cost of arbitration and the lack of mutuality as to each of these terms. As a consequence, this is not a case where the court may strike a single clause and compel arbitration.”

This appeal timely followed.

DISCUSSION
The questions posed here are (1) whether the agreement to arbitrate is unconscionable and, therefore, unenforceable; and (2) if so, whether the court properly declined to enforce the entire arbitration clause rather than sever unconscionable provisions. We answer both questions in the affirmative.

I. Standard of Review

^HN1On appeal from the denial of a motion to compel arbitration, “[u]nconscionability findings are reviewed de novo if they are based on declarations that raise ‘no meaningful factual disputes.’ [Citation.] However, where an unconscionability determination ‘is based upon the trial court’s resolution of conflicts in the evidence, or on the factual inferences which may be drawn [*821] therefrom, we consider the evidence in the light most favorable to the court’s determination and review those aspects of the determination for substantial evidence.’ [Citation.] The ruling on severance is reviewed for abuse [***6] of discretion.” (Murphy v. Check ’N Go of California, Inc. (2007) 156 Cal.App.4th 138, 144 [67 Cal. Rptr. 3d 120]; see Armendariz, supra, 24 Cal.4th at p. 122.) In keeping with California’s strong public policy in favor of arbitration, any doubts regarding the validity of an arbitration agreement are resolved in favor of arbitration. (Coast Plaza Doctors Hospital v. Blue Cross of California (2000) 83 Cal.App.4th 677, 686 [99 Cal. Rptr. 2d 809]; see Armendariz, supra, at p. 97.)

II. Unconscionability
^CA(1)(1) We turn first to GeoEx’s contention that the court erred when it found the arbitration agreement unconscionable. Although the issue arises here in a relatively novel setting, the basic legal framework is well established. ^HN2“ ‘[U]nconscionability has generally been recognized to include an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party.’ [Citation.] Phrased another way, unconscionability has both a ‘procedural’ and a ‘substantive’ element.” (A & M Produce Co. v. FMC Corp. [**849]
(1982) 135 Cal.App.3d 473, 486 [186 Cal. Rptr. 114].) “ ‘The procedural element requires oppression or surprise. [Citation.] Oppression occurs where a contract involves lack of negotiation and meaningful [***7] choice, surprise where the allegedly unconscionable provision is hidden within a prolix printed form. [Citation.] The substantive element concerns whether a contractual provision reallocates risks in an objectively unreasonable or unexpected manner.’ [Citation.] Under this approach, both the procedural and substantive elements must be met before a contract or term will be deemed unconscionable. Both, however, need not be present to the same degree. A sliding scale is applied so that ‘the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.’ ? (Morris v. Redwood Empire Bancorp (2005) 128 Cal.App.4th 1305, 1317 [27 Cal. Rptr. 3d 797], quoting Armendariz, supra, 24 Cal.4th at p. 114; see A & M Produce Co., supra, at p. 486.) This notion of a “sliding scale,” as will be seen, figures centrally in the analysis of the agreement at issue here.

A. Procedural Unconscionability
GeoEx argues the arbitration agreement involved neither the oppression nor surprise aspects of procedural unconscionability. GeoEx argues the agreement was not oppressive because plaintiffs made no showing of an “industry-wide [***8] requirement that travel clients must accept an agreement’s [*822] terms without modification” and “they fail[ed] even to attempt to negotiate” with GeoEx. We disagree. GeoEx’s argument cannot reasonably be squared with its own statements advising participants that they must sign an unmodified release form to participate in the expedition; that GeoEx’s “lawyers, insurance carriers and medical consultants give [it] no discretion” on that point; and that other travel companies were no different. ² In other words, GeoEx led plaintiffs to understand not only that its terms and conditions were nonnegotiable, but that plaintiffs would encounter the same requirements with any other travel company. This is a sufficient basis for us to conclude plaintiffs lacked bargaining power.

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2 This is the clear import of Sano’s letter and, in any event, it is also the trial court’s interpretation, which we accept because it is supported by substantial evidence. (Murphy v. Check ’N Go of California, Inc., supra, 156 Cal.App.4th at p. 144.)
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GeoEx also contends its terms were not oppressive, apparently as a matter of law, because Menefee and Lhotka could have simply decided not to trek up Mount Kilimanjaro. [***9] It argues that contracts for recreational activities can never be unconscionably oppressive because, unlike agreements for necessities such as medical care or employment, a consumer of recreational activities always has the option of foregoing the activity. The argument has some initial resonance, but on closer inspection we reject it as unsound.

^HN3^CA(2)(2) While the nonessential nature of recreational activities is a factor to be taken into account in assessing whether a contract is oppressive, it is not necessarily the dispositive factor. Szetela v. Discover Bank (2002) 97 Cal.App.4th 1094 [118 Cal. Rptr. 2d 862] is informative. The defendant, a credit card company, argued the plaintiff could not establish procedural unconscionability because there were “market alternatives” to its product—i.e., the plaintiff had the option of taking his business to a different bank. The court disagreed, and held the customer’s ability to [**850] walk away rather than sign the offending contract was not dispositive. “The availability of similar goods or services elsewhere may be relevant to whether the contract is one of adhesion, but even if the clause at issue here is not an adhesion contract, it can still be found unconscionable. Moreover, [***10] ‘in a given case, a contract might be adhesive even if the weaker party could reject the terms and go elsewhere. [Citation.]’ [Citation.] Therefore, whether Szetela could have found another credit card issuer who would not have required his acceptance of a similar clause is not the deciding factor.” (Id. at p. 1100, italics added; see also Harper v. Ultimo (2003) 113 Cal.App.4th 1402, 1408–1409 [7 Cal. Rptr. 3d 418].) The focus of procedural unconscionability in Szetela, rather, was on the manner in which the disputed clause was presented. Faced with the options of either closing his account or accepting the credit card company’s “take it or leave it” terms, Szetela established the necessary [*823] element of procedural unconscionability despite the fact that he could have simply taken his business elsewhere. (Szetela, supra, at p. 1100.)

The cases on which GeoEx relies do not hold otherwise. GeoEx relies on Morris v. Redwood Empire Bancorp, supra, 128 Cal.App.4th at page 1320, for its statement that the “ ‘procedural element of unconscionability may be defeated[] if the complaining party has a meaningful choice of reasonably available alternative sources of supply from which to obtain the desired goods and services [***11] free of the terms claimed to be unconscionable.’ ” “[M]ay be defeated,” true—but not “must,” in all cases and as a matter of law. Morris takes its premise from Dean Witter Reynolds, Inc. v. Superior Court (1989) 211 Cal.App.3d 758, 772 [259 Cal. Rptr. 789], in which Division Two of this court expressly declined to hold or suggest “that any showing of competition in the marketplace as to the desired goods and services defeats, as a matter of law, any claim of unconscionability.” Indeed, Morris itself recognizes that some contracts may be oppressive despite the availability of market alternatives, albeit in the context of employment or medical care—i.e., contracts for “ ‘life’s necessities.’ ” (Morris, supra, at p. 1320, quoting West v. Henderson (1991) 227 Cal.App.3d 1578, 1587 [278 Cal. Rptr. 570]; see Armendariz, supra, 24 Cal.4th at p. 115 [employment].)
Many of the other authorities cited by GeoEx are inapposite because they concern challenges to release of liability clauses under the rule that invalidates exculpatory provisions that affect the public interest. (See Tunkl v. Regents of University of California (1963) 60 Cal.2d 92, 96–97 & fn. 6 [32 Cal. Rptr. 33, 383 P.2d 441]; Civ. Code, § 1668.) In this specific context, our courts consistently hold that [***12] recreation does not implicate the public interest, and therefore approve exculpatory provisions required for participation in recreational activities. (See, e.g., Randas v. YMCA of Metropolitan Los Angeles (1993) 17 Cal.App.4th 158, 161–162 [21 Cal. Rptr. 2d 245] [swim class]; Saenz v. Whitewater Voyages, Inc. (1990) 226 Cal.App.3d 758, 764 [276 Cal. Rptr. 672] [river rafting]; Madison v. Superior Court (1988) 203 Cal.App.3d 589, 597?599 [250 Cal. Rptr. 299] [scuba diving]; Paralift, Inc. v. Superior Court (1993) 23 Cal.App.4th 748, 756 [29 Cal. Rptr. 2d 177] [skydiving]; Buchan v. United States Cycling Federation, Inc. (1991) 227 Cal.App.3d 134 [277 Cal. Rptr. 887] [cycle racing]; Coates v. Newhall Land & Farming, Inc. (1987) 191 Cal.App.3d 1, 8 [236 Cal. Rptr. 181] [riding dirtbike]; Kurashige v. Indian Dunes, Inc. (1988) 200 Cal.App.3d 606, 611–612 [246 Cal. Rptr. 310] [**851] [motorcycle dirtbike].) But these cases do not focus on unconscionability, and they do not hold that contracts for recreational activities are immune from analysis for procedural unconscionability.

^CA(3)(3) Here, certainly, plaintiffs could have chosen not to sign on with the expedition. ^HN4That option, like any availability of market alternatives, is [*824] relevant to the existence, and degree, of oppression. (See Szetela v. Discover Bank, supra, 97 Cal.App.4th at p. 1100; Laster v. T-Mobile USA, Inc. (S.D.Cal. 2005) 407 F.Supp.2d 1181, 1188 [***13] & fn. 1; see also Allan v. Snow Summit, Inc. (1996) 51 Cal.App.4th 1358, 1376 [59 Cal. Rptr. 2d 813] [nonessential, recreational nature of skiing was one of several factors that indicated a release clause was not substantively unconscionable]; but see Belton v. Comcast Cable Holdings, LLC (2007) 151 Cal.App.4th 1224, 1246 [60 Cal. Rptr. 3d 631] [dictum that availability of other cable providers defeated claim of unconscionability].) But we must also consider the other circumstances surrounding the execution of the agreement. GeoEx presented its limitation of liability and release form as mandatory and unmodifiable, and essentially told plaintiffs that any other travel provider would impose the same terms. “Oppression arises from an inequality of bargaining power which results in no real negotiation and an absence of meaningful choice … .” (Crippen v. Central Valley RV Outlet (2004) 124 Cal.App.4th 1159, 1165 [22 Cal. Rptr. 3d 189] [finding no oppression where evidence showed no circumstances surrounding the execution of the agreement, so no showing of unequal bargaining power, lack of negotiation, or lack of meaningful choice].) Here, in contrast to Crippen, GeoEx presented its terms as both nonnegotiable and no different than what plaintiffs would [***14] find with any other provider. Under these circumstances, plaintiffs made a sufficient showing to establish at least a minimal level of oppression to justify a finding of procedural unconscionability. (See Morris v. Redwood Empire Bancorp, supra, 128 Cal.App.4th at p. 1319 [“our task is not only to determine whether procedural unconscionability exists, but more importantly, to what degree it may exist”].)

B. Substantive Unconscionability
With the “sliding scale” rule firmly in mind (Armendariz, supra, 24 Cal.4th at p. 114), we address whether the substantive unconscionability of the GeoEx contract warrants the trial court’s ruling. Harper v. Ultimo, supra, 113 Cal.App.4th 1402, is analogous. The Harpers hired a contractor to perform work on their property. The contractor allegedly broke a sewer pipe, causing concrete to infiltrate the plaintiffs’ soil, plumbing and sewer and wreak havoc on their backyard drainage system. Unfortunately for the Harpers, the arbitration provision in the construction contract limited the remedies against their contractor to a refund, completion of work, costs of repair or any out-of-pocket loss or property damage—and then capped any compensation at $ 2,500 [***15] unless the parties agreed otherwise in writing.

^CA(4)(4) In the words of Justice Sills, substantive unconscionability was “so present that it is almost impossible to keep from tripping” over it. (Harper v. Ultimo, supra, 113 Cal.App.4th at p. 1406.) ^HN5“Substantive unconscionability focuses on the one-sidedness or overly harsh effect of the contract term or [*825] clause. [Citation.] In the present case, the operative effect of the arbitration is even more one-sided against the customer than the clauses in [**852] any number of cases where the courts have found substantive unconscionability. (E.g., Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064 [130 Cal. Rptr. 2d 892, 63 P.3d 979] [either party could appeal any award of more than $ 50,000 to second arbitrator]; Szetela v. Discover Bank[, supra,] 97 Cal.App.4th 1094 … [arbitration clause absolutely barred class actions]; Saika v. Gold (1996) 49 Cal.App.4th 1074 [56 Cal. Rptr. 2d 922] [arbitration award could be rejected if it exceeded $ 25,000].) As in Little, Szetela and Saika, the limitation of damages provision here is yet another version of a ‘heads I win, tails you lose’ arbitration clause that has met with uniform judicial opprobrium.” The arbitration provision in the Harpers’ contract did not allow even a theoretical [***16] possibility that they could be made whole, because there was no possibility of obtaining meaningful compensation unless the contractor agreed—which, not surprisingly, it did not. (Harper v. Ultimo, supra, at p. 1407.)
The arbitration provision in GeoEx’s release is similarly one-sided as that considered in Harper. It guaranteed that plaintiffs could not possibly obtain anything approaching full recompense for their harm by limiting any recovery they could obtain to the amount they paid GeoEx for their trip. In addition to a limit on their recovery, plaintiffs, residents of Colorado, were required to mediate and arbitrate in San Francisco—all but guaranteeing both that GeoEx would never be out more than the amount plaintiffs had paid for their trip, and that any recovery plaintiffs might obtain would be devoured by the expense they incur in pursing their remedy. ³ The release also required plaintiffs to indemnify GeoEx for its costs and attorney fees for defending any claims covered by the release of liability form. ⁴ Notably, there is no reciprocal limitation on damages or indemnification obligations imposed on GeoEx. Rather than providing a neutral forum for dispute resolution, GeoEx’s [***17] arbitration scheme provides a potent disincentive for an aggrieved client to pursue any claim, in any forum—and may well guarantee that GeoEx wins even if it loses. Absent reasonable justification for this arrangement—and none is apparent—we agree with the trial court that the arbitration clause is so one-sided as to be substantively unconscionable. (See Armendariz, supra, [*826]
24 Cal.4th at p. 121 [damages remedy unilaterally limited]; Pinedo v. Premium Tobacco Stores, Inc. (2000) 85 Cal.App.4th 774, 781 [102 Cal. Rptr. 2d 435] [damages remedy limited, plaintiff required to pay all costs, and required hearing location was in Oakland].)

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3 The requirement that the parties share the cost of mediation does not factor into our analysis that the agreement is substantively unconscionable. Whether such cost sharing is appropriate depends on a number of issues that we need not consider. (See D.C. v. Harvard-Westlake School (2009) 176 Cal.App.4th 836, 860–864 [98 Cal. Rptr. 3d 300].)4 GeoEx is wrong when it claims the trial court erred “in even considering clauses outside the arbitration provision,” such as the limitation of liability and indemnification provisions, “etc.” It is unclear which “etc.” provisions GeoEx contends are “outside” the [***18] arbitration clause, but the limitation of liability clause GeoEx specifically identifies appears as subdivision (d) of the paragraph that requires arbitration, while the indemnification provision that immediately follows it is substantively relevant to whether or not the proposed arbitration system would provide an unacceptably one-sided forum for dispute resolution.
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III. Severability
GeoEx argues that, even if the limitation of liability provision was unconscionable, the court abused its discretion [**853] when it refused to strike it and enforce the remainder of the arbitration clause. We disagree.
^CA(5)(5) Civil Code section 1670.5, subdivision (a) gives the trial court discretion to either refuse to enforce a contract it finds to be unconscionable, or to strike the unconscionable provision and enforce the remainder of the contract. It provides: ^HN6“If [***19] the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.” ^HN7The trial court has discretion under this statute to refuse to enforce an entire agreement if the agreement is “permeated” by unconscionability. (Armendariz, supra, 24 Cal.4th at p. 122; Murphy v. Check ’N Go of California, Inc., supra, 156 Cal.App.4th at p. 149.) An arbitration agreement can be considered permeated by unconscionability if it “contains more than one unlawful provision … . Such multiple defects indicate a systematic effort to impose arbitration … not simply as an alternative to litigation, but as an inferior forum that works to the [stronger party’s] advantage.” (Armendariz, supra, at p. 124; see Murphy, supra, at p. 148.) “The overarching inquiry is whether ‘ “the interests of justice … would be furthered” ’ by severance.” (Armendariz, supra, at p. 124.)

^CA(6)(6) Here, the trial court identified multiple elements [***20] of the agreement that indicate GeoEx designed its arbitration clause “not simply as an alternative to litigation, but as an inferior forum” that would give it an advantage. In addition to limiting plaintiffs’ recovery, the agreement required them to indemnify GeoEx for its legal costs and fees if they pursued any claims covered by the release agreement. These one-sided burdens were compounded by the requirements that plaintiffs pay half of any mediation fees and mediate and arbitrate in San Francisco, GeoEx’s choice of venue, far from plaintiffs. It was within the court’s discretion to conclude this agreement was so permeated by unconscionability that the interests of justice would not be furthered by severing the damages limitation clause and enforcing the remainder. (Armendariz, supra, 24 Cal.4th at p. 124.)

[*827]
DISPOSITION
The order denying GeoEx’s motion to compel arbitration is affirmed.
McGuiness, P. J., and Pollak, J., concurred.
CIVIL CODE
Division 3. Obligations
Part 2. Contracts
Title 4. Unlawful Contracts
Cal Civ Code § 1670.5 (2010)
§ 1670.5. Unconscionable contract
(a) If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.
(b) When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose, and effect to aid the court in making the determination.

Geographic Expeditions, Inc., v. The Estate Of Jason Lhotka, 599 F.3d 1102; 2010 U.S. App. LEXIS 6606

Posted: December 13, 2010 | Author: Recreation Law | Filed under: California, Mountaineering, Release (pre-injury contract not to sue) | Tags: fatality, Kilimanjaro, Mount Kilimanjaro, Mountain Climbing, Mountaineering, Mt Kilimanjaro | 2 Comments

To Read an Analysis of this decision see

Complicated serious of cases created to defend against a mountaineering death.

Geographic Expeditions, Inc., v. The Estate Of Jason Lhotka, 599 F.3d 1102; 2010 U.S. App. LEXIS 6606
GEOGRAPHIC EXPEDITIONS, INC., Petitioner-Appellant, v. THE ESTATE OF JASON LHOTKA BY ELENA LHOTKA, executrix; SANDRA MENEFEE, Respondents-Appellees.
No. 09-15069
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
599 F.3d 1102; 2010 U.S. App. LEXIS 6606
March 11, 2010, Argued and Submitted, San Francisco, California
March 31, 2010, Filed
PRIOR HISTORY: [**1]
Appeal from the United States District Court for the Northern District of California. D.C. No. 3:08-cv-04624-SI. Susan Illston, District Judge, Presiding.
Geographic Expeditions, Inc. v. Estate of Lhotka, 2008 U.S. Dist. LEXIS 105691 (N.D. Cal., Dec. 29, 2008)
DISPOSITION: REVERSED and REMANDED.
CASE SUMMARY:

PROCEDURAL POSTURE: Respondents, a decedent’s estate and survivors, filed suit in a state court alleging, inter alia, that the decedent’s death from high altitude sickness was caused by the negligence of petitioner corporation’s employees. The corporation filed a petition to compel arbitration under 9 U.S.C.S. § 4. The U.S. District Court for the Northern District of California dismissed the petition for lack of subject matter jurisdiction. The corporation appealed.

OVERVIEW: The corporation contended that subject matter jurisdiction existed under 28 U.S.C.S. § 1332(a). The court found that the district court erred when it held that the corporation had to prove by a preponderance of the evidence that the amount in controversy exceeded $ 75,000 because the corporation did not remove the case from state to federal court and then file a motion to compel arbitration. Rather, the corporation commenced an action in federal court by filing a petition to compel arbitration. The legal certainty standard applied when a party filed a petition in federal court to compel arbitration, even when the opposing party was suing the federal petitioner in state court. The corporation’s allegation that it had a reasonable, good-faith belief that the damages exceeded $ 75,000 even though the state court complaint did not specify an amount was sufficient to confer subject matter jurisdiction on a federal court because it was not legally certain the amount in controversy was $ 75,000 or less. The district court erred when it dismissed for lack of subject matter jurisdiction the corporation’s petition to compel arbitration.

OUTCOME: The judgment was reversed and remanded for further proceedings.
CORE TERMS: amount in controversy, removal, subject matter jurisdiction, federal jurisdiction, preponderance, compel arbitration, arbitration, petition to compel arbitration, arbitration agreement, expedition, trip, jurisdictional amount, unenforceable, citizens of different states, evidence standard, burden to prove, altitude sickness, good faith, proponent, exceeded, specify, federal forum, state trial, exclusive of interest, burden of proof, parties agree, collateral estoppel, diversity jurisdiction, valid defense, unconscionable

COUNSEL: Rodney E. Gould, Rubin Hay & Gould P.C. for Geographic Expeditions, Inc., petitioner-appellant.
Daniel U. Smith, Law Office of Daniel U. Smith, David J. Bennion, Law Offices of David J. Bennion, for the Estate of Lhotka and Sandra Menefee, respondents-appellees.
JUDGES: Before: Betty B. Fletcher, Richard R. Clifton and Carlos T. Bea, Circuit Judges. Opinion by Judge Bea.
OPINION BY: Carlos T. Bea
OPINION
[*1104] BEA, Circuit Judge:
Geographic Expeditions, Inc. (“GeoEx”), appeals the district court’s dismissal of GeoEx’s petition to compel arbitration for lack of subject matter jurisdiction. Fed. R. Civ. P. 12(b)(1). GeoEx contends subject matter jurisdiction exists under [HN1] 28 U.S.C. § 1332(a), which provides federal jurisdiction over disputes between citizens of different states in which the amount in controversy exceeds $ 75,000 exclusive of interest and costs. The district court held that GeoEx had to establish by a preponderance of the evidence that the amount in controversy exceeded $ 75,000, and that, because a clause in the arbitration agreement [**2] limited damages to $ 16,831, GeoEx could not meet its burden. We conclude the district court erred both when it applied a preponderance of the evidence standard and when it held that the liability cap precludes federal jurisdiction. We therefore reverse and remand for further proceedings.

I. Factual and Procedural Background ¹
1 We take these facts from the First Amended Complaint, on file in the district court, and declarations filed in support of and in opposition to the motion to dismiss. All are part of our record. See Trentacosta v. Frontier Pac. Aircraft Indus., Inc., 813 F.2d 1553, 1558-59 (9th Cir. 1987) (quoting 5C C. Wright & A. Miller, Federal Practice and Procedure, § 1363, at 653-54 (1969)).

The underlying dispute in this case arose out of a series of events on Mount Kilimanjaro in October 2007. GeoEx, a California corporation with its principal place of business in San Francisco, leads guided expeditions for profit to various [*1105] destinations throughout the world. Jason Lhotka, who was 37 years old, and his mother, Sandra Menefee, both citizens of Colorado, purchased tickets for a GeoEx expedition to Mount Kilimanjaro. As part of their registration for the trip, Lhotka and Menifee [**3] each signed a GeoEx trip participant contract, which included a provision requiring them to submit any dispute they might have with GeoEx to binding arbitration. The agreement further provided that the amount of recovery would be capped at “the sum of the land and air cost of my trip with GeoEx,” which the parties agree is $ 16,831. ²

2 The full text of the clause is:
I agree that in the unlikely event a dispute of any kind arises between me and GeoEx, the following conditions apply: (a) the dispute will be submitted to a neutral third-party mediator in San Francisco, California, with both parties splitting equally the costs of such mediator. If the dispute cannot be resolved through mediation, then (b) the dispute will be submitted for binding arbitration to the American Arbitration Association in San Francisco, California; (c) the dispute will be governed by California law; and (d) the maximum amount of recovery to which I will be entitled under any and all circumstances will be the sum of the land and air cost of my trip with GeoEx. I agree that this is a fair and reasonable limitation on the damages, of any sort whatsoever, that I may suffer.

The expedition began in Africa on September [**4] 29, 2007, and was to last until October 8, 2007. On October 1, Jason Lhotka began to suffer difficulty sleeping and experienced sudden onset of severe fatigue–early symptoms of high altitude sickness. On October 2, Jason Lhotka told the head expedition guide he needed to go back down the mountain because of his fatigue. He began his descent, accompanied by a GeoEx assistant guide. Although supplemental oxygen was available, it was not administered to Lhotka, nor was a rapid descent ordered, although such a route was also available. Both of these procedures are proper protocol for a person with high altitude sickness. On October 4, while descending the mountain, Lhotka died.
In July 2008, Lhotka’s estate and his survivors filed suit in San Francisco Superior Court alleging, inter alia, that Lhotka’s death from high altitude sickness was caused by the negligence of GeoEx employees in failing to recognize and treat Lhotka’s symptoms. In accord with California Code of Civil Procedure § 425.10(b), the state court complaint did not specify the amount of damages sought. In September 2008, GeoEx filed with the state court a motion to compel arbitration pursuant to the parties’ arbitration [**5] agreement. In December 2008, the state trial court denied GeoEx’s motion to compel arbitration; it held the arbitration agreement unconscionable and thus unenforceable. GeoEx appealed, and, on January 29, 2010, the California Court of Appeal affirmed. GeoEx then filed a petition for review with the California Supreme Court, which is currently pending. ³ In October [*1106] 2008–after filing in state court its motion to compel arbitration, but before the state trial court had ruled on the motion–GeoEx filed in federal district court the current petition to compel arbitration. The district court held that GeoEx had the burden to prove by a preponderance of the evidence that the amount in controversy exceeded $ 75,000 and that, because of the contractual damages limitation, recovery was limited to $ 16,831. Because GeoEx could not carry its assigned burden of proof, the district court dismissed GeoEx’s petition under Rule 12(b)(1) for lack of subject matter jurisdiction. This appeal from the order of dismissal timely followed.

3 Although the California Court of Appeal held the arbitration agreement to be unenforceable, that does not yet prevent the federal suit from proceeding. It is true that [**6] [HN2] “federal courts are compelled by the ‘full faith and credit’ statute” to give the same collateral estoppel and res judicata effects to state court judgments as would the courts of that state. Se. Res. Recovery Facility Auth. v. Montenay Int’l. Corp., 973 F.2d 711, 712 (9th Cir. 1992). However, the California Court of Appeal’s judgment that the arbitration agreement is unenforceable is not yet final. [HN3] Under California law, a judgment is not final for the purposes of collateral estoppel until it is free from the potential of a direct attack, i.e. until no further direct appeal can be taken. Abelson v. Nat’l Union Fire Ins. Co., 28 Cal. App. 4th 776, 35 Cal. Rptr. 2d 13, 19 (Ct. App. 1994). Here, the parties agree that the state court judgment is not yet final because GeoEx filed a petition for review in the California Supreme Court, which petition remains pending. Thus, this court can proceed on the merits.

II. Standard of Review
[HN4] We review de novo a district court’s dismissal for lack of subject matter jurisdiction. Crum v. Circus Circus Enters., 231 F.3d 1129, 1130 (9th Cir. 2000).
III. Analysis
A. Burden of Proof
The district court erred when it held GeoEx had to prove by a preponderance of the evidence that [**7] the amount in controversy exceeded $ 75,000. GeoEx filed a petition to compel arbitration under § 4 of the Federal Arbitration Act (“FAA”). Section 4 provides:
[HN5] A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court which, save for such agreement, would have jurisdiction under title 28, in a civil action . . . of the subject matter of a suit arising out of the controversy between the parties, for an order directing that such arbitration proceed in the manner provided for in such agreement.

9 U.S.C. § 4. As the Supreme Court has explained, [HN6] § 4 “bestows no federal jurisdiction but rather requires for access to a federal forum an independent jurisdictional basis over the parties’ dispute.” Vaden v. Discover Bank, 129 S. Ct. 1262, 1271, 173 L. Ed. 2d 206 (2009). Thus, a federal court has jurisdiction over a petition to compel arbitration if the federal court would have jurisdiction over the underlying substantive dispute–here the negligence action filed by Lhotka’s estate and survivors. See id. at 1273.

[HN7] A federal court has jurisdiction over the underlying dispute if the suit is between citizens [**8] of different states, ⁴ and the amount in controversy exceeds $ 75,000 exclusive of interest and costs (i.e., diversity jurisdiction). 28 U.S.C. § 1332(a). Where the plaintiff originally files in federal court, “the amount in controversy is determined from the face of the pleadings.” Crum, 231 F.3d at 1131 (9th Cir. 2000). The amount in controversy alleged by the proponent of federal jurisdiction–typically the plaintiff in the substantive dispute–controls so long as the claim is made in good faith. Id. “To justify dismissal, it must appear to a legal certainty that the claim is really for less than the jurisdictional amount.” Id. (internal quotation omitted). This is called the “legal certainty” standard, which means a federal court has subject matter jurisdiction unless “upon the face of the complaint, it is obvious that the suit cannot involve the necessary amount.” St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 292, 58 S. Ct. 586, 82 L. Ed. 845 (1938).
4 The parties concede this is a suit between citizens of different states.

On the other hand, [HN8] in a case that has been removed from state court to federal court under 28 U.S.C. § 1441 on the basis of diversity jurisdiction, the proponent of federal [**9] jurisdiction–typically [*1107] the defendant in the substantive dispute–has the burden to prove, by a preponderance of the evidence, that removal is proper. See Gaus v. Miles, Inc., 980 F.2d 564, 567 (9th Cir. 1992). The preponderance of the evidence standard applies because removal jurisdiction ousts state-court jurisdiction and “must be rejected if there is any doubt as to the right of removal in the first instance.” Id. at 566. This gives rise to a “strong presumption against removal jurisdiction [which] means that the defendant always has the burden of establishing that removal is proper.” Id. For these reasons, “[w]e strictly construe the removal statute against removal jurisdiction.” Id. ⁵

5 See also Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09, 61 S. Ct. 868, 85 L. Ed. 1214 (1941) (“The power reserved to the states under the Constitution to provide for the determination of controversies in their courts, may be restricted only by the action of Congress in conformity to the Judiciary Articles of the Constitution. Due regard for the rightful independence of state governments, which should actuate federal courts, requires that [federal courts] scrupulously confine their own jurisdiction to the precise limits [**10] which [§ 1441] has defined.”(internal quotation omitted)).

Here, the district court cited Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996)–a removal case–and held that, because Lhotka’s estate did not specify damages in its state court complaint, GeoEx had the burden to prove the amount in controversy was satisfied by a preponderance of the evidence. This was error, however, because GeoEx did not remove the case from state to federal court and then file a motion to compel arbitration. Rather, GeoEx commenced an action in federal court by filing a petition to compel arbitration. Because a parallel action to compel arbitration commenced in federal court does not oust state court jurisdiction, the presumption against removal jurisdiction and attendant preponderance of the evidence standard, found in removal cases, do not apply. ⁶ Thus, we hold that [HN9] the legal certainty standard applies when a party files a petition in federal court to compel arbitration, even when the opposing party is suing the federal petitioner in state court. Two other circuits have come to the same conclusion. E.g., Doctor’s Assocs., Inc. v. Hamilton, 150 F.3d 157 (2d Cir. 1998); Woodmen of the World Life Ins. Soc’y v. Manganaro, 342 F.3d 1213 (10th Cir. 2003).

6 Although [**11] the petitioner in a motion to compel arbitration is typically the defendant in the underlying substantive dispute, like the proponent of federal jurisdiction in a removal case, that does not mean the removal standard should apply in the non-removal context. When a case is removed to federal court, the federal court completely precludes the state court’s authority to adjudicate the controversy. A petition filed in federal court to compel arbitration is much less intrusive on state court jurisdiction. In fact, as this case demonstrates, it does not preclude the state action from proceeding in any way. Thus the rationale for the higher burden of proof is absent.

Under the legal certainty standard, the good faith allegations in GeoEx’s petition as to the amount in controversy suffice to establish the jurisdictional amount unless it appears legally certain that the amount in dispute is $ 75,000 or less. Here, GeoEx’s petition alleges that Lhotka’s damages in the state court action are reasonably in excess of $ 75,000. GeoEx bases this allegation on the fact that Lhotka’s state court complaint requests damages: (1) for the alleged wrongful death of Jason Lhotka, who was 37 years old at the [**12] time of the trip, was married, and had at least one dependant; (2) for loss of consortium for his wife and his son; (3) for fraud, misrepresentation, gross negligence, and intentional infliction of emotional distress; (4) for violations of California’s consumer fraud statutes; and (5) for funeral, medical, and burial expenses. GeoEx alleged [*1108] that, based on Lhotka’s requests in state court, it “has a reasonable, good-faith belief that the damages exceed $ 75,000” even though the state court complaint does not specify an amount. ⁷ This allegation is sufficient to confer subject matter jurisdiction on a federal court because it is not legally certain the amount in controversy is $ 75,000 or less.

7 As is perhaps quite predictable, Lhotka does not claim GeoEx’s allegation that the amount in controversy exceeds $ 75,000 is not made in good faith.
B. Potential Defenses
GeoEx’s potential defense to the state court action that the damages limitation restricts recovery to less than $ 75,000 (indeed, to $ 16,831) does not preclude federal jurisdiction. As the Supreme Court has explained, [HN10] “the fact that the complaint discloses the existence of a valid defense to the claim” does not eliminate federal [**13] jurisdiction, nor do events “occurring subsequent to the institution of suit which reduce the amount recoverable below the statutory limit.” St. Paul Mercury Indemnity Co., 303 U.S. at 289-90. This rule makes sense; just because a defendant might have a valid defense that will reduce recovery to below the jurisdictional amount does not mean the defendant will ultimately prevail on that defense. ⁸ Further, if a district court had to evaluate every possible defense that could reduce recovery below the jurisdictional amount the district court would essentially have to decide the merits of the case before it could determine if it had subject matter jurisdiction. This rule applies even though GeoEx is asserting the potential defense, and at the same time seeking a federal forum based on diversity jurisdiction.

8 Indeed, in the context of this case, the state court determined that the liability cap along with the rest of the arbitration agreement was unconscionable and therefore unenforceable.

Thus, the district court erred when it held the amount in controversy cannot exceed $ 16,831. The district court should not have relied on GeoEx’s potential contractual defense to determine the amount [**14] in controversy. Because it does not appear to a legal certainty that the underlying amount in controversy is below $ 75,000, the district court erred when it dismissed for lack of subject matter jurisdiction GeoEx’s petition to compel arbitration.

REVERSED and REMANDED

Vote, every day for Matt Moniz for Adventurer of the Year 2010

Posted: December 11, 2010 | Author: Recreation Law | Filed under: Uncategorized | Leave a comment

I have a friend who has the opportunity to win a big deal from National Geographic magazine. He is Matt Moniz and he is in the running for the National Geographic Adventurers of the Year 2010. Matt Moniz climbed to the highest point in all 50 United States in just 43 days. Matt was 12 at the time.

Yes his dad is part of the issue, but my conversations, and a lot of time listening, with Matt have always centered around Matt wanting to do this rather than Matt following his dad up a mountain. If it was Matt following, I would not be telling you about Matt. I don’t support father’s egos. I do support great kids and Matt is a great kid!

In the process Matt has been supporting and raising money for Pulmonary Arterial Hypertension (PAH). Matt has a friend who has it.

Each day from now to January 15, 2011 Vote for Matt. Thanks.

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National Park Service (NPS) Share the Experience Photo Contest

Posted: December 10, 2010 | Author: Recreation Law | Filed under: Uncategorized | Leave a comment

The winning entry will be the cover photograph for the 2012 America the Beautiful – National Parks and Federal Recreational Lands Pass

To enter the photo contest go to Share the Experience. There are tons of other prizes for the winner and the next 15 winners.

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Update: Payouts in Outdoor Recreation

Posted: December 9, 2010 | Author: Recreation Law | Filed under: Uncategorized | Leave a comment

Payouts in Outdoor Recreation

(Except Skiing Incidents)

The information here has been collected from various sources. The accuracy is not guaranteed.

Year	Payout	Defendant	Claim	Source
	$750,000	Remlinger Farms	Climbing wall	http://www.schifferman.com/CM/Custom/Settlements-Verdicts.asp
2003	$250,000	Mountain Streams Outfitters	Drowned whitewater rafting
2008	$400,000	Sutter County California School District	Improperly tied into the course	$400,000 challenge course settlement for shattered ankle
2009	$500,000	Ohio University	Failure to supervise and protect from a fire	OU to pay $500,000 to settle lawsuit with burned student
2009	$13,000000	Cathedral Oaks Athletic Club Summer Camp	Drowning	Death we have commented on allegedly has a $14 million verdict
2009	$4,700000	Alpine Towers International	Improper equipment and failure to train	$4.7 million dollar verdict in climbing wall case against Alpine Towers in South Carolina Court
2009	$2,300000	Boomers	Fall from Climbing Wall	Another multimillion dollar jury verdict in outdoor recreation
2009	$2,360000	Work To Ride Inc.	Kicked by horse	Boy Awarded $2.36 Million for Horse Kick to the Face
2004	$936,000	Greenfield Community College	Foot Entrapment at College Summer Camp	Wow, someone apologized
2010	$4,750,000	Idlewild Baptist Church	Ski Collision	$5 Million because a church took a kid skiing and allowed him to……..ski
	$29,946,000.00

Totals by Defendants

Ropes/Challenge Courses	$5.10 M
Youth Church Programs	$4.75 M
Climbing Walls	$2.95 M
Outdoor Programs	$2.61 M
Summer Camps	$13.0 M
College & Universities	$1.50 M
	$29.95 M

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10 First Aid Myths

Posted: December 8, 2010 | Author: Recreation Law | Filed under: First Aid | Tags: Adventure travel, Epinephrine, first aid, James H. Moss, Myths, Recreation, Ski Resort | 3 Comments

This Presentation was given at the 2010 Association of Outdoor Recreation and Education Conference at Keystone Colorado.

10 First Aid Myths

http://static.slidesharecdn.com/swf/ssplayer2.swf?doc=aoremed-101126114719-phpapp01&stripped_title=10-first-aid-myths-5924402&userName=JHMoss

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Colorado Avalanche Information Center is emailing reports!

Posted: December 7, 2010 | Author: Recreation Law | Filed under: Avalanche, Ski Area, Skiing / Snow Boarding | Leave a comment

As CAIC says: If there is enough snow to ride, there is enough snow to slide.

If you are not a member of the CAIC and not receiving Avalanche reports from the CAIC you should never venture outside the boundaries of any ski area. (You should probably never venture outside the Front Range!)

Membership in the CAIC for a year is cheap! Figure out what your life is worth and send them a percentage of that value. While you are at the website, sign up for the CAIC newsletter.

Here is an example of the information the CAIC provides:

There are a few ingredients necessary for an avalanche. The first is a slope steep enough to slide. Most avalanches start on slopes steeper than 30 degrees, in the range of black diamond ski runs. Slopes that steep are often the first to fill in as snow drifts into gullies and below ridges. Permanent snowfields are usually sufficiently steep, too.
The next ingredient is a layer of strong over weak snow. This is relative strength, so the strong snow can appear quite soft. It just needs to bond together more than underlying snow. One of the best mechanisms for making strong snow is drifting from wind. The areas with snow deep enough to ride are most likely drifted and have the greatest potential for strong over weak layering.
Weak snow is easy to find in the early season. Thin, shallow snow facets rapidly. Faceted snow consists of big sugary grains that are poorly bonded. You can find the biggest, weakest facets are nearest the ground.
Permanent snowfields, at first glance, have weak over strong layering. They are not avalanche immune because a thin layer of very weak snow tends to form at the base of the recent snow. The old, strong snow is often icy and slick, a perfect surface for fast-running avalanches. The icy old snow makes it hard for a rider tumbling in an avalanche to self-arrest or slow down, and high-speed falls result.
The final ingredient is a trigger to break the weaker snow. A rider makes a very good trigger, overloading the weak snow and causing an avalanche. The stronger slab fractures and flows downhill around the rider. Early season avalanches tend to be small, but tumble a rider over rocks and stumps and cause lots of injuries.

We need to brush up on our avalanche skills as part of our pre-season training. Flip through your favorite avalanche books, or check out some of the online tutorials. Beacon practice is a great way to pass a gray afternoon. Your avalanche gear deserves the same attention you lavish on your skis, board, or sled.

Seriously, sign up, give them some money, take a course, and buy a beacon, shovel and probe and ski so you never have to use any of them!

What do you think? Leave a comment.

© 2010 Recreation Law (720) Edit Law, Recreaton.Law@Gmail.com

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Michigan court upholds release in a climbing wall accident where injured climber sued his belayer for his injuries

Posted: December 6, 2010 | Author: Recreation Law | Filed under: Climbing Wall | 1 Comment

Belayer failed to keep enough slack in the system allowing the climber hit the ground.

Mankoski v Mieras, 1999 Mich. App. LEXIS 514, March 12, 1999

This case was the first time I’ve seen the injured plaintiff sue his belayer for his injuries. The plaintiff and the belayer went to a climbing gym to climb. Both were experienced climbers.

While climbing the plaintiff fell. The belayer was unable to catch the climber in a way that prevented him from hitting the floor. Either the belayer did not know how to use the belay device or had too much slack in the rope to prevent the climber from crashing. The injured climber, the plaintiff, sued the belayer for his injuries. The plaintiff claimed the belayer was negligent in his belaying.

The defendant belayer argued:

… he breached no duty to plaintiff, that plaintiff assumed the risks of injury, that the injury sustained was within the scope of plaintiff’s consent to the risks inherent in the sport, and that plaintiff released all participants from liability.

The defendant filed a motion for summary judgment which he won. The plaintiff appealed and the Michigan Appellate Court upheld the lower court decision:

…finding that a participant in a sporting event is assumed to be aware of the inherent risks of injury in the sport, and to have consented to those risks. The plaintiff’s injury was within the scope of the plaintiff’s consent.

The court agreed the plaintiff assumed the risks because the risk was assumed by the plaintiff in writing. The release the plaintiff signed was used as proof that the plaintiff assumed the risk.

So?

· Make sure your release protects you.
· Make sure your release protects your patrons and guests.
· Make sure your release outlines the risks of the activity.

Here the court took the language in the release and applied it to the defense of the belayer. However, your release should be clear that it not only protects you, your volunteers, employees and your business but your other guests and patrons.

How much business will you continue to receive if the word gets out that you can be sued just because you are not perfect in your business?

Releases are complex legal documents that require knowledge of the sport, knowledge of the types of issues and claims in the sport and a good knowledge of the law of contracts and releases. You just can’t find one on the internet and hope it works. It may not.

What do you think? Leave a comment.

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Mankoski v Mieras, 1999 Mich. App. LEXIS 514, March 12, 1999

Posted: December 6, 2010 | Author: Recreation Law | Filed under: Uncategorized | Leave a comment

Mankoski v Mieras, 1999 Mich. App. LEXIS 514, March 12, 1999

Brian Gerald Mankoski, Plaintiff-Appellant, v Shane Mieras, Defendant-Appellee.
No. 204659

Court of Appeals of Michigan

1999 Mich. App. LEXIS 514, March 12, 1999, Decided

Notice: [*1] In accordance with the Michigan court of appeals rules, unpublished opinions are not precedentially binding under the rules of stare decisis.
Prior History: Kent Circuit Court. LC No. 95-004412 NO.
Disposition: Affirmed.
Judges: Before: Murphy, P.J., and MacKenzie and Talbot, JJ.
Opinion: per curiam.

Plaintiff appeals as of right from the circuit court order granting defendant ‘s motion for summary disposition. We affirm. This appeal is being decided without oral argument pursuant to MCR 7.214(E).

Plaintiff and defendant went to a facility to participate in indoor rock climbing. Both parties were experienced at the sport. Prior to engaging in climbing, plaintiff signed a document in which he acknowledged the risks inherent in the sport, expressly assumed those risks, and released the facility from liability. Defendant acted as plaintiff’s belayer. A belayer is a spotter who watches the climber, controls the tension on the safety rope, and operates a braking device designed to prevent the climber from falling to the ground. When plaintiff fell from the wall, defendant attempted to operate the braking device.

Because the safety rope had excessive slack, defendant could not prevent plaintiff from falling to [*2] the ground.

Plaintiff filed suit, alleging that defendant was negligent in exercising his duties as a belayer. Defendant moved for summary disposition pursuant to MCR 2.116(c)(10), arguing that he breached no duty to plaintiff, that plaintiff assumed the risks of injury, that the injury sustained was within the scope of plaintiff’s consent to the risks inherent in the sport, and that plaintiff released all participants from liability. The trial court granted defendant’s motion based on Higgins v Pfeiffer, 215 Mich App 423; 546 NW2d 645 (1996).

This Court reviews a trial court’s ruling on a motion for summary disposition de novo. Harrison v Olde Financial Corp, 225 Mich App 601, 605; 572 NW2d 679 (1997).

We affirm. In Higgins, supra, the plaintiff was injured by a baseball thrown by a teammate. We affirmed the grant of the defendants’ motion for summary disposition, finding that a participant in a sporting event is assumed to be aware of the inherent risks of injury in the sport, and to have consented to those risks. The plaintiff’s injury was within the scope of the plaintiff’s consent. Higgins, supra, at 425-427. [*3] Here, plaintiff expressly acknowledged and consented to the risks inherent in indoor rock climbing, including the risk that his belayer would act in a negligent manner. Plaintiff’s injuries were within the scope of his consent. Higgins, supra, controls the instant case and supports the granting of defendant’s motion for summary disposition.

Contrary to plaintiff’s argument, the doctrine of primary assumption of the risk may be asserted as a defense if the plaintiff has expressly contracted to assume the risk. Felgner v Anderson, 375 Mich 23, 55-56; 133 NW2d 136 (1965).

Plaintiff expressly assumed the risks of indoor rock climbing, including that he would incur injury due to the negligence of his belayer.

Affirmed.
/s/ William B. Murphy
/s/ Barbara B. MacKenzie
/s/ Michael J. Talbot

Benefit Concert and Auction for Brody Miller, the Utah Park Ranger shot 2 weeks ago.

Posted: December 4, 2010 | Author: Recreation Law | Filed under: Uncategorized | Leave a comment

Many of you have probably heard of the tragic shooting of a Utah State Park Ranger in Moab two weeks ago today. He is Brody Young, a former employee Western River Expeditions. Brody is alive and fighting in a Grand Junction, Colorado hospital. The prognosis is guarded but optimistic.

Some of Brody’s friends have organized a benefit concert and auction for him and his young family on Friday, December 10th.
The band “Highwater,” will be performing and there is an amazing array of auction items.
The number of donations to the auction has nearly doubled since the flyer was made. The flyer also tells you how to donate if you can’t make it to the concert. We’re going to keep it fun and upbeat, just like the Young family.

Please share this with others. We need to fill 1100 seats and there are a lot of items in the auction.

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Bob Roll is Boycotting Vail Colorado

Posted: December 4, 2010 | Author: Recreation Law | Filed under: Criminal Liability, Cycling | 1 Comment

Maybe you should too?

Hit and run misdemeanor charge in Vail Colorado means Vail does not want cyclists. Push the Quiznos Pro Challenge to move the race out of Vail!

Bob Roll in his Bob’s Beef said he was not going to report on the Quiznos Pro Challenge from Vail Colorado until the situation in Vail is rectified. To see Bob’s video see Bob’s Beef: Cyclists Being Killed Must Stop.

Bob’s right (and I rarely say that… J).

We cyclists need to boycott Vail. Of all the towns in Colorado, Vail is the most tourists centric. A boycott of Vail during its tourist season will have an impact. To have a greater impact let the Vail community know you are boycotting the town. Contact all of the following people.

The Town Manager of Vail is Stan Zemler, Phone: 970-479-2106, E-mail: szemler@vailgov.com.
Vail Chamber and Business Association works on bringing tourists to Vail and Eagle County. You can leave a message for them at their contact page or 970.477.0075, info@vailchamber.org.

Let the Vail media know also. Contact RealVail.com at its contact page and the Vail Daily Newspaper through the editor Don Rogers: (970) 748-2920, drogers@vaildaily.com.

We need to let the Quiznos Pro Challenge know. Joe Moller is the President of Quiznos Pro Challenge. He can be reached at: Joe@QuiznosProChallonge.com or (303) 592-3811.

Tell Quiznos the main sponsor of the race. Quiznos can be reached at its contact page here. Select the category other and let them know you won’t be attending the Vail portion of the race.

If you are from out of state, let the state of Colorado know about your boycott. You can contact the Colorado State Tourism Office at its contact page.

Tell each of them the following:

1. You are boycotting the Town of Vail and Eagle County.
2. You are boycotting the Quiznos Pro Challenge if it is in Vail.
3. You are boycotting the Vail and Eagle County because motorists that hit and run cyclists are only charged with misdemeanors.
4. When this is rectified, you will come back to Vail and Eagle County.
5. You are not coming to Vail to Ski, Ride or Cycle.
6. Tell them the reason is the Vail Community obviously encourages an indifferent attitude against drivers who hit and run cyclists.

We need to put press and pressure on Vail to get them to understand why people are mad. For a city like Vail, pressure means dollars. Granted most cyclists don’t have a lot of money to spend at a place where the beers are $7.00 during happy hour, but one beer not being bought by enough people makes an impact.
Any complaint letter requires three things. (1.) A good statement of the issues. (2.) A demand, what do you want. (3.) the most important thing is who you copy on the letter. In this case, you need to let everyone know that things need to change, copy everyone. Contact everyone on that list and tell them you are upset and why.
Even if you had no plans to go to Vail, let people know. Tell them you won’t watch the Vail portion of the race on TV or the web.

Believe me; once district attorney’s figure out those not charging motorists that hit cyclists may cost their communities money, things might start to change.

For more information on the accident see Hit-and-Run in Vail, Colorado Incites Outrage.

What do you think? Leave a comment.

Copyright 2010 Recreation Law (720) Edit Law, Recreation.Law@Gmail.com

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American Alpine Club Grant Awards Deadline 1/1/11

Posted: December 3, 2010 | Author: Recreation Law | Filed under: Uncategorized | Leave a comment

Free money to go have fun! But check out the AAC library to make sure you are not trying something that has already been done.

The following awards have a deadline of 1/1/11.

Lyman Spitzer Cutting Edge Award
McNeill-Nott Award
Mountain Fellowship Grant
Copp-Dash Inspire Award
Lara-Karena Bitenieks Kellogg Memorial Conservation Grant
Mountain Fellowship Grant
Research Grants
Scott Fischer Memorial Conservation Grant
The American Alpine Club Nikwax Alpine Bellwether Grant

Zack Martin Breaking Barriers Grant

All of the grants can be found at the AAC Grants page. For general information on AAC Grants see Fund Your Trip! AAC Grant Deadlines Fast Approaching.

What do you think? Leave a comment.

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Black Hawk Colorado has banned bicycles.

Posted: December 2, 2010 | Author: Recreation Law | Filed under: Cycling | 1 Comment

I think some other town should ban Black Hawk.

See Bicyclists Banned From Riding Through Black Hawk.

A judge in Blackhawk has upheld a law that bans bicyclists in Black Hawk Colorado. It’s confusing, because under Colorado law, and the law of most states a bicycle is a vehicle, subject to the laws of the state. A city banning cars would not go over well.

This is simple.

1. Join Bicycle Colorado to show your support and help with the fight.
2. Sign up for the Bicycle Colorado Email to say informed. It’s free.
3. Make a donation to Bicycle Colorado and tell them to use the money to fight the ban.
4. Contact the City Manager of Black Hawk and let them know you don’t support the ban: CityManager@CityofBlackHawk.org
5. Contact the casinos in Black Hawk and tell them you are not coming up to spend a nickel in their casino as long as bikes are banned.

a. The Lodge Casino John East General Manager
b. Bullwhackers Casino, P.O. Box 49, 101 Gregory St., Black Hawk, CO 80422, 1.800.GAM.BULL
c. Fitzgeralds Black Hawk

d. Lady Luck Casino

Step 5 is the most important. Black Hawk was a little town that did not care. Now it is a little town with money. Tell the money, (the casinos) you are not bringing your money up and something may happen.

What do you think? Leave a comment.

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States that allow a parent to sign away a minor’s right to sue

Posted: December 1, 2010 | Author: Recreation Law | Filed under: Release (pre-injury contract not to sue) | Leave a comment

If your state is not listed here, you should assume a parent cannot waive a minor’s right to sue in your state.

State	By Statute	Restrictions
Alaska	Alaska: Sec. 09.65.292	Sec. 05.45.120 does not allow using a release by ski areas for ski injuries
Arizona	ARS § 12-553	Limited to Equine Activities
Colorado	C.R.S. §§13-22-107	Some commentators consider the statute a little weak
Florida	Florida Statute § 744.301 (3)
	By Case Law
California	Hohe v. San diego unified sch. Dist., 224 Cal.App.3d 1559, 274 Cal.Rptr. 647 (1990)
Florida	Global Travel Marketing, Inc v. Shea, 2005 Fla. LEXIS 1454	Allows a release signed by a parent to require arbitration of the minor’s claims
Florida	Gonzalez v. City of Coral Gables, 871 So.2d 1067, 29 Fla. L. Weekly D1147	Release can be used for volunteer activities and by government entities
Massachusetts	Sharon v. City of Newton, 437 Mass. 99; 769 N.E.2d 738; 2002 Mass. LEXIS 384
North Dakota	McPhail v. Bismarck Park District, 2003 ND 4; 655 N.W.2d 411; 2003 N.D. LEXIS 3
Ohio	Zivich v. Mentor Soccer Club, Inc., 696 N.E.2d 201, 82 Ohio St.3d 367 (1998)	Maybe only for non-profits
Wisconsin	Osborn v. Cascade Mountain, Inc., 655 N.W.2d 546, 259 Wis. 2d 481, 2002 Wisc. App. LEXIS 1216, 2003 WI App 1	However the decision in Atkins v. Swimwest Family Fitness Center, 2005 WI 4; 2005 Wisc. LEXIS 2 voided all releases in the state

What do you think? Leave a comment.

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CPSC is proposing changes to the Bicycle definitions

Posted: November 30, 2010 | Author: Recreation Law | Filed under: Cycling | Leave a comment

The changes are mostly technical, but if you manufacture bikes or parts you should review them.

The consumer products safety commission (CPSC) is proposing new rule changes for bicycles. The changes will affect

Sidewalk bikes
Track bikes
Recumbents
Mechanical issues
Testing procedures

The comical part of this is bicycles are classified under hazardous substances such as toxic, corrosive, flammable or combustible, an irritants. Granted some petroleum guzzling drivers may find cyclists as irritants, however the idea overall is a laugh.

The rule can be found at 16 CFR part 1512.

Comments must be submitted by January 18, 2011. You must include the agency name and docket number with your comments.

US Consumer Product Safety Commission
Docket No. CPSC-2010-0104

Electronic Submissions: Submit electronic comments through the Federal eRulemaking Portal:

Written Submissions: Send five copies to

Office of the Secretary, U.S. CPSC
Room 820, 4330 East West Highway
Bethesda, MD 20814
Telephone (301) 504-7923.

A text version of the proposed changes can be found here and a PDF version here.

What do you think? Leave a comment.

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A Recent Colorado Supreme Court Decision lowers the requirements to be brought into the state to defend a lawsuit.

Posted: November 29, 2010 | Author: Recreation Law | Filed under: Jurisdiction and Venue (Forum Selection) | 2 Comments

Email, phone calls and a vague contract were enough to bring a Rhode Island defendant to Colorado to defend a claim.

In The Foundation for Knowledge in Development, v. Interactive Design Consultants, LLC, 2010 Colo. LEXIS 505 the Colorado Supreme Court held that a foreign defendant had to come to Colorado to defend a lawsuit. In this case, foreign means someone from another state.

This case resolves around the legal issues jurisdiction and venue. Venue is the place where any litigation will take place. Jurisdiction is the law that will be applied to the case. Jurisdiction and venue decisions deal with where a lawsuit will be brought and what law will be applied to the lawsuit. You can have a court sitting in one state applying the law of another state. However, that is rare.

Normally, to bring someone into a specific state court, that person or business must be in that state, do business in a physical manner in that state or the accident or reason for the suit must be in the state. The final way is to have a clause in your contract that says the jurisdiction of any suit will be in a specific state.
Venue and jurisdiction are critical determining the outcome or settlement issues of a trial. If a defendant has to travel to another state, hire an attorney in another state and deal with laws he or she may not be familiar with, there is a greater incentive to settle a case. Additionally, the laws of the foreign state may not be as conducive to the defendant.

The perfect example of laws that are not friendly to a party would be release law. Virginia, Montana and Louisiana, among others, do not support releases. If a plaintiff from one of those states was able to sue you in one of those states and apply the law of that state, your release only be good to prove assumption of the risk.

The jurisdiction and venue clause are the second most important clause in your release or assumption of risk document after your negligence clause.

In The Foundation for Knowledge in Development, v. Interactive Design Consultants, LLC, 2010 Colo. LEXIS 505 the defendant never came to Colorado. He just negotiated a contract to provide work over the phone and email to do work for the Colorado plaintiff. The agreement was silent as to jurisdiction and venue.

The court applied a two part test to decide whether the defendant should have to defend in Colorado:

“(1) whether the defendant purposefully availed himself of the privilege of conducting business in the forum state, and (2), whether the litigation arises out of the defendant’s forum-related contacts.” Archangel [Diamond Corp. v. Lukoil,] 123 P.3d 1187, 1192 at 1194 (Colo. 2005).

As you can see, by doing business with a Colorado business with a contract where the benefits were to arise in Colorado the court easily found Colorado was the correct state for the litigation.

The court also held the decision as to whether the litigation should be in Colorado must be reasonable. The reasonableness test is a three part test:

(1) the burden on the defendant;
(2) the forum state’s interest in resolving the controversy; and
(3) the plaintiff’s interest in attaining effective and convenient relief.

The Supreme Court looked at the burden on the defendant to defend in Colorado. The court found the evidence was electronic, so there was no evidence or witness burden to the defendant to force the defendant to litigate in Colorado. Evidence or witness burden means the cost of bringing witnesses and evidence from one state to another.

Here the court found that a contract, for a Colorado client, which was to be used in Colorado, was enough to bring someone being sued to Colorado. The only contact the defendant had with Colorado, the normal test was minimal, emails and phone calls, but was enough to subject the defendant to a Colorado lawsuit and Colorado law.

Outdoor recreation companies are reaching further across state lines to attract customers. It is critical that your documentation requires any litigation to be in their state and county. This will save the defendant money, make it easier on witnesses and place the litigation in an environment where jurors understand the issues and the risks.

Imagine trying to explain snow to someone who has lived their entire life in Louisiana?
A jurisdiction and venue clause should be in your release or your VAR if you are a concessionaire or permittee.

What do you think? Leave a comment.

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The Foundation for Knowledge in Development, v. Interactive Design Consultants, LLC, 2010 Colo. LEXIS 505

Posted: November 29, 2010 | Author: Recreation Law | Filed under: Uncategorized | Leave a comment

In re: Plaintiff: The Foundation for Knowledge in Development, d/b/a Sensory Processing Disorder Foundation, a Colorado 501(c)(3) Public Charity, v. Defendants: Interactive Design Consultants, LLC, a Rhode Island corporation, and Rick DiNobile.

Case No. 10SA58

SUPREME COURT OF COLORADO
June 28, 2010, Decided

NOTICE:
THIS OPINION IS NOT THE FINAL VERSION AND SUBJECT TO REVISION UPON FINAL PUBLICATION
PRIOR HISTORY: [*1]

Original Proceeding Pursuant to C.A.R. 21. Arapahoe County District Court, Case No. 09CV2525. Honorable Marilyn Leonard Antrim, Judge.
DISPOSITION: ORDER AFFIRMED.

COUNSEL: Holland & Hart LLP, Gregory A. Eurich, Joseph Neguse, Denver, Colorado, Attorneys [*2] for Plaintiff.
Harris, Karstaedt, Jamison & Powers, P.C., Jamey W. Jamison, Coulter M. Bump, Englewood, Colorado, Attorneys for Defendants.
JUDGES: JUSTICE RICE delivered the Opinion of the Court.
OPINION BY: RICE
OPINION

EN BANC
JUSTICE RICE delivered the Opinion of the Court.
In this original proceeding taken pursuant to C.A.R. 21, we review an order from the Arapahoe County District Court denying the Defendants’ motion to dismiss for lack of personal jurisdiction. We find that the trial court properly determined that it had personal jurisdiction over the Defendants based on their contacts with Colorado regarding the subject matter of the dispute. We therefore affirm the trial court’s order and remand for further proceedings.

I. Facts and Procedural History
Plaintiff, The Sensory Processing Disorder Foundation (“SPDF”), is a nonprofit corporation headquartered in Colorado. SPDF conducts research, education, and advocacy on behalf of children with an inability to regulate sensation in a normal manner. In 2008, SPDF was considering developing web-based learning programs to provide information and interactive features to those interested in learning more about the disorder.

An SPDF representative from Colorado contacted [*3] co-Defendant Rick DiNobile, who resided in Rhode Island and was the sole owner of co-Defendant Interactive Design Consultants (collectively “DiNobile”), to inquire about whether DiNobile would be interested in designing interactive e-learning modules for SPDF. ¹ The parties discussed the specifics of SPDF’s needs through a series of emails and telephone conversations between DiNobile in Rhode Island and SPDF in Colorado. Following these discussions, DiNobile drafted a contract to memorialize the parties’ discussions. The parties then negotiated several changes to the draft agreement. SPDF signed the final agreement in Colorado and faxed it to DiNobile, who signed it in Rhode Island and then faxed the fully executed agreement back to SPDF.

1 SPDF learned about DiNobile through Michelle Clarke, SPDF’s Education Program Manager. Clarke was familiar with DiNobile because he completed several projects for one of Clarke’s previous employers in Colorado.

DiNobile commenced work on the project in Rhode Island. DiNobile never traveled to Colorado in relation to his work with SPDF. From Colorado, SPDF exchanged hundreds of email and telephone communications with DiNobile. Representatives from SPDF [*4] spent significant time in Colorado developing the content for the e-learning program, while DiNobile performed substantial work under the agreement in Rhode Island.
Each party ultimately disputed the other’s compliance with the agreement. SPDF filed suit in Colorado, alleging breach of contract as well as negligent misrepresentation. DiNobile moved to dismiss under C.R.C.P. 12(b)(2), arguing that Colorado did not have personal jurisdiction because he conducted all his business outside Colorado. ² The trial court denied DiNobile’s motion. DiNobile appealed, and we granted review using the discretion afforded to this court under C.A.R. 21.

2 C.R.C.P. 12(b)(2) states that “the following defenses may at the option of the pleader be made by motion: . . . (2) lack of jurisdiction over the person.”

II. Analysis
The trial court did not hold a hearing on DiNobile’s 12(b)(2) motion, but rather relied on the documentary evidence presented by the parties including the pleadings, affidavits, and the contract at issue. In denying the motion to dismiss, the trial court issued a written order stating that “Plaintiff has established sufficient contacts for this case to proceed in Colorado.”

A. Procedure
A [*5] trial court may decide a 12(b)(2) motion to dismiss based solely on documentary evidence or by holding a hearing. Archangel Diamond Corp. v. Lukoil, 123 P.3d 1187, 1192 (Colo. 2005). In this case, neither party requested a hearing nor do they argue for one in this appeal. When the court bases its determination solely on documentary evidence, the plaintiff must make a prima facie showing of personal jurisdiction. Id.

“A prima facie showing exists where the plaintiff raises a reasonable inference that the court has jurisdiction over the defendant.” Goettman v. N. Fork Valley Rest., 176 P.3d 60, 66 (Colo. 2007). This is a light burden intended only to “screen out ‘cases in which personal jurisdiction is obviously lacking, and those in which the jurisdictional challenge is patently bogus.'” Archangel, 123 P.3d at 1192 (quoting Foster-Miller, Inc. v. Babcock & Wilcox Can., 46 F.3d 138, 145 (1st Cir. 1995)). However, “the plaintiff ultimately bears the burden of demonstrating personal jurisdiction by the close of trial by a preponderance of the evidence if the defendant raises the challenge again at that time.” Archangel, 123 P.3d at 1192 n.3.

When basing its determination solely on documentary [*6] evidence, the trial court may not resolve disputed issues of jurisdictional fact. Goettman, 176 P.3d at 66. “[T]he allegations in the complaint must be accepted as true to the extent they are not contradicted by the defendant’s competent evidence, and where the parties’ competent evidence presents conflicting facts, these discrepancies must be resolved in the plaintiff’s favor.” Archangel, 123 P.3d at 1192.

B. Requirements of Colorado’s Long-Arm Statute and Due Process
Because SPDF is seeking jurisdiction in Colorado over a nonresident defendant, it must satisfy both Colorado’s long-arm statute and the constitutional requirements of due process. Goettman, 176 P.3d at 66-67. Colorado’s long-arm statute extends jurisdiction to the maximum extent allowed by the due process requirements of the Constitution. ³ Scheuer v. Dist. Court, 684 P.2d 249, 250 (Colo. 1984). Thus, if a plaintiff satisfies the constitutional requirements, the long-arm statute is also satisfied. Goettman, 176 P.3d at 67. With respect to tort claims, this court has “previously indicated that negligent conduct in a foreign state which causes injury in Colorado may be deemed an act committed within Colorado for purposes [*7] of the long-arm statute.” Scheuer, 684 P.2d at 251.

3 Colorado’s long-arm statute states, in pertinent part:

Engaging in any act enumerated in this section by any person, whether or not a resident of the state of Colorado, either in person or by an agent, submits such person . . . to the jurisdiction of the courts of this state concerning any cause of action arising from: (a) The transaction of any business within this state; (b) The commission of a tortious act within this state . . . .

§ 13-1-124(1)(a)-(b), C.R.S. (2009).

To satisfy the requirements of due process, a defendant must have “certain minimum contacts with the forum state such that maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 90 L. Ed. 95 (1945). “Due process requires that a defendant have certain minimum contacts with the forum state so that he may foresee being answerable in court there.” Archangel, 123 P.3d at 1194. The defendant must take some action by which he “purposefully avails himself of the privilege of conducting activities in the forum state so that he will not be subject to personal jurisdiction solely as a result of random [*8] or fortuitous contacts or the unilateral activity of a third party.” Goettman, 176 P.3d at 67 (internal quotations omitted).

The minimum amount of contacts required for Colorado to exercise personal jurisdiction depends on whether the plaintiff has alleged general or specific jurisdiction. Goettman, 176 P.3d at 67. “A court has general jurisdiction over a defendant if the defendant conducted continuous and systematic activities that are of a general business nature in the forum state.” Goettman, 176 P.3d at 67. A court has specific jurisdiction over a defendant if the “injuries triggering the litigation arise out of and are related to activities that are significant and purposefully directed by the defendant at the residents of the forum state.” Archangel, 123 P.3d at 1194 (internal quotation omitted).

SPDF has not alleged that DiNobile should be subject to general jurisdiction in Colorado. Thus, we first review the documentary evidence de novo to determine whether specific jurisdiction is appropriate. Goettman, 176 P.3d at 68. If we find that the trial court may exercise specific jurisdiction, we must then determine whether the exercise of personal jurisdiction over the nonresident [*9] defendant is reasonable. Id.

1. Specific Jurisdiction for SPDF’s Contract Claim
A court may exercise specific jurisdiction where the alleged injury arises out of and is related to “activities that are significant and purposefully directed by the defendant at residents of the forum.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S. Ct. 2174, 85 L. Ed. 2d 528 (1985). For a defendant to be subject to specific jurisdiction, the court must determine: “(1) whether the defendant purposefully availed himself of the privilege of conducting business in the forum state, and (2), whether the litigation arises out of the defendant’s forum-related contacts.” Archangel, 123 P.3d at 1194 (internal quotations omitted).

Using this analytical framework, we must determine whether, based on the documentary evidence presented to the trial court, SPDF presented sufficient evidence supporting its breach of contract claim for the trial court to exercise specific jurisdiction over DiNobile. The evidence in this case includes SPDF’s complaint, an affidavit from Michelle Clarke (SPDF’s Education Program Manager), an affidavit from DiNobile, and a copy of the executed agreement. From this evidence we must determine whether DiNobile purposefully [*10] availed himself of the privilege of doing business in Colorado and whether SPDF’s claims arise out of DiNobile’s contacts. See Goettman, 176 P.3d at 69.

a. Whether DiNobile Purposefully Availed Himself of the Privilege of Conducting Business in Colorado
As to the first part of this analysis, “[t]he purposeful availment requirement precludes personal jurisdiction resulting from ‘random, fortuitous, or attenuated contacts.'” Id. (quoting Bell Helicopter Textron, Inc. v. Heliqwest Int’l, Ltd., 385 F.3d 1291, 1296 (10th Cir. 2004)). The actions taken by the defendant “are significant in determining whether the defendant purposefully availed himself of the privilege of conducting business in the forum state.” Archangel, 123 P.3d at 1194. If the defendant deliberately created “continuing obligations” with the forum state, he has availed himself of the privilege of conducting business there. Id. (citing Keefe v. Kirschenbaum & Kirschenbaum, P.C., 40 P.3d 1267, 1271 (Colo. 2002)).

The [*11] evidence presented to the trial court demonstrates that the parties’ agreement required, and resulted in, significant contacts between DiNobile and SPDF. The complaint contains a statement of jurisdiction that reads:

[The Araphahoe County District Court] has jurisdiction over this matter and personal jurisdiction over [DiNobile] because [DiNobile] entered into a contract with SPDF in Arapahoe County, Colorado, in September of 2008 and [DiNobile] represented that [he] could perform the work required by the contract, a representation upon which SPDF reasonably relied. A substantial portion of the events giving rise to Plaintiff’s claims occurred in Arapahoe County, Colorado.

Furthermore, the complaint states that Colorado “has a substantial interest in this matter as it involves wrongs committed against a Colorado public charity which therefore affects the People of the State of Colorado.”
Clarke’s affidavit highlights the amount of work the agreement required SPDF to perform and the actions taken by DiNobile in the course of conducting business with a Colorado nonprofit corporation. See Archangel, 123 P.3d at 1194. She states that she worked with DiNobile on two prior projects in Colorado [*12] for a previous employer. For these projects, DiNobile traveled to Colorado on numerous occasions. Pertaining to the contract at issue here, Clarke states that all negotiations on behalf of SPDF were conducted by email or telephone communications originating in Colorado. Clarke signed the agreement in Colorado on behalf of SPDF. Clarke states that SPDF’s executive director, Dr. Lucy Miller, invested hundreds of hours in the development of the E-Learning program content. All core content for the E-Learning program was developed by Dr. Miller and SPDF in the State of Colorado, including conversion of power point material into storyboards, editing and expanding on storyboard content, preparing graphics and video recording of Dr. Miller as well as her audio narration. In addition, all phases of testing of the E-Learning program were conducted by SPDF in Colorado as well as development of a website landing page and pre-launch registration and payment functionality, content and graphics for the E-Learning portal, and administration of E-Learning users. The program content is the proprietary material of SPDF.

Clarke never traveled outside the state of Colorado concerning the agreement. Clarke [*13] claims that all contacts by SPDF with DiNobile originated in Colorado. Clarke estimates that she “personally had hundreds of e-mail and telephone communications with Mr. DiNobile from Colorado.”

DiNobile’s affidavit highlights the activities that took place outside Colorado. He states that he did not solicit business from SPDF, rather an SPDF representative contacted him in Rhode Island. DiNobile drafted the agreement in Rhode Island and sent it to SPDF in Colorado. DiNobile signed the final agreement in Rhode Island. He states that he performed all of the services required by the agreement in Rhode Island. Neither DiNobile nor his representatives performed any work in Colorado. Finally, Dinobile claims that he has “never traveled to Colorado in furtherance of this Agreement or to transact any business with Plaintiff in Colorado.”

The agreement itself provides guidance as to whether DiNobile availed himself of the privilege of conducting business in Colorado and whether DiNobile deliberately created continuing obligations with Colorado. See Archangel, 123 P.3d at 1194. At the outset, the agreement states that it “is entered into between [DiNobile] and [SPDF] for the design and development [*14] of four e-learning modules by [DiNobile] as more particularly described [herein].” Per the agreement, DiNobile would collect any e-commerce revenue and remit seventy percent to SPDF. DiNobile was to charge SPDF a monthly hosting/usage fee. Travel expenses incurred in performance of the agreement were to be invoiced separately, and DiNobile was to provide SPDF an estimate of any such expenses. DiNobile would host the e-learning modules within an online learning environment. Current users would be directed from SPDF’s web site to the learning portal, and prospective users would be directed to a website hosted by DiNobile to facilitate the financial transaction.

In the section of the agreement titled “Program Development,” the parties stated that “[t]he following outlines the various phases of program development and the deliverables output from each phase. SPDF will be an active partner within each of these phases and will assign a project resource to assist in project management, analysis and design, and final course delivery and implementation.” As part of the project, DiNobile was to produce detailed storyboards for elements of the program and then send the storyboards to SPDF for [*15] its approval. SPDF was required to “approve each storyboard individually before the next phase of development begins.” DiNobile’s programmers were then to use an approved design document along with the approved storyboards as their main program specifications.

The agreement further stated that SPDF had the ability to test the program extensively before it was completed and launched. The test feedback would be analyzed by SPDF and DiNobile, and approved changes would be submitted to DiNobile. After any corrections, SPDF would then approve the final version of the program. Finally, DiNobile was to deliver the final version via an externally hosted learning portal, which SPDF was again required to approve.

The agreement also identifies specific individuals and their duties under the agreement. For SPDF, Dr. Miller was to oversee the overall project and was responsible for “approval of key milestones and deliverables.” She was also to provide all subject matter expertise for the program content. Clarke was the key point of contact at SPDF for all project resources. She would provide specific support to project resources related to content, design, development, and implementation. Clarke [*16] was also to manage the pilot testing process. For Interactive Design Consultants, DiNobile was the key point of contact. He would provide the final program master to the client and assist in its implementation and deployment. He would also provide technical support during design, development, and deployment.

Based on this evidence we conclude that SPDF adequately established that Colorado has specific jurisdiction for its contract claim. We determine that the documentary evidence is adequate to show that DiNobile purposefully directed his business to SPDF, a resident of Colorado. Although controlling cases have suggested that a contractual relationship alone is insufficient to establish personal jurisdiction, see Burger King Corp., 471 U.S. at 478, here DiNobile had numerous additional contacts with Colorado. The agreement required that significant work be performed in Colorado by SPDF and outside Colorado by DiNobile. DiNobile communicated extensively with SPDF representatives in Colorado concerning their duties under the agreement. Per the agreement, DiNobile was required to send various parts of the project to SPDF in Colorado for its approval and was also required to remit a percentage [*17] of e-commerce payments to SPDF.

DiNobile pursued a business relationship with a corporation that was, at all relevant times, headquartered in Colorado. In these situations, the Supreme Court has “rejected the notion that an absence of physical contacts can defeat personal jurisdiction.” Burger King Corp., 471 U.S. at 476 (also noting that “it is an inescapable fact of modern commercial life that a substantial amount of business is transacted solely by mail and wire communications across state lines”). The contacts here are not “random, fortuitous, or attenuated” in nature and sufficiently establish that DiNobile purposefully availed himself of the privilege of conducting business in Colorado. See Goettman, 176 P.3d at 67.

b. Whether the Litigation Arises out of DiNobile’s Contacts
The second step of our specific jurisdiction inquiry asks whether the litigation arises out of the defendant’s contacts with the forum state. Id. at 69. To meet this requirement, “the actions of the defendant giving rise to the litigation must have created a ‘substantial connection’ with the forum state.” Archangel, 123 P.3d at 1194.
SPDF’s contract claim centers on the provisions of the agreement, which were [*18] negotiated by the parties between Rhode Island and Colorado, and DiNobile’s failure to adequately perform under that agreement. Thus, we conclude that SPDF’s breach of contract claim arises directly out of DiNobile’s contacts with Colorado. DiNobile’s actions under the agreement, as described above, created a substantial connection with Colorado and are sufficient to satisfy this part of the specific jurisdiction analysis.

2. Specific Jurisdiction for SPDF’s Tort Claim
In many cases “the commission of a tort, in itself, creates a sufficient nexus between a defendant and the forum state that satisfies the due process inquiry and establishes specific jurisdiction.” Goettman, 176 P.3d at 69. “In such cases, there is no need for further minimum contacts analysis because the defendant is so connected with the forum state that traditional notions of fair play and substantial justice are not offended by the forum state’s exercise of personal jurisdiction over the defendant.” Id. (citing Classic Auto Sales, Inc. v. Schocket, 832 P.2d 233, 237 (Colo. 1992)). “In other cases, even if an injury is sustained in the forum state, the defendant’s tortious acts may be so remote as to require a closer [*19] nexus between the defendant and the state.” D & D Fuller CATV Constr., Inc. v. Pace, 780 P.2d 520, 525 (Colo. 1989) (citing Scheuer, 684 P.2d at 249 (Colo. 1984), and Fleet Leasing, Inc. v. Dist. Court, 649 P.2d 1074 (Colo. 1982)). In these cases, the court must analyze whether the defendant has the required minimum contacts with Colorado. D & D Fuller CATV Constr., Inc., 780 P.2d at 525.

Here, we find that, accepting the allegations in the complaint as true, SPDF’s claim of negligent misrepresentation alleged a sufficient nexus between DiNobile and Colorado for the trial court to exercise specific jurisdiction. ⁴ The affidavits do not address the alleged pre-contract misrepresentations, so we look only at the allegations in SPDF’s complaint. SPDF claims that the misrepresentations occurred through telephone and email conversations exchanged between Rhode Island and Colorado. Although the extent of these communications is unclear, SPDF alleges that DiNobile was negligent in representing his skill and expertise throughout the parties’ communications.

4 We decline to review DiNobile’s claim that the economic loss rule precludes assertion of the tort claim. Here, we are only concerned with [*20] personal jurisdiction, and DiNobile’s allegation that the tort claim is precluded can be addressed by a separate motion to the trial court.

As stated above, in most cases the commission of a tortious act in Colorado is sufficient for a Colorado court to exercise jurisdiction over a nonresident defendant. Goettman, 176 P.3d at 69. But even if the tortious act alone is not sufficient in this case, DiNobile’s contacts with Colorado are adequate to satisfy due process. The alleged misrepresentations occurred in communications intentionally directed at a Colorado corporation. DiNobile recognized that he was negotiating with a corporation headquartered in Colorado and certainly understood that his communications with SPDF would be received in Colorado. Furthermore, SPDF suffered the alleged injury from DiNobile’s tortious conduct in Colorado. Thus, DiNobile had sufficient contacts in Colorado related to the tort claim for the trial court to exercise specific jurisdiction. ⁵

5 Because there are sufficient contacts to exercise jurisdiction for each claim, we need not address whether sufficient contacts for only one claim would suffice to exercise jurisdiction for both claims on the basis that [*21] the claims arise from the same course of action.

3. Reasonableness
If a court finds, as we have, that it may exercise specific jurisdiction, it must then “determine whether the assertion of personal jurisdiction would comport with fair play and substantial justice.” Archangel, 123 P.3d at 1195. This determination is essentially one of reasonableness. Id. Among the factors a court may consider in determining reasonableness are: (1) the burden on the defendant; (2) the forum state’s interest in resolving the controversy; and (3) the plaintiff’s interest in attaining effective and convenient relief. Id. (citing Keefe, 40 P.3d at 1271-72).

Starting with the first factor, defending an action in Colorado would place an undeniable burden on DiNobile. DiNobile does not reside in Colorado, and it is likely that the evidence of his work performed on the project will be outside the state. But much of the evidence is presumably electronic, thereby mitigating the burden of gathering and presenting this evidence in Colorado. Second, Colorado has a strong interest in resolving any controversy involving a nonprofit corporation headquartered and incorporated within the state. This is undoubtedly the case [*22] here: the dispute involves a contract entered into by a Colorado corporation that was the result of extensive communication with residents of Colorado. Finally, SPDF’s interest in litigating the case in Colorado is naturally strong. SPDF is headquartered in Colorado, and most of the actions performed by SPDF under the agreement took place in Colorado. Examining these factors together, we hold that it is reasonable for Colorado to exercise personal jurisdiction over DiNobile.

III. Conclusion
We affirm the trial court’s determination and hold that, based on the documentary evidence presented to the trial court, SPDF has made a prima facie showing that Colorado has personal jurisdiction over DiNobile for the contract and tort claims in this case. Accordingly, we remand the case to the trial court for further proceedings.

Keep Bicycling a Priority in Denver

Posted: November 26, 2010 | Author: Recreation Law | Filed under: Cycling | Leave a comment

Bike Denver is attempting to gather 5000 signatures to encourage the soon to be new mayor of Denver to continue the bicycle friendly atmosphere.

The petition will say:

Dear Mayor,
As a resident or visitor to Denver, I believe that bicycling is good for the City. It is important to me that bicycling is a priority through policy, planning, funding and political support.
Bicycling is good for our children.
Bicycling is good for the environment.
Bicycling is good for local business.
Bicycling is good for communities.
Bicycling is good for health.
Bicycling is good for Denver.
I strongly encourage you to publicly adopt Mayor John Hickenlooper’s visionary goal of 10% transportation mode-share for bicycling by 2018 and provide your staff the tools and resources to reach this goal.

If you are interested in signing the petition go here.

What do you think? Leave a comment.

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Fitness/Athletic & Outdoor Apparel Top Holiday Gift Lists

Posted: November 26, 2010 | Author: Recreation Law | Filed under: Uncategorized | Leave a comment

A recent Leisure Trends MAAP survey showed Fitness/Athletic and Outdoor apparel topped the gift lifts of ifs survey members.

Athletic/Fitness and Outdoor apparel top the list of items Active Americans plan to purchase this holiday season. According to a recent study by Leisure Trends Group with the Most Active Americans Panel™, 39% of Active Americans plan to purchase Athletic/Fitness apparel for someone on their shopping list this year, while 38% plan to purchase Outdoor apparel. Those who receive the gifts will not be the only beneficiaries of these shopping trips, however, as half (50%) of respondents indicate they plan to purchase these items for themselves.

The “Coolest” gifts to give or receive this holiday season are:

1. Cycling Equipment & Accessories (12%)
2. GPS (12%)
3. Vacation (10%)
4. Ski or Snowboard (8%)
5. Kayak/Canoe/Boat (6%)

To become a member of the MAAP survey team go here and complete a survey. Tell them Rec Law sent you.

If you are in the industry you can sign up for their newsletter here.

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Happy Thanksgiving

Posted: November 25, 2010 | Author: Recreation Law | Filed under: Uncategorized | Leave a comment

Happy Thanksgiving. Please enjoy this day!

Fifteen Percent Discount on Gear Ties

Posted: November 25, 2010 | Author: Recreation Law | Filed under: Uncategorized | 1 Comment

You will get a 15% discount off of your order when you purchase from www.geartie.com, now through December 31st.

The code is HOLIDAY1 that you will need at time of checkout.

I use these and they are great. They are a rubber coded twist tie that come in five sizes. You can use them to tie anything up, down, together or apart. Use them to keep cables organized, hang items, or just keep handy in your car for what every you may need.

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Pakistan reduces climbing fees (supposedly).

Posted: November 25, 2010 | Author: Recreation Law | Filed under: Mountaineering | Leave a comment

Forty (40%) Percent fee reduction for 6500 meter peaks.

The Government of Pakistan has reduced the royalty fee by 40% for climbing mountains above 6500 meters for 2011.

This is a great opportunity for mountaineers wishing to explore and climb Pakistan.

Pakistan’s Ministry of Tourism, has decided to raise the altitude for peaks where no peak fees or Liaison Officer are required from below 6,500 meters for which opens up many additional mountains for small teams to attempt. The only restrictions will be the usual trekking fee of US$ 50 per person per month, if the peak located in the specified trekking routes in Restricted Areas. Foreigners are allowed to trek or climb in the open zone without permit up to 6500 meters.

What do you think? Leave a comment.

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Rice, et als, vs. American Skiing Company, Et Als, 2000 Me. Super. LEXIS 90

Posted: November 25, 2010 | Author: Recreation Law | Filed under: Legal Case, Maine, Release (pre-injury contract not to sue), Ski Area | Tags: Inc., MAINE, Outdoors, Perfect Turn, Recreation, Resort, Ski, ski lesson, Sunday River, Sunday River Ski Co., Thomas Rice | Leave a comment

Thomas Rice, et als, Plaintiffs vs. American Skiing Company, Et Als, Defendants

Civil Action Docket No. CV-99-06

SUPERIOR COURT OF MAINE, OXFORD COUNTY

2000 Me. Super. LEXIS 90

May 8, 2000, Decided

May 9, 2000, Filed

DISPOSITION: [*1] Plaintiff Laurene’s Motion for Summary Judgment on Defendants’ Counterclaim GRANTED; Defendants’ Motion for Summary Judgment on Count I of Plaintiffs’ Complaint DENIED; and Defendants’ Motion for Summary Judgment on Count II of Plaintiffs’ Complaint GRANTED.

OPINION

DECISION AND ORDER

This matter is before the court on the motion of the plaintiff Laurene Rice for summary judgment, dated December 6, 1999, directed to the defendants’ counterclaim and on the defendants’ motion for summary judgment, dated January 6, 2000, directed to the plaintiffs’ complaint.

FACTUAL BACKGROUND

The plaintiffs Thomas and Laurene Rice are the parents of the plaintiff Nicholas Rice. The defendants Sunday River Skiway Corporation (SRS) and Perfect Turn, Inc. (Perfect Turn), are affiliates of each other and subsidiaries of the defendant American Skiing Company (American Skiing). ¹ SRS owns and operates the Sunday River Ski Resort in Newry, Maine (Sunday River). SRS also operates a ski school there called “Perfect Kids Children’s Program” (ski school), but does not require individuals to enroll in the ski instruction program as a precondition to skiing at Sunday River. The defendant Timothy McGuire [*2] is employed by SRS as a ski instructor.

1 On April 26, 2000, the parties filed a stipulation of dismissal without prejudice as to American Skiing Company and Perfect Turn, Inc.

On December 13, 1997, the plaintiffs went to Sunday River to ski. Nicholas was almost nine years old at the time and Laurene enrolled him in the ski school. She selected the Level Three program for people who already had certain skiing skills. ²

2 In deposition testimony, Timothy McGuire described that skill level:

Q. Would you please tell us again what Level Three meant in terms of skill level?

A. That it meant that they were able to form a wedge, to be able to stop and start and to get up on their own if they fall and they can put their skis on by themselves and that they have experience riding the chairlift.

Defendants’ Statement of Material Facts, Ex. B at p. 22.

[*3] Prior to Nicholas’ enrollment in the class, Laurene signed a form entitled “Acknowledgement & Acceptance of Risks & Liability Release” (Ski Enrollment Form) on behalf of herself and her son. The document began with a “WARNING” about the hazards of “Alpine activities” ³ and the challenges of the ski school program, then included language purporting to be a release by Laurene and Nicholas ⁴ of SRS and

“its owners, affiliates, employees and agents from any and all liability for all personal injury [] arising from any alleged negligence in the operation and maintenance or design of the ski area and other conditions such as those listed in the WARNING above.”

See Affidavit of Joseph R. Saunders, Esq. The document concluded with Laurene’s agreement to indemnify the defendants “for all awards, legal expenses and settlements arising out of” her child’s participation in the ski school and his use of the Sunday River premises. Thomas did not sign the Ski Enrollment Form and there is no evidence that he was involved in the enrollment process. The parents went off to ski while Nicholas was in class.

3 The hazards included many of the dangers or conditions included in the definition of “inherent risks of skiing” in Maine’s Skiers’ and Tramway Passengers’ Responsibilities Act. 32 M.R.S.A. § 15217(1)(A) (Supp. 1999). See Affidavit of Joseph R. Saunders, Esq.

[*4]

4 The document included the following language:

“As a parent/guardian with legal responsibility for a minor participant, I am authorized to sign this agreement for that child. I consent and agree for the minor child to be bound by this agreement ….”

See Affidavit of Joseph R. Saunders, Esq.

The ski class began around 9:30 a.m. McGuire first taught the class “rule number one” which was “you don’t pass the coach.” Nicholas fell at one point during a training run in the morning session. McGuire and the rest of the class went further ahead, then stopped and formed a group. When the boy caught up to them, McGuire was finishing an instruction about a skiing maneuver for stopping called a “hockey stop”.

The class broke for lunch at 11:15 a.m. and resumed shortly after the noon hour on a trail called Mixing Bowl. Ski conditions were good and the trail was in good shape. McGuire took his charges on a “fun run” down the slope again instructing the class not to ski past him. Nicholas fell and the group stopped further on to wait for him. He got up and began skiing toward them. He [*5] started going faster and panicked. As he approached the group, he could not slow down. He tried to do a “hockey stop”, skied off the side of the trail, hit a tree and was injured.

DECISION

A summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law. Panasonic Communications & Sys. Co. v. State, 1997 ME 43, P10, 691 A.2d 190, 194 (citing Gonzales v. Comm’r, Dep’t of Pub. Safety, 665 A.2d 681, 682-83 (Me. 1995)). Even if the parties differ as to the legal conclusions to be drawn from the historical facts before the court, if there is no serious dispute as to what those facts are, consideration of a summary judgment is proper. North East Ins. Co. v. Soucy, 1997 ME 106, P8, 693 A.2d 1141.

At the heart of it, the plaintiffs allege that the defendants, acting through McGuire, were negligent in their supervision of Nicholas. Laurene’s separate claim for lost wages can only survive on the strength of this negligence claim. The defendants disclaim responsibility by virtue of the immunity provisions of Maine’s Skiers’ and Tramway Passengers’ Responsibilities [*6] Act, 32 M.R.S.A. § 15217 (Supp. 1999), and the provisions of the Ski Enrollment Form signed by Laurene.

Maine’s Skiers and Tramway Passengers’ Responsibilities Act

The threshold issue is whether the Act immunizes the defendants against liability for a claim of negligent supervision. The court concludes that it does not. The Act relieves ski area operator’s from responsibility for injuries that result from the “inherent risks of skiing–such as skiing into a tree. Id. However, the statute expressly provides that it “does not prevent the maintenance of an action against the ski area operator for [] the negligent operation [] of the ski area”. 32 M.R.S.A. § 15217(8)(A). ⁵ Nicholas’ claim of negligent supervision clearly falls within the Act’s “negligent operation” exclusion.

5 See McGuire v. Sunday River Skiway Corp., 1994 WL 505035, *5 (D. Me.), in which Judge Hornby wrote “McGuire’s argument for liability might have some appeal if her skiing instructor had encouraged her to do something inappropriate during her lesson. That might amount to negligent operation of the ski area.”

[*7] Nicholas’ Claim

The issue then becomes whether the boy’s claim against the defendants has been effectively released by his mother. This issue requires an examination of the meaning and validity of the release language in the Ski Enrollment Form.

Releases in general are not against public policy. See Emery Waterhouse Co. v. Lea, 467 A.2d 986, 993 (Me. 1983). However, for its terms to be valid, a release absolving a defendant of liability for its own negligence “must spell out ‘with greatest particularity’ the intention of the parties contractually to extinguish negligence liability.” The courts have “traditionally disfavored contractual exclusions of negligence liability and have exercised a heightened degree of judicial scrutiny when interpreting contractual language which allegedly exempts a party from liability for his own negligence.” See Hardy v. St. Clair, 1999 ME 142, P3, 739 A.2d 368, 369, citing Doyle v. Bowdoin College, 403 A.2d 1206, 1207 (Me. 1979). The release must be construed strictly. See Doyle, 403 A.2d at 1207-08 (citing Prosser, Torts, § 68 (4th ed. 1971)) (it must appear that [*8] the terms of the release were “brought home to the plaintiff”).

The release that Laurene signed on behalf of herself and Nicholas prevents claims

“against [SRS], its owners, affiliates, employees and agents from any and all liability for all personal injury, including death or property damage arising from any alleged negligence in the operation and maintenance or design of the ski area and other conditions such as those listed in the WARNING above.”

See Affidavit of Joseph R. Saunders, Esq. (emphasis added). This language is unambiguous and, if valid, clearly releases the defendants from liability for damages and losses sustained as a result of negligence in the operation of the ski area, which would include the claim of negligent supervision in this case. The interpretation of an unambiguous contract is a question of law, see Fleet Bank of Maine v. Harriman, 1998 ME 275, P4, 721 A.2d 658.

More to the point of this case, the issue is whether an unambiguous release of negligence claims given by a parent on behalf of her child is valid. The defendants cite Zivich v. Mentor Soccer Club, Inc., 82 Ohio St. 3d 367, 696 N.E.2d 201 (Ohio 1998), as [*9] support for their assertion that a parent can give a binding release of such claims on behalf of the child. However, Zivich stands for the more limited proposition “that parents have the authority to bind their minor children to exculpatory agreements in favor of volunteers and sponsors of nonprofit sports activities where the cause of action sounds in negligence.” 82 Ohio St. 3d at 374 (emphasis added). The decision was grounded on two public policy considerations: first, nonprofit sports organizations would be unable to get volunteers without such releases and would go out of existence; and, second, parental authority to make and give such releases is of constitutional importance. However, the first consideration is inapplicable to the facts of this case–none of the defendants is a nonprofit organization and McGuire was not a volunteer–and the court is not persuaded by the second.

The defendants’ do make a broader public policy argument addressed to the facts of this case. They assert that ski schools are offered by ski areas for the convenience and safety of their guests. If releases on behalf of minors are unenforceable, ski areas will be reluctant to offer [*10] training and instructions to children, whose safety will then be as risk. This is not an inconsequential point. However, it is a risk against which a for-profit business may insure itself. ⁶ This court cannot conclude that the public policy consideration espoused by the defendants is paramount to the right of the infant to his negligence claim.

6 The court is mindful that in Zivich the Ohio Supreme court determined that “insurance for the [nonprofit] organizations is not the answer, because individual volunteers may still find themselves potentially liable when an injury occurs.” 82 Ohio St. 3d at 371-72. However, the point in Zivich, which involves a volunteer, is distinguishable from this case, which involves a paid employee. While a volunteer may reasonably expect that he should suffer no penalty for the consequences of his gratuitous acts, a paid employee–such as Defendant McGuire–may not.

There are numerous cases holding contrary to the defendants’ position. See, e.g., Scott v. Pacific West Mtn. Resort, 119 Wn.2d 484, 834 P.2d 6 (Wash. 1992) [*11] (en banc); Whitcomb v. Dancer, 140 Vt. 580, 443 A.2d 458, 460 (Vt. 1982). Maine appears to side with these decisions. In the case of Doyle v. Bowdoin College, supra, the Law Court was unequivocal in its declaration, albeit dicta, ⁷ that “this Court has held that a parent, or guardian, cannot release the child’s or ward’s, cause of action.” Doyle v. Bowdoin College, 403 A.2d at 1208 n.3. This language is too unequivocal to ignore. In fact, other courts holding in line with Scott have cited Doyle as support for this proposition. See Scott, 834 P.2d at 12 n.19; see also International Union v. Johnson Controls, Inc., 499 U.S. 187, 214, 113 L. Ed. 2d 158, 111 S. Ct. 1196 (1991)(White, J., concurring) (“the general rule is that parents cannot waive causes of action on behalf of their children”); Meyer v. Naperville Manner, Inc., 262 Ill. App. 3d 141, 634 N.E.2d 411, 414, 199 Ill. Dec. 572 (Ill. App. 1994).

7 Although it is dicta, courts have cited Doyle for the proposition that a parent cannot release a child’s causes of action.

[*12] The court concludes that the claim for negligent supervision brought on behalf of Nicholas is not barred by the release provisions of the Ski Enrollment Form signed by his mother.

Laurene’s Claim

Laurene’s claim for lost wages arises out of and is dependant upon her son’s claim for negligent supervision. As noted, the release language is unambiguous and clearly releases the defendants from liability for damages and losses “arising from any alleged negligence in the operation [] of the ski area”, which includes the claim of negligent supervision in this case. Although this court concludes that Nicholas’ cause of action survives the release provisions of the Ski Enrollment Form, his mother’s claim does not. See Scott v. Pacific West Mtn. Resort, 834 P.2d at 12 (holding that although child’s cause of action is not barred by parents’ signing of release, parents’ claims based on child’s injury are barred by unambiguous and conspicuous release); see also Childress v. Madison Cty., 777 S.W.2d 1, 7-8 (Tenn. Ct. App. 1989) (although child and child’s father are not bound by release signed by mother, she is barred from bringing claims based [*13] on child’s injuries).

Indemnification Clause

Finally, there remains the issue of whether Laurene is obligated to indemnify the defendants against Nicholas’ cause of action. In Maine, the Law Court views clauses “indemnifying a party against its own negligence with disfavor, and directs courts to construe them strictly against such a result.” See International Paper Co. v. A&A Brochu, 899 F. Supp. 715, 719 (D. Me. 1995), citing Emery Waterhouse, 467 A.2d at 993. However, the court may uphold an indemnification agreement that expressly indemnifies the indemnitee against its own negligence in a manner that clearly reflects the mutual intent of the parties. “[A] clear reflection of mutual intent requires language from the face of which the parties unambiguously agree to indemnification for indemnitee negligence.” See id. In International Paper, the court upheld the validity of such an indemnification clause that provided, as follows:

“SELLER does hereby agree to indemnify and hold harmless PURCHASER from and against any and all claims, damages, debts, demands, suits, actions, attorney fees, court costs and expenses arising [*14] out of, attributable to, or resulting from SELLER’S or any supplier’s said operations, whether the same are caused or alleged to have been caused in whole or in part by the negligence of PURCHASER, Its (sic) agents or employees.”

Id. (emphasis added). However, unlike International Paper, it is not clear that the indemnification provision in this case applies to the defendants’ own negligence. ⁸ The Ski Enrollment Form provides as follows:

“I hereby indemnify the ski areas named above, its owners, affiliates, employees and agents for all awards, legal expenses and settlements arising out of the child’s participation in this clinic and the use of the ski area premises.”

Employing a strict construction analysis, the court concludes that this language is ambiguous and does not reflect an express mutually intended agreement that Laurene will indemnify the defendants against their own negligence. In fact, it seems more suited to an interpretation that the indemnification is for losses or damages caused by Nicholas while participating in the ski school.

8 See McGraw v. S.D. Warren Co., 656 A.2d 1222, 1224 (Me. 1995), where the court held that Cianbro did not specifically agree to indemnify Warren for damages caused by Warren’s own negligence where the clause provided:

The contractor [Cianbro] is responsible for and shall continuously maintain protection of all the work and property in the vicinity of the work from damage or loss from any cause arising in connection with the contract and any work performed thereunder. [Cianbro] shall indemnify and hold owner [Warren] harmless for any claims, suits, losses or expenses including attorneys’ fees suffered by [Warren] arising out of injury to any person including [Warren’s] or [Cianbro’s] employees or damage to any property, including [Warren’s] property if the injury or damage is caused in whole or in part by [Cianbro] or any of [Cianbro’s] subcontractors, material men or anyone directly or indirectly employed or otherwise controlled by any of them while engaged in the performance of any work hereunder.

[*15] Based on the conclusion that the Ski Enrollment Form does not include an indemnification by Laurene against the defendants’ own negligence, the court does not need to reach the plaintiffs’ further claim that the indemnification clause is unconscionable as a contract of adhesion. See Dairy Farm Leasing Co., Inc. v. Hartley, 395 A.2d 1135, 1139-40 (Me. 1978) (“where a standard-form, printed contract is submitted to the other on a ‘take it or leave it’ basis, upon equitable principles the provisions of the contract are generally construed to meet the reasonable expectations of the party in the inferior bargaining position; when a contract of adhesion is exacted by the overreaching of a party, the defense of unconscionability may be asserted”).

Pursuant to Rule 79(a) M.R.Civ.P., the Clerk is directed to enter this Decision and Order on the Civil Docket by a notation incorporating it by reference, and the entry shall be:

Plaintiff Laurene’s Motion for Summary Judgment on Defendants’ Counterclaim is GRANTED;

Defendants’ Motion for Summary Judgment on Count I of Plaintiffs’ Complaint is DENIED; and

Defendants’ Motion for Summary Judgment on Count II of [*16] Plaintiffs’ Complaint is GRANTED.

Dated: May 8, 2000

/s/ signed

Justice, Superior Court

Markel top Five Camp Claims for 2010

Posted: November 23, 2010 | Author: Recreation Law | Filed under: Insurance, Summer Camp | Leave a comment

Claims are mixed between general liability and property damage claims, but instructive.

Markel Insurance has listed their top five (5) claims for the 2010 camp season.

1. Auto-related events. The majority of driver-at-fault accidents involved backing into and hitting parked vehicles, colliding at intersections, rear-ending other vehicles, and striking objects such as deer and trees.
2. Tripping and falling accidents. These events often took place on playground equipment and during open-field game activities.
3. Wind damage. Wind-related damages were primarily caused by trees falling on structures during strong storms.
4. Abuse. Abuse allegations reported during 2010 were primarily camper-to-camper incidents.
5. Lightning damage. Damages occurred to office equipment, such as computers and telephone systems.
Auto, Wind and Lighting are property damage claims. In most cases, these are the real reasons why you have insurance. To pay for damage for things you cannot control, wind and weather.

Tripping and falling accidents are the curious claims listed. Kids fall down. Many of these claims can be avoided if the parents know that kids are going to be hurt when they run, jump and play.

The Markel Risk Management Tips newsletter can be seen here. To sign up for the newsletter go to CampInsurance.com. A complete article about the top five risks can be found at Train Your Staff with Lessons from the Past.

What do you think? Leave a comment.

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Ski Patroller dies in Avalanche at Wolf Creek

Posted: November 23, 2010 | Author: Recreation Law | Filed under: Avalanche, Ski Area | Leave a comment

Wolf Creek Ski Area closed after ski patrol director killed in avalanche

Patroller killed in Wolf Creek slide

Wolf Creek Ski Area closed after death of employee

The patroller was the ski patrol director, 41 year old Scott Kay.

What do you think? Leave a comment.

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Keywords: #recreation-law.com, #outdoor law, #recreation law, #outdoor recreation law, #adventure travel law, #law, #travel law, #Jim Moss, #James H. Moss, #attorney at law, #tourism, #adventure tourism, #rec-law, #rec-law blog, #recreation law, #recreation law blog, #risk management, #Human Powered, #human powered recreation,# cycling law, #bicycling law, #fitness law, #recreation-law.com, #backpacking, #hiking, #Mountaineering, #ice climbing, #rock climbing, #ropes course, #challenge course, #summer camp, #camps, #youth camps, #skiing, #ski areas, #negligence, #Wolf Creek Ski Area, #avalanche, #fatality, #employee,
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