What the term “strictly construed” actually means when used to describe how a release will be viewed by the court.Posted: July 9, 2018
The decision involves several legal issues, the one that concerns us is the issue of a release for a product. In Kansas, releases are strictly construed. In this case that meant that the language of the release did not meet the requirements of state law for a release. However, the court stretched incredibly far to come to that conclusion.
State: Kansas, United States District Court for the District of Kansas
Plaintiff: Patricia Fee
Defendant: Steve Snyder Enterprises, Inc.; Russell Young; SSE, Incorporated; Greene County Sport Parachute Center of Wellsville, Kansas, Inc.; and John Doe Corporation
Plaintiff Claims: Wrongful death and survival claims based on negligence, product liability and breach of warranty
Defendant Defenses: Statute of Limitations ran,
Holding: for the plaintiff
The lawsuit was brought over the failure of an automatic opener, which did not during a sky dive. The widow sued the manufacture of the device and the sky-diving center who sold the device to the deceased. The deceased signed a release and indemnity agreement, two separate documents when purchasing the automatic opener.
In Kansas, releases are allowed but strictly construed. Here strict construction is used, improperly, to interpret the release in an extremely narrow way to allow the lawsuit to proceed.
The deceased died when he was sky diving, and his automatic opening device failed to open. The automatic opening device was manufactured by the defendant.
The plaintiff spent eight years attempting to serve the defendant, starting in 1977 and finally serving the defendant in 1985. This lead to a discussion about when the lawsuit actually started, which takes the first half of the decision. Because the defendant had avoided service of process, because he knew about it and made attempts not to get sued, the date of the lawsuit started was the date he was served. However, due to the defendant’s actions, the statute of limitations did not run.
The widow purchased the automatic opener for the deceased, although the dates in the decision must be incorrect. The decision states the device was purchased a year after the deceased died. The device failed the first time it was used by the decedent.
The deceased signed a release for the parachute center. The defendant manufacturer raised the release as a defense to the claims of the plaintiff against the manufacture as well as those claims against the dive center.
The release was on one side of the paper and on the reverse was an assumption of risk language. The deceased also signed a separate indemnify agreement. The decedent signed both agreements.
This decision is that of the Federal District Court in Kansas.
Analysis: making sense of the law based on these facts.
The court first looked at release law in Kansas. If not against public policy, then Kansas recognizes exculpatory agreements, releases. However, like many state’s releases, the courts in Kansas use the language that releases “are not favored by the law and are strictly construed against the party relying on them.” Strictly construed does not require the specific term negligence but must clearly appear to express the intent to release from liability the defendant.
It is not necessary; however, that the agreement contained specific or express language covering in so many words the party’s negligence, if the intention to exculpate the party from liability clearly ap-pears from the contract, the surrounding circumstances and the purposes and objects of the parties.
The court in reading the release found it did not stop the plaintiff’s claims.
The court first in looking at the language found the language covered use of the product but did not cover liability for “sale” of the product.
First, a review of the agreement itself shows that, although it specifically releases the Parachute Center from liability for injuries or death arising out of the “ownership, operation, use, maintenance or control” of many devices,” the agreement fails to mention any release of liability revolving around the sale of any product to the parachuter.
The court admitted the deceased understood that parachuting was dangerous, that was not enough. By making the determination that the product was defective when sold, the court found the release would not stand because you cannot release liability for selling a defective product.
Strictly construing the agreement; however, we do not believe that this should be interpreted to exempt the Parachute Center from a failure to use due care in furnishing safe equipment, or should allow it to sell a product in a defective condition unreasonably dangerous to the parachuter. To do so would impermissibly extend the terms of the agreement to situations not plainly within its language.
The court then determined the release would also not work to stop the plaintiff’s claims for breach of either express or implied warranty. The court found attempting to release the defendant parachute center from liability was unconscionable. Under Kansas law, a release could be used to stop warranty claims, unless that was found to be unconscionable.
We, therefore, hold that plaintiff’s action is not barred by the release, covenant not to sue and indemnity clause signed by the plaintiff’s decedent. Summary judgment in favor of the defendants Parachute Center and Russell Young is therefore, inappropriate.
The indemnification agreement seemed to be ignored in reaching this determination by the court.
So Now What?
Strict construction is a term that gives leeway to a court to review the language of the release to make sure it conforms to the language required under state law. However, that term was created and applied to release’s decades ago and rarely used now except in rare situations like this. When the judge wants the defendant to pay.
Probably the term was created when courts were first asked to apply releases to a plaintiff’s claims and wanted a way to soften the blow. Now days, in most states it is quoted in the decision at the beginning and never heard of again. Eventually if the courts review enough releases, the term is not even quoted.
Few states allow a release to be used to stop product liability claims. However, several states do and several states allow assumption of risk to stop product liability claims. A well-written release that incorporates assumption of risk language is still effective in many product liability cases.
Here, however, the court reached as far as it could to find that the release was barred from stopping the claims. Part of that desire to allow the suit to proceed was probably because of the actions of the manufacturer who spend eight years avoiding service of the lawsuit.
The rest, however, was simply a stretch to allow the lawsuit to proceed.
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Patricia Fee, Plaintiff, v. Steve Snyder Enterprises, Inc.; Russell Young; SSE, Incorporated; Greene County Sport Parachute Center of Wellsville, Kansas, Inc.; and John Doe Corporation, Defendants
CIVIL ACTION No. 84-2323
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS
1986 U.S. Dist. LEXIS 28158
March 14, 1986
CORE TERMS: parachute, sport, summary judgment, decedent, personally, covenant, implied warranties, statute of limitations, service of process, mail service, notice, mail, parachuting, personal injury, personal service, parachuter, consumer, assigns, wrongful death, strict liability, territorial limits, unconscionable, consequential, predecessor, disclaimer, diversity, automatic, warranty, opening, saving
COUNSEL: [*1] John E. McKay, LAW OFFICES OF BENSON & McKAY, 911 Main Street, Suite 1430, Kansas City, Missouri 64105, (816) 842-7604; Mark R. Singer/Micheline Z. Burger ROMAIN, BURGER & SINGER, CHTD., The College View Building, 4500 College Blvd., Suite 103, Overland Park, Kansas 66221, (913)649-5224; Paul v. Herbers, James E. Cooling, Cooling, Herbers & Sears, P.C., P.O. Box 26770, Kansas City, MO 64196, (816) 474-0770; Russell C. Leffel, 7315 Frontage Road, Suite 111, Shawnee Mission, KS 66204, 913-362-9727, Neal E. Millert, Larry J. Tyrl, James, Millert, Houdek, Tyrl & Sommers, 804 Bryant Building, 1102 Grand, Kansas City, Missouri 64106, Randolph G. Austin, Speer, Austin, Holliday, & Ruddick, 261 N. Cherry, P.O. Box 1000, Olathe, Kansas 66061.
OPINION BY: O’CONNOR
MEMORANDUM AND ORDER
EARL E. O’CONNOR, CHIEF JUDGE.
This matter is before the court on defendants’ motions for summary judgment and plaintiff’s motion for costs. This is a diversity action for wrongful death and survivorship based on claims of negligence, strict liability and breach of express and implied warranties.
I. Motion for Summary Judgment by Defendant SSE, Incorporated.
Defendant SSE, Incorporated, moves for [*2] summary judgment on the ground that plaintiff’s action is barred by the two-year statute of limitations found at K.S.A. 60-513(a). For the following reasons, defendant’s motion must be denied.
[HN1] Summary judgment is appropriate when the matters considered by the court disclose that “there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Federal Rule of Civil Procedure 56(c). The court must look at the record in the light most favorable to the party opposing the motion. Prochaska v. Marcoux, 632 F.2d 848, 850 (10th Cir. 1980), cert. denied, 451 U.S. 984 (1981). Before summary judgment may be granted, the moving party must establish that it is entitled to summary judgment beyond a reasonable doubt. Ellis v. El Paso Natural Gas Co., 754 F.2d 884, 885 (10th Cir. 1985).
The uncontroverted facts relevant to this motion are as follows:
1. The plaintiff’s decedent died while skydiving on December 11, 1982, when his parachute failed to open. Decedent’s parachute was equipped with an automatic opening device, which was manufactured by the defendant SSE, Incorporated.
2. Plaintiff filed this lawsuit on August 13, [*3] 1984, consisting of wrongful death and survival claims based on negligence, product liability and breach of warranty. Plaintiff named Steve Snyder Enterprises, Inc., as a defendant, claiming that it was a Pennsylvania corporation that designed, manufactured and sold the defective device.
3. On August 14, 1984, the complaint was mailed to Steve Snyder Enterprises, Inc., at a New Jersey address.
4. Steve Snyder Enterprises, Inc., had changed its name to “SSE, Incorporated,” in November of 1977. Its corporate headquarters, however, remained at the same location.
5. SSE, Incorporated, received the complaint at the New Jersey address.
6. ln a telephone conversation with plaintiff’s counsel, the attorney for SSE, Incorporated, advised plaintiff’s counsel that neither SSE nor its predecessor corporation, Steve Snyder Enterprises, Inc., would accept service by mail.
7. On November 1, 1984, counsel for SSE, Incorporated, rated, wrote to plaintiff’s counsel, again informing him that SSE intended not to acknowledge the mail service.
8. On November 14, 1984, the complaint was again mailed to Steve Snyder Enterprises, Inc. SEE, Incorporated, received the complaint, but refused to sign or [*4] return an acknowledgement.
9. On December 7, 1984, plaintiff filed her first amended complaint, adding SSE, Incorporated, as a defendant.
10. From January 1985 to August 28, 1985, plaintiff’s process servers made thirty-three attempts to personally serve SSE, Incorporated.
11. On August 29, 1985, plaintiff successfully served Steve Snyder, the registered agent and president of SSE, Incorporated.
Defendant SSE, Incorporated, argues that summary judgment is appropriate on all of plaintiff’s claims because they are barred by the two-year statute of limitations for wrongful death actions set forth at K.S.A. 60-513(a)(5). The court notes, however, that not all of plaintiff’s claims are for wrongful death — Counts VI through VIII are survival actions based on negligence, strict liability and breach of express and implied warranties. Nevertheless, a similar two-year statute of limitations (see K.S.A. 60-13(a)(4)) applies to the negligence, strict liability and breach of warranty claims. See Grey v. Bradford-White Corp., 581 F.Supp. 725 (D. Kan. 1984). The court will therefore treat defendant’s motion as seeking summary judgment on all of plaintiff’s claims and not merely plaintiff’s [*5] wrongful death claims.
To decide whether plaintiff’s claims are barred by the two-year statute of limitations, we must first determine when plaintiff’s suit was commenced. [HN2] In a diversity action, the court must apply the state law prescribing when an action commences for statute of limitations purposes rather than Rule 3 of the Federal Rules of Civil Procedure. Walker v. Armco Steel Corp., 446 U.S. 740 (1980); Ragan v. Merchants Transfer & Warehouse Company, 337 U.S. 530 (1949). [HN3] Kansas law provides that an action is commenced at the time a petition is filed if service of process is obtained within ninety days. See K.S.A. 60-203(a)(1). If service is not obtained during the 90-day period, then the action is commenced at the time of service. Id.
Defendant argues that plaintiff’s action did not com- mence until August 29, 1985, when plaintiff personally served the agent of SSE, Incorporated, Steve Snyder. Accordingly, since plaintiff’s cause of action arose on December 11, 1982, her claims are barred by the two-year statute of limitations. We are not persuaded by defendant’s argument.
We conclude that plaintiff’s action was timely commenced under the saving provisions [*6] of K.S.A. 60-203(b). That section provides:
[HN4] If service of process or first publication purports to have been made within the time specified by subsection (a)(1) but is later adjudicated to have been invalid due to any irregularity in form or procedure or any defect in making service, the action shall nevertheless be deemed to have been commenced by the original filing of the petition if valid service is obtained or first publication is made within 90 days after that adjudication, except that the court may extend that time an additional 30 days upon a showing of good cause by the plaintiff.
Applying this statute to the facts in this case, we find that plaintiff purported to serve process by mail on August 14, 1984, only one day after the suit was filed. Service by mail is proper under a recent amendment to the Kansas Code of Civil Procedure. 1
See K.S.A. 60-314 (Supp. 1985). We find, however, that plaintiff’s service was invalid due to the defendant’s failure to complete and return the enclosed notice. Under the saving provision of section 60-203(b), we may nevertheless deem plaintiff’s action to have been commenced on the date plaintiff’s complaint was filed, [*7] so long as plaintiff makes personal service on the defendant within ninety days of this order.
1 We must look to the Kansas law prescribing the method of service. This is a diversity action in which plaintiff asserts jurisdiction over the defendant pursuant to the Kansas long-arm statute, K.S.A. 60-308. Fed. R. Civ. P. 4(f) provides that “process other than a subpoena may be served anywhere within the territorial limits of the state in which the district court is held, and when authorized by a statute of the United States or by these rules, beyond the territorial limits of that state.” There is no applicable federal statute that would allow service of process outside the state in this case. Thus, in order to obtain service beyond the territorial limits of the court, there must be authorization in “these rules.” Rule 4(e) provides for service of process on defendants who are not inhabitants of or found within the state. In pertinent part it states:
Whenever a statute or rule of court of the state in which the district is held provides (1) for service of a summons, or of a notice, or of an order in lieu of summons upon a party not an inhabitant of or found within the state, . . . service may . . . be made under the circumstances and in the manner prescribed in the [state] statute or rule.
Clearly, service by mail is a “manner” of service provided by the Kansas statute in this situation. See K.S.A. 60-314 (Supp. 1985).
[*8] Defendant also argues that because plaintiff’s mail service was directed to Steve Snyder Enterprises, Inc., rather than to SSE, Incorporated, it was totally ineffective. We find defendant’s argument meritless for two reasons. First, under the saving provision discussed above, plaintiff’s mistake in naming defendant’s predecessor corporation qualifies as a defect in the service that may be remedied by plaintiff reserving the defendant under its proper name within ninety days of this order. Second, [HN5] both the federal rules (Rule 15(c)) and Kansas law (K.S.A. 60-215(c)) allow for relation back of an amendment changing a party. Under these provisions, [HN6] a change in party relates back so long as the claim asserted arose out of the events set forth in the original complaint and
within the period provided by law for commencing the action against him, the party to be brought in by amendment (1) has received such notice of the institution of the action that he will not be prejudiced in maintaining his defense on the merits, and (2) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against him.
Federal Rule [*9] of Civil Procedure 15(c); K.S.A. 60-215(c).
In this case, an amendment changing defendant’s name from Steve Snyder Enterprises, Inc., to SSE, Incorporated, would clearly relate back. First, the claims asserted would be identical to those originally filed. Second, SSE, Incorporated, admits it had notice of this action within the statutory period. Counsel for SSE, Incorporated, informed plaintiff’s counsel in August and November of 1984 that SSE had received the mail service but chose not to acknowledge it. Third, SSE, Incorporated, knew that but for plaintiff’s confusion over the name of its predecessor corporation, the action would have been brought against it.
We therefore hold that plaintiff shall have ninety (90) days from the date of this order to personally serve the defendant SSE, Incorporated. Upon such service, plaintiff’s action will be deemed to have commenced on August 13, 1984, when the case was filed. Plaintiff’s claims will therefore be timely. If, however, plaintiff fails to serve SSE, Incorporated, within the 90-day time period, plaintiff’s action against this defendant will be deemed time-barred. Defendant’s motion for summary judgment will therefore be held in abeyance [*10] for ninety days from the date of this order to allow plaintiff to properly serve the defendant.
II. Plaintiff’s Motion for Costs.
Plaintiff moves for payment of the costs incurred in plaintiff’s previous attempts to personally serve defendant. [HN7] Costs are available pursuant to both Federal Rule of Civil Procedure 4(c)(2)(D) and K.S.A. 60-314:
Unless good cause is shown for not doing so the court shall order the payment of the costs of personal service by the person served if such person does not complete and return within 20 days after mailing, the notice and acknowledgment of receipt of summons.
Defendant in this case has shown no reason why costs should not be assessed against it. Defendant deliberately refused to acknowledge mail service and even went so far as to inform plaintiff that it was electing to assert its “right to service of process in the customary manner and not by mail.” Defendant’s Exhibit 4. Not only did defendant refuse mail service, but it also made every attempt to thwart personal service. Plaintiff was thus forced to attempt service at least thirty-three times against defendant. We therefore hold that plaintiff is entitled to recover costs in [*11] the amount of $1,628.47 as requested in her motion. Furthermore, plaintiff will be entitled to recover costs incurred in serving the defendant again, as discussed in part I above, upon plaintiff’s submission of proof of expenses.
III. Motion for Summary Judgment by Defendants Russell Young and Greene County Sport Parachute Center.
Defendant Russell Young moves for summary judgment on the ground that plaintiff’s decedent signed a release and covenant not to sue in favor of Greene County Sport Parachute Center of Wellsville, Kansas, Inc. (hereinafter the Parachute Center), and its employees and agents. The Parachute Center joins in said motion.
The material uncontroverted facts are as follows:
1. On May 8, 1982, plaintiff’s decedent signed a “Release and Covenant Not To Sue,” which read in pertinent part:
[I] do hereby fully and forever release and discharge the said Greene County Sport Parachute Center of Wellsville, Kansas, Inc. and their employees, servants, stockholders, agents, successors, assigns, and all other persons whomsoever directly or indirectly liable, from any and all other claims and demands, actions and cause of action, damages, costs, loss of services, [*12] expenses and any and all other claims of damages whatsoever, resulting from PERSONAL INJURIES, DEATH OR PROPERTY DAMAGES SUSTAINED BY ME, arising out of AIRCRAFT FLIGHTS, PARACHUTE JUMPS, or any other means of lift, ascent or descent from an aircraft of any nature, or arising out of the ownership, operation, use, maintenance or control of any vehicle, whether motor vehicle, aircraft, or otherwise, or any device, or mooring, while on the ground or in flight, and meaning and intending to include herein all such PERSONAL INJURIES, DEATH OR PROPERTY DAMAGE resulting from or in any way connected with or arising out of instructions, training, and ground or air operations incidental thereto.
This release and covenant not to sue is made and entered in consideration of the permission extended to me by Greene County Sport Parachute Center of Wellsville, Kansas, Inc. to participate in a course of parachuting instructions, parachuting training flying activities, ground or air operations incidental to parachuting and flying.
I further acknowledge that I will not rely on any oral or written representation of Greene County Sports Parachute Center of Wellsville, Kansas, Inc. or any agent thereof. [*13] I fully understand that there are dangerous risks in the sport of parachute jumping, and I assume said risks. . . .
I HAVE READ AND FULLY UNDERSTAND that Release and Covenant Not to Sue and sign the same as my own free act.
2. Plaintiff’s decedent also signed an “Indemnity Clause,” which read:
I acknowledge that Greene County Sport Parachute Center of Wellsville, Ks., Inc., is not an insurer of me. I do, for myself, my heirs, executors, administrators and assigns, hereby expressly stipulate, covenant and agree to indemnify and hold forever harmless the said Greene County Sport Parachute Center of Wellsville, Ks., Inc., and its employees, servants, stockholders, agents, successors, and assigns, and all other persons whomsoever against and from any and all actions, causes of action, claims and demands for damages, judgments, executions, costs, loss of services, expenses, compensation, including reimbursement of all legal costs and reasonable counsel fees incurred or paid by the said indemnified parties or any of them, for the investigation, prosecution or defense of any such action, cause of action or claim or demand for damages, and any and all other claims for damages, whatsoever, [*14] which may hereafter arise, or be instituted or recovered against said Greene County Sport Parachute Center of Wellsville, Ks., Inc., and its servants, employees, stockholders, agents, successors, assigns or any other person or persons whomsoever, by me or by any other person whomsoever, whether for the purpose of making or enforcing a claim for damages, on account of PERSONAL INJURIES, DEATH, OR PROPERTY DAMAGE sustained by me, or whether for the purpose of enforcing a claim for damages of any nature by any person whomsoever, on account of, or in any way resulting therefrom.
3. The decedent signed both the clause and release and certified that he had read them. His signature was witnessed by defendant Russell Young, President of the Parachute Center.
4. On the reverse side of the release, the decedent also signed and certified the following statements:
(9) I understand there are potential dangers and risks involved in this sport and acknowledge that the training I have received is intended to minimize such but is no guarantee or representation that there are none.
(10) I understand that parachuting is a potentially dangerous sport and that the proper functions of these parachutes [*15] or any parachute cannot be and is not guaranteed.
5. The decedent ordered and promised to pay for an automatic parachute opening device from the defendants Parachute Center and Russell Young. Young delivered the device to the decedent in December 1982.
6. The decedent used the device for the first time while skydiving on December 11, 1982. His parachute failed to open, he fell to the ground and was fatally injured.
7. The decedent’s widow paid the Parachute Center $254.60 for the device on January 27, 1983.
[HN8] Kansas courts have long recognized the validity of exculpatory agreements relieving a party from liability unless it would be against the settled public policy to do so. See, e.g., Belger Cartage Service, Inc. v. Holland Construction Co., 224 Kan. 320, 329, 582 P.2d 1111, 1118 (1978); Hunter v. American Rentals, 189 Kan. 615, 617, 371 P.2d 131, 133 (1962). Exculpatory contracts, however, “are not favored by the law and are strictly construed against the party relying on them.” Cason v. Geis Irrigation Co., 211 Kan. 406, 411, 507 P.2d 295, 299 (1973). Accord. Belger, 224 Kan. at 329, 582 P.2d at 1119. The terms of the agreement are not to be extended to [*16] situations not plainly within the language employed. Baker v. City of Topeka, 231 Kan. 328, 334, 644 P.2d 441, 446 (1982); Missouri Pacific Railroad Co. v. City of Topeka, 213 Kan. 658, 664, 518 P.2d 372, 377 (1973). It is not necessary, however, that the agreement contain specific or express language covering in so many words the party’s negligence, if the intention to exculpate the party from liability clearly appears from the contract, the surrounding circumstances and the purposes and objects of the parties. Bartlett v. Davis Corp., 219 Kan. 148, 159, 547 P.2d 800, 806 (1976).
After reviewing the language of the contract and the totality of the circumstances to determine the intent of these parties, we conclude that the release and indemnity clause do not preclude plaintiff’s action. First, a review of the agreement itself shows that, although it specifically releases the Parachute Center from liability for injuries or death arising out of the “ownership, operation, use, maintenance or control” of many device,” the agreement fails to mention any release of liability revolving around the sale of any product to the parachuter. Granted, there is a paragraph in [*17] which the parachuter states that he understands that parachuting is a potentially dangerous sport and that the proper function of the parachute cannot be guaranteed. Strictly construing the agreement, however, we do not believe that this should be interpreted to exempt the Parachute Center from a failure to use due care in furnishing safe equipment, or should allow it to sell a product in a defective condition unreasonably dangerous to the parachuter. To do so would impermissibly extend the terms of the agreement to situations not plainly within its language.
Other courts have held that similar releases exempt parachute centers and trainers only from injuries that ordinarily occur without any fault of the defendant. See Diedrich v. Wright, 550 F.Supp. 805 (N.D. Ill. 1982); Gross v. Sweet, 49 N.Y.2d 102, 424 N.Y.S.2d 65, 400 N.E.2d 306 (Ct.App. 1979). We agree with these courts that the language alerting the parachuter to the dangers in parachute jumping is used to drive home to the individual that he must enter into this sport with an apprehension of the risks inherent in the nature of the sport. See 550 F.Supp. at 808; 49 N.Y.2d at
, 424 N.Y.S.2d at 369, 400 [*18] N.E.2d at It does not, however, follow that he must accept enhanced exposure to injury or death based on the carelessness of the defendants in selling him a defective product or failing to warn him about its use.
Furthermore, we hold that the release was ineffective under Kansas law to limit liability for a breach of either an express or implied warranty. [HN9] With respect to disclaimer of express warranties, K.S.A. 84-2-719(3) provides:
Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. Limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation of damages where the loss is commercial is not.
In this case, the automatic opening device qualifies as a consumer good under K.S.A. 84-9-109. Under section 84-2-719(3), the defendants’ attempt to exclude consequential damages for personal injury was unconscionable and therefore unenforceable.
Furthermore, with respect to disclaimer of implied warranties of merchantability, [HN10] the Kansas Consumer Protection Act flatly prohibits in consumer cases the use of any limitation on remedies or liability for implied [*19] warranties, and declares that any such disclaimers are void. K.S.A. 50-639(a) and (e). See also id. at 84-2-719 (Kansas Comment).
We therefore hold that plaintiff’s action is not barred by the release, covenant not to sue and indemnity clause signed by plaintiff’s decedent. Summary judgment in favor of the defendants Parachute Center and Russell Young is therefore inappropriate.
IT IS THEREFORE ORDERED that defendants’ motion for summary judgment by Russell Young and Greene County Sport Parachute Center of Wellsville, Kansas, Inc., is denied.
IT IS FURTHER ORDERED that defendant’s motion for summary judgment by SSE, Incorporated, shall be held in abeyance until plaintiff obtains personal service upon SSE, Incorporated. Plaintiff shall have ninety (90) days from the date of this order to personally serve SSE, Incorporated. If plaintiff fails to so serve the defendant, defendant’s motion for summary judgment will be granted.
IT IS FURTHER ORDERED that plaintiff’s motion for costs to personally serve the defendant SSE, Incorporated, in the amount of $1,628.47, is granted.
Dated this 14th May of March, 1986, at Kansas City, Kansas.
If you fall down in a foreign country, and you have paid money to be there, you probably have to sue there.Posted: June 15, 2015
The exception is cheap vacations where the hotels and resorts won’t have you sign a forum selection clause when you arrive.
State: Kansas, United States Court of Appeals For The Eleventh Circuit
Plaintiff: John C. Mcarthur, Sandra S. Mcarthur
Defendant: Kerzner International Bahamas Limited, Kerzner International Limited, Island Hotel Company Limited, Paradise Island Limited
Plaintiff Claims: negligence
Defendant Defenses: Forum Selection Clause
Holding: For the Defendant
The plaintiffs, husband and wife, went to the Bahamas to watch a college basketball tournament. While at a resort, the husband slipped and fell near the pool injuring his back. The plaintiff’s filed a lawsuit in the federal district court in Kansas. The defendants filed a motion to dismiss based on the forum selection clause the plaintiff’s had signed.
A forum selection clause is the same as a jurisdiction and venue clause. It identifies the place and the law that will be applied to the case.
The district court dismissed the plaintiff’s claims and the plaintiff’s, husband and wife, appealed to the Eleventh Circuit Court of Appeals. This is the decision of the Eleventh Circuit Court of Appeals.
Analysis: making sense of the law based on these facts.
The plaintiff’s booked their travel through a travel agent who was hired by the university or done in conjunction with the university. The travel agent upon booking the rooms received a contract from the hotel which required the travel agent to inform the guests of the rules and contract provisions.
The relationship between a travel agent and the hotel is different from most contracts. First whether or not a contract exists is based on the relationship. If a contract exists it is to pay a commission a specific way to the travel agent and/or be based on a relationship. However, in every situation there is a third party beneficiary to the contract or third parties that are part of the contract, the travelers. Either way the travelers have an interest in the contract. The travel agent usually has requirements as part of the contract to communicate parts or the entire contract to their customers, the travelers.
Sometimes the travel agent is the agent of the travelers. In cases where the travel agent is an agent, then the travel agent must communicate all things known or required by the hotel to the traveler.
Those terms and provisions, which were to be communicated in this case included:
…two provisions in which the travel agent agrees to notify their clients that when they book their reservation through the travel agent, they are subject to certain terms and conditions governing their stay at Atlantis.
A section of the contract indicates that the additional terms and conditions are available on the Atlantis website.
The terms and conditions provide that the guest will be asked to sign a form agreeing to certain terms related to any claims the guest may have as a result of the guest’s stay at the Atlantis Resort. It specifically states that “I agree that any claim I may have against [several named defendants and others], along with their parent, related and affiliated companies at every tier, . . . resulting from any events occurring in The Bahamas shall be governed by and construed in accordance with the laws of the Commonwealth of The Bahamas, and further, irrevocably agree to the Supreme Court of The Bahamas as the exclusive venue for any such proceedings whatsoever.”
Because the travel agent is an “agent” of the plaintiff the plaintiff had constructive notice of the terms of the agreement before they arrived in the Bahamas. Constructive notice means you legally had notice of the facts or pleadings at issue even if you did not have actual notice.
When the plaintiff’s arrived at the resort, they signed a registration card titled Acknowledgement, Agreement and Release. This too had a choice of forums clause requiring all suits to be brought in the Bahamas.
The court first reviewed the law surrounding forum selection clauses.
A forum selection clause will be invalidated where “(1) its formation was induced by fraud or overreaching; (2) the plaintiff would be deprived of its day in court because of inconvenience or unfairness; (3) the chosen law would deprive the plaintiff of a remedy; or (4) enforcement of the clause would contravene public policy.”
The test on whether a forum selection clause goes too far or overreaches is:
To determine whether there was fraud or overreaching in a non-negotiated forum selection clause, the court looks to “whether the clause was reasonably communicated to the consumer. A useful two-part test of ‘reasonable communicativeness’ takes into account the clause’s physical characteristics and whether the plaintiffs had the ability to become meaningfully informed of the clause and to reject its terms.”
The court found “The Bahamas is an adequate alternative forum, and the public interest factors weigh in favor of transfer.” The court then looked at the arguments raised by the plaintiffs as to why the forum selection clause should be invalidated. However, the plaintiff’s did not argue any of the four factors necessary to overcome the selection in the clause.
Consequently, the court upheld the District Court’s dismissal of the claim. The plaintiffs were free to go to the Bahamas and file their claim again.
So Now What?
The legal term for deciding the case should be dismissed is forum non conveniens. Latin for the forum is not convenient, meaning the right one based on the contract.
There are two keys here that were critical for the court to rule this way. The first was the forum selected was reasonable for the situation. Normally, you have to choose the forum of the defendant, where the defendant is served or where you may catch the defendant temporarily. (There are classic “stories” of serving defendants in airplanes as they flew over a particular state.)
There must be a reasonable reason for the selection you choose. If you are based in one state and the plaintiff’s come from others, you cannot just choose any state with the best law or the hardest courts to find. You must choose a state where the accident happens if you are fixed, what the accident may happen if you are running trips in other states or the state where you are legally based.
The second is the plaintiff’s had the opportunity, whether or not they took it, to see the forum selection clause, and the other contractual terms, prior to leaving their homes. This might have resolved with a different result if the forum selection clause and other contracts, such as a release, had been handed to the plaintiff’s upon the arrival without any notice they would be required to sign it.
If the client had not signed the agreement at the time of check in, and if they claimed they had not read or received the contract, the plaintiff’s might still have been held to the contract because they took advantage of the benefits the contract offered.
Get your release, with its forum selection clause, in front of the plaintiff as soon as possible. Now days it can be part of the sign up process online or posted on your website or emailed to the guest when their credit card is run.
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Records help prove even if your release is weak, the plaintiff really understood the risks.
Plaintiff: Eric Walton
Defendant: Oz Bicycle Club
Plaintiff Claims: negligence
Defendant Defenses: (1) that the release signed by Walton bars the present action; (2) that Walton assumed the risk of the injuries received; and (3) that Oz assumed no duty of due care towards Walton
Holding: for the defendant
In Walton v. Oz Bicycle Club of Wichita, the federal district court upheld a release used in a bicycle race. The race was held in Wichita Kansas, by the Oz Bicycle Club of Wichita. The plaintiff was rounding a corner in the lead on an open race course when he swerved to miss a car and crashed. An open bicycle race course means cars are on the roadway. An open course is not closed to traffic or pedestrians. A closed course, all cars have been prohibited on the course.
The defendant bicycle club filed a motion for summary judgment, which was granted by the court. The plaintiff when he signed up for the race was handed a release which he signed. The plaintiff had raced twenty to thirty times before and signed releases each time. He did not read this release but had read others and knew what he was signing. Prior to the start of the race the plaintiff had been informed that the course was not closed. The plaintiff encountered traffic on the race course at least twice prior to his crash.
The plaintiff was an employee of a bicycle manufacturing company which was also a sponsor of the race.
Summary of the case
The court first reviewed the issue of whether Assumption of Risk was a defense at this time in Kansas. The court concluded it probably not because the Kansas Supreme Court had not handed down a decision that was specific in stating assumption of risk was a defense in Kansas.
The court quoted the heading and four paragraphs of the release in its decision. The heading of the release read: “NOTICE: THIS ENTRY BLANK AND RELEASE FORM IS A CONTRACT WITH LEGAL CONSEQUENCES. READ IT CAREFULLY BEFORE SIGNING.”
The plaintiff argued that releases were not favored under Kansas law; however, the plaintiff never showed how the release at issue, was void under Kansas law.
The court in one paragraph summed up the requirements for the release to be valid under Kansas law:
Although exculpatory agreements have an inherent potential for abuse and overreaching, and hence are subjected to close scrutiny by the courts, these agreements have a vital role to play in allowing the individual to participate in activities of his own choice. If the individual has entered into an exculpatory clause freely and knowingly, and the application of the clause violates no aspect of fundamental public policy, the individual’s free choice must be respected. Here, public policy supports, rather than detracts from, the application of the exculpatory clause. “Unless courts are willing to dismiss such actions without trial, many popular and lawful recreational activities are destined for extinction.”
The court looked at the release and found it to be valid. The release lacked the word negligence; however, it spoke to “rights and claims” for “any and all damages” sustained by participating in the event. The court concentrated on the fact the plaintiff had signed more than 20 other releases, participated in more than 20 races and had crashed in at least two races. This is another situation where the facts and knowledge of the plaintiff helped seal the release in the mind of the court.
So Now What?
It was obvious that the defendant’s ability to show the court 20-30 other releases for bicycle racing signed by the plaintiff was instrumental in proving the arguments of the plaintiff did not matter. You need to hold on to releases, you never know when one many years old maybe valuable in proving your case.
That does not require that you hold onto each paper copy of a release. Electronic copies are equally valid. Invest in a scanner and take all of your old releases and scan them. You can organize them by date or race or activity. You do not need to identify each release at the time. You cans scan them in a way that they are searchable later, and if you ever need to find one, you can.
Also instrumental was the fact the plaintiff was informed at the beginning of the race that the course was open, going to have cars on the course. Add to that the defendant could prove the plaintiff had avoided cars on the course during the race and had raced on open courses in the past. I would suggest putting important information such as the course being open into the release, so you can prove you gave the rider the information. Having that information in the release, should not, however, remove the responsibility to tell the people about the open course also.
While working at a ski area, we threw in the weather report and an area map into all big accident files. We never knew if any accident would lead to a suit, however, why worry about it. Make sure the file has everything you need, every back reference or proof needed when you build the file so you don’t have to search for it. We had a lot of stored weather reports and ski area maps, but if one was needed in a lawsuit, they were easy to find.
We also included all of the skiing history we had on the injured guest. Any logs from his skiing that year, each time his pass had been scanned if the injured guest had a season pass. Prior season pass or skiing history if we had it. Proof that the injured guest knew how to ski and assumed the risk or proof that the injured guest had signed numerous releases.
That ability to find information, electronically or on paper, saved the day in this bicycle race case.
What do you think? Leave a comment.
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Walton v. Oz Bicycle Club Of Wichita, 1991 U.S. Dist. LEXIS 17655 (Dist Kan 1991)
Eric Walton, Plaintiff, vs. Oz Bicycle Club Of Wichita, Defendant.
United States District Court For The District Of Kansas
1991 U.S. Dist. LEXIS 17655
November 21, 1991, Decided
November 22, 1991, Filed
COUNSEL: PLAINTIFF COUNSEL: David P. Calvert, Focht, Hughey, Hund & Calvert, 807 North Waco, Suite 300, Wichita, KS 67203
DEFENSE COUNSEL: Don D. Gribble, II, Donald N. Peterson, II, Kahrs, Nelson, Fanning, Hite & Kellogg, 200 West Douglas, Suite 630, Wichita, KS 67202
OPINION BY: PATRICK F. KELLY
OPINION: Nearing the end of the sixth lap of the seven-lap bicycle race held in Hutchinson, Kansas on August 12, 1989, Eric Walton began to pull into the lead. Closely pursued by two other racers, Walton approached the intersection of Crazy Horse and Snokomo Streets. The course of the race required the racers traveling east on Crazy Horse to make a left turn at the intersection onto Snokomo.
MEMORANDUM AND ORDER
Leaning into the turn at about 30 miles per hour, Walton cut the northwest corner of the intersection about two feet from the curb. Flying past the corner, Walton was able to see for the first time the car stopped at the stop sign at the intersection and which had been hidden by the crowd of spectators lining Crazy Horse. Walton turned to the right to avoid the car. His bike went off the roadway, striking the open door of the van owned by the race’s referee, Gaylen Medders. As a result of this accident, Walton sustained injuries which have formed the basis for the present action.
The defendant, Oz Bicycle Club of Wichita, Kansas, has moved for summary judgment on the claims advanced by Walton. Oz presents three arguments in support of its motion: (1) that the release signed by Walton bars the present action; (2) that Walton assumed the risk of the injuries received; and (3) that Oz assumed no duty of due care towards Walton.
[HN1] Summary judgment is proper where the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). [HN2] In considering a motion for summary judgment, the court must examine all evidence in a light most favorable to the opposing party. McKenzie v. Mercy Hospital, 854 F.2d 365, 367 (10th Cir. 1988). [HN3] The party moving for summary judgment must demonstrate its entitlement to summary judgment beyond a reasonable doubt. Ellis v. El Paso Natural Gas Co., 754 F.2d 884, 885 (10th Cir. 1985). The moving party need not disprove plaintiff’s claim; it need only establish that the factual allegations have no legal significance. Dayton Hudson Corp. v. Macerich Real Estate Co., 812 F.2d 1319, 1323 (10th Cir. 1987).
[HN4] In resisting a motion for summary judgment, the opposing party may not rely upon mere allegations or denials contained in its pleadings or briefs. Rather, the nonmoving party must come forward with specific facts showing the presence of a genuine issue of material fact for trial and significant probative evidence supporting the allegation. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). Once the moving party has carried its burden under Rule 56(c), the party opposing summary judgment must do more than simply show there is some metaphysical doubt as to the material facts. “In the language of the Rule, the nonmoving party must come forward with ‘specific facts showing that there is a genuine issue for trial.'” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting Fed.R.Civ.P. 56(e)) (emphasis in Matsushita). [HN5] One of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses, and the rule should be interpreted in a way that allows it to accomplish this purpose. Celotex Corp. v. Catrett, 477 U.S. 317 (1986).
Walton was an employee of the Continental Cyclery Company in Hutchinson, Kansas, and participated in the race as a member of the Continental Cyclery team. An experienced racer, Walton had participated in 20 to 30 prior races, and had experienced two prior accidents while racing.
The August 12 race in Hutchinson was sponsored by Continental Cyclery, as well as a local pizzeria and mortuary. The race was conducted under the auspices of defendant Oz Bicycle Club of Wichita, which conducts periodic bicycle races as a part of its “Toto Racing Series.” For the August 12 race, local sponsors arranged for standby emergency medical and law enforcement services, planned the course of the race, and arranged for corner marshals along the route. Medders, the chairman of Oz, took participant applications, and served as the official and timer of the race.
Entrants in the race paid an $ 8.00 fee to Oz. In addition, entrants were required to sign a release. This release provides in part:
NOTICE: THIS ENTRY BLANK AND RELEASE FORM IS A CONTRACT WITH LEGAL CONSEQUENCES. READ IT CAREFULLY BEFORE SIGNING.
In consideration of the acceptance of my application for entry in the above event, I hereby freely agree to and make the following contractural [sic] representations and agreements.
I fully realize the dangers of participating in a bicycle race and fully assume the risks associated with such participation including, by way of example, and not limitation, the following: the dangers of collision with pedestrians, vehicles, other racers, and fixed or moving objects; the dangers arising from surface hazards, equipment failure, inadequate safety equipment, and weather conditions; and the possibility of serious physical and/or mental trauma or injury associated with athletic cycling competition.
I hereby waive, release and discharge for myself, my heirs, executors, administrators, legal representatives, assigns, and successors in interest (hereinafter collectively “successors”) any and all rights and claims which I have or which may hereafter accrue to me against the sponsors of this event, the Oz Bicycle Club, the promoter and any promoting organization(s), property owners, law enforcement agencies, all public entities, special districts, and properties (and their respective agents, officials, and employees) through or by which the events will be held for any and all damages which may be sustained by me directly or indirectly in connection with, or arising out of, my participation in or association with the event, or travel to or return from the event.
Similar releases were contained in the registration forms for each of the 20 to 30 prior races in which Walton had participated. Walton was given an opportunity to read the release. Having read similar forms on prior occasions, Walton did not read this release. Walton was aware of what was in the release and understood its terms.
Walton’s participation in the race was not required. However, Walton voluntarily wished to enter the race and knew that signing the release was a requirement for participation. Walton recognized the dangers of participating in a bike race. Walton signed the release.
Prior to the start of the race, Medders had warned the participants that the course of the race was not closed to traffic, and during the course of the race Walton had encountered other cars on the course. However, as he cut the corner at the end of the sixth lap, Walton had not thought of the possibility of a car, hidden by the crowd, laying in his path on the other side of the intersection.
The status of the doctrine of assumption of risk is not clear under present Kansas law. In Shufelberger v. Worden, 189 Kan. 379, 385, 369 P.2d 382 (1962), the court indicated that the doctrine of assumption of risk was generally limited to situations involving an “employment relationship or [a] contractual relationship, express or implied.” By a process of slow osmosis, the Kansas Supreme Court has held most recently that the doctrine of assumption of risk is “limited to cases such as this where a master-servant relationship is involved.” Borth v. Borth, 221 Kan. 494, 499, 561 P.2d 408 (1977). To what extent this evolution, reflected in Smith v. Blakey, 213 Kan. 91, 101, 515 P.2d 1062 (1973); Ballhorst v. Hahner-Forman-Cale, Inc., 207 Kan. 89, 484 P.2d 38 (1971); Perry v. Schmitt, 184 Kan. 758, 339 P.2d 36 (1959); George v. Beggs, 1 Kan.App.2d 356 Syl para. 1, 564 P.2d 593 (1977), is the result of an intentional, conscious modification of the law is uncertain. At no time have the state courts considered the impact of the adoption of comparative fault in relation to the continued validity of the doctrine of assumption of risk. But it is unnecessary to resolve the issue of assumption of risk here, since the court finds that the release signed by Walton is a valid exculpatory agreement which bars the present action.
In his brief in opposition to the motion for summary judgment, Walton presents several arguments in opposition to the application of the release agreement. Walton contends that the agreement reflects “overreaching” by the defendant, and cites the long list of persons protected by the agreement, including property owners in the area, law enforcement officers, and all public entities. This argument might be considered if the defendant were such a party, unconnected with either the race or the release agreement. Here, however, Oz is the bicycle club which helped to organize the race, took the applications of participants, and required the release agreements to be signed by those participants. In inserted, typed language, the agreement specifically lists “Oz Bicycle Club” as one of the parties protected by the release agreement.
Citing several Kansas cases, Walton contends that the law does not favor exculpatory agreements. This is certainly correct. But the cases cited by Walton merely establish that such agreements are disfavored and therefore are to be strictly construed. They do not establish that exculpatory agreements are inherently void as contrary to law. Mid-America Sprayers, Inc., v. United States Fire Ins. Co., 8 Kan.App.2d 451, 660 P.2d 1380 (1979).
It is correct, as Walton notes, that exculpatory agreements are void where they are contrary to established public interests. Hunter v. American Rentals, 189 Kan. 615, 371 P.2d 131 (1962); In re Estate of Shirk, 186 Kan. 311, 350 P.2d 1 (1960). Yet, despite this suggestion, Walton does not attempt to explain how bicycle racing affects important and established public interests.
The position advanced by Walton has been expressly rejected elsewhere. [HN6] Voluntary sporting competitions are not matters of important public interest, as that term is used in considering which matters may not be the subject of exculpatory agreements. “There is no compelling public interest in facilitating sponsorship and organization of the leisure activity of bicycle racing for public participation.” Okura v. United States Cycling Fed., 186 Cal.App.3d 1462, 231 Cal. Rptr. 429 (1986). See also Dobratz v. Thomson, 161 Wis.2d 502, 468 N.W.2d 654 (1991) (water skiing); Barnes v. Birmingham Intern. Raceway, Inc., 551 So.2d 929 (Ala. 1989) (automobile racing); Milligan v. Big Valley Corp., 754 P.2d 1063 (Wyo. 1988) (downhill skiing); Boehm v. Cody Country Chamber of Commerce, 748 P.2d 704 (Wyo. 1987) (mock gunfight conducted by gun club); McAtee v. Newhall Land & Farming, 169 Cal.App.3d 1031, 216 Cal.Rptr. 465 (1985) (motorcross racing); Hulsey v. Elsinore Parachute Center, 168 Cal.App.3d 333, 214 Cal.Rptr. 194 (1985) (sky diving); Williams v. Cox Enternrises, Inc., 159 Ga.App. 333, 283 S.E.2d 367 (1981) (10,000 meter foot race). Even the fact that a participant considers the sport to be more than a “hobby” and hopes to someday participate at an Olympic level, will not raise the matter to a compelling public interest. Buchan v. U.S. Cycling Fed., 227 Cal. App.3d 134, 277 Cal. Rptr. 887 (1991).
Walton also argues that the danger herein — an automobile on the course of the race — was not a hazard normally associated with bicycle competitions, and cites the decision of the California Court of Appeals in Bennett v. United States Cycling Fed., 193 Cal.App.3d 1485, 239 Cal. Rptr. 55 (1987), in which the court found that an automobile’s presence on the course of the raceway was found to be a risk not normally associated with bicycle racing, and therefore not within the contemplation of an exculpatory agreement signed by the plaintiff. Unlike Bennett, where the bicycle race involved a “closed race” in which automobiles were not to be permitted on the raceway, the uncontradicted facts herein establish that the presence of automobiles on the course of the Toto race in Hutchinson was not unknown to the participants. Rather, the fact that the course was open to normal traffic was explicitly made known to the participants. Under the factual background of the case, there is no basis for the contention that the plaintiff could not or should not have anticipated the presence of automobiles on the raceway as a danger reflected in the release agreement.
[HN7] Although exculpatory agreements have an inherent potential for abuse and overreaching, and hence are subjected to close scrutiny by the courts, these agreements have a vital role to play in allowing the individual to participate in activities of his own choice. If the individual has entered into an exculpatory clause freely and knowingly, and the application of the clause violates no aspect of fundamental public policy, the individual’s free choice must be respected. Here, public policy supports, rather than detracts from, the application of the exculpatory clause. “Unless courts are willing to dismiss such actions without trial, many popular and lawful recreational activities are destined for extinction.” Buchan, 227 Cal.App.3d at 147.
IT IS ACCORDINGLY ORDERED this 21 day of November, 1991, that the defendant’s motion for summary judgment (Dkt. No. 35) is hereby granted.
PATRICK F. KELLY, JUDGE