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Have you ever read your insurance policy? You should! The one at issue in this case specifically excluded the risks the policy was bought to cover.

An event organizer of a 5K Extreme Rampage purchased an insurance policy that specifically excluded coverage for a 5K run with obstacles, mud runs and tough-guy races.

Johnson v. Capitol Specialty Ins. Corp., 2018 Ky. App. Unpub. LEXIS 447

State: Kentucky, Court of Appeals of Kentucky

Plaintiff: Chris Johnson D/B/A Extreme Rampage, and Chris Johnson, and Christopher Johnson, Rampage LLC, Christopher Johnson D/B/A Rampage, LLC, and/or Extreme Rampage, Casey Arnold, Individually and as Administratrix Of the Estate of Chad Arnold, and as Next Friend and Guardian/ Conservator for Miles Arnold, and as Assignee for All Claims Held By “The Johnson Parties

Defendant: Capitol Specialty Insurance Corporation

Plaintiff Claims: negligence; violation of the Kentucky Consumer Protection Act and the Unfair Claims Settlement Practices Act; fraud; and breach of contract

Defendant Defenses:

Holding:

Year: 2018

Summary

Insurance litigation about a claim for an event, service, trip or liability is much costlier and time-consuming than any litigation concerning an injury.

In this case, the event owner and organizer of a mud run obstacle course in Kentucky purchased insurance for the event, which excluded all coverage needed for the event. Effectively, the plaintiff in this case paid for paper that had no value.

The trial courts and the appellate court agreed with the insurance company because the exclusions were in the policy that was available to the insured prior to the event.

Facts

The plaintiff in this appeal created an owned a mud run obstacle course the Extreme Rampage. Johnson the individual created Extreme Rampage LLC, which then organized and ran the event.

The event was a 3K obstacle race, similar if not identical to mud runs, death races, etc., The race was to be held at the Kentucky Horse Park. The horse park required a $1 million-dollar policy covering them.

Johnson contacted an insurance agent over the phone who completed an application and sent it off. A quote was received and accepted. The cost was $477.00, which should have been the first clue; it was too cheap. The only part of the application or proposal that Johnson saw was the “subjectivities page” which stated the policy was to be issued after a list of things were verified. The items to be verified list things as rallies, cattle drives, etc., but did not list obstacle course, running events or the like.

When the policy was issued it contained two exclusions. The first was labeled the sponsor exclusion by the court and stated:

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY

EXCLUSION — ATHLETIC OR SPORTS PARTICIPANTS

This endorsement modifies insurance provided under the following:

COMMERCIAL GENERAL LIABILITY COVERAGE PART.

SCHEDULE

Description of Operations:

Special event — 5K run with obstacles.

. . .

With respect to any operations shown in the Schedule, this insurance does not apply to “bodily injury” to any person while practicing for or participating in any sports or athletic contest or exhibition that you sponsor.

And the second exclusion labeled by the court as the participant exclusion provided as follows:

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY EXCLUSION — PARTICIPANTS

(SPECIFIED ACTIVITIES/OPERATIONS)

SCHEDULE

Descriptions of Activity/Operations

Mud Runs and Tough Guy Races

This insurance does not apply to “bodily injury,” “property damage,” “personal or advertising injury” or medical expense arising out of any preparation for or participation in any of the activities or operations shown in the schedule above.

During the race, one of the participants collapsed and died. His wife sued. The insurance company denied coverage. That means the insurance company was not only not going to pay the claim, they were not going to pay for attorneys to defend the case.

The Insurance Company filed a declaratory action. This lawsuit was between Johnson, the policyholder and the insurance company where the insurance company was looking for a ruling stating it had no duty to provide coverage. This is a request for immediate decision from the court on the interpretation of the policy.

Johnson, the insured and Arnold the family of the deceased participant both filed suit against the insurance company. The trial court combined the two lawsuits into one. Both filed motions for summary judgment and the insurance company filed its motion for summary judgment.

After reading the exclusions, the policy only covered spectators at the event. The spectators had to be 100′ from the event so any spectator injured that was closer than 100′ to the event could sue, and Johnson would have no coverage for that claim either. Basically, the policy was a worthless piece of paper for the event.

The trial court granted the insurance companies motion for summary judgment, and this appeal ensued. Both Johnson and the Arnold family appealed.

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

Insurance policies have their own set of laws. Even though they are contracts, after the contract is formed, new ways of interpreting a policy are created.

One such rule is any ambiguity in the policy will be ruled or interpreted against the insurance company. Since policies are presented as a take it or leave it contract, any mistakes in the contract are ruled so the policy holder wins.

The first claim is a quasi-fraud claim based on the lack of information concerning the exclusions. The court looked at this more as a situation where the event organizer did not read the policy.

Johnson cannot avoid the terms of the insurance contract by pleading ignorance of its contents. It is axiomatic that “insured persons are charged with knowledge of their policy’s contents.

Because Johnson signed the policy (? Application not the policy, in reality) Johnson was held to the terms of the policy.

Although Johnson claims, based on his interaction with Delre, that the terms of the policy were not what he had anticipated, no genuine issue of material fact exists that Johnson signed the policy and, as a matter of law, was presumed to know its contents.

The next argument was the insurance agent the event organizer worked with was an agent of the insurance company Capitol. As such, the agents could be liable and the agents could create liability for Capitol. An agency is created when the principal, the insurance company, grants specific authority to the agent.

“Actual authority arises from a direct, intentional granting of specific authority from a principal to an agent.” The Restatement (Third) of Agency § 2.02(1) (2006) provides that “[a]n agent has actual authority to take action designated or implied in the principal’s manifestations to the agent and acts necessary or incidental to achieving the principal’s objectives, as the agent reasonably understands the principal’s manifestations and objectives when the agent determines how to act.”

However, there was no evidence in the record to show any agency between the insurance sales person and the insurance company, even though the sales person is called an agent.

The next argument was over the language in the policy. The event organizer argued the exclusion should not apply because the term “sponsor” was ambiguous.

Exclusions in insurance contracts are to be narrowly interpreted, and all questions resolved in favor of the insured. Exceptions and exclusions are to be strictly construed so as to render the insurance effective. Any doubt as to the coverage or terms of a policy should be resolved in favor of the insured. And since the policy is drafted in all details by the insurance company, it must be held strictly accountable for the language used.

After narrowly interpreting the policy, any ambiguity in the language of the policy must be interpreted in favor of the policy holder and against the insurance company.

…[t]he rule of strict construction against an insurance company certainly does not mean that every doubt must be resolved against it and does not interfere with the rule that the policy must receive a reasonable interpretation consistent with the parties’ object and intent or narrowly expressed in the plain meaning and/or language of the contract. Neither should a nonexistent ambiguity be utilized to resolve a policy against the company. We consider that courts should not rewrite an insurance contract to enlarge the risk to the insurer.

However, the court found the term in this case, was not ambiguous.

The event organizer then argued that the Concurrent Proximate Cause Doctrine should apply in this case. The concurrent proximate cause doctrine holds that when an insured event flows from an insured event, the protection afforded by the insurance policy flows with to the new event.

Where the loss is essentially caused by an insured peril with the contribution of an excluded peril merely as part of the chain of events leading to the loss, there is coverage under the policy. Stated alternately, coverage will exist where a covered and noncovered peril join to cause the loss provided that the covered peril is the efficient and dominant cause.

The court found that there was no insured event to begin with so nothing could “flow” to the uninsured event.

The appellate court upheld the motion in the declaratory action by the trial court stating the insurance company Capitol had no duty to defend the event organizer Johnson and thus any liability to the Arnold family.

So Now What?

This is simple. You MUST do the following things if you are the owners, sponsor, organizer or insured with an insurance policy.

  1. Read it
  2. Understand it
  3. Make sure it covers what you need it to cover.
  4. Find an agent who understands what you need and can communicate that to all the insurance companies he may be working with.
    1. If that means getting the insurance company out from behind their desk and down the river, to an event, or in your factory do that.
  5. Always confirm in writing or electronically that the coverage you requested and need is covered in the policy you are purchasing.
  6. Ask to see the policy and any exclusions, prerequisites or other requirements before paying for it. Once you open your wallet, you won’t get your money back.
  7. If the price of the policy is too good to be true, start investigating. On average a policy should cost $5 to $10 per person per day for outdoor recreation coverage. That amount is the bottom line and can go beyond that. If you are purchasing a policy at 1980 prices $2.00 per person per day, you are buying worthless paper.

You cannot be in business without an insurance policy. Contrary to popular believe, insurance policies do not attract lawsuits. How do people know if you are insured? If they do not know you are insured, how can someone decided to sue just because you have money.

If for no other reason, you need a policy that will pay to prove you are right. The attorney fees, court costs, exhibits, witness fees alone on a small case will exceed $50K. That means with no policy or a bad policy, you are out $50 to $100K before you even begin to pay a claim.

Insurance policies are difficult. I spent six years, three before and three after working for Nationwide Insurance. Reading a policy, let alone understanding it is mind numbing and hard. But you better or you will be standing in the cold, because someone took your house.

What do you think? Leave a comment.

Copyright 2017 Recreation Law (720) 334 8529

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Johnson v. Capitol Specialty Ins. Corp., 2018 Ky. App. Unpub. LEXIS 447

Johnson v. Capitol Specialty Ins. Corp.

Court of Appeals of Kentucky

June 22, 2018, Rendered

NO. 2017-CA-000171-MR, NO. 2017-CA-000172-MR

Reporter

2018 Ky. App. Unpub. LEXIS 447 *; 2018 WL 3090503CHRIS JOHNSON D/B/A EXTREME RAMPAGE, AND CHRIS JOHNSON, AND CHRISTOPHER JOHNSON, RAMPAGE LLC, CHRISTOPHER JOHNSON D/B/A RAMPAGE, LLC, AND/OR EXTREME RAMPAGE (COLLECTIVELY KNOWN AS “THE JOHNSON PARTIES”) BY AND THROUGH ASSIGNEE CASEY ARNOLD, APPELLANTS v. CAPITOL SPECIALTY INSURANCE CORPORATION, APPELLEE;CASEY ARNOLD, INDIVIDUALLY AND AS ADMINISTRATRIX OF THE ESTATE OF CHAD ARNOLD, AND AS NEXT FRIEND AND GUARDIAN/ CONSERVATOR FOR MILES ARNOLD, AND AS ASSIGNEE FOR ALL CLAIMS HELD BY “THE JOHNSON PARTIES”, APPELLANTS v. CAPITOL SPECIALTY INSURANCE CORPORATION, APPELLEE

Notice: THIS OPINION IS DESIGNATED “NOT TO BE PUBLISHED.” PURSUANT TO THE RULES OF CIVIL PROCEDURE PROMULGATED BY THE SUPREME COURT, CR 76.28(4)(C), THIS OPINION IS NOT TO BE PUBLISHED AND SHALL NOT BE CITED OR USED AS BINDING PRECEDENT IN ANY OTHER CASE IN ANY COURT OF THIS STATE; HOWEVER, UNPUBLISHED KENTUCKY APPELLATE DECISIONS, RENDERED AFTER JANUARY 1, 2003, MAY BE CITED FOR CONSIDERATION BY THE COURT IF THERE IS NO PUBLISHED OPINION THAT WOULD ADEQUATELY ADDRESS THE ISSUE BEFORE THE COURT. OPINIONS CITED FOR CONSIDERATION BY THE COURT SHALL BE SET OUT AS AN UNPUBLISHED DECISION IN THE FILED DOCUMENT AND A COPY OF THE ENTIRE DECISION SHALL BE TENDERED ALONG WITH THE DOCUMENT TO THE COURT AND ALL PARTIES TO THE ACTION.

Prior History:  [*1] APPEAL FROM FAYETTE CIRCUIT COURT. HONORABLE KIMBERLY N. BUNNELL, JUDGE. ACTION NOS. 14-CI-00948 & 15-CI-00777. APPEAL FROM FAYETTE CIRCUIT COURT. HONORABLE KIMBERLY N. BUNNELL, JUDGE. ACTION NOS. 14-CI-00948 & 15-CI-00777.

Counsel: BRIEFS FOR APPELLANTS, CHRIS JOHNSON D/B/A EXTREME RAMPAGE, AND CHRIS JOHNSON, AND CHRISTOPHER JOHNSON, RAMPAGE LLC, CHRISTOPHER JOHNSON D/B/A RAMPAGE, LLC, AND/OR EXTREME RAMPAGE: Don A. Pisacano, Lexington, Kentucky.

BRIEFS FOR APPELLANTS, CASEY ARNOLD, INDIVIDUALLY AND AS ADMINISTRATRIX OF THE ESTATE OF CHAD ARNOLD, AND AS NEXT FRIEND AND GUARDIAN/ CONSERVATOR FOR MILES ARNOLD, AND AS ASSIGNEE FOR ALL CLAIMS HELD BY “THE JOHNSON PARTIES”: A. Neal Herrington, Christopher H. Morris, Louisville, Kentucky.

BRIEFS FOR APPELLEE, CAPITOL SPECIALTY INSURANCE CORPORATION: Richard J. Rinear, Zachary D. Bahorik, Cincinnati, Ohio.

Judges: BEFORE: CLAYTON, CHIEF JUDGE; MAZE AND THOMPSON, JUDGES. MAZE, JUDGE, CONCURS. THOMPSON, JUDGE, CONCURS IN RESULT ONLY.

Opinion by: CLAYTON

Opinion

AFFIRMING

CLAYTON, CHIEF JUDGE: These consolidated appeals1 are taken from a Fayette Circuit Court order entering declaratory summary judgment in favor of Capitol Specialty Insurance Corporation. The primary issue is whether a [*2]  general commercial liability insurance policy issued by Capitol covers potential damages stemming from the death of a participant in an obstacle race, or whether exclusions in the policy bar recovery.

The obstacle race, known as “Extreme Rampage,” was organized and presented by Chris Johnson, the owner of Rampage, LLC. The 5K race, which included a climbing wall and mud pits, was held at the Kentucky Horse Park on March 2, 2013. Under the terms of his contract with the Horse Park, Johnson was required to “provide public liability insurance issued by a reputable company, which shall cover both participants and spectators with policy coverage of one million dollars ($1,000,000.00) minimum for each bodily injury[.]”

Johnson purchased the policy from Stephen Delre, an insurance agent employed at the Tim Hamilton Insurance Agency (“THIA”). Delre filled out an application for insurance on Johnson’s behalf and submitted it to Insurance Intermediaries, Inc. (“III”). III submitted the application to Capitol. Capitol prepared a proposal for coverage which III gave to THIA. Johnson accepted the proposal and III produced the policy based upon the terms offered by Capitol.

The policy contained two [*3]  provisions excluding bodily injury to the event participants from its coverage. For purposes of this opinion, the exclusions will be referred to as the “sponsor” exclusion and the “arising out of” exclusion.

The sponsor exclusion provided as follows:

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY

EXCLUSION — ATHLETIC OR SPORTS PARTICIPANTS

This endorsement modifies insurance provided under the following:

COMMERCIAL GENERAL LIABILITY COVERAGE PART.

SCHEDULE

Description of Operations:

Special event — 5K run with obstacles.

. . .

With respect to any operations shown in the Schedule, this insurance does not apply to “bodily injury” to any person while practicing for or participating in any sports or athletic contest or exhibition that you sponsor.

The participant exclusion provided as follows:

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY EXCLUSION — PARTICIPANTS

(SPECIFIED ACTIVITIES/OPERATIONS)

SCHEDULE

Descriptions of Activity/Operations

Mud Runs and Tough Guy Races

This insurance does not apply to “bodily injury,” “property damage,” “personal or advertising injury” or medical expense arising out of any preparation for or participation in any of the activities or operations [*4]  shown in the schedule above.

During the course of the Extreme Rampage race, one of the participants, Chad Arnold, collapsed and died. His wife, Casey Arnold, acting individually, as the administratrix of his estate and as guardian/conservator for their minor son Miles (“Arnold”), filed a wrongful death suit naming numerous defendants, including Johnson. Johnson sought defense and indemnity under the Capitol policy. Capitol denied coverage and filed a declaratory judgment complaint in Fayette Circuit Court on March 17, 2014, asserting it had no duty to defend or indemnify Johnson because the policy expressly excluded coverage for event participants.

Johnson and Arnold subsequently filed a complaint in a different division of Fayette Circuit Court against Capitol, THIA, Delre, and III, asserting claims of negligence; violation of the Kentucky Consumer Protection Act and the Unfair Claims Settlement Practices Act; fraud; and breach of contract. On April 15, 2015, the two actions were consolidated by court order. Johnson and Arnold filed a motion for summary judgment; Capitol filed a motion for summary declaratory judgment. The trial court held extensive hearings on the motions and thereafter [*5]  entered an order granting Capitol’s motion and dismissing with prejudice all claims asserted against Capitol by Johnson and Arnold. Additional facts will be set forth as necessary later in this opinion.

In granting summary declaratory judgment to Capitol, the trial court held that that the policy issued by Capitol to Johnson excluded coverage to the Johnson defendants for the underlying claims of the Arnold defendants because the sponsor exclusion was clear and unambiguous and the Johnson defendants are a “sponsor” within the plain meaning of the word as used in the exclusion. The trial court further held that, as a matter of law, neither the concurrent proximate cause doctrine nor the efficient proximate cause doctrine applies to afford coverage under the policy to the Johnson defendants for the claims of the Arnold defendants; that neither Delre nor THIA is an agent of any kind of Capitol; and finally, that no other oral or written contract modified and/or superseded the policy to afford coverage by Capitol.

These appeals by Johnson and Arnold followed.

In reviewing a grant of summary judgment, our inquiry focuses on “whether the trial court correctly found that there were no genuine [*6]  issues as to any material fact and that the moving party was entitled to judgment as a matter of law.” Scifres v. Kraft, 916 S.W.2d 779, 781, 43 1 Ky. L. Summary 17 (Ky. App. 1996) (citing Kentucky Rules of Civil Procedure (CR) 56.03). Summary judgment may be granted when “as a matter of law, it appears that it would be impossible for the respondent to produce evidence at the trial warranting a judgment in his favor and against the movant.” Steelvest, Inc. v. Scansteel Serv. Ctr., Inc., 807 S.W.2d 476, 483 (Ky. 1991) (internal quotation marks and citation omitted). “The record must be viewed in a light most favorable to the party opposing the motion for summary judgment and all doubts are to be resolved in his favor.” Id. at 480. On the other hand, “a party opposing a properly supported summary judgment motion cannot defeat it without presenting at least some affirmative evidence showing that there is a genuine issue of material fact for trial.” Id. at 482. “An appellate court need not defer to the trial court’s decision on summary judgment and will review the issue de novo because only legal questions and no factual findings are involved.” Hallahan v. The Courier-Journal, 138 S.W.3d 699, 705 (Ky. App. 2004).

We have grouped the Appellants’ arguments into the following six categories: first, that the terms of the policy do not reflect what Johnson requested from Delre; second, that Delre and THIA were actual or apparent agents of Capitol whose alleged misrepresentations [*7]  or omissions to Johnson about the policy bound their principal; third, that neither the “sponsor” exclusion nor the “arising out of” exclusion in the policy was applicable; fourth, that the exclusions create an ambiguity in the policy when read with the coverage endorsements; fifth, that the concurrent proximate cause doctrine provides coverage under the policy; and sixth, that the trial court erred in dismissing all claims against Capitol.

1. The purchase of the policy

Johnson denies that the insurance policy attached to Capitol’s declaratory judgment complaint is a true and accurate copy of the policy he purchased and admits only that the document attached to the complaint is the document he received in the mail after he had paid for the policy.

According to deposition testimony, Johnson first spoke with Delre about obtaining insurance coverage for the Extreme Rampage event in a telephone conversation in December 2012. Johnson had purchased an insurance policy for a similar race event from Delre approximately six months earlier. Delre questioned Johnson about the type of coverage he was seeking. Johnson was unaware that Delre was simultaneously filling out a “special event” insurance [*8]  application. According to Johnson, he told Delre he needed participant coverage and Delre specifically asked him how many participants would be involved in the event. Delre nonetheless left blank on the “special event” application form whether athletic participant coverage was requested. Delre signed Johnson’s name to the application for insurance without Johnson reviewing the document. After the insurance application was submitted, Delre sent a proposal to Johnson which he claims he never received.

On February 8, 2013, Johnson visited Delre and THIA’s office to pay for the policy in the amount of $477. He signed a “subjectivities page” which stated that the policy quote was subject to verification of the following:

No events involving the following: abortion rights, pro choice or right-to-life rallies/parades or gatherings, air shows or ballooning events, auto racing regardless of vehicle size (including go-karts, motorcycles and snowmobiles), cattle drives, events involving inherently dangerous or stunting activities, events with water rides/slides etc., political demonstrations or protest rallies by groups with a history of violent incidents, [n]o events with fireworks displays. AND [*9]  — Spectators must be a safe distance (100 feet minimum) from the obstacle course.

Johnson was not shown the actual policy, nor was he informed of the participation exclusions in the insurance proposal.

A copy of the complete policy containing the “sponsor” exclusion and the “arising out of” exclusion was mailed to Johnson on February 27, 2013. Johnson asserts that the policy did not conform to what he agreed to in his conversation with Delre and that he was never informed that participants would be excluded from coverage. He points out that the policy was also later unilaterally modified by Delre after the Horse Park requested a certificate of insurance indicating that it was an “additional insured” on the policy.

Johnson cannot avoid the terms of the insurance contract by pleading ignorance of its contents. It is axiomatic that “insured persons are charged with knowledge of their policy’s contents[.]” Bidwell v. Shelter Mut. Ins. Co., 367 S.W.3d 585, 592 (Ky. 2012) (citing National Life & Accident Ins. Co. v. Ransdell, 259 Ky. 559, 82 S.W.2d 820, 823 (1935)). “In Midwest Mutual Insurance Company v. Wireman, 54 S.W.3d 177 (Ky. App. 2001), the Court of Appeals held an insured can waive UM coverage by signing the application for liability coverage, even if the insured alleges the agent never explained the meaning of UM coverage to him.” Moore v. Globe Am. Cas. Co., 208 S.W.3d 868, 870 (Ky. 2006). “All persons are presumed to know the law and the mere lack of knowledge [*10]  of the contents of a written contract for insurance cannot serve as a legal basis for avoiding its provisions.” Id. (internal quotation and citation omitted).

Although Johnson claims, based on his interaction with Delre, that the terms of the policy were not what he had anticipated, no genuine issue of material fact exists that Johnson signed the policy and, as a matter of law, was presumed to know its contents. The trial court did not err in ruling that there was no genuine issue of material fact concerning the policy and that no other oral or written contract modified or superseded the policy to afford coverage to Johnson for Arnold’s claims.

2. Were Delre and THIA agents of Capitol

Arnold seeks to hold Capitol liable for any omissions or misrepresentations of Delre and THIA by arguing that they were Capitol’s actual or apparent agents. “Under common law principles of agency, a principal is vicariously liable for damages caused by torts of commission or omission of an agent or subagent, . . . acting on behalf of and pursuant to the authority of the principal.” Williams v. Kentucky Dep’t of Educ., 113 S.W.3d 145, 151 (Ky. 2003), as modified (Sept. 23, 2003) (internal citations omitted).

“Actual authority arises from a direct, intentional granting of [*11]  specific authority from a principal to an agent.” Kindred Healthcare, Inc. v. Henson, 481 S.W.3d 825, 830 (Ky. App. 2014). The Restatement (Third) of Agency § 2.02(1) (2006) provides that “[a]n agent has actual authority to take action designated or implied in the principal’s manifestations to the agent and acts necessary or incidental to achieving the principal’s objectives, as the agent reasonably understands the principal’s manifestations and objectives when the agent determines how to act.” Kentucky’s Insurance Code provides that “[a]ny insurer shall be liable for the acts of its agents when the agents are acting in their capacity as representatives of the insurer and are acting within the scope of their authority.” Kentucky Revised Statutes (KRS) 304.9-035.

There is no evidence in the record that Capitol made a direct, intentional grant of authority to THIA and Delre to act as its agents or representatives; nor is there evidence that Capitol made any manifestations of its objectives to THIA or Delre with the expectation that they would act to achieve those objectives. Furthermore, as elicited in the hearing before the trial court, Capitol does not have a written agreement with THIA or Delre establishing them as its agents nor is there a registration or filing with the Kentucky Department of Insurance designating them as licensed [*12]  agents of Capitol. By contrast, Delre and THIA are registered, authorized agents of Nationwide Insurance in Kentucky and Johnson actually believed he would be purchasing a Nationwide policy from Delre.

As evidence of an actual agency relationship, Arnold points to the fact that THIA and Capitol both have contracts with III, the intermediary brokerage company which sent Johnson’s application for insurance to Capitol, seeking a policy proposal. The existence of contracts with the same third party was not sufficient in itself to create an actual agency relationship between THIA and Delre and Capitol. Capitol prepared the insurance proposal in reliance on the information contained in the application submitted by III; Capitol had no contact with or control over Delre or THIA. Consequently, Capitol could not be bound by what Johnson believed Delre had promised.

Similarly, there is no evidence that THIA and Delre were apparent agents of Capitol. “Apparent authority . . . is not actual authority but is the authority the agent is held out by the principal as possessing. It is a matter of appearances on which third parties come to rely.” Mark D. Dean, P.S.C. v. Commonwealth Bank & Tr. Co., 434 S.W.3d 489, 499 (Ky. 2014) (quoting Mill St. Church of Christ v. Hogan, 785 S.W.2d 263, 267 (Ky. App. 1990)). “One who represents that another is his servant [*13]  or other agent and thereby causes a third person justifiably to rely upon the care or skill of such apparent agent is subject to liability to the third person for harm caused by the lack of care or skill of the one appearing to be a servant or other agent as if he were such.” Paintsville Hosp. Co. v. Rose, 683 S.W.2d 255, 257 (Ky. 1985) (quoting Restatement (Second) of Agency § 267 (1958)).

The only representations made to Johnson by Capitol were in the form of the proposal and written policy he signed. Capitol never held out Delre and THIA as its agents. Johnson admitted he had no contact with Capitol whatsoever and did not even know the policy he purchased was provided by Capitol until after the Extreme Rampage event.

The trial court did not err in holding that no agency relationship, actual or apparent, existed between Capitol and Delre and THIA.

3. Applicability of the policy exclusions

The trial court ruled that the “sponsor” exclusion was clear and unambiguous and the Johnson defendants were a “sponsor” within the plain meaning of the word as it was used in the exclusion. The Appellants disagree, arguing that the multiple definitions of the term “sponsor,” which is not defined in the policy, render it ambiguous.

“Interpretation and construction of an insurance contract is a matter [*14]  of law for the court.” Kemper Nat’l Ins. Companies v. Heaven Hill Distilleries, Inc., 82 S.W.3d 869, 871 (Ky. 2002). Exclusions in insurance contracts

are to be narrowly interpreted and all questions resolved in favor of the insured. Exceptions and exclusions are to be strictly construed so as to render the insurance effective. Any doubt as to the coverage or terms of a policy should be resolved in favor of the insured. And since the policy is drafted in all details by the insurance company, it must be held strictly accountable for the language used.

Eyler v. Nationwide Mut. Fire Ins. Co., 824 S.W.2d 855, 859-60 (Ky. 1992) (internal citations omitted).

On the other hand,

[t]he rule of strict construction against an insurance company certainly does not mean that every doubt must be resolved against it and does not interfere with the rule that the policy must receive a reasonable interpretation consistent with the parties’ object and intent or narrowly expressed in the plain meaning and/or language of the contract. Neither should a nonexistent ambiguity be utilized to resolve a policy against the company. We consider that courts should not rewrite an insurance contract to enlarge the risk to the insurer.

St. Paul Fire & Marine Ins. Co. v. Powell-Walton-Milward, Inc., 870 S.W.2d 223, 226-27 (Ky. 1994).

The Appellants rely on an opinion of the federal district court for the Eastern District of Pennsylvania, Sciolla v. West Bend Mut. Ins. Co., 987 F. Supp. 2d 594 (E.D. Pa. 2013) which held an identical insurance exclusion [*15]  to be inapplicable after concluding the term “sponsor” is ambiguous due to the lack of a universally accepted definition of the term by dictionaries and the courts. Sciolla, 987 F. Supp. 2d at 603. The Sciolla court assembled the following dictionary definitions of “sponsor:”

The full definition given by Merriam-Webster is: “a person or an organization that pays for or plans and carries out a project or activity; especially: one that pays the cost of a radio or television program usually in return for advertising time during its course.” Merriam-Webster’s Collegiate Dictionary, 1140 (9th ed. 1983). . . .

. . . [T]he American Heritage Dictionary defines sponsor, in relevant part, as “[o]ne that finances a project or an event carried out by another person or group, especially a business enterprise that pays for radio or television programming in return for advertising time.” American Heritage Dictionary of the English Language, 1679, (4th ed., 2009). Other dictionaries defines sponsor as “[o]ne that finances a project or an event carried out by another,” The American Heritage College Dictionary, 1315 (3d ed. 1993), or, as a verb, “to pay or contribute towards the expenses of a radio or television program, a performance, [*16]  or other event or work in return for advertising space or rights.” Oxford English Dictionary, 306 (2d ed. 1989).

Id. at 602.

The Sciolla court grouped the definitions into two categories: “The first concept is that of a person or an organization that pays for a project or activity. . . . The second concept is of a person or an organization that plans and carries out a project or activity.” Id. (italics in original).

As recognized by the Sciolla court, in order to be found ambiguous, a term with multiple definitions must be subject to more than one interpretation when applied to the facts of the case before it. Id. at 603. “Because a word has more than one meaning does not mean it is ambiguous. The sense of a word depends on how it is being used; only if more than one meaning applies within that context does ambiguity arise.” Board of Regents of Univ. of Minnesota v. Royal Ins. Co. of Am., 517 N.W.2d 888, 892 (Minn. 1994). As the United States Supreme Court has observed in the context of statutory interpretation, “[a]mbiguity is a creature not of definitional possibilities but of statutory context[.]” Brown v. Gardner, 513 U.S. 115, 118, 115 S. Ct. 552, 555, 130 L. Ed. 2d 462 (1994).

It is the Appellants’ position that Johnson did not “sponsor” the Extreme Rampage but actually organized, promoted, and ran the event. In his deposition, Johnson stated that he was not a “sponsor” of the [*17]  Extreme Rampage event but that he “owned” the event, and that he actually discovered Delre and THIA while seeking sponsorships for Rampage events. Delre in his deposition confirmed that Johnson asked him to be a sponsor. When he was asked how he got started funding Rampage, LLC, Johnson replied “Sponsorships and my own pocket.” Thus, the evidence indicates that Johnson helped to fund Extreme Rampage and also planned and carried it out. There is no evidence that he financed a project carried out by another or that he paid for the project in exchange for advertising space.

The fact that Johnson’s actions do not meet each and every one of the multiple definitions of “sponsor” does not render the term ambiguous, however, when the term is viewed in the context of the language of the exclusion, which applies to “bodily injury to any person while practicing for or participating in any sports or athletic contest or exhibition that you sponsor.” (Emphasis added.)

The policy provides the following definition of “you”: “Throughout this policy the words ‘you’ and ‘your’ refer to the Named Insured shown in the declarations, and any other person or organization qualifying as a Named Insured under [*18]  this policy. The words ‘we’, ‘us’ and ‘our’ refer to the company providing this insurance.” Thus, Johnson, the Named Insured, is “you.” When the term “sponsor” is viewed within the context of an insurance policy covering one discrete event sponsored by the Named Insured, Johnson, it was plainly intended to refer to Johnson and to the specific Extreme Rampage event he was sponsoring.

The Appellants argue that the trial court did not have the right to choose which of the multiple competing definitions of sponsor applied. When viewed in the context of the exclusion, however, the definition is plainly limited to the sponsorship activities of the Name Insured, Johnson.

Because the trial court did not err in holding that the “sponsor” exclusion is applicable, we need not address the validity of the “arising out of” exclusion.

4. The applicability of the concurrent proximate cause doctrine

Johnson argues that even if the policy exclusions apply, the concurrent proximate cause doctrine provides coverage under the policy. Johnson contends that the doctrine was adopted by the Kentucky Supreme Court in Reynolds v. Travelers Indem. Co. of Am., 233 S.W.3d 197, 203 (Ky. App. 2007). Reynolds is an opinion of the Court of Appeals, and it did not officially adopt the doctrine; [*19]  it approved of the reasoning in a case from our sister state in Bowers v. Farmers Insurance Exchange, 99 Wash. App. 41, 991 P.2d 734 (2000), which applied the “efficient proximate cause doctrine.” Reynolds, 233 S.W.3d at 203.

The doctrine holds that

Where the loss is essentially caused by an insured peril with the contribution of an excluded peril merely as part of the chain of events leading to the loss, there is coverage under the policy. Stated alternately, coverage will exist where a covered and noncovered peril join to cause the loss provided that the covered peril is the efficient and dominant cause.

10A Couch on Insurance 3d § 148:61 (2005).

Applying the doctrine, Johnson argues that even if Chad Arnold’s participation in the race was an excluded peril, the loss was essentially caused by a peril that was insured. He contends that the allegations of Arnold’s complaint, such as failure to provide reasonable medical treatment; failure to plan and have proper policies and procedures; and failure to train, instruct, and supervise are not predicated upon a cause of action or risk that is excluded under the policy. He points to the affidavit of a doctor who reviewed Chad Arnold’s medical records and post-mortem examination and concluded that he died of a pre-existing heart condition unconnected [*20]  with his participation in the race.

This argument ignores the fact that the “sponsor” exclusion does not reference causation or a specific “peril”; it merely excludes participants in the covered event from recovery for bodily injury, whatever the cause. It does not require a finding that the bodily injury was caused by participation in the event.

We agree with the reasoning of the federal district court for the Western District of Kentucky, which addressed a factually-similar situation involving a student who collapsed and died while practicing for his college lacrosse team. Underwriters Safety & Claims, Inc. v. Travelers Prop. Cas. Co. of Am., 152 F. Supp. 3d 933 (W.D. Ky. 2016), aff’d on other grounds, 661 F. App’x 325 (6th Cir. 2016). The college’s insurance policy contained an exclusion for athletic participants. The plaintiffs argued that the allegations of their complaint were focused on the college’s failure to provide pre-participation medical forms to physicians who examined the student and on the college’s failure to render proper medical treatment. The district court described these arguments as “red herrings” that attempted “to re-contextualize the fatal injury as a result of medical malpractice or concurrently caused by medical malpractice and engagement in athletic activity.” Underwriters, 152 F. Supp. 3d at 937. The complaint filed by the [*21]  student’s estate “did not seek redress for a bodily injury that occurred during pre-participation athletic medical screenings. The policy specifically excludes bodily injury while engaged in athletic or sports activities. Passfield [the student] was engaged in such an activity at the time of the injury. While the Court liberally construes insurance policies in favor of the insured, the Court also strictly construes exclusions. This is an instance of the latter.” Id. Similarly, in the case before us, the exclusion applies specifically to bodily injury while participating in the Extreme Rampage. The exclusion does not require a causal link between the participation and the injury to apply. There is no genuine issue of fact that Chad Arnold was a participant in the race and that, as the complaint alleges, “during the course of the event, the decedent collapsed, consciously suffered for an undetermined amount of time, and died.”

5. Do the two exclusions create an ambiguity in the policy

Johnson further argues that the two exclusions create an ambiguity in the policy when read in conjunction with two coverage endorsements. Johnson claims that the “Combination Endorsement-Special Events” and [*22]  the “Limitation-Classification Endorsement” provide unfettered coverage while the two exclusions limit coverage, thus creating an ambiguity. Johnson’s brief gives no reference to the record to show where the endorsements are found, nor does it indicate when or how the trial court addressed this issue. CR 76.12(4)(c)(v) requires an appellate brief to contain “ample supportive references to the record and . . . a statement with reference to the record showing whether the issue was properly preserved for review and, if so, in what manner.” The purpose of this requirement “is so that we, the reviewing Court, can be confident the issue was properly presented to the trial court and therefore, is appropriate for our consideration.” Oakley v. Oakley, 391 S.W.3d 377, 380 (Ky. App. 2012). “[E]rrors to be considered for appellate review must be precisely preserved and identified in the lower court.” Skaggs v. Assad, 712 S.W.2d 947, 950 (Ky. 1986). We are simply “without authority to review issues not raised in or decided by the trial court.” Regional Jail Authority v. Tackett, 770 S.W.2d 225, 228 (Ky. 1989). Nor is it the task of the appellate court to search the record for pertinent evidence “not pointed out by the parties in their briefs.” Baker v. Weinberg, 266 S.W.3d 827, 834 (Ky. App. 2008).

We recognize that the hearing on August 25, 2016, at which this issue may have been argued before the trial court, was not recorded. [*23]  Nonetheless, “when the complete record is not before the appellate court, that court must assume that the omitted record supports the decision of the trial court.” Commonwealth v. Thompson, 697 S.W.2d 143, 145 (Ky. 1985).

6. Dismissal of all claims against Capitol.

Finally, Arnold argues that the trial court erred in dismissing all causes of action against Capitol. Arnold contends that the arguments before the trial court only concerned the applicability of the insurance policy, but never addressed the additional allegations in the complaint of negligence, consumer protection, unfair claims settlement practices, and fraud. Arnold does not explain what the grounds for Capitol’s liability on these claims would be if, as the trial court ruled, the “sponsor” exclusion is valid and Delre and THIA were not acting as Capitol’s agents. Under these circumstances, the trial court did not err in dismissing all claims against Capitol.

For the foregoing reasons, the order of the Fayette Circuit Court granting summary declaratory judgment to Capitol is affirmed.

MAZE, JUDGE, CONCURS.

THOMPSON, JUDGE, CONCURS IN RESULT ONLY.

Bibliography

CHRIS JOHNSON D/B/A EXTREME RAMPAGE, AND CHRIS JOHNSON, AND CHRISTOPHER JOHNSON, RAMPAGE LLC, CHRISTOPHER JOHNSON D/B/A RAMPAGE, LLC, AND/OR EXTREME RAMPAGE (COLLECTIVELY KNOWN AS “THE JOHNSON PARTIES”) BY AND THROUGH ASSIGNEE CASEY ARNOLD, APPELLANTS v. CAPITOL SPECIALTY INSURANCE CORPORATION, APPELLEE;CASEY ARNOLD, INDIVIDUALLY AND AS ADMINISTRATRIX OF THE ESTATE OF CHAD ARNOLD, AND AS NEXT FRIEND AND GUARDIAN/ CONSERVATOR FOR MILES ARNOLD, AND AS ASSIGNEE FOR ALL CLAIMS HELD BY “THE JOHNSON PARTIES”, APPELLANTS v. CAPITOL SPECIALTY INSURANCE CORPORATION, APPELLEE, 2018 Ky. App. Unpub. LEXIS 447, 2018 WL 3090503, (Court of Appeals of Kentucky June 22, 2018, Rendered).


If you really are bad, a judge will figure out a way to void your release

Davis, v. 3 Bar F Rodeo, 2007 Ky. App. LEXIS 423

Appellate court sends back to trial court on issue that release did not protect against Gross Negligence, and the deceased did not have time to read the release.

I guess I knew that these contests happened. I grew up in a rural community where we had greased pig contests, but nothing like this. The plaintiff entered a contest where he went into a rodeo and stood in a white circle. There were other participants also standing in circles. A bull was released into the ring. The last person standing in a white circle won. Prize money was $50.00. The contest was called the “Ring of Fear.” The bull struck the deceased bursting his liver.

$50.00?

The plaintiff’s spouse sued. The deceased prior to entering the ring signed a release. The release was comprehensive but apparently had all participant signatures on one form. Allegedly, the deceased was not given any time to read the release.

Prior to the bull being released into the ring, the bull was allegedly provoked by jabbing him with a wooden object and beating sticks against the bull’s cage. (I’m guessing PETA is not big in this part of Kentucky…….)

The trial court dismissed the complaint based on the release signed by the deceased. The plaintiff appealed.

Summary of the case

The appellate court first looked at the Kentucky Farm Animals Activities Act (FAAA) KRS 247.401 through KRS 247.4029. The court found the statute was applicable to the facts in this case. The court also found that the warnings found in the act provided immunity to defendants who posted the warnings. Failure to post the warnings did not create a claim of negligence per se or strict liability as the plaintiff argued. Failing to post the warnings simply failed to provide the immunity under the statute.

The court also found that the FAAA allowed farm animal event sponsors to sue the act if they posted the warning signs.

The court found that the FAAA had no duty to reduce or eliminate the inherent risks found in farm animal activities. The court also found that act did not protect sponsors that intentionally mistreat or aggravate a farm animal. That would be the antithesis of the purpose of the act.

The court then looked at the issue of the release and stated,

While agreements to exempt future liability for either ordinary or gross negligence are not invalid per se, they are generally disfavored and are strictly construed against the parties relying upon them. [Emphasize added]

Although not a definitive statement on the issue, it appears that under Kentucky law, a release will protect a defendant against a claim of gross negligence.

Releases in Kentucky will be upheld if they meet the following tests if:

(1) it explicitly expresses an intention to exonerate by using the word “negligence;” or

(2) it clearly and specifically indicates an intent to release a party from liability for a personal injury caused by that party’s own conduct; or

(3) protection against negligence is the only reasonable construction of the contract language; or

(4) the hazard experienced was clearly within the contemplation of the provision.

From a legal point, this is an extremely broad language about how a release will be interpreted by the courts.

The court then examined the release and found no language the court could interpret that could be used to say the release was going to stop a gross negligence claim. The court also found that intentionally mistreating the bull would “at the very least constitute gross negligence.”

The court followed up by stating that infuriating a bull would constitute willful of wanton conduct which “a party may not contract away any liability through a release.”

Finally, the court looked at a laundry list of additional issues raised by the plaintiff:

..that Appellees should have inquired as to the abilities of the participants to participate in the Ring of Fear. Finally, Susan contends that Charles did not have an opportunity to read the release prior to signing it.

The court stated that those were all factual issues to be resolved by a trier of fact.

So Now What?

Although the issue that a release in Kentucky may protect against gross negligence is great as well as the broad language that can be used in a release in Kentucky, the last two issues mentioned by the court allow numerous ways to void releases in Kentucky and place a burden upon the business or program operating in Kentucky and using a release.

That is requiring an outfitter to see if a guest has the sufficient skills, ability and desire to undertake the activities and making sure the person signing a release has sufficient time to read the release.

Solving the problems of the Defendant

First, I would have raised an assumption of risk argument, although I am not sure of the status of A/R in Kentucky. However, I believe that it is pretty obvious that you can get gored by a bull in a ring. The deceased and the plaintiff were going to the event for a rodeo so it had to have been obvious, to some extent.

Second by having separate releases rather than one sign-up sheet, the argument that the deceased did not have time to read the release could have been diffused if not eliminated. If each person has a sheet of paper, then there is no rush to get all the signatures on one sheet of paper.

Still to be resolved

The issue that the defendant did not enquire as to the ability of the participant to participate in the Ring of Fire is an open-ended opportunity for every lawsuit in Kentucky to go to trial.

How are you going to determine the requirements for a participant to undertake an activity? No matter what system, test or determination you make, you did not do a good job if someone is hurt or injured on your trip. Nor can you use medical information to determine if someone can participate because unless you are a physician, that would require diagnosis which you cannot do.

The only solution you can come up with to create a system so the participants can self-determine if they are able to participate. Show a video or create a checklist.  Make sure your release states that the person has watched the video, seen your website and reviewed the checklist and understands it is their responsibility to determine if they are able to participate in the activity.

This could be a nightmare in Kentucky.

What do you think? Leave a comment.

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Davis, v. 3 Bar F Rodeo, 2007 Ky. App. LEXIS 423

Davis, v. 3 Bar F Rodeo, 2007 Ky. App. LEXIS 423

Susan Davis, Individually and as Administratrix of the Estate of Charles A. Davis, Deceased, Appellants v. 3 Bar F Rodeo; Marcus Fannin; Bobby Ray Fannin; Grant County Fair, Inc., Appellees

NO. 2006-CA-002212-MR

COURT OF APPEALS OF KENTUCKY

2007 Ky. App. LEXIS 423

November 2, 2007, Rendered

NOTICE:

PLEASE REFER TO THE KENTUCKY RULES REGARDING FINALITY OF OPINIONS. TO BE PUBLISHED. [UNLESS OTHERWISE ORDERED BY THE KENTUCKY SUPREME COURT, OPINIONS DESIGNATED “TO BE PUBLISHED” BY THE COURT OF APPEALS ARE NOT TO BE PUBLISHED IF DISCRETIONARY REVIEW IS PENDING, IF DISCRETIONARY REVIEW IS GRANTED, OR IF ORDERED NOT TO BE PUBLISHED BY THE COURT WHEN DENYING THE MOTION FOR DISCRETIONARY REVIEW OR GRANTING WITHDRAWAL OF THE MOTION.]

SUBSEQUENT HISTORY: As Modified May 2, 2008.

Rehearing denied by Davis v. 3 Bar F. Rodeo, 2008 Ky. App. LEXIS 266 (Ky. Ct. App., May 2, 2008)

Review denied and ordered not published by Grant County Fair, Inc. v. Davis, 2008 Ky. LEXIS 249 (Ky., Oct. 15, 2008)

PRIOR HISTORY: [*1]

APPEAL FROM GRANT CIRCUIT COURT. HONORABLE STEPHEN L. BATES, JUDGE. ACTION NO. 05-CI-00427.

DISPOSITION: REVERSING AND REMANDING.

COUNSEL: BRIEF AND ORAL ARGUMENT FOR APPELLANTS: Jerry M. Miniard, Florence, Kentucky.

BRIEF AND ORAL ARGUMENT FOR APPELLEE, GRANT COUNTY FAIR, INC.: Thomas R. Nienaber, Covington, Kentucky

BRIEFS FILED FOR APPELLEES, 3 BAR F RODEO, MARCUS FANNIN, AND BOBBY RAY FANNIN: Steven N. Howe, Dry Ridge, Kentucky.

JUDGES: BEFORE: LAMBERT, TAYLOR AND WINE, JUDGES. ALL CONCUR.

OPINION BY: WINE

OPINION

REVERSING AND REMANDING

WINE, JUDGE: Susan Davis (“Susan”), individually and as the Administratrix of the Estate of Charles A. Davis (“Charles”), deceased, appeals a summary judgment order entered by the Grant Circuit Court dismissing her claims against the Grant County Fair, Inc. (“GCF”), 3 Bar F Rodeo (“3-BFR”), Marcus Fannin (“M. Fannin”) and Bobby Ray Fannin (“B. Fannin”) (“Appellees” collectively) for the injuries and wrongful death of her husband, Charles, which occurred on September 25, 2004. Specifically, Susan argues the trial court erred by denying her motion for summary judgment based upon the Appellees’ alleged failure to give her husband the mandatory warning pursuant to KRS 247.4027, which resulted in Charles’s severe internal bodily injuries [*2] which ultimately led to his death. For the reasons stated herein, we remand this case as summary judgment was not appropriate.

Appellant, GCF, is a non-profit corporation whose primary function is to own, maintain, and operate the Grant County Fairgrounds. 3-BFR is an unincorporated association comprised of M. Fannin and B. Fannin. 3-BFR’s primary function is to conduct rodeo events for the general public. GCF entered into an agreement with 3-BFR, M. Fannin and B. Fannin whereby 3-BFR would hold a rodeo at the fairgrounds.

On September 25, 2004, Charles and Susan attended the rodeo at the Grant County Fair. The announcer for the rodeo, Aaron Platt (“Platt”), called for participants for a game called the “Ring of Fear.” This game called for audience members to participate by entering the rodeo ring and standing in marked circles on the ground. Kenny, a bull from Ohio, was then released into the ring. The last person standing, without stepping outside of the circle, won the grand prize of $ 50.00. Charles proceeded to the ring to try his luck in the Ring of Fear. Susan alleges Kenny was angered by someone jabbing him with a wooden object and beating sticks against his cage prior to his [*3] release. Once released, Kenny proceeded to drive his head into Charles’s abdomen, lifting him off the ground. Charles made his way back into the stands where his wife Susan was seated. Unknown to Charles or anyone else, Kenny’s blow to Charles’s abdomen had caused his liver to burst and he was bleeding internally. Charles faded into temporary unconsciousness next to his wife in the stands. Charles died the next morning at the University of Cincinnati’s trauma unit. The cause of death was ruled “blunt trauma to torso” and internal bleeding.

Susan then brought a wrongful death action against GCF, 3-BFR and the Fannins, alleging that their negligence had caused her husband’s death. GCF moved for summary judgment based upon a release signed by Charles prior to his participation in the Ring of Fear. 3-BFR, M. Fannin and B. Fannin filed similar motions. After completing more discovery and taking depositions, Susan filed a cross-motion for summary judgment, asserting that the Appellees failed to properly warn of the dangers of the Ring of Fear as required by KRS 247.4027. Susan alleged the Appellees’ failure to warn was a substantial factor in causing the injuries that led to her husband’s [*4] death. The trial court granted summary judgment to the Appellees, finding that the release was sufficient to exempt them from liability in light of Hargis v. Baize, 168 S.W.3d 36 (Ky. 2005). The trial court denied Susan’s cross-motion for summary judgment. This appeal followed.

[HN1] In reviewing a motion for summary judgment, a trial court must consider all the stipulations and admissions on file. CR 56.03. “[S]ummary judgment is proper only where the movant shows that the adverse party cannot prevail under any circumstances.” Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476, 480 (Ky. 1991), citing Paintsville Hospital Co. v. Rose, 683 S.W.2d 255 (Ky. 1985). The standard of review on appeal of a summary judgment is whether the trial court correctly found that there were no genuine issues as to any material fact and that the moving party was entitled to judgment as a matter of law. Scifres v. Kraft, 916 S.W.2d 779, 43 1 Ky. L. Summary 17 (Ky.App. 1996). There is no requirement that the appellate court defer to the trial court because factual findings are not at issue. Goldsmith v. Allied Building Components, Inc., 833 S.W.2d 378, 381, 39 7 Ky. L. Summary 24 (Ky. 1992).

Susan argues the Appellees breached their duty to warn [*5] pursuant to the Farm Animals Activities Act (“FAAA”), found in KRS 247.401 through KRS 247.4029. Specifically, [HN2] the FAAA represents a statutory plan designed to outline the duties and responsibilities of both participants and sponsors conducting animal activities. Having thoroughly read the statute, we agree with Susan that the statute applies to this case. However, KRS 247.4027(2)(a) allows for a waiver of liability if the participant signs a release waiving his right to bring an action against the farm animal event sponsor.

Susan asserts that non-compliance with the warning requirements of KRS 247.401 constitutes negligence per se and/or strict liability. We disagree. KRS Chapter 247 is generally recognized throughout the country as “Equine Activity Statutes” (“EAS”). In general, these statutes are an attempt to limit liability of persons engaging in animal activities. Therefore, [HN3] if a sponsor of an animal activity does post the suggested warnings found in KRS Chapter 247, he is granted immunity from liability if someone gets hurt. If, as in this case, the warnings are not posted, the sponsor loses the immunity and may be held responsible for the injury in accordance with other applicable [*6] law. KRS 247.4013. Therefore, EAS statutes are “immunity statutes,” not negligence per se or strict liability statutes as recognized in many of our sister states. See Anderson v. Four Seasons Equestrian Center, Inc., 852 N.E.2d 576 (Ind. 2006); Amburgey v. Sauder, 238 Mich. App. 228, 605 N.W.2d 84 (Mich. App. 1999).

[HN4] Although KRS 247.402 requires farm animal activity sponsors to warn of the inherent risks, there is no duty to reduce or eliminate the inherent risks. However, to intentionally mistreat or aggravate a farm animal would be the antithesis of this duty.

While it is clear that the Appellees did not have warning signs posted at the ring entrance, it is undisputed that Charles signed a release just prior to his participation in the Ring of Fear. Therefore, the central issue in this case is the validity of the release Charles signed. The release Charles signed states as follows:

We the undersigned hereby request permission (1) to enter the restricted area (2) to participate as a contestant, assistant, official or otherwise rodeo events (3) to compete for money, prizes, recognition or reward.

In consideration of “permissive entry” into the restricted areas, which is the area from which admission to the [*7] general public is restricted, which includes, but is not limited to the rodeo arena, chutes, pens, adjacent walkways, concessions and other appurtenances, I undersigned, my personal representatives, heirs, next of kin, spouses and assigns to hereby:

1. I release, discharge and covenant not to sue the rodeo committee, stock contractor, sponsors, arena operators or owners and each of them, their officers, agents and employees all hereafter collectively referred to as (Releases) from any and all claims and liability arising out of strict liability or ordinary negligence of Releases or any other participant which causes the undersigned injury, death, damages or property damage. I, the undersigned, jointly, severally, and in common, covenant to hold releases from any claim, judgment or expenses that may incur arising out of my activities or presence in the restricted area.

2. Understand that entry into the restricted area and/or participation in rodeo events contains danger and risks of injury or death, that conditions of the rodeo arena change from time to time and may become more hazardous, that rodeo animals are dangerous and unpredictable, and that there inherent danger in rodeo which [*8] I appreciate and voluntarily assume because I chose to do so. Each of the undersigned has observed events of this type and that I seek to participate in. I further understand that the arena surface, access ways or lack thereof, lighting or lack thereof, and weather conditions all change and pose a danger. I further understand that other contestants and participants pose a danger, but nevertheless, I voluntarily elect to accept all risks connected with the entry into restricted areas and/or participate in any rodeo events.

3. I agree that this agreement shall apply to any incident, injury, and accident death occurring on the above date and fore (sic) a period of one (1) year thereafter. All subsequent agreement and release documents signed by any of the undersigned shall amplify, shall in no way limit the provisions of the document.

4. I the undersigned agree to indemnify the Releases and each of them from loss, liability damage or costs they may incur due to the presence or participation in the described activities whether caused by the negligence of the Releases or otherwise.

WE HAVE READ THIS DOCUMENT, WE UNDERSTAND IT IS A RELEASE OF ALL CLAIMS, WE APPRECIATE AND ASSUME ALL RISKS INHERENT IN RODEO. [*9]

Charles’s signature appears below this language along with the signatures of the other participants of the Ring of Fear on September 25, 2004.

[HN5] While agreements to exempt future liability for either ordinary or gross negligence are not invalid per se, they are generally disfavored and are strictly construed against the parties relying upon them. Hargis, 168 S.W.3d at 47.

[A] preinjury release will be upheld only if (1) it explicitly expresses an intention to exonerate by using the word “negligence;” or (2) it clearly and specifically indicates an intent to release a party from liability for a personal injury caused by that party’s own conduct; or (3) protection against negligence is the only reasonable construction of the contract language; or (4) the hazard experienced was clearly within the contemplation of the provision.

Id., citing 57A AM. JUR. 2d, Negligence § 53 (citations omitted). The trial court held that the release met the above requirements in Hargis and, absent genuine issues of fact as to the release, its enforceability warranted summary judgment in favor of Appellees.

We disagree with the trial court that the release form signed by Charles satisfies all of the [*10] factors in Hargis. The release uses the word “negligence.” The release does specifically and explicitly release the Appellees from liability for “any and all claims and liability arising out of strict liability or ordinary negligence of Releases [Appellees] . . . which causes the undersigned [Charles] injury . . . [or] death . . . .”

The language of the release is specific as to its purpose to exonerate the sponsors from ordinary negligence liability. The release specifically warns that rodeo events contain danger and risks of injury or death; that the conditions of the rodeo arena change and may become more hazardous; that rodeo animals are dangerous and unpredictable; and finally that anyone choosing to participate voluntarily assumes the inherent danger that exists in rodeo events. However, there is no language that releases Appellees from conduct that would constitute gross negligence. Susan contends that Appellees provoked Kenny by prodding him and beating on his cage prior to his release into the ring. The intentional provocation of the bull by Appellees to attack the participants is clearly not contemplated by the release. While the Appellees dispute the allegations of intentionally [*11] mistreating Kenny, if true, it would at the very least constitute gross negligence. The release contemplates getting into the ring with a bull and even mentions that rodeo animals are unpredictable. However, the release does not contemplate a bull that has been infuriated by the Appellees prior to its release into the ring. Such conduct could be construed as willful or wanton for which a party may not contract away any liability through a release. Hargis, supra. This material issue of fact as disputed by the parties can only be resolved by a trier of fact and is not appropriately resolved by summary judgment. If the jury determines that Appellees’ conduct was grossly negligent, the release would be unenforceable as to this conduct. Of course, under comparative negligence, the jury could also consider Charles’s own conduct in contributing to his death.

Susan also argues that the trial court was presented with a genuine issue of material fact as to whether the Appellees offered her husband protective chest gear. M. Fannin testified that the participants in the Ring of Fear on the date in question were given an opportunity to put on a protective vest before entering the rodeo ring. Conversely, [*12] Rob Wells (“Wells”), who participated on the same day as Charles, submitted an affidavit indicating that he was never offered a protective vest nor did he observe that there were protective vests available. Susan further submits that Appellees should have inquired as to the abilities of the participants to participate in the Ring of Fear. Finally, Susan contends that Charles did not have an opportunity to read the release prior to signing it. In support of this contention, Susan relies on the affidavit of Wells wherein he indicates that he did not read the release. These are all factual issues to be resolved by a trier of fact.

Accordingly, we reverse and remand this case to the Grant Circuit Court for a jury trial.

ALL CONCUR.

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