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

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

State

By Statute Restrictions
Alaska Alaska: Sec. 09.65.292 Sec. 05.45.120 does not allow using a release by ski areas for ski injuries
Arizona ARS § 12-553 Limited to Equine Activities
Colorado C.R.S. §§13-22-107
Florida Florida Statute § 744.301 (3) Florida statute that allows a parent to release a minor’s right to sue
Virginia Chapter 62.  Equine Activity Liability § 3.2-6202.  Liability limited; liability actions prohibited Allows a parent to sign a release for a minor for equine activities
Utah 78B-4-203.  Limitations on Liability for Equine and Livestock Activities Limited to Equine Activities
(b) providing a document or release for the participant, or the participant’s legal guardian if the participant is a minor, to sign.
 

By Case Law

California Hohe v. San Diego Unified Sch. Dist., 224 Cal.App.3d 1559, 274 Cal.Rptr. 647 (1990)
Florida Global Travel Marketing, Inc v. Shea, 2005 Fla. LEXIS 1454 Allows a release signed by a parent to require arbitration of the minor’s claims
Florida Gonzalez v. City of Coral Gables, 871 So.2d 1067, 29 Fla. L. Weekly D1147 Release can be used for volunteer activities and by government entities
Maryland BJ’s Wholesale Club, Inc. v. Rosen, 435 Md. 714; 80 A.3d 345; 2013 Md. LEXIS 897 Maryland top court allows a parent to sign away a minor’s right to sue. Release was not fantastic, but good enough.
Massachusetts Sharon v. City of Newton, 437 Mass. 99; 769 N.E.2d 738; 2002 Mass. LEXIS 384
Minnesota Moore vs. Minnesota Baseball Instructional School, 2009 Minn. App. Unpub. LEXIS 299
North Dakota McPhail v. Bismarck Park District, 2003 ND 4; 655 N.W.2d 411; 2003 N.D. LEXIS 3 North Dakota decision allows a parent to sign away a minor’s right to sue
Ohio Zivich v. Mentor Soccer Club, Inc., 696 N.E.2d 201, 82 Ohio St.3d 367 (1998) Ohio Appellate decision upholds the use of a release for a minor for a commercial activity
Wisconsin Osborn v. Cascade Mountain, Inc., 655 N.W.2d 546, 259 Wis. 2d 481, 2002 Wisc. App. LEXIS 1216, 2003 WI App 1 However the decision in Atkins v. Swimwest Family Fitness Center, 2005 WI 4; 2005 Wisc. LEXIS 2 may void all releases in the state
 

On the Edge, but not enough to really rely on

Decisions are by the Federal District Courts and only preliminary motions
North Carolina Kelly v. United States of America, 2011 U.S. Dist. LEXIS 89741 North Carolina may allow a parent to sign away a minor’s right to sue for injuries when the minor is engaged in non-profit activities sponsored by schools, volunteers, or community organizations
New York DiFrancesco v. Win-Sum Ski Corp., Holiday Valley, Inc., 2017 U.S. Dist. LEXIS 39695 New York Federal Magistrate in a Motion in Limine, hearing holds the New York Skier Safety Statute allows a parent to sign away a minor’s right to sue.

What do you think? Leave a comment.

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Releases work for exercise programs when a mall, for free, opens up early to help people age in Massachusetts

Any exception to a release in Massachusetts must be specifically identified in the release. This means that if a plaintiff wants to argue the release does not apply to “this” which caused my injury; “this” must be identified as something the release does not apply to.

Bastable v. Liberty Tree Mall Limited Partnership, 6 Mass. L. Rep. 217; 1996 Mass. Super. LEXIS 64

State: Massachusetts; Superior Court of Massachusetts, at Middlesex

Plaintiff: Rosamond Bastable

Defendant: Liberty Tree Mall Limited Partnership

Plaintiff Claims: negligence

Defendant Defenses: release

Holding: for the Defendant

Year: 1996

Outdoor recreation normally does not cover walking indoors; however, it is an important component for a lot of former recreationists (and it is probably in all of our futures). In this case, the local hospital and the mall teamed up to offer seniors the opportunity to exercise indoors in the mall before it opened.

On September 12, 1993, Bastable enrolled in the “STEPPIN’ OUT!” walking program sponsored by Liberty Tree Mall and Beverly Hospital. The program permitted people in the community to walk in the mall for exercise each day prior to the mall opening to the public. In order to participate in the program, Bastable was required to sign a release.

While exciting the mall one day after walking, the plaintiff fell. The plaintiff argued cracked tile caused her fall and injuries. She sued, and the court dismissed her complaint based on the release.

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

The first issue addressed by the court was the issue of validity of releases in Massachusetts. Releases are valid in Massachusetts.

The release Bastable signed was a valid and lawful waiver. “There is no rule of general application that a person cannot contract for exemption from liability for his own negligence. Moreover, a release which allocates risk is not against public policy.

In an effect to have the release not apply to the plaintiff’s injuries; she argued the release only applied to “general maintenance activities,’ which she described as now removal and landscaping. The plaintiff’s injuries did not arise from that general maintenance but from specific failed maintenance issues. Meaning the release was written for water on the floor rather than a tile the needed repaired. However, that did not work.

Bastable does not allege that the release was unlawful; rather, she claims that the release applies only to injuries caused by general maintenance activities (such as snow removal and landscaping) and that her injury did not arise from these activities.

Under Massachusetts law, releases are to be interpreted broadly if the language of the release is comprehensive in nature. Any exception to a release must be specifically identified in the release as an exception. “Additionally, Massachusetts courts have held that if the parties intend that an exception to a general release exists, they must include that exception in the release.”

Meaning if the drafters and parties to the release wanted a broadly written comprehensive release not to cover a specific issue or possible risk, it must be identified in the release as not being covered in the release.

If Liberty had intended to limit its liability to only those accidents arising from maintenance tasks, it would have specifically stated so in its release. Instead, the release holds Liberty harmless for “any . . . injury that may take place on mall property” whether or not it results from a maintenance activity.

Because the damaged tile or this type of maintenance was not identified in the release as not being covered by the release, the release prevented the suit for those issues also.

The defendant won this case because the release was written broadly enough to cover all issues.

So Now What?

A policy under release law would eliminate numerous arguments made by plaintiff’s that the release did not affect their claim because their claim was not specifically or generally contemplated by the release. Here, the courts said the release was written broadly, and that breadth covered your injuries.

This is not something can be easily changed in a state, as it is a court policy decided over the years. However, it is possibly an issue that should be brought up and argued in release cases so courts understand it should be an issue they review.

What do you think? Leave a comment.

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By Recreation Law           Rec-law@recreation-law.com     James H. Moss

#AdventureTourism, #AdventureTravelLaw, #AdventureTravelLawyer, #AttorneyatLaw, #Backpacking, #BicyclingLaw, #Camps, #ChallengeCourse, #ChallengeCourseLaw, #ChallengeCourseLawyer, #CyclingLaw, #FitnessLaw, #FitnessLawyer, #Hiking, #HumanPowered, #HumanPoweredRecreation, #IceClimbing, #JamesHMoss, #JimMoss, #Law, #Mountaineering, #Negligence, #OutdoorLaw, #OutdoorRecreationLaw, #OutsideLaw, #OutsideLawyer, #RecLaw, #Rec-Law, #RecLawBlog, #Rec-LawBlog, #RecLawyer, #RecreationalLawyer, #RecreationLaw, #RecreationLawBlog, #RecreationLawcom, #Recreation-Lawcom, #Recreation-Law.com, #RiskManagement, #RockClimbing, #RockClimbingLawyer, #RopesCourse, #RopesCourseLawyer, #SkiAreas, #Skiing, #SkiLaw, #Snowboarding, #SummerCamp, #Tourism, #TravelLaw, #YouthCamps, #ZipLineLawyer, Walking, Mall, Shopping Center, Release, Comprehensive,

 


Bastable v. Liberty Tree Mall Limited Partnership, 6 Mass. L. Rep. 217; 1996 Mass. Super. LEXIS 64

Bastable v. Liberty Tree Mall Limited Partnership, 6 Mass. L. Rep. 217; 1996 Mass. Super. LEXIS 64

Rosamond Bastable v. Liberty Tree Mall Limited Partnership

95-02505-F

SUPERIOR COURT OF MASSACHUSETTS, AT MIDDLESEX

6 Mass. L. Rep. 217; 1996 Mass. Super. LEXIS 64

December 9, 1996, Decided

DISPOSITION: [*1] Defendant’s Motion For Summary Judgment is ALLOWED.

JUDGES: Herman J. Smith, Jr., Justice of the Superior Court.

OPINION BY: HERMAN J. SMITH, JR.

OPINION

MEMORANDUM OF DECISION AND ORDER ON DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

The plaintiff, Rosamond Bastable (“Bastable”), commenced this action against the defendant, Liberty Tree Mall Limited Partnership (“Liberty”), alleging that Liberty’s negligent maintenance of its property caused her to slip and fall and sustain injury. Liberty has moved for summary judgment pursuant to Rule 56(b) of the Massachusetts Rules of Civil Procedure. The motion for summary judgment is ALLOWED.

FINDINGS OF FACT

On September 12, 1993, Bastable enrolled in the “STEPPIN’ OUT!” walking program sponsored by Liberty Tree Mall and Beverly Hospital. The program permitted people in the community to walk in the mall for exercise each day prior to the mall opening to the public. In order to participate in the program, Bastable was required to sign a release. The clauses of the release pertinent to this summary judgment motion read as follows:

We are pleased to extend use of Liberty Tree Mall premises during non-operational hours, however, please be advised [*2] that certain hazardous conditions may exist as this is the time during which normal maintenance and housekeeping tasks are performed. This includes exterior landscaping and snow removal activities.

Therefore, please understand that you must hold the Mall harmless for any loss, cost, damage or injury that may take place on Mall property during the time you are on the site as part of the STEPPIN’ OUT WALKING PROGRAM. In addition, you must agree to indemnify the Mall for any loss, any injury that may take place during the time you are on the property for the purpose of the STEPPIN’ OUT WALKING PROGRAM.

On January 10, 1994, Bastable arrived at the Liberty Tree Mall to participate in the STEPPIN’ OUT program. As she was leaving the mall, Bastable fell and fractured her leg. Bastable now brings a negligence action against Liberty alleging that a cracked tile caused her to slip and fall. Liberty maintains that the release Bastable signed expressly bars her negligence action because the release holds Liberty harmless for injuries that occur while the walkers are participating in the STEPPIN’ OUT program. 1

1 Bastable claims that because she had completed the program at the time of her fall the release does not apply. This court finds that Bastable was on the premises exclusively for the purposes of participating in the program and that the release applies to Bastable’s injury. The plaintiff’s affidavit and other submissions do not raise a material issue of fact on this point.

[*3] DISCUSSION

[HN1] Summary judgment shall be granted where there are no genuine issues as to any material fact in dispute and where the moving party is entitled to judgment as a matter of law. Cassesso v. Commissioner of Correction, 390 Mass. 419, 422, 456 N.E.2d 1123 (1983); Community Nat’l Bank v. Dawes, 369 Mass. 550, 553, 340 N.E.2d 877 (1976); Mass.R.Civ.P. 56(c). The moving party bears the burden of affirmatively demonstrating the absence of a triable issue “and that the moving party is entitled to judgment as a matter of law.” Pederson v. Time, Inc., 404 Mass. 14, 17, 532 N.E.2d 1211 (1989).

The release Bastable signed was a valid and lawful waiver. [HN2] “There is no rule of general application that a person cannot contract for exemption from liability for his own negligence.” Clarke v. Ames, 267 Mass. 44, 47, 165 N.E. 696 (1929). See also Cormier v. Central Massachusetts Chapter of the National Safety Council, 416 Mass. 286, 288, 620 N.E.2d 784 (1993) (organizer of motorcycle safety course can exempt itself from liability for its own negligence by requiring participants to sign a release). Id. at 289; Clark v. Ames at 48.

Bastable does not allege that the [*4] release was unlawful; rather, she claims that the release applies only to injuries caused by general maintenance activities (such as snow removal and landscaping) and that her injury did not arise from these activities. She argues that because Liberty specifically mentioned the maintenance activities in the first paragraph of the release, Liberty intended to limit its liability only in regard to injuries caused by those particular activities.

[HN3] Massachusetts courts will broadly interpret a release if the language in the release is comprehensive in nature. In Cormier, the plaintiff signed a release which exempted the defendant “from any and all liability . . . for . . . injuries arising out of participation in the motorcycle training course.” Id. at 287. While the plaintiff was participating in the course, she sustained injury due to the defendant’s negligence. The court held that while the release did not mention the term negligence, the release was unambiguous and comprehensive enough to bar a claim in negligence although the release did not specifically mention the term. Id. at 288. Similarly, in Clark v. Ames, a lessee signed a lease which “saved the lessor harmless [*5] and indemnified from . . . any injury . . . to any person . . . while in transit thereto or therefrom upon the hallways, stairways, elevators or other approaches to the demised premises.” 267 Mass. at 46. The plaintiff was injured in an elevator due to the negligence of the lessor’s agent. The court ruled that although the lessor’s agent was not specifically mentioned in the lease, the language of the lease was broad enough to exempt the lessor’s agent from liability. Id.

Additionally, Massachusetts courts have held that [HN4] if the parties intend that an exception to a general release exist, they must include that exception in the release. In Tupper v. Hancock, 319 Mass. 105, 106 n.1, 64 N.E.2d 441 (1946), the creditor plaintiffs, under the assumption that the estate was bankrupt, signed a release discharging the estate administrator “from all debts, demands . . . [and] causes of action.” When the estate later received additional assets, the plaintiffs sued to recover their debts. The court held that the release language was unequivocal and that if the plaintiffs had wanted to reserve their right to collect debts when additional assets became available, they should have included this [*6] exception in the release. Id. at 108. [HN5] A release “is to be given effect even if the parties did not have in mind all the wrongs which existed at the time of the release . . . If exceptions to the scope of the [release] were intended, they should have been stated.” Schuster v. Baskin, 354 Mass. 137, 140, 236 N.E.2d 205 (1968). See also Naukeag Inn, Inc. v. Rideout, 351 Mass. 353, 356, 220 N.E.2d 916 (1966).

Liberty’s release states that the walker must “hold the Mall harmless for any loss, cost, damage or injury that may take place on Mall property during the time [the walker is] on the site as part of the STEPPIN’ OUT WALKING PROGRAM.” (Emphasis added.) The release clearly states that Liberty can not be held liable for any injury that occurs while the walker is participating in the program. The paragraph regarding maintenance activities which precedes the paragraph regarding indemnification merely serves as a notice to the participant of the type of hazardous conditions that may exist on the premises while the walkers are participating in the program. The mere mention of the maintenance activities in the first paragraph does not limit Liberty’s liability to only those accidents which arise [*7] from maintenance activities. If Liberty had intended to limit its liability to only those accidents arising from maintenance tasks, it would have specifically stated so in its release. Instead, the release holds Liberty harmless for “any . . . injury that may take place on mall property” whether or not it results from a maintenance activity. Because the release does not specifically limit Liberty’s liability to injuries arising from maintenance tasks but instead exempts Liberty’s liability for all injuries no matter how they occur, the plaintiff’s negligence action is barred.

CONCLUSION

Bastable’s negligence action is barred by the release she signed when she enrolled in the STEPPIN’ OUT walking program. Because the release holds Liberty harmless for all injuries which occur while the walker is participating in the program, Liberty is not liable for Bastable’s injuries.

ORDER

For the above reasons, the court hereby ORDERS that the defendant’s Motion For Summary Judgment is ALLOWED.

Herman J. Smith, Jr.

Justice of the Superior Court

Dated: December 9, 1996


Indemnification between businesses requires a contract outlining the type of indemnification and a certificate of insurance from one party to the other so the insurance company knows it is on the hook.

Because no certificate of insurance was issued by the third-party insurance company, company, the contract requiring indemnification between the ski area and the manufacturer failed.

Jiminy Peak Mountain Report, LLC, v. Wiegand Sports, LLC, 2016 U.S. Dist. LEXIS 34209

State: Massachusetts, United States District Court for the District of Massachusetts

Plaintiff: Jiminy Peak Mountain Report, LLC

Defendant: Wiegand Sports, LLC, and, Navigators Specialty Insurance, CO.

Plaintiff Claims:  Indemnification

Defendant Defenses: No contract

Holding: for the Defense

Year: 2016

Obviously, this is not your normal injured guest case. This case looks at the relationship between a resort and a manufacturer who installed a ride at the resort.

In 2006 the defendant Wiegand built an Alpine Coaster for the plaintiff ski area Jiminy Peak Mountain Resort, LLC. The construction/purchase agreement (Consulting, Purchase, Delivery, Assembly and Inspection Contract) also contained language requiring the manufacturer to defend any claims that were brought against the plaintiff for injuries after the ride was built.

The construction agreement required Jiminy Peak to pay part of the premiums for the insurance policy. However, the policy was only in the name of the defendant Wiegand, and did not list Jiminy Peak as an additional insured or co-insured.

Section 8 of the Contract, titled “Rights and Obligations of [Jiminy]” included in its final subsection, 8(j), language stating that Wiegand would purchase product liability insurance for the Coaster, but that Jiminy was required to pay a portion of the premium, the amount of which would be determined based on the purchase price of the Coaster, and Jiminy would then be listed as an additional insured.

The agreement also stated that Wiegand would defend and pay for any claim that Jiminy Peak received.

…in the event of a product liability suit against [Wiegand], [Wiegand] “shall, at its own expense, defend any suit or proceeding brought against [Jiminy] and shall fully protect and indemnify [Jiminy] against any and all losses, liability, cost, recovery, or other expense in or resulting from such . . . suit (provided, however, [Jiminy] has fully performed all ongoing maintenance obligations).

In 2012, two minors were seriously injured riding the coaster. Wiegand had a commercial liability policy with the defendant Navigators Insurance Company. However, Navigators did not issue a certificate of insurance covering Jiminy Peak. The parents of the injured minors filed suit against Jiminy Peak and Wiegand. Jiminy Peak sued Wiegand and Navigator seeking a declaratory judgment requiring Wiegand and Navigator to pay the cost of defending those suits.

A declaratory judgment is a quick request for a court to issue an order. Jiminy and Wiegand dismissed their claims against each other and just were fighting the lawsuit against them. The case between Jiminy and Navigator then is the subject of this decision.

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

Navigator argued that there was a duty to defend someone who was not a named insured. Jiminy Peak was not listed on the policy as an insured, co-insured or additional insured. Navigator also argued that it had no legal relationship with Jiminy Peak; therefore, it owed Jiminy Peak no money.

Navigators argues that as an insurer it owes a duty to defend its insured, Wiegand, but it does not owe a direct duty to defend Jiminy because Jiminy is not an additional insured under the Policy. Further, the duty Navigators has under the Policy to pay defense costs to a non-insured party pursuant to a contractual liability of its insured only requires it to make payments to the insured, and only when the insured has actually requested payment. In this case, Navigators asserts that even if Wiegand is found to owe Jiminy its defense costs, it will be up to Wiegand to determine whether it wishes to pay the amount or to make a claim to Navigators. Since Navigators owes no duty directly to Jiminy and it would be up to Wiegand to determine whether to make a claim in the event judgment is entered against it with respect to Jiminy’s defense costs…

Jiminy Peak responded by arguing the contract between it, and Wiegand was enough to force Navigator to pay. (You and I go to dinner and try to convince the waiter that your friend who is not at the table should pay for our meal.)

The court looked into the requirements for an insurance company to defend under Massachusetts law.

The court begins its analysis by considering whether Massachusetts law allows Jiminy to compel payment from Navigators based on Navigators’ obligations to its insured, Wiegand. Massachusetts law imposes on insurers a “broad duty to defend its insured against any claims that create a potential for indemnity.” This duty is broad and attaches whenever the claims in the complaint match up with the language in the policy.

However, the broad language of the policy only applies to the companies named in the policy as an insured. Jiminy Peak was not named in any way under the policy.

The Contract also included provisions regarding both additional insureds and “insured contracts,” suggesting that Jiminy, like Navigators and Wiegand, understood that Wiegand’s promise to pay Jiminy’s defense costs would not grant Jiminy the status of an “additional insured” with respect to Navigators.

If Jiminy Peak had been named in the policy or listed as an additional insured, then coverage would have been provided under Navigator’s policy issued to Wiegand.

In the absence of a contractual relationship between Navigators and Jiminy, the court finds no legal basis for ordering Navigators to pay Jiminy’s defense costs directly. Any obligation upon Navigators to pay such costs will arise only after an insured, in this case Wiegand, makes a claim for payment and then its only obligation will be to Wiegand.

Jiminy Peak may still be indemnified by Navigator’s policy. However, to be covered Wiegand will have to make a claim under the policy and if Wiegand was negligent and did something defined under the policy as an insured, then coverage will be provided.

However, I doubt any coverage will be provided unless Jiminy Peak can prove that Wiegand was negligent in its relationship. The contract only applies to product liability or negligence claims of the insured, Wiegand.

So Now What?

Insurance policies are written so the language is clear. The insured or persons covered by the policy are listed on the first page, the declaration page, or as additional insured on the policy. The coverage provided by a policy is broader than the language usually required by state law. However, the broad coverage is only extended to the people listed in the policy.

If you name is not on a piece of paper issued by the insurance company you are not covered under the policy.

A certificate of insurance request by Jiminy Peak would have solved the problem.

However, requesting a certificate of insurance does not solve all problems, in fact it only solves very limited problems. For a simple certificate of insurance to provide protection, the named insured must have done something to create liability for the insured under the certificate of insurance.

Just requesting a certificate of insurance without an agreement outlining what is to be covered is worthless.

Every day I see situations were one company requests a certificate of insurance believing that provides coverage. It does not. To be effective a certificate of insurance should be issued based on a contract which outlines what is to be covered under the certificate of insurance. The certificate of insurance must confirm to the contract between the parties.

A certificate of insurance, by itself is pretty worthless. (If they had real value would insurance companies issue them so easily?)

clip_image002What do you think? Leave a comment.

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Jiminy Peak Mountain Report, LLC, v. Wiegand Sports, LLC, 2016 U.S. Dist. LEXIS 34209

Jiminy Peak Mountain Report, LLC, v. Wiegand Sports, LLC, 2016 U.S. Dist. LEXIS 34209

Jiminy Peak Mountain Report, LLC, Plaintiff, v. Wiegand Sports, LLC, and, Navigators Specialty Insurance, CO., Defendants.

Civil Action No. 14-40115-MGM

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

2016 U.S. Dist. LEXIS 34209

March 16, 2016, Decided

March 16, 2016, Filed

CORE TERMS: insured, insurer, duty to defend, liability insurance, owe, cross-motions, liability claims, bodily injury’, declaratory, premium, state law, insurance policy, amount in controversy, threshold amount, principal place of business, wholly-owned subsidiary, disclosures, publicly, disputed, traded, judgment ordering, seriously injured, own expense, fully performed, negligence claim, indemnification, cross-claims, contractual, separately, asserting

COUNSEL: [*1] For Jiminy Peak Mountain Resort, LLC, Plaintiff: Jennifer C. Sheehan, Matthew D. Sweet, Richard J. Shea, Hamel, Marcin, Dunn, Reardon & Shea, P.C., Boston, MA.

For Navigators Specialty Insurance Company, Defendant: David A. Grossbaum, LEAD ATTORNEY, Matthew R. Watson, Hinshaw & Culbertson LLP, Boston, MA.

JUDGES: MARK G. MASTROIANNI, United States District Judge.

OPINION BY: MARK G. MASTROIANNI

OPINION

MEMORANDUM AND ORDER ON CROSS-MOTIONS FOR JUDGMENT ON THE PLEADINGS

(Dkt. Nos. 40 & 42)

MASTROIANNI, U.S.D.J.

I. Introduction

Plaintiff, Jiminy Peak Mountain Resort, LLC (“Jiminy”) operates a ski area in Hancock, Massachusetts. In 2005 it entered into a contract with Defendant, Wiegand Sports, LLC (“Wiegand”), to purchase a Wiegand, Alpine Coaster (the “Coaster”). The Coaster opened to the public in 2006. In August of 2012, two minors were seriously injured while riding the Coaster. The parents of the minors subsequently filed two lawsuits (together, the “Underlying Action”), each asserting claims against Jiminy and Wiegand. Jiminy subsequently filed this suit against Wiegand and Defendant, Navigators Specialty Insurance, Co. (“Navigators”), Wiegand’s insurer at the time the minors were injured, seeking a declaratory judgment [*2] ordering Wiegand and Navigators to pay the defense costs incurred by Jiminy in the Underlying Action. Before the court are cross-motions for judgment on the pleadings from Jiminy and Navigators. Jiminy and Wiegand have stipulated to the dismissal of their cross-claims, agreeing to litigate those claims in the Underlying Action, rather than in this lawsuit.

II. Jurisdiction

In this action, Jiminy seeks an order requiring Navigators to pay Jiminy’s past and future defense costs in the Underlying Action based on the terms of the contract between Jiminy and Wiegand and the insurance policy Navigators issued to Wiegand. The relief is requested pursuant to state law. Federal courts have jurisdiction over suits brought pursuant to state law where there is complete diversity of citizenship between the adversaries and the amount in controversy exceeds a threshold amount of $75,000. 28 U.S.C. § 1332; Arbaugh v. Y&H Corp., 546 U.S. 500, 513, 126 S. Ct. 1235, 163 L. Ed. 2d 1097 (2006). Based on the content of the complaint and the corporate disclosures filed by the parties (Dkt. Nos. 20, 21, 55), the court finds that (1) Jiminy is a Massachusetts limited liability company, owned by two other Massachusetts limited liability companies, which in turn are owned by members who reside in Massachusetts [*3] and (2) Navigators is incorporated in Delaware, has its principal place of business in Connecticut, and is a wholly-owned subsidiary of the publicly traded Navigators Group, Inc., less than ten percent (10%) of which is owned by any other single publicly traded corporation.1 Plaintiff asserts the amount in controversy exceeds the statutory threshold amount. In the absence of any challenge from Defendant, the court finds it has jurisdiction in this case pursuant to 28 U.S.C. § 1332.

1 Though Jiminy is no longer pursuing its claim against Wiegand, the court notes that Wiegand, as a wholly-owned subsidiary of a German entity with its principal place of business in Salt Lake City, Utah, is also diverse with respect to Jiminy. (Compl. ¶ 7, Dkt. No. 1, Corp. Disclosure, ¶ 1, Dkt. No. 19.)

III. Standard of Review

“‘A motion for judgment on the pleadings [under Rule 12(c)] is treated much like a Rule 12(b)(6) motion to dismiss,’ with the court viewing ‘the facts contained in the pleadings in the light most favorable to the nonmovant and draw[ing] all reasonable inferences therefrom.'” In re Loestrin 24 Fe Antitrust Litig., No. 14-2071, 2016 U.S. App. LEXIS 3049, 2016 WL 698077, at *8 (1st Cir. Feb. 22, 2016) (quoting Pérez-Acevedo v. Rivero-Cubano, 520 F.3d 26, 29 (1st Cir. 2008)). Where, as here, the court is presented with cross-motions for judgment on the pleadings, the court’s role is [*4] “to determine whether either of the parties deserves judgment as a matter of law on facts that are not disputed.” Curran v. Cousins, 509 F.3d 36, 44 (1st Cir. 2007) (internal citations omitted)). As in the case of a motion under Rule 12(b)(6), the court is permitted to consider documents central to the plaintiff’s claims where the authenticity of the documents is not disputed and the complaint adequately references the documents. Id. (citing Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993)).

IV. Background

In December of 2005, Jiminy and Wiegand entered into a “Consulting, Purchase, Delivery, Assembly and Inspection Contract” (the “Contract”). (Compl. ¶ 9, Dkt. No. 1.) Pursuant to this contract, Jiminy agreed to purchase the Coaster and Wiegand agreed to deliver, assemble, and inspect it. (Id.) Section 8 of the Contract, titled “Rights and Obligations of [Jiminy]” included in its final subsection, 8(j), language stating that Wiegand would purchase product liability insurance for the Coaster, but that Jiminy was required to pay a portion of the premium, the amount of which would be determined based on the purchase price of the Coaster, and Jiminy would then be listed as an additional insured. (Compl. Ex. A, Contract, § 8(j), Dkt. No. 1-1.) (Id.) The Contract did not set forth the term during which Wiegand’s product [*5] liability insurance policy would apply, but did provide that Jiminy would have the option to continue as an additional insured during subsequent periods, provided it continued to pay the “same premium ratio.” Id. The same section also provided that Jiminy would separately maintain a personal injury insurance policy “at its own expense at all times so long as [it] operates [the Coaster].” (Id.) The Complaint does not assert that Jiminy continued to pay premiums to remain an additional insured under Wiegand’s product liability insurance policy.

Separately at Section 12, titled “Indemnification,” the Contract provided that:

in the event of a product liability suit against [Wiegand], [Wiegand] “shall, at its own expense, defend any suit or proceeding brought against [Jiminy] and shall fully protect and indemnify [Jiminy] against any and all losses, liability, cost, recovery, or other expense in or resulting from such . . . suit (provided, however, [Jiminy] has fully performed all ongoing maintenance obligations).

(Id. at § 12(A)(1).)

The following paragraph then provided that Jiminy would

protect, indemnify, defend and hold [Wiegand] harmless from and against any and all losses of [Wiegand] arising out of or sustained, [*6] in each case, directly or indirectly, from . . . any default by [Jiminy] . . . including without limitation, from defective/bad maintenance and/or operation of the Alpine Coaster caused by [Jiminy’s] gross negligence or willful misconduct.

(Id. at § 12(A)(2).)

Under Section 18, the Contract is to be interpreted in accordance with Massachusetts law.

(Id. at § 18.)

The Coaster was installed and became operational in 2006. In August of 2012, two minors were seriously injured while riding the Coaster. At the time of the accident, Wiegand had a general commercial liability insurance policy with Navigators (“Policy”). (Policy, Ex. C, Dkt. No. 1-3.) The Policy Period ran from March 1, 2012 through March 1, 2013. Id. Pursuant to Section I(1)(a), the Policy provided that Navigators would “pay those sums that [Wiegand] becomes legally obligated to pay as damages because of ‘bodily injury’ . . . to which [the Policy] applies.” (Id. at Section I(1)(a).) The obligation established under Section I(1)(a) is further defined in Section I(2)(b) as excluding certain types of damages, including those assumed in a contract, unless assumed in an “insured contract.” (Id. at Section I(2)(b).) In the case of an “insured contract,” “reasonable [*7] attorney fees and necessary litigation expenses incurred by or for a party other than an insured [was] deemed to be damages because of ‘bodily injury’ . . . , provided . . . that the party’s defense [had] also been assumed in the same ‘insured contract'” and the damages arise in a suit to which the Policy applied. (Id.) An “insured contract” is defined in the Policy as including “[t]hat part of any other contract or agreement pertaining to [Wiegand’s] business . . . under which [Wiegand] assume[d] the tort liability of another party to pay for ‘bodily injury’ . . . to a third person or organization.” (Id. at Section V(9)(f)). “Tort liabililty” is, in turn, defined as “a liability that would be imposed by law in the absence of any contract or agreement.” (Id.)

The parents of the minors injured on the Coaster in August of 2012 subsequently filed the Underlying Action against Jiminy and Wiegand.2 (Compl., Ex. B, Compls. in Underlying Action, Dkt. No. 1-2.) The six-count complaints3 both include a negligence claim against Jiminy (Count I), a negligence claim against Wiegand (Count II), products liability claims against Wiegand (Counts III and IV), breach of implied warranty of merchantability claim against [*8] Wiegand (Count V), and a loss of consortium claim against Wiegand and Jiminy (Count VI). (Id.) After the Underlying Action was filed, Jiminy filed this action against Wiegand and Navigators, seeking a declaratory judgment ordering Wiegand and Navigators to pay the defense costs incurred by Jiminy in connection with the Underlying Action. (Compl., Dkt. No. 1.) As mentioned above, Jiminy and Wiegand agreed to the dismissal of Jiminy’s claim seeking declaratory judgment from Wiegand in this action and instead are litigating the issues in the Underlying Action.

2 These suits were initially filed in the Eastern District of New York, but have since been transferred to this court where they are proceeding as a consolidated case – 13-cv-30108-MGM. The claims brought on behalf of the minors have already been settled. The only remaining claims in those cases are the cross-claims between Jiminy and Wiegand.

3 In both complaints, the claims are actually labeled 1-5 and 7.

V. Discussion

Both Jiminy and Navigators have moved for judgment on the pleadings. Navigators argues that as an insurer it owes a duty to defend its insured, Wiegand, but it does not owe a direct duty to defend Jiminy because Jiminy [*9] is not an additional insured under the Policy.4 Further, the duty Navigators has under the Policy to pay defense costs to a non-insured party pursuant to a contractual liability of its insured only requires it to make payments to the insured, and only when the insured has actually requested payment. In this case, Navigators asserts that even if Wiegand is found to owe Jiminy its defense costs, it will be up to Wiegand to determine whether it wishes to pay the amount or to make a claim to Navigators. Since Navigators owes no duty directly to Jiminy and it would be up to Wiegand to determine whether to make a claim in the event judgment is entered against it with respect to Jiminy’s defense costs, Navigators argues judgment on the pleadings should enter in its favor.

4 In its filings and at oral argument, Jiminy was clear that it was not claiming to be an additional insured under the Policy.

For its part, Jiminy begins its argument with the Contract, asserting first that the language in the Contract at § 12(A)(1) clearly establishes that Wiegand has a duty to pay Jiminy’s defense costs regardless of any potential factual disputes between Jiminy and Wiegand, provided (1) the defense costs are incurred [*10] in litigation in which there is a product liability claim against Wiegand and (2) Jiminy is also a defendant named in the action.5 As the Underlying Action includes product liability claims against Wiegand, as well as other claims against Jiminy, Jiminy asserts the two requirements are met. Jiminy then turns to the Policy, arguing that the Contract is an “insured contract” for purposes of the Policy. Finally, Jiminy argues that since the Policy provides coverage for liability assumed by Wiegand in an “insured contract,” Navigator, as an insurer, is required under Massachusetts law, to pay for Jiminy’s defense, without regard to the resolution of the dispute between Wiegand and Jiminy.

5 Initially, in its memorandum in support of its motion for judgment on the pleadings, Jiminy argued that it would also be necessary to establish that there were no disputes as to whether Jiminy had “fully performed all ongoing maintenance obligations.” (Compl., Ex. B, Contract §12(A)(1).) Subsequently, in its opposition to Navigators’ motion for judgment on the pleadings, Jiminy instead argued that the requirement regarding maintenance obligations applied only to indemnification claims.

Navigators has not contested, [*11] at least relative to the purpose of the motions currently before the court, that the Contract between Jiminy and Wiegand is an “insured contract” for purposes of the Policy. Also, Navigators does not dispute or that the Underlying Action is the type of litigation covered under the Policy. The court begins its analysis by considering whether Massachusetts law allows Jiminy to compel payment from Navigators based on Navigators’ obligations to its insured, Wiegand. Massachusetts law imposes on insurers a “broad duty to defend its insured against any claims that create a potential for indemnity.” Doe v. Liberty Mut. Ins. Co., 423 Mass. 366, 667 N.E.2d 1149, 1151 (Mass. 1996). This duty is broad and attaches whenever the claims in the complaint match up with the language in the policy. See Liberty Mut. Ins. Co. v. SCA Services, Inc., 412 Mass. 330, 588 N.E.2d 1346, 1347 (Mass. 1992). However, the cases cited by the parties all involve cases in which the court discussed the duty in the context of the insured.

Jiminy has not cited any cases in which a court imposed on an insurer a duty to defend a third-party beneficiary of a policy. Instead, Jiminy argues the language of the Policy providing coverage for defense costs of a third-party pursuant to an “insured contract” shows the parties’ intention that Navigators would pay such costs and, therefore, such language [*12] should be construed to impose upon Navigators a duty to make payment directly to Jiminy. The court disagrees. As demonstrated by the provisions in the Policy that allow for the designation of an additional insured, Navigators and Wiegand knew how to extend Navigators’ duties as an insurer to other parties. Damages, including defense costs, associated with “insured contracts” were handled differently, indicating that Navigators and Wiegand did not, in fact, intend that in a case like this one Navigators would have any direct obligations to Jiminy based on the Contract. The Contract also included provisions regarding both additional insureds and “insured contracts,” suggesting that Jiminy, like Navigators and Wiegand, understood that Wiegand’s promise to pay Jiminy’s defense costs would not grant Jiminy the status of an “additional insured” with respect to Navigators.

In the absence of a contractual relationship between Navigators and Jiminy, the court finds no legal basis for ordering Navigators to pay Jiminy’s defense costs directly. Any obligation upon Navigators to pay such costs will arise only after an insured, in this case Wiegand, makes a claim for payment and then its only obligation [*13] will be to Wiegand. Judgment on the pleadings in favor of Navigators is, therefore, appropriate.

VI. Conclusion

For the Foregoing reasons, Plaintiff’s Motion for Judgment on the Pleadings is hereby DENIED and Defendant’s Motion for Judgment on the Pleadings is hereby ALLOWED.

It is So Ordered.

/s/ Mark G. Mastroianni

MARK G. MASTROIANNI

United States District Judge


Do you have contracts with all of your athletes? Manufacturers who provide more than swag to athletes may be sued without a written agreement.

In this case the manufacturer one because the damages were not able to be proven, however, this is just the tip of the iceberg on what could happen. What if the rider was injured, and you were their largest contributor to their income?

Rogatkin v. Raleigh America Inc., 69 F. Supp. 3d 294; 2014 U.S. Dist. LEXIS 164154

State: Massachusetts, UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MAS-SACHUSETTS

Plaintiff: Nicholi Rogatkin, Minor by His Father and Next Friend, Vladmir Rogatkin

Defendant: Raleigh America Inc./Diamondback BMX, and John Does 1-8

Plaintiff Claims: : unauthorized use of name and portrait or picture in violation of Mass. Gen. Laws ch. 214 § 3A (Count I); unfair and/or deceptive business practices in violation of Mass. Gen. Laws ch. 93A, §§ 2 & 11 (Count II); defamation (Count III); negligent misrepresentation (Count IV); unjust enrichment (Count V); promissory estoppel (Count VI); and intentional misrepresentation (Count VII).

Defendant Defenses: No evidence and No damages

Holding: for the defendant

Year: 2014

The plaintiff was a very talented BMX rider starting at a very early age. The defendant started sponsoring him at age 11 in 2007. That sponsorship continued for five years until 2012 when the plaintiff moved on to another sponsorship. During that time, the sponsorship started as a bike and other equipment and grew to a monthly income and travel expenses. During that time the plaintiff wore the defendant’s logos and sent photographs and videos to the defendant to be used on their website.

The plaintiff one year flew out to the defendants, at the defendant’s expense to be photographed for the defendant’s catalog. The defendant started asking for in 2010 and was told that he had a great career ahead of him.

Prior to receiving income, the plaintiff and defendant did not have any contract between them. Once the defendant started receiving a monthly income the plaintiff signed a Team Rider Sponsorship Agreement. The agreement was signed by the plaintiff’s father on behalf of the plaintiff. The agreement provided the plaintiff with a monthly payment, and the defendant got unlimited promotional use of the plaintiff’s name and likeness.

At no time, was the plaintiff restricted from receiving sponsorship from other manufacturers. Eventually, the plaintiff was picked up by other manufacturers, including other bike manufacturers. Eventually, he went to one of the manufacturers as a high-paid rider and left the defendant. Soon thereafter the plaintiff, by and through his father, sued the defendant. The claims total seven counts.

unauthorized use of name and portrait or picture in violation of Mass. Gen. Laws ch. 214 § 3A (Count I);

unfair and/or deceptive business practices in violation of Mass. Gen. Laws ch. 93A, §§ 2 & 11 (Count II);

defamation (Count III);

negligent misrepresentation (Count IV);

unjust enrichment (Count V);

promissory estoppel (Count VI);

and intentional misrepresentation (Count VII).

Basically, the plaintiff sued to get more money believing that he was not compensated enough by the defendant for his work prior to leaving. He did not win any of these arguments. The judge granted the defendants motion for summary judgment.

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

The decisions starts with an analysis of the defamation claim. To prove defamation on Massachusetts law the plaintiff must prove:

…the defendant was at fault for the publication of a false statement regarding the plaintiff, capable of damaging the plaintiff’s reputation in the community, which either caused economic loss or is actionable without proof of economic loss.

The plaintiff based his claims on the theory that the defendant did not change the photos on its website fast enough to match the growth of the plaintiff and his riding larger bikes. For a year or so after he had advanced from a 16” (wheel size) bike to 18” then 20” bikes he was pictured on the website riding 16” bikes.

Although Rogatkin admits that the accused material was accurate and non-defamatory when published, he contends that as he grew in age and skill, his static portrayal by Raleigh took on a defamatory undertone.

Because the information was valid at the time it was posted, and the plaintiff’s date of birth was on the site, the court found no major issue with not changing photographs as quickly as the plaintiff wanted. The court even had fun with this argument.

Although Raleigh did not update Rogatkin’s biography with the march of time (the court knows of no duty the law imposes to do as much), it published Rogatkin’s accurate date of birth on the same page — a reasonable assurance that the public would never confuse Rogatkin with, say, Peter Pan or Benjamin Button.

More importantly the plaintiff could not offer any evidence showing that by failing to change the photographs, he had suffered an injury.

A false statement is defamatory if it “would tend to hold the plaintiff up to scorn, hatred, ridicule or contempt, in the minds of any considerable and respectable segment in the community

The court then had fun and brought in Shirley Temple in its analysis of the negative publicity claimed by the plaintiff.

The publication of Rogatkin’s age (12) and characterizing him as a “kid” in a biography is no more susceptible to a defamatory meaning than biographical references to Ambassador Shirley Temple as a child actor or as “America’s Little Darling.

A biography, like a photograph, is a faithful snapshot of a person taken at a particular time in his or her life.

The court also looked at the argument made by the plaintiff as one of not suffering injury from not showing him riding larger bikes, but of failing to post more images of him on larger bikes, which could not be actionable.

Rogatkin alleges that Raleigh’s continued publication of images of him as a 16-inch bike rider led to ridicule and scorn because he was not shown riding a larger bike. This is not an objection to the publications, but to the lack of publication of photos showing Rogatkin riding larger bikes. Rogatkin has not identified any support for the novel proposition that the absence of publication may form the basis of a defamation claim.

The court then looked at the first count, unauthorized use of the name and image of the plaintiff.

The statute at issue allows a private right of action when an image had been used for commercial advertising without the consent of the person. The defendant argued that the emails between them showed consent to use the images. The court agreed.

…Rogatkin does not disagree that he condoned Raleigh’s use of his name and images for purposes of advertising at the time of publication, or that he attended the various photo shoots (such as the one in Seattle in 2008) with any expectation other than that his name and image would be used by Raleigh to promote sales of its bikes.

The court also brought up the fact the emails from the plaintiff complained they were not posting enough photographs of him on the defendant’s website. Again, the plaintiff could not show any damages from the posting of his images. Just because Raleigh made money from using his injuries is not damages for injury upon the plaintiff. “Because Rogatkin has adduced no material evidence of damages attributable to the use of his name and image, Raleigh is entitled to summary judgment on Count I.”

Next the court took on claims IV, VI and VII, Intentional/Negligent Misrepresentation, and Promissory Estoppel.

Under Massachusetts’s law to win a claim of misrepresentation, the plaintiff had to show false statement that induced him to do something.

To sustain a claim of misrepresentation, a plaintiff must show a false statement of material fact made to induce the plaintiff to act, together with reliance on the false statement by the plaintiff to the plaintiff’s detriment. . . . The speaker need not know ‘that the statement is false if the truth is reasonably susceptible of actual knowledge, or otherwise expressed, if, through a modicum of diligence, accurate facts are available to the speaker.’

However, even if the defendant had made a false representation, the plaintiff had to prove he was worse off based on the false representation.

…a plaintiff must allege that (1) a promisor makes a promise which he should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee, (2) the promise does induce such action or forbearance, and (3) injustice can be avoided only by enforcement of the promise.

The plaintiff could have rejected the sponsorship from the defendant, and the plaintiff was free to contract with other manufacturers for sponsorship.

On top of that, the plaintiff could not prove a promissory estoppel claim because he could not prove any terms or elements to create a legal claim.

Under Massachusetts law, “as with a claim for breach of contract, [i]n order to establish the existence of an enforceable promise under promissory estoppel, the plaintiff must show that the defendants’ promise included enough essential terms so that a contract including them would be capable of being enforced.”

Count V, unjust enrichment was reviewed by the court next.

The plaintiff claimed that the defendant unfairly profited from his work and photographs by paying him minimally. To prove an unjust enrichment claim the plaintiff must show:

(1) a benefit conferred upon the defendant by the plaintiff;

(2) an appreciation or knowledge of the benefit by the defendant; and

(3) the acceptance or retention of the benefit by the defendant under circumstances which make such acceptance or retention inequitable.

Damages from an unjust enrichment claim are the disgorgement of the property unjustly appropriated.

Because unjust enrichment is a theory of equitable recovery, and not a separate cause of action, a court may not order restitution as a form of damages; it may only require a party to disgorge property that has been wrongfully appropriated from the rightful possession of the other party.

First because the relationship between the parties was voluntary there were no fraud or “unjust” actions by the defendant. On top of that, the plaintiff benefited from the relationship just as the defendants did.

He also benefited materially from the relationship in terms of equipment, gear, and travel expenses. If Rogatkin found the terms of his association with Raleigh unsatisfactory, he was free to renegotiate, or leave to pursue other opportunities (both of which he eventually did). Because Raleigh did not unfairly retain any benefit conferred by Rogatkin,….

Here again, the plaintiff could show no damages nor could he even show injury in this case.

The court looked at Count II then, Unfair and/or Deceptive Business Practices under Chapter 93A, a Massachusetts statute.

Here again, the plaintiff did not successfully argue this claim because he could not prove that the defendant was unethical, unscrupulous and a fraud.

Rogatkin has not shown that Raleigh’s actions fell within “the penumbra of some common-law, statutory, or other established concept of unfairness . . . or [was] immoral, unethical, oppressive or unscrupulous . . . [or] cause[d] substantial injury to consumers (or competitors or other businessmen).

These arguments were all based in fraud or contract. In all cases, the damages cannot be what the defendant got from third parties but what it cost the plaintiff in dealing with the defendant. Here the plaintiff could not show any damages that qualified, in fact, the court found the plaintiff had benefited from the relationship and at worse was a bad negotiator.

So Now What?

Once you put someone’s image on your website or your give something, specifically to someone based upon their relationship with your product you better have that relationship in writing.

Once you hand product to someone to sue in an effort to promote your product and create a long-term relationship with that person that is not defined by other facts, such as product testers, writers, reviewers, etc., you might look at immortalizing that relationship in writing.

Most states have laws concerning the unauthorized use of someone’s likeness without their permission. That is an easy reason to see why you should have an agreement.

The facts here are another reason. A written contract outlining the relationship from the beginning would have eliminated this lawsuit.

However, this can get worse.

The IRS wants to know what your relationship is. Without an agreement, the IRS is free to determine that relationship on its own with little help. (Although a contract is not persuasive, it helps when dealing with the IRS.) If the sponsored athlete is only sponsored by you and uses your equipment and does not pay taxes, the IRS can look to you for failing to pay withholding for the “employee.” The IRS wants it money and will work hard to get it from anyone who can write a check easily.

Another group that wants money is the athlete’s health insurance carrier or the unpaid hospital and doctors if the athlete does not have any insurance. The health insurance carrier through its subrogation clause can look to anyone it believes is legally responsible for the damages it paid out for the injured athlete’s medical bills. The insurer may see the action as the same way the IRS does; the injured athlete was an employee and should have been covered under your worker’s compensation insurance. A successful lawsuit on this issue will not only cost you money in paying the health insurance company, but double more for penalties to your worker’s comp carrier for not listing the athlete.

The health insurance carrier could also come after you if it believes the bike or another product was defective. Again, a contract with the athlete would eliminate both arguments.

Unpaid medical bills can also trigger claims based on either an employee theory or on the legal theory that you were legally responsible for encouraging the athlete.

It is easy to get these contracts written. You need to specify general issues like medical coverage, health insurance, taxes and the legal definition of the parties and that relationship. More importantly you need to define what you are going to do and all limits to that relationship so that no matter who or what, they cannot exceed the limits placed in the agreement.

You want to get your product out there, and you want to help up-and-coming athletes. However, taking the time to establish legally the relationship will make everyone’s life easier from the start.

Who knows, fifty years from now, that signature on an athlete’s first contract might have value in itself.

What do you think? Leave a comment.

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Author: Outdoor Recreation Insurance, Risk Management and Law

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Rogatkin v. Raleigh America Inc., 69 F. Supp. 3d 294; 2014 U.S. Dist. LEXIS 164154

Rogatkin v. Raleigh America Inc., 69 F. Supp. 3d 294; 2014 U.S. Dist. LEXIS 164154

Nicholi Rogatkin, Minor by His Father and Next Friend, Vladmir Rogatkin1 v. Raleigh America Inc./Diamondback Bmx, and John Does 1-8

1 Nicholi Rogatkin was a minor at the commencement of this lawsuit. As he has since reached his majority, the court will regard him as the proper plaintiff.

CIVIL ACTION NO. 13-11574

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

69 F. Supp. 3d 294; 2014 U.S. Dist. LEXIS 164154

November 24, 2014, Decided

November 24, 2014, Filed

PRIOR HISTORY: Rogatkin v. Raleigh Am., 2013 U.S. Dist. LEXIS 130561 (D. Mass., Sept. 12, 2013)

CORE TERMS: team, bike, summary judgment, rider, photograph, advertising, sponsorship, biography, website, defamatory, bicycle, travel, written consent, unjust enrichment, promissory estoppel, defamatory meaning, false statement, email, reasonably susceptible, misrepresentation, defamation, portrait, catalog, greatly increased, business practices, negligent misrepresentation, material fact, unauthorized, benefitted, discovery

COUNSEL: [**1] For Nicholi Rogatkin, Plaintiff: Stephen J. Atkins, Jr., LEAD ATTORNEY, Atkins & Goulet LLC, Nashua, NH; Shane D. Goulet, Atlas Tack Corporation, Boston, MA.

For Raleigh America, Inc./Diamondback BMX, Defendant: Patrick M. Curran, Jr., LEAD ATTORNEY, Nicole S. Corvini, Ogletree Deakins Nash Smoak & Stewart, Boston, MA.

JUDGES: Richard G. Stearns, UNITED STATES DISTRICT JUDGE.

OPINION BY: Richard G. Stearns

OPINION

[*296] MEMORANDUM AND ORDER ON DEFENDANT RALEIGH AMERICA, INC.’S MOTION FOR SUMMARY JUDGMENT

STEARNS, D.J.

Plaintiff Nicholi Rogatkin, a professional freestyle BMX (bicycle motocross) rider, alleges that defendant Raleigh America, Inc., a bicycle manufacturer and the sponsor of the Diamondback BMX Team, unfairly exploited his youth and inexperience during his 5-year stint as a rider for Team Diamondback. Discovery having been completed, Raleigh moves for summary judgment on all seven counts of the Amended Complaint. For the reasons stated, the motion will be allowed.

BACKGROUND2

2 The facts are viewed most favorably to Rogatkin as the nonmoving party.

Rogatkin became an accomplished BMX rider at an early age. In 2007, at age 11, Rogatkin joined Team Diamondback. At the time of his enlistment, Rogatkin and Raleigh did not [**2] enter into any written agreement, nor did Rogatkin request or receive any monetary compensation from Raleigh.

While competing for Team Diamondback, Rogatkin used equipment provided by Raleigh and wore Raleigh’s logo. Raleigh, in turn, used images of Rogatkin in its catalogs and advertisements,3 and publicized Rogatkin on its diamondbackbmx.com website. A mini-biography of Rogatkin, published on the website until at least November of 2011, described Rogatkin as 12 years old, 4 feet 10 inches tall, and sporting the monikers “little dude” and/or “little kid.” The website featured several photographs of Rogatkin performing tricks on a 16-inch bicycle, see Pl.’s Opp’n Ex. Q, and included a link to Rogatkin’s personal Youtube page.

3 In 2008, Raleigh paid for Rogatkin to travel to and from a photo shoot, where photos of Rogatkin were taken for Raleigh’s catalog. Raleigh also furnished Rogatkin a new bicycle expressly for the photo shoot.

Periodically, Rogatkin sent photos, videos, and biographical information about himself to Raleigh for use on the website. Rogatkin complained on occasion that Raleigh was giving him too little attention on the website. He also repeatedly asked Raleigh to update [**3] his biography and photos to reflect his coming-of-age, and particularly [*297] his switch to bigger bicycles.4 Raleigh, however, delayed in doing so because it used Rogatkin’s image to promote sales of its 16-inch bikes.

4 Rogatkin began competing on an 18-inch bike in 2009. He first competed on a 20-inch bike in 2010, and by 2011 was competing exclusively on 20-inch bikes.

Sometime in 2009 and 2010, Rogatkin broached the topic of compensation with Raleigh for his efforts on behalf of Team Diamondback. Although Raleigh stated that it would only consider limited financial support for the time being, it hinted at a bright future for Rogatkin. Rogatkin relates several oral and email5 conversations with Raleigh representatives Mike Hammond, Trevor Knesal, Sharon Robinson, and Kristian Jamieson6 in which he was assured that he would receive “greatly increased support,” that he had a “green light” to feel optimistic about his career at Team Diamondback, and that he could look forward to a “golden life” if he stayed with Raleigh. Rogatkin Dep. at 39:19-23; 108:15-17; & 71:11-22.

5 Rogatkin believes that certain of these emails have been deleted from his account.

6 Jamieson was not employed by Raleigh. He rather [**4] served as athletic manager for TAOW Productions, LLC and Windells Camps/NW School of Freeride, the promotors Raleigh had contracted to manage Team Diamondback through June of 2009.

In 2010, Raleigh agreed to provide Rogatkin with a $2,000 travel budget.7 In June of 2011, Rogatkin and Raleigh executed a Diamondback Team Rider Sponsorship Agreement effective from April 1, 2011 to March 31, 2012.8 The Sponsorship Agreement provided that Rogatkin would receive a monthly retainer of $416.66, and up to $5,000 in result-based incentive bonuses from Raleigh.9 Rogatkin Dep. Ex. 8 at Addendum A. In return, Raleigh was permitted to make unlimited promotional use of Rogatkin’s name and likeness. Id. ¶ 2.

7 Rogatkin invested substantially more than $2,000 to travel to competitions with his father.

8 Rogatkin’s father, Vladmir Rogatkin, signed on Rogatkin’s behalf.

9 It is undisputed that Rogatkin received the full amount he was entitled to under the Sponsorship Agreement.

Rogatkin left Team Diamondback in June of 2012.10 While still at Team Diamondback, Rogatkin was approached by Bulldog Bikes (in 2009), DK Bikes (in 2010), and KHE (in 2011), with sponsorship nibbles. Out of loyalty to Team Diamondback, Rogatkin [**5] did not pursue any of these overtures.11 After leaving Team Diamondback, however, Rogatkin became a fulltime rider for KHE. At present, KHE pays Rogatkin a $30,000 annual salary and $8,000 in travel expenses. On or about June 6, 2012, Raleigh removed any references to Rogatkin from the Team Diamondback webpage.

10 Rogatkin made the following public statement concerning his departure from Raleigh.

After five great years, I am sad to say I’m leaving Diamondback. I’ve had the best time with the company and with my forever teammates. I want to especially thank Trevor Knesal, who signed me on to the pro team when I was only 11 and sent me on the best trips and the biggest contests around the world. However, a great opportunity has come up for me outside of DB and I will keep you guys updated when it’s final. Thanks again to everyone at Diamondback.

Rogatkin Dep. Ex. 6.

11 Rogatkin began promoting Kali Protectives and Monster Energy in 2009. Both Kali and Monster have provided Rogatkin with travel expenses. Rogatkin began a limited relationship with KHE in 2011.

[*298] Rogatkin brought this lawsuit in Middlesex Superior Court in May of 2013. The Amended Complaint lists seven counts: unauthorized use of name [**6] and portrait or picture in violation of Mass. Gen. Laws ch. 214 § 3A (Count I); unfair and/or deceptive business practices in violation of Mass. Gen. Laws ch. 93A, §§ 2 & 11 (Count II); defamation (Count III); negligent misrepresentation (Count IV); unjust enrichment (Count V); promissory estoppel (Count VI); and intentional misrepresentation (Count VII). Invoking diversity jurisdiction, Raleigh removed the Complaint to this court in July of 2013. Raleigh filed its motion for summary judgment in July of 2014, following the completion of discovery.

DISCUSSION

Summary judgment is appropriate when “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A material fact is one which has the “potential to affect the outcome of the suit under applicable law.” Nereida-Gonzalez v. Tirado-Delgado, 990 F.2d 701, 703 (1st Cir. 1993). For a dispute to be “genuine,” the “evidence relevant to the issue, viewed in the light most flattering to the party opposing the motion, must be sufficiently open-ended to permit a rational factfinder to resolve the issue in favor of either side.” Nat’l Amusements v. Town of Dedham, 43 F.3d 731, 736 (1st Cir. 1995) (citation omitted).

Defamation (Count III)

Rogatkin alleges as defamatory Raleigh’s repeated publication of a biography characterizing him as a 12-year old “kid” and of [**7] photographs depicting him as a 16-inch bike rider.12 To prove defamation, a plaintiff must establish that “the defendant was at fault for the publication of a false statement regarding the plaintiff, capable of damaging the plaintiff’s reputation in the community, which either caused economic loss or is actionable without proof of economic loss.” White v. Blue Cross & Blue Shield of Mass., Inc., 442 Mass. 64, 66, 809 N.E.2d 1034 (2004); see also Phelan v. May Dep’t Stores Co., 443 Mass. 52, 56, 819 N.E.2d 550, (2004).

12 Although Rogatkin admits that the accused material was accurate and non-defamatory when published, he contends that as he grew in age and skill, his static portrayal by Raleigh took on a defamatory undertone.

A false statement is defamatory if it “would tend to hold the plaintiff up to scorn, hatred, ridicule or contempt, in the minds of any considerable and respectable segment in the community.” Phelan, 443 Mass. at 56. “[WJhether a communication is reasonably susceptible of a defamatory meaning [] is a question of law for the court.” Id. “The court [must] examine the statement in its totality in the context in which it was uttered or published. The court must consider all the words used, not merely a particular phrase or sentence.” Amrak Prods., Inc. v. Morton, 410 F.3d 69, 73 (1st Cir. 2005).

The publication of Rogatkin’s age (12) and characterizing him as a “kid” in a biography is no more susceptible to a defamatory [**8] meaning than biographical references to Ambassador Shirley Temple as a child actor or as “America’s Little Darling.” A defamatory statement must be false. There is no dispute that Rogatkin’s biographical details were accurate when initially published (Rogatkin supplied Raleigh with the biography). The publication of true but historical facts (even if outdated) about a person cannot be defamatory as a matter of law. A biography, like a photograph, is a faithful snapshot of a [*299] person taken at a particular time in his or her life. Although Raleigh did not update Rogatkin’s biography with the march of time (the court knows of no duty the law imposes to do as much), it published Rogatkin’s accurate date of birth on the same page — a reasonable assurance that the public would never confuse Rogatkin with, say, Peter Pan or Benjamin Button.

By the same principle, the authentic photographs of Rogatkin performing and riding on a 16-inch bike are also not reasonably capable of a defamatory meaning. Although photographs may take on a defamatory cast if published in a demeaning or derogatory context, see, e.g., Stanton v. Metro Corp., 438 F.3d 119, 125-129 (1st Cir. 2006) (concluding that photograph of high school student juxtaposed with article on teenage [**9] sex was reasonably susceptible of defamatory meaning), or manipulated as in Soviet days to depict something other than reality, there is no suggestion that Raleigh published photographs of Rogatkin that lent themselves to any interpretation other than that he was an accomplished 16-inch bike rider.13 Because the accused publications are not reasonably susceptible for defamatory meaning, Raleigh is entitled to summary judgment on Count III.

13 Rogatkin alleges that Raleigh’s continued publication of images of him as a 16-inch bike rider led to ridicule and scorn because he was not shown riding a larger bike. This is not an objection to the publications, but to the lack of publication of photos showing Rogatkin riding larger bikes. Rogatkin has not identified any support for the novel proposition that the absence of publication may form the basis of a defamation claim.

Unauthorized Use of Name and Portrait/Image (Count I)

Rogatkin alleges that because no written contract governed his relationship with Raleigh outside of the April of 2011 to March of 2012 Sponsorship Agreement, Raleigh’s use of his name and image on its website and in its catalogs and other advertising violates Chapter 214, Section 3A [**10] of Massachusetts General Laws. Section 3A grants a right of private action to “[a]ny person whose name, portrait or picture is used within the commonwealth for advertising purposes or for the purposes of trade without his written consent . . . to prevent and restrain the use thereof; and [to] recover damages for any injuries sustained by reason of such use.” (emphasis added).

Raleigh contends that Rogatkin’s email communications constitute sufficient written consent because Section 3A does not require that written consent be memorialized in any particular format. See, e.g., Rogatkin Dep. Ex. 12 (3/10/2007 email from Rogatkin to Knesal) (“Trevor, whatever you’re saying in your letter — make a frame for me?!!, having me in a Diamondback Catalog?!! already sounds like a dream come true. What can I do for Diamondback?”). Moreover, Rogatkin does not disagree that he condoned Raleigh’s use of his name and images for purposes of advertising at the time of publication, or that he attended the various photo shoots (such as the one in Seattle in 2008) with any expectation other than that his name and image would be used by Raleigh to promote sales of its bikes. Rogatkin supplied Raleigh photographs and videos of himself for use on the Raleigh website over the course of his career at Team Diamondback, and if he complained of anything, it was that Raleigh was posting too few of his feats.14

14 Section 3A protects [**11] “the interest in not having the commercial value of one’s name, portrait or picture appropriated to the benefit of another.” Tropeano v. Atl. Monthly Co., 379 Mass. 745, 749, 400 N.E.2d 847 (1980). As the title of Section 3A makes clear, that interest is infringed only when the use is “unauthorized.” To protect the interests of the parties, consent is optimally memorialized in a written instrument. However, at common law, consent may be given orally or through a course of conduct. Although the language of Section 3A references “written consent,” nothing in the statute suggests a legislative intent to displace common law or the equitable defenses of acquiescence and waiver.

[*300] Even if the court were to adopt Rogatkin’s argument for purposes of summary judgment, that his enthusiastic emails, voluntary participation in the production of his images, and his condonation of their publication are insufficient to satisfy the formalities of the “written consent” required by Section 3A, Rogatkin cannot show any personal damages resulting in Raleigh’s use of his image in its advertisements. His complaint rather is that Raleigh benefitted more from the sales of bikes generated by his image than he did from the exposure. The court knows of no theory of quasi-contract (other than unjust enrichment, [**12] see discussion of Count V infra) that would permit a party to recoup the benefits that the other acquires from an otherwise consensual relationship.15 Moreover, the only evidence that Rogatkin submits in support of the claim that Raleigh benefitted disproportionately from the association — a chart showing Raleigh’s total sales of 16-inch and 18-inch bikes from October of 2008 to September of 2013 — offers no basis on which a finder of fact could determine what, if any, percentage of these sales is reasonably attributable to the use of Rogatkin’s image in Raleigh’s advertising “in the commonwealth” (or anywhere else). See Bonacorso Const. Co. v. Master Builders, Inc., 1991 U.S. Dist. LEXIS 6057, 1991 WL 72796, at *10 (D. Mass. Apr. 24, 1991) (“The plaintiff has not demonstrated that it will be able to analyze this data [of variable year-to-year sales in Massachusetts] to prove by a preponderance of the evidence that any of the amount of the increase was due to use of its name and likeness.”).16 Because Rogatkin has adduced no material evidence of damages attributable to the use of his name and image, Raleigh is entitled to summary judgment on Count I.

15 Rogatkin’s testimony that Raleigh treated other riders more generously is inadmissible hearsay, and at best, simply evidence that other riders struck more advantageous [**13] bargains with Raleigh (as Rogatkin later did with KHE). So too with Rogatkin’s complaint that he suffered harm from his failure to pursue sponsorships with other bike companies because of his loyalty to Team Diamondback. There is no evidence of the terms of any concrete competing offer that Rogatkin received and rejected, or any evidence that Raleigh forbid or restrained Rogatkin from entering a relationship with another team or bicycle manufacturer.

16 Raleigh also contends that its use of Rogatkin’s name and images for advertising was not “within the commonwealth.” It is undisputed, however, that Rogatkin’s rider page, featuring his biography and photographs, was accessible in Massachusetts over the internet. Moreover, advertising for Diamondback featuring Rogatkin appeared in BMX magazines that circulated in Massachusetts. See Rogatkin Dep. Ex. 10.

Intentional/Negligent Misrepresentation, and Promissory Estoppel, (Counts IV, VI, and VII)

Rogatkin’s claims of intentional and negligent misrepresentation and promissory estoppel also fail for the lack of any evidence of damages. “To sustain a claim of misrepresentation, a plaintiff must show a false statement of material fact made to induce [**14] the plaintiff to act, together with reliance on the false statement by the plaintiff to the plaintiff’s detriment. . . . The speaker need not know ‘that the statement is false if the truth is reasonably susceptible of actual knowledge, or otherwise [*301] expressed, if, through a modicum of diligence, accurate facts are available to the speaker.'” Zimmerman v. Kent, 31 Mass. App. Ct. 72, 77, 575 N.E.2d 70 (1991), quoting Acushnet Fed. Credit Union v. Roderick, 26 Mass. App. Ct. 604, 605, 530 N.E.2d 1243 (1988)). “Where a plaintiff does not prove that he is worse off than if there had been no misrepresentation he has not made out a case of deceit.” Connelly v. Bartlett, 286 Mass. 311, 315, 190 N.E. 799 (1934). To prove a claim of promissory estoppel under Massachusetts law,

a plaintiff must allege that (1) a promisor makes a promise which he should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee, (2) the promise does induce such action or forbearance, and (3) injustice can be avoided only by enforcement of the promise.

Neuhoff v. Marvin Lumber & Cedar Co., 370 F.3d 197, 203 (1st Cir. 2004).

These theories, as with tort claims generally, require proof of actual damages — here based on reasonable reliance on Raleigh’s representations17 or promises.18 There is no evidence that Rogatkin was required by Raleigh to reject other (unspecified) sponsorship offers or that Rogatkin was contractually bound to represent Raleigh [**15] exclusively. As Rogatkin himself admits, he did represent other companies, including KHE, his current primary sponsor, while still a member of Team Diamondback. Without any showing of material damages, Raleigh is entitled to summary judgment on Counts IV, VI, and VII.

17 The statements Rogatkin allegedly relied upon — “greatly increased support,” “green light,” and “golden life” — “fall[] within the ordinary rule that false statements of opinion, of conditions to exist in the future, or of matters promissory in nature are not actionable” as misrepresentations. Yerid v. Mason, 341 Mass. 527, 530, 170 N.E.2d 718 (1960); see also Deming v. Darling, 148 Mass. 504, 505, 20 N.E. 107 (1889) (Holmes, J.).

18 Under Massachusetts law, “as with a claim for breach of contract, [i]n order to establish the existence of an enforceable promise under promissory estoppel, the plaintiff must show that the defendants’ promise included enough essential terms so that a contract including them would be capable of being enforced.” Armstrong v. Rohm & Haas Co., 349 F. Supp. 2d 71, 82 (D. Mass. 2004) (internal quotation marks omitted). Although Rogatkin alleges that Raleigh gave him assurances of future compensation, he cannot recall a specific number that was ever discussed. General statements of optimism such as “greatly increased support,” “green light” and “golden life” are simply too vague to [**16] form the basis of an enforceable promise.

Unjust Enrichment (Count V)

Rogatkin alleges that Raleigh unfairly profited from his efforts to promote Raleigh (both by appearing in Raleigh advertising and competing with Team Diamondback) while compensating him minimally for his efforts. To establish a claim of unjust enrichment, Rogatkin must prove

(1) a benefit conferred upon the defendant by the plaintiff;

(2) an appreciation or knowledge of the benefit by the defendant; and

(3) the acceptance or retention of the benefit by the defendant under circumstances which make such acceptance or retention inequitable.

Stevens v. Thacker, 550 F. Supp. 2d 161, 165 (D. Mass. 2008). Because unjust enrichment is a theory of equitable recovery, and not a separate cause of action, Lopes v. Commonwealth, 442 Mass. 170, 179, 811 N.E.2d 501 (2004), a court may not order restitution as a form of damages; it may only require a party to disgorge property [*302] that has been wrongfully appropriated from the rightful possession of the other party. Santagate v. Tower, 64 Mass. App. Ct. 324, 336, 833 N.E.2d 171 (2005).

The court here sees no inequity in any benefit that Raleigh may have derived from its association with Rogatkin. The undisputed evidence is that Rogatkin’s relationship with Raleigh was voluntary from its inception and throughout. Rogatkin is an avid BMX athlete and he competed not only to promote [**17] Raleigh as his sponsor, but to also to gain experience and advance his standing in the world of BMX biking. Rogatkin was aware of Raleigh’s use of his name and image in advertising and never objected for the obvious reason that he was a direct beneficiary of the publicity. He also benefitted materially from the relationship in terms of equipment, gear, and travel expenses. If Rogatkin found the terms of his association with Raleigh unsatisfactory, he was free to renegotiate, or leave to pursue other opportunities (both of which he eventually did). Because Raleigh did not unfairly retain any benefit conferred by Rogatkin, Raleigh in entitled to summary judgment on Count V.

Unfair and/or Deceptive Business Practices under Chapter 93A (Count II)

Having found that Raleigh is entitled to summary judgment on all of the foundational claims, the court also finds that Raleigh is entitled to summary judgment on the unfair and deception business practices (Chapter 93A) claim. Rogatkin has not shown that Raleigh’s actions fell within “the penumbra of some common-law, statutory, or other established concept of unfairness . . . or [was] immoral, unethical, oppressive or unscrupulous . . . [or] cause[d] substantial [**18] injury to consumers (or competitors or other businessmen).” PMP Assocs., Inc. v. Globe Newspaper Co., 366 Mass. 593, 596, 321 N.E.2d 915 (1975).

ORDER

For the foregoing reasons, Raleigh’s motion for summary judgment is ALLOWED. The claims against the John Doe defendants are also DISMISSED.19 The Clerk will enter judgment for Raleigh and close the case.

19 This case was removed to this court in July of 2013. Fact discovery closed in April of 2014. Plaintiff has yet to identify and serve the John Doe defendants. “[A] district court otherwise prepared to act on dispositive motions is not obligated to wait indefinitely for [the plaintiff] to take steps to identify and serve . . . unknown defendants.” Figueroa v. Rivera, 147 F.3d 77, 83 (1st Cir. 1998) (internal quotation marks omitted).

SO ORDERED.

/s/ Richard G. Stearns

UNITED STATES DISTRICT JUDGE