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What happens if you fail to follow the requirements of your insurance policy and do not get a release signed? In New Hampshire, you have no coverage.

You either have to create an absolutely fool proof system or take your release
online. If they don’t sign they don’t climb!

Colony Insurance Company v. Dover Indoor Climbing Gym & a., 158 N.H. 628; 974 A.2d
399; 2009 N.H. LEXIS 51

State: New Hampshire, Supreme Court of New Hampshire

Plaintiff: Colony Insurance Company

Defendant: Dover Indoor Climbing Gym& a.

Plaintiff Claims: There was no insurance coverage because the insured did not get a release signed by the injured claimant

Defendant Defenses: The insurance policy endorsement requiring a release to be signed was ambiguous

Holding: For the Plaintiff Insurance Company

Year: 2009

This is a scary case, yet the outcome is correct. The plaintiff insurance company issued a policy to the defendant climbing gym. An endorsement (an added amendment to the contract) to the policy said there would only be coverage if the gym all customers sign a release.

 An endorsement to the policy stated: “All ‘participants’ shall be required to sign a waiver or release of liability in
your favor prior to engaging in any ‘climbing activity.’ “It further stated: “Failure to conform to this warranty will render this policy null and void as [sic] those claims brought against you.”

A climber came to the gym with a group of friends. The gym asked everyone if they had a release on file, and no one said no. (Yes really stupid procedures!) Bigelow was part of the group and did not have a release on file and had not signed a release. While climbing Bigelow fell and was injured.

Bigelow accompanied friends to the climbing gym, but did not sign a waiver. He testified that he was never asked to sign a waiver; the gym owner’s affidavit stated that the owner asked the group of climbers if they had waivers on file and received no negative answers. It is undisputed; however, that Bigelow did not sign a waiver or release. While climbing, Bigelow fell and sustained serious injuries.

The defendant climbing gym put the plaintiff insurance company on notice of the claim. When the insurance company found out no release was signed, the insurance company filed a declaratory judgment motion. A declaratory judgment is a way to go into a court and say there is no coverage under this policy because there was no release. It is an attempt to be a quick interpretation of the contract so the bigger issue can be resolved quickly.

The gym then put Colony on notice to defend and pay any verdict obtained by Bigelow. In response, Colony filed a petition for declaratory judgment, arguing that the gym’s failure to obtain a release from Bigelow absolved Colony of any duty to defend or indemnify the gym.

Both parties filed motions for summary judgment. The trial court granted the climbing gym’s motion for summary judgment saying the endorsement requiring the signed release was ambiguous. The ambiguity was created because the insurance company had not provided the gym with a sample waiver to use.

The trial court found that Colony’s failure to provide the gym with a sample waiver rendered the endorsement provision ambiguous. The trial court therefore denied Colony’s motion for summary judgment, and granted the defendants’ cross-motion for summary judgment. 

This analysis by the court was absurd. Releases need to be written for the gym, for the gym’s clients and for the state law of the state where it is to be used. A “sample” release is a guaranteed loser in most cases. However, I suspect the court was looking for anyway it could find to provide coverage for the gym.

The trial court’s ruling meant the plaintiff insurance company had to provide coverage to the defendant for any claims made by the injured climber Bigelow.

The insurance company appealed the decision. New Hampshire does not have an intermediary appellate court system so the appeal went to the New Hampshire Supreme Court.

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

Insurance policies are contracts and are interpreted as such. However, because have been written in a specific way and are always offered on a take it or leave it basis, as well as the fact the insurance company has all the cards (money) insurance policies have additional legal interpretations in addition to contract law.

The New Hampshire Supreme Court started its analysis by looking at how insurance policies are interpreted. That means the policy is read as a whole objectively. Terms are given their natural meaning, meaning there is no special interpretation of any term, and if the policy is clear and unambiguous is it enforced. No special reading of the policy is allowed based on any party to the policy’s expectations.

We construe the language of an insurance policy as would a reasonable person in the position of the insured based upon a more than casual reading of the policy as a whole. Policy terms are construed objectively, and where the terms of a policy are clear and unambiguous, we accord the language its natural and ordinary meaning. We need not examine the parties’ reasonable expectations of coverage when a policy is clear and unambiguous; absent ambiguity, our search for the parties’ intent is limited to the words of the policy.

The burden of proving that no insurance coverage exists as defined by the policy rests on the insurance company. That means coverage exists under the policy unless the insurance company can prove no coverage was written.

If an insurance company wants to limit its coverage, it is allowed to do so. However, that limitation must be clear and unambiguous. An ambiguity exists if a reasonable disagreement exists between the insurance company and the policyholder and that disagreement could lead to two or more, interpretations.

Although an insurer has a right to contractually limit the extent of its liability, it must do so “through clear and unambiguous policy language. Ambiguity exists if “reasonable disagreement between contracting parties” leads to at least two interpretations of the language. 

Ambiguities will be examined in the appropriate context and the words construed in their plain, ordinary and popular meaning. If the interpretation of the ambiguity favors the policyholder, then the coverage will favor the insured.

In determining whether an ambiguity exists, we will look to the claimed ambiguity, consider it in its appropriate context, and construe the words used according to their plain, ordinary, and popular definitions. If one of the reasonable meanings of the language favors the policyholder, the ambiguity will be construed against the insurer. 

If, however, the language in the policy is clear, the court will not bend over backward or as written in this case “perform amazing feats of linguistic gymnastics” to find an ambiguity and create coverage.

Where, however, the policy language is clear, this court “will not perform amazing feats of linguistic gymnastics to find a purported ambiguity” simply to construe the policy against the insurer and create coverage where it is clear that none was intended. 

The court then looked at the determination of the trial court which found an ambiguity because the insurance company did not provide a sample insurance policy. The Supreme Court found that was an incorrect interpretation of the policy. Even the defendant climbing gym agreed with the court on this
issue.

Even the gym, however, contends that the trial court “reached the correct result for the wrong reasons.” Thus, the gym does not argue that the endorsement creates an ambiguity by its failure to provide the insured with a sample waiver form, but, rather, that the exclusionary language is ambiguous because it states that participants shall “be required” to sign waivers as opposed to mandating that the gym obtain signed waivers.  

The court then applied to the law of New Hampshire in interpreting insurance policies to the facts of this case. The court found the language requiring a release was clear and that a reasonable person could only read it.

The clear meaning of the policy language is that the gym is required to actually obtain waivers from climbing participants. The gym’s interpretation would lead to the absurd result of requiring coverage even if the gym never actually enforced its waiver policy. A reasonable person reading the policy would not understand that coverage existed in such circumstances. The gym’s interpretation is unreasonably narrow, and is therefore not the type of alternative interpretation that renders policy language ambiguous.

Simply put the policy requires the defendant climbing gym to have everyone sign a release. If no release is signed, there was no coverage for the gym. The trial court was overturned, and the climbing gym faced the claims of the injured climber without insurance coverage.

So Now What?

One of the first cases I was involved with was very similar. A Montana stable was insured by an insurance company with an endorsement just as this one; all riders were required to sign a release. In Montana all guides, including horseback guides had to be licensed by the state. A state employee was checking out the
stable and found the releases. In Montana, you cannot use a release. (See States that do not Support the Use of a Release andMontana Statute Prohibits Use of a Release)

The state employee had the stable quit using the release, or they would lose their license to operate in Montana. A rider was injured and sued the stable, and the insurance company denied coverage. I was contacted by the law firm representing the insurance company and was floored by the facts and how the insurance company could deny coverage when it violated state regulations.

However, in that situation as well as this one, there is not much you can do to get around the situation if the policy clearly states you must have a release signed. In the Montana case, the stable owner should have immediately contacted his insurance company when he was told he could not use a release and pay to have the endorsement removed or found another insurance company to write him a policy.

In this case, a proper procedure should have been put in place to confirm signed releases rather than relying on the honesty of someone walking through the doors to the gym.

When you purchase insurance make sure you and your insurance agent are speaking clearly to each other, and you both understand what you are looking for. When the policy arrives, read the policy or pay a professional to read the policy for you looking for the coverage’s you need as well as looking for problems with the coverage.

If you ask the agent or broker to clarify the coverage you are wanting, to make sure you get that clarification in writing (or an email), so you can take that to court if necessary.

Most importantly create a system to make sure that everyone who comes to your facility, activity or business when you use a release, signs a release.

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

What do you think? Leave a comment.

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Author: Outdoor Recreation Insurance, Risk Management and Law

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Colony Insurance Company v. Dover Indoor Climbing Gym, 158 N.H. 628; 974 A.2d 399; 2009 N.H. LEXIS 51

Colony Insurance Company v. Dover Indoor Climbing Gym & a., 158 N.H. 628; 974 A.2d 399; 2009 N.H. LEXIS 51

Colony Insurance Company v. Dover Indoor Climbing Gym & a.

No. 2008-759

SUPREME COURT OF NEW HAMPSHIRE

158 N.H. 628; 974 A.2d 399; 2009 N.H. LEXIS 51

March 18, 2009, Argued

April 24, 2009, Opinion Issued

HEADNOTES NEW HAMPSHIRE OFFICIAL REPORTS HEADNOTES

1. Insurance–Policies–Construction The interpretation of insurance policy language is a question of law for the court to decide. The court construes the language of an insurance policy as would a reasonable person in the position of the insured based upon a more than casual reading of the policy as a whole. Policy terms are construed objectively, and where the terms of a policy are clear and unambiguous, the court accords the language its natural and ordinary meaning. The court need not examine the parties’ reasonable expectations of coverage when a policy is clear and unambiguous; absent ambiguity, the court’s search for the parties’ intent is limited to the words of the policy.

2. Insurance–Proceedings–Burden of Proof The burden of proving that no insurance coverage exists rests squarely with the insurer.

3. Insurance–Policies–Ambiguities Although an insurer has a right to contractually limit the extent of its liability, it must do so through clear and unambiguous policy language. Ambiguity exists if reasonable disagreement between contracting parties leads to at least two interpretations of the language. In determining whether an ambiguity exists, the court will look to the claimed ambiguity, consider it in its appropriate context, and construe the words used according to their plain, ordinary, and popular definitions. If one of the reasonable meanings of the language favors the policyholder, the ambiguity will be construed against the insurer. Where, however, the policy language is clear, the court will not perform amazing feats of linguistic gymnastics to find a purported ambiguity simply to construe the policy against the insurer and create coverage where it is clear that none was intended.

4. Insurance–Policies–Construction When a climbing gym’s insurance policy stated, “All participants shall be required to sign a waiver or release of liability in your favor prior to engaging in any climbing activity,” the clear meaning of the policy language was that the gym was required to actually obtain waivers from climbing participants. The gym’s interpretation that a reasonable person would believe that coverage existed so long as the gym had a policy of requiring waivers regardless of whether it actually obtained waivers would lead to the absurd result of requiring coverage even if the gym never actually enforced its waiver policy. A reasonable person reading the policy would not understand that coverage existed in such circumstances. Because the policy required the gym to obtain waivers from all participants, the failure to do so in the case of an injured climber rendered coverage under the policy inapplicable to his claims.

COUNSEL: Wiggin & Nourie, P.A., of Manchester (Doreen F. Connor on the brief and orally), for the plaintiff.

Mallory & Friedman, PLLC, of Concord (Mark L. Mallory on the brief and orally), for defendant, Dover Indoor Climbing Gym.

Shaheen & Gordon, P.A., of Dover, for defendant, Richard Bigelow, filed no brief.

JUDGES: DUGGAN, J. BRODERICK, C.J., and DALIANIS, J., concurred.

OPINION BY: DUGGAN

OPINION

[**400]   [*629]  Duggan, J. The plaintiff, Colony Insurance Company (Colony), appeals an order of the Superior Court (McHugh, J.) denying its motion for summary judgment and granting that of the defendants, Dover Indoor Climbing Gym (the gym) and Richard Bigelow. We reverse and remand.

The trial court found, or the record supports, the following facts. Colony issued a commercial general liability insurance policy to the gym, which was in effect from January 5, 2007, to January 5, 2008. An endorsement to the policy stated: “All ‘participants’ shall be required to sign a waiver or release of liability in your favor prior to engaging in any ‘climbing activity.’ ” It further stated: “Failure to conform to this warranty will render this policy null and void as [sic] those claims brought against you.”

On August 14, 2007,  [***2] Bigelow accompanied friends to the climbing gym, but did not sign a waiver. He testified that he was never asked to sign a waiver; the gym owner’s affidavit stated that the owner asked the group of climbers if they had waivers on file and received no negative answers. It is undisputed, however, that Bigelow did not sign a waiver or release. While climbing, Bigelow fell and sustained serious injuries. The gym then put Colony on notice to defend and pay any verdict obtained by Bigelow. In response, Colony filed a petition for declaratory judgment, arguing that the gym’s failure to obtain a release from Bigelow absolved Colony of any duty to defend or indemnify the gym.

Both Colony and the defendants filed motions for summary judgment, which the trial court addressed in a written order. The trial court found that Colony’s failure to provide the gym with a sample waiver rendered the endorsement provision ambiguous. The trial court therefore denied Colony’s motion for summary judgment, and granted the defendants’ cross-motion  [**401]  for summary judgment. This appeal followed.

[*630]  On appeal, Colony argues that the trial court erred in finding that the endorsement was ambiguous, and contends that the  [***3] gym’s failure to obtain a waiver from Bigelow renders the policy inapplicable as to his claims. Alternatively, Colony argues that even if the endorsement is ambiguous, the gym is not entitled to coverage because it had actual knowledge of the policy’s waiver requirement.

[HN1] In reviewing the trial court’s grant or denial of summary judgment, we consider the evidence, and all inferences properly drawn from it, in the light most favorable to the non-moving party. Everitt v. Gen. Elec. Co., 156 N.H. 202, 208, 932 A.2d 831 (2007); Sintros v. Hamon, 148 N.H. 478, 480, 810 A.2d 553 (2002). If there is no genuine issue of material fact, and if the moving party is entitled to judgment as a matter of law, the grant of summary judgment is proper. Everitt, 156 N.H. at 209; Sintros, 148 N.H. at 480. We review the trial court’s application of the law to the facts de novo. Everitt, 156 N.H. at 209; Sintros, 148 N.H. at 480.

[1]  [HN2] The interpretation of insurance policy language is a question of law for this court to decide. Godbout v. Lloyd’s Ins. Syndicates, 150 N.H. 103, 105, 834 A.2d 360 (2003). We construe the language of an insurance policy as would a reasonable person in the position of the insured based upon a more than casual reading  [***4] of the policy as a whole. Id. Policy terms are construed objectively, and where the terms of a policy are clear and unambiguous, we accord the language its natural and ordinary meaning. Id. We need not examine the parties’ reasonable expectations of coverage when a policy is clear and unambiguous; absent ambiguity, our search for the parties’ intent is limited to the words of the policy. Id.

[2, 3] In this case, the gym argues that the policy is ambiguous and Colony maintains that it is not.  [HN3] The burden of proving that no insurance coverage exists rests squarely with the insurer. Curtis v. Guaranty Trust Life Ins. Co., 132 N.H. 337, 340, 566 A.2d 176 (1989); see RSA 491:22-a (1997).  [HN4] Although an insurer has a right to contractually limit the extent of its liability, it must do so “through clear and unambiguous policy language.” Id. (quotation omitted). Ambiguity exists if “reasonable disagreement between contracting parties” leads to at least two interpretations of the language. Int’l Surplus Lines Ins. Co. v. Mfgs. & Merchants Mut. Ins. Co., 140 N.H. 15, 20, 661 A.2d 1192 (1995); Trombly v. Blue Cross/Blue Shield, 120 N.H. 764, 771, 423 A.2d 980 (1980). In determining whether an ambiguity exists, we will look to the claimed ambiguity,  [***5] consider it in its appropriate context, and construe the words used according to their plain, ordinary, and popular definitions. Int’l Surplus, 140 N.H. at 20. If one of the reasonable meanings of the language favors the policyholder, the ambiguity will be construed against the insurer. Id. Where, however, the policy language is clear, this court “will not  [*631]  perform amazing feats of linguistic gymnastics to find a purported ambiguity” simply to construe the policy against the insurer and create coverage where it is clear that none was intended. Hudson v. Farm Family Mut. Ins. Co., 142 N.H. 144, 147, 697 A.2d 501 (1997); Curtis, 132 N.H. at 342.

The trial court found that the endorsement requiring waivers is ambiguous because Colony did not provide the gym with a sample waiver. Even the gym, however, contends that the trial court “reached the  [**402]  correct result for the wrong reasons.” Thus, the gym does not argue that the endorsement creates an ambiguity by its failure to provide the insured with a sample waiver form, but, rather, that the exclusionary language is ambiguous because it states that participants shall “be required” to sign waivers as opposed to mandating that the gym obtain signed waivers.  [***6] Under this interpretation, the gym argues, a reasonable person would believe that coverage exists so long as the gym has a policy of requiring waivers regardless of whether it actually obtained waivers from climbing participants. Colony argues that the policy language is unambiguous. We agree with Colony.

[4] The clear meaning of the policy language is that the gym is required to actually obtain waivers from climbing participants. The gym’s interpretation would lead to the absurd result of requiring coverage even if the gym never actually enforced its waiver policy. A reasonable person reading the policy would not understand that coverage existed in such circumstances. The gym’s interpretation is unreasonably narrow, and is therefore not the type of alternative interpretation that renders policy language ambiguous. See Curtis, 132 N.H. at 342 ( [HN5] refusing to find ambiguity when alternate interpretations would “inevitably lead to absurd results”). To construe the exclusion against the insurer here would create coverage where it is clear that none was intended. We therefore conclude that the policy language is unambiguous and that a reasonable insured would understand that the exclusion would  [***7] apply in this case.

Because the policy requires the gym to obtain waivers from all participants, the failure to do so in the case of Bigelow renders coverage under the policy inapplicable to his claims. In light of our holding, we need not address Colony’s remaining argument. We therefore reverse the order of the trial court granting the defendants’ motion for summary judgment, and hold that Colony is entitled to summary judgment as a matter of law.

Reversed and remanded.

Broderick, C.J., and Dalianis, J., concurred.

 


Did a Federal District Court in New Hampshire allow a release to bar a minor’s claims? Maybe, but only by omission, not by intent I believe.

This decision also looks at requiring initials in a release. Stupid move to require initials in any document, it just creates an argument for the plaintiff and requires more time on the defendant’s part to review the signed document.

Lizzol v. Brothers Property Management Corporation, Et. Al., 2016 DNH 199; 2016 U.S. Dist. LEXIS 150427

State: New Hampshire, United States District Court for the District of New Hampshire

Plaintiff: Jennifer Lizzol, Michael Lizzol, and T.G.,

Defendant: Brothers Property Management Corporation, Out Back Kayak, Inc., and Martin Welch,

Plaintiff Claims: negligence, including negligent training and supervision, vicarious liability, bystander liability, and loss of consortium

Defendant Defenses: Release

Holding: For the Defendant

Year: 2016

This case has two important articles regarding release law. The first is whether a plaintiff can sign away a minor’s right to sue. The results of the decision are yes; however, the issue was never argued or discussed in the decision.

The second is the use of places to initial in a release. The court ruled them of no value. However, because two of the plaintiff’s had not initialed certain sections, it allowed the plaintiff to argue those sections were not valid. Get rid of places to initial in your release because not all courts will rule this way.

The plaintiffs were a husband, wife and minor child who had booked a vacation at the defendant resort. As part of that vacation, they booked  a snowmobile (snow machine in the decision) instructions and tour. The booking was done online and occurred as soon as the plaintiff’s checked into the resort.

The snowmobile tours were run by a third party, also a defendant, Out Back Kayak, Inc. This defendant was not named on the release as a party to be protected. Upon arriving at the tour the plaintiffs were instructed to pick out a helmet and sign the release.

Mountain View Grand employee, who told them to quickly pick out helmets and sign a two-page document that bore the following heading:

Snow Machine Tour

ACKNOWLEDGEMENT OF RISKS AND HAZARDS

COVENANT NOT TO SUE

WAIVER AND RELEASE OF LIABILITY

(the “Release”). The Lizzols felt rushed during the process, see, e.g., Defs.’ Mot. for Summary Judgment, Exh. C. at p. 3, but both Jennifer and Michael had an opportunity to review the Release, and each signed and initialed it. (Jennifer executed the release on behalf of her minor son, T.G.). [Emphasize added]

The release had five sections, Section A through E, which had to be initialed. The mother did not initial two sections and the father did not initial one section.

The Release includes five lettered paragraphs that provide tour participants with a designated space in which to place his or her initials, thereby confirming that he or she understands and acknowledges the following:

********************

Id. Jennifer did not initial Paragraph B or Paragraph D, and Michael did not initial Paragraph B. [Emphasize added]

The plaintiff’s received a few minutes of instruction on how to steer brake and operate the snow machines then the tour took off. The plaintiff husband and wife were riding together right behind the guide, and their son was farther back in the line.

The guide told everyone he would not exceed twenty miles per hour. The guide exceeded the self-imposed speed limit immediately and continued to speed. The plaintiff mother was driving the snow machine, and she quickly fell behind and was lost. While attempting to follow the tracks of the guide, she lost control of the machine which flipped and she and her husband fell down an embankment.

Jennifer and Michael rode on a two-person snow machine, with Jennifer operating the vehicle. They were directly behind Welch in the line of snowmobiles. Their son, T.G., rode by himself and was farther back in the line. Welch drove rather quickly during the tour, and far exceeded the self-imposed 20 miles per hour speed limitation he had announced earlier. Jennifer did not keep pace, and, as Welch increased his speed during the second half of the tour, Jennifer lost sight of him. Jennifer attempted to follow Welch’s tracks in the snow, but, in doing so, lost control of the snowmobile, which left the path and flipped over. Jennifer, Michael, and the snow machine fell down a steep embankment that was approximately seventy-five feet high.

The plaintiff’s later learned that numerous customers complained about the guide driving too fast. One manager of the resort asked the husband if the guide had been driving too fast. plaintiff’s later learned that numerous customers complained about the guide driving too fast. One manager of the resort asked the husband if the guide had been driving too fast.

The plaintiffs later learned that other customers may have complained that Welch drove too quickly during earlier snow machine tours. After the accident, Mountain View Grand manager, Chris Diego, asked Michael if Welch had been “going too fast again.”

The defendant filed a motion for summary judgment based on the release. The court granted the motion for summary judgment and dismissed the case.

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

In making its decision reviewed here the court first looked at the requirements for releases in New Hampshire. New Hampshire has three requirements to make a release enforceable.

Exculpatory contracts are enforceable if: “(1) they do not violate public policy; (2) the plaintiff understood the import of the agreement or a reasonable person in [plaintiff’s] position would have understood the import of the agreement; and (3) the plaintiff’s claims fall within the contemplation of the parties when they executed the contract.”

The plaintiff first argued the release did not apply because the release language looked at renting the equipment and did not contemplate the guide’s failure to act reasonably.

Altogether, they say, the impression is given that the Release applies only to injuries inherent to snow machine activity and the use of snow machine equipment, but not to harm resulting from an instructor’s or guide’s failure to act with reasonable care.

However, the court did not find this argument persuasive because releases are reviewed applies the common meaning to the words in the release and as long as the language is clear and specifically indicates the intent of the parties it will be upheld.

Under applicable New Hampshire law, courts examine the language of a release and “give the language used by the parties its common meaning and give the contract itself the meaning that would be attached to it by a reasonable person.” “As long as the language of the release clearly and specifically indicates the intent to release the defendant from liability for personal injury caused by the defendant’s negligence, the agreement will be upheld.”

However, any doubt in the language as to whether the plaintiff agreed to assume the risk, and the release would not be enforced.

However, a defendant “will not be released from liability when the language of the contract raises any doubt as to whether the plaintiff has agreed to assume the risk of a defendant’s negligence.

The language in the release was broad in reach, detailed and clear and as such upheld against this argument of the plaintiff.

The language of the Release unarguably applies to claims or suits based on the negligence of Mountain View Grand owners, employees, officers or agents. The Release does not qualify or limit the “negligence” being released in any way, nor is the Release ambiguous in that regard. [Emphasize added for further discussion.]

A reasonable person “would have contemplated that the agreements released the defendants from any negligence, not just from negligence inherent” in snowmobiling.

The next argument was another that would not have gone in favor of the defendants in many states. The actual party that employed the guide, OBK, was not a named defendant in the release. However, case law in New Hampshire had held that parties protected by a release did not necessarily have to be named in the release. (This is an exception to the rule! Do not rely upon this when writing your release.)

Under New Hampshire law, the release need not specifically name the parties to be protected by only provide functional identification of the parties.

An exculpatory contract need not specifically identify the defendant by name.” “However, the contract must at least provide a functional identification of the parties being released.”

In this release enough of an agency relationship was covered in the release to protect the defendant OBK.

…the Release here makes evident that it pertains not just to the furnishing and use of equipment associated with the snow machine activity, but also to the furnishing of services associated with that activity.

The initial issue was next reviewed. The plaintiff made a great argument to void the sections of the release not initialed by the plaintiff.

Plaintiffs next argue that, even if the Release does encompass the claims at issue, it is still not enforceable against Jennifer, because she failed to initial paragraphs B and D of the Release. Plaintiffs characterize the lettered paragraphs as “several distinct exculpatory clauses” that they were required to agree to separately, and which, as structured, give the impression that “the participant might agree to certain terms, but not others.

However, the court found the concluding language of the release encompassed the entire agreement and by signing the release right below that language the plaintiff agreed to the entire agreement.

Jennifer Lizzol’s failure to initial paragraphs B and D of the Release does not render the Release or those paragraphs unenforceable against her. The same general analysis applies to Michael Lizzol’s failure to initial Paragraph B of the Release.

The first requirement for a valid release under New Hampshire law is that does not violate public policy. This was the last argument raised by the plaintiff and reviewed in the court’s decision. Under New Hampshire law, a release must not violate public policy.

“A defendant seeking to avoid liability must show that the exculpatory agreement does not contravene public policy; i.e., that no special relationship existed between the parties and that there was no other disparity in bargaining power.” “‘A special relationship exists when “the defendant is a common carrier, innkeeper or public utility, or is otherwise charged with a duty of public service.'” Additionally, a release may be against public policy if, among other things, “it is injurious to the interests of the public, violates some public statute, or tends to interfere with the public welfare or safety.”

The plaintiff’s relied on the “disparity of bargaining power” argument to claim the release violated New Hampshire public policy. “”Where there is a disparity in bargaining power, the plaintiff may not be deemed to have freely chosen to enter into the contract.” However, the court found this would not work.

Here, the plaintiffs were “under no physical or economic compulsion to sign the release,” and “[s]ince the defendants’ service is not an essential one, the defendants had no advantage of bargaining strength” over the plaintiffs or others who sought to participate in the snowmobile lesson and tour.

The plaintiff’s also argued public policy was violated because they were fraudulent induced to sign the release based upon the knowledge that the guide drove too fast.

Plaintiffs assert that defendants had prior knowledge that Welch generally drove too quickly when conducting snow machine tours, and, notwithstanding that knowledge, failed (negligently) to take reasonable steps to ensure that Welch conducted the tours safely. Plaintiffs further contend that they were induced to sign the Release based upon defendants’ false assurances that the lesson and tour would be conducted in a safe manner, with adequate instruction, and at a safe speed. Relying on those assurances, plaintiffs signed the Release. Plaintiffs argue that, at the very least, whether the defendants made assurances (and omissions) regarding the nature of the snow machine tour with conscious indifference to the truth, and whether the plaintiffs justifiably relied upon those statements when signing the Release, are disputed issues of material fact precluding summary judgment.

Fraud in the inducement is a valid defense to contracts and releases. (Remember Marketing Makes Promises Risk Management has to Pay For) to prove fraud in the inducement the plaintiffs must prove:

As the parties seeking to invalidate the Release on fraudulent inducement grounds, plaintiffs bear a substantial burden: they “must establish that the other party made a representation with knowledge of its falsity or with conscious indifference to its truth with the intention to cause another to rely upon it. In addition, the party seeking to prove fraud must demonstrate justifiable reliance.”

However, the plaintiffs could produce no facts to support fraud, an intentional act so to speak on the part of the defendants to support their argument.

Because plaintiffs have not produced sufficient evidence from which a finder of fact could conclude that the defendants knowingly made fraudulent representations to them, they have not established that a genuine issue of fact exists with respect to whether their execution of the Release was fraudulently induced, and is therefore ineffective.

The Release is valid and enforceable, and it encompasses the plaintiffs’ bystander liability claim as well as their negligence claims.

For those reasons, the plaintiff’s claims were dismissed, and the case closed.

So Now What?

There are several important points made in this decision.

Whether or not the court intended for the release to be valid against the claims of the minor is not known. A defendant was probably a minor, and his claims were dismissed based upon the signature on a release signed by his mother.  However, this is not a strong enough decision to rely upon at this time.

The statement by the court that the language of the release “does not qualify or limit the “negligence” being released in any way…” is important. So often releases are written with the intent to soften the effect in the mind of the writer or the release is inadvertently written in a way that limits the value of the release. Write a release as broadly as possible and allow the court to restrict it. Why do the court’s job in advance and eliminate a possible defense you may have to a claim.

The final issue is initials. GET RID OF INITIALS in your release. They have no value. You need a signature at the end of the contract and nothing else. The only value initials provide is to the plaintiff to make an argument that a place on the release that is not initialed should void the release or at least void that section of the release.

This case would probably have a different outcome in another jurisdiction.

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

What do you think? Leave a comment.

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Lizzol v. Brothers Property Management Corporation, Et. Al., 2016 DNH 199; 2016 U.S. Dist. LEXIS 150427

Lizzol v. Brothers Property Management Corporation, Et. Al., 2016 DNH 199; 2016 U.S. Dist. LEXIS 150427

Jennifer Lizzol, Michael Lizzol, and T.G., Plaintiffs v. Brothers Property Management Corporation, Out Back Kayak, Inc., and Martin Welch, Defendants

Case No. 15-cv-100-SM

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

2016 DNH 199; 2016 U.S. Dist. LEXIS 150427

October 31, 2016, Decided

October 31, 2016, Filed

PRIOR HISTORY: Lizzol v. Bros. Prop. Mgmt. Corp., 2016 U.S. Dist. LEXIS 16863 (D.N.H., 2016)

COUNSEL:  [*1] For Jennifer Lizzol, Michael Lizzol, T. G., Plaintiffs: Philip R. Waystack, Jr., Sandra L. Cabrera, LEAD ATTORNEYS, Waystack Frizzell, Colebrook, NH.

 

For Brothers Property Management Corporation, Out Back Kayak, Inc. OBK, Defendants: Paul B. Kleinman, Bouchard Kleinman & Wright PA (M), Manchester, NH.

For Martin Welch, Defendant: Paul B. Kleinman, LEAD ATTORNEY, Bouchard Kleinman & Wright PA (M), Manchester, NH.

JUDGES: Steven J. McAuliffe, United States District Judge.

OPINION BY: Steven J. McAuliffe

OPINION

ORDER

Jennifer Lizzol, her husband Michael, and their son, T.G., filed suit to recover damages for injuries sustained as a result of a snow machine accident that occurred during a winter vacation at the Mountain View Grand Resort & Spa, in Whitefield, New Hampshire (“Mountain View Grand”). Defendants move for summary judgment based upon a liability release and covenant not to sue executed by Jennifer and Michael before the accident. Defendants also move for summary judgment on Michael Lizzol’s and T.G’s bystander liability claim. For the reasons discussed, defendants’ motion is granted.

Standard of Review

When ruling on a motion for summary judgment, the court must “constru[e] the record in the light most favorable to the [*2]  nonmoving party and resolv[e] all reasonable inferences in that party’s favor.” Pierce v. Cotuit Fire Dist., 741 F.3d 295, 301 (1st Cir. 2014). Summary judgment is appropriate when the record reveals “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). In this context, “a fact is ‘material’ if it potentially affects the outcome of the suit and a dispute over it is ‘genuine’ if the parties’ positions on the issue are supported by conflicting evidence.” Int’l Ass’n of Machinists & Aerospace Workers v. Winship Green Nursing Ctr., 103 F.3d 196, 199-200 (1st Cir. 1996) (citations omitted). See also Nolan v. CN8, 656 F.3d 71, 76 (1st Cir. 2011). Nevertheless, if the nonmoving party’s “evidence is merely colorable, or is not significantly probative,” no genuine dispute as to a material fact has been proved, and “summary judgment may be granted.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986) (citations omitted).

Background

Construing the record in the light most favorable to plaintiffs, and resolving all reasonable inferences in their favor, the controlling facts appear to be as follows.

The Lizzols travelled to the Mountain View Grand from Long Island, New York, on January 27, 2013, arriving in the afternoon. Prior to their arrival, Jennifer had scheduled a snowmobile lesson and tour for herself, her husband, and her son, as well as for a few of their friends, through the Mountain View Grand’s website. [*3]  Defs.’ Mot. for Summary Judgment, Exh. C at p. 2. The lessons and guided tour were provided by Out Back Kayak, Inc. (“OBK”). Upon arrival at the resort, the Lizzols quickly put their luggage in their rooms, and then left to participate in the snowmobile activity, including a lesson and tour. Id.

The Lizzols were directed by the hotel activities desk to a small building on the grounds, where they met a Mountain View Grand employee, who told them to quickly pick out helmets and sign a two-page document that bore the following heading:

Snow Machine Tour

ACKNOWLEDGEMENT OF RISKS AND HAZARDS

COVENANT NOT TO SUE

WAIVER AND RELEASE OF LIABILITY

(the “Release”). The Lizzols felt rushed during the process, see, e.g., Defs.’ Mot. for Summary Judgment, Exh. C. at p. 3, but both Jennifer and Michael had an opportunity to review the Release, and each signed and initialed it. (Jennifer executed the release on behalf of her minor son, T.G.). The Release includes the following language:

I . . . hereby voluntarily agree to release, waive, discharge, hold harmless, defend and indemnify BPMC, the field operator, the event promoter, the owners of premises used to conduct the snowmobile activity, their owners, [*4]  agents, officers and employees from any and all claims, actions or losses for bodily injury, property damage, wrongful death or injury, loss of services or otherwise which may arise out of my use of eques[trian] or other equipment or my participation in any BPMC activity. I specifically understand that I am giving up any rights that I may have by releasing, discharging and waiving any claims or actions presently or in the future for the negligent acts or other conduct by the owners, agents, officers, designees or employees of BPMC.

Defs.’ Mot. for Summary Judgment, Exh. A, p. 1. The Release includes five lettered paragraphs that provide tour participants with a designated space in which to place his or her initials, thereby confirming that he or she understands and acknowledges the following:

(A) that he or she is physically fit to participate in the activity;

(B) that participation in the activity may result in “bodily injury, disease, strains, fractures, partial and/or total paralysis, eye injury, dental injury, blindness, . . . cold weather injuries, heart attack, asthma, vehicle injuries, mental duress, death or other ailments that could cause serious disability;”

(C) that “[t]hese risks and dangers [*5]  [of bodily injury] may be caused by the negligence of the owners, employees, officers or agents of the Mountain View Grand and/or the negligence of the participants . . . ;”

(D) that by participating “in these activities and/or use of equipment, [the participant] . . . assume[s] all risks and dangers and all responsibility for any loss and/or damages, whether caused in whole or in part by the negligence or other conduct of the owners, agents, officers, designees, employees of BPMC, or by any other person[;]” and

(E) that the participant “understand[s] that [he or she is] undertaking this snowmobiling activity at [his or her] own risk, freely and voluntarily without any inducement[.]”

Id. Jennifer did not initial Paragraph B or Paragraph D, and Michael did not initial Paragraph B.

After signing the Release and obtaining their helmets, the Lizzols met their tour instructor, OBK employee Martin Welch, and his assistant, Jennifer Welch. The Lizzols had no snow machine experience. Welch provided a very brief introduction to and instruction regarding operation of the snow machines. He explained how to accelerate, brake, and turn. He told them that the tour would never travel faster than 20 miles per hour. Welch then [*6]  assisted the tour members with their snowmobile selections, and the tour began.

Jennifer and Michael rode on a two-person snow machine, with Jennifer operating the vehicle. They were directly behind Welch in the line of snowmobiles. Their son, T.G., rode by himself and was farther back in the line. Welch drove rather quickly during the tour, and far exceeded the self-imposed 20 miles per hour speed limitation he had announced earlier. Jennifer did not keep pace, and, as Welch increased his speed during the second half of the tour, Jennifer lost sight of him. Jennifer attempted to follow Welch’s tracks in the snow, but, in doing so, lost control of the snowmobile, which left the path and flipped over. Jennifer, Michael, and the snow machine fell down a steep embankment that was approximately seventy-five feet high.

Both Jennifer and Michael suffered physical injuries, but Jennifer’s were particularly severe. She lost consciousness, had collapsed lungs, 10 broken ribs, and multiple injuries to her spine and back.

The plaintiffs later learned that other customers may have complained that Welch drove too quickly during earlier snow machine tours. After the accident, Mountain View Grand manager, [*7]  Chris Diego, asked Michael if Welch had been “going too fast again.” Pls.’ Opp. to Summary Judgment, Exh. 4, p. 6.

Jennifer, Michael, and their son brought suit against Brothers Property Management Corporation (which owns and operates the Mountain View Grand), OBK, and Martin Welch, asserting claims for negligence, including negligent training and supervision, vicarious liability, bystander liability, and loss of consortium. The defendants move for summary judgment, arguing that the contractual Release is both valid and enforceable.

Discussion

Defendants argue that the scope of the Release plainly encompasses the claims at issue here because the complaint alleges that, as a result of the defendants’ negligence, they were injured while participating in the snow machine lesson and tour activity. Plaintiffs disagree.

New Hampshire law generally prohibits exculpatory contracts. McGrath v. SNH Development, Inc., 158 N.H. 540, 542, 969 A.2d 392 (2009). But, there are exceptions. Exculpatory contracts are enforceable if: “(1) they do not violate public policy; (2) the plaintiff understood the import of the agreement or a reasonable person in [plaintiff’s] position would have understood the import of the agreement; and (3) the plaintiff’s claims fall within the contemplation [*8]  of the parties when they executed the contract.” Id. at 542 (quoting Dean v. MacDonald, 147 N.H. 263, 266-67, 786 A.2d 834 (2008)).

A. The Scope of the Release

Plaintiffs argue that the Release is not enforceable because they did not understand it to encompass claims for negligent instruction, or negligent guidance on the snow machine tour, and a reasonable person in their position would not understand the Release to bar such claims. They say that the content, structure, and organization of the Release – which plaintiffs contend is verbose, employs obfuscating language, and uses confusing sentence structure – disguised any intent to relieve the defendants of liability for their own negligence related to instruction or guidance along the trail. They point out that the words “instruction,” “lesson” and “guide” are terms that do not appear in the Release. Rather, the Release focuses on terms like “services,” “use of equipment,” and “participation in activities.” Altogether, they say, the impression is given that the Release applies only to injuries inherent to snow machine activity and the use of snow machine equipment, but not to harm resulting from an instructor’s or guide’s failure to act with reasonable care.

The parties’ differing subjective understandings [*9]  of the Release’s intent is of limited relevance to the controlling analysis, however, since courts must “judge the intent of the parties by objective criteria rather than the unmanifested states of mind of the parties.” Dean, 147 N.H. at 267 (citing Lake v. Sullivan, 145 N.H. 713, 715, 766 A.2d 708 (2001) and Barnes v. New Hampshire Karting Ass’n, Inc., 128 N.H. 102, 107, 509 A.2d 151 (1986)). Under applicable New Hampshire law, courts examine the language of a release and “give the language used by the parties its common meaning and give the contract itself the meaning that would be attached to it by a reasonable person.” McGrath, 158 N.H. at 545 (internal quotations omitted) (quoting Dean, 147 N.H. at 267). “As long as the language of the release clearly and specifically indicates the intent to release the defendant from liability for personal injury caused by the defendant’s negligence, the agreement will be upheld.” Id. (internal quotations omitted) (quoting Dean, 147 N.H. at 267). However, a defendant “will not be released from liability when the language of the contract raises any doubt as to whether the plaintiff has agreed to assume the risk of a defendant’s negligence.” Allen v. Dover Co-Recreational Softball League, 148 N.H. 407, 414, 807 A.2d 1274 (2002) (citations omitted).

The language used in the Release at issue here is broad in reach, detailed, and clear. A reasonable person would be hard pressed to avoid recognizing the significance and effect of the words used. The Release [*10]  plainly purports to release Mountain View Grand employees and agents of all liability for their own negligence, or the negligence of others (e.g. other snowmobile activity participants), related to the snow machine instruction and tour (equipment and services). The Release repeatedly references waiving the negligence of MVG’s employees, officers and agents. For example, after warning the signatory of the serious risks of injury associated with participation in the snow machine tour, including bodily injury and death, the Release explains that those risks could be caused by “the negligence of the owners, employees or agents of the Mountain View Grand.” Defs.’ Mot. for Summary Judgment, Exh. A. The Release then states that the signatory agrees to “assume all risks and dangers and all responsibility for any loss and/or damages whether caused in whole or in part by the negligence . . . of the owners, agents, officers, designees, employees of BPMC.” Id. The Release further provides: “I specifically understand that I am giving up any rights that I may have by releasing, discharging and waiving any claims or actions . . . for the negligent acts or other conduct by the owners, agents, officers, [*11]  designees or employees of BPMC.” Id.

The language of the Release unarguably applies to claims or suits based on the negligence of Mountain View Grand owners, employees, officers or agents. The Release does not qualify or limit the “negligence” being released in any way, nor is the Release ambiguous in that regard. References in the Release to “participation in [the] activity” also make clear that claims arising from the releasees’ negligence associated with the described activity are being waived.

The Lizzols participated in an activity that consisted of a snow machine lesson and a snow machine tour. Plaintiffs’ claim that they were injured because defendants negligently conducted both the snow machine lesson and the tour. Their negligence claims, then, necessarily arise directly from their participation in the activity (the snow machine lesson and tour). That the Release does not include terms like “instruction,” “lesson” or “guide” is not dispositive: “[T]he parties need not have contemplated the precise occurrence that resulted in the plaintiff’s injuries, and may adopt language that covers a broad range of accidents.” McGrath, 158 N.H. at 545 (internal citations omitted) (citing Barnes, 128 N.H. at 107). So, attempting to carve out [*12]  discrete acts of negligence from the Release is futile if, as here, those discrete acts are associated with the conduct of the snow machine instruction and tour activity.

A reasonable person “would have contemplated that the agreements released the defendants from any negligence, not just from negligence inherent” in snowmobiling. McGrath, 158 N.H. at 547.

B. The Release encompasses the negligence claims against OBK

Plaintiffs further argue that the Release failed to place them on notice that they were releasing OBK from liability, since OBK is not a named party to the exculpatory contract, and is not mentioned by name. Relying on Porter v. Dartmouth College, No. 07-cv-28-PB, 2009 U.S. Dist. LEXIS 90516, 2009 WL 3227831 (D.N.H. Sept. 30, 2009), plaintiffs note that the Release repeatedly makes reference to the Mountain View Grand and its equipment, but does not mention OBK or its instructors. Therefore, they say, a reasonable person would not understand that the Release also purported to absolve OBK from liability for its own negligence.

“An exculpatory contract need not specifically identify the defendant by name.” Porter, 2009 U.S. Dist. LEXIS 90516, 2009 WL 3227831, at *3 (citing Dean, 147 N.H. at 270). “However, the contract must at least provide a functional identification of the parties being released.” Id. Here, the Release reads in relevant part:

I . [*13]  . . voluntarily agree to release . . . BPMC, the field operator, the event promoter, the owners of premises used to conduct the snowmobile activity, their owners, agents, officers and employees from any and all claims, actions or losses for bodily injury, . . . wrongful death or injury, loss of services or otherwise which may arise out of my use of [equestrian] or other equipment or my participation in any BPMC activity. I specifically understand that I am giving up any rights that I may have by releasing, discharging and waiving any claims or actions . . . for the negligent acts or other conduct by the owners, agents, officers, designees or employees of BPMC.

Defs.’ Mot. for Summary Judgment, Exh. A (emphasis supplied).

Defendants point out that OBK, and Welch individually, are covered by the Release because they are both “agents” of BPMC, and they acted as the referenced “field operator” for the snow machine tour. Indeed, plaintiffs specifically alleged the existence of an agency relationship between BPMC and OBK in their Complaint. See, e.g., Compl. ¶ 48 (“Mountain View Grand controlled in whole or in part the activities engaged in by Out Back Kayak and/or its employees and is vicariously [*14]  liable for the negligent actions of the snow mobile tour guides committed while engaged in the scope of employment.”). The asserted agency relationship is an essential element of plaintiffs’ vicarious liability claim. Defendants readily agree that OBK and Welch were agents of BPMC. For reasons satisfactory to the parties, they do not dispute OBK’s or Welch’s status as agents of BPMC. As BPMC’s agent, OBK and Welch are plainly covered by the Release.

Moreover, plaintiffs’ reliance on Porter is unhelpful. In Porter, the plaintiff, an undergraduate student at Dartmouth College, was fatally injured while participating in a class that included ski lessons, at a facility owned, operated, and maintained by Dartmouth. 2009 U.S. Dist. LEXIS 90516, 2009 WL 3227831, at *1. Her estate filed suit, asserting claims for negligence and wrongful death. Id. Dartmouth argued that the claims were barred by a release agreement plaintiff signed before renting ski equipment for the class. 2009 U.S. Dist. LEXIS 90516, [WL] at *2. The release in Porter, which had been drafted by Solomon (the ski and bindings manufacturer), did not mention Dartmouth by name, and repeatedly emphasized and referred only to ski equipment being rented by the student. See 2009 U.S. Dist. LEXIS 90516, [WL] at *3. Based on those distinguishing facts, the court concluded [*15]  that the release failed to place the “equipment renter on even functional notice that Dartmouth was in any way a party” to the release agreement. Id.

Unlike the release at issue in Porter, the Release here makes evident that it pertains not just to the furnishing and use of equipment associated with the snow machine activity, but also to the furnishing of services associated with that activity. The clearest example is found in the first paragraph of the Release, which provides: “In consideration of Brothers Property Management Corporation . . . furnishing services and equipment to enable me to participate in the Snow Machine tour (snowmobiling), I acknowledge and agree as follows.” Defs.’ Mot. for Summary Judgment, Exh. A (emphasis added). Indeed, nearly every time the Release references the signatory’s use of equipment, the Release also references the signatory’s participation in the snow machine lesson and tour. See id. Such references objectively manifest the parties’ intent that the Release encompass all claims based upon the negligent provision of services – including services provided by Mountain View Grand’s agent, OBK — that related to plaintiffs’ participation in the snow machine [*16]  tour activity. While not identified by name, OBK and Welch were functionally identified as benefitting from the Release, when acting as agents of Mountain View Grand.

C. Jennifer’s failure to initial certain paragraphs of the Release does not preclude its enforcement.

Plaintiffs next argue that, even if the Release does encompass the claims at issue, it is still not enforceable against Jennifer, because she failed to initial paragraphs B and D of the Release. Plaintiffs characterize the lettered paragraphs as “several distinct exculpatory clauses” that they were required to agree to separately, and which, as structured, give the impression that “the participant might agree to certain terms, but not others.” Pls.’ Mem. in Opp. to Mot. for Summary Judgment at p. 18. Because Jennifer did not initial two of the contract’s paragraphs, plaintiffs say, those paragraphs are not enforceable against her. At the very least, plaintiffs continue, Jennifer’s failure to initial those paragraphs gives rise to disputed issues of material fact regarding her intent to be bound by those paragraphs, and whether there was a “meeting of the minds” with respect to releasing defendants from liability for their [*17]  own negligence. Id.

In response, defendants point out that the final paragraph of the Release reads:

I have read the above paragraphs and fully understand their content. I understand that this is a Release of Liability, which will legally prevent me or any other person from filing suit and making any other claims for damages in the event of personal injury, death or property damage.

Defs.’ Mot. for Summary Judgment, Exh. A. Defendants argue that the final paragraph clearly and explicitly incorporates the terms of paragraphs B and D, and therefore plaintiffs’ argument is unavailing.

The final paragraph of the Release is unambiguous. By signing the Release, Jennifer acknowledged that she had read the entire agreement and agreed to its terms; all of its terms. Cf. Serna v. Lafayette Nordic Vill., Inc., No. 14-CV-049-JD, 2015 U.S. Dist. LEXIS 92669, 2015 WL 4366250, at *3 (D.N.H. July 16, 2015) (finding that plaintiff’s failure to sign a release on the back of a form did not bar enforcement, where plaintiff had signed the front of the agreement following a statement acknowledging that she had read the agreement on the back of the form concerning the release of liability, and agreed to its terms); see also Gannett v. Merchants Mut. Ins. Co., 131 N.H. 266, 269-70, 552 A.2d 99 (1988) (“The plaintiff argues, however, that she is not bound by the [*18]  condition in the release, as she never returned the release to Merchants. The return of the release, however, is irrelevant, as it was the acceptance of a check offered on the condition that it constitute payment in full, rather than the signing of the release, which bound [plaintiff]. It is also irrelevant whether she actually read the release, when the release clearly and unambiguously stated the condition, and when [plaintiff] had the opportunity to read it before cashing the check.”). Here, Jennifer acknowledged having read the entire release and objectively manifested her agreement, after which she accepted the services to be provided only on condition that a full release first be given.

The parties do not cite New Hampshire authorities directly on point, nor has the court found any, but it appears that the Tenth Circuit addressed a nearly identical issue in Elsken v. Network Multi-Family Security Corp, 49 F.3d 1470 (10th Cir. 1995). In Elsken, the plaintiff entered into a services agreement with a security corporation to provide a 24-hour alarm system. Id. at 1471. The agreement contained a limitation of liability clause, on the same page as a space provided for a party to initial. Id. at 1473. The plaintiff signed the agreement, but failed to initial the line next to the [*19]  limitation of liability clause. Plaintiff there also signed the agreement below a provision “articulating a presumption that the agreement was properly executed,” which read:

Resident acknowledges that resident has read and understands all of this resident agreement including the terms and conditions on this side and the reverse side, particularly Paragraph 3.0 Limitation of Liability and agrees to the amounts set forth herein.

Id. at 1473. The plaintiff was subsequently fatally stabbed in her apartment. Her estate filed suit against the security alarm company, asserting claims for breach of contract, negligence, and breach of warranties based on the alarm company’s failure to properly respond to an alarm. Plaintiffs argued that the limitation of liability clause was not effective because plaintiff did not initial the line provided for that purpose, and, therefore, had not objectively manifested her agreement to the waiver provision. Id. at 1472-73.

The court of appeals found that plaintiff’s failure to initial the line provided did not preclude summary judgment, since plaintiff had signed “directly below a statement of acceptance of the contract that explicitly incorporates the provisions on the reverse side [*20]  of the page.” Id. at 1474. The court determined that, “[b]ased upon a plain reading of the contract,” plaintiff agreed to the contract in its entirety as written. Id. So too, here. Jennifer’s signature directly follows a paragraph that references the liability waiver clauses defendants seek to enforce.

Finally, plaintiffs point to no evidence in the record that might support a finding that Jennifer’s failure to initial paragraphs B and D was in any way motivated by an objection to or non-acceptance of either of those terms. Nor do they point to evidence in the record that would support a finding that Jennifer ever expressed any objection to the terms of paragraphs B and D before executing the agreement. Indeed, the relevant evidence of record suggests that Jennifer’s failure to initial paragraphs B and D was not the product of a conscious decision. See Defs.’ Mot. for Summary Judgment, Exh. C, p. 4 (Q: “Do you have any explanation for why A, C, and E were initialed, but not B and D?” Jennifer Lizzol: “No.” . . . Q: “Was there a conscious decision on your part not to initial B and D?” Jennifer Lizzol: “No.”)

Jennifer Lizzol’s failure to initial paragraphs B and D of the Release does not render the Release [*21]  or those paragraphs unenforceable against her. The same general analysis applies to Michael Lizzol’s failure to initial Paragraph B of the Release.

D. The Release does not violate public policy.

Plaintiffs argue that the Release contravenes public policy, because its enforcement would relieve an instructor from liability for his own negligent instruction. Plaintiffs contend that because the instructor/guide holds a position of authority over the conduct of the snow machine tour, the instructor/guide is uniquely positioned to ensure that the tour is conducted in a reasonably safe manner. So, plaintiffs say, releasing an instructor of his or her obligation to exercise reasonable care will result in that instructor failing to make a good faith effort to carry out his duties, which, they say, is what happened here. That contravenes public policy, they argue, because it will surely impede public safety.

The argument, while creative, avoids the public policy analysis required under New Hampshire law. “A defendant seeking to avoid liability must show that the exculpatory agreement does not contravene public policy; i.e., that no special relationship existed between the parties and that there [*22]  was no other disparity in bargaining power.” Barnes, 128 N.H. at 106. “‘A special relationship exists when “the defendant is a common carrier, innkeeper or public utility, or is otherwise charged with a duty of public service.'” Serna v. Lafayette Nordic Vill., Inc., 2015 U.S. Dist. LEXIS 92669, 2015 WL 4366250, at *2 (quoting Barnes, 128 N.H. at 106). Additionally, a release may be against public policy if, among other things, “it is injurious to the interests of the public, violates some public statute, or tends to interfere with the public welfare or safety.” Serna, 2015 U.S. Dist. LEXIS 92669, 2015 WL 4366250, at *2 (citing McGrath, 158 N.H. at 543).

Plaintiffs do not contend that a “special relationship” existed between the parties, as that term is used in the liability waiver context. Nor could they. While the Mountain View Grand is an inn, the Release does “not pertain to the usual activities of running an inn,” but instead to the Mountain View Grand’s facilitation of collateral outdoor recreation activities. Serna v. Lafayette Nordic Vill., Inc., 2015 U.S. Dist. LEXIS 92669, 2015 WL 4366250, at *2. And snowmobiling (like skating, Serna, id., and snowboarding, McGrath, 158 N.H. at 544) constitutes recreational activity, not “an activity ‘of such great importance or necessity to the public that it creates a special relationship.'” Serna, 2015 U.S. Dist. LEXIS 92669, 2015 WL 4366250, at *2 (quoting McGrath, 158 N.H. at 544).

“Where there is a disparity in bargaining power, the plaintiff may not be deemed to have freely chosen to enter into the contract.” McGrath, 158 N.H. at 544 (citing Barnes, 128 N.H. at 107). But, “there [is] no [*23]  substantial disparity in bargaining power among the parties, despite the fact that [plaintiffs were] required to sign the release in order to” participate in the snow machine lesson and tour. Barnes, 128 N.H. at 108. Here, the plaintiffs were “under no physical or economic compulsion to sign the release,” and “[s]ince the defendants’ service is not an essential one, the defendants had no advantage of bargaining strength” over the plaintiffs or others who sought to participate in the snowmobile lesson and tour. Barnes, 128 N.H. at 108.

The Release does not violate public policy.

E. The plaintiffs have not sufficiently established fraud in the inducement.

Finally, plaintiffs argue that the Release is unenforceable because they were fraudulently induced to enter into the agreement. Plaintiffs assert that defendants had prior knowledge that Welch generally drove too quickly when conducting snow machine tours, and, notwithstanding that knowledge, failed (negligently) to take reasonable steps to ensure that Welch conducted the tours safely. Plaintiffs further contend that they were induced to sign the Release based upon defendants’ false assurances that the lesson and tour would be conducted in a safe manner, with adequate instruction, and at [*24]  a safe speed. Relying on those assurances, plaintiffs signed the Release. Plaintiffs argue that, at the very least, whether the defendants made assurances (and omissions) regarding the nature of the snow machine tour with conscious indifference to the truth, and whether the plaintiffs justifiably relied upon those statements when signing the Release, are disputed issues of material fact precluding summary judgment.

“Under New Hampshire law, fraud in the inducement is a valid defense to a contract action and can be raised to void a contract.” Bryant v. Liberty Mut. Grp., Inc., No. 11-CV-217-SM, 2013 U.S. Dist. LEXIS 76713, 2013 WL 2403483, at *9 (D.N.H. May 31, 2013) (citing Nashua Trust Co. v. Weisman, 122 N.H. 397, 400, 445 A.2d 1101 (1982)). As the parties seeking to invalidate the Release on fraudulent inducement grounds, plaintiffs bear a substantial burden: they “must establish that the other party made a representation with knowledge of its falsity or with conscious indifference to its truth with the intention to cause another to rely upon it. In addition, the party seeking to prove fraud must demonstrate justifiable reliance.” Trefethen v. Liberty Mut. Grp., Inc., No. 11-CV-225-SM, 2013 U.S. Dist. LEXIS 76753, 2013 WL 2403314, at *7 (D.N.H. May 31, 2013)(quoting Van Der Stok v. Van Voorhees, 151 N.H. 679, 682, 866 A.2d 972 (2005)) (additional citations omitted).

Plaintiffs rely on Van Der Stok v. Van Voorhees, but that decision offers little support. That case arose [*25]  out of a transaction for the sale of real estate. The plaintiff represented that defendant-purchaser would be able to build on the property, but did not disclose that his own earlier application to the zoning board for a permit to build on the property had been denied. After the closing, defendant went to the town offices to inquire about the property, and first learned that plaintiff’s earlier permit application had been denied. Defendant stopped payment on the check given at closing to cover the purchase price. The plaintiff subsequently filed an action, and defendant raised fraud in the inducement as a defense to plaintiff’s claims. Plaintiff argued the defendant could not show reasonable reliance on his purported misrepresentation, because the purchase and sale agreement provided, “Seller makes no representations as to land use law or regulations.” Id. at 682.

The New Hampshire Supreme Court rejected that argument for two reasons. First, the court was unconvinced that the disclaimer “would put a reasonable person on notice that he could not rely upon the specific representation made . . . that the particular lot he was buying was a buildable lot.” Id. at 683. Moreover, the plaintiff had “made a representation [*26]  with knowledge of its falsity or with conscious indifference to the truth with the intention to cause another to rely upon it.” Id. (quoting Snierson v. Scruton, 145 N.H. 73, 77, 761 A.2d 1046 (2000)). Such “positive fraud,” the court stated, “vitiates every thing.” Id. (quoting Jones v. Emery, 40 N.H. 348, 350 (1860)).

This case is distinguishable from Van Der Stok because the Lizzols have not shown what representation defendant(s) allegedly made “with knowledge of its falsity or with conscious indifference to its truth with the intention to cause another to rely upon it.” Id. In support of their assertion that defendants knew (or believed) that Walsh was likely to conduct their particular tour in an unsafe manner, plaintiffs point to the following: (1) “[u]pon information and belief, there had been complaints from customers that OBK’s tour guides, specifically Martin Welch, had driven unreasonably fast while conducting tours; (2) after the incident, the MVG manager asked Michael if Welch had been “driving too fast again.”

Admissibility of that evidence is doubtful, and it is plainly insufficient to support a finding that defendants knew that plaintiffs’ lesson and tour would be conducted in a negligent or actionably unsafe manner or were recklessly indifferent to that likelihood. And [*27]  plaintiffs have identified no particular representation made by defendants, with the intention to induce plaintiffs to rely upon it, and, upon which they justifiably relied, that either proved to be false or the product of reckless indifference to the truth. The only statement in the record to which they point (Welch’s statement that he would not drive the snow machines faster than 20 miles per hour) occurred after plaintiffs signed the Release. The record is also utterly silent with respect to whether speed in excess of 20 mph is considered dangerous or negligent when conducting a snowmobile tour, or whether “too fast” in the past equates to the speed driven by the guide on plaintiffs’ tour, or even what “too fast” might mean in the context of a snowmobile tour that included novices.

Because plaintiffs have not produced sufficient evidence from which a finder of fact could conclude that the defendants knowingly made fraudulent representations to them, they have not established that a genuine issue of fact exists with respect to whether their execution of the Release was fraudulently induced, and is therefore ineffective.

The Release is valid and enforceable, and it encompasses the plaintiffs’ [*28]  bystander liability claim as well as their negligence claims.

Conclusion

For the foregoing reasons, and for those argued in the defendants’ memoranda, the motion for summary judgment (document no. 23) is necessarily granted under controlling New Hampshire law. The Release at issue here is not ambiguous. It unmistakably released the defendants from any liability relating to their negligence, and that of their employees and agents. Neither qualifying language nor any other provision in, nor the structure of the Release, obscured the defendants’ intent to be relieved of all liability for their own negligence. A reasonable person would have understood that the Release relieved the defendants of all liability for injuries caused by their negligence. The Clerk of Court shall enter judgment for defendants and close the case.

SO ORDERED.

/s/ Steven J. McAuliffe

Steven J. McAuliffe

United States District Judge

October 31, 2016

 


New Hampshire court upholds release and defines the steps under NH law to review a release.

Release law is stretched in New Hampshire court to cover injuries from snowmobile driven by employee hitting the plaintiff on the ski slopes.

McGrath v. SNH Development, Inc. 2008 N.H. Super. LEXIS 45

State: New Hampshire, Superior Court of New Hampshire, Hillsborough County

Plaintiff: Marcella McGrath f/k/a Marcella Widger

Defendant: NH Development, Inc. and John Doe

Plaintiff Claims: negligence

Defendant Defenses: Release

Holding: for the Defendant

Year: 2008

The defendant is the owner of Crotched Mountain Ski Area in New Hampshire. The plaintiff signed an application for a season pass which included release language in the application. While skiing one day the plaintiff was hit by an employee of the defendant driving a snowmobile.

The defendants moved for summary judgment based on the release. The plaintiff objected stating the release violated public policy. The plaintiff also argued the parties, when the release was signed, did not contemplate the release would cover negligence claims.

The phrase “did not contemplate” is another way of saying there was no meeting of the minds. For a contract to be valid, the parties to the contract must understand the basic nature of the contract. There must be a meeting of the minds to the contract. This does not mean that all aspects of the contract must be contemplated by both parties, just that the major issues and purpose of the contract are understood.

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

The court reviewed the requirements for a release to be valid under New Hampshire law, which requires the release to:

…(1) do not violate public policy; (2) the plaintiff understood the import of the agreement or a reasonable person in his position would have understood the import of the agreement; and (3) the plaintiff’s claims were within the contemplation of the parties when they executed the contract.

Then the court looked at each of the three requirements. The first, Public Policy in New Hampshire, means the parties did not have a special relationship and were not of disparity in bargaining power. This definition is the original definition of public policy.

Special relationship means where one party had no choice but to deal with the other party to obtain a necessary good or service.

A defendant seeking to avoid liability must show that the exculpatory agreement does not contravene public policy i.e that no special relationship existed between the parties and that there was no other disparity in bargaining power.”

A special relationship exists “[w]here the defendant is a common carrier, innkeeper or public utility, or is otherwise charged with a duty of public service….” Id. The plaintiff contends that a special relationship existed between the parties because any person operating a snowmobile has a statutory duty to yield the right of way

Specifically, a special relationship exists between common carriers, innkeepers or public utilities and the public. A Monopoly that supplies goods or services that a person must have is an example of a defendant this definition would fit. Transportation, a place to stay and gas and electric providers have special relationships with the people they serve. This is the original definition of relationship that creates unequal bargaining power where releases are void.

The theory behind public policy was the state must step in to protect the common public from unscrupulous, overbearing or overreaching companies when the public had no choice but to deal with them. This relationship is based on the practical necessity of the goods or services they provide. Without them, life would not be possible or as possible.

Skiing in New Hampshire is not a practical necessity. You can live your life and never ski, in fact, many people do. On top of that the defendant was not the only ski area. Meaning the plaintiff could have gone to any number of other ski areas; the defendant did not force her to visit its ski area nor was she compelled to visit the defendant’s ski area. Consequently, there was no disparity of bargaining power because the plaintiff could have bargained with someone else or not gone skiing and still lived on.

The plaintiff also argued the release was a violation of public policy because it relieved the defendant of statutory compliance with a New Hampshire statute governing the use of snowmobiles. However, the court found the release did not affect the enforcement of the statute. The statute was one outlining the requirements for a state commissioner to make and enforce laws concerning snowmobiles. The release did not alter the commissioner’s ability to do so and would not alter any law or regulation made or the law or regulations affect.

If the release does not violate public policy, then the requirement two requires a review of whether or not the plaintiff or a reasonable person would have understood the exculpatory provisions in the release. For the plaintiff to argue that she did not understand the release, she would have to prove the language in the release was not understandable.

…therefore examine[s] the language of the release to determine whether “a reasonable person in [the plaintiff’s] position would have known of the exculpatory provision.” A reasonable person would understand the provision if its language “clearly and specifically indicates the intent to release the defendant from liability for personal injury caused by the defendant’s negligence….”

The plaintiff did not deny she understood the release; she argued that the release did not cover the precise occurrence that gave rise to here injuries. Meaning the release did not cover injuries from being hit by a snowmobile being driven by an employee of the defendant. However, the law does not require a release to be specific in its language to cover the injury the plaintiff may later claim.

Thus, in order to effectively release a defendant from liability for his own negligence, “the contract must clearly state that the defendant is not responsible for the consequences of his negligence.” There is no requirement that the term “negligence” or any other magic words appear in the release as long “as the language of the release clearly and specifically indicates the intent to release the defendant from liability for personal injury caused by the defendant’s negligence.”

The release language was broadly written to cover all types of injuries that could occur while skiing. New Hampshire also does not require “magic words” such as negligence to make the release valid or convey a specific risk to the signor.

In reviewing the language the court found the language was broad enough to cover the injury the plaintiff received.

As noted above, the parties need not have contemplated a negligence claim arising from a snowmobile accident. Rather, it is sufficient that the parties adopted language to cover a broad range of accidents. The application releases the defendants “from any and all liability for personal injury or property damage which results in any way from negligence,” and the Liability Release Agreement releases the defendants “from any and all liability for personal injury, death or property damage which results in from negligence.”

The final argument made by the plaintiff was the release did not contemplate a snowmobile accident because snowmobiles are not an inherent part of skiing.

In this case, the release did not refer to the inherent risks of skiing, but stated that skiing was a hazardous sport and that injuries are commonplace.

Here, however, the application and the Liability Release Agreement do not mention the inherent hazards of skiing. Rather, the application and the Liability Release Agreement note that skiing is a hazardous sport and that injuries are a common occurrence and then, without using the term “therefore,” release the defendants from any and all liability. Because the application and the Liability Release Agreement do not use the phrase “inherent hazards of skiing” or the term “therefore,” this case is distinguishable from Wright. A reasonable person would have contemplated that the application and the Liability Release Agreement would release the defendants from a negligence claim, whether nor not that claim arouse from an inherent hazard of skiing.

Consequently, the restrictions that the term inherent would have identified were not there, the language was broad enough to cover the accident the plaintiff complained of.

The case was dismissed based upon the defendant’s motion for summary judgment.

So Now What?

Use of the narrowing term inherent in the release when referring to the risks might have allowed the plaintiff to continue with her claim. Remember inherent is a restricting word and if used in this release, it might have excluded a snowmobile accident from the pool of possible claims. As the release was worded the snowmobile accident was covered.

The bigger issue is the attempt to spread the definition of Public Policy board enough that it would void this release. However, the court did not do that and kept the definition to the original definition that a release cannot protect those monopolies that provide a necessity to the public cannot use a release to limit their liability.

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

What do you think? Leave a comment.

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McGrath v. SNH Development, Inc. 2008 N.H. Super. LEXIS 45

McGrath v. SNH Development, Inc. 2008 N.H. Super. LEXIS 45

Marcella McGrath f/k/a Marcella Widger v. SNH Development, Inc. and John Doe, an unnamed individual

No. 07-C-0111

SUPERIOR COURT OF NEW HAMPSHIRE, HILLSBOROUGH COUNTY

2008 N.H. Super. LEXIS 45

May 19, 2008, Decided

NOTICE:

THE ORDERS ON THIS SITE ARE TRIAL COURT ORDERS THAT ARE NOT BINDING ON OTHER TRIAL COURT JUSTICES OR MASTERS AND ARE SUBJECT TO APPELLATE REVIEW BY THE NEW HAMPSHIRE SUPREME COURT.

SUBSEQUENT HISTORY: Affirmed by McGrath v. SNH Dev., Inc., 158 N.H. 540, 969 A.2d 392, 2009 N.H. LEXIS 43 (2009)

JUDGES:  [*1] GILLIAN L. ABRAMSON, PRESIDING JUSTICE.

OPINION BY: GILLIAN L. ABRAMSON

OPINION

ORDER

The plaintiff commenced the instant action alleging negligence against the defendants, SNH Development, Inc. (“SNH Development”) and John Doe, an unnamed individual. The defendants now move for summary judgment, and the plaintiff objects.

For purposes of the defendants’ motion for summary judgment, the parties do not appear to dispute the following facts. SNH Development is a subsidiary of Peak Resorts, Inc. and owns and operates the Crotched Mountain Ski Area in Bennington, New Hampshire. On October 23, 2003, the plaintiff signed an application (the “application”) for a season pass to the Crotched Mountain Ski Area. The application provides:

I understand and accept the fact that alpine skiing in its various forms is a hazardous sport, and I realize that injuries are a common occurrence. I agree, as a condition of being allowed to use the ski area facility, that I freely accept and voluntarily assume all risks of personal injury or death of property damage, release Crotched Mountain its owners and its agents, employees, directors, officers and shareholders from any and all liability for personal injury or property damage  [*2] which results in any way from negligence, conditions on or about the premises, the operations of the ski area including, but not limited to, grooming snow making, ski lift operations, actions or omissions of employees or age the area, or my participation in skiing, accepting myself the full responsibility

Defs.’ Mot. for Summ. J., Ex. B. Moreover, on December 20, 2003, the plaintiff signed a Liability Release Agreement, which provides:

I understand and accept the fact that alpine skiing in its various forms is a hazardous sport, and I realize that injuries are a common occurrence. I agree, as a condition of being allowed to use the area facility, that I freely accept and voluntarily assume all risks of personal injury or death or property damage, and release Peak Resorts, Inc, all of its subsidiaries, and its agents, employees, directors, officers, shareholders and the manufacturers and distributors of this equipment and the school and group organizers (collective “providers’), from any and all liability for personal injury, death or property damage which results in any way from negligence, conditions on or about the premises, the operation of the area including, but not limited to grooming,  [*3] snowmaking, lift operations, actions or omissions of employees or agents of the areas, or my participating in skiing, snowboarding, blading, accepting myself the full responsibility.

Id. On February 20, 2004, the plaintiff was skiing 1 a trail at the Crotched Mountain Ski Area when an employee of SNH Development drove a snowmobile into the plaintiff’s path, causing a collision.

1 Some of the pleadings state that the plaintiff was skiing, while other’s state that the plaintiff was snowboarding.

The defendants now move for summary judgment, arguing that the plaintiff signed the application and the Liability Release Agreement, both of which are valid, enforceable exculpatory contracts. The plaintiff objects, arguing that the application and the Liability Release Agreement violate public policy and that the parties did not contemplate that the application or the Liability Release Agreement would bar the plaintiff’s negligence claim.

In ruling on a motion for summary judgment, the Court “consider[s] the affidavits and other evidence, and all inferences properly drawn from them, in the light most favorable to the non-moving party.” White v. Asplundh Tree Expert Co., 151 N.H. 544, 547, 864 A.2d 1101 (2004).  [*4] The Court must grant a motion for summary judgment if its “review of the evidence does not reveal a genuine issue of material fact, and if the moving party is entitled to judgment as a matter of law Id. A fact is material “if it affects the outcome of the litigation under the applicable substantive law.” Palmer v. Nan King Restaurant, 147 N.H. 681, 683, 798 A.2d 583 (2002).

New Hampshire law generally prohibits exculpatory contracts, but the Court will enforce them if; “(1) do not violate public policy; (2) the plaintiff understood the import of the agreement or a reasonable person in his position would have understood the import of the agreement; and (3) the plaintiff’s claims were within the contemplation of the parties when they executed the contract.” Dean v. MacDonald, 147 N.H. 263, 266-267, 786 A.2d 834 (2001). Thus, the Court considers each of these requirements in turn.

Regarding the first requirement, an exculpatory contract violates public policy if a special relationship existed between the parties or if there was some other disparity in bargaining power. See Barnes v. N.H. Karting Assoc., 128 N.H. 102, 106, 509 A.2d 151 (1986) (“A defendant seeking to avoid liability must show that the exculpatory agreement does  [*5] not contravene public policy i.e that no special relationship existed between the parties and that there was no other disparity in bargaining power.”).

A special relationship exists “[w]here the defendant is a common carrier, innkeeper or public utility, or is otherwise charged with a duty of public service….” Id. The plaintiff contends that a special relationship existed between the parties because any person operating a snowmobile has a statutory duty to yield the right of way, RSA 215-C:49, XII (Supp. 2007), and because the Crotched Mountain Ski Area serves the public. Assuming that RSA 215-C:49, XII applies to the operation of a snowmobile on a privately owned ski area, the plaintiff has not offered any legal support for the conclusion that this statute somehow charges the defendants with a duty of public service. Moreover, the fact that the Crotched Mountain Ski Area serves the public is not conclusive. For example, Barnes, involved a negligence claim arising from a collision at an enduro kart racing facility. In Barnes, the New Hampshire Supreme Court noted that the defendant’s served the public but held that the defendant’s were not charged with a duty of public service because  [*6] Endurokart racing is not “affected with a public interest.” Barnes, 128 N.H. at 108. Similarly, skiing is a recreational activity not affected with a public interest, and the Court finds that the defendant’s are not charged with a duty of public service.

The Plaintiff also contends that she was at an obvious disadvantage in bargaining power because all ski areas require skiers to sign releases. The Court disagrees.

This case … does not have any hallmarks of a disparity in bargaining power. The [skiing] service offered by the defendant is not a “matter of practical necessity.” Nor did the defendant in this ease have monopoly control over this service such that the plaintiff could not have gone elsewhere.

Audley v. Melton, 138 N.H. 416, 418, 640 A.2d 777 (1994) (quoting Barnes, 128 N.H. at 108). 2

2 The Plaintiff also argues that the application and the Liability Release Agreement violate public policy because they relieve the defendant’s from compliance with RSA chapter 215-C, which governs snowmobiles. Assuming that RSA chapter 215-C applies to the operation of a snowmobile on privately owned ski area, the application and the Liability Release Agreement would have no bearing on the enforcement of RSA chapter 215-C.  [*7] See RSA 215-C-32 (Supp.2007) (providing for the enforcement of RSA chapter 215-C).

“Once an exculpatory agreement is found unobjectionable as a matter of public policy, it will be upheld only if it appears that the plaintiff understood the import of the agreement or that reasonable person in his position would have known of the exculpatory provision.” Barnes, 128 N.H. at 107. “The plaintiff’s understanding presents an issue of fact, and the plaintiff should have an opportunity to prove the fact at trial unless the exculpatory language was clear and a misunderstanding was unreasonable.” Wright v. Loon Mt. Recreation Corp., 140 N.H. 166, 169, 663 A.2d 1340 (1995). The Court

therefore examine[s] the language of the release to determine whether “a reasonable person in [the plaintiff’s] position would have known of the exculpatory provision.” A reasonable person would understand the provision if its language “clearly and specifically indicates the intent to release the defendant from liability for personal injury caused by the defendant’s negligence….”

Id. (citations omitted) (quoting Barnes, 128 N.H. at 107). The Court “will assess the clarity. the contract by evaluating it as a whole, not by examining  [*8] isolated words and phrases. Id. at 169-170.

The plaintiff does not appear to dispute that she understood the import of the application or the Liability Release Agreement. Rather, the plaintiff argues that the parties did not contemplate that the application or the Liability Release Agreement would bar the plaintiff’s negligence claim. Thus, the Court turns to the third requirement.

“[T]he plaintiff’s claims must have been within the contemplation of the parties at the time of the execution of the agreement. The parties need not, however, have contemplated the precise occurrence that resulted in the plaintiff’s injuries. They may adopt language to cover, a broad range of accidents….” Barnes, 128 N.H. at 107 (citation omitted). To determine the scope of a release, the Court examines its language, strictly construing it against the defendant. Dean, 147 N.H. at 267.

Thus, in order to effectively release a defendant from liability for his own negligence, “the contract must clearly state that the defendant is not responsible for the consequences of his negligence.” There is no requirement that the term “negligence” or any other magic words appear in the release as long “as the language of  [*9] the release clearly and specifically indicates the intent to release the defendant from liability for personal injury caused by the defendant’s negligence.”

Audley, 138 N.H. at 418 (citations omitted) (quoting Barnes, 128 N.H. at 107).

The plaintiff contends that the parties did not contemplate that the application or the Liability Release Agreement would bar the plaintiff’s negligence claim because neither the application nor the Liability Release Agreement reference snowmobiles. As rioted above, the parties need not have contemplated a negligence claim arising from a snowmobile accident. Rather, it is sufficient that the parties adopted language to cover a broad range of accidents. The application releases the defendants “from any and all liability for personal injury or property damage which results in any way from negligence,” and the Liability Release Agreement releases the defendants “from any and all liability for personal injury, death or property damage which results in from negligence.” Defs.’ Mot. for Summ. J., Ex. B. This language clearly states that the defendants are not responsible for the consequences of their negligence.

The Plaintiff also contends that the parties did  [*10] not contemplate that the application or the Liability Release Agreement would bar the plaintiff’s negligence claim because snowmobiles are not an inherent hazard of skiing. The plaintiff relies on Wright. In Wright, the New Hampshire Supreme Court noted:

The paragraphs preceding the exculpatory clause emphasize the inherent hazards of horseback riding. Because the exculpatory clause is prefaced by the term “therefore,” a reasonable person might understand its language to relate to the inherent dangers of horseback riding and liability for injuries that occur “for that

Wright, 140 N.H. at 170. Here, however, the application and the Liability Release Agreement do not mention the inherent hazards of skiing. Rather, the application and the Liability Release Agreement note that skiing is a hazardous sport and that injuries are a common occurrence and then, without using the term “therefore,” release the defendants from any and all liability. Because the application and the Liability Release Agreement do not use the phrase “inherent hazards of skiing” or the term “therefore,” this case is distinguishable from Wright. A reasonable person would have contemplated that the application and the  [*11] Liability Release Agreement would release the defendants from a negligence claim, whether nor not that claim arouse from an inherent hazard of skiing.

Based on the foregoing, the defendant’s motion for summary judgment is GRANTED.

So ORDERED.

 


New Hampshire does not recognize more than one type of negligence, simple or ordinary negligence. Claims for gross negligence, say to void a release, do not exist.

Supreme Court outlines requirements for releases. to be successful including public policy and failure to read the release requirements.

Barnes & a. v. New Hampshire Karting Association, Inc, 128 N.H. 102; 509 A.2d 151; 1986 N.H. LEXIS 254

State: New Hampshire, Supreme Court of New Hampshire

Plaintiff: John E. and Virginia A. Barnes

Defendant: New Hampshire Karting Association (NHKA), David E. Whitesell, Midway Raceway, Inc. d/b/a Bryar Motorsport Park (Bryar), the World Karting Association (WKA) and International Insurance Company (International)

Plaintiff Claims: negligence and gross negligence

Defendant Defenses: release

Holding: for the defendant

Year: 1986

The plaintiff went to a go kart event. He signed a pit pass which contained a release. While driving he hit another kart on the track that was disabled. There was no indication or warning of the disabled go-kart before the plaintiff hit it.

The plaintiff sued for ordinary and gross negligence. The lower court dismissed the plaintiff’s claims, and the plaintiff appealed.

New Hampshire has three courts; however, the lower two, Circuit and Superior handle different matters. Both the Circuit court and the Superior courts are trial courts so any appeal is to the New Hampshire Supreme Court.

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

The plaintiff claimed the release was barred by public policy; the release was ambiguous and did not apply to the risks, not inherent in the sport. The plaintiff also argued the release did not cover gross negligence.

The New Hampshire Supreme Court first looked at releases in New Hampshire.

Exculpatory agreements call into conflict two tenets of the law.  First, a party should be liable for the consequences of the negligent breach of a duty owed another.  As this court stated in a recent case involving an amusement ride accident, the owner of a place of public amusement “must exercise that degree of care which, under the same or similar circumstances, would be exercised by an ordinarily careful or prudent individual.” Failure to do so will result in liability for injuries proximately caused by the breach of duty.

However, parties may eliminate tort liability by contract.

Contraposed against this basic rule of tort law is the principle that, as a matter of efficiency and freedom of choice, parties should be able to contract freely about their affairs. Under this rule, parties may bargain for various levels of risk and benefit as they see fit. Thus, a plaintiff may agree in advance that the defendant has no legal duty toward him and thereby assume the risk of injury arising from the defendant’s conduct.

Under New Hampshire law, a defendant must show the release does not contravene public policy, that no special relationship existed between the parties and there was no disparity of bargaining power.

A defendant seeking to avoid liability must show that the exculpatory agreement does not contravene public policy; i.e., that no special relationship existed between the parties and that there was no other disparity in bargaining power. Where the defendant is a common carrier, innkeeper or public utility, or is otherwise charged with a duty of public service, the defendant cannot by contract rid itself of its obligation of reasonable care.

Public policy, not identified as such, is held to include common carriers, innkeepers and public utilities. A go-kart operation is not a commercial transport for hire, a place to sleep or a public utility providing gas, electricity or such.

Disparity in bargaining power occurs when the defendant is a monopoly or where the plaintiff has no alternative but to deal with the defendant. “Where there is a disparity in bargaining power, the plaintiff may not be deemed to have freely chosen to enter into the contract; accordingly, courts refuse to enforce the agreement.”

Again, a go-kart facility is not a necessity such that the plaintiff had to negotiate for its life or substance.

Once the public policy argument is out of the way, the issue then becomes whether the plaintiff understood the basics of the agreement.

Once an exculpatory agreement is found unobjectionable as a matter of public policy, it will be upheld only if it appears that the plaintiff understood the import of the agreement or that a reasonable person in his position would have known of the exculpatory provision.  Furthermore, the plaintiff’s claims must have been within the contemplation of the parties at the time of the execution of the agreement.

This contemplation must not cover the exact issues the plaintiff complains about, but covers a broad range of accidents or injuries the plaintiff may suffer.

Contracts are generally construed against the writer, in the case of a release, construed against the defendant.

…the contract must clearly state that the defendant is not responsible for the consequences of his negligence. As long as the language of the release clearly and specifically indicates the intent to release the defendant from liability for personal injury caused by the defendant’s negligence, the agreement will be upheld.

The plaintiff argued he did not read the entire release; however, that does not invalidate the release. The court found he could have if he wanted, therefore, his argument failed based on his own actions.

There was no evidence, however, that Barnes was denied the opportunity to read the body of the release.  “[H]aving failed to avail himself of that opportunity, yet gaining the admission to which his signature was a condition precedent, he cannot now complain that he had no notice of the import of the paper . . . he signed.”

Summing up the public policy argument made by the plaintiff failed as stated by the court

With these principles in mind, we now consider whether the release bars the plaintiff’s claims in this case.  The first question is whether the release is contrary to public policy. The defendants do not fall within any of the commonly-recognized classes of persons charged with a duty of public service. The record indicates that the 1981 Enduro kart races at Bryar were organized by the NHKA, which is associated with the WKA and which manages its races in accordance with WKA rules and regulations.  Although the defendants serve a segment of the public, we cannot say that Enduro kart racing is affected with a public interest.  Provision of racing facilities is not a service of great importance to the public, nor is racing a matter of practical necessity.

Moreover, there was no substantial disparity in bargaining power among the parties, despite the fact that Barnes was required to sign the release in order to use the racetrack. The plaintiff was under no physical or economic compulsion to sign the release.  Since the defendants’ service is not an essential one, the defendants had no advantage of bargaining strength over Barnes or others who sought to participate in Enduro kart racing.

Thus the release was not barred by public policy arguments in New Hampshire.

The plaintiff then argued that the actions against the defendant were grossly negligent and cited cases from other jurisdictions to support its claim. The court simply stated:

These cases are inapposite because New Hampshire law does not distinguish causes of action based on ordinary and gross negligence. “[T]he doctrine of definitive degrees of negligence is not recognized as a part of our common law.

There is only one claim in New Hampshire for negligence no matter egregious the defendants’ actions.

The plaintiff then argued the release was only valid for a restricted area of the facility. However, applying the common meaning to the language in the release the court found the language covered the area where the accident occurred.

We find that participation in practice laps on the racing surface comes within the terms of the release.  The restricted areas are defined in terms of physical spaces, not in terms of function, and the reference to “enter[ing] for any purpose” contemplates that the racing surface is a restricted area during practice runs and during the actual race.  Although the plaintiff testified that he had practiced on occasion without signing a release, he signed the release prior to taking a practice lap on the day in question.  One can contemplate that racers are exposed to a variety of hazards while in the racing arena regardless of whether the actual race is taking place.  We believe that the practice run taken by Barnes in preparation for the race later that day may reasonably be construed as part of “participat[ion] in the event.” We therefore uphold the master’s conclusion that the language of the agreement was not ambiguous and that the release applied to practice laps.

A final argument was made that the release was an “illegal tying arrangement.” Meaning the release and the insurance coverage were illegally tied together the plaintiff could not take one without taking the other. The court found this was not the case because no evidence was presented that insurance was a separate charge after admissions.

The trial court decision was affirmed.

So Now What?

New Hampshire law is fairly standard on how it looks at release law, even though the particular language used might vary. What is significant is the Supreme Court has held that New Hampshire does not recognize gross negligence.

Not being able to plead gross negligence limits the ability of the plaintiff to void a release or argue for greater damages. Normally a jury finding the defendant acted grossly negligent includes greater damages, sometimes punitive damages.

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