Wethington v. Swainson, d/b/a/ Pegasus Airsport Center, 2015 U.S. Dist. LEXIS 169145

Posted: March 29, 2016 | Author: | Filed under: Legal Case, Oklahoma, Release (pre-injury contract not to sue), Skydiving, Paragliding, Hang gliding | Tags: , , , , , , | Leave a comment

Wethington v. Swainson, d/b/a/ Pegasus Airsport Center, 2015 U.S. Dist. LEXIS 169145

Holly Wethington and Makenzie Wethington, Plaintiffs, v. Robert Swainson, d/b/a/ Pegasus Airsport Center, Defendant.

Case No. CIV-14-899-D

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA

2015 U.S. Dist. LEXIS 169145

December 18, 2015, Decided

December 18, 2015, Filed

SUBSEQUENT HISTORY: Sanctions allowed by, in part, Sanctions disallowed by, in part Wethington v. Swainson, 2015 U.S. Dist. LEXIS 171126 (W.D. Okla., Dec. 23, 2015)

Motion granted by Wethington v. Swainson, 2016 U.S. Dist. LEXIS 7421 (W.D. Okla., Jan. 22, 2016)

COUNSEL: [*1] For Holly Wethington, individually, Mackenzie Wethington, Plaintiffs: James E Weger, LEAD ATTORNEY, Jones Gotcher & Bogan, Tulsa, OK; Robert E Haslam, Haslam & Gallagher, Fort Worth, TX.

Robert Swainson, doing business as Pegasus Airsport Center, Defendant, Pro se.

Robert Swainson, Third Party Plaintiff, Pro se.

Joseph Wethington, Third Party Defendant, Pro se.

Robert Swainson, Counter Claimant, Pro se.

For Holly Wethington, individually, Counter Defendant: James E Weger, LEAD ATTORNEY, Jones Gotcher & Bogan, Tulsa, OK; Robert E Haslam, Haslam & Gallagher, Fort Worth, TX.

JUDGES: TIMOTHY D. DEGIUSTI, UNITED STATES DISTRICT JUDGE.

OPINION BY: TIMOTHY D. DEGIUSTI

OPINION

ORDER

The determinative issue before the Court concerns the authority of a parent to bind their minor child to an exculpatory agreement, which functions to preclude a defendant’s liability for negligence, before an injury has even occurred. Holly and Makenzie Wethington, mother and daughter (“Plaintiffs”), bring this action against Defendant Robert Swainson, d/b/a/ Pegasus Airsport Center, for injuries suffered by Makenzie while skydiving.1 Under theories of negligence and breach of contract, Plaintiffs contend Defendant (1) provided inadequate training to [*2] Makenzie in preparation for the parachute jump, (2) selected a person to provide radio assistance who had no prior experience, (3) provided old equipment that malfunctioned during Makenzie’s jump, and (4) permitted Makenzie to use a parachute she was ill-prepared to use and which was inappropriate for her skill level. Before the Court is Defendant’s Motion for Summary Judgment [Doc. No. 24], to which Plaintiffs have filed their response in opposition [Doc. No. 30]. The matter is fully briefed and at issue.

1 At the time this action was brought, Makenzie was a minor. She has since become eighteen and will thus be referenced by name.

BACKGROUND

The following facts are undisputed. On January 24, 2014, Makenzie, who was then sixteen years old and accompanied by her parents, went to Defendant to learn how to skydive. As part of the registration process, Makenzie executed a Registration Form and Medical Statement. Near the bottom of the document, Makenzie initialed a disclaimer which read:

I FURTHER UNDERSTAND THAT SKYDIVING AND GLIDING ARE VERY SERIOUS AND HAZARDOUS SPORTS IN WHICH I COULD SUSTAIN SERIOUS AND PERMANENT INJURIES OR EVEN DEATH

Makenzie underwent an instruction course that included [*3] determining the condition of the parachute after deployment, gaining control and resolving any deployment problems and, if necessary, activating her emergency parachute. In connection with her registration and training, Makenzie and her parents both signed and/or initialed an accompanying document entitled “Agreement, Release of Liability and Acknowledgment of Risk” (the Release). The Release contained numerous exculpatory provisions, which stated in pertinent part:

1. RELEASE FROM LIABILITY. I hereby RELEASE AND DISCHARGE [Defendant] from any and all liability claims, demands or causes of action that I may hereafter have for injuries and damages arising out of my participation in parachuting and other aviation activities, including but not limited to LOSSES CAUSED BY THE NEGLIGENCE OR OTHER FAULT OF THE RELEASED PARTIES.

2. COVENANT NOT TO SUE. I further agree that I WILL NOT SUE OR MAKE A CLAIM AGAINST [Defendant] for damages or other losses sustained as a result of my participation in parachuting and other aviation activities.

* * *

5. ACKNOWLEDGMENT OF RISK. I understand and acknowledge that parachuting activities have inherent dangers that no amount of care, caution, instruction or [*4] expertise can eliminate and I EXPRESSLY AND VOLUNTARILY ACKNOWLEDGE ALL RISK OF DEATH OR PERSONAL INJURY SUSTAINED WHILE PARTICIPATING IN PARACHUTING AND OTHER AVIATION ACTIVITIES WHETHER OR NOT CAUSED BY THE NEGLIGENCE OR OTHER FAULT OF THE RELEASED PARTIES, including but not limited to equipment malfunction from whatever cause or inadequate training.

* * *

9. ENFORCEABILITY. I agree that if any portion of this Agreement, Release of Liability and Acknowledgment of risk is found to be unenforceable or against public policy, that only that portion shall fall and all other portions shall remain in full force and effect. . . . I also specifically waive any unenforceability or any public policy argument that I may make or that may be made on behalf of my estate or by anyone who would sue because of injury, damage or death as a result of my participation in parachuting and other aviation activities.

10. LEGAL RIGHTS. It has been explained to me, and I expressly recognize that this Agreement, Release of Liability and Acknowledgment of Risk is a contract pursuant to which I am giving up important legal rights, and it is my intention to do so.

(Emphasis added).

Near the bottom of the form, Makenzie [*5] read and rewrote the following statement: “I hereby certify that I have read this Agreement, Release of Liability and Acknowledgment of Risk, that I fully understand the contents of this contract, that I wish to be bound by its terms, and that I have signed this contract of my own free will.” This statement was signed and dated by Makenzie and initialed by her mother. At the bottom of the Release, under the heading, “RATIFICATION BY PARENT/GUARDIAN if participant is under 18-years-of-age,” both parents attested that they had read the agreement, understood its terms, and agreed to be bound thereby.

Makenzie received four hours of training and instruction. She was assigned a used parachute based on her size and weight. Defendant employed the assistance of Jacob Martinez to act as radio controller. Mr. Martinez’s duty was to help guide the jumpers onto the landing area and it was his first time to assist with the radio. Upon Makenzie’s jump, her chute malfunctioned, causing her to spin with increasing rapidity towards the ground. Makenzie landed at a high speed and impact, causing her to sustain serious injuries.

STANDARD OF DECISION

“Summary judgment is proper if, viewing the evidence in [*6] the light most favorable to the non-moving party, there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Bonidy v. U.S. Postal Service, 790 F.3d 1121, 1124 (10th Cir. 2015) (citing Peterson v. Martinez, 707 F.3d 1197, 1207 (10th Cir. 2013)). The Court’s function at the summary judgment stage is not to weigh the evidence and determine the truth of the matter asserted, but to determine whether there is a genuine issue for trial. Tolan v. Cotton, U.S. , 134 S.Ct. 1861, 1866, 188 L.Ed.2d 895 (2014). An issue is “genuine” if there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way. Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998). An issue of fact is “material” if under the substantive law it is essential to the proper disposition of the claim. Id. Once the moving party has met its burden, the burden shifts to the nonmoving party to present sufficient evidence in specific, factual form to establish a genuine factual dispute. Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d 887, 891 (10th Cir. 1991).

The nonmoving party may not rest upon the mere allegations or denials of its pleadings. Rather, it must go beyond the pleadings and establish, through admissible evidence, there is a genuine issue of material fact that must be resolved by the trier of fact. Salehpoor v. Shahinpoor, 358 F.3d 782, 786 (10th Cir. 2004). Unsupported conclusory allegations do not create an issue of fact. Finstuen v. Crutcher, 496 F.3d 1139, 1144 (10th Cir. 2007).

DISCUSSION

Defendant contends the Release absolves him from all liability [*7] for any injury suffered by Makenzie. Plaintiffs respond that Defendant’s motion should be denied because (1) Makenzie was a minor when she signed the Release, rendering it invalid under Oklahoma law,2 (2) Defendant is clearly liable under the theories asserted, and (3) this Court had a duty to protect Makenzie as a minor.

2 In Oklahoma, a minor is any person under eighteen (18) years of age. 15 Okla. Stat. § 13.

“An exculpatory clause releases in advance the second party for any harm the second party might cause the first party after the contract is entered.” Arnold Oil Properties LLC v. Schlumberger Tech. Corp., 672 F.3d 1202, 1206-07 (10th Cir. 2012) (citation omitted). While generally enforceable, such clauses are considered “distasteful to the law.” Schmidt v. United States, 1996 OK 29, P 8, 912 P.2d 871, 874 (emphasis in original).3 Exculpatory clauses are enforceable only if they meet the three following criteria:

(1) Their language must evidence a clear and unambiguous intent to exonerate the would-be defendant from liability for the sought-to-be-recovered damages;

(2) At the time the contract was executed, there must have been no vast difference in bargaining power between parties; and

(3) Enforcement of the clause would not (a) be injurious to public health, public morals or confidence in administration of the law or (b) so undermine the security of individual [*8] rights vis-a-vis personal safety or private property as to violate public policy.

Schmidt, 912 P.2d at 874. “The clause will never avail to relieve a party from liability for intentional, willful or fraudulent acts or gross, wanton negligence.” Id. at 874 (citations omitted, emphasis in original); Satellite System, Inc. v. Birch Telecom of Okla., Inc., 2002 OK 61, P 11, 51 P.3d 585, 589 (“Oklahoma has a strong legislative public policy against contracts which attempt ‘to exempt anyone from responsibility for his own fraud, or willful injury to the person or property of another.'”) (citing 15 Okla. Stat. § 212).

3 Notwithstanding this admonition, courts should void contract clauses on public-policy grounds “rarely, with great caution and in cases that are free from doubt.” Union Pacific R. Co. v. U.S. ex rel. U.S. Army Corps of Engineers, 591 F.3d 1311, 1321 (10th Cir. 2010) (quoting Shepard v. Farmers Ins. Co., 1983 OK 103, P 3, 678 P.2d 250, 251).

Oklahoma courts, and others, have upheld exculpatory contracts similar to the present Release, i.e., contracts that exculpate the defendant from injuries suffered by plaintiffs while skydiving. See Manning v. Brannon, 1998 OK CIV APP 17, PP 15-17, 956 P.2d 156, 158-59 (exculpatory contract relieving defendant from any liability for injuries to plaintiff from parachuting activities was valid and enforceable); see also Scrivener v. Sky’s the Limit, Inc., 68 F. Supp. 2d 277, 280 (S.D.N.Y. 1999); Paralift, Inc. v. Superior Court, 23 Cal.App.4th 748, 756, 29 Cal.Rptr.2d 177, 181 (1993); Jones v. Dressel, 623 P.2d 370, 376 (Colo. 1981). This Court, likewise, finds the Release is generally valid on its face.

First, the Release states in clear and unequivocal terms the intention of the parties to excuse Defendant from liability caused [*9] by Defendant’s negligence, equipment failure, or inadequate instruction. Plaintiffs signed and initialed several clauses containing the headings, RELEASE FROM LIABILITY, COVENANT NOT TO SUE, and ACKNOWLEDGMENT OF RISK. Mrs. Wethington and her husband signed a ratification stating they had read the Release, understood its terms, and agreed to be bound thereby. Second, there is no evidence of unequal bargaining power. “Oklahoma courts consider two factors in determining parties’ relative bargaining power: ‘(1) the importance of the subject matter to the physical or economic wellbeing of the party agreeing to the release, and (2) the amount of free choice that party could have exercised when seeking alternate services.'” Arnold Oil, 672 F.3d at 1208 (quoting Schmidt, 912 P.2d at 874). There is no evidence that skydiving was necessary or important to Plaintiffs’ wellbeing. In fact, when asked why she wanted to skydive, Makenzie answered, “It’s on my bucket list.” Moreover, Plaintiffs do not contend Makenzie had no choice but to agree to be trained by and jump with Defendant as opposed to going elsewhere. Third, as noted, Oklahoma courts have upheld such releases as not against public policy. See Manning, 956 P.2d at 159 (“we find a exculpatory contract in the [*10] context of a high-risk sport such as sky diving not against the public policy of this state.”).

Plaintiffs nevertheless maintain the Release is voidable because Makenzie was a minor when she signed it and her subsequent suit disaffirmed the agreement. It is also true that as a matter of public policy, courts have protected minors from improvident and imprudent contractual commitments by declaring the contract of a minor is voidable at the election of the minor after she attains majority. See 15 Okla. Stat. § 19. “A release is a contract.” Corbett v. Combined Communications Corp., 1982 OK 135, P 5, 654 P.2d 616, 617. Under Oklahoma law, a minor’s right to rescind a contract is unaffected by the approval or consent of a parent. Gomes v. Hameed, 2008 OK 3, P 26, 184 P.3d 479, 489 (citing Gage v. Moore, 1948 OK 214, P 8, 200 Okla. 623, 198 P.2d 395, 396).

In this case, however, Makenzie’s parents also knowingly signed the Release on her behalf, ratifying and affirming its exculpatory content, and agreeing to be bound thereby. Nevertheless, Defendant refers this Court to no controlling authority that permits the parent of a minor to, on the minor’s behalf, release or waive the minor’s prospective claim for negligence. The Court is unaware of any such authority, and therefore must predict how the Oklahoma Supreme Court would rule on the question. Ortiz v. Cooper Tire & Rubber Co., No. CIV-13-32-D, 2015 U.S. Dist. LEXIS 41544, 2015 WL 1498713, at *5 (W.D. Okla. Mar. 31, 2015) (“A [*11] federal court sitting in diversity must apply state law as propounded by the forum’s highest court. Absent controlling precedent, the federal court must attempt to predict how the state’s highest court would resolve the issue.”) (quoting Royal Maccabees Life Ins. Co. v. Choren, 393 F.3d 1175, 1180 (10th Cir. 2005)).

Although the cases are split on the issue, it is well-recognized that the majority of state courts considering the issue have held a parent may not release a minor’s prospective claim for negligence. See Fedor v. Mauwehu Council, Boy Scouts of Am., 21 Conn. Supp. 38, 143 A.2d 466, 467-68 (Conn. 1958); Kirton v. Fields, 997 So.2d 349, 356 (Fla. 2008) (pre-injury release executed by parent on behalf of minor is unenforceable against minor or the minor’s estate in a tort action arising from injuries resulting from participation in a commercial activity); Hojnowski v. Vans Skate Park, 187 N.J. 323, 901 A.2d 381, 386 (N.J. 2006) (New Jersey public policy prohibits parents of a minor child from releasing a minor child’s potential tort claim arising out of the use of a commercial recreational facility); Meyer v. Naperville Manner, Inc., 262 Ill. App. 3d 141, 634 N.E.2d 411, 414, 199 Ill. Dec. 572 (Ill. App. Ct. 1994) (“[I]n the absence of statutory or judicial authorization, a parent cannot waive, compromise, or release a minor child’s cause of action merely because of the parental relationship . . . . This rule has also been extended to render ineffective releases or exculpatory agreements for future tortious conduct by other persons where such releases had been signed by parents on [*12] behalf of their minor children.”); Galloway v. State, 790 N.W.2d 252, 256 (Iowa 2010) (public policy precluded enforcement of parent’s pre-injury waiver of her child’s cause of action for injuries caused by negligence); Doyle v. Bowdoin College, 403 A.2d 1206, 1208 n. 3 (Me. 1979) (“a parent, or guardian, cannot release the child’s or ward’s, cause of action.”); Childress v. Madison County, 777 S.W.2d 1, 6-7 (Tenn. Ct. App. 1989); Woodman v. Kera, LLC, 280 Mich. App. 125, 760 N.W.2d 641, 655-56 (Mich. Ct. App. 2008) (pre-injury waivers effectuated by parents on behalf of their minor children are not presumptively enforceable); Apicella v. Valley Forge Military Acad. & Junior Coll., 630 F.Supp. 20, 24 (E.D. Penn. 1985) (“Under Pennsylvania law, parents do not possess the authority to release the claims or potential claims of a minor child merely because of the parental relationship.”); Munoz v. II Jaz Inc., 863 S.W.2d 207, 209-10 (Tex. App. 1993) (statute which empowered parents to make legal decisions concerning their child did not give parents power to waive child’s cause of action for personal injuries); Scott v. Pacific West Mountain Resort, 119 Wn.2d 484, 834 P.2d 6, 11-12 (Wash. 1992) (“A parent does not have legal authority to waive a child’s own future cause of action for personal injuries resulting from a third party’s negligence”).4

4 Of the cases enforcing pre-injury releases executed by parents on behalf of minor children, most involve state-enacted legislation permitting such waiver or the minor’s participation in school-run or community-sponsored activities. See, e.g., Squires v. Breckenridge Outdoor Educ. Ctr., 715 F.3d 867, 874 (10th Cir. 2013); Hohe v. San Diego Unified Sch. Dist., 224 Cal. App. 3d 1559, 1564, 274 Cal. Rptr. 647, 649-50 (1990); BJ’s Wholesale Club, Inc. v. Rosen, 435 Md. 714, 80 A.3d 345, 362 (Md. 2013); Sharon v. City of Newton, 437 Mass. 99, 769 N.E.2d 738, 746-47 (Mass. 2002); Zivich v. Mentor Soccer Club, Inc., 82 Ohio St. 3d 367, 1998 Ohio 389, 696 N.E.2d 201, 205 (Ohio 1998).

These decisions have invalidated such agreements on the grounds that (1) parents have no [*13] such power, or (2) the agreements violate public policy. The underlying rationale employed by many is that courts, acting in the role as parens patriae, have a duty to protect minors. Oklahoma recognizes its duty to protect minor children. Baby F. v. Oklahoma County District Court, 2015 OK 24, P 23, 348 P.3d 1080, 1088. In Oklahoma, a parent or guardian may not settle a child’s claim without prior court approval. See 30 Okla. Stat. § 4-702 (“A guardian, with the approval of the court exercising jurisdiction in the suit or proceeding, may compromise and settle any claim made by, on behalf of or against the ward in such suit or proceeding.”). As aptly summarized by the Washington Supreme Court in Scott:

Since a parent generally may not release a child’s cause of action after injury, it makes little, if any, sense to conclude a parent has the authority to release a child’s cause of action prior to an injury. In situations where parents are unwilling or unable to provide for a seriously injured child, the child would have no recourse against a negligent party to acquire resources needed for care and this is true regardless of when relinquishment of the child’s rights might occur.

Scott, 834 P.2d at 11-12 (emphasis added).

Based on the case law in Oklahoma and other jurisdictions, the Court is led to the conclusion [*14] that (1) Makenzie’s acknowledgment and execution of the Release is of no consequence and does not preclude her claims against Defendant, and (2) the Oklahoma Supreme Court would find that an exculpatory agreement regarding future tortious conduct, signed by parents on behalf of their minor children, is unenforceable. Accordingly, to the extent the Release purports to bar Makenzie’s own cause of action against Defendant, it is voidable. Plaintiffs correctly argue that commencement of this lawsuit constitutes a disaffirmance of the Release (see, e.g., Gage, supra; Ryan v. Morrison, 1913 OK 598, 40 Okla. 49, 135 P. 1049), and the contract is void ab initio. Grissom v. Beidleman, 1912 OK 847, P 8, 35 Okla. 343, 129 P. 853, 857 (“The disaffirmance of a contract made by an infant nullifies it and renders it void ab initio; and the parties are returned to the same condition as if the contract had never been made.”). The ratification signed by Makenzie’s parents is likewise unenforceable as a bar to Makenzie’s claims. The Release, however, is otherwise conspicuous and clear so as to bar the parents’ cause of action based upon injury to their child. Therefore, Mrs. Wethington’s causes of action, individually, are barred.5

5 As noted, exculpatory clauses cannot excuse one for, inter alia, gross negligence. The statutory definition [*15] of gross negligence is “want of slight care and diligence.” 25 Okla. Stat. § 6. Under Oklahoma law, “gross negligence” requires the intentional failure to perform a manifest duty in reckless disregard of consequences or in callous indifference to life, liberty, or property of another. Palace Exploration Co. v. Petroleum Dev. Co., 374 F.3d 951, 954 (10th Cir. 2004). Plaintiffs expressly plead in their Complaint only causes of action for negligence and breach of contract. Moreover, although Plaintiffs’ Complaint seeks punitive damages based on Defendant’s alleged “gross, willful, and intentional acts,” Compl., P 8, Plaintiffs neither argue nor present any evidence indicating Defendant’s actions constituted anything beyond ordinary negligence.

CONCLUSION

Defendant’s Motion for Summary Judgment [Doc. No. 24] is GRANTED IN PART and DENIED IN PART. Defendant’s motion is granted as to Plaintiff Holly Wethington’s claims and denied as to Plaintiff Makenzie Wethington’s claim for negligence. Since the skydiving contract is rendered void ab initio by means of Makenzie’s lawsuit, her breach of contract claim cannot proceed as a matter of law.

IT IS SO ORDERED this 18th day of December, 2015.

/s/ Timothy D. DeGiusti

TIMOTHY D. DeGIUSTI

UNITED STATES DISTRICT JUDGE

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Oklahoma Federal Court opinion: the OK Supreme Court would void a release signed by the parent for a minor.

Posted: December 28, 2015 | Author: | Filed under: Oklahoma, Release (pre-injury contract not to sue), Skydiving, Paragliding, Hang gliding | Tags: , , , , , | Leave a comment

Minor injured in a sky-diving accident is allowed to sue because the release, she and her parents signed are void under Oklahoma law. Parents are not allowed to sue for their claims because of the release.

Wethington v. Swainson, 2015 U.S. Dist. LEXIS 169145

State: Oklahoma, United States District Court for the Western District of Oklahoma

Plaintiff: Holly Wethington and Makenzie Wethington

Defendant: Robert Swainson, d/b/a/ Pegasus Airsport

Plaintiff Claims: (1) provided inadequate training to [*2]  Makenzie in preparation for the parachute jump, (2) selected a person to provide radio assistance who had no prior experience, (3) provided old equipment that malfunctioned during Makenzie’s jump, and (4) permitted Makenzie to use a parachute she was ill-prepared to use and which was inappropriate for her skill level

Defendant Defenses: Release

Holding: for the defendant for the claims of the parents, for the plaintiff for her claims

Year: 2015

The minor plaintiff was sixteen years old when she wanted to check another item off her bucket list. She went to the defendant’s sky-diving business along with her parents.

First, the minor plaintiff completed a Registration Form and Medical Statement which included a notice that sky diving was dangerous. The minor plaintiff also signed a release. Her parents also signed the release. The release required the minor plaintiff to write out a statement that she knew she was signing a release and understood the risks. She wrote this out and signed it. The bottom of the release also had a ratification paragraph which the Parent/Guardian was required to sign that stated they understood the risks and released the defendants. Both parents signed this.

In total, a warning in one document, a release signed by all three parents, an additional clause signed by the paragraphs and a written paragraph written and signed by the minor plaintiff is normally far in excess of what a party signs before engaging in recreational activities.

The minor plaintiff then received four houses of training. On her first jump, her parachute malfunctioned, and she hit the ground sustaining injuries.

The defendants filed for a motion for summary judgment based on the release.

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

The court started by looking at the issues surrounding release law in Oklahoma. “An exculpatory clause releases in advance the second party for any harm the second party might cause the first party after the contract is entered.” Releases are enforceable in Oklahoma but are “distasteful.”

At the same time, releases in Oklahoma should not be voided because of public policy grounds. “Notwithstanding this admonition, courts should void contract clauses on public-policy grounds “rarely, with great caution and in cases that are free from doubt.” Public policy grounds are the normal way releases signed by minors are voided.

Releases in Oklahoma have to meet three criteria to be valid.

(1) Their language must evidence a clear and unambiguous intent to exonerate the would-be defendant from liability for the sought-to-be-recovered damages;

(2) At the time the contract was executed, there must have been no vast difference in bargaining power between parties; and

(3) Enforcement of the clause would not (a) be injurious to public health, public morals or confidence in administration of the law or (b) so undermine the security of individual rights vis-a-vis personal safety or private property as to violate public policy.

The court also stated that under Oklahoma law releases cannot work to prevent “liability for intentional, willful or fraudulent acts or gross, wanton negligence.”

After reviewing the release the court found the release was valid.

First, the Release states in clear and unequivocal terms the intention of the parties to excuse Defendant from liability caused by Defendant’s negligence, equipment failure, or inadequate instruction. Plaintiffs signed and initialed several clauses containing the headings, RELEASE FROM LIABILITY, COVENANT NOT TO SUE, and ACKNOWLEDGMENT OF RISK. Mrs. Wethington and her husband signed a ratification stating they had read the Release, understood its terms, and agreed to be bound thereby.

The court then looked at whether there was inequality in the bargaining power of the plaintiff and found none.

Second, there is no evidence of unequal bargaining power. “Oklahoma courts consider two factors in determining parties’ relative bargaining power: ‘(1) the importance of the subject matter to the physical or economic wellbeing of the party agreeing to the release, and (2) the amount of free choice that party could have exercised when seeking alternate services.'” There is no evidence that skydiving was necessary or important to Plaintiffs’ wellbeing. In fact, when asked why she wanted to skydive, Makenzie answered, “It’s on my bucket list.”

The court found the plaintiffs were not bound to sky dive with the defendant; she was free to sky dive with anyone. Therefore, the plaintiff was not under any pressure or requirement to sky dive with the defendant.

The court then looked at Oklahoma law to see if parents could sign away a minor’s right to sue.

It is also true that as a matter of public policy, courts have protected minors from improvident and imprudent contractual commitments by declaring the contract of a minor is voidable at the election of the minor after she attains majority. Under Oklahoma law, a minor’s right to rescind a contract is unaffected by the approval or consent of a parent.

The court also found that for a claim to be approved for a minor for an injury resulting in a settlement, the court had to approve the settlement.

However, the court found this case was complicated by the fact the minor plaintiff’s parents had also signed the release. “In this case, however, Makenzie’s parents also knowingly signed the Release on her behalf, ratifying and affirming its exculpatory content, and agreeing to be bound thereby.”

The Oklahoma Supreme Court did not rule on the issue. Federal courts hearing cases based on the diversity of the parties dealing with state law issues must apply the law of the state where the lawsuit is based or the law that applies.

…federal court sitting in diversity must apply state law as propounded by the forum’s highest court. Absent controlling precedent, the federal court must attempt to predict how the state’s highest court would resolve the issue.

The next issue is disaffirmance of the contract. A minor must disaffirm a contract after reaching the age of majority or the contract is valid. The plaintiffs argued, and the court agreed that the filing of the lawsuit disaffirmed the release. “Plaintiffs correctly argue that commencement of this lawsuit constitutes a disaffirmance of the Release, and the contract is void ab initio.”

For more on this see Rare issue this case looked at a release signed by a minor that prevented a suit for his injuries after turning age 18. However, this decision was later overturned in Oregon Supreme Court finds release signed at ski area is void as a violation of public policy.

The court also examined the issue that the parents signed the release and found it had no bearing on the case. However, the release did stop claims by the parents.

The ratification signed by Makenzie’s parents is, likewise, unenforceable as a bar to Makenzie’s claims. The Release, however, is otherwise conspicuous and clear so as to bar the parents’ cause of action based upon injury to their child.

When a minor is injured, the minor can sue and the parents can sue. Dependent upon the state, the claims of the parents may include those of the minor or may be solely based on the parents’ loss.

The court then ruled that the minor claim was valid and not barred by the release. The parent’s claims, specifically the named plaintiff, the minor plaintiff’s mother, were barred by the release.

Defendant’s motion is granted as to Plaintiff Holly Wethington’s claims and denied as to Plaintiff Makenzie Wethington’s claim for negligence. Since the skydiving contract is rendered void ab initio by means of Makenzie’s lawsuit, her breach of contract claim cannot proceed as a matter of law.

So Now What?

The minor plaintiff can sue, and the mother cannot.

This decision is not controlling in Oklahoma. The Oklahoma Supreme Court could still rule that a parent can sign away a minor’s right to sue.

At the same time, this decision outlines release law in Oklahoma and does a great job. As far as how the Oklahoma Supreme Court will rule, the Federal District Court knows the Supreme Court in the state where they sit better than any other person, and I would vote with the Federal Court.

As in other cases in the majority of states, a parent cannot sign away a minor’s right to sue.  To see the States where a parent can sign away a minor’s right to sue and the decisions deciding that issue see States that allow a parent to sign away a minor’s right to sue.

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Decisive Supreme Court Decision on the Validity of Releases in Oklahoma

Posted: May 27, 2013 | Author: | Filed under: Equine Activities (Horses, Donkeys, Mules) & Animals, Oklahoma, Release (pre-injury contract not to sue) | Tags: , , , , , , , , , , , , , , , , | Leave a comment

Schmidt v. United States of America, 1996 OK 29; 912 P.2d 871; 1996 Okla. LEXIS 38 (Okla 1996)

Case arose as a certified question from the US District Court from Western Oklahoma.

This is a request by the Federal District Court in Western Oklahoma for clarification on a legal point. When a Federal court has to apply state law and there are no decisions for the Federal court to rely upon, it certifies the question to the state Supreme Court for clarification. That is how this case arose.

The plaintiff went for a trail ride at Artillery Hunt Riding Stables at Fort Sill, Oklahoma. Because the stable was owned by the Army that is the reason for the suit to be brought in Federal Court and why the defendant is the USA.

While on the ride, the “ride leader” allegedly rode up behind the plaintiff and frightened her horse causing the horse to throw her. The plaintiff sued saying that the US “(1) is liable vicariously for the ride leader’s negligence and (2) is culpable for its own negligence in selecting and keeping an unfit ride leader.” Both claims are based in negligence.

The Federal Court could not find case law to rely upon to issue an opinion on the defendant’s defense of release so it sent the case the Oklahoma Supreme Court.

The Oklahoma Supreme Court did not decide the case. The court only used the facts as supplemental information in making its decision concerning releases in Oklahoma.

The Oklahoma looked at the question in two parts:

1. Whether, under Oklahoma law, a contractual exculpatory clause for personal injury is valid and enforceable?

2. Whether, under Oklahoma law, the exculpatory provisions contained in the Rental Riding Agreement are valid and enforceable and operate to bar the plaintiff’s negligence and negligent entrustment claims?

The court responded this way: “

We respond to the first question in the affirmative. We answer the second with a qualifying affirmative by noting that it applies if the certifying court finds that three preconditions to the clause’s enforcement are met: (1) the exculpatory clause’s language clearly, definitely and unambiguously displays an intent to insulate the United States from the type of liability the plaintiff seeks to impose; (2) no disparity of bargaining power existed between the two parties to the agreement containing the clause at the time it was executed; and (3) its effect would not violate public policy.

We note that exculpatory clauses cannot relieve one from liability for fraud, willful injury, gross negligence or violation of the law.

Summary of the case

This decision is a well-written look at how Oklahoma and many other states look at releases. Generally, releases are upheld in Oklahoma. However, although releases are “generally enforceable” releases are distasteful. The test in Oklahoma on whether a release is valid is:

(1) their language must evidence a clear and unambiguous intent to exonerate the would-be defendant from liability for the sought-to-be-recovered damages;

(2) at the time the contract (containing the clause) was executed there must have been no vast difference in bargaining power between the parties; and

(3) enforcement of these clauses must never

(a) be injurious to public health, public morals or confidence in administration of the law or

(b) so undermine the security of individual rights vis-a-vis personal safety or private property as to violate public policy.

The court then described what clear and unambiguous intent was:

A contractual provision which one party claims excuses it from liability for in futuro tortious acts or omissions must clearly and cogently (1) demonstrate an intent to relieve that person from fault and (2) describe the nature and extent of damages from which that party seeks to be relieved. This is so not only when one assesses a party’s direct liability for negligence, but also when assaying whether the agreement’s terms embrace acts of an agent or servant of that party. In short, both the identity of the tortfeasor to be released and the nature of the wrongful act — for which liability is sought to be imposed — must have been foreseen by, and fall fairly within the contemplation of, the parties. The clause must also identify the type and extent of damages covered — including those to occur in futuro.

The court did differentiate between an exculpatory clause (release) which limits suits and clauses, which limit damages under Oklahoma law.

Bargaining power was described by the court in looking at releases as:

Courts consider two factors when called upon to ascertain the equality of the parties’ bargaining power, vis-a-vis each other, in the setting of a promissory risk assumption: (1) the importance of the subject matter to the physical or economic well-being of the party agreeing to the release and (2) the amount of free choice that party could have exercised when seeking alternate services.

The final issue, a release that violates public policy was described as:

While courts may declare void those portions of private contracts which contradict public policy, they must do so only with great caution. Two classes of exculpating agreements may be said to violate public policy: (1) those which — if enforced — patently would tend to injure public morals, public health or confidence in the administration of the law and (2) those which would destroy the security of individuals’ rights to personal safety or private property.

The court summed up its opinion on what a release must have under Oklahoma law as:

“any agreement having as its purpose the unequivocal exoneration of one party from negligent tort liability of another must identify both the putative tortfeasor and the category of recovery from which that actor would be relieved.

However, if any single requirement of the three requirements is not met by a release, then the release must fail.

So Now What?

You never find a decision that says this is what you must do to be legal. This decision from the Oklahoma Supreme Court explains step by step what an attorney must do to write a release.

 

Plaintiff: Elizabeth M. Schmidt

 

Defendant: United States of America (Artillery Hunt Riding Stables at Fort Sill, Oklahoma)

 

Plaintiff Claims: Negligence in the original Federal Action

 

Defendant Defenses: Release

 

Holding: Sent to the Federal Court for determination based on the decision here.

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Schmidt v. United States of America, 1996 OK 29; 912 P.2d 871; 1996 Okla. LEXIS 38 (Okla 1996)

Posted: May 27, 2013 | Author: | Filed under: Equine Activities (Horses, Donkeys, Mules) & Animals, Legal Case, Oklahoma, Release (pre-injury contract not to sue) | Tags: , , , , , , , , , , , , , , , , | Leave a comment

Schmidt v. United States of America, 1996 OK 29; 912 P.2d 871; 1996 Okla. LEXIS 38 (Okla 1996)

ELIZABETH M. SCHMIDT, Plaintiff, v. UNITED STATES OF AMERICA, Defendant.

No. 85,545

SUPREME COURT OF OKLAHOMA

1996 OK 29; 912 P.2d 871; 1996 Okla. LEXIS 38

February 27, 1996, FILED

COUNSEL: Alan D. Rosenbaum, Lawton, OK, Reggie N. Whitten, Douglas A. Terry, MILLS & WHITTEN, Oklahoma City, OK, For Plaintiff.

Patrick M. Ryan, United States Attorney, Ronny D. Pyle, Assistant United States Attorney, Western District of Oklahoma, For Defendant.

JUDGES: KAUGER, V.C.J., HODGES, LAVENDER, SIMMS, HARGRAVE, OPALA, SUMMERS and WATT, JJ., concur; WILSON, C.J., concurs in part and dissents in part.

OPINION BY: OPALA

OPINION

[*872] CERTIFIED QUESTIONS FROM A UNITED STATES COURT

Opala, J.

The United States District Court for the Western [**2] District of Oklahoma [certifying court] certified the following questions pursuant to the Uniform Certification of Questions of Law Act, 20 O.S.1991 §§ 1601 et seq.:

“1. Whether, under Oklahoma law, a contractual exculpatory clause for personal injury is valid and enforceable?

2. Whether, under Oklahoma law, the exculpatory provisions contained in the Rental Riding Agreement are valid and enforceable and operate to bar the plaintiff’s negligence and negligent entrustment claims?”

We respond to the first question in the affirmative. We answer the second with a qualifying affirmative by noting that it applies if the certifying court finds that three preconditions to the clause’s enforcement are met: (1) the exculpatory clause’s language clearly, definitely and unambiguously displays an intent to insulate the United States from the type of liability the plaintiff seeks to impose; (2) no disparity of bargaining power existed between the two parties to the agreement containing the clause at the time it was executed; and (3) its effect would not violate public policy. We note that exculpatory clauses cannot relieve one from liability for fraud, [**3] willful injury, gross negligence or violation of the law. 1

1 See infra notes 8 and 15.

I

ANATOMY OF THE FEDERAL LITIGATION 2

2 The material accompanying the certified questions consists of the parties’ pleadings and motions filed in the certifying court. The factual recitals in the anatomy of the federal litigation were gleaned from this material and from the briefs submitted to this court.

Elizabeth M. Schmidt [plaintiff or Schmidt] went to the Artillery Hunt Riding Stables [Stables] at Fort Sill, Oklahoma 3 to engage in recreational horseback riding. Before participating in this activity she executed a Rental Riding Agreement [contract]. The contract contained the following clause [exculpatory clause or clause]:

“In consideration for being allowed to participate in Horse Rental, I hereby release [**4] the Artillery Hunt Center and its employees and/or ride leaders . . . and the United States Government from any liabilities or claims arising from my participation. I agree that I will never prosecute or in any way aid in prosecuting any demand, claim or suit against the United States Government for any loss, damage or injury to my person or property that may occur from any cause whatsoever as a result of taking part in this activity.” [Emphasis supplied.]

3 The Stables are admittedly an instrumentality of the U.S. Army.

Schmidt claims that, during the ride, a “ride leader” employed by the Stables negligently rode up behind her, frightened her horse and caused it to throw her to the ground, then fall on and injure her.

[*873] Schmidt brought a negligent tort complaint against the United States 4 alleging that the latter (1) is liable vicariously for the ride leader’s negligence and (2) is culpable for its own negligence in selecting and keeping an unfit ride leader. 5 By its summary [**5] judgment motion the United States interposed the exculpatory clause, by which it sought to defeat Schmidt’s claim.

4 Schmidt’s action invokes the Federal Tort Claims Act [FTCA], 28 U.S.C. §§ 2671 et seq. [HN1] By the FTCA’s terms the United States’ liability is measured according to the law of the state in which the wrongful act occurred. 28 U.S.C. § 2674.

5 Schmidt charges the United States with actual notice of the employee’s unfitness to lead the ride.

II

THE NATURE OF THIS COURT’S FUNCTION WHEN ANSWERING QUESTIONS FROM A FEDERAL COURT

[HN2] While the actionability of state-law claims identified in the submitted questions may be tested when answering the queries posed, it is not this court’s province to intrude (by the responses to be given) upon the federal court’s decision-making process. Because this case is not before us for decision,we refrain, as we must, from applying the declared state-law responses to the facts elicited or to be determined in the federal-court litigation (whether [**6] made by evidence adduced at trial or by acceptable probative substitutes, called “evidentiary materials”, for use in the summary adjudication process). 6 The task of analyzing the impact of today’s answers must be and hence is deferred to the certifying court.

6 Brown v. Ford, Okl., 905 P.2d 223, 226 n. 3 (1995); Bonner v. Oklahoma Rock Corp., Okl., 863 P.2d 1176, 1178 n. 3 (1993); Shebester v. Triple Crown Insurers, Okl., 826 P.2d 603, 606 n. 4 (1992).

III

THE PARAMETERS OF THE CLAUSE’S ENFORCEABILITY

[HN3] By entering into an exculpatory agreement of the type dealt with here 7 the promisor assumes the risks that are waived. 8 [*874] While these exculpatory promise based obligations are generally enforceable, 9 they are distasteful to the law. 10 For a validity test the exculpatory clause must pass a gauntlet of judicially-crafted hurdles: (1) their language must evidence a clear and unambiguous intent to exonerate the would-be defendant 11 from liability for the sought-to-be-recovered [**7] damages; 12 (2) at the time the contract (containing the clause) was executed there must have been no vast difference in bargaining power between the parties; 13 and (3) enforcement of these clauses must never (a) be injurious to public health, public morals or confidence in administration of the law or (b) so undermine the security of individual rights vis-a-vis personal safety or private property as to violate public policy. 14

7 For a discussion of the difference between a contract clause totally exempting one from culpability and one which merely limits the financial extent of that liability, see Elsken v. Network Multi-Family Sec. Corp., Okl., 838 P.2d 1007, 1008 (1992); Fretwell v. Protection Alarm Co., Okl., 764 P.2d 149, 151 (1988). In both of those cases a burglar alarm company sought to limit its liability for loss due to theft of customers’ property via a liquidated damages provision. The propriety of similar liability-limiting contract clauses is subject to an analysis grounded in contract law that lies outside the realm of tort jurisprudence. See MacNeil, Power of Contract and Agreed Remedies, 47 CORNELL L. Q. 495 (1962).

[**8]

8 [HN4] Express assumption of risk occurs in those cases where the plaintiff expressly contracts with another not to sue for any future injuries which may be caused by that person’s negligence. Thomas v. Holliday by and through Holliday, Okl., 764 P.2d 165, 168 n. 8 (1988); Murray v. Ramada Inns, Inc., 521 So. 2d 1123, 1129 (La. 1988); Anderson v. Ceccardi, 6 Ohio St. 3d 110, 451 N.E.2d 780, 783 (1983). The terms of RESTATEMENT (SECOND) OF TORTS § 496B (1965) provide:

[HN5] “A plaintiff who by contract or otherwise expressly agrees to accept a risk of harm arising from the defendant’s negligent or reckless conduct cannot recover for such harm, unless the agreement is invalid as contrary to public policy.” [Emphasis added.]

For a discussion of the jurisprudential requisites for determining whether an exculpatory contract violates public policy, see infra Part IIIC. See also in this connection V. SCHWARTZ, COMPARATIVE NEGLIGENCE § 9.1 at 154 (1974). [HN6] Express consent, which might also be called “waiver” or “release”, will usually bar recovery by the plaintiff unless there is a statute or established public policy against it. Murray, supra at 1129. The two statutory provisions cited by Schmidt are inapposite here. The terms of the first, [HN7] 15 O.S.1991 § 212, provide:

“All contracts which have for their object, directly or indirectly, to exempt anyone from responsibility for his own fraud, or willful injury to the person or property of another or violation of the law, whether willful or negligent, are against the public policy of the law.” [Emphasis added.]

This section forbids agreements relieving one from liability for fraud, willful injury or violation of the law. Its terms cannot be read to embrace contracts affecting liability for simple negligence. We assume — for want of contrary notice from the federal-court record — that in this case there is no fraudulent or willful conduct.

The terms of the second section, [HN8] 15 O.S.1991 § 212.1, provide:

“Any notice given by a business entity which provides services or facilities for profit to the general public and which seeks to exempt the business entity from liability for personal injury caused by or resulting from any acts of negligence on its part or on the part of its servants or employees, shall be deemed void as against public policy and wholly unenforceable.” [Emphasis added.]

[HN9] This section’s terms apply to promises imposed without the promisor’s adequate knowledge through explanation or sans consideration. That is not the case here because the exculpatory contract in suit clearly amounts to more than a posted notice.

[**9]

9 Wolf v. Ford, 335 Md. 525, 644 A.2d 522, 525 (1994); Colgan v. Agway, Inc., 150 Vt. 373, 553 A.2d 143, 145 (Vt. 1988); Harris v. Walker, 119 Ill. 2d 542, 116 Ill. Dec. 702, 519 N.E.2d 917, 919 (1988); Rawlings v. Layne & Bowler Pump Company, 93 Idaho 496, 465 P.2d 107, 110 (1970); Henry v. Mansfield Beauty Academy, Inc., 353 Mass. 507, 233 N.E.2d 22, 24 (Mass. 1968); Ciofalo v. Vic Tanney Gyms, Inc., 10 N.Y.2d 294, 177 N.E.2d 925, 926, 220 N.Y.S.2d 962 (1961).

10 Gulf C&S Ry. Co. v. Anderson, 120 Okla. 60, 250 P. 500, 502 (1926).

11 Colgan, supra note 9 at 145; Jones v. Dressel, 623 P.2d 370, 378 (Colo. 1981); Anderson, supra note 10 at 502.

12 Anderson, supra note 10 at 502.

13 Salt River Project Agr. v. Westinghouse Elec., 143 Ariz. 368, 694 P.2d 198, 213 (1985); Elsken, supra note 7 at 1010-1111.

14 Shepard v. Farmers Insurance Co., Okl., 678 P.2d 250, 251 (1984). See also Thomas, supra note 8 at 168 n. 7; Fisk v. Bullard, 205 Okla. 502, 239 P.2d 424, 427 (1951); Anderson, supra note 10 at 502. See also in this connection Harris, supra note 9 at 909; Salt River, supra note 13 at 213; Belger Cartage Serv., Inc., v. Holland Const. Co., 224 Kan. 320, 582 P.2d 1111, 1119 (1978); Ciofalo, supra note 9 at 926. 15

[**10] [HN10]

The clause will never avail to relieve a party from liability for intentional, willful or fraudulent acts or gross, wanton negligence. 15

15 Wolf supra note 9 at 528; Jones, supra note 11 at 376; Manhattan Co. v. Goldberg, 38 A.2d 172, 174 (D.C. 1944).

A. Clear and Unambiguous Description of Parties and Damages

[HN11] A contractual provision which one party claims excuses it from liability for in futuro tortious acts or omissions must clearly and cogently (1) demonstrate an intent to relieve that person from fault and (2) describe the nature and extent of damages from which that party seeks to be relieved. This is so not only when one assesses a party’s direct liability for negligence, but also when assaying whether the agreement’s terms embrace acts of an agent or servant of that party. In short, both the identity of the tortfeasor to be released and the nature of the wrongful act — for which liability is sought to be imposed — must have been foreseen by, and fall [**11] fairly within the contemplation of, the parties. 16 The clause must also identify the type and extent of damages covered — including those to occur in futuro. 17

16 Anderson, supra note 10 at 502.

17 Anderson, supra note 10 at 502.

B. Bargaining Power’s Parity Level

[HN12] Courts consider two factors when called upon to ascertain the equality of the parties’ bargaining power, vis-a-vis each other, in the setting of a promissory risk assumption: (1) the importance of the subject matter to the physical or economic well-being of the party agreeing to the release and (2) the amount of free choice that party could have exercised when seeking alternate services. 18

18 Goldberg, supra note 15 at 174-175. See Trumbower v. Sports Car Club of America, Inc., 428 F. Supp. 1113, 1117 (W.D. Okla. 1976).

[**12] [*875] C. The Element Whose Presence Makes the Exculpation Not Violative of Public Policy 19

19 [HN13] In the context of an exculpatory clause’s validity, “public policy” means that which inhibits anything injurious to the good of all. The term is applied here in a sense broader than that used when scrutinizing for conformity to “public policy” wrongful-termination claims pressed by discharged at-will employees. Cameron & Henderson v. Franks, 199 Okla. 143, 184 P.2d 965, 972 (1947). For cases that deal with claims by discharged at-will employees see Groce v. Foster, Okl., 880 P.2d 902, 904 (1994); Gilmore v. Enogex, Inc., Okl., 878 P.2d 360, 364 (1994); Burk v. K-Mart Corp., Okl., 770 P.2d 24, 28-29 (1989).

[HN14]

While courts may declare void those portions of private contracts which contradict public policy, 20 they must do so only with great caution. 21 Two classes of exculpating agreements may be said to violate public policy: (1) those which — if enforced — patently would tend to injure public [**13] morals, public health or confidence in the administration of the law and (2) those which would destroy the security of individuals’ rights to personal safety or private property. 22

20 Hargrave v. Canadian Valley Elec. Co-op., Okl., 792 P.2d 50, 59 (1990).

21 Shepard v. Farmers Insurance Co., Okl., 678 P.2d 250, 251 (1984); Johnston v. J.R. Watkins Co., 195 Okla. 341, 157 P.2d 755, 757 (1945); Camp v. Black Gold Petroleum Co., 189 Okla. 692, 119 P.2d 815, 817-818 (1941).

22 Shepard, supra note 21 at 251; Anderson v. Reed, 133 Okla. 23, 270 P. 854, 856 (1928). An example of an exculpatory clause injurious to public health is afforded by an agreement exonerating a common carrier from liability for negligence. See Pine Belt Lumber Co. v. Riggs, 80 Okla. 28, 193 P. 990, 996-997 (1920).

IV

SUMMARY

[HN15] National jurisprudence teaches that parties may contractually allocate the risk of future harm. The exercise of this power is conditional; any agreement having as its purpose [**14] the unequivocal exoneration of one party from negligent tort liability of another must identify both the putative tortfeasor and the category of recovery from which that actor would be relieved. The parties must have bargained for their exchange on a level playing field — the level to be measured by the seriousness of the contract’s subject matter and the options available to the person giving up the right to sue. If the clause is to pass the test’s muster, the assumed obligation cannot be deemed to have brought about a result perceived as harmful to the principles of “public policy”. 23

23 See supra note 19.

The validity of the Schmidt/Stables exculpatory clause in suit depends on the outcome of the fact-finding investigation to be conducted in the certifying court. 24 If — under the test we announce today — that court should determine that any single requirement for the clause’s enforceability has not been met, its decision could not uphold the contract and exonerate the United [**15] States.

24 Promise-based obligations of the type dealt with here are treated as the promisor’s risk assumption. See supra Part III. [HN16] The terms of ART. 23, § 6, OKL.CONST., provide in pertinent part:

“The defense of . . . assumption of risk shall, in all cases whatsoever, be a question of fact, and shall, at all times, be left to the jury.” [Emphasis added.]

[HN17] The terms of ART. 23, § 8, OKL.CONST., provide:

Any provision of a contract, express or implied, made by any person, by which any of the benefits of this constitution is sought to be waived, shall be null and void.” [Emphasis added.]

Today we merely define the parameters of an exculpating clause’s enforceability. Whether, as applied to this case, the provision presents a disputed law question or also a disputed fact question is to be decided by the certifying court.

CERTIFIED QUESTIONS ANSWERED.

KAUGER, V.C.J., HODGES, LAVENDER, SIMMS, HARGRAVE, OPALA, SUMMERS and WATT, JJ., concur;

WILSON, [**16] C.J., concurs in part and dissents in part.

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Oklahoma Sales Representative

Posted: March 17, 2013 | Author: | Filed under: Oklahoma | Tags: , , , , , | Leave a comment

OKLAHOMA STATUTES, ANNOTATED BY LEXISNEXIS ®

TITLE 15. CONTRACTS

CHAPTER 17A. SALES REPRESENTATIVES RECOGNITION ACT

Go to the Oklahoma Code Archive Directory

15 Okl. St. § 675 (2012)

§ 675. Short title

Sections 1 through 5 of this act shall be known and may be cited as the “Sales Representatives Recognition Act”.

§ 676. Definitions

As used in the Sales Representatives Recognition Act:

1. “Commission” means compensation accruing to a person for payment by another person, the rate of which is expressed as a percentage of the dollar amount of orders, sales or profits;

2. “Principal” means any person who does not have a permanent or fixed place of business in this state and who does all of the following:

a. Engages in the business of manufacturing, producing, importing or distributing one or more products for sale to customers who purchase products for resale,

b. Utilizes one or more sales representatives to solicit wholesale orders for those products, and

c. Compensates the sales representatives in whole or in part by commission; and

3. “Sales representative” means a person who contracts with a principal to solicit wholesale orders for a product within this state and who is compensated, in whole or in part, by commission. “Sales representative” does not include a person who places orders for or purchases the product for his own account for resale, a person who is an employee of a principal, or a person who sells the product to the ultimate consumer.

§ 677. Commission—Time when due

For purposes of the Sales Representatives Recognition Act, the time at which a commission is due to a sales representative shall be determined in the following manner:

1. If the contract between the principal and the sales representative is in writing and its terms unambiguously and clearly specify when the commission is due, the terms of the contract shall control the determination;

2. If the contract between the principal and the sales representative is not in writing, or if the contract between them is in writing but its terms do not specify when the commission is due or its terms are ambiguous or unclear, the past practice used by the principal and the sales representative shall control the determination; or

3. If neither paragraph 1 or 2 of this section can be used to clearly ascertain when a commission is due, the custom and usage prevalent in this state for the industry of the principal and sales representative shall control the determination.

§ 678. Termination of contract—Payment of commission—Attorney’s fees and court costs

A. If a contract between a principal and a sales representative for the solicitation of wholesale orders is terminated, the principal shall pay the sales representative all commissions due him at the time of the termination within fourteen (14) calendar days of the termination, and shall pay the sales representative all commissions that become due after termination within fourteen (14) calendar days of the date on which the commissions become due.

B. The prevailing party in an action brought under this section is entitled to reasonable attorney’s fees and court costs.

§ 679. Principal—Personal jurisdiction—Waiver of provisions of Act—Availability of rights and remedies—Contracts affected

A. For purposes of the Sales Representatives Recognition Act, a person who enters into an agreement, as a principal, with a sales representative for the solicitation of orders in this state is transacting business in this state and therefore authorizes the exercise of personal jurisdiction over said principal by the court.

B. Any provision in any contract between a sales representative and principal purporting to waive any of the provisions of the Sales Representatives Recognition Act is void.

C. Nothing in the Sales Representatives Recognition Act invalidates or restricts any other or additional right or remedy available to a sales representative, or precludes a sales representative from seeking to recover in one action on all claims against a principal.

D. The provisions of the Sales Representatives Recognition Act shall have no effect on any contract or agreement entered into prior to November 1, 1989.

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