Overturned: Plaintiff loses snow tubing case in PA because their experts could not argue the actions of the defendant were gross negligence.

Association resource guide is used against the defendants to prove the plaintiff’s case.

Bourgeois v. Snow Time, Inc., 2018 Pa. Super. Unpub. LEXIS 2938; 2018 WL 3868670

State: Pennsylvania, Superior Court of Pennsylvania

Plaintiff: Ray M. Bourgeois and Mary Ann I. Bourgeois

Defendant: Snow Time, Inc. and Ski Roundtop Operating Corporation

Plaintiff Claims: negligence, gross negligence, recklessness, and loss of consortium

Defendant Defenses: failure to state a claim and release

Holding: For the defendant

Year: 2018

Summary

In the instant matter, Appellant Ray Bourgeois was seriously injured while snow tubing when his tube crossed folded anti-fatigue rubber kitchen mats which Appellees had placed in the deceleration area of the snow tubing run. Appellants’ theory of the case is that Appellees acted recklessly and with gross negligence by placing the mats at the end of the tubing run to aid in tube deceleration.

Facts

This case stems from an incident that occurred while Appellant Ray Bourgeois (Bourgeois) was snow tubing at Roundtop Mountain Resort (the Resort), which is owned and operated by Appellees. As described by the trial court, Bourgeois

went down the hill on his stomach, [head first] on his tube, and proceeded to reach the run-out area at the bottom of the hill. To aid snow tubers in slowing down and stopping at the bottom of the hill, [Appellees] utilized deceleration mats. On his final run, [Bourgeois’s] snow tube came into contact with a deceleration mat, causing his tube to come to an abrupt stop. [Bourgeois’s] body continued forward in motion after his tube stopped, causing him to land [head first] into the snow. The resulting collision caused a hyperextension of [Bourgeois’s] spinal cord in his neck that has left him quadriplegic with limited mobility from his neck down.

The defendants filed a motion for summary judgment, which was granted and the plaintiff’s appealed.

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

The first issue the appellate court reviewed was the dismissal of the plaintiff’s claims for gross negligence. The appellate court held that “we find that Appellants did not establish a prima facie claim for recklessness or gross negligence”

The court came to that conclusion because no one could state the standard of care needed to prove the actions of the defendant rose to the level of gross negligence.

In this case, the trial court concluded as a matter of law that Appellants could not establish a claim for recklessness or gross negligence. The trial court reasoned that since Appellants’ experts had not articulated the standard of care that Appellees failed to meet, a factfinder could not conclude that Appellees were aware of that standard of care and disregarded it and, thus, acted recklessly or with grossly negligence:

The court first looked at the definition of recklessness and gross negligence.

The Pennsylvania Supreme Court, citing the Restatement (Second) of Torts, found that a defendant acts recklessly, when, inter alia, he owes a duty to the plaintiff and fails to meet that duty. That is, a defendant is reckless when:

he does an act or intentionally fails to do an act which it is his duty to the other to do, knowing or having reason to know of facts which would lead a reasonable man to realize, not only that his conduct creates an unreasonable risk of physical harm to another, but also that such risk is substantially greater than that which is necessary to make his conduct negligent.

The key point is the failure must be an intentional failure. The plaintiff must establish that the defendant consciously acted or failed to act. “Thus, recklessness is more closely aligned with intentional conduct than with negligence, which suggests “unconscious inadvertence.”

To prove gross negligence Pennsylvania laws requires a deviation from the standard of care.

Similarly, an element of gross negligence is the deviation from a standard of care. More precisely, a plaintiff must establish that a defendant’s conduct grossly and flagrantly deviated from “the ordinary standard of care.”

Normally the trier of fact, the jury must make this decision. However, Pennsylvania courts are allowed to decide this issue if the facts are “entirely free from doubt and there is no possibility that a reasonable jury could find gross negligence.”

Normally, to prove the defendant’s duty, expert testimony is required to establish the standard of care that the defendant failed to meet and how the expert deviated from that standard of care.

The plaintiff hired to experts that provided opinions as to the actions of the defendant. The first expert opined that the actions of the defendant were beyond the standard of care, but never provided an opinion about what the standard of care was.

DiNola, however, did not cite or explain the “ordinary standards of conduct for a tubing park operator” from which Appellees’ conduct had departed. He just baldly opined that the use of the mats departs from ordinary standards of conduct.

The second expert did not set forth any standards of care.

Therefore, we are constrained to agree with the trial court that Appellants failed to articulate the appropriate standard of care for the use of deceleration mats. Without such a standard of care, Appellants, as a matter of law, cannot establish Appellees’ duty to Appellants and that Appellees knew or should have known about the standard of care. Since Appellants failed to meet this element of recklessness and gross negligence, the trial court properly granted Appellees’ Motion for Summary Judgment on this issue.

The simple negligence claims were barred by a release. The plaintiff argued on appeal that the release was void because it did not specifically name in the release one of the defendants. However, the court found that the language in the release, “and their owners” was sufficient to cover the defendant when not specifically named in the release.

There was a dissent in this case. The dissent argued the plaintiff should win because the warning on the mats used to decelerate the tubes stated that vinyl tubes were not to be decelerated by mats or other devices. The dissent also argued the opinions of the experts did provide enough information for a decision about the recklessness and gross negligence of the defendants.

In my view, Appellants have put forth enough evidence at this stage for the jury to decide the issue. I disagree with the sole focus of the Majority and trial court on the use of the folded mats, when that is but one piece of Appellants’ claims. See Appellants’ Brief at 45-47 (discussing the facts Appellees knew or should have known, including the conditions contributing to speeds as high as 30-35 miles per hour, the risk of serious injuries when a fast-traveling snow tube abruptly collides with an obstacle, the lack of sufficient run-out area, and the use of mats not designed for use in snow tubing).5 Both experts explained the ways in which Appellees’ conduct deviated from the standard of care, based upon the facts established through depositions of Appellees’ employees and officers. It is clear to me that a jury could have determined that the series of conscious decisions made by Appellees worked together to create an unreasonable risk of physical harm to Bourgeois that was substantially greater than ordinary negligence. Therefore, I would reverse the trial court’s grant of summary judgment and remand for trial.

So Now What?

The plaintiff was rendered a quadriplegic by the accident so a lot of money was at stake. The plaintiff did not hire experts correctly or did not explain what was needed from the experts. This first rule of pleading is proving your case legally on the paperwork and then prove it in the record. The plaintiff failed to do that.

The biggest hurdle was the association resource guide. The National Ski Area Association created a resource guide for tubing hills. The dissenting judge called it the standard of care. The resource guide did not contain any information on using devices to slow tubes. The resource guide said you should have a sufficient run out.

The court did not see the issue as using a mat to slow participants as a violation of the standard to use a run out.

That was the close one in this case.

What do you think? Leave a comment.

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Scotti v Tough Mudder Inc., 63 Misc. 3d 843, 97 N.Y.S.3d 825, 2019 N.Y. Misc. LEXIS 1525, 2019 NY Slip Op 29098, 2019 WL 1511142

Scotti v Tough Mudder Inc., 63 Misc. 3d 843, 97 N.Y.S.3d 825, 2019 N.Y. Misc. LEXIS 1525, 2019 NY Slip Op 29098, 2019 WL 1511142

Supreme Court of New York, Kings County

March 29, 2019, Decided

522905/17

Reporter

63 Misc. 3d 843 *; 97 N.Y.S.3d 825 **; 2019 N.Y. Misc. LEXIS 1525 ***; 2019 NY Slip Op 29098 ****; 2019 WL 1511142

 [****1]  Richard E. Scotti et al., Plaintiffs, v Tough Mudder Incorporated et al., Defendants.

Counsel: Wilson Elser Moskowitz Edelman &Dicker LLP [***1] , New York City (Joshua Cash of counsel), for defendants.

The Bongiorno Law Firm, PLLC, Garden City (Brandon Michael Cruz of counsel), for plaintiffs.

Judges: Hon. Debra Silber, J.S.C.

Opinion by: Debra Silber

Opinion

 [*844]  [**828] Debra Silber, J.

Defendants Tough Mudder Incorporated and Tough Mudder Event Production Incorporated move for an order, pursuant to CPLR 7501 and 7503 (a), to compel arbitration and to stay this action pending resolution of the arbitration proceeding. For the reasons which follow, the motion is denied.

Background and Procedural History

This personal injury action stems from an accident which occurred on July 23, 2016, when the plaintiffs Richard E. Scotti and Joseph Russo participated in the “Tough Mudder,” a physically challenging obstacle course event (hereinafter the TM event), which took place at 1303 Round Swamp Road, Old Bethpage, New York. Defendants Tough Mudder Incorporated and [****2]  Tough Mudder Event Production Incorporated (collectively, Tough Mudder) are the business entities that organized the [*845]  TM event. Plaintiffs commenced the within action on or about November 17, 2017, against Tough Mudder alleging that they each sustained [***2]  injuries as a result of defendants’ negligent operation of an activity at the event, referred to as the “salmon ladder.” Tough Mudder joined issue on or about December 20, 2017, with the service of a verified answer. In their answer, Tough Mudder denied all material allegations and asserted various affirmative defenses, including that the plaintiffs’ action is barred by the participation/registration agreement, which included an arbitration clause.

Tough Mudder now moves, pursuant to CPLR 7501 and 7503, to compel arbitration, arguing that the plaintiffs are barred from pursuing the instant action in this court because they each waived the right to sue by virtue of agreeing to arbitrate any “disputes, controversies, or claims” arising out of their participation in the TM event. Tough Mudder claims that the plaintiffs each entered into an agreement to arbitrate all claims related to their participation in the TM event when they completed an online Internet registration form. In support of this contention, Tough Mudder has submitted the sworn affidavit of Jenna Best, the manager of customer relations for Tough Mudder Incorporated (affirmation of Joshua Cash, exhibit C). Best avers that she is fully [***3]  familiar with the TM event online registration process as it existed in 2016 when the plaintiffs registered for the TM event at issue.¹ Tough Mudder has submitted copies of the online registration forms that the plaintiffs allegedly completed for the TM event (Cash affirmation, exhibit D). Best states that, during the online registration process, the plaintiffs were required to scroll down to a section containing the “Participant Waiver and Course Rules” (hereinafter PWCR), a document version of which [**829]  has been submitted herein (Cash affirmation, exhibit F). She contends that the full text of the PWCR was contained in a box on the screen, which could be read by scrolling down in the text box. Best contends that the initial visible content of the scrollable box, which preceded the full PWCR document, which could be read in its entirety by scrolling down, read as follows:

“Participant Waiver: Tough Mudder Incorporated

“ASSUMPTION OF RISK, WAIVER OF LIABILITY, AND INDEMNITY AGREEMENT

 [*846] “PARTICIPANTS: READ THIS DOCUMENT CAREFULLY BEFORE ACCEPTING. THIS DOCUMENT HAS LEGAL CONSEQUENCES AND WILL AFFECT YOUR LEGAL RIGHTS AND WILL ELIMINATE YOUR ABILITY TO BRING FUTURE LEGAL ACTIONS.” (Cash affirmation, [***4]  exhibit E.)

Best claims the PWCR contained the following “Mediation and Arbitration” provision:

“Mediation and Arbitration: In the event of a legal issue, I agree to engage in good faith efforts to mediate any dispute that might arise. Any agreement reached will be formalized by a written contractual agreement at that time. Should the issue not be resolved by mediation, I agree that all disputes, controversies, or claims arising out of my participation in the TM event shall be submitted to binding arbitration in accordance with the applicable rules of the American Arbitration Association then in effect. The costs of such action shall be shared equally by the parties.

“I further acknowledge and agree that any question, issue or dispute as to the arbitrability of any dispute, controversy, or claim arising out of my participation in the TM event, will be submitted to an arbitrator in accordance with the applicable rules of the American Arbitration Association then in effect. The Arbitration Rules of the American Arbitration Association are available on-line at http://www.adr.org” (Cash affirmation, exhibit F). [***5] 

Below the box containing the scrollable PWCR was another box next to the statement: “I agree to the above waiver.” Best avers that it was necessary for the plaintiffs, or any other registrant, to click on the box to indicate his or her consent to the PWCR in order for the registrant to complete his or her registration for the TM event. According to Best, the Internet registration form cannot proceed to the payment page, and registration cannot be completed, until the registrant checks the box indicating his or her consent to the PWCR (Cash affirmation, exhibit D, ¶ 5). She further avers that both plaintiffs did in fact click on the box indicating their consent to the PWCR, as otherwise they would not have been able to participate in the TM event (id. ¶ 6). Based upon the foregoing, Tough Mudder contends that the plaintiffs agreed to the terms of the online waiver, which included the arbitration clause, and, therefore, are barred from pursuing the instant action.

 [*847] In opposition, plaintiffs argue that the arbitration [***6]  provision at issue is unenforceable because Tough Mudder has failed to establish that they actually agreed to it. In this regard, plaintiffs point out that the webpage where the PWCR was located contained a text box that did not show the entire document. In order to read the full PWCR, including the arbitration provision, plaintiffs contend it would have been necessary to scroll down through many screens of text using the arrows on the right-hand side of the text box. The PWCR fills seven single-spaced pages of text (exhibit F to Cash affirmation). Plaintiffs further argue that Tough Mudder has failed [**830]  to proffer any evidence that either plaintiff actually signed/checked the consent box, or any evidence identifying the computers or electronic devices from which their respective registrations were completed.

Plaintiffs additionally argue that the arbitration clause in the PWCR is unenforceable because it contains a conflicting provision regarding disputes. Plaintiffs point out that the PWCR contains a clause entitled “Venue and Jurisdiction” located several paragraphs before the “Mediation and Arbitration” clause, which states (exhibit F at 3): “I understand that if legal action is [***7]  brought, the appropriate state or federal trial court for the state in which the TM Event is held has the sole and exclusive jurisdiction and that only the substantive laws of the State in which the TM Event is held shall apply.” Plaintiffs argue that this provision clearly conflicts with the arbitration clause located many lines of type below it, thereby rendering it void and unenforceable.

Finally, plaintiffs argue that the entire PWCR agreement, including the purported arbitration provision, is unenforceable because the “Waiver of Liability for Ordinary Negligence” clause (on page three of the PWCR as exhibit F) violates General Obligations Law § 5-326, which prohibits contracts between the owner or operator of any “place of amusement or recreation” from exempting such owner or operator from “liability for damages caused by or resulting from the negligence of the owner, operator or person in charge of such establishment.” In this regard, plaintiffs contend that Tough Mudder’s operation of the TM event obstacle course was clearly operated as a “place of amusement or recreation” within the meaning of General Obligations Law § 5-326. Since the plaintiffs paid a fee [*848]  to use the obstacle course and were injured while engaged [***8]  in that activity, they argue that General Obligations Law § 5-326 renders the entire waiver of liability clause, and all remaining provisions of the PWCR, including the arbitration clause, void and unenforceable.

In reply, Tough Mudder points out that the plaintiffs do not dispute that they each did in fact register for the TM event. In addition, Tough Mudder argues that General Obligations Law § 5-326 is not applicable herein and, therefore, does not invalidate the waiver or any other PWCR provision. In this regard, Tough Mudder maintains that the TM event is distinguishable from the “recreational” activities intended to be covered under the statute, such as horseback riding, auto racing, cycling and skiing, which Tough Mudder characterizes as being “relaxed and undemanding” activities, which “do not necessitate any research or physical preparation.” Tough Mudder argues that the TM event is distinguishable from the foregoing activities in that it is “a rigorous and grueling athletic competition that requires proper training and dedication” (Cash reply affirmation ¶ 8). Tough Mudder further argues that TM events are “unique to their participants,” and pose risks and challenges exclusive to obstacle courses, thereby rendering such events completely [***9]  distinct from the recreational activities engaged in by the “general public” as contemplated by General Obligations Law § 5-326.

In addition, Tough Mudder points out that the PWCR contains a “Severability” provision which states, in relevant part, as follows:

“I understand and agree that this . . . Waiver of Liability . . . is intended to be as broad and inclusive as is permitted by the state in which the TM Event is held and that if any provision shall be found to be . . . void, or for any reason unenforceable, then that provision shall be severed from this Agreement and does not affect the validity and enforceability of any remaining provisions.”

 [**831] In light of the foregoing provision, Tough Mudder argues that, in the event a clause is deemed unenforceable, it does not invalidate any of the remaining provisions of the [****3]  PWCR, including the arbitration clause at issue.

Tough Mudder also argues that the “Venue and Jurisdiction” clause is not contradicted by the “Mediation and Arbitration” [*849]  clause, as the latter clause only mandates arbitration regarding disputes “arising out of [one’s] participation in the TM event.” Therefore, Tough Mudder contends that there are clearly certain circumstances when a state or federal [***10]  trial court would be the appropriate venue for claims that do not arise out of one’s participation in the TM event. However, since plaintiffs’ claims do arise out of their participation, Tough Mudder maintains that arbitration of this matter is required.

Discussion

HN1[] It is well settled that “[a] party to an agreement may not be compelled to arbitrate its dispute with another unless the evidence establishes the parties’ clear, explicit and unequivocal agreement to arbitrate” (God’s Battalion of Prayer Pentecostal Church, Inc. v Miele Assoc., LLP, 6 NY3d 371, 374, 845 NE2d 1265, 812 NYS2d 435 [2006] [internal quotation marks omitted]; see
Matter of Robert Stigwood Org. [Atlantic Recording Corp.], 83 AD2d 123, 126, 443 NYS2d 726 [1981]). When one party seeks to compel the other to arbitrate any disputes between them, the court must first determine whether the parties made a valid arbitration agreement (see
Harriman Group v Napolitano, 213 AD2d 159, 162, 623 NYS2d 224 [1995]). The party seeking arbitration bears the burden of establishing that an agreement to arbitrate exists (see
Seneca Ins. Co. v Secure-Southwest Brokerage, 294 AD2d 211, 212, 741 NYS2d 690 [2002]; Matter of Allstate Ins. Co. v Roseboro, 247 AD2d 379, 380, 667 NYS2d 914 [1998]). The court must draw all inferences in favor of the non-moving party. (Nicosia v Amazon.com, Inc., 834 F3d 220, 229 [2d Cir 2016].)

“The creation of online contracts ‘has not fundamentally changed the principles of contract’ ” (Resorb Networks, Inc. v YouNow.com, 51 Misc 3d 975, 980-981, 30 NYS3d 506 [Sup Ct NY County 2016], quoting Register.com, Inc. v Verio, Inc., 356 F3d 393, 403 [2d Cir 2004]). The question of whether there is agreement to accept the terms of an online contract turns on the particular facts and circumstances. Courts generally look for evidence [***11]  that a website user had actual or constructive notice of the terms by using the website (see
Schnabel v Trilegiant Corp., 697 F3d 110, 120 [2d Cir 2012]). Where the person’s alleged consent is solely online, courts seek to determine whether a reasonably prudent person would be put on notice of the provision in the contract, and whether the terms of the agreement were reasonably communicated to the user (id. at 120; see
Fteja v Facebook, Inc., 841 F Supp 2d 829, 833, 835 [SD NY 2012];  [*850] Starke v Gilt Groupe, Inc., 2014 WL 1652225, *2-3, 2014 US Dist LEXIS 58006, *6-7 [SD NY, Apr. 24, 2014, No. 13 Civ 5497(LLS)]; Jerez v JD Closeouts, LLC, 36 Misc 3d 161, 168, 943 NYS2d 392 [Nassau Dist Ct 2012]). In Specht v Netscape Communications Corp. (306 F3d 17 [2d Cir 2002]), the court emphasized that “[r]easonably conspicuous notice of the existence of contract terms and unambiguous manifestation of assent to those terms by consumers are essential if electronic bargaining is to have integrity and credibility” (id. at 35; see
Starke v Squaretrade, Inc., 2017 WL 3328236, *5, 2017 US Dist LEXIS 122599, *9-12 [ED NY, Aug. 3, 2017, 16-CV-7036 (NGG)], affd
913 F3d 279 [2d Cir 2019]).

In Berkson v Gogo LLC (97 F Supp 3d 359, 394-403 [ED NY 2015]), the four “general types of online consumer contracts  [**832] [are identified as] (a) browsewrap; (b) [****4]  clickwrap; (c) scrollwrap; and (d) sign-in-wrap.” As explained by Judge Weinstein in Berkson:

“Browsewrap exists where the online host dictates that assent is given merely by using the site. Clickwrap refers to the assent process by which a user must click ‘I agree,’ but not necessarily view the contract to which she is assenting. Scrollwrap requires users to physically scroll through an internet agreement and click on a separate ‘I agree’ button in order to assent to the terms and [***12]  conditions of the host website. Sign-in-wrap couples assent to the terms of a website with signing up for use of the site’s services . . . .” (Id. at 394-395; see
Applebaum v Lyft, Inc., 263 F Supp 3d 454, 465 [SD NY 2017] [applying New York law and denying motion to compel arbitration where notice of contract terms was insufficient to bind plaintiff].)

[1] Here, the PWCR at issue appears to be a click-wrap agreement as identified in Berkson in that the clickable box is located directly below the scrollable text box that allegedly contained the full text of the agreement. Only by scrolling down in the text box would the user see all of the terms of the PWCR, including the arbitration clause at issue. However, the user could proceed to complete the registration process without necessarily scrolling down through the text box to view the full document, thereby rendering it a click-wrap agreement. At oral argument, counsel for defendants claimed that it was a scrollwrap agreement, as it was not possible to click “I agree” without [*851]  scrolling through the agreement, but there is nothing in the record to support this claim.²

HN2[] A party may be bound to a click-wrap agreement by clicking a button declaring assent, so long as the party is given a “sufficient opportunity to read the . . . agreement, and assents thereto after being provided with an unambiguous method of accepting or declining the offer.” (Serrano v Cablevision Sys. Corp., 863 F Supp 2d 157, 164 [ED NY 2012]; see also
Whitt v Prosper Funding LLC, 2015 WL 4254062, *4, 2015 US Dist LEXIS 91413, *8-10 [SD NY, July 14, 2015, 1:15-cv-136-GHW]; Kai Peng v Uber Tech., Inc., 237 F Supp 3d 36, 47-48 [ED NY 2017]; Berkson, 97 F Supp 3d at 397.) However, as stated by Judge Koeltl in Applebaum v Lyft, Inc. (263 F Supp 3d at 466),

“[HN3[] a] court cannot presume that a person who clicks on a box that appears on a . . . screen has notice of all contents not only of that page but of other content that requires further action (scrolling, following a link, etc.). The presentation of the online agreement matters: Whether there was notice of the existence of additional contract terms presented on a webpage depends heavily on whether the design and [****5]  content [***14]  of that webpage rendered the existence of terms reasonably conspicuous. Clarity and conspicuousness of arbitration terms are important in securing informed assent.” (Internal quotation marks and citations omitted.)

Thus, on a motion to compel arbitration, a valid agreement to arbitrate exists where the notice of the arbitration provision was reasonably conspicuous, and manifestation [**833]  of assent is unambiguous as a matter of law (see
Specht v Netscape Communications Corp., 306 F3d 17, 28 [2d Cir 2002]). Therefore, [*852]  the issue herein is whether Tough Mudder’s website registration screen put a reasonably prudent user on inquiry notice of the relevant terms of the PWCR, particularly the arbitration clause at issue (see
Applebaum, 263 F Supp 3d at 465). Insofar as it turns on the reasonableness of notice, the enforceability of a web-based agreement is clearly a fact-intensive inquiry (id.; see
Meyer v Uber Tech., Inc., 868 F3d 66, 76 [2d Cir 2017], citing Schnabel v Trilegiant Corp., 697 F3d 110, 124 [2d Cir 2012]).

Here, plaintiffs did not have actual notice of the arbitration provision at issue in this case. However, plaintiffs can still be bound by the contractual terms if there is inquiry notice of the terms and plaintiffs “assent[ed] to [the terms] through the conduct that a reasonable person would understand to constitute assent” (Plazza v Airbnb, Inc., 289 F Supp 3d 537, 548 [SD NY 2018]; see also
Nicosia, 834 F3d at 233). A person is on inquiry notice if a “reasonably prudent offeree would [***15]  be on notice of the term[s] at issue” (Schnabel, 697 F3d at 120 [“ ’Inquiry notice is actual notice of circumstances sufficient to put a prudent man upon inquiry’ ”], quoting Specht v Netscape Communications Corp., 306 F3d 17, 30 n 14 [2d Cir 2002]).

As cited in a recent decision, Corwin v NYC Bike Share, LLC (238 F Supp 3d 475, 489[SD NY 2017]),

“a user’s clicking of a box is not, without more, sufficient to signal their assent to any contract term. The touchstone in most courts’ analysis of the enforceability of clickwrap contracts turns on whether the website provided ‘reasonably conspicuous notice that [users] are about to bind themselves to contract terms’ ” (Specht v Netscape Communications Corp., 306 F3d 17, 32 [2d Cir 2002, Sotomayor, J.]).

In many cases, this becomes a fact-intensive inquiry because “electronic agreements fall along a spectrum in the degree to which they provide notice, and it is difficult to draw bright-line rules because each user interface differs from others in distinctive ways” (Meyer v Kalanick, 200 F Supp 3d 408, 420 [SD NY 2016]). In Meyer, a putative class action claiming price-fixing, the district court found that adequate notice was not given to plaintiff of mandatory arbitration when he registered to use Uber. The screen had a hyperlink to the agreement, but plaintiff did not need to click on it to register as a user. Then, after clicking on it, you needed to click further to read the terms of service and the arbitration provision [***16]  was at the bottom [*853]  of page seven. This was determined to be a “browsewrap” agreement. The Second Circuit, on appeal,³ determined that the issue was whether the plaintiff was on inquiry notice of the arbitration provision by virtue of the hyperlink on the screen, under California Law, and determined that adequate notice was [****6]  given. However, the panel remanded the case to the district court to consider whether defendants had waived their right to arbitration due to the extensive litigation that had already taken place.

The court further notes that online agreements may be revised from time to time, so not only must the court determine whether the party seeking to enforce such an agreement has provided the version seen by the other party at the time the contract was made, but whether the court in any seemingly on point case cited actually rendered its decision based on the same version of the agreement (see
Plazza v Airbnb, Inc., 289 F Supp 3d 537 [SD NY 2018] [archived computer code for 2009 sign-up screen provided to court, along with screenshots of terms of service]).

HN4[] In Berkson, Judge Weinstein of the Eastern District of New York, surveying [**834]  cases from federal courts nationwide, provided a useful set of parameters to guide a court’s inquiry. First, terms of use should not be enforced if a reasonably prudent user would not have [***17]  had at the very least inquiry notice of the terms of the agreement (Berkson, 97 F Supp 3d at 401, citing Nguyen v Barnes & Noble Inc., 763 F3d 1171, 1177 [9th Cir 2014]). Second, terms should be enforced when a user is encouraged by the design and content of the website and the agreement’s webpage to examine the terms, such as when they are clearly available through a hyperlink. Third, terms should not be enforced when they are “buried at the bottom of a webpage or tucked away in obscure corners.” (Id. at 402.) HN5[] Special attention should be paid to whether the site design brings the consumer’s attention to “material terms that would alter what a reasonable consumer would understand to be her default rights when initiating an online . . . transaction,” and, in appropriate cases, such terms should not be enforced even when the contract is otherwise enforceable. (Id.)

“When contractual terms as significant as . . . the right to sue in court are accessible only via a small and distant hyperlink . . . with text about agreement thereto presented even more obscurely, there [*854]  is a genuine risk that a fundamental principle of contract formation will be left in the dust: the requirement for a manifestation of mutual assent” (Meyer v Kalanick, 200 F Supp 3d at 421-422 [internal quotation marks and citation omitted]).

A broad exculpatory clause waiving [***18]  liability for negligence would also certainly qualify as a material term and one that alters a contracting party’s commonly-understood rights.

Here, the court finds that Tough Mudder has failed to establish that the webpage, as it existed in 2016 when the plaintiffs registered for the TM event, provided reasonable notice of the relevant term (the arbitration provision) of the PWCR. In fact, Tough Mudder has failed to set forth sufficiently detailed evidence as to how its online registration webpage appeared to the plaintiffs, or other users/registrants, during the relevant time period. In this regard, the court finds that the affidavit by Ms. Best holds little evidentiary value, as she does not set forth the basis of her personal knowledge of Tough Mudder’s online registration process at the time the plaintiffs registered, or of her familiarity with the applicable computer generated documents (see
Gogos v Modell’s Sporting Goods, Inc., 87 AD3d 248, 253-254, 926 NYS2d 53 [2011]). Additionally, absent from her affidavit is any indication that she was even employed by Tough Mudder at the relevant [****7]  time period.

In addition, the court notes that the purported copies of the plaintiffs’ respective online registration forms (screenshots) submitted by Tough Mudder (exhibit [***19]  D) are black and white copies of poor quality, the text of which is in an extremely small font size and is barely legible. Tough Mudder has not proffered any color copies of any screenshots depicting its online registration process. In addition, the full text of the PWCR, as provided by Tough Mudder, is not a screenshot but a black and white document, consisting of seven pages of single-spaced language, all in the same font and size, with no underlined, hyperlinked or bolded terms. In order to view the “Mediation and Arbitration” clause, the plaintiffs, by using the arrows inside the text box, needed to scroll down significantly beyond what is initially visible, to page four of the seven-page single-spaced PWCR document. The court additionally notes that, as with the entire document, the arbitration provision is neither underlined, bolded nor hyperlinked. Further, since this court has only been provided with a black and white document, [**835]  not screenshots, it is unable to discern how the subject arbitration [*855]  clause actually appeared to the user. HN6[] Indeed, “[i]n the context of web-based contracts, [courts] look to the design and content of the relevant interface to determine if the contract [***20]  terms were presented to the offeree in a way that would put her [or him] on inquiry notice of such terms” (Starke v SquareTrade, Inc., 913 F3d 279, 289-290 [2d Cir 2019], citing Nguyen v Barnes & Noble Inc., 763 F3d 1171, 1177 [9th Cir 2014], and Specht v Netscape Communications Corp., 306 F3d 17, 23 [2d Cir 2002] [where court refused to enforce terms of use that “would have become visible to plaintiffs only if they had scrolled down to the next screen”]). Here, Tough Mudder’s submissions with respect to the “design and content” of its website and the relevant terms of the PWCR, especially the arbitration clause, are woefully inadequate.

The court further notes that the initially visible portion of the online text box containing the scrollable PWCR has an all-caps header stating:

“ASSUMPTION OF RISK, WAIVER OF LIABILITY, AND INDEMNITY AGREEMENT

“PARTICIPANTS: READ THIS DOCUMENT CAREFULLY BEFORE ACCEPTING. THIS DOCUMENT HAS LEGAL CONSEQUENCES AND WILL AFFECT YOUR LEGAL RIGHTS AND WILL ELIMINATE YOUR ABILITY TO BRING FUTURE LEGAL ACTIONS.”

However, while this header specifically draws the user’s attention to certain specified provisions (i.e., assumption of risk, waiver of liability and indemnity) which appear at the beginning of the document (on pages one and three), it makes no reference to the arbitration provision, which appears on page four of the seven-page PWCR document.

Additionally, [***21]  the court notes that the “Venue and Jurisdiction” clause, which appears on page three of the PWCR, states that if “legal action is brought, the appropriate state or federal trial court for the state in which the TM Event is held has the sole and exclusive jurisdiction.” This provision clearly conflicts with the arbitration clause at issue, which mandates that all claims “arising out of [one’s] participation in the TM Event shall be submitted to binding arbitration.” Given that the plaintiffs would have viewed (in the scrollable text box) the “Venue and Jurisdiction” provision first, the court [****8]  finds it highly unlikely that they would have been placed on inquiry notice of the arbitration provision, which appeared on a subsequent page in the agreement.

 [*856] HN7[] As noted above, the party seeking to compel arbitration bears the burden of establishing that an agreement to arbitrate exists (see
Seneca Ins. Co. v Secure-Southwest Brokerage, 294 AD2d at 212), which Tough Mudder has failed to do. Under the circumstances presented here, the court finds that the arbitration provision was not sufficiently conspicuous to place the plaintiffs on inquiry or constructive notice and, therefore, is [***22]  not enforceable (see
Specht v Netscape Communications Corp., 306 F3d at 32; Applebaum, 263 F Supp 3d at 465). Further, due to the conflicting provisions regarding litigation and arbitration, the arbitration provision is void due to ambiguity. Accordingly, Tough Mudder’s motion to stay the action and compel arbitration is denied.

General Obligations Law § 5-326

[2] As to plaintiffs’ argument that the waiver and release provision set forth in the PWCR (exhibit F at 3) is invalid pursuant to General Obligations Law § 5-326, the court agrees. That statute protects consumers from the effect of form releases printed on membership applications and similar documents when such releases are offered in connection with the use of a “place of amusement or recreation” for which a fee [**836]  is paid (General Obligations Law § 5-326; see
Rogowicki v Troser Mgt., 212 AD2d 1035, 623 NYS2d 47 [1995]; Blanc v Windham Mtn. Club, 115 Misc 2d 404, 454 NYS2d 383 [1982], affd
92 AD2d 529, 459 NYS2d 447 [1983]). The terms of this statute apply to the plaintiffs herein, who paid a fee to use Tough Mudder’s obstacle course, which, contrary to Tough Mudder’s assertion, is a place of recreation (see
Leftow v Kutsher’s Country Club Corp., 270 AD2d 233, 234, 705 NYS2d 380 [2000]). Indeed, the nature of the TM event as described by Tough Mudder—a rigorous, athletic competition requiring proper training—is comparable to the other activities, such as horseback riding, auto racing, cycling and skiing, which have been held to be covered by General Obligations Law § 5-326. Furthermore, Tough Mudder’s assertion that, unlike the TM event, such activities are “relaxed [***23]  and undemanding” and “do not necessitate any research or physical preparation” is an inaccurate and absurd distinction. Thus, the PWCR’s waiver provision, waiving defendants’ liability for “ordinary negligence,” violates General Obligations Law § 5-326 and is therefore void (see
Garnett v Strike Holdings LLC, 64 AD3d 419, 882 NYS2d 115 [2009] [applying section 5-326 where plaintiff paid a fee to use the recreational facility];  [*857] Alibey v Tough Mudder Inc., 2018 NY Misc LEXIS 4883, 2018 NY Slip Op 32743(U), *2-3, 2018 WL 5298473, at *2 [Sup Ct, Kings County 2018]; Hansen v Tough Mudder, Inc., Sup Ct, Kings County, 2018, index No. 515072/15).

However, as Tough Mudder correctly argues, the unenforceable provisions of the PWCR do not nullify the entire agreement. HN8[] Where an agreement consists partially of an unlawful objective, the “court may sever the illegal aspects . . . and enforce the legal ones, so long as the illegal aspects are incidental to the legal aspects and are not the main objective of the agreement.” (Mark Hotel LLC v Madison Seventy-Seventh LLC, 61 AD3d 140, 143, 872 NYS2d 111 [2009].) “[W]hether the provisions of a contract are severable depends largely upon the intent of the parties as reflected in the language they employ and the particular circumstantial milieu in which the agreement came into being.” ( [****9] Matter of Wilson, 50 NY2d 59, 65, 405 NE2d 220, 427 NYS2d 977 [1980].)

Here, the waiver of liability provision in the PWCR releasing Tough Mudder from liability, as well as the arbitration clause, are severable from the remainder of the PWCR agreement on the [***24]  ground that the unenforceable provisions are incidental to the legal aspects and not the main objective of the agreement. Further, the severability provision in the PWCR reflects the intent of the parties that the legal provisions of the agreement be severed from any provisions determined to be void and unenforceable.

Conclusion

For the reasons state above, Tough Mudder’s motion to compel arbitration and stay the action is denied.

Restatement 2d of Torts, § 302

Restatement 2d of Torts, § 302

§ 302Risk of Direct or Indirect Harm

A negligent act or omission may be one which involves an unreasonable risk of harm to another through either

(a) the continuous operation of a force started or continued by the act or omission, or

(b) the foreseeable action of the other, a third person, an animal, or a force of nature.

COMMENTS & ILLUSTRATIONS

Comment:

a.    This Section is concerned only with the negligent character of the actor’s conduct, and not with his duty to avoid the unreasonable risk. In general, anyone who does an affirmative act is under a duty to others to exercise the care of a reasonable man to protect them against an unreasonable risk of harm to them arising out of the act. The duties of one who merely omits to act are more restricted, and in general are confined to situations where there is a special relation between the actor and the other which gives rise to the duty. As to the distinction between act and omission, or “misfeasance” and “non-feasance,” see § 314 and Comments. If the actor is under no duty to the other to act, his failure to do so may be negligent conduct within the rule stated in this Section, but it does not subject him to liability, because of the absence of duty.

b.    A special application of Clause (b) of this Section, involving the risk of harm through the negligent or reckless conduct of others, is stated in § 302 A. A second special application of Clause (b), involving the risk of the intentional or criminal conduct of others, is stated in § 302 B.

c.    The actor may be negligent in setting in motion a force the continuous operation of which, without the intervention of other forces or causes, results in harm to the other. He may likewise be negligent in failing to control a force already in operation from other causes, or to prevent harm to another resulting from it. Such continuous operation of a force set in motion by the actor, or of a force which he fails to control, is commonly called “direct causation” by the courts, and very often the question is considered as if it were one of the mechanism of the causal sequence. In many instances, at least, the same problem may be more effectively dealt with as a matter of the negligence of the actor in the light of the risk created.

Illustrations:

1.    A sets a fire on his own land, with a strong wind blowing toward B’s house. Without any other negligence on the part of A, the fire escapes from A’s land and burns down B’s house. A may be found to be negligent toward B in setting the fire.

2.    A discovers on his land a fire originating from some unknown source. Although there is a strong wind blowing toward B’s house, A makes no effort to control the fire. It spreads to B’s land and destroys B’s house. A may be found to be negligent toward B in failing to control the fire.

D.    Probability of intervening action. If the actor’s conduct has created or continued a situation which is harmless if left to itself but is capable of being made dangerous to others by some subsequent action of a human being or animal or the subsequent operation of a natural force, the actor’s negligence depends upon whether he as a reasonable man should recognize such action or operation as probable. The actor as a reasonable man is required to know the habits and propensities of human beings and animals and the normal operation of natural forces in the locality in which he has intentionally created such a situation or in which he knows or should realize that his conduct is likely to create such a situation. (See § 290.) In so far as such knowledge would lead the actor as a reasonable man to recognize a particular action of a human being or animal or a particular operation of a natural force as customary or normal, the actor is required to anticipate and provide against it. The actor is negligent if he intentionally creates a situation, or if his conduct involves a risk of creating a situation, which he should realize as likely to be dangerous to others in the event of such customary or normal act or operation. (See § 303.)

e.    Meaning of “normal.” The actor as a reasonable man is required to anticipate and provide against the normal operation of natural forces. And here the word “normal” is used to describe not only those forces which are constantly and habitually operating but also those forces which operate periodically or with a certain degree of frequency.

Illustration:

1.    A erects a swinging sign over the highway. He is required to keep it in such condition that it will not be blown down, not only by the ordinary breezes which are of everyday occurrence, but also by the gales which experience shows are likely to occur from time to time.

f.    Normal conditions of nature. As stated in § 290, Comments g and h, the actor is required to recognize the fact that a certain number of animals and human beings may act in a way which is not customary for ordinary individuals, and that there are occasional operations of natural forces which are radically different from the normal. It would, however, be impracticable to set a standard of behavior so high as to require every man under all circumstances to take into account the chance of these exceptional actions and operations. Therefore, except where the actor has reason to except the contrary, he is entitled to assume that human beings and animals will act and the natural forces will operate in their usual manner, unless their exceptional action or operation would create a serious chance of grave harm to some valuable interest and there is little utility in the actor’s conduct. Thus a motorist driving along a highway is entitled to assume, unless he has special reason to expect the contrary, that other motorists will keep to the right side of the road, since motor traffic would be unduly hindered unless motorists were free to act on that assumption. On the other hand, a motorist approaching a railroad crossing is not entitled to assume that the railway company will comply with its duty to blow the whistle and ring the bell, but is required to take very great precautions to look out for trains which have not given such notice of their approach.

g.    Abnormal conditions of nature. The actor is not required to anticipate or provide against conditions of nature or the operation of natural forces which are of so unusual a character that the burden of providing for them would be out of all proportion to the chance of their existence or operation and the risk of harm to others involved in their possible existence or operation. It is therefore not necessary that a particular operation of the natural force be unprecedented. The likelihood of its recurrence may be so slight that in the aggregate the burden of constantly providing against it would be out of all proportion great as compared with the magnitude of the risk involved in the possibility of its recurrence.

Illustration:

1.    In 1938 a hurricane caused serious damage in a city in New England. There is no record of any hurricane of similar force within the preceding 130 years. A, thereafter constructing a building in the city in question, is not negligent in failing to adopt an expensive method of construction which would make it safe against damage from a similar hurricane.

2.    The same facts as in Illustration 4, with the additional fact that by 1957 hurricanes of similar violence have recurred four times in New England. A, constructing a building in 1957, may be found to be negligent in failing to adopt a method of construction which would make it safe against such hurricanes.

h.    If the actor knows or should perceive circumstances which would lead a reasonable man to expect a particular operation of a natural force, he is required to provide against it, although, but for such circumstances, it would be so extraordinary that he would be entitled to ignore the possibility of its occurrence.

Illustration:

1.    A moors his boat in a river fed by mountain streams. The moorings are sufficient to prevent the boat from being cast adrift by any stage of water likely to occur at that season of the year. A sudden cloudburst in the mountain causes an extraordinary flood which sweeps his boat away, causing it to collide with the boat of B. A may be found to be negligent if he has or should have such knowledge of the occurrence of the cloudburst as to give him reason to expect the unusual and otherwise unforeseeable flood.

i.    Action of domestic animals. The actor as a reasonable man is both entitled to assume and required to expect that domestic animals will act in accordance with the nature of such animals as a class, unless he knows or should know of some circumstances which should warn him that the particular animal is likely to act in a different manner.

j.    Action of human beings. As stated in § 290, the actor is required to know the common qualities and habits of other human beings, in so far as they are a matter of common knowledge in the community. The actor may have special knowledge of the qualities or habits of a particular individual, over and above the minimum which he is required to know. His act or omission may be negligent because it involves an unreasonable risk of harm to another through the intervention of conduct on the part of the other, or of third persons, which a reasonable man in the actor’s position would anticipate and guard against. As to the actor’s negligence where such foreseeable conduct is itself negligent, see § 302 A. As to his negligence where the foreseeable conduct is intentional or criminal, see § 302 B.

REPORTER’S NOTES

This Section has been changed from the first Restatement by rewording it to include negligent omissions as well as acts. The original Comments j to n inclusive, with the accompanying Illustrations, have been shifted to Sections 302 A and 302 B, which involve special applications of the rule stated in this Section.

Restatement of the Law, Second, Torts

Copyright (c) 1965, The American Law Institute

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