Teresa Brigance, Plaintiff – Appellant, v. Vail Summit Resorts, Inc., Defendant – Appellee.
UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT
2018 U.S. App. LEXIS 397
January 8, 2018, Filed
PRIOR HISTORY: [*1] Appeal from the United States District Court for the District of Colorado. (D.C. No. 1:15-CV-01394-WJM-NYW).
Brigance v. Vail Summit Resorts, Inc., 2017 U.S. Dist. LEXIS 5447 (D. Colo., Jan. 13, 2017)
OVERVIEW: HOLDINGS: -In an action brought by an injured skier, an examination of each of the Jones v. Dressel factors for determining the enforceability of an exculpatory agreement led to the conclusion that none of them precluded enforcement of a Ski School Waiver or Lift Ticket Waiver. The factors included the existence of a duty to the public, the nature of the service performed, whether the contract was fairly entered into, and whether the intention of the parties was expressed in clear and unambiguous language; -The district court properly determined that the provisions of the Colorado Ski Safety Act of 1979 and the Passenger Tramway Safety Act had no effect on the enforceability of defendant ski resort’s waivers. Colorado law had long permitted parties to contract away negligence claims in the recreational context; -The skier’s claims were barred by the waivers.
OUTCOME: The court affirmed the district court’s grant of summary judgment in favor of the ski resort and the partial grant of the resort’s motion to dismiss.
CORE TERMS: ski, exculpatory, skiing, lift ticket, recreational, lesson, lift, ski area, practical necessity, recreational activities, public policies, bargaining, skier, inherent dangers, unenforceable, service provided, essential service, inherent risks, discovery, holder, signer, summary judgment, riding, equine, common law, ski lifts, negligence per se, quotation marks omitted, practically, harmless
COUNSEL: Trenton J. Ongert (Joseph D. Bloch with him on the briefs), Bloch & Chapleau, LLC, Denver, Colorado, for Plaintiff – Appellant.
Michael J. Hofmann, Bryan Cave LLP, Denver, Colorado, for Defendant – Appellee.
JUDGES: Before PHILLIPS, KELLY, and McHUGH, Circuit Judges.
OPINION BY: McHUGH
McHUGH, Circuit Judge.
During a ski lesson at Keystone Mountain Resort (“Keystone”), Doctor Teresa Brigance’s ski boot became wedged between the ground and the chairlift. She was unable to unload but the chairlift kept moving, which caused her femur to fracture. Dr. Brigance filed suit against Vail Summit Resorts, Inc. (“VSRI”), raising claims of (1) negligence, (2) negligence per se, (3) negligent supervision and training, (4) negligence (respondeat superior), (5) negligent hiring, and (6) violation of the Colorado Premises Liability Act (the “PLA”), Colo. Rev. Stat. § 13-21-115. The district court dismissed Dr. Brigance’s negligence and negligence per se claims at the motion to dismiss stage. After discovery, the district court granted VSRI’s motion for summary judgment on the remaining claims, concluding the waiver Dr. Brigance signed before participating [*2] in her ski lesson, as well as the waiver contained on the back of her lift ticket, are enforceable and bar her claims against VSRI. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.
A. Factual Background
Keystone is a ski resort located in Colorado that is operated by VSRI. In March 2015, Dr. Brigance visited Keystone with her family and participated in a ski lesson. At the time, ski lesson participants, including Dr. Brigance, were required to sign a liability waiver (the “Ski School Waiver”) before beginning their lessons. The Ski School Waiver signed1 by Dr. Brigance contained, among other things, the following provisions:
RESORT ACTIVITY, SKI SCHOOL, & EQUIPMENT RENTAL WARNING, ASSUMPTION OF RISK, RELEASE OF LIABILITY & INDEMNITY AGREEMENT
THIS IS A RELEASE OF LIABILITY & WAIVER OF CERTAIN LEGAL RIGHTS.
. . .
2. I understand the dangers and risks of the Activity and that the Participant ASSUMES ALL INHERENT DANGERS AND RISKS of the Activity, including those of a “skier” (as may be defined by statute or other applicable law).
3. I expressly acknowledge and assume all additional risks and dangers that may result in . . . physical injury and/or death above and beyond the inherent dangers [*3] and risks of the Activity, including but not limited to: Falling; free skiing; following the direction of an instructor or guide; . . . equipment malfunction, failure or damage; improper use or maintenance of equipment; . . . the negligence of Participant, Ski Area employees, an instructor . . . or others; . . . lift loading, unloading, and riding; . . . . I UNDERSTAND THAT THE DESCRIPTION OF THE RISKS IN THIS AGREEMENT IS NOT COMPLETE AND VOLUNTARILY CHOOSE FOR PARTICIPANT TO PARTICIPATE IN AND EXPRESSLY ASSUME ALL RISKS AND DANGERS OF THE ACTIVITY, WHETHER OR NOT DESCRIBED HERE, KNOWN OR UNKNOWN, INHERENT OR OTHERWISE.
4. Participant assumes the responsibility . . . for reading, understanding and complying with all signage, including instructions on the use of lifts. Participant must have the physical dexterity and knowledge to safely load, ride and unload the lifts. . . .
. . .
6. Additionally, in consideration for allowing the Participant to participate in the Activity, I AGREE TO HOLD HARMLESS, RELEASE, INDEMNIFY, AND NOT TO SUE [VSRI] FOR ANY . . . INJURY OR LOSS TO PARTICIPANT, INCLUDING DEATH, WHICH PARTICIPANT MAY SUFFER, ARISING IN WHOLE OR IN PART OUT OF PARTICIPANT’S PARTICIPATION [*4] IN THE ACTIVITY, INCLUDING, BUT NOT LIMITED TO, THOSE CLAIMS BASED ON [VSRI’s] ALLEGED OR ACTUAL NEGLIGENCE . . . .
Aplt. App’x at 117 (emphasis in original).
1 Although VSRI did not produce an original or copy of the Ski School Waiver signed by Dr. Brigance, it provided evidence that all adults participating in ski lessons at Keystone are required to sign a waiver and that the Ski School Waiver was the only waiver form used by VSRI for adult ski lessons during the 2014-15 ski season. Before it was clear that VSRI could not locate its copy of the signed waiver, Dr. Brigance indicated in discovery responses and deposition testimony that she signed a waiver before beginning ski lessons. See Brigance v. Vail Summit Resorts, Inc. (“Brigance II“), No. 15-cv-1394-WJM-NYW, 2017 U.S. Dist. LEXIS 5447, 2017 WL 131797, at *3-4 (D. Colo. Jan. 13, 2017). Based on this evidence and Dr. Brigance’s failure to argue “that a genuine question remains for trial as to whether she did in fact sign the Ski School Waiver in the form produced or whether she agreed to its terms,” 2017 U.S. Dist. LEXIS 5447, [WL] at *4, the district court treated her assent to the Ski School Waiver as conceded and concluded that “there is no genuine dispute as to whether [Dr. Brigance] consented to the terms of the Ski School Waiver,” id.
On appeal, Dr. Brigance offers no argument and points to no evidence suggesting that the district court’s conclusion was erroneous in light of the evidence and arguments before it. Instead, she merely denies having signed the Ski School Waiver and reiterates that VSRI has yet to produce a signed copy of the waiver. But in response to questioning at oral argument, counsel for Dr. Brigance conceded that this court could proceed with the understanding that Dr. Brigance signed the Ski School Waiver. Oral Argument at 0:41-1:23, Brigance v. Vail Summit Resorts, Inc., No. 17-1035 (10th Cir. Nov. 13, 2017). Three days later, counsel for Dr. Brigance filed a notice with the court effectively revoking that concession.
Dr. Brigance’s assertion that she did not execute the Ski School Waiver is forfeited because she failed to adequately raise it as an issue below. Avenue Capital Mgmt. II, L.P. v. Schaden, 843 F.3d 876, 884 (10th Cir. 2016); see also Brigance II, 2017 U.S. Dist. LEXIS 5447, 2017 WL 131797, at *4 (“[N]otwithstanding the absence of a signed copy of the [Ski School Waiver], [Dr. Brigance] does not argue that this issue presents a genuine dispute requiring trial.”). But even if we were to entertain the argument, it would fail to defeat summary judgment. Despite her obfuscation, VSRI’s inability to produce the signed Ski School Waiver and Dr. Brigance’s assertions that she did not sign the waiver–which contradict her discovery responses and deposition testimony–are insufficient to establish that the district court erred in concluding that no genuine dispute exists as to whether Dr. Brigance agreed to the terms of the waiver. [HN1] “Although the burden of showing the absence of a genuine issue of material fact” rests with the movant at summary judgment, “the nonmovant must do more than simply show that there is some metaphysical doubt as to the material facts.” Champagne Metals v. Ken-Mac Metals, Inc., 458 F.3d 1073, 1084 (10th Cir. 2006) (internal quotation marks omitted). Indeed, the
party asserting that a fact . . . is genuinely disputed must support the assertion by: (A) citing to particular parts of materials in the record . . . ; or (B) showing that the materials cited do not establish the absence . . . of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.
Fed. R. Civ. P. 56(c)(1)(A)–(B). Dr. Brigance made no such showing below, nor does she attempt to do so on appeal.
In addition, Dr. Brigance’s husband purchased a lift ticket enabling her to ride the ski lifts at Keystone. Dr. Brigance received the ticket from her husband and used it to ride the Discovery Lift. The lift ticket contained a warning and liability waiver (the “Lift Ticket Waiver”) on its back side, which provides in pertinent part:
HOLDER AGREES AND UNDERSTANDS THAT SKIING . . . AND USING A SKI AREA, INCLUDING LIFTS, CAN BE HAZARDOUS.
Under state law, the Holder of this pass assumes the risk of any injury to person or property resulting from any of the inherent dangers and risks of skiing and may not recover from the [*5] ski area operator for any injury resulting from any of the inherent dangers and risks of skiing. Other risks include cliffs, extreme terrain, jumps, and freestyle terrain. Holder is responsible for having the physical dexterity to safely load, ride and unload the lifts and must control speed and course at all times. . . . Holder agrees to ASSUME ALL RISKS, inherent or otherwise. Holder agrees to hold the ski area harmless for claims to person or property. . . .
. . .
NO REFUNDS. NOT TRANSFERABLE. NO RESALE.
Id. at 121 (emphasis in original).
After receiving some instruction during her ski lesson on how to load and unload from a chairlift, Dr. Brigance boarded the Discovery Lift. As Dr. Brigance attempted to unload from the lift, her left ski boot became wedged between the ground and the lift. Although she was able to stand up, she could not disengage the lift because her boot remained squeezed between the ground and the lift. Eventually, the motion of the lift pushed Dr. Brigance forward, fracturing her femur.
B. Procedural Background
Dr. Brigance filed suit against VSRI in the United States District Court for the District of Colorado as a result of the injuries she sustained while attempting to unload [*6] from the Discovery Lift.2
In her amended complaint Dr. Brigance alleged that the short distance between the ground and the Discovery Lift at the unloading point–coupled with the inadequate instruction provided by her ski instructor, the chairlift operator’s failure to stop the lift, and VSRI’s deficient hiring, training, and supervision of employees–caused her injuries. She consequently asserted the following six claims against VSRI: (1) negligence; (2) negligence per se; (3) negligent supervision and training; (4) negligence (respondeat superior); (5) negligent hiring; and (6) liability under the PLA.
2 The district court properly invoked diversity jurisdiction because Dr. Brigance is a citizen of Florida and VSRI is a Colorado corporation with its principal place of business in Colorado, and the amount in controversy exceeds $75,000. See 28 U.S.C. §§ 1332(a), (c)(1)(B)–(C).
VSRI moved to dismiss all claims raised by Dr. Brigance with the exception of her respondeat superior and PLA claims. The district court granted in part and denied in part VSRI’s motion. Brigance v. Vail Summit Resorts, Inc. (“Brigance I“), No. 15-cv-1394-WJM-NYM, 2016 U.S. Dist. LEXIS 31662, 2016 WL 931261, at *1-5 (D. Colo. Mar. 11, 2016). It dismissed Dr. Brigance’s negligence claim as preempted by the PLA. 2016 U.S. Dist. LEXIS 31662, [WL] at *3-4. It also dismissed her negligence per se claim, concluding that she “fail[ed] to identify any requirement” of the Colorado Ski Safety Act of 1979 (the “SSA”), Colo. Rev. Stat. §§ 33-44-101 to -114, that VSRI had allegedly violated. Brigance I, 2016 U.S. Dist. LEXIS 31662, 2016 WL 931261, at *2. In dismissing this claim, the district court also held that the [*7] provisions of the Passenger Tramway Safety Act (the “PTSA”), Colo. Rev. Stat. §§ 25-5-701 to -721, relied upon by Dr. Brigance “do[ ] not provide a statutory standard of care which is adequate to support [a] claim for negligence per se.” Brigance I, 2016 U.S. Dist. LEXIS 31662, 2016 WL 931261, at *2 (emphasis omitted). But the district court refused to dismiss Dr. Brigance’s claims regarding negligent supervision and training and negligent hiring. 2016 U.S. Dist. LEXIS 31662, [WL] at *4-5.
Upon completion of discovery, VSRI moved for summary judgment on the basis that the Ski School Waiver and Lift Ticket Waiver completely bar Dr. Brigance’s remaining claims. In the alternative, VSRI argued that summary judgment was appropriate because (1) Dr. Brigance failed to satisfy the elements of her PLA claim and (2) her common-law negligence claims are preempted by the PLA and otherwise lack evidentiary support. Dr. Brigance opposed the motion, contending in part that the waivers are unenforceable under the SSA and the four-factor test established by the Colorado Supreme Court in Jones v. Dressel, 623 P.2d 370 (Colo. 1981). Dr. Brigance also asserted that her common-law negligence claims are not preempted by the PLA and that she presented sufficient evidence to allow her claims to be heard by a jury.
The district court granted VSRI’s motion. Brigance v. Vail Summit Resorts, Inc. (“Brigance II“), No. 15-cv-1394-WJM-NYW, 2017 U.S. Dist. LEXIS 5447, 2017 WL 131797, at *10 (D. Colo. Jan. 13, 2017) [*8] . It determined that the Ski School Waiver and Lift Ticket Waiver are enforceable under the factors established by the Colorado Supreme Court in Jones and that the SSA and PTSA do not otherwise invalidate the waivers. 2017 U.S. Dist. LEXIS 5447, [WL] at *5-9. It then determined that all of Dr. Brigance’s remaining claims fall within the broad scope of the waivers and are therefore barred. 2017 U.S. Dist. LEXIS 5447, [WL] at *10. This appeal followed.
Dr. Brigance challenges the district court’s enforcement of both the Ski School Waiver and Lift Ticket Waiver, as well as the dismissal of her negligence and negligence per se claims. [HN2] “[B]ecause the district court’s jurisdiction was based on diversity of citizenship, [Colorado] substantive law governs” our analysis of the underlying claims and enforceability of the waivers. Sylvia v. Wisler, 875 F.3d 1307, 2017 WL 5622916, at *3 (10th Cir. 2017) (internal quotation marks omitted). We “must therefore ascertain and apply [Colorado] law with the objective that the result obtained in the federal court should be the result that would be reached in [a Colorado] court.” Id. (internal quotation marks omitted). In doing so, “we must defer to the most recent decisions of the state’s highest court,” although “stare [*9] decisis requires that we be bound by our own interpretations of state law unless an intervening decision of the state’s highest court has resolved the issue.” Id. (internal quotation marks omitted).
Although the substantive law of Colorado governs our analysis of the waivers and underlying claims, [HN3] federal law controls the appropriateness of a district court’s grant of summary judgment and dismissal of claims under Federal Rule of Civil Procedure 12(b)(6). See Stickley v. State Farm Mut. Auto. Ins. Co., 505 F.3d 1070, 1076 (10th Cir. 2007). We therefore review the district court’s grant of summary judgment and dismissal of claims pursuant to Rule 12(b)(6) de novo, applying the same standards as the district court. Id.; see also Sylvia, 875 F.3d 1307, 2017 WL 5622916, at *4, 16. “However, we may affirm [the] district court’s decision[s] on any grounds for which there is a record sufficient to permit conclusions of law, even grounds not relied upon by the district court.” Stickley, 505 F.3d at 1076 (internal quotation marks omitted).
“Summary judgment should be granted if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Sylvia, 875 F.3d 1307, 2017 WL 5622916, at *16 (internal quotation marks omitted). Because it is undisputed that all of Dr. Brigance’s claims–including those dismissed pursuant [*10] to Rule 12(b)(6)–fall within the broad scope of either waiver if they are deemed enforceable under Colorado law, the first, and ultimately only, question we must address is whether the Ski School Waiver and Lift Ticket Waiver are enforceable.
[HN4] Under Colorado law, “exculpatory agreements have long been disfavored,” B & B Livery, Inc. v. Riehl, 960 P.2d 134, 136 (Colo. 1998), and it is well-established that such agreements cannot “shield against a claim for willful and wanton conduct, regardless of the circumstances or intent of the parties,” Boles v. Sun Ergoline, Inc., 223 P.3d 724, 726 (Colo. 2010). See also Espinoza v. Ark. Valley Adventures, LLC, 809 F.3d 1150, 1152 (10th Cir. 2016) (“Under Colorado common law, it’s long settled that courts will not give effect to contracts purporting to release claims for intentional, knowing, or reckless misconduct.”). “But claims of negligence are a different matter. Colorado common law does not categorically prohibit the enforcement of contracts seeking to release claims of negligence.” Espinoza, 809 F.3d at 1152; accord Chadwick v. Colt Ross Outfitters, Inc., 100 P.3d 465, 467 (Colo. 2004). Neither does it always preclude exculpatory agreements as to claims of negligence per se. Espinoza, 809 F.3d at 1154-55.
Accordingly, [HN5] the Colorado Supreme Court has instructed courts to consider the following four factors when determining the enforceability of an exculpatory agreement: “(1) the existence of a duty to the public; (2) the nature of the service performed; (3) whether the [*11] contract was fairly entered into; and (4) whether the intention of the parties is expressed in clear and unambiguous language.” J/ones, 623 P.2d at 376. It appears that if an exculpatory agreement satisfies any of the four factors, it must be deemed unenforceable. Although consideration of these factors is generally sufficient to determine the enforceability of exculpatory agreements, the Colorado Supreme Court has clarified that “other public policy considerations” not necessarily encompassed in the Jones factors may invalidate exculpatory agreements. See Boles, 223 P.3d at 726 (“[M]ore recently, we have identified other public policy considerations invalidating exculpatory agreements, without regard to the Jones factors.”); see, e.g., Cooper v. Aspen Skiing Co., 48 P.3d 1229, 1232-37 (Colo. 2002), superseded by statute, Colo. Rev. Stat. § 13-22-107.
The district court examined each of the Jones factors and concluded that none of them preclude enforcement of the Ski School Waiver or Lift Ticket Waiver. Brigance II, 2017 U.S. Dist. LEXIS 5447, 2017 WL 131797, at *5-8. It also determined that the provisions of the SSA and PTSA “have no effect on the enforceability” of the waivers. 2017 U.S. Dist. LEXIS 5447, [WL] at *9. We agree.
A. The Jones Factors
1. Existence of a Duty to the Public
[HN6] The first Jones factor requires us to examine whether there is an “existence of a duty to the public,” Jones, 623 P.2d at 376, or, described another way, “whether [*12] the service provided involves a duty to the public,” Mincin v. Vail Holdings, Inc., 308 F.3d 1105, 1109 (10th Cir. 2002). The Colorado Supreme Court has not specified the precise circumstances under which an exculpatory agreement will be barred under this factor, but it has explained that unenforceable exculpatory agreements
generally involve businesses suitable for public regulation; that are engaged in performing a public service of great importance, or even of practical necessity; that offer a service that is generally available to any members of the public who seek it; and that possess a decisive advantage of bargaining strength, enabling them to confront the public with a standardized adhesion contract of exculpation.
Chadwick, 100 P.3d at 467. The Colorado Supreme Court has expressly “distinguished businesses engaged in recreational activities” from the foregoing class of businesses because recreational activities “are not practically necessary” and therefore “the provider[s of such activities] owe[ ] no special duty to the public.” Id.; see also Espinoza, 809 F.3d at 1153 (“Though some businesses perform essential public services and owe special duties to the public, the [Colorado Supreme] [C]ourt has held that ‘businesses engaged in recreational activities’ generally do not.” (quoting Chadwick, 100 P.3d at 467)).
And, indeed, [*13] Colorado courts examining exculpatory agreements involving recreational activities under Colorado law have almost uniformly concluded that the first Jones factor does not invalidate or render unenforceable the relevant agreement. See, e.g., Chadwick, 100 P.3d at 467-69; Jones, 623 P.2d at 376-78; Stone v. Life Time Fitness, Inc., No. 15CA0598, 2016 COA 189M, 2016 WL 7473806, at *3 (Colo. App. Dec. 29, 2016) (unpublished) (“The supreme court has specified that no public duty is implicated if a business provides recreational services.”), cert. denied, No. 17SC82, 2017 Colo. LEXIS 572, 2017 WL 2772252 (Colo. Jun. 26, 2017); Hamill v. Cheley Colo. Camps, Inc., 262 P.3d 945, 949 (Colo. App. 2011) (“Our supreme court has held that businesses engaged in recreational activities that are not practically necessary, such as equine activities, do not perform services implicating a public duty.”); see also Espinoza, 809 F.3d at 1153-56; Mincin, 308 F.3d at 1110-11; Patterson v. Powdermonarch, L.L.C., No. 16-cv-00411-WYD-NYW, 2017 U.S. Dist. LEXIS 151229, 2017 WL 4158487, at *5 (D. Colo. July 5, 2017) (“Businesses engaged in recreational activities like [defendant’s ski services] have been held not to owe special duties to the public or to perform essential public services.”); Brooks v. Timberline Tours, Inc., 941 F. Supp. 959, 962 (D. Colo. 1996) (“Providing snowmobile tours to the public does not fall within” the first Jones factor.); Lahey v. Covington, 964 F. Supp. 1440, 1445 (D. Colo. 1996) (holding white-water rafting is recreational in nature and is therefore “neither a matter of great public importance nor a matter of practical necessity” (internal quotation marks omitted)), aff’d sub nom., Lahey v. Twin Lakes Expeditions, Inc., 113 F.3d 1246 (10th Cir. 1997).
The relevant services provided by VSRI–skiing and ski lessons–are [*14] clearly recreational in nature. Like horseback riding and skydiving services, see Chadwick, 100 P.3d at 467; Jones, 623 P.2d at 377, skiing and ski lessons are not of great public importance or “matter[s] of practical necessity for even some members of the public,” Jones, 623 P.2d at 377. They therefore do not implicate the type of duty to the public contemplated in the first Jones factor. Although it appears the Colorado Supreme Court and Colorado Court of Appeals have yet to address the first Jones factor within the context of skiing or ski lesson services, the few courts that have considered similar issues have reached the unsurprising conclusion that ski-related services are recreational activities and do not involve a duty to the public. See, e.g., Rumpf v. Sunlight, Inc., No. 14-cv-03328-WYD-KLM, 2016 U.S. Dist. LEXIS 107946, 2016 WL 4275386, at *3 (D. Colo. Aug. 3, 2016); Potter v. Nat’l Handicapped Sports, 849 F. Supp. 1407, 1409 (D. Colo. 1994); Bauer v. Aspen Highlands Skiing Corp., 788 F. Supp. 472, 474 (D. Colo. 1992).
Dr. Brigance fails to address the principle “that businesses engaged in recreational activities that are not practically necessary . . . do not perform services implicating a public duty.” Hamill, 262 P.3d at 949. Instead, she contends VSRI owes a duty to the public because the ski and ski lesson services provided by VSRI implicate a number of additional factors the California Supreme Court relied upon in Tunkl v. Regents of Univ. of Cal., 60 Cal. 2d 92, 32 Cal. Rptr. 33, 383 P.2d 441, 444-46 (Cal. 1963), to determine whether an exculpatory agreement should be deemed invalid as affecting [*15] public interest.3 Specifically, Dr. Brigance contends VSRI owes a duty to the public because the Colorado ski industry is subject to express regulation under the SSA and PTSA, VSRI is willing to perform its services for any member of the public who seeks them, VSRI maintains an advantage in bargaining strength, and skiers are placed under the complete control of VSRI when riding their lifts.
3 Dr. Brigance separately argues that the waivers are invalid under the provisions and public policies contained within the SSA, PTSA, and PLA. Although she incorporates these arguments in her analysis of the first Jones factor, we address them separately in Section II.B, infra.
The Colorado Supreme Court has cited Tunkl and noted its relevance in determining whether a business owes a duty to the public. Jones, 623 P.2d at 376-77. But when analyzing the first Jones factor, particularly within the context of recreational services, courts applying Colorado law focus on and give greatest weight to whether the party seeking to enforce an exculpatory agreement is engaged in providing services that are of great public importance or practical necessity for at least some members of the public. See, e.g., Espinoza, 809 F.3d at 1153-54; Rowan v. Vail Holdings, Inc., 31 F. Supp. 2d 889, 896-97 (D. Colo. 1998); Potter, 849 F. Supp. at 1409; Jones, 623 P.2d at 376-77; Stone, 2016 COA 189M, 2016 WL 7473806, at *3; Hamill, 262 P.3d at 949. And the additional factors listed by Dr. Brigance are insufficient to establish that the recreational services offered by VSRI are of great public importance or practically necessary. An activity does not satisfy the first Jones factor simply because it is subject to state regulation. [*16] As we have explained, the first Jones factor does not
ask whether the activity in question is the subject of some sort of state regulation. Instead, [it] ask[s] whether the service provided is of “great importance to the public,” a matter of “practical necessity” as opposed to (among other things) a “recreational one. [Jones,] 623 P.2d at 376-77. And the distinction the Jones factors draw between essential and recreational services would break down pretty quickly if the presence of some state regulation were enough to convert an otherwise obviously “recreational” service into a “practically necessary” one. After all, state law imposes various rules and regulations on service providers in most every field these days–including on service providers who operate in a variety of clearly recreational fields.
Espinoza, 809 F.3d at 1154; see also Chadwick, 100 P.3d at 467-68. Furthermore, Dr. Brigance’s argument regarding VSRI’s bargaining strength is more properly addressed under the third Jones factor, and her remaining arguments concerning VSRI’s willingness to provide services to the public and its control over skiers are not sufficiently compelling to sway us from departing from the principle “that [HN7] no public duty is implicated if a business provides recreational services.” [*17] Stone, 2016 COA 189M, 2016 WL 7473806, at *3.
The district court therefore did not err in concluding that the first Jones factor does not render the Ski School Waiver and the Lift Ticket Waiver unenforceable.
2. Nature of the Service Performed
[HN8] Under the second Jones factor, we examine “the nature of the service performed.” Jones, 623 P.2d at 376. Analysis of this factor is linked to and in many respects overlaps the analysis conducted under the first Jones factor, as it calls for an examination of whether the service provided is an “essential service” or a “matter of practical necessity.” See Espinoza, 809 F.3d at 1153; Stone, 2016 COA 189M, 2016 WL 7473806, at *3; Hamill, 262 P.3d at 949. As is evident from our discussion of the first Jones factor, Colorado “courts have consistently deemed recreational services to be neither essential nor a matter of practical necessity.” Stone, 2016 COA 189M, 2016 WL 7473806, at *3; see also Chadwick, 100 P.3d at 467 (noting “recreational activities . . . are not practically necessary”); Jones, 623 P.2d at 377-78 (holding the skydiving service provided by defendants “was not an essential service”); Hamill, 262 P.3d at 949 (acknowledging recreational camping and horseback riding services are not essential or matters of practical necessity). And as previously established, the ski and ski lesson services offered by VSRI are recreational in nature and therefore, like other recreational activities examined by this and other [*18] courts, cannot be deemed essential or of practical necessity. See, e.g., Mincin, 308 F.3d at 1111 (“[M]ountain biking is not an essential activity.”); Squires ex rel. Squires v. Goodwin, 829 F. Supp. 2d 1062, 1073 (D. Colo. 2011) (noting the parties did not dispute that skiing “is a recreational service, not an essential service”); Rowan, 31 F. Supp. 2d at 897 (“[S]kiing is not an essential service.”); Potter, 849 F. Supp. at 1410 (disagreeing with plaintiff’s argument that “ski racing for handicapped skiers rises to the level of an essential service [as] contemplated by Colorado law”); Bauer, 788 F. Supp. at 474 (noting “free skiing[, equipment rentals, and ski lessons] for travel agents do[ ] not rise to the level of essential service[s] contemplated by Colorado law.”).
Dr. Brigance raises no argument specific to this factor other than asserting that “the ski industry is a significant revenue generator for the State of Colorado” and the services provided by VSRI are “public [in] nature.” Aplt. Br. 47. Dr. Brigance cites no authority suggesting that either factor would render the recreational services provided by VSRI essential in nature. And given Colorado courts’ assertion that “recreational services [are] neither essential nor . . . matter[s] of practical necessity,” Stone, 2016 COA 189M, 2016 WL 7473806, at *3, we conclude the district court did not err in determining that the second Jones factor also does not dictate that the waivers be [*19] deemed unenforceable.
3. Whether the Waivers Were Fairly Entered Into
[HN9] The third Jones factor requires us to examine “whether the contract was fairly entered into.” Jones, 623 P.2d at 376. “A contract is fairly entered into if one party is not so obviously disadvantaged with respect to bargaining power that the resulting contract essentially places him at the mercy of the other party’s negligence.” Hamill, 262 P.3d at 949 (citing Heil Valley Ranch, Inc. v. Simkin, 784 P.2d 781, 784 (Colo. 1989)). When engaging in this analysis, we examine the nature of the service involved, Espinoza, 809 F.3d at 1156, the circumstances surrounding the formation of the contract, id., and whether the services provided are available from a source other than the party with which the plaintiff contracted,
see Stone, 2016 COA 189M, 2016 WL 7473806, at *3; Hamill, 262 P.3d at 950.
The Colorado Court of Appeals has identified “[p]ossible examples of unfair disparity in bargaining power [as] includ[ing] agreements between employers and employees and between common carriers or public utilities and members of the public.” Stone, 2016 COA 189M, 2016 WL 7473806, at *3. It has also expressly acknowledged an unfair disparity in bargaining power in residential landlord-tenant relationships, presumably based in part on its holding “that housing rental is a matter of practical necessity to the public.” Stanley v. Creighton Co., 911 P.2d 705, 708 (Colo. App. 1996). But the Colorado Court of Appeals has also held that “this type of unfair disparity [*20] is generally not implicated when a person contracts with a business providing recreational services.” Stone, 2016 COA 189M, 2016 WL 7473806, at *3. This is because recreational activities are not essential services or practically necessary, and therefore a person is not “at the mercy” of a business’s negligence when entering an exculpatory agreement involving recreational activities. Hamill, 262 P.3d at 949-50. As we have previously explained, “Colorado courts have repeatedly emphasized that . . . because recreational businesses do not provide ‘essential’ services of ‘practical necessity[,]’ individuals are generally free to walk away if they do not wish to assume the risks described” in an exculpatory agreement. Espinoza, 809 F.3d at 1157; see also Mincin, 308 F.3d at 1111 (noting that a disparity of bargaining power may be created by the “practical necessity” of a service, but that no such necessity existed because “mountain biking is not an essential activity” and therefore the plaintiff “did not enter into the contract from an inferior bargaining position”).
We reiterate, at the risk of redundancy, that the ski and ski lesson services offered by VSRI are recreational in nature and do not constitute essential services or matters of practical necessity. As a result, Dr. Brigance did not enter the Ski [*21] School Waiver or Lift Ticket Waiver from an unfair bargaining position because she was free to walk away if she did not wish to assume the risks or waive the right to bring certain claims as described in the waivers. This conclusion is supported by a number of cases involving similar recreational activities, including those we have previously addressed under the first two Jones factors. See, Jones, 623 P.2d at 377-78 (holding an exculpatory release related to skydiving services was not an unenforceable adhesion contract “because the service provided . . . was not an essential service” and therefore the defendant “did not possess a decisive advantage of bargaining strength over” the plaintiff); see also Squires, 829 F. Supp. 2d at 1071 (“Where, as here, the service provided is a recreational service and not an essential service, there is no unfair bargaining advantage.”); Day v. Snowmass Stables, Inc., 810 F. Supp. 289, 294 (D. Colo. 1993) (“[T]he recreational services offered by [defendant] were not essential and, therefore, [it] did not enjoy an unfair bargaining advantage.”); Bauer, 788 F. Supp. at 475 (“Here, defendants’ recreational services were not essential and, therefore, they did not enjoy an unfair bargaining advantage.”).
Moreover, the circumstances surrounding Dr. Brigance’s entry into the exculpatory agreements indicate she [*22] did so fairly. Dr. Brigance does not identify any evidence in the record calling into question her competency, ability to comprehend the terms of the agreements, or actual understanding of the agreements. Nor does she point to anything in the record reflecting an intent or attempt by VSRI to fraudulently induce her to enter the agreements or to conceal or misconstrue their contents. In addition, there is nothing in the record to suggest Dr. Brigance’s agreement to the terms of the Ski School Waiver was not voluntary. See Brigance II, 2017 U.S. Dist. LEXIS 5447, 2017 WL 131797, at *3-4.
Notwithstanding the well-established law that exculpatory agreements involving businesses providing recreational services do not implicate the third Jones factor, Dr. Brigance argues her assent to the terms of the Lift Ticket Waiver was obtained unfairly and that VSRI had an advantage in bargaining strength. This is so, she contends, because she “did not have a chance to review the exculpatory language contained on the back of the non-refundable [lift] ticket before she purchased it” and that “[o]nce the ticket was purchased, she was forced to accept the exculpatory language or lose the money she invested.” Aplt. Br. 47. Dr. Brigance’s argument fails to account for her [*23] voluntary acceptance of the Ski School Waiver. And although Dr. Brigance asserts she “did not have a chance to review” the Lift Ticket Waiver before purchasing it, she does not identify any evidence that VSRI prevented her from reviewing the Lift Ticket Waiver before she used it to ride the Discovery Lift, and “Colorado courts have repeatedly emphasized that individuals engaged in recreational activities are generally expected to read materials like these.” Espinoza, 809 F.3d at 1157. Most importantly, Dr. Brigance did not raise this argument below and does not provide a compelling reason for us to address it on appeal.4
See Crow v. Shalala, 40 F.3d 323, 324 (10th Cir. 1994) (“Absent compelling reasons, we do not consider arguments that were not presented to the district court.”).
4 In fact, the district court noted that Dr. Brigance “neither disputes the relevant facts nor counters VSRI’s argument that she accepted the contractual terms of the Lift Ticket Waiver by skiing and riding the lifts.” Brigance II, 2017 U.S. Dist. LEXIS 5447, 2017 WL 131797, at *4. As a result, the district court concluded Dr. Brigance had agreed to the terms of the Lift Ticket Waiver and would be bound to its terms to the extent it was otherwise enforceable. Id.
For these reasons, the district court did not err in concluding that the third Jones factor does not render the Ski School Waiver or the Lift Ticket Waiver unenforceable.
4. Whether the Parties’ Intent Was Expressed Clearly and Unambiguously
[HN10] The fourth and final Jones factor is “whether the intention of the parties is expressed in clear and unambiguous language.” Jones, 623 P.2d at 376. The inquiry conducted under this factor “should be whether the intent of the parties was to extinguish liability and [*24] whether this intent was clearly and unambiguously expressed.” Heil Valley Ranch, 784 P.2d at 785. The Colorado Supreme Court has explained that “[t]o determine whether the intent of the parties is clearly and unambiguously expressed, we [may] examine[ ] the actual language of the agreement for legal jargon, length and complication, and any likelihood of confusion or failure of a party to recognize the full extent of the release provisions.”
Chadwick, 100 P.3d at 467. We may also take into account a party’s subsequent acknowledgement that it understood the provisions of the agreement. Id.
In addition, it is well-established that the term “negligence” is not invariably required for an exculpatory agreement to be deemed an unambiguous waiver or release of claims arising from negligent conduct. Id.
The Ski School Waiver contains approximately a page and a half of terms and conditions in small, but not unreadable, font.5 It prominently identifies itself as, among other things, a “RELEASE OF LIABILITY . . . AGREEMENT”–a fact that is reiterated in the subtitle of the agreement by inclusion of the statement “THIS IS A RELEASE OF LIABILITY & WAIVER OF CERTAIN LEGAL RIGHTS.” Aplt. App’x 117. The provisions of the waiver include the signer’s express acknowledgment [*25] and assumption of “ALL INHERENT DANGERS AND RISKS of the Activity, including those of a ‘skier’ (as may be identified by statute or other applicable law),” as well as “all additional risks and dangers that may result in . . . physical injury and/or death above and beyond the inherent dangers and risks of the Activity, including but not limited to” a lengthy list of specific events and circumstances that includes “lift loading, unloading, and riding.” Id. In addition to this assumption-of-the-risk language, the Ski School Waiver provides that the signer
AGREE[S] TO HOLD HARMLESS, RELEASE, INDEMNIFY, AND NOT TO SUE [VSRI] FOR ANY . . . INJURY OR LOSS TO PARTICIPANT, INCLUDING DEATH, WHICH PARTICIPANT MAY SUFFER, ARISING IN WHOLE OR IN PART OUT OF PARTICIPANT’S PARTICIPATION IN THE ACTIVITY, INCLUDING, BUT NOT LIMITED TO, THOSE CLAIMS BASED ON ANY RELEASED PARTY’S ALLEGED OR ACTUAL NEGLIGENCE OR BREACH OF ANY CONTRACT AND/OR EXPRESS OR IMPLIED WARRANTY.
5 Although Dr. Brigance denies that she signed the Ski School Waiver, see supra note 1, she has not made any arguments regarding the readability or font size of the terms and conditions.
The Lift Ticket Waiver–approximately two paragraphs in length–is not as detailed as the Ski School Waiver, but contains somewhat similar language regarding the ticket holder’s assumption of risk and waiver of claims. After detailing [*26] some of the inherent dangers and risks of skiing that the holder of the ticket assumes, as well as identifying other risks and responsibilities, the Lift Ticket Waiver provides that the “Holder agrees to ASSUME ALL RISKS, inherent or otherwise” and “to hold the ski area harmless for claims to person and property.” Id. at 121.
Neither waiver is unduly long nor complicated, unreadable, or overburdened with legal jargon. Most importantly, the intent of the waivers is clear and unambiguous. In addition to the language indicating Dr. Brigance’s assumption of all risks of skiing, inherent or otherwise, both waivers contain clear language stating that Dr. Brigance agreed to hold VSRI harmless for injuries to her person as a result of skiing at Keystone. Moreover, the Ski School Waiver clearly and unambiguously provides that Dr. Brigance agreed to “RELEASE, INDEMNIFY, AND NOT TO SUE” VSRI for personal injuries arising in whole or in part from her participation in ski lessons, including claims based on VSRI’s “ALLEGED OR ACTUAL NEGLIGENCE.” Id. at 117. Dr. Brigance does not argue that any of the language regarding her agreement to hold harmless, indemnify, release, or not to sue VSRI is ambiguous or confusing. [*27] And like this and other courts’ examination of similarly worded provisions, we conclude the relevant release language of the Ski School Waiver and Lift Ticket Waiver cannot be reasonably understood as expressing anything other than an intent to release or bar suit against VSRI from claims arising, in whole or in part, as a result of Dr. Brigance’s decision to ski and participate in ski lessons at Keystone, including claims based on VSRI’s negligence. See Espinoza, 809 F.3d at 1157-58; Mincin, 308 F.3d at 1112-13; Chadwick, 100 P.3d at 468-69; B & B Livery, 960 P.2d at 137-38; Hamill, 262 P.3d at 950-51.
Dr. Brigance’s argument on appeal regarding the fourth Jones factor centers on the assumption-of-the-risk language contained in both waivers. Specifically, Dr. Brigance contends the intent of the waivers is ambiguous because the provisions providing that she assumes all risks of skiing, “inherent or otherwise,” conflict with the SSA because the statute’s provisions only bar a skier from recovering against a ski area operator “for injury resulting from any of the inherent dangers and risks of skiing.” Colo. Rev. Stat. § 33-44-112; see also id. at 33-44-103(3.5). Because of this alleged conflict, Dr. Brigance asserts that she could not know whether she was “releasing [VSRI] of all liability as indicated by the [waivers], or only for the inherent risks of skiing as [*28] mandated by the SSA.” Aplt. Br. 50-51.
Dr. Brigance’s argument is unavailing for a number of reasons. First, it only addresses the assumption-of-the-risk language contained in each waiver. But the more pertinent provisions of the waivers are those regarding Dr. Brigance’s agreement to hold harmless, release, indemnify, and not to sue VSRI. These provisions appear independent from the assumption-of-the-risk language and therefore their plain meaning is unaffected by any potential ambiguity in the “inherent or otherwise” clauses. Dr. Brigance does not contest the clarity of the release provisions and, as previously described, we believe those provisions unambiguously reflect the parties’ intent to release VSRI from claims arising from Dr. Brigance’s participation in ski lessons at Keystone.
Second, the Lift Ticket Waiver’s “assumes all risks, inherent or otherwise” phrase, as well as a similar phrase contained in the Ski School Waiver, are not ambiguous. Rather, their meanings are clear–the signer of the agreement or holder of the ticket is to assume all risks of skiing, whether inherent to skiing or not. The term “otherwise,” when “paired with an adjective or adverb to indicate its contrary”–as [*29] is done in both waivers–is best understood to mean “NOT.” Webster’s Third New Int’l Dictionary 1598 (2002). The plain language and meaning of the phrases therefore reflect a clear intent to cover risks that are not inherent to skiing. Dr. Brigance offers no alternative reading of the phrases and does not specify how “inherent or otherwise” could be understood as only referring to the inherent risks identified in the SSA. And while the Ski School Waiver contains a provision in which the signer agrees to assume all inherent dangers and risks of skiing as may be defined by statute or other applicable law, the next provision of the agreement clearly expands that assumption of risk, stating that the signer “expressly acknowledge[s] and assume[s] all additional risks and dangers that may result in . . . physical injury and/or death above and beyond the inherent dangers and risks of the Activity, including but not limited to” a rather extensive list of circumstances or events that may occur while skiing, including “lift loading, unloading, and riding.” Aplt. App’x at 117. That same provision continues, indicating that the signer understands the description of risks in the agreement is “NOT COMPLETE,” but that the signer nevertheless [*30] voluntarily chooses to “EXPRESSLY ASSUME ALL RISKS AND DANGERS OF THE ACTIVITY, WHETHER OR NOT DESCRIBED HERE, KNOWN OR UNKNOWN, INHERENT OR OTHERWISE.” Id. Reading the “inherent or otherwise” phrase in context clearly indicates that, at a minimum, the Ski School Waiver includes an assumption of risk above and beyond the inherent risks and dangers of skiing as defined in the SSA. See Ringquist v. Wall Custom Homes, LLC, 176 P.3d 846, 849 (Colo. App. 2007) (“In determining whether a provision in a contract is ambiguous, the instrument’s language must be examined and construed in harmony with the plain and generally accepted meanings of the words used, and reference must be made to all the agreement’s provisions.”); Moland v. Indus. Claim Appeals Office of State, 111 P.3d 507, 510 (Colo. App. 2004) (“The meaning and effect of a contract is to be determined from a review of the entire instrument, not merely from isolated clauses or phrases.”).
Third, the Colorado Supreme Court rejected a similar argument in B & B Livery, Inc. v. Riehl, 960 P.2d 134 (Colo. 1998). There, the Colorado Supreme Court examined an exculpatory agreement that included a statutorily mandated warning that equine professionals are not liable to others for the inherent risks associated with participating in equine activities, “as well as a broader clause limiting liability from non-inherent risks.” Id. at 137-38. It concluded that “the [*31] insertion of a broader clause further limiting liability does not make the agreement ambiguous per se” and instead “merely evinces an intent to extinguish liability above and beyond that provided” in the statute. Id. at 137; see also Hamill, 262 P.3d at 951 (upholding enforcement of an exculpatory agreement that purported to cover “inherent and other risks,” as well as claims against “any legal liability,” and noting that “[t]o hold . . . that the release did not provide greater protection than the release from liability of inherent risks provided by the equine act . . . would render large portions of the agreement meaningless”). Furthermore, the waivers do not conflict with the SSA merely because they purport to cover a broader range of risks than those identified by the statute as inherent to skiing. See Fullick v. Breckenridge Ski Corp., No. 90-1377, 1992 U.S. App. LEXIS 9988, 1992 WL 95421, at *3 (10th Cir. Apr. 29, 1992) (unpublished) (“If one could never release liability to a greater degree than a release provided in a statute, then one would never need to draft a release, in any context.”); Chadwick, 100 P.3d at 468 (“[T]his court has made clear that parties may, consistent with the [equine] statute, contract separately to release sponsors even from negligent conduct, as long as the intent of the parties is clearly expressed in the contract.”).
Finally, the single [*32] case relied upon by Dr. Brigance that applies Colorado law is distinguishable. In Rowan v. Vail Holdings, Inc., 31 F. Supp. 2d 889, 899-900 (D. Colo. 1998), the district court determined an exculpatory agreement was ambiguous and therefore unenforceable in part because it first recited “the risks being assumed in the broadest possible language,” expressly including risks associated with the use of ski lifts, and then later addressed the assumption of risk in terms of the inherent risks and dangers of skiing as defined in the SSA, which indicates the use of ski lifts does not fall within its definition of inherent risks. The release therefore conflicted with itself and the relevant statutory language.
See Cunningham v. Jackson Hole Mountain Resort Corp., 673 F. App’x 841, 847 (10th Cir. Dec. 20, 2016) (unpublished). But unlike the waiver at issue in Rowan, the Ski School Waiver and Lift Ticket Waiver do not define the inherent risks of skiing in a manner contrary to the SSA. Nor do they contain conflicting provisions. The non-exhaustive list of inherent risks identified in the Lift Ticket Waiver appears to be drawn directly from the SSA, while the Ski School Waiver indicates inherent risks include those “as may be defined by statute or other applicable law.” Aplt. App’x at 117, 121. In addition, after referencing the inherent risks of skiing and providing that the signer [*33] of the agreement assumes those risks, the Ski School Waiver goes on to identify other, non-inherent risks associated with skiing and ski lessons and expressly provides that the signer assumes those risks. Specifically, the waiver makes clear that the risks assumed by Dr. Brigance include “all additional risks and dangers . . . above and beyond the inherent dangers and risks” of skiing and ski lessons, whether described in the waiver or not, known or unknown, or inherent or otherwise. Id. at 117. Unlike the provisions at issue in Rowan that provided conflicting statements regarding the risks assumed, the waivers here unambiguously provide that Dr. Brigance agreed to not only assume risks and dangers inherent to skiing, but also those risks and dangers not inherent to skiing.
Accordingly, the district court did not err in concluding that the fourth Jones factor does not invalidate the waivers.
Based on the foregoing analysis, we agree with the district court that application of the Jones factors to the Ski School Waiver and Lift Ticket Waiver do not render them unenforceable.
B. The SSA and PTSA
Although analysis of the Jones factors is often sufficient to determine the validity of an exculpatory [*34] agreement, the Colorado Supreme Court has “identified other public policy considerations invalidating exculpatory agreements, without regard to the Jones factors.” Boles, 223 P.3d at 726. At various points on appeal, either as standalone arguments or embedded within her analysis of the Jones factors, Dr. Brigance contends the Ski School Waiver and the Lift Ticket Waiver are unenforceable as contrary to Colorado public policy because they conflict with the SSA, PTSA, and the public policies announced therein.6 The district court considered these arguments and determined that the statutes do not affect the enforceability of either waiver as to Dr. Brigance’s claims. We find no reason to disagree.
6 Dr. Brigance also argues that the PLA prohibits use of exculpatory agreements as a defense to claims raised under its provisions and that the Ski School Waiver and Lift Ticket Waiver conflict with the public policies set forth in its provisions. But Dr. Brigance forfeited these arguments by failing to raise them in the district court. Avenue Capital Mgmt. II, 843 F.3d at 884. Although we may consider forfeited arguments under a plain-error standard, we decline to do so when, as here, the appellant fails to argue plain error on appeal. Id. at 885; see also Richison v. Ernest Grp., Inc., 634 F.3d 1123, 1130-31 (10th Cir. 2011). We decline to address Dr. Brigance’s argument that the waivers are unenforceable because their language is broad enough to encompass willful and wanton behavior for the same reason.
In 1965, the Colorado General Assembly enacted the PTSA with the purpose of assisting “in safeguarding life, health, property, and the welfare of the state in the operation of passenger tramways.” Bayer v. Crested Butte Mountain Resort, Inc., 960 P.2d 70, 73 (Colo. 1998). [HN11] The PTSA provides that “it is the policy of the state of Colorado to establish a board empowered to prevent unnecessary mechanical hazards in the operation of passenger tramways” and to assure that reasonable design and construction, periodic inspections, and adequate devices and personnel are provided with respect to passenger [*35] tramways. Colo. Rev. Stat. § 25-5-701. The General Assembly empowered the board “with rulemaking and enforcement authority to carry out its functions,” including the authority to “conduct investigations and inspections” and “discipline ski area operators.” Bayer, 960 P.2d at 73-74; see also Colo. Rev. Stat. §§ 25-5-703 to -704, -706 to -707. With its authority, the board adopted the standards, with some alterations, utilized by the American National Standards Institute for passenger tramways. Bayer, 960 P.2d at 73-74.
The General Assembly enacted the SSA fourteen years later. The SSA “supplements the [PTSA]’s focus on ski lifts, but its principal function is to define the duties of ski areas and skiers with regard to activities and features on the ski slopes.” Id. at 74. [HN12] The provisions of the SSA indicate that “it is in the interest of the state of Colorado to establish reasonable safety standards for the operation of ski areas and for the skiers using them” and that the SSA’s purpose is to supplement a portion of the PTSA by “further defin[ing] the legal responsibilities of ski area operators . . . and . . . the rights and liabilities existing between the skier and the ski area operator.” Colo. Rev. Stat. § 33-44-102. [HN13] In addition to the SSA’s provisions defining various responsibilities and duties of skiers and ski area operators, [*36] the 1990 amendments to the SSA limited the liability of ski area operators by providing that “no skier may make any claim against or recover from any ski area operator for injury resulting from any of the inherent dangers and risks of skiing.” Id. at 33-44-112. The SSA also provides that any violation of its provisions applicable to skiers constitutes negligence on the part of the skier, while “[a] violation by a ski area operator of any requirement of [the SSA] or any rule or regulation promulgated by the passenger tramway safety board . . . shall . . . constitute negligence on the part of such operator.” Id. at 33-44-104. “The effect of these statutory provisions is to make violations of the [SSA] and [the rules and regulations promulgated by passenger tramway safety board] negligence per se.” Bayer, 960 P.2d at 74. [HN14] Ultimately, the SSA and PTSA together “provide a comprehensive . . . framework which preserves ski lift common law negligence actions, while at the same time limiting skier suits for inherent dangers on the slopes and defining per se negligence for violation of statutory and regulatory requirements.” Id. at 75.
Dr. Brigance contends the waivers conflict with the public policy objectives of the SSA and PTSA because enforcing [*37] either waiver would allow VSRI to disregard its statutorily defined responsibilities and duties. We find Dr. Brigance’s argument unpersuasive.
At the outset, it is worth reiterating that [HN15] under Colorado law exculpatory agreements are not invalid as contrary to public policy simply because they involve an activity subject to state regulation. Espinoza, 308 F.3d at 1154; see also id. at 1155 (acknowledging the Colorado Supreme Court has allowed enforcement of exculpatory agreements with respect to equine activities despite the existence of a statute limiting liability for equine professionals in certain circumstances, while still allowing for liability in other circumstances); Mincin, 308 F.3d at 1111 (“The fact that the Colorado legislature has limited landowner liability in the contexts of horseback riding and skiing is relevant to the question of whether landowner liability might be limited in other circumstances absent a contract.”). Similarly, exculpatory agreements do not conflict with Colorado public policy merely because they release liability to a greater extent than a release provided in a statute.
See Fullick, 1992 U.S. App. LEXIS 9988, 1992 WL 95421, at *3; Chadwick, 100 P.3d at 468; B & B Livery, 960 P.2d at 137-38.
[HN16] It is true that the SSA and PTSA identify various duties and responsibilities that, if violated, may subject a ski area operator to [*38] liability. But the acts establish a framework preserving common law negligence actions in the ski and ski lift context, Bayer, 960 P.2d at 75, and do nothing to expressly or implicitly preclude private parties from contractually releasing potential common law negligence claims through use of an exculpatory agreement. While “a statute . . . need not explicitly bar waiver by contract for the contract provision to be invalid because it is contrary to public policy,” Stanley v. Creighton Co., 911 P.2d 705, 707 (Colo. App. 1996), Dr. Brigance does not identify a single provision in either the SSA or PTSA suggesting the enforcement of exculpatory agreements in the ski and ski lift context is impermissible or contrary to public policy. Moreover, “Colorado law has long permitted parties to contract away negligence claims in the recreational context” and we “generally will not assume that the General Assembly mean[t] to displace background common law principles absent some clear legislative expression of that intent.” Espinoza, 809 F.3d at 1154, 1155. This principle is particularly relevant in the context of exculpatory agreements because “[t]he General Assembly . . . has shown that–when it wishes–it well knows how to displace background common law norms and preclude the release of civil claims.” Espinoza, 809 F.3d at 1154-55.
Our conclusion that [*39] the SSA and PTSA do not bar exculpatory agreements is supported by the Colorado Supreme Court’s regular enforcement of exculpatory agreements involving recreational activities, particularly in the context of equine activities, as well as the General Assembly’s relatively recent pronouncements regarding the public policy considerations involved in a parent’s ability to execute exculpatory agreements on behalf of its child with respect to prospective negligence claims. In 2002, the Colorado Supreme Court concluded that Colorado public policy prohibits a parent or guardian from releasing a minor’s prospective claims for negligence. See Cooper, 48 P.3d at 1237. The Colorado Supreme Court’s broad holding appeared to apply even within the context of recreational activities, as the relevant minor had injured himself while skiing. Id. at 1231-35. The following year, the General Assembly enacted Colo. Rev. Stat. § 13-22-107, which expressly declared that the General Assembly would not adopt the Colorado Supreme Court’s holding in Cooper. Colo. Rev. Stat. § 13-22-107(1)(b). Instead, the General Assembly explained that, among other things, it is the public policy of Colorado that “[c]hildren . . . should have the maximum opportunity to participate in sporting, recreational, educational, and other activities [*40] where certain risks may exist” and that “[p]ublic, private, and non-profit entities providing these essential activities to children in Colorado need a measure of protection against lawsuits.” Id. at 13-22-107(1)(a)(I)-(II). Accordingly, the General Assembly established that “[a] parent of a child may, on behalf of the child, release or waive the child’s prospective claim for negligence.” Id. at 13-22-107(3). The General Assembly’s enactment of § 33-22-107 reaffirms Colorado’s permissive position on the use of exculpatory agreements in the recreational context, and its authorization of parental releases and waivers suggests it did not intend and would not interpret the SSA as barring such agreements for adults.
Notwithstanding the lack of any statutory suggestion that the SSA and PTSA prohibit the enforcement of exculpatory agreements as a matter of public policy, Dr. Brigance contends two Colorado Court of Appeals decisions support her assertion to the contrary. In Stanley v. Creighton, the Colorado Court of Appeals analyzed an exculpatory clause in a residential rental agreement under the Jones factors and concluded that the agreement involved a public interest sufficient to invalidate the exculpatory [*41] clause. 911 P.2d at 707-08. The Stanley court reached this conclusion because, among other things, Colorado has long regulated the relationship between landlords and tenants, the PLA “confirms that landowner negligence is an issue of public concern,” and “a landlord’s services are generally held out to the public and . . . housing rental is a matter of practical necessity to the public.” Id. Although the Stanley court’s partial reliance on the existence of state regulations tends to support Dr. Brigance’s assertion that the existence of the SSA and PTSA render the Ski School Wavier and Lift Ticket Waiver either contrary to public policy or sufficient to satisfy the first Jones factor, the circumstances here are readily distinguishable. Unlike residential housing, skiing is not essential nor a matter of practical necessity. Among other considerations not present here, the Stanley court “placed greater emphasis on the essential nature of residential housing” and “alluded to a distinction between residential and commercial leases, implying that an exculpatory clause might well be valid in the context of a commercial lease.” Mincin, 308 F.3d at 1110.
Similarly, Dr. Brigance’s reliance on Phillips v. Monarch Recreation Corp., 668 P.2d 982 (Colo. App. 1983), does not alter our conclusion. In Phillips [*42]
, the Colorado Court of Appeals stated that “[s]tatutory provisions may not be modified by private agreement if doing so would violate the public policy expressed in the statute.” Id. at 987. Applying this principle, the Phillips court concluded that because the SSA “allocate[s] the parties’ respective duties with regard to the safety of those around them, . . . the trial court correctly excluded a purported [exculpatory] agreement intended to alter those duties.” Id. But apparently unlike the agreement at issue in Phillips, the Ski School Waiver and Lift Ticket Waiver do not appear to alter the duties placed upon VSRI under the SSA. See, Fullick, 1992 U.S. App. LEXIS 9988, 1992 WL 95421, at *3. And the court’s application of this principle to the SSA appears to be inconsistent with the more recent pronouncements by the Colorado Supreme Court and General Assembly regarding Colorado policies toward the enforceability of exculpatory agreements in the context of recreational activities. Moreover, as detailed above, the SSA and PTSA do not express a policy against exculpatory agreements.
“Given all this,” particularly the SSA’s and PTSA’s silence with respect to exculpatory agreements, “we do not think it our place to adorn the General Assembly’s handiwork with revisions to [*43] the [SSA, PTSA, and] common law that it easily could have but declined to undertake for itself.” Espinoza, 809 F.3d at 1155.
In summary, Colorado’s “relatively permissive public policy toward recreational releases” is one “that, no doubt, means some losses go uncompensated.” Espinoza, 809 F.3d at 1153. And the Colorado Supreme Court and General Assembly may someday “prefer a policy that shifts the burden of loss to the service provider, ensuring compensation in cases like this.” Id. But “that decision is their decision to make, not ours, and their current policy is clear.” Id. As a result, for the reasons stated above, we conclude the Ski School Waiver and Lift Ticket Waiver are enforceable and accordingly bar Dr. Brigance’s claims.
We AFFIRM the district court’s grant of summary judgment in favor of VSRI and, on this alternative basis, its partial grant of VSRI’s motion to dismiss.
Dominique Forrester, Plaintiff and Appellant, v. Sierra at Tahoe, Defendant and Respondent.
COURT OF APPEAL OF CALIFORNIA, THIRD APPELLATE DISTRICT
2017 Cal. App. Unpub. LEXIS 5204
July 27, 2017, Opinion Filed
NOTICE: NOT TO BE PUBLISHED IN OFFICIAL REPORTS. CALIFORNIA RULES OF COURT, RULE 8.1115(a), PROHIBITS COURTS AND PARTIES FROM CITING OR RELYING ON OPINIONS NOT CERTIFIED FOR PUBLICATION OR ORDERED PUBLISHED, EXCEPT AS SPECIFIED BY RULE 8.1115(b). THIS OPINION HAS NOT BEEN CERTIFIED FOR PUBLICATION OR ORDERED PUBLISHED FOR THE PURPOSES OF RULE 8.1115.
SUBSEQUENT HISTORY: Review denied by Forrester v. Sierra at Tahoe, 2017 Cal. LEXIS 7927 (Cal., Oct. 11, 2017)
PRIOR HISTORY: [*1] Superior Court of El Dorado County, No. PC20120138.
CORE TERMS: snowmobile, collision, ski, inherent risk, snowboarding, sport, checklist, toboggan, driver, ski resort, skiing, unreasonably, assumption of risk, slope, secondary, emergency, resort, ski area, skier, hit, snowboarder, patroller, patrol, risks inherent, instructional error, lift, discarded, siren, suppression, tower
JUDGES: Duarte, J.; Butz, Acting P. J., Mauro, J. concurred.
OPINION BY: Duarte, J.
Plaintiff Dominique Forrester was injured while snowboarding at defendant ski resort Sierra-at-Tahoe (Sierra) on March 7, 2010. He claimed he was hit by a toboggan, that in turn was being towed by a snowmobile, while on a beginner slope. The trial court found assumption of the risk applied to the claim, and the case went to the jury to answer the question of whether Sierra unreasonably increased the risk to Forrester above that already inherent in the sport of snowboarding. By a vote of 10 to 2, the jury answered “no.”
On appeal, plaintiff contends the trial court erred in ruling that primary assumption of the risk applied to this case, and instructing the jury accordingly. Plaintiff argues a collision with a snowmobile is not an inherent risk of snowboarding. He further contends the court incorrectly instructed the jury on secondary assumption of the risk, and erred in refusing to instruct on the willful suppression of evidence.
As we will explain, this case is unusual among liability cases in general because the very existence of the alleged accident–the collision itself–was [*2] and remains in dispute. We first conclude that unwanted contact with a snowmobile (here encompassing a towed toboggan), on a ski slope at a ski resort, is indeed an inherent risk of snowboarding. Although Forrester argues the particular alleged circumstances of the operation of the snowmobile on the day of the incident took the collision outside the boundaries of inherent risk, that issue was tendered to the jury and the jury found Sierra did not unreasonably increase the risks already inherent in snowboarding
We assume instructional error on secondary assumption of the risk but find no prejudice, and conclude that the evidence did not support an instruction on willful suppression of the evidence.
Accordingly, we affirm the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
The Alleged Accident
On Sunday, March 7, 2010, Forrester met his high school friend, Franklin Medina, for a day of snowboarding at Sierra. That day was the busiest of the year, with about 6,370 people at the resort. Forrester described himself as an intermediate snowboarder who does not perform jumps. He did not wear ear buds or ear phones while snowboarding and did not recall ever seeing a snowmobile in a ski area before that [*3] day.
At about 3:30 or 4:00 p.m., Forrester was filming Medina doing jumps. After the last jump, Medina snowboarded down the run to wait for Forrester. The bottom area of the ski run is known as Broadway; it is a beginner run near the teaching area and close to the lodge.
According to Forrester, as he began to snowboard down Broadway, he heard someone yell “hey.” He tried to turn around and was hit in the back of the legs. He went airborne and landed on his bottom and then hit his head. His goggles cut his face. He was hurt and dizzy. The snowmobile was 30 yards away when Forrester first saw it, and the driver “took off.” Forrester thought the driver’s jacket was orange or red, but he was not sure. He assumed only ski patrollers, who wear orange-red jackets, operated snowmobiles. He thought the snowmobile driver was wearing a beanie. Forrester did not hear the snowmobile. After the collision, Forrester slid down the mountain, and some other snowboarders asked if he was okay. He did not realize his equipment was broken until he later responded to special interrogatories.
Medina claimed he saw the incident, and that the snowmobile was in front of Forrester’s path and pulling a toboggan. [*4] He saw the toboggan clip Forrester’s feet and “take him out.” The snowmobile was going two or three times faster than Forrester. Forrester took his equipment off and walked down the mountain. Medina claimed the driver of the snowmobile was wearing a black and purple vest like the ones worn by terrain park employees (rather than the orange and red jacket described by Forrester). Medina did not see any lights on the snowmobile and did not notice a flag, nor did he hear a siren.
Forrester did not report the accident, but tried to “walk off” the injury. On the way home Forrester and Medina discussed that Forrester had been hit and decided they should call Sierra. Forrester called just after 5:00 p.m. and got an answering machine. Forrester began vomiting and they stopped in Placerville where Medina took pictures of his face. Medina drove Forrester home.
The next day, Monday, Forrester hurt all over his body, including a bad headache. He went to his doctor who ordered a CT scan, the results of which were normal. Over the next few days, Forrester’s back began to hurt. He was diagnosed with a concussion and a whiplash back injury. Forrester was later diagnosed with disc degeneration with a [*5] prognosis of ongoing pain.
Reporting the Accident
Forrester called Sierra again on Monday morning. He was told there was no one with whom he could discuss the incident and to call back on Wednesday. He called Wednesday and spoke with Evan MacClellan, the risk manager. MacClellan completed an incident report based on the phone call. The report described the injury as occurring at the bottom of Broadway near the terrain park. The report described that Forrester was hit by a “snowmobile (patroller),” got up after the incident, and did not report it. On the way home he started to vomit and went to the hospital the next day. The report listed Medina as a witness and included his telephone number.
Forrester contacted an attorney the same day he spoke with MacClellan. Forrester sent MacClellan a written report, in which he stated he “was involved in a collision with a Sierra Ski Patrol Officer (Ski Patroller) whom [sic] was driving a snow mobile, towing a stretcher. . . . The Ski Patroller was apparently attempting to cross from my left, which was behind me (I have a ‘regular’ board stance), across my face, to the right of me when he collided into me from my blind side. As a result I flew over [*6] him and crashed very hard into the mountain. I suffered a head injury, as well as whiplash, and subsequently blacked out for a short period of time.” The statement continued that Forrester did not see the “patroller” and heard no sirens; he heard only a brief “hey” right before the impact. His friend Medina had witnessed the collision and could not believe it; other snowboarders asked if Forrester was okay, but the ski patrol did not.
MacClellan spoke with the ski patrol and terrain park employees about Forrester’s claim. None of the ski patrollers on duty that day or others with whom they had spoken recalled any accident or collision. Both MacClellan and the general manager, John Rice, were suspicious of the claim; in 37 years in the ski industry, Rice had never seen a report made days after the incident. MacClellan did not call Medina, although Forrester had identified him as a witness. MacClellan could not determine that the accident actually took place. He first learned that Forrester claimed the collision was with a towed toboggan rather than the snowmobile itself after Forrester’s deposition.
The Lawsuit and Trial
Forrester brought suit against Sierra for general negligence and [*7] premises liability. The complaint stated: “Included in the Cause of Action for General Negligence are Claims for Breach of Statutory Duty; Negligence Per Se; Gross Negligence and/or Reckless Conduct; and/or Common Carrier Liability.” Forrester took some theories of liability “off the table” and the trial court granted defendant’s motion for nonsuit as to others. As we explain in more detail, post, the matter was submitted to the jury as an assumption of the risk case, with the jury asked to determine whether Sierra unreasonably increased the inherent risks of snowboarding
Sierra requires its snowmobile drivers to follow a safety checklist and check lights, brakes, and other functions before a snowmobile is taken out. The checklist is a written form detailing the items to be checked and the name of the person taking out the snowmobile. The checklist is discarded on a daily basis unless an entry triggers a need for snowmobile maintenance. Due to this practice of discarding the checklist daily, no attempt was made to find the checklists for March 7, and the driver of the snowmobile allegedly involved in the accident was never found. At trial, Sierra stipulated that anyone [*8] driving a snowmobile at the resort that day would have been employed by Sierra. The checklist would not necessarily reveal the identity of the driver of the snowmobile in any event, because once the snowmobile is checked out others may use it without completing a new checklist. Sierra maintains no record showing who is using a snowmobile at a particular time on a specific date.
A snowmobile is a loud machine; its sound is comparable to a motorcycle or lawnmower. The flashing lights are always on if the snowmobile is running, but the siren can be turned on and off. It is against Sierra’s policy to operate a snowmobile without a siren when guests are present. The snowmobile has an attached fiberglass pole with a flag atop, to aid in visibility. March 7, 2010, was a peak day and there was a blackout on the use of snowmobiles in the ski areas except for emergencies. Rice defined emergencies as ski patrol rescue, lift evacuation, a fire or gas leak on the hill, and to carry law enforcement to an altercation. There were no documented emergencies the day of the incident. MacClellan testified that with 6,000 people on the ski slopes, it would be “virtually impossible” to drive a snowmobile [*9] through the Broadway area.
The ski patrol uses orange toboggans for rescue, which are stored in different locations on the mountain and used to transport injured guests. Patrollers take them uphill by chair lift or by snowmobile. Snowmobiles are rarely used to take a toboggan down the mountain; usually a patroller skis them down. Snowmobiles do not tow injured guests in a toboggan.
In addition to medical experts, plaintiff called a ski safety consultant and an accident reconstructionist. Richard Penniman testified as an expert on ski area mountain operations. He testified it was below industry standard to have a snowmobile on the ski slopes when a large number of people are present. On a run like Broadway that is designed for beginners, it was very dangerous to have anything present other than skiers and snowboarders. It was below the industry standard to use the Broadway area as a snowmobile route. Penniman added snowmobiles are only a convenience and a ski resort can operate without them. He conceded, however, that it was standard practice for ski areas to use snowmobiles and agreed they were extremely useful in an emergency where the risk they create might be worth [*10] it. He agreed with the policy of Sierra-at-Tahoe not to use snowmobiles on busy days except in the case of an emergency. In Penniman’s opinion, Sierra’s conduct in operating a snowmobile the day of the incident increased the risk of injury to skiers and snowboarders.
Jesse Wobrock, an accident reconstructionist and bioengineer, prepared an animation of the accident. He testified the accident had “an injury mechanism for both the lumbar spine and the traumatic brain injury.” The damage to Forrester’s left binding was consistent with the height of the toboggan, as was the orange color transfer on the binding. Wobrock testified the physical evidence corroborated the eyewitness testimony. In his opinion, the snowboard went between the tread of the snowmobile and the toboggan; the toboggan ran over the snowboard.
John Gardiner, a forensic engineer and biomechanic, testified for the defense. He opined there was neither consistent testimony nor sufficient physical evidence to conclude what occurred that day. Gardiner testified that if Forrester’s left binding made contact with a toboggan, the contact occurred at the rear portion of the toboggan. If the contact had been near the [*11] front of the toboggan, the snowboard would have hit the treads of the snowmobile and caused damage; there was no evidence of damage to the front of the snowboard. In Gardiner’s opinion, the force involved in Forrester’s fall would not have caused a lumbar disc injury and a concussion. Gardiner also testified that Medina’s view of the accident would have been obstructed by the snowmobile and its driver and that Wobrock’s animation of the incident was inconsistent with the laws of physics and Forrester’s testimony.
The defense pointed out the many inconsistencies between Medina’s deposition and his trial testimony, such as where he dropped off Forrester, whether Forrester wore a helmet, Forrester’s level of skill on a snowboard, the time they finished snowboarding, and whether Medina saw the snowmobile before the collision. Medina had changed his story only after talking to Forrester. The defense argued the differences between the testimony of Medina and Forrester as to the color of the snowmobile, the clothing of the driver, the location of the accident, and the timing showed that Forrester failed to carry his burden of proof as to what happened. The defense questioned how Forrester [*12] could fail to see or hear the snowmobile and offered three possibilities: (1) the collision had not happened; (2) Forrester was not paying attention; or (3) Forrester saw the snowmobile, but not the toboggan and tried to cut behind. The defense argued number three was the most reasonable and Forrester did not report the accident because he felt it was his fault.
As relevant here, the court instructed the jury as follows:
“[CACI No.] 410. Dominique Forrester claims he was harmed while participating in snowboarding at the snow — at the Sierra at Tahoe Ski resort. To establish this claim Dominique Forrester must prove all of the following:
“1. That Sierra at Tahoe was the owner of the ski resort and that its employee was operating the snowmobile in issue in this case. Sierra at Tahoe admits that it is the owner of the ski resort and only its employee would have had access to and would have been operating a snowmobile on the ski resort.
“2. Dominique Forrester must also prove that Sierra at Tahoe unreasonably increased the risk to Dominique Forrester over and above those inherent in snowboarding;
“3. And Dominique Forrester must prove that Dominique Forrester was harmed; and lastly [*13]
“4. That Sierra at Tahoe’s conduct was a substantial factor in causing Dominique Forrester’s harm.
“[Modified CACI No.] 405. Sierra at Tahoe claims that Dominique contributed to his harm. To succeed on this claim, Sierra at Tahoe must prove the following:
“1. That Dominique Forrester assumed the risks that led to his injury; and
“2. That Dominique Forrester’s assumption of those risks was a substantial factor in causing his harm.
“If Sierra at Tahoe proves the above, Dominique Forrester’s damages are reduced by your determinations of the percentage of Dominique Forrester’s responsibility. I will calculate the actual reduction.”
Verdict and Motion for New Trial
During deliberations, the jury asked for a definition of “unreasonable” and to have Rice’s testimony about reports of emergencies that day reread. With the parties’ approval, the court responded to the first request as follows: “‘Unreasonable’ – is conduct that is contrary to conduct that a prudent person would exercise in the same or similar circumstances e.g. conduct that is careless, irrational, foolish, unwise, senseless, immoderate, exorbitant or arbitrary under the circumstances.”
By a vote of 10 to 2, the jury found Sierra did [*14] not unreasonably increase the risks to Forrester over and above those inherent in snowboarding in a ski area. Because the jury’s answer to this first question was “no,” it did not answer any additional questions contained in the verdict forms.
Forrester moved for a new trial, contending assumption of the risk did not apply to the case, there were evidentiary errors, and the court erred in not instructing on suppression of evidence. The court denied the motion.1
1 The record does not contain an order denying the motion. Under Code of Civil Procedure section 660, if there was no order, the effect is a denial of the motion.
Assumption of the Risk
A. The Law
“Primary assumption of risk is a complete bar to recovery. It applies when, as a matter of law, the defendant owes no duty to guard against a particular risk of harm.” (Gregory v. Cott (2014) 59 Cal.4th 996, 1001, 176 Cal. Rptr. 3d 1, 331 P.3d 179.) “Primary assumption of risk occurs where a plaintiff voluntarily participates in a sporting event or activity involving certain inherent risks. For example, an errantly thrown ball in baseball or a carelessly extended elbow in basketball are considered inherent risks of those respective sports.” (Wattenbarger v. Cincinnati Reds, Inc. (1994) 28 Cal.App.4th 746, 751, 33 Cal. Rptr. 2d 732.)
“The primary assumption of risk doctrine rests on a straightforward policy foundation: the need to avoid chilling vigorous participation in or sponsorship of recreational activities by imposing a tort duty to eliminate or [*15] reduce the risks of harm inherent in those activities. It operates on the premise that imposing such a legal duty ‘would work a basic alteration–or cause abandonment’ of the activity.” (Nalwa v. Cedar Fair, L.P. (2012) 55 Cal.4th 1148, 1156, 150 Cal. Rptr. 3d 551, 290 P.3d 1158.) “[U]nder the primary assumption of risk doctrine, operators, sponsors and instructors in recreational activities posing inherent risks of injury have no duty to eliminate those risks, but do owe participants the duty not to unreasonably increase the risks of injury beyond those inherent in the activity. (Id. at p. 1162.)
“Snowboarding is a classic example of a sport that requires participants to assume considerable risks.” (Vine v. Bear Valley Ski Co. (2004) 118 Cal.App.4th 577, 603, 13 Cal. Rptr. 3d 370 (Vine).) Courts have recognized many risks inherent in skiing and snowboarding. “Those risks include injuries from variations in terrain, surface or subsurface snow or ice conditions, moguls, bare spots, rocks, trees, and other forms of natural growth or debris. They also include collisions with other skiers, ski lift towers, and other properly marked or plainly visible objects and equipment.” (Lackner v. North (2006) 135 Cal.App.4th 1188, 1202, 37 Cal. Rptr. 3d 863.)
Whether the assumption of risk doctrine applies in a particular case is a question of law.”2 (Amezcua v. Los Angeles Harley-Davidson, Inc. (2011) 200 Cal.App.4th 217, 227, 132 Cal. Rptr. 3d 567.)
2 Although Forrester recognizes the question of whether assumption of the risk applies is a question of law reviewed de novo, he devotes a considerable portion of his briefing to arguing the trial court’s two analyses, first before trial and then on the motion for a new trial, were incorrect. “In reviewing a trial court’s decision, we review the result, not the reasoning.” (Florio v. Lau (1998) 68 Cal.App.4th 637, 653, 80 Cal. Rptr. 2d 409.)
B. Application to this Case
As we noted earlier, this case is unusual among liability cases in general because [*16] the collision itself was in dispute. Because the jury was not asked to make any preliminary factual findings, we cannot even assume that it found a collision occurred. We know only that the jury found Sierra did not unreasonably increase the inherent risk of snowboarding by its conduct on the day in question–whatever its conduct was found to be. With this in mind, we turn to Forrester’s first claim of error.
Forrester contends a collision with a snowmobile is not an inherent risk of snowboarding. He argues that although some collisions–such as with trees or other skiers or snowboarders–are inherent risks, the line should be drawn at a collision between an individual and a motorized vehicle. He asserts assumption of the risk has no role in the circumstances he claims were present here: an unmarked snowmobile with no lights, siren or flag, operated by a non-safety employee on a busy beginner slope, contrary to the safety policies of the ski resort.
Sierra counters that the circumstances Forrester claims were present here, outlined immediately above, would have unreasonably increased the risks undertaken by Forrester had the jury found the circumstances were as Forrester alleged. Sierra [*17] argues that it is apparent from the jury’s “no” vote that it found circumstances more closely aligned to those alleged by the defense, such as the absence of any collision (and even the absence of any snowmobile) whatsoever and other facts favorable to Sierra.
We first address the threshold question of whether unwanted contact with a snowmobile is, in general, an inherent risk of snowboarding. We conclude that it is.
On at least two occasions, this court has found a collision with resort equipment at a ski resort to be an inherent risk of the sport.
In Connelly v. Mammoth Mountain Ski Area (1995) 39 Cal.App.4th 8, 45 Cal. Rptr. 2d 855 (Connelly), the plaintiff collided with an unpadded ski lift tower while skiing. In affirming summary judgment for the defendant, we found this risk was inherent in the sport, and the obvious danger of the tower served as its own warning. (Id. at p. 12.) In concluding that contact with the tower was an inherent risk of the sport, the Connelly court relied on Danieley v. Goldmine Ski Associates, Inc. (1990) 218 Cal.App.3d 111, 266 Cal. Rptr. 749, where a skier collided with a tree. Danieley, in turn, relied on a Michigan statute that set forth certain inherent risks of skiing, including both trees and “‘collisions with ski lift towers and their components'” along with properly marked or plainly visible “‘snow-making or snow-grooming [*18] equipment.'” (Id. at p. 123.) “[B]ecause the Michigan Ski Area Safety Act purports to reflect the pre-existing common law, we regard its statutory pronouncements as persuasive authority for what the common law in this subject-matter area should be in California.” (Ibid.)
In Souza v. Squaw Valley Ski Corp. (2006) 138 Cal.App.4th 262, 41 Cal. Rptr. 3d 389 (Souza), a child skier collided with a plainly visible aluminum snowmaking hydrant located on a ski run. Following Connelly, we affirmed summary judgment for the defendant, finding the snowmaking hydrant was visible and a collision with it was an inherent risk of skiing. (Id. at p. 268.)
A snowmobile is not one of the risks specifically identified in the Michigan Ski Area Safety Act, and we have not found a published case specifically deciding whether a collision on a ski slope with a snowmobile is an inherent risk of skiing or snowboarding. Nevertheless, collision with certain vehicles has been included. While Souza involved only stationary equipment, the Michigan Ski Area Safety Act–which Danieley and Connelly accepted as reflecting the common law–included a collision with snow-grooming equipment as an inherent risk. Thus, collisions with some vehicles are recognized as inherent risks of the sports of skiing and snowboarding.
We recognize that assumption [*19] of the risk applies only to risks that are necessary to the sport. (Souza, supra, 138 Cal.App.4th at p. 268.) In Souza, snowmaking equipment was necessary to the sport of skiing because nature had failed to provide adequate snow. (Ibid.) As in Souza, we find the following quote from Verro v. New York Racing Ass’n, Inc. (1989) 142 A.D.2d 396, 400, 536 N.Y.S.2d 262 apt: “As is at least implicit in plaintiff’s argument, if only the risks of ordinary and necessary dangers inherent in a sport are deemed assumed, the doctrine of [primary] assumption of risk . . . would not apply to obvious, known conditions so long as a defendant could feasibly have provided safer conditions. Then, obviously, such risks would not be ‘necessary’ or ‘inherent’. This would effectively emasculate the doctrine, however, changing the critical inquiry . . . to whether the defendant had a feasible means to remedy [the dangers].”
Forrester’s expert Penniman claimed snowmobiles were merely a convenience and a ski resort could operate without them. He also testified, however, that the use of snowmobiles was a standard practice at ski resorts. Although critical of their overuse, Penniman recognized their usefulness in an emergency. He agreed with Sierra’s policy, which permitted snowmobiles to be used on the ski slopes in cases of emergency, [*20] even on the busiest days. Thus Penniman agreed generally that the use of snowmobiles was necessary to ski resorts, although he disputed the specific circumstances under which that use might be warranted.
There are many inherent risks of injury and emergency in skiing and snowboarding, and snowmobiles are used to respond quickly to injuries as well as to other emergencies such as lift malfunctions requiring evacuation, fire, gas leaks, and altercations. It appears to us that the use of snowmobiles on the ski slopes at ski resorts is at least as necessary to the sport as the snowmaking equipment in Souza or the directional signs acknowledged as “necessary” in Van Dyke v. S.K.I. Ltd. (1998) 67 Cal.App.4th 1310, 1317, 79 Cal. Rptr. 2d 775.
At least one unpublished federal case has found a collision with a snowmobile to be an inherent risk of skiing or snowboarding. In Robinette v. Aspen Skiing Co., L.L.C. (D. Colo., Apr. 23, 2009, No. 08-CV-00052-MSK-MJW, 2009 U.S. Dist. LEXIS 34873, affd sub nom. Robinette v. Aspen Skiing Co., L.L.C. (10th Cir. 2010) 363 Fed.Appx. 547, the court found “the specific risk of colliding with a snowmobile being operated by a ski resort employee is necessarily within the ‘risks of skiing/riding.'” (Id. at p. *7.) The court reasoned that since “the legislature has seen fit to specifically enact safety measures to prevent skier-snowmobile collisions, one can [*21] hardly argue that such a collision somehow falls outside of [plaintiff’s] express assumption of ‘all risks of skiing.'”3 (Ibid.)
3 Although California has no similar regulation of snowmobiles at ski slopes, the requirements of the Colorado law are similar to Sierra-at-Tahoe’s policy for snowmobile operation. “All snowmobiles operated on the ski slopes or trails of a ski area shall be equipped with at least the following: One lighted headlamp, one lighted red tail lamp, a brake system maintained in operable condition, and a fluorescent flag at least forty square inches mounted at least six feet above the bottom of the tracks.” (Colo. Rev. Stat. Ann. § 33-44-108, subd. (3).)
Based on the foregoing, we conclude the trial court did not err in ruling that primary assumption of the risk applies in this case and instructing the jury accordingly. To the extent that the evidence showed a snowmobile was operating at the resort and involved in an collision with Forrester that day, its presence and that of related equipment (here apparently a towed toboggan) on the slope was an inherent risk of snowboarding at the resort. However, that risk may well have been unreasonably increased by Sierra if the specific circumstances alleged by Forrester regarding the snowmobile’s use at the time of the alleged collision were believed by the jury. But the jury was presented with a variety of competing scenarios as to what happened at the resort that day. Although we do not know which evidence it credited and which it did not, we know that it did not consider the specific circumstances of the snowmobile’s operation that day to have unreasonably increased the risk already present from the necessary use of snowmobiles at resorts.4
4 The better practice in cases such as this one, where key facts–here even the preliminary fact as to whether there was a collision at all, let alone a collision between a snowboarder and a snowmobile towing a toboggan–are in dispute, is to craft the special verdict form to require the jury to make preliminary factual findings, here such as whether the alleged accident occurred at all and the particulars, if so. (See CACI No. 410, Directions for Use [“There may also be disputed facts that must be resolved by a jury before it can be determined if the doctrine applies”], citing Shin v. Ahn (2007) 42 Cal.4th 482, 486, 64 Cal. Rptr. 3d 803, 165 P.3d 581.)
In arguing that a collision [*22] with a motorized vehicle is not an inherent risk, Forrester relies on out-of-state cases, some unpublished. We find those cases distinguishable or not persuasive. In Verberkmoes v. Lutsen Mountains Corp. (D. Minn. 1994) 844 F.Supp. 1356, a skier collided with an unmarked all terrain vehicle (ATV) parked on or near a groomed trail. The court denied summary judgment for the defendant, finding the hazard of the parked ATV was within the control of the ski resort, not an obvious risk like a lift tower, and not a hidden risk like a snow-covered stump. (Id. at pp. 1358-1359.) Defendant’s “parking of the ATV on the trail during routine maintenance of the ski slope cannot be deemed, as a matter of law, an inherent risk of skiing.” (Id. at p. 1360.) Rather, it was “a danger that reasonable prudence on the part [of defendant] would have foreseen and corrected or at least placed a warning for skiers.” (Id. at p. 1359.) We find Verberkmoes distinguishable, largely because the decision was based on where the ATV was parked; the ski resort could have easily parked it elsewhere or warned against the hazard. Here, the question was whether the resort’s use of snowmobiles on the ski slopes and consequential possibility of contact with snowboarders was an inherent risk of snowboarding.
In Schlumbrecht-Muniz v. Steamboat Ski and Resort Corp. (D. Colo. 2015) 132 F.Supp.3d 1310, the defendant had argued that [*23] a collision with a snowmobile is an inherent danger and risk of skiing. The court had rejected this argument twice before, each time concluding “whether a collision with a snowmobile is an inherent danger or risk of skiing is not necessarily a question of law because what is an inherent danger or risk of skiing is not limited to the circumstances specifically enumerated in the [Ski Safety Act].” (Id. at p. 1316.) The court declined to address the argument again. (Ibid.)
We find this conclusory analysis unhelpful. For the reasons stated ante, we find a collision with a snowmobile is an inherent risk of snowboarding. As to whether this particular collision was the result of the inherent risk, the jury was properly tasked with determining whether Sierra’s operation of the snowmobile unreasonably increased the risk already inherent in snowboarding. This determination governed whether this particular collision was barred by the assumption of the risk doctrine.
Forrester also relies on an unpublished case from the state of Ohio, Coblentz v. Peters 2005 Ohio 1102, 2005 Ohio App. LEXIS 1073, that found use of a motorized golf cart was not “an actual part of the sport of golf,” so the risk of being struck and injured by a golf cart “is not an ordinary risk of the game.” [*24] (Id. at ¶ 21.) To the limited extent this case is analogous, we decline to apply its narrow analysis to the sport of snowboarding and the associated risk of encountering the resort’s necessary equipment when on the ski slopes. (See Souza, supra, 138 Cal.App.4th at p. 269 [finding snowmaking equipment necessary to the sport of skiing].)
As we have noted, unlike many assumption of the risk cases, including those cited ante, here there is a genuine factual dispute as to what happened to Forrester and caused his injuries. The jury needed to resolve this factual dispute in order to determine whether Sierra unreasonably increased the inherent risk. Accordingly, the issue of whether recovery is barred by assumption of the risk could not be determined as a matter of law, such as by a motion for summary judgment, as is often the case. Here, we need not decide if Forrester’s specific collision was an inherent risk, but only the broader question of whether a collision with a snowmobile operated on the ski slopes of a resort is an inherent risk of snowboarding. If so, recovery is still possible if Sierra unreasonably increased the risk by the specific circumstances surrounding its operation of the snowmobile.
“Although defendants generally [*25] have no legal duty to eliminate (or protect a plaintiff against) risks inherent in the sport itself, it is well established that defendants generally do have a duty to use due care not to increase the risks to a participant over and above those inherent in the sport. Thus, although a ski resort has no duty to remove moguls from a ski run, it clearly does have a duty to use due care to maintain its towropes in a safe, working condition so as not to expose skiers to an increased risk of harm.” (Knight v. Jewett (1992) 3 Cal.4th 296, 315-316, 11 Cal. Rptr. 2d 2, 834 P.2d 696.) Numerous cases have pondered the factual question of whether various ski resorts have increased the inherent risks of skiing or snowboarding. (See Vine, supra, 118 Cal.App.4th at p. 591 [redesign of snowboarding jump]; Solis v. Kirkwood Resort Co. (2001) 94 Cal.App.4th 354, 366, 114 Cal. Rptr. 2d 265 [construction of the unmarked race start area on the ski run]; Van Dyke v. S.K.I. Ltd., supra, 67 Cal.App.4th 1317 [placement of signs in ski run].)
Forrester contends that even if the ski patrol’s use of a snowmobile is necessary to support the sport of snowboarding, the evidence here showed the snowmobile was not used for that purpose. Indeed, he claims that because the members of the ski patrol on duty that day denied being involved in a collision, the evidence established that the snowmobile was driven by a non-safety employee. He argues the trial court was required [*26] to resolve factual questions as to whether a member of the ski patrol was using the snowmobile before it determined whether assumption of risk applied.
We disagree with Forrester that the trial court was required to resolve these factual questions before submitting the case to the jury. Resolution of the factual issues as to how and by whom the snowmobile was operated “requires application of the governing standard of care (the duty not to increase the risks inherent in the sport) to the facts of this particular case–the traditional role of the trier of fact.” (Luna v. Vela (2008) 169 Cal.App.4th 102, 112, 86 Cal. Rptr. 3d 588.) “Our conclusion it is for the trier of fact to determine whether Vela breached his limited duty not to increase the risks inherent in the sport of volleyball finds solid support in the Supreme Court’s most recent sports injury, primary assumption of the risk decision, Shin v. Ahn, supra, 42 Cal.4th 482 . . . . In Shin the Supreme Court affirmed the trial court’s denial of a motion for summary judgment brought by a golfer who had struck one of his own playing partners with a tee shot. The court held the primary assumption of the risk doctrine regulates the duty a golfer owes both to playing partners and to other golfers on the course, found being hit by a stray [*27] golf shot was an inherent risk of the sport and concluded ‘golfers have a limited duty of care to other players, breached only if they intentionally injure them or engage in conduct that is “so reckless as to be totally outside the range of the ordinary activity involved in the sport.”‘ [Citation.] However, the Court also held whether the defendant had breached that limited duty of care by engaging in reckless conduct was a question for the trier of fact: ‘In determining whether defendant acted recklessly, the trier of fact will have to consider both the nature of the game and the totality of circumstances surrounding the shot. . . . [¶] Many factors will bear on whether a golfer’s conduct was reasonable, negligent, or reckless. . . . [¶] . . . This record is simply too sparse to support a finding, as a matter of law, that defendant did, or did not, act recklessly. This will be a question the jury will ultimately resolve based on a more complete examination of the facts.’ [Citation.]” (Luna, at pp. 112-113.) “In light of the Supreme Court’s decision in Shin, we conclude as the Luna court did, that resolving the question of whether [defendant] increased the risk of falling is properly decided by the trier [*28] of fact.” (Fazio v. Fairbanks Ranch Country Club (2015) 233 Cal.App.4th 1053, 1062, 183 Cal. Rptr. 3d 566.)
Forrester’s argument about the circumstances of the snowmobile’s use that day is premised upon the jury’s accepting his version of events–that a snowmobile hit him from behind, while driven by a non-safety employee who was not responding to an emergency and who was operating without lights, siren, or flag and contrary to numerous safety policies of Sierra. In short, Forrester assumes that the snowmobile had no legitimate reason to be on Broadway at the time of the incident. But the state of the evidence was such that the jury could decide otherwise. Due to Forrester’s failure to report the accident when it happened, the conflicting testimony of Forrester and Medina, the conflict in expert testimony as to how a collision would have occurred and what caused Forrester’s injuries, and the absence of any independent witness who saw or even heard about the accident, the jury could have rationally concluded the accident did not happen at all. Alternatively, the jury could have concluded that Forrester hit the toboggan out of carelessness or recklessness, Forrester’s injuries were not from the collision, or simply that Forrester failed to prove his version of the accident.
This [*29] case turned in large part on the jury’s assessment of credibility. There was evidence from which the jury could conclude that the incident occurred as described by Forrester and Medina, and that Sierra unreasonably increased its visitors’ inherent risk of a collision with a snowmobile accordingly–because a non-safety employee, not responding to an emergency, drove a snowmobile at significant speed across a beginner run on the busiest day of the year without using lights, siren or a flag, and in contravention of numerous safety policies. These circumstances, or any combination thereof, could certainly constitute an unreasonable increase of the inherent risk by Sierra. Forrester’s theory was tendered to the jury and the jury decided adversely to his argument. Forrester does not challenge the sufficiency of the evidence to support the verdict.
The trial court did not err in determining assumption of the risk applied and submitting the case to the jury on the question of whether Sierra unreasonably increased the risk inherent in the sport of snowboarding.
Instruction on Secondary Assumption of the Risk
As we set forth ante, the jury was also instructed pursuant to CACI No. 405–the comparative [*30] fault instruction modified by the trial court–as to secondary assumption of the risk. The jury was told that in order for Sierra to succeed on its claim that Forrester contributed to his own harm, Sierra would need to prove both that Forrester assumed the risks that led to his injury and that Forrester’s assumption of those risks was a substantial factor in causing his harm.
The term “assumption of risk” has been “used in connection with two classes of cases: those in which the issue to be resolved was whether the defendant actually owed the plaintiff a duty of care (primary assumption of risk), and those in which the defendant had breached a duty of care but where the issue was whether the plaintiff had chosen to face the risk of harm presented by the defendant’s breach of duty (secondary assumption of risk). [Citation.] In the latter class of cases, we concluded, the issue could be resolved by applying the doctrine of comparative fault, and the plaintiff’s decision to face the risk would not operate as a complete bar to recovery. In such a case, the plaintiff’s knowing and voluntary acceptance of the risk functions as a form of contributory negligence. [Citation.]” (Kahn v. East Side Union High School Dist. (2003) 31 Cal.4th 990, 1003, 4 Cal. Rptr. 3d 103, 75 P.3d 30.)
“Secondary assumption [*31] of risk [arises] where a defendant breaches a duty of care owed to the plaintiff but the plaintiff nevertheless knowingly encounters the risk created by the breach. Secondary assumption of risk is not a bar to recovery, but requires the application of comparative fault principles.” (Connelly, supra, 39 Cal.App.4th at p. 11.)
Forrester contends the special instruction on secondary assumption of the risk was incorrect because it omitted the requirement that a plaintiff “knowingly” or “voluntarily” accept the increased risk, and because the court failed to set it apart from the instruction related to primary assumption of the risk. Forrester contends the error prejudiced him because it confused the jury on the law.
As Sierra does not defend the instruction, we will assume arguendo that it is incorrect for omitting “knowingly” or “voluntarily.” We reject, however, the argument that it was error to instruct on secondary assumption of the risk immediately after instructing in the language of CACI No. 410 on primary assumption of the risk. Each instruction begins by noting the party whose claim the instruction addresses and what each party must prove to succeed on its claim. The two claims are necessarily related. “Nevertheless, in [*32] certain circumstances primary and secondary assumption of risk are intertwined and instruction is required so the jury can properly determine whether the defendant did, in fact, increase the risks inherent in a hazardous sport so that secondary assumption of risk should be considered.” (Vine, supra, 118 Cal.App.4th at p. 592.)
“Cases like this one, where the plaintiff contends the defendant breached the duty not to increase the risks inherent in a hazardous sporting activity, present both aspects of the assumption of risk doctrine. If the plaintiff fails to show any increase in the inherent risks, or if the trial court determines that the only risks encountered were inherent in the sport, the defendant prevails based on primary assumption of risk. If the jury, properly instructed on the scope of the defendant’s duty, determines the defendant did increase the inherent risk, it then considers the plaintiff’s claim based on secondary assumption of risk as an aspect of the plaintiff’s comparative fault.” (Vine, supra, 118 Cal.App.4th at p. 593.)
“[T]here is no rule of automatic reversal or ‘inherent’ prejudice applicable to any category of civil instructional error, whether of commission or omission. A judgment may not be reversed for instructional error in a civil case [*33] ‘unless, after an examination of the entire cause, including the evidence, the court shall be of the opinion that the error complained of has resulted in a miscarriage of justice.’ (Cal. Const., art. VI, § 13.)” (Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 580, 34 Cal. Rptr. 2d 607, 882 P.2d 298 (Soule).)
“Instructional error in a civil case is prejudicial ‘where it seems probable’ that the error ‘prejudicially affected the verdict.’ [Citations.]” (Soule, supra, 8 Cal.4th at p. 580.) Actual prejudice must be assessed in the context of the entire record using a multifactor test. (Ibid.) “Thus, when deciding whether an error of instructional omission was prejudicial, the court must also evaluate (1) the state of the evidence, (2) the effect of other instructions, (3) the effect of counsel’s arguments, and (4) any indications by the jury itself that it was misled.” (Id. at pp. 580-581.)
Forrester contends the record demonstrates prejudice because there was strong evidence that Sierra increased the risk by its operation of a snowmobile that day, the jury deliberated for two full days, and the request for a definition of “unreasonable” suggests the jury was confused as to the law.
We disagree that the record shows it was “probable” that the instructional error “prejudicially affected the verdict.” (Soule, supra, 8 Cal.4th at p. 580.) As we have discussed, the evidence raised questions [*34] of witness credibility, and the jury was also called upon to consider conflicting expert testimony. The jury heard five days of evidence and deliberated for two days. In that circumstance, the jury’s two days of deliberation may suggest its “conscientious performance of its civic duty, rather than its difficulty in reaching a decision.” (People v. Walker (1995) 31 Cal.App.4th 432, 439, 37 Cal. Rptr. 2d 167 [six and one-half hours of deliberation after two and one-half hours of presentation of evidence].) The jury’s request for a definition of “unreasonable” and its request for a reread of evidence as to whether there was an emergency that day indicate the jury was most likely focused on Sierra’s conduct, not Forrester’s.
The most useful guide for the jury in sorting through the issues of primary and secondary assumption of the risk was the verdict form that separated the issues. The verdict form asked six questions; only if the jury answered yes to a question was it to proceed to the next question. The questions were: (1) Did Sierra or its employee unreasonably increase the risks inherent in snowboarding? (2) Was this unreasonable increase in the risks a substantial factor in causing harm to Forrester? (3) What are Forrester’s total damages? (4) Did [*35] Forrester assume the risks that led to his injury? (5) Was that assumption of risk a substantial factor in causing his injury? (6) What percentage of responsibility for Forrester’s harm do you assign to Sierra, to Forrester? The jury answered the first question “no” and therefore did not answer any other questions. Accordingly, the jury never reached the issue of secondary assumption of risk and thus never had to apply the challenged jury instruction. Forrester has failed to show prejudicial instructional error. (See Caldwell v. Paramount Unified School Dist. (1995) 41 Cal.App.4th 189, 206, 48 Cal. Rptr. 2d 448 [error to grant new trial due to instructional error when jury never reached issue covered by instruction]; Vahey v. Sacia (1981) 126 Cal.App.3d 171, 179-180, 178 Cal. Rptr. 559 [purported instructional error on damages was not prejudicial where jury found the defendant was not negligent and never reached the issue of damages].)
Refusal to Instruct on Willful Suppression of Evidence
At trial, Forrester made much of the fact that the snowmobile’s driver was never identified, which he blamed on Sierra’s failure to retain the daily checklist completed by the driver who had taken out the snowmobile that day. Before trial, Forrester sought to admit Sierra’s special ski permit and winter operation plan from the United States Forest [*36] Service. He argued Sierra was required to maintain the checklist under the document retention policy set forth in that plan. The trial court excluded the document, ruling that whether Sierra had a contractual duty to retain the report was irrelevant, particularly because–given the evidence that the snowmobile could be used by multiple people in the same day–the checklist would not necessarily indicate who was driving a snowmobile at the time of the alleged accident. The court noted that Sierra had provided Forrester with a list of 19 authorized drivers.
Forrester requested that the trial court give CACI No. 204, which provides: “You may consider whether one party intentionally concealed or destroyed evidence. If you decide that a party did so, you may decide that the evidence would have been unfavorable to that party.” The request was based on evidence that MacClellan failed to interview all 19 people authorized to use a snowmobile that day and the destruction of the checklist. The court denied Forrester’s request.
Forrester raised the failure to give CACI No. 204 in his motion for a new trial.
Forrester contends it was error to refuse the requested instruction. For the first time on appeal, he asserts [*37] the snowmobile driver’s leaving the scene of the accident without identifying himself was sufficient evidence to support the instruction. As to the destruction of the checklist, the basis for instruction advanced at trial, Forrester argues there was no evidence the checklist was actually discarded, only that the practice was to discard the checklists daily. He contends he was prejudiced by lack of the instruction because he could not argue the presumption that the destroyed evidence was unfavorable to Sierra to offset the inability to identify the driver.
“A party is entitled to have the jury instructed on his theory of the case, if it is reasonable and finds support in the pleadings and evidence or any inference which may properly be drawn from the evidence.” (Western Decor & Furnishings Industries, Inc. v. Bank of America (1979) 91 Cal.App.3d 293, 309, 154 Cal. Rptr. 287.) An instruction on willful suppression of evidence is appropriate if there is evidence “that a party destroyed evidence with the intention of preventing its use in litigation.” (New Albertsons, Inc. v. Superior Court (2008) 168 Cal.App.4th 1403, 1434, 86 Cal. Rptr. 3d 457.)
First, Forrester did not rely at trial on the theory that evidence was destroyed when the snowmobile driver left without identifying himself. “‘A civil litigant must propose complete instructions in accordance with his or her theory of the litigation [*38] and a trial court is not “obligated to seek out theories [a party] might have advanced, or to articulate for him that which he has left unspoken.” [Citations.]’ [Citation.]” (Stevens v. Owens-Corning Fiberglas Corp. (1996) 49 Cal.App.4th 1645, 1653, 57 Cal. Rptr. 2d 525.) Thus we need not consider this new theory first advanced on appeal.
Further, the evidence established the checklist had been discarded shortly after the accident, before Forrester made his complaint. While there was no testimony from the person who discarded the checklist for that day and MacClellan testified he did not know if the specific checklist had been discarded, Rice testified the checklists were thrown out on a daily basis and MacClellan testified he knew they were thrown out shortly after they were filled out.
Forrester relies on Ventura v. ABM Industries Inc. (2012) 212 Cal.App.4th 258, 150 Cal. Rptr. 3d 861, claiming it is “right on point.” In Ventura, a negligent hiring and supervision case, the trial court gave the instruction at issue here based on testimony of the human resources director about redactions in personnel records and the defendant’s failure to interview certain witnesses during the investigation of plaintiff’s complaints. (Id. at p. 273.) The appellate court found no error, noting “Defendants were free to present the jury with evidence that (as counsel represented to the [*39] court), the redactions were only of telephone numbers, and that the failure to interview certain witnesses was proper, and to argue that evidence to the jury.” (Ibid.)
Ventura is distinguishable. There, the actions that supported the instruction occurred during the investigation of plaintiff’s claim, thus permitting an inference there was destruction of evidence to prevent its use in litigation. Here, the evidence was that the snowmobile checklists were routinely discarded each day long before the incident at issue here, unless information on the checklist triggered a need for maintenance. Because Forrester did not report his accident until multiple days had passed, Sierra did not become aware of Forrester’s claim until after the checklist at issue had been discarded. There was no evidence, either direct or from which the inference could be drawn, that the practice of discarding the checklists daily was intended to forestall their use in litigation.
The trial court did not err in declining to give CACI No. 204 on willful suppression of evidence.5
5 Further, Forrester’s claim of prejudice is unconvincing. The instruction permits the jury to draw the inference that the suppressed evidence would have been unfavorable to the party suppressing it. The checklist would have shown, at most, the name of the snowmobile driver. Sierra stipulated that the driver was one of its employees and provided Forrester with a list of authorized drivers.
The judgment is affirmed. Sierra shall recover costs on appeal. (Cal. Rules of Court, rule 8.278(a).)
/s/ Duarte, J.
/s/ Butz, Acting P. J.
/s/ Mauro, J.
Petitioners: Ruby D. Stockdale; Clara Cardwell, individually and as personal representative of Kenneth Ray Cardwell; Jennifer Lynn Lake; and Patricia Ann Rider Jones, a/k/a Patricia Ann Jones, v. Respondent: Chester J. Ellsworth. and Concerning: XTO Energy, Inc.
Supreme Court Case No. 16SC798
SUPREME COURT OF COLORADO
2017 CO 109; 2017 Colo. LEXIS 1092
December 18, 2017, Decided
THIS OPINION IS NOT THE FINAL VERSION AND SUBJECT TO REVISION UPON FINAL PUBLICATION
PRIOR HISTORY: [**1] Certiorari to the Colorado Court of Appeals. Court of Appeals Case No. 15CA1114.
DISPOSITION: Judgment Reversed.
CORE TERMS: heirs, alter ego, corporate veil, attorneys’ fees, joinder, piercing, shareholder, mineral deeds, entity, corporate entity, personal jurisdiction, jointly, notice, individual liability, severally liable, personal liability, individually liable, post-judgment, interpleader, frivolous, pierce, join, oil, substituted service, opportunity to contest, final judgment, properly joined, checking account, equitable, joined
Stockdale v. Ellsworth–Corporations–Piercing the Corporate Veil–Attorneys’ Fees–Joinder
The supreme court reverses the court of appeals’ opinion vacating the trial court’s judgment awarding attorneys’ fees. The supreme court holds that the trial court properly pierced the corporate veil to impose joint and several liability on a limited liability company’s managing member for attorneys’ fees. The supreme court also holds that the managing member was properly joined as a party to the litigation, and that imposing such liability did not violate the managing member’s due process rights under the circumstances of this case.
COUNSEL: For Petitioners Ruby D. Stockdale, Clara Cardwell and Patricia Ann Jones: Law Office of John C. Seibert, LLC, John Seibert, Durango, Colorado.
For Petitioner Jennifer Lynn Lake: Law Office of David Liberman, LLC, David Liberman, Durango, Colorado.
No appearance on behalf of Respondent.
JUDGES: JUSTICE MÁRQUEZ delivered the Opinion of the Court.
OPINION BY: MÁRQUEZ
JUSTICE MÁRQUEZ delivered the Opinion of the Court.
[*1] In 2009, XTO Energy, Inc., filed an interpleader action, seeking to resolve [**2] competing claims to oil and gas proceeds held by XTO. XTO named several potential claimants as defendants in the interpleader action, including Seawatch Royalty Partners, LLC (managed by Chester J. Ellsworth) and several alleged heirs of the record owner of the relevant oil and gas interests. After a bench trial, the court concluded that a group of individuals–deemed the true heirs of the record owner–were entitled to the proceeds. Pertinent here, the trial court also ruled that Seawatch’s claims and defenses were frivolous; that Seawatch was an alter ego of Ellsworth; and that Seawatch and Ellsworth were jointly and severally liable for any future award of attorneys’ fees. Ellsworth was subsequently joined as a party under C.R.C.P. 21 and served via substituted service. The post-judgment sanctions proceedings continued for another several years. During that time, Ellsworth contested his individual liability, arguing that the court lacked personal jurisdiction over him; that he had been improperly served; and that Seawatch was not, in fact, his alter ego. The trial court rejected these arguments and entered judgment jointly and severally against Seawatch and Ellsworth for approximately $1 million [**3] in attorneys’ fees. Ellsworth appealed pro se.
[*2] In an unpublished opinion, the court of appeals vacated the judgment against Ellsworth, holding that the district court lacked jurisdiction to hold him jointly and severally liable for the attorneys’ fee award because, as a nonparty, Ellsworth did not have notice and opportunity to contest his individual liability. XTO Energy, Inc. v. Ellsworth, No. 15CA1114, 2016 Colo. App. LEXIS 1205, slip op. at 1 (Colo. App. Aug. 25, 2016). Because we conclude that Ellsworth had adequate notice and opportunity to challenge the alter ego findings that established his individual liability, we reverse the judgment of the court of appeals.
I. Facts and Procedural History
[*3] In 2009, XTO Energy, Inc., a producer of oil and natural gas, filed an interpleader action to determine the rights to certain oil and gas proceeds held by XTO. At the time of filing, XTO operated two natural gas wells that were extracting gas from an area of pooled mineral interests in the Fruitland Formation in La Plata County. One of the record owners of a mineral interest within the pooled area was Roy P. Cardwell, who had recorded his title in 1938. Because Cardwell and his heirs could not be located in the 1990s when the Colorado Oil and Gas Conservation [**4] Commission authorized the pooling of interests in the area, the proceeds attributable to Cardwell’s interest were held in suspense as the natural gas wells were developed. When XTO filed the interpleader action in 2009, the proceeds attributable to Cardwell’s interest totaled approximately $2.7 million.
[*4] In its interpleader complaint, XTO sought a declaratory judgment as to who should receive the proceeds of Cardwell’s interest. XTO identified as potential claimants the heirs of a Roy P. Cardwell who died in California in 1971 (“California Heirs”); the heirs of a Roy P. Cardwell who died in Kansas in 1980 (“Kansas Heirs”); and two business entities managed by Chester Ellsworth: CEMPCO, Inc. and Seawatch Royalty Partners, LLC. CEMPCO and the Kansas Heirs withdrew their claims to the proceeds prior to trial, and the remaining parties–Seawatch and the California Heirs–stipulated that the California Heirs were the true heirs of the record owner. Seawatch claimed that it was entitled to the proceeds because it had obtained mineral deeds from the California Heirs. The California Heirs, however, claimed that they were entitled to the proceeds because Seawatch had obtained the mineral deeds [**5] from them through fraud or deceit.
[*5] After a seven-day bench trial, the trial court (Judge Dickinson) issued its Findings, Order, and Judgment on November 10, 2011. The trial court granted the California Heirs’ claims for rescission of the mineral deeds and assignments to Seawatch, concluding that Ellsworth had obtained them on behalf of Seawatch through fraud and misrepresentation. Specifically, Ellsworth told the California Heirs that there was no oil and gas production in the Cardwell interest and that there may be no minerals to extract, even though Ellsworth (or entities he controlled) had already received over $1 million in proceeds from mineral interests in adjoining lands. Ellsworth also falsely represented to the California Heirs that they could be liable for any costs of production or accidents associated with their interests.
[*6] The trial court found that Seawatch failed to produce any credible evidence to support its assertion that Ellsworth did not make material misstatements or unjustifiably conceal material facts; the court therefore ruled that Seawatch’s claims and defenses were frivolous and groundless. Pertinent here, the trial court also concluded that “Seawatch was at [**6] all material times an alter ego of Ellsworth,” thus piercing the corporate veil and rendering Seawatch and Ellsworth jointly and severally liable for attorneys’ fees incurred by XTO and the California Heirs in responding to Seawatch’s frivolous claims and defenses.
[*7] Seawatch appealed, raising several arguments. During this first appeal, Seawatch argued, among other things, that the trial court’s order holding Ellsworth individually liable for attorneys’ fees must be vacated because the court did not have personal jurisdiction over Ellsworth. The court of appeals affirmed the judgment against Seawatch in a unanimous, unpublished decision, but did not address the argument regarding Ellsworth because the trial court had not yet entered final judgment on attorneys’ fees. We denied certiorari review. XTO Energy, Inc. v. Seawatch Royalty Partners LLC, Nos. 11CA2388 & 12CA1159, 2013 Colo. App. LEXIS 312, (Colo. App. March 7, 2013), cert. denied, No. 13SC453 (Feb. 18, 2014).
[*8] While that appeal was pending, XTO and the California Heirs filed motions seeking attorneys’ fees and costs from Seawatch and Ellsworth. XTO and the California Heirs also filed a joint motion to join Ellsworth to the post-judgment proceedings pursuant [**7] to C.R.C.P. 21. The trial court granted the motion to join Ellsworth as a party “as authorized by C.R.C.P. 21 and City of Aurora v. Colorado State Engineer, 105 P.3d 595 (Colo. 2005).” After unsuccessful attempts to serve Ellsworth personally, XTO and the California Heirs moved for an order authorizing substituted service, which the trial court granted.
[*9] In 2013, Ellsworth, making what he called a “limited appearance,” filed numerous objections and motions in which he argued that the court lacked personal jurisdiction over him and that substituted service had been improper.
[*10] In an order dated April 10, 2014, the trial court denied several pending motions, including Ellsworth’s motion to dismiss for lack of personal jurisdiction. Judge Herringer, who presided over the case following Judge Dickinson’s retirement, held that Judge Dickinson’s corporate veil-piercing findings in his November 10, 2011 ruling were “law of the case.” Judge Herringer therefore incorporated the earlier findings into the April 2014 order–specifically, that “Seawatch was at all material times an alter ego of Ellsworth”; that Ellsworth, as Seawatch’s agent, “engaged in civil conspiracy” and “made material omission[s]”; and that Ellsworth’s statements “constitute[d] fraud.” The court articulated several [**8] additional findings relevant to whether piercing the corporate veil was necessary to achieve an equitable result. The court found, for example, that Seawatch’s sole business function was to acquire the mineral deeds from the California Heirs for Ellsworth’s benefit; that Seawatch had no business dealings outside the facts that gave rise to this litigation and was controlled entirely by Ellsworth; that Seawatch was apparently insolvent and had no assets, such that limiting liability to Seawatch would foreclose any meaningful opportunity for injured parties to recover for conduct for which Ellsworth was responsible; and that there was no indication that Seawatch’s litigation strategy was controlled by anyone other than Ellsworth.
[*11] Ultimately, the court held that Ellsworth was liable for attorneys’ fees after concluding that “[t]he only respect in which Ellsworth has treated Seawatch as a corporate entity, independent of him personally, is as a barrier to his personal liability.” As a result, “[t]o the extent that Seawatch advanced frivolous argument and made groundless claims,” the court ruled, “Ellsworth is the person who should ultimately be held responsible for that conduct.”
[*12] About [**9] a year later, in an April 8, 2015 order, the trial court awarded fees and costs to XTO and the California Heirs under section 13-17-102, C.R.S. (2017), holding Ellsworth and Seawatch jointly and severally liable. The court instructed XTO and the California Heirs to prepare proposed judgments consistent with its order. Notice of the proposed final judgments was served on Ellsworth. Ellsworth did not file any objections. The court entered separate judgments for XTO and the California Heirs in May 2015.
[*13] Ellsworth appealed pro se, arguing, in relevant part, that when Judge Dickinson initially determined that Seawatch was an alter ego of Ellsworth, he had not been made a party to the case, and therefore, to hold him jointly and severally liable for attorneys’ fees violated his right to due process. In a unanimous, unpublished opinion, the court of appeals agreed with Ellsworth and vacated the attorneys’ fee judgment with respect to him. XTO Energy, Inc. v. Ellsworth, No. 15CA1114, 2016 Colo. App. LEXIS 1205 (Colo. App. Aug. 25, 2016).
[*14] Despite his victory in the court of appeals, Ellsworth filed a petition for a writ of certiorari with this court, seeking “relief of manifest injustice to include $200,000,000 in exemplary damages pursuant to [**10] § 13-17-101 [C.R.S. (2017)] to punish the trial court’s and Respondent’s acts of frivolous, groundless and vexatious litigation in [the underlying cases] and the appellate courts [sic] acts of applying an incorrect standard of review and failure to order as adjudicated.”
[*15] XTO filed an opposition to Ellsworth’s petition, and the California Heirs filed a cross-petition for certiorari review, arguing that Ellsworth had been properly joined in the litigation under this court’s decision in City of Aurora ex rel. Utility Enterprise v. Colo. State Engineer, 105 P.3d 595 (Colo. 2005). Ellsworth subsequently filed several documents on behalf of Seawatch and CEMPCO, which this court struck under section 13-1-127(2), C.R.S. (2017). Finally, Ellsworth filed a “Motion to Declare . . . C.R.S. § 13-1-127 . . . Unconstitutional,” which this court denied.
[*16] Ultimately, we denied Ellsworth’s petition for a writ of certiorari, but granted the California Heirs’ cross-petition to review the court of appeals’ ruling on whether Ellsworth was properly joined in the case.1
1 We granted certiorari review of the following issues:
1. Whether the petitioner was properly joined in the sanctions proceedings pursuant to City of Aurora ex rel. Utility Enterprise v. Colorado State Engineer, 105 P.3d 595, 621-24 (Colo. 2005).
2. Whether piercing an entity’s corporate veil is a form of vicarious liability supporting joinder pursuant to City of Aurora ex rel. Utility Enterprise v. Colorado State Engineer, 105 P.3d 595 (Colo. 2005).
3. Whether service of a summons and an opportunity to be heard before entry of the sanctions [**11] judgments afforded the petitioner due process.
The California Heirs filed their opening brief on July 3, 2017. Pursuant to our May 22 scheduling order, Ellsworth had until August 7 to file an answer brief. On August 23, having not received an answer from Ellsworth, we ordered him to notify the court by August 30 whether he intended to file an answer brief, warning that if he did not comply, we would presume that he did not intend to file an answer brief, and the case would proceed. Ellsworth did not thereafter file any response.
A. Piercing the Corporate Veil
[*17] We address first the merits of the trial court’s decision to pierce the corporate veil and hold Ellsworth individually liable for Seawatch’s litigation conduct. “Piercing the corporate veil involves a mixed question of law and fact.” Lester v. Career Bldg. Acad., 2014 COA 88, ¶ 42, 338 P.3d 1054, 1062. Accordingly, “[w]e defer to the trial court’s findings of fact if they are supported by the record, but review the trial court’s legal conclusions de novo.” See People v. Marquardt, 2016 CO 4, ¶ 8, 364 P.3d 499, 502.
[*18] A duly formed corporation is a legal entity distinct from its shareholders. Connolly v. Englewood Post No. 322 Veterans of Foreign Wars of the United States, Inc. (In re Phillips), 139 P.3d 639, 643 (Colo. 2006). This separate status normally insulates a corporation’s shareholders from personal liability for the debts of the corporation. Indeed, such “[i]nsulation from individual liability is an inherent purpose of incorporation; only extraordinary circumstances justify disregarding the corporate entity to impose personal liability.” Leonard v. McMorris, 63 P.3d 323, 330 (Colo. 2003).
[*19] However, in certain circumstances, a court will “pierce the veil of corporate entity” to expose the individuals “hiding behind” it. I.M. Wormser, Piercing the Veil of Corporate Entity, 12 Colum. L. Rev. 496, 515, 497 (1912); Phillips, 139 P.3d at 644. For instance, a shareholder may be individually liable for the corporation’s actions [**12] “when the corporation is merely the alter ego of the shareholder, and the corporate structure is used to perpetuate a wrong.” Phillips, 139 P.3d at 644 (citation omitted). “In such extraordinary circumstances, the courts may ignore the independent existence of the business entity and pierce the corporate veil to achieve an equitable result.” Id.; see also Griffith v. SSC Pueblo Belmont Operating Co. LLC, 2016 CO 60M, 381 P.3d 308, 313 (“The case law governing corporate veil-piercing applies to disregarding the LLC form as well.”)
[*20] A corporation is the alter ego of its shareholder or shareholders when it is a “mere instrumentality for the transaction of the shareholders’ own affairs, and there is such unity of interest in ownership that the separate personalities of the corporation and the owners no longer exist.” Id. (quoting Krystkowiak v. W.O. Brisben Co., 90 P.3d 859, 867 n.7 (Colo. 2004)). To determine whether a corporation is an alter ego, a court should consider a number of factors, including whether “(1) the corporation is operated as a distinct business entity, (2) funds and assets are commingled, (3) adequate corporate records are maintained, (4) the nature and form of the entity’s ownership and control facilitate misuse by an insider, (5) the business is thinly capitalized, (6) the corporation is used as a ‘mere shell,’ (7) shareholders disregard [**13] legal formalities, and (8) corporate funds or assets are used for noncorporate purposes.” Id. As we explained in Phillips, “[t]hese factors reflect the underlying principle that the court should only pierce when the corporate form has been abused.” Id.
[*21] Next, if the corporation is found to be merely the alter ego of a shareholder, the court must consider “whether justice requires recognizing the substance of the relationship between the shareholder and corporation over the form because the corporate fiction was used to perpetrate a fraud or defeat a rightful claim.” Id. (quotation marks omitted). “Only when the corporate form was used to shield a dominant shareholder’s improprieties may the veil be pierced.” Id.
[*22] Finally, “the court must evaluate whether an equitable result will be achieved by disregarding the corporate form and holding the shareholder personally liable for the acts of the business entity.” Id. “Achieving an equitable result is the paramount goal of traditional piercing of the corporate veil.” Id.
[*23] A claimant seeking to pierce the corporate veil must make a clear and convincing showing that each of the foregoing factors has been satisfied. Id. If a claimant satisfies [**14] this burden and the corporate veil is pierced, the court may ignore the independent existence of the corporate entity and hold the shareholder liable for the corporation’s actions. See id.
[*24] Here, the trial court held that Seawatch “was at all material times” the alter ego of Ellsworth. In its November 10, 2011 order, the trial court adopted XTO’s proposed findings of fact and conclusions of law, as well as portions of the California Heirs’ post-trial briefing. Specifically, the trial court found that Ellsworth was the sole managing partner of Seawatch, which he owned with his wife and two adult children; Ellsworth’s payments to the California Heirs for the mineral deeds were made from Ellsworth’s personal checking account or were cash; Seawatch did not have its own checking account, its own cash, or any loan agreements with Ellsworth; Seawatch did not own other property, had never received any income, and did not file tax returns; and Ellsworth used these alter ego entities to perpetuate a wrong.
[*25] Subsequently, after Judge Herringer took over the case for Judge Dickinson, the trial court incorporated these findings as law of the case in its April 10, 2014 order. In that order, the trial [**15] court also revisited the third requirement for piercing the corporate veil–i.e., whether piercing the veil is necessary to achieve an equitable result. On that point, the court found that “Seawatch was used by Ellsworth as an instrumentality for committing fraud” and that Seawatch’s “sole business function was to acquire mineral deeds from the California Heirs for the benefit of Ellsworth.” Indeed, according to the trial court, “Seawatch had no business dealings outside the facts that give rise to this litigation and it was entirely controlled by Ellsworth.” Moreover, the court found, “Seawatch is apparently insolvent and has no assets, not even its own checking account” and “when Ellsworth was purportedly conducting business on behalf of Seawatch, he used his personal checking account for transactions made by Seawatch.” Additionally, “there [was] no indication that Seawatch’s litigation strategy was controlled or dictated by anyone other than Ellsworth.”
[*26] Thus, the court reasoned, “if liability was limited to Seawatch, it would foreclose any meaningful opportunity for the injured parties to recover for conduct [for] which Ellsworth is responsible.” Because “[t]he record is devoid of [**16] any meaningful evidence that Seawatch was operated as a separate corporate entity apart from Ellsworth,” and “[t]he only respect in which Ellsworth has treated Seawatch as a corporate entity, independent of him personally, is as a barrier to his personal liability,” the court concluded, holding Ellsworth “liable for the actions of Seawatch is required to achieve fairness and reach a just result.”
[*27] As noted above, we “defer to the trial court’s findings of fact if they are supported by the record.” Marquardt, ¶ 8, 364 P.3d at 502. Here, the trial court’s findings are amply supported by the record. During the 2011 bench trial related to the mineral deeds, Ellsworth testified that he owned Seawatch with his wife and two children. Ellsworth testified that he had been the sole manager of Seawatch since its inception in 2007 and that he makes all the decisions for Seawatch. Ellsworth further testified that Seawatch did not have a checking account when he obtained the mineral deeds from the California Heirs; indeed, at least one California Heir testified that Ellsworth paid for the mineral deeds with a personal check. Ellsworth also testified that Seawatch had not received any income and had not filed tax [**17] returns.
[*28] Based on the above factual findings, and reviewing the trial court’s legal conclusion de novo, id., we conclude that the trial court did not err by piercing the corporate veil.
B. Joinder and Due Process
[*29] The court of appeals vacated the judgment against Ellsworth, holding that the trial court lacked personal jurisdiction over him because Ellsworth had not yet been joined as a party (and therefore had no notice or opportunity to contest personal liability) when the trial court entered the November 2011 order holding him individually liable. XTO Energy, slip op. at 1, 5-6. Consequently, the court of appeals reasoned, the initial order was void with respect to Ellsworth, and all subsequent orders and judgments based on the initial order were void as well. Id. at 14. The court of appeals rejected XTO’s argument that joinder “cured” this jurisdictional defect, because (1) joinder was improper; and (2) Ellsworth did not have a chance, after the joinder motion was filed, to contest the trial court’s alter ego findings or its imposition of joint and several liability. Id. at 10-14.
[*30] It is true that a person is not bound by a judgment if he was not “designated as a party or . . . made a party by service of process.” Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 110, 89 S. Ct. 1562, 23 L. Ed. 2d 129 (1969). But here, we conclude [**18] that Ellsworth was a party to the post-judgment proceedings. The court of appeals’ conclusion that Ellsworth was not properly joined because there was no pleaded “claim for relief” against Ellsworth, XTO Energy, slip op. at 10-12, is contrary to our decision in City of Aurora. There, after the trial court entered its order of dismissal following an eight-week trial, the prevailing party sought attorneys’ fees and costs under section 13-17-102(4), and moved to join Aurora solely “for purposes of collecting attorney fees and costs.” City of Aurora, 105 P.3d at 605. The court granted joinder, and we affirmed.
[*31] As we explained, under the Colorado Rules of Civil Procedure, “[p]arties may be dropped or added by order of the court on motion of any party . . . at any stage of the action and on such terms as are just.” Id. at 623 (emphasis in original) (quoting C.R.C.P. 21). Rules 20 and 21, which should be “liberally construed,” specifically “authorize joinder in situations where one party seeks to join a person who may be liable for the same debt or conduct that is already before the court.” Id. These rules “indicate clearly a general policy to disregard narrow technicalities and to bring about the final determination of justiciable controversies without undue delay.” Id. (quoting Swan v. Zwahlen, 131 Colo. 184, 280 P.2d 439, 441 (Colo. 1955)). Thus, we held, [**19] joinder of Aurora was not an abuse of discretion, even though the court had already entered judgment on the merits, “[b]ecause C.R.C.P. 20 allows joinder at any stage of the proceedings and because C.R.C.P. 21 anticipates joinder where there are joint liabilities, as well as common questions of law and fact,” and Aurora “was potentially liable for conduct that was already before the court.” Id.
[*32] Nor were XTO and the California Heirs required to amend their pleadings to add a “claim for relief” against Ellsworth, or file additional pleadings to the same effect, to join Ellsworth. Such a rule would be antithetical to the policy behind Rules 20 and 21, and would make little sense in situations where, like here and in City of Aurora, the trial court has already entered judgment on the underlying dispute. Additionally, in light of the unique factual circumstances of this case, any failure to amend the complaint to add Ellsworth as a party to the post-judgment sanctions proceedings would be, at most, harmless error. “The court at every stage of the proceeding must disregard all errors and defects that do not affect any party’s substantial rights.” C.R.C.P. 61. “[A]n error affects a substantial right only if it can be said with fair [**20] assurance that the error substantially influenced the outcome of the case or impaired the basic fairness of the trial itself.” Laura A. Newman, LLC v. Roberts, 2016 CO 9, ¶ 24, 365 P.3d 972, 978 (quotation marks omitted). By the time Ellsworth was joined as a party, he had already been heavily involved with the case for several years as Seawatch’s sole managing member. Indeed, he spent much of the trial at counsel’s table and also testified. He was then properly served with the joinder motion and summons. On this record, Ellsworth cannot establish that any error regarding amending the complaint substantially influenced the outcome of the case or impaired the basic fairness of the trial.
[*33] Furthermore, contrary to the court of appeals’ assertion, Ellsworth had an opportunity to contest his individual liability once he was joined as a party. The trial court found that Seawatch was Ellsworth’s alter ego in November 2011 and that, accordingly, Ellsworth would be jointly and severally liable for any award of attorneys’ fees. In December 2011, XTO and the California Heirs moved for judgment on attorneys’ fees and to join Ellsworth as a party to the post-judgment proceedings. The court granted the joinder motion in August 2012, and Ellsworth was served via [**21] substituted service in January 2013. The court did not enter final judgment awarding attorneys’ fees against Ellsworth, however, until May 2015. During the three years after Ellsworth was joined as a party and before the entry of final judgment, Ellsworth had ample opportunity to challenge the alter ego findings.
[*34] In fact, Ellsworth did offer arguments, however unartful, regarding the propriety of piercing the corporate veil. In 2013, Ellsworth, making what he called a “limited appearance,” argued that the court lacked personal jurisdiction over him and that the substituted service had been improper. In his motion to dismiss, Ellsworth, represented by the same attorney who represented Seawatch, “object[ed] to the validity of the Summons served by substitute service . . . and also on the basis that the Court lacks personal jurisdiction over Ellsworth.” Ellsworth’s motion to dismiss went on to address “the elements of ‘piercing the corporate veil,'” arguing that the trial court’s order holding Ellsworth individually liable “contains no record that [the relevant] elements were evaluated” and that the record was “also completely void of the analysis showing all elements satisfied a standard [**22] of ‘clear and convincing’ proof.” (citing Phillips, 139 P.3d at 644).
[*35] In a subsequent filing, Ellsworth argued against piercing the corporate veil under a section entitled “CEMPCO AND SEAWATCH ARE NOT AGENTS OR ALTER EGOS OF ELLSWORTH.” Ellsworth asserted that the “alter-ego theory of the trial court cannot be applied here” for various reasons, including that “the failure of a limited liability company to observe the formalities or requirements relating to the management of its business and affairs is not in itself a ground for imposing personal liability on the members for liabilities of the limited liability company.” (quoting § 7-80-107, C.R.S. (2017)). Ellsworth went on to address the “[c]ommon law Alter Ego elements,” reiterating that the trial court made, in his view, insufficient findings on the record. Based on this record, we disagree with the court of appeals that “Ellsworth did not have a chance, after the joinder motion was filed, to contest the court’s alter ego finding or its imposition of joint and several liability.” XTO Energy, slip op. at 13.
[*36] The court of appeals’ focus on the 2013 hearing on the motions for attorneys’ fees was misplaced. That hearing, the court of appeals asserted, was limited to “whether XTO could recover fees it [**23] had incurred by participating in the litigation more actively than a traditional interpleader plaintiff” and thus “did not provide any kind of belated opportunity for Ellsworth to challenge the court’s alter ego finding.” Id. However, this conclusion is belied by the transcripts of the hearing; it also discounts the time after joinder before the hearing, and the years after the hearing but before final judgment entered.
[*37] It is true that Judge Herringer ruled that Judge Dickinson’s findings were “law of the case.” But that doctrine did not prevent Ellsworth from challenging those findings. Generally speaking, the law of the case doctrine “provides that prior relevant rulings made in the same case are to be followed unless such application would result in error or unless the ruling is no longer sound due to changed conditions.” People v. Dunlap, 975 P.2d 723, 758 (Colo. 1999). However, the law of the case doctrine recognizes that “a trial court is not inexorably bound by its own precedents.” Brodeur v. Am. Home Assur. Co., 169 P.3d 139, 149 (Colo. 2007). That is, the law of the case doctrine does not “prevent[ ] a trial court from clarifying or even revisiting its prior rulings.” In re Bass, 142 P.3d 1259, 1263 (Colo. 2006). To the contrary, “[a] trial court has discretion to apply the law of the case doctrine to its own prior rulings.” [**24] San Antonio, Los Pinos & Conejos River Acequia Pres. Ass’n v. Special Improvement Dist. No. 1, 2015 CO 52, ¶ 31, 351 P.3d 1112, 1120. Thus, Judge Herringer was not bound by Judge Dickinson’s findings. And indeed, here, before addressing the merits of the trial court’s decision to pierce the corporate veil, Ellsworth argued that “the trial court always possesses the power to correct or re-direct a prior Order and . . . is ‘not’ to be trapped by the ‘law of the case’ doctrine while its case remains pending.” (emphasis in original) (citing Bass, 142 P.3d at 1263).
[*38] Ellsworth also could have filed a Rule 59(e) motion to alter or amend the judgment after the trial court entered judgment against him in May 2015. He did not do so. Nor did he move under Rule 60(b) to ask the court to relieve him from the final judgment. See Link v. Wabash R.R. Co., 370 U.S. 626, 632, 82 S. Ct. 1386, 8 L. Ed. 2d 734 (1962) (recognizing that “the availability of a corrective remedy such as is provided by Federal Rule of Civil Procedure 60(b)–which authorizes the reopening of cases in which final orders have been inadvisedly entered–renders the lack of prior notice of less consequence.”); see also Am. Sur. Co. v. Baldwin, 287 U.S. 156, 168, 53 S. Ct. 98, 77 L. Ed. 231 (1932) (“Due process requires that there be an opportunity to present every available defense; but it need not be before the entry of judgment.”). In sum, we disagree with the court of appeals that Ellsworth lacked notice and opportunity to contest his liability.
[*39] We conclude that the trial court [**25] properly pierced the corporate veil to hold Ellsworth individually liable for Seawatch’s, his alter ego, frivolous claims and defenses. Additionally, we hold that Ellsworth, who was properly joined to the post-judgment proceedings, had notice and opportunity to contest his individual liability. We therefore reverse the court of appeals and remand with instructions to reinstate the judgment awarding attorneys’ fees and costs.
That means more than 275 articles have been written looking at the legal issues of Outdoor Recreation for Outfitters, Guides, Manufacturers, College & University for credit and non-credit programs and many other
Here are the cases I’ve reviewed:
Albert v. Ober Gatlinburg, Inc., 2006 U.S. Dist. LEXIS 100150 http://rec-law.us/1hRlKFP
Alexander v. The Sports Authority, Inc., et al., 2007 U.S. Dist. LEXIS 43317 http://rec-law.us/1idHb4V
Allison v. Charter Rivers Hospital, Inc, 334 S.C. 611; 514 S.E.2d 601; 1999 S.C. App. LEXIS 43 http://rec-law.us/1fpUgtf
Alvero v. Allen, Jr., 262 A.D.2d 434; 692 N.Y.S.2d 116; 1999 N.Y. App. Div. LEXIS 6634 http://rec-law.us/1ROrCW3
Anderson v Boyne USA, Inc., 2012 Mich. App. LEXIS 1725 http://rec-law.us/ICcr07
Angland v. Mountain Creek Resort, Inc., 2011 N.J. Super. Unpub. LEXIS 2542 http://rec-law.us/Hc9ZqD
Atcovitz v. Gulph Mills Tennis Club, Inc, 571 Pa. 580; 812 A.2d 1218; 2002 Pa. LEXIS 2832 http://rec-law.us/1mslAfq
Atkins v. Swimwest Family Fitness Center, 2005 WI 4; 2005 Wisc. LEXIS 2 http://rec-law.us/12c3Ha1
Azad v. Mill Creek Equestrian Center, Inc., 2004 Cal. App. Unpub. LEXIS 11218 http://rec-law.us/18IFVV8
Barnes v. Dungan et al., 261 A.D.2d 797; 690 N.Y.S.2d 338; 1999 N.Y. App. Div. LEXIS 5556 http://rec-law.us/1c6hxjp
Bayer v. Crested Butte Mountain Resort, 960 P.2d 70 (Colo. 1998) http://rec-law.us/2uRbdd1
Benavidez v. The University of Texas — Pan American, 2014 Tex. App. LEXIS 11940 http://rec-law.us/1vgi4sa
Berlin v. Nassau County Council, Boy Scouts of America, 229 A.D.2d 414, 645 N.Y.S.2d 90 http://rec-law.us/1nqJGny
BJ’s Wholesale Club, Inc. v. Rosen, 435 Md. 714; 80 A.3d 345; 2013 Md. LEXIS 897 http://rec-law.us/1bpyPHR
Blackwell, v. Sky High Sports Nashville Operations, LLC. 2017 Tenn. App. LEXIS 6 http://rec-law.us/2rY5rlU
Bonne, et al., v. Premier Athletics, LLC, et al., 2006 U.S. Dist. LEXIS 77802 http://rec-law.us/HeFemi
Bossi v. Sierra Nevada Recreation Corporation et al, 2004 Cal. App. Unpub. LEXIS 1992 http://rec-law.us/RaqgkN
Brigance v. Vail Summit Resorts, Inc., 2016 U.S. Dist. LEXIS 31662 http://rec-law.us/1qiCmQG
Brush, v. Jiminy Peak Mountain Resort, Inc., Et Al, 626 F. Supp. 2d 139; 2009 U.S. Dist. LEXIS 52204 http://rec-law.us/11KEUsP
Buck, v. Camp Wilkes, Inc. 906 So. 2d 778; 2004 Miss. App. LEXIS 1141 http://rec-law.us/GYcpew
Cahill v. Ski Liberty Operating Corp., 2006 Pa. Dist. & Cnty. Dec. LEXIS 444; 81 Pa. D. & C.4th 344 http://rec-law.us/11JYZdA
Camire v. The Gunstock Area Commission, 166 N.H. 374; 97 A.3d 250; 2014 N.H. LEXIS 60 http://rec-law.us/1IuciVx
Chapple, Et Al., v. Ultrafit Usa, Inc., Et Al., 2002 Ohio 1292; 2002 Ohio App. LEXIS 1366 http://rec-law.us/1cyVosh
Childress v. Madison County, 777 S.W.2d 1 (Tenn. Ct. App. 1989) http://rec-law.us/2sdIhMr
Cole v. Boy Scouts of America, 2011 S.C. LEXIS 383 http://rec-law.us/GXvqum
Cole, et al., v. Camelback Mountain Ski Resort, et al., 2017 U.S. Dist. LEXIS 100183 http://rec-law.us/2y9JMge
Cottom v. USA Cycling, Inc, 2002 U.S. Dist. LEXIS 6745 (W.D. Mich. 2002) http://rec-law.us/173kQld
Courbat v. Dahana Ranch, Inc., 111 Haw. 254; 141 P.3d 427; 2006 Haw. LEXIS 386 http://rec-law.us/Xm7L53
Davis, v. 3 Bar F Rodeo, 2007 Ky. App. LEXIS 423 http://rec-law.us/XjgsZB
De Castro v. Odetah Camping Resort, Inc., 2015 Conn. Super. LEXIS 2297 http://rec-law.us/1UYtPiD
Dearnley v. Mountain Creek, 2012 N.J. Super. Unpub. LEXIS 527 http://rec-law.us/1eA8RfR
DeWitt, Jr. v. Felt Racing, LLC et al., 2017 Conn. Super. LEXIS 235 http://rec-law.us/2gMwDAg
Dodge v. Grafton Zipline Adventures, LLC, 2015 IL App (5th) 140124-U; 2015 Ill. App. Unpub. LEXIS 1584 http://rec-law.us/1Hp65Pn
Duncan, et al., v. Ryba Company, 1999 U.S. Dist. LEXIS 12424 http://rec-law.us/1hwbulZ
Elliott, v. Carter, 2016 Va. LEXIS 151 http://rec-law.us/2eNYr3F
Fein, etc., v. Cook, 2017 N.Y. App. Div. LEXIS 6607; 2017 NY Slip Op 06603 http://rec-law.us/2iSOd75
Fisher v. Sierra Summit, Inc. et al., 2011 Cal. App. Unpub. LEXIS 185 http://rec-law.us/1aOOz1H
Fleury v. IntraWest Winter Park Operations Corporation, 2014 Colo. App. LEXIS 242 http://rec-law.us/M6gByP
Fontaine v. Boyd, 2011 R.I. Super. LEXIS 27 http://rec-law.us/1cw5KZA
Foster, et al., v. Alex Kosseff, et al., 2013 U.S. Dist. LEXIS 40566 (E.D. Wash. 2013) http://rec-law.us/11pcuzl
Galloway v. State of Iowa, 790 N.W.2d 252; 2010 Iowa Sup. LEXIS 109 http://rec-law.us/MsfCcE
Galvan, et al., v. The Salvation Army, 2011 U.S. Dist. LEXIS 47257 http://rec-law.us/GYhrrF
Gamze v Camp Sea-Gull, Inc., 2012 Mich. App. LEXIS 1227 (Mich App 2012) http://rec-law.us/17Xyy90
Ganz vs. United States Cycling Federation, 1994 Mont. Dist. LEXIS 756 http://rec-law.us/1fzW8vM
Giebink v. Fischer, 709 F. Supp. 1012; 1989 U.S. Dist. LEXIS 7791 http://rec-law.us/1cyS6Fg
Global Travel Marketing, Inc v. Shea, 2005 Fla. LEXIS 1454 http://rec-law.us/14ywoyb
Gomes v. Boy Scouts of America, et al., 2013 N.Y. Misc. LEXIS 4622; 2013 NY Slip Op 32453(U) http://rec-law.us/1hEALOQ
Gregorie v. Alpine Meadows Ski Corporation, 2011 U.S. Dist. LEXIS 20275 http://rec-law.us/HayvH7
Grotheer v. Escape Adventures, Inc., et al., 14 Cal. App. 5th 1283; 2017 Cal. App. LEXIS 764 http://rec-law.us/2yCMGar
Gwyn v. Loon Mountain Corporation, 350 F.3d 212; 2003 U.S. App. LEXIS 23995 http://rec-law.us/1fR7z6Q
Hamill v. Cheley Colorado Camps, Inc., 2011 Colo. App. LEXIS 495 http://rec-law.us/wHui4x
Hanks v. Powder Ridge Restaurant Corporation et al., 276 Conn. 314; 885 A.2d 734; 2005 Conn. LEXIS 500 http://rec-law.us/177o3Fp
Hatch v. V.P. Fair Foundation, Inc., 990 S.W.2d 126; 1999 Mo. App. LEXIS 315 http://rec-law.us/1LSY6fX
Henderson v. Quest Expeditions, Inc. 174 S.W.3d 730; 2005 Tenn. App. LEXIS 334 http://rec-law.us/1fjsSvW
Hogan v. Pat’s Peak Skiing, LLC, 2015 N.H. LEXIS 74 http://rec-law.us/1Qg0COq
Hohe v. San Diego Unified Sch. Dist., 224 Cal.App.3d 1559, 274 Cal.Rptr. 647 (1990) http://rec-law.us/17yfgqr
Hoosier Mountain Bike Association, Inc., et. al., v. Kaler, 73 N.E.3d 712; 2017 Ind. App. LEXIS 133 http://rec-law.us/2yLQquv
Horvath Et Al., v. Ish Et Al., 2012 Ohio 5333; 2012 Ohio LEXIS 2872 http://rec-law.us/UIMpde
John v. CC Cyclery, 2017 N.Y. Misc. LEXIS 3213; 2017 NY Slip Op 31810(U) http://rec-law.us/2hDTEpb
Johnson v. Gibson, 358 Ore. 624; 369 P.3d 1151; 2016 Ore. LEXIS 129 http://rec-law.us/2la8bMy
Johnson v. Recreational Equipment, Inc., 2011 Wash. App. LEXIS 351 http://rec-law.us/N0zzbe
Johnson v. Royal Caribbean Cruises, Ltd., 2011 U.S. Dist. LEXIS 28128; 2011 AMC 1171 http://rec-law.us/1fAiSMm
Jozewicz v. GGT Enterprises, LLC; 2010 U.S. Dist. LEXIS 53937 http://rec-law.us/Zp7LME
Keeter v. Alpine Towers International, Inc., 399 S.C. 179; 730 S.E.2d 890; 2012 S.C. App. LEXIS 171 http://rec-law.us/11Udj6C
Kelly v. United States of America, 2011 U.S. Dist. LEXIS 89741 http://rec-law.us/GUF3hI
King v. CJM Country Stables, 315 F. Supp. 2d 1061; 2004 U.S. Dist. LEXIS 7511 http://rec-law.us/1lo1yB2
Kirton vs. Fields, No. SC07-1739, No. SC07-1741, No. SC07-1742 (FL 2008) http://rec-law.us/1fqhT37
Knight v. Jewett, 3 Cal. 4th 296; 834 P.2d 696; 11 Cal. Rptr. 2d 2; 1992 Cal. LEXIS 3969; 92 Cal. Daily Op. Service 7261; 92 Daily Journal DAR 11765; 92 Daily Journal DAR 11870 http://rec-law.us/1fCbn5G
Kopeikin v. Moonlight Basin Management, LLC, 90 F. Supp. 3d 1103; 2015 U.S. Dist. LEXIS 15348 http://rec-law.us/1T9bmfp
LaFond v. Salomon North America, Inc. et al., 2011 Mass. Super. LEXIS 344 http://rec-law.us/HeyzbL
Laliberte v. White Water Mountain Resorts, 2004 Conn. Super. LEXIS 2194 http://rec-law.us/2eXqBKZ
Lautieri v. Bae, 17 Mass. L. Rep. 4; 2003 Mass. Super. LEXIS 290 http://rec-law.us/1iPsNm3
Lemoine v Cornell University, 2 A.D.3d 1017; 769 N.Y.S.2d 313; 2003 N.Y. App. Div. LEXIS 13209 (NY 2003) http://rec-law.us/1ba9zQc
Lewis v. Habitat for Humanity of Greater New Haven, Inc., 2012 Conn. Super. LEXIS 146 http://rec-law.us/MvlsmW
Lewis v. Snow Creek, Inc., 6 S.W.3d 388; 1999 Mo. App. LEXIS 421 http://rec-law.us/VZUmgk
Littlejohn v. Timberquest Park at Magic, LLC, et. al., 2015 U.S. Dist. LEXIS 96443 http://rec-law.us/1P0r5gf
Lloyd v. Bourassa, 2002 Me. Super. LEXIS 132 http://rec-law.us/MzwDm8
Lombard v. Colorado Outdoor Education Center, Inc., 2011 Colo. App. LEXIS 1401 http://rec-law.us/1cNrWyz
Lucas v Norton Pines Athletic Club, Inc., 2010 Mich. App. LEXIS 1066 http://rec-law.us/GY61Vq
Mark, v. Moser, 46 N.E.2d 410; 2001 Ind. App. LEXIS 671 http://rec-law.us/ZFsVuR
Mazza v. Ski Shawnee Inc., 2005 Pa. Dist. & Cnty. Dec. LEXIS 113; 74 Pa. D. & C.4th 416 http://rec-law.us/10dXBVq
McDonough v. National Off-Road Bicycle Assn. (NORBA), 1997 U.S. Dist. LEXIS 8036 (Dist. Del 1997) http://rec-law.us/1bXtzet
Mcgarry v. Philly Rock Corp., 2015 Pa. Super. Unpub. LEXIS 3767 http://rec-law.us/1JSr1dz
McGowan et al v. West End YMCA, 2002 Cal. App. Unpub. LEXIS 3018 http://rec-law.us/1k7VxqQ
McGrath v. SNH Development, Inc. 2008 N.H. Super. LEXIS 45 http://rec-law.us/10OjjNo
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Randall Fein, etc., Plaintiff-Appellant, v Neil L. Cook, Defendant, Asphalt Green, Inc., Defendant-Respondent.
SUPREME COURT OF NEW YORK, APPELLATE DIVISION, FIRST DEPARTMENT
2017 N.Y. App. Div. LEXIS 6607; 2017 NY Slip Op 06603
September 26, 2017, Decided
September 26, 2017, Entered
THE LEXIS PAGINATION OF THIS DOCUMENT IS SUBJECT TO CHANGE PENDING RELEASE OF THE FINAL PUBLISHED VERSION. THIS OPINION IS UNCORRECTED AND SUBJECT TO REVISION BEFORE PUBLICATION IN THE OFFICIAL REPORTS.
COUNSEL: [*1] Clyde & Co., New York (Jeffrey J. Ellis of counsel), for appellant.
Rutherford & Christie, LLP, New York (Michael C. Becker of counsel), for respondent.
JUDGES: Sweeny, J.P., Renwick, Kapnick, Kern, Moulton, JJ.
Order, Supreme Court, New York County (Richard F. Braun, J.), entered August 22, 2016, which granted defendant Asphalt Green, Inc.’s (AGI) motion for summary judgment, to the extent of dismissing the amended complaint as against it, unanimously affirmed, without costs.
Decedent died from injuries sustained when, while in the middle of a crosswalk in Central Park, he was struck by a bike ridden by defendant Neil Cook, a bicyclist and coach employed by AGI, which operates, among other things, a fitness facility on the Upper East Side.
The motion court correctly determined that AGI could not be held vicariously liable for Cook’s alleged negligence, as Cook was acting outside the scope of his employment. At the time of the accident, Cook was engaged in a weekend bicycle ride, in a public park, using a bicycle that he purchased and equipped, was alone and was not coaching anyone, and was not acting in furtherance of any duties owed to AGI (see Riviello v Waldron, 47 NY2d 297, 391 N.E.2d 1278, 418 N.Y.S.2d 300 ; Weimer v Food Merchants, 284 AD2d 190, 726 N.Y.S.2d 423 [1st Dept 2001]).
Cook’s unsupported belief, as set forth in an [*2] affirmative defense, that his bicycle riding had a work component to it, and his unsworn Response to the Notice to Admit (see CPLR 3123[a]), which improperly sought admissions as to employment status, a contested issue central to the action (see Berg v Flower Fifth Ave. Hosp., 102 AD2d 760, 476 N.Y.S.2d 895 [1st Dept 1984]), do not create triable issues of fact as to whether Cook was acting in the scope of employment. Unlike in Aycardi v Robinson (128 AD3d 541, 9 N.Y.S.3d 262 [1st Dept 2015]), relied upon by plaintiff, there is no indication that AGI was exercising any control over Cook at the time of the accident (see Lundberg v State of New York, 25 NY2d 467, 255 N.E.2d 177, 306 N.Y.S.2d 947 ).
The motion court correctly dismissed plaintiff’s direct negligence claim against AGI. There is no evidence that AGI knew or should have known of Cook’s alleged propensity to dangerously ride his bicycle in Central Park, an element necessary to support the claim for negligent hiring and retention (see White v Hampton Mgt. Co. L.L.C., 35 AD3d 243, 244, 827 N.Y.S.2d 120 [1st Dept 2006]), and plaintiff’s conclusory allegations of deficient training are insufficient to defeat summary judgment (see Richardson v New York Univ., 202 AD2d 295, 296-297, 609 N.Y.S.2d 180 [1st Dept 1994]).
We have considered plaintiff’s remaining arguments and find them unavailing.
THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: SEPTEMBER 26, 2017
SUPREME COURT OF NEW YORK, KINGS COUNTY
2017 N.Y. Misc. LEXIS 3213; 2017 NY Slip Op 31810(U)
August 22, 2017, Decided
NOTICE: THIS OPINION IS UNCORRECTED AND WILL NOT BE PUBLISHED IN THE PRINTED OFFICIAL REPORTS.
CORE TERMS: bicycle, subject accident, notice, deposition, replaced, shop, repair, contumacious, stricken, willful, pick, material evidence, prima facie case, failed to demonstrate, negligently, discarding, layperson, destroyed, destroy, threw, front wheel, confirmed, repaired, riding, asking, email, bike
JUDGES: [*1] PRESENT: HON. LARRY D. MARTIN, J.S.C.
OPINION BY: LARRY D. MARTIN
Upon the foregoing papers, plaintiff Hywel John (“plaintiff”) moves for an order: (1) pursuant to CPLR § 3126, striking the Answer of defendants CC Cyclery and Co LLC and William Svenstrup (collectively, “defendants”) on the grounds of negligent and/or intentional spoliation of material evidence; and (2) extending the time to file a Note of Issue (NOI).
Brief Facts & Procedural History
Plaintiff commenced the instant action to recover compensatory damages for personal injuries he allegedly sustained on. November 28, 2014, when the front wheel of a bicycle (the “subject bicycle”) he was riding dislodged, causing him to be flung from the bicycle onto the ground (the “subject accident”). In the verified bill of particulars, plaintiff alleges, among other things, that defendants “negligently repaired and maintained” (Bill of Particulars, ¶ 13) the subject bicycle.
At his January 11, 2016 deposition, plaintiff testified that he initially went to defendants’ repair shop, CC Cyclery and Co. LLC (“Cyclery”), to have guards placed on the subject bicycle’s wheels and a rack fitted onto the back (Plaintiff’s Affirmation, exhibit E, Hywel Deposition, 26: 24-25; [*2] 27: 13-14; 22-23). Plaintiff returned to Cyclery on the date of the subject accident to pick up his bicycle, and was riding along Avenue A, in Brooklyn, New York, when the subject accident occurred [**2] (id. at 31: 22-25; 32:2-11). Plaintiff testified that immediately after his accident, he returned to Cyclery, informed an individual named Mr. Jeff Underwood (“Mr. Underwood”) of what transpired and left the bicycle in the shop’s possession for further repairs to be performed (id. at 64: 7-12).
Thereafter, plaintiff emailed Mr. Underwood on December 3, 2014 asking for the company’s insurance information, claiming that he was “pretty concerned about [his] healthcare contribution going forward” as well as his “lack of ability to work properly over the next couple of months” due to his injuries (id. at exhibit M). Mr. Underwood responded to plaintiff in an email dated December 9, 2014 stating, among other things, “your front wheel had to be straightened and the tire had to be replaced . . .” and “I also switched out the quick release on the front to a Allen bolt . . .” (id. at exhibit L). Mr. Underwood did not address plaintiff’s request for insurance information in his email. According to plaintiff, he returned [*3] to Cyclery on January 23, 2015 to pick up his bike and, once again, asked Mr. Underwood for the company’s insurance information (id. at 68: 15-17). However, plaintiff claims that Mr. Underwood refused to comply with plaintiff’s request for insurance information (id. at 68: 18-20).
At Mr. Underwood’s deposition on July 26, 2016, he stated that he is the former owner of Cyclery and, among other things, was working as a mechanic for the company at the time of the subject accident (id. at exhibit H, Underwood Deposition, 17: 5-9; 18: 12-14). Mr. Underwood confirmed that he made repairs to plaintiff’s bicycle both before and after the subject accident. Moreover, during his deposition, Mr. Underwood identified a photo of the subject bicycle (previously marked as Defendants’ exhibit A) and confirmed that it accurately depicted the condition of the bike on the date of the accident (id. at 53: 23-25; 54: 2-3; see exhibit K).
In his post-accident repair of plaintiff’s bicycle, Mr. Underwood stated that he replaced several of the parts, including a device called a quick release (id. at 60: 5-22). Mr. Underwood further admitted that upon showing plaintiff which bicycle parts he fixed, he threw away the broken parts including the quick [*4] release (id. at 61: 15-23). Additionally, Mr. Underwood testified that he held onto the defective parts “until the trash came” on the week that plaintiff picked up his bicycle [**3] (id. at 64: 5-9).
According to Mr. Underwood, plaintiff asked him to talk to the shop owner about submitting an insurance claim on plaintiff’s behalf, and Mr. Underwood replied that the company could not do so (id. at 63: 16-19). Mr. Underwood asserted that he never touched the quick release device prior to the subject accident, and, therefore, defendants could not be at fault for plaintiff’s accident (id. at exhibit H, 52: 3-5; 8; 19-21).
Plaintiff thereafter commenced the instant action on February 4, 2015. On March 1, 2016, plaintiff served defendants with a notice to “preserve and retain any and all parts and equipment f[ro]m the plaintiff’s bicycle . . .” (see id. at exhibit F). On May 5, 2016, a compliance conference was held and an order was issued directing, among other things, for plaintiff to “preserve the bicycle at issue for inspection by defendants” (id. at exhibit G).
Plaintiff contends that defendants’ Answer should be stricken pursuant to CPLR § 3126 because Mr. Underwood disposed of the bicycle parts without first “advis[ing] plaintiff or [*5] anyone else that he intended to throw out or destroy the purportedly defective parts” (Plaintiff’s Affirmation, ¶ 45). Plaintiff asserts that “Mr. Underwood threw out these parts in spite of having preserved and retained exclusive possession and control over these parts at CC Cyclery from November 28, 2014 (DOA) and continuing until sometime after the plaintiff returned to the shop to pick up his bicycle on January 23, 2015” (id.). According to plaintiff, defendants “knew or should have known that the parts removed and replaced from plaintiff’s bicycle were significant and material evidence in a reasonably foreseeable litigation, based upon plaintiff’s repeated requests for insurance information in order for him to effectuate a claim for the damages he sustained in this accident” (id. at ¶ 54).
In response, defendants assert that they did not act in a willful or contumacious manner in discarding the bicycle parts. Rather, defendants contend that plaintiff’s act in asking Mr. Underwood about insurance was “merely a request for insurance information that [plaintiff] could use to obtain additional health care contributions” and did not constitute notice “that the accident would result [*6] in [**4] litigation with claims of negligence on the part of the defendants” (see Defendants’ Affirmation in Opp, ¶ 4). Additionally, defendants aver that Mr. Underwood–an unrepresented layperson at the time–would not have interpreted plaintiff’s request for insurance as notice that he was required to preserve the replaced bicycle parts (see Defendants’ Affirmation in Opp, ¶ 4). In any event, defendants argue that striking their Answer is not an appropriate sanction in this instance because the missing bicycle parts do not prejudice or impede plaintiff’s ability to make out his prima facie case (id. at ¶ 5). In fact, defendants assert that the loss of such evidence is more prejudicial to them, “as it will be evidence that they now lack to show that plaintiff failed to keep his bicycle in proper condition and failed to request a proper maintenance from defendants at the time that he [initially] brought the bicycle in to be repaired” (id. at ¶ 6).
Based upon a review of the record submitted by the parties and the relevant law, the Court denies plaintiff’s motion. CPLR § 3126 provides for the striking out of a party’s pleadings when that party “refuses to obey an order for disclosure or wilfully fails [*7] to disclose information which the court finds ought to have been disclosed . . .” (CPLR § 3126 ). However, such a drastic remedy is “unwarranted absent a ‘clear showing that the failure to comply with discovery demands was willful, contumacious or in bad faith'” (Foncette v LA Express, 295 AD2d 471, 472, 744 N.Y.S.2d 429 [2d Dept 2002]). Moreover, under the common law, “when a party negligently loses or intentionally destroys key evidence, thereby depriving the non-responsible party from being able to prove its claim or defense, the responsible party may be sanctioned by the striking of its pleading” (Baglio v St. John’s Queens Hosp., 303 AD2d 341, 342, 755 N.Y.S.2d 427 [2d Dept 2003]). Additionally, a pleading may be stricken where the evidence lost or destroyed is so central to the case .that it renders the party seeking the evidence “prejudicially bereft of appropriate means to confront a claim with incisive evidence” (Foncette, 295 AD2d at 472; see Awon v Harran Transp. Co., Inc., 69 AD3d 889, 890, 895 N.Y.S.2d 135 [2d Dept 2010]). Notably, “even if the evidence was destroyed before the spoliator became a party, [the pleading may nonetheless be stricken] provided [the party] was on notice that the evidence might be needed for future litigation” (Baglio, 303 AD2d at 342).
[**5] As an initial matter, the Court notes that a Notice to Preserve Evidence was not served on defendants until more than one year after the subject accident occurred and the instant action was commenced (see MetLife Auto & Home v Joe Basil Chevrolet, Inc., 1 NY3d 478, 484, 807 N.E.2d 865, 775 N.Y.S.2d 754 ) [*8] . Absent such notice, the Court finds that plaintiff’s act in requesting insurance information was insufficient to put a layperson such as Mr. Underwood on notice that litigation was contemplated.
Moreover, the Court finds that plaintiff has failed to demonstrate that Mr. Underwood’s act in discarding the removed bicycle parts was willful and contumacious (see Di Domenico v C & S Aeromatik Supplies, 252 AD2d 41, 52, 682 N.Y.S.2d 452 [2d Dept 1998]). Plaintiff also fails to establish that Mr. Underwood’s actions have completely deprived him of the ability to prove his prima facie case (cf. Baglio, 303 AD2d at 342). As defendants note, plaintiff still has at his disposal the photograph reflecting the defective condition of the bicycle at the time of the accident, as well as Mr. Underwood’s undisputed deposition testimony detailing which portions of the bicycle he fixed and which portions he discarded. Thus, while it cannot be said that plaintiff is not adversely affected by the loss of the defective bicycle parts, the Court finds that plaintiff has failed to demonstrate that he is prejudiced by this loss (see Awon, 69 AD3d at 890; Foncette, 295 AD2d at 472).
Accordingly, that portion of plaintiff’s motion seeking to strike defendants’ Answer is denied. That portion of plaintiff’s motion seeking an order providing for the filing of [*9] the NOI is denied as moot. A review of the court’s record indicates that plaintiff filed the NOI herein on October 14, 2016. The parties are reminded of their September 6, 2017 appearance in JCP.
The foregoing constitutes the decision and order of the Court.
/s/ Larry Martin
HON. LARRY MARTIN