New Jersey ski area pushes “indemnification” clause in release too far and gets told by court its release is an adhesion contract.
Posted: January 22, 2024 Filed under: New Jersey, Release (pre-injury contract not to sue), Skier v. Skier, Skiing / Snow Boarding | Tags: Adhesion Contract, Bright Line, Indemnification, Indemnification Clause, Mountain Creek, New Jersey Skier Statute, Release Leave a comment
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Indemnification agreements in releases fail. You cannot write the language in a release to qualify for indemnification. Here the ski area tried to get greedy and got slammed.
Vladichak v. Mountain Creek Ski Resort, Inc., A-1367-20 (N.J. Super. App. Div. Apr 13, 2022)
State: New Jersey; Superior Court of New Jersey, Appellate Division
Plaintiff: Andrea Vladichak
Defendant: Mountain Creek Ski Resort, Inc., Defendant-Appellant, and Michael Lavin, Defendant-Respondent.
Plaintiff Claims: Indemnification from the co-defendant
Defendant Defenses: The indemnification clause was not valid.
Holding: for the Defendant-Respondent
Year: 2022
Summary
After winning a lawsuit from a skier injured in a skier v. skier collision, Mountain Creek Ski Area sued the at fault skier in the collision for damages. The appelleate court found the indemnification clause in the release was not written correct and then found Mountain Creek’s release to be an adhesion contract.
Facts
Defendant Snow Creek, LLC d/b/a Mountain Creek Resort, Inc. (Mountain Creek) appeals from a November 9, 2020 order denying its motion for summary judgment and granting summary judgment to defendant Michael Lavin (Lavin) dismissing Mountain Creek’s cross-claims for defense costs and contractual indemnification. Judge David J. Weaver (motion judge) concluded in a thorough opinion that the contractual language was ambiguous and therefore Mountain Creek was not entitled to indemnification from Lavin or defense costs incurred to defend plaintiff’s allegations that Mountain Creek itself was negligent. We affirm.
On December 21, 2017, plaintiff sustained personal injuries while skiing at a ski area owned and operated by Mountain Creek in Vernon Township, New Jersey. Plaintiff was struck from behind by Lavin, another skier. Plaintiff filed a complaint alleging Mountain Creek and Lavin were negligent. Plaintiff’s complaint alleged Mountain Creek was independently negligent for failing to provide appropriate warnings to skiers, failing to appropriately designate the difficulty of ski trails, failing to provide skiers with appropriate information about trail conditions, failing to timely remove obvious manmade hazards, and/or otherwise failing to establish adequate procedures to provide a safe skiing environment. The complaint alleged Lavin was negligent for breaching his duty to others to ski in a reasonably safe manner by skiing in a reckless manner and/or intentionally colliding into plaintiff and causing her injuries.
Prior to the incident, Lavin signed an equipment rental agreement (Rental Agreement) and lift ticket agreement (Release Agreement) in which he agreed to defend and indemnify Mountain Creek from any claims related to his own conduct and use of the property’s equipment facilities. On August 7, 2019, Mountain Creek filed an answer and cross-claims seeking defense and indemnification from Lavin based on the executed Rental and Release Agreements. Mountain Creek previously tendered the defense to Lavin on July 16, 2019.
Plaintiff’s counsel served a report from plaintiff’s liability expert, who concluded that Lavin violated the New Jersey Ski Statute, N.J.S.A. 5:13-1 to -12, and the Skier’s Responsibility Code by failing to control his speed and course and by failing to yield to the skiers ahead of him. The expert opined that Lavin’s reckless conduct caused the accident. On March 27, 2020, Judge Stephan C. Hansbury entered an order granting Mountain Creek’s motion for summary judgment dismissing plaintiff’s claims that Mountain Creek was negligent. Lavin and plaintiff settled and filed a stipulation of dismissal with prejudice dated May 29, 2020.
After plaintiff’s settlement with Lavin, Mountain Creek filed its motion seeking reimbursement from Lavin for defending plaintiff’s allegations and indemnification from Lavin.[1] Lavin filed a cross-motion for summary judgment on September 1. That led to the order under review.
The judge concluded that, as a matter of law, the indemnification provisions were ambiguous and thus unenforceable to compel indemnification in favor of Mountain Creek for claims of its own negligence. The motion judge denied Lavin’s cross-motion for summary judgment in part and granted it in part. The motion judge requested the parties submit the detail and extent of defense costs incurred by Mountain Creek for costs incurred for which liability was only vicarious.
Simply put, Mountain Creek and Michael Lavin were sued by the original plaintiff Andrea Vladichak for injuries received due to a skier v. skier collision between Lavin and Vladichak. Mountain Creek was dismissed from the original lawsuit. Lavin settled with Vladichak.
The day of the collision, Lavin had rented equipment from Mountain Creek and signed a release as part of the rental agreement. The release had a poorly worded indemnification clause in it. After Lavin settled and Mountain Creek was dismissed, Mountain Creek sued Lavin using the indemnification clause in an attempt to recover the money Mountain Creek spent defending the lawsuit. Mountain Creek lost the original lawsuit and this is the result of the appeal of that trial court decision.
Analysis: making sense of the law based on these facts.
The basis for the reasoning on why Mountain Creek made these moves seems to have been a report from the plaintiff’s expert witness that found Lavin liable for the accident.
Plaintiff’s counsel served a report from plaintiff’s liability expert, who concluded that Lavin violated the New Jersey Ski Statute, N.J.S.A. 5:13-1 to -12, and the Skier’s Responsibility Code by failing to control his speed and course and by failing to yield to the skiers ahead of him. The expert opined that Lavin’s reckless conduct caused the accident.
The trial judge ruled that the indemnification language did not meet the necessary requirements to be valid in New Jersey.
The judge concluded that, as a matter of law, the indemnification provisions were ambiguous and thus unenforceable to compel indemnification in favor of Mountain Creek for claims of its own negligence.
The Appelleate court set forth how contracts in general are examined by the courts and the special requirements of indemnification clauses.
The judge’s role “in construing a contractual indemnity provision is the same as in construing any other part of a contract-it is to determine the intent of the parties.” Generally, courts give contractual provisions “their plain and ordinary meaning.” “However, indemnity provisions differ from provisions in a typical contract in one important aspect. If the meaning of an indemnity provision is ambiguous, the provision is ‘strictly construed against the indemnitee.
Meaning indemnification language is not looked at as whether the parties agreed to the provisions, but whether the writer of the clause did so meeting the strict requirements the courts require to create indemnification.
This is known as the bright line test, do the words in the clause meet the “bright line” test required.
One of the tests as to whether the language in an indemnification clause is written correctly is whether the act that triggers indemnification is identified in the agreement.
Our Court affirmed and held that “in order to allay even the slightest doubt on the issue of what is required to bring a negligent indemnitee within an indemnification agreement, we reiterate that the agreement must specifically reference the negligence or fault of the indemnitee.”
Indemnification clauses cannot use general language and be used to recover money for any action that may cost one party money. They are clauses that must be written to cover the specific acts set forth in the clause.
Here the language failed to meet that requirement.
We agree with the motion judge that the indemnity provisions in the agreements are ambiguous as to claims of Mountain Creek’s independent negligence. Although the provisions reference Mountain Creek’s negligence in bold and capitalized letters, the language “arising out of or resulting from my conduct . . . whether or not MOUNTAIN CREEK’S NEGLIGENCE contributed thereto in whole or in part” is insufficient to meet the Azurak standard. One could reasonably interpret the provisions to require indemnification and defense of Mountain Creek for any claims of negligence against it caused by Lavin’s conduct even when Mountain Creek is partially at fault or to require Lavin to indemnify and defend Mountain Creek for separate claims of its own negligence.
The clause also failed because the acts that gave rise to litigation against Mountain Creek, or the claims, were not the acts or claims that were brought against Lavin. Here again the language of the indemnification agreement was too broad to meet the specific language requirements required by New Jersey Law.
An indemnitor may expect to indemnify and defend an indemnitee for claims caused by its negligent conduct when the indemnitee may also be at fault but may not expect to be solely responsible to indemnify and defend the indemnitee when the indemnitee has committed separate acts of negligence.
The indemnification clause did not cover the acts of Lavin which Mountain Creek was claiming were covered. Again, Mountain Creek wrote a clause using broad language when the courts require specific language.
The provisions at issue do not meet the bright line rule requiring “unequivocal terms” that the duty to indemnify extends to the indemnitee’s own negligence. Thus, the provisions are ambiguous and must be strictly construed against Mountain Creek.
Lavin argued and the court agreed that the release was a contract of adhesion.
As a threshold issue, we determine that the Release and Rental Agreements were contracts of adhesion. If a contract is characterized as a contract of adhesion, “nonenforcement of its terms may be justified on other than such traditional grounds as fraud, duress, mistake, or illegality. An adhesion contract is one that “is presented on a take-it-or-leave-it basis, commonly in a standardized printed form, without opportunity for the ‘adhering’ party to negotiate except perhaps on a few particulars.” “Although a contract of adhesion is not per se unenforceable, a [judge] may decline to enforce it if it is found to be unconscionable.”
Contracts of adhesion are still enforceable; however, they are easier to void and cannot be enforced if found to be unconscionable. By making this argument, Mountain Creek put a label on its release which will make it easier in the future to beat.
The court then looked at the four factors to determine if under New Jersey law a contract is unconscionable.
When determining whether an adhesion contract is unconscionable, we evaluate four factors that “focus on procedural and substantive aspects of the contract to determine whether the contract is so oppressive, or inconsistent with the vindication of public policy, that it would be unconscionable to permit its enforcement.” Those factors include “the subject matter of the contract, the parties’ relative bargaining positions, the degree of economic compulsion motivating the ‘adhering’ party, and the public interests affected by the contract.”
Nothing like the appelleate court of your state setting out the requirements to void your release. The court found that this release was not unconscionable only the indemnification language was void.
So Now What?
Go to far. A ski area sues one of its customers to recover money for the actions of the customer against a third party, not the ski area. That went to far and the New Jersey Appelleate Court slammed Mountain Creek in two ways for doing so.
- The indemnification clause was void because it was not written correctly.
- The release was labeled a contact of adhesion, providing a road map for future lawsuits to follow.
Indemnification agreements in releases have not been upheld. You must either write them correctly, which is difficult to do or take them out.
I’ve only read one decision where the indemnification clause was upheld and it was a little different. A federal district court in Massachusetts upholds indemnification clause in a release.
Most decisions do not uphold indemnification clauses.
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Vladichak v. Mountain Creek Ski Resort, Inc., A-1367-20 (N.J. Super. App. Div. Apr 13, 2022)
Posted: January 22, 2024 Filed under: New Jersey, Release (pre-injury contract not to sue), Ski Area, Skier v. Skier, Skiing / Snow Boarding | Tags: Adhesion Contract, Bright Line, Inc., Indemnification, Indemnification Clause, Mountain Creek, Mountain Creek Ski Resort, Release, Strictly Construed Leave a commentTo Read an Analysis of this decision see: New Jersey ski area pushes “indemnification” clause in release too far and gets told by court its release is an adhesion contract.
ANDREA VLADICHAK, Plaintiff-Respondent,
v.
MOUNTAIN CREEK SKI RESORT, INC., Defendant-Appellant,
and MICHAEL LAVIN, Defendant-Respondent.
No. A-1367-20
Superior Court of New Jersey, Appellate Division
April 13, 2022
This opinion shall not “constitute precedent or be binding upon any court .” Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
Argued April 4, 2022
On appeal from the Superior Court of New Jersey, Law Division, Sussex County, Docket No. L-0590-18.
Samuel J. McNulty argued the cause for appellant (Hueston McNulty, PC, attorneys; Samuel J. McNulty, of counsel and on the briefs; Edward J. Turro, on the briefs).
Matthew E. Kennedy argued the cause for respondent Michael Lavin (Leary Bride Mergner & Bongiovanni, PA, attorneys; Matthew E. Kennedy, of counsel and on the brief).
Before Judges Fasciale and Sumners.
PER CURIAM
Defendant Snow Creek, LLC d/b/a Mountain Creek Resort, Inc. (Mountain Creek) appeals from a November 9, 2020 order denying its motion for summary judgment and granting summary judgment to defendant Michael Lavin (Lavin) dismissing Mountain Creek’s cross-claims for defense costs and contractual indemnification. Judge David J. Weaver (motion judge) concluded in a thorough opinion that the contractual language was ambiguous and therefore Mountain Creek was not entitled to indemnification from Lavin or defense costs incurred to defend plaintiff’s allegations that Mountain Creek itself was negligent. We affirm.
On December 21, 2017, plaintiff sustained personal injuries while skiing at a ski area owned and operated by Mountain Creek in Vernon Township, New Jersey. Plaintiff was struck from behind by Lavin, another skier. Plaintiff filed a complaint alleging Mountain Creek and Lavin were negligent. Plaintiff’s complaint alleged Mountain Creek was independently negligent for failing to provide appropriate warnings to skiers, failing to appropriately designate the difficulty of ski trails, failing to provide skiers with appropriate information about trail conditions, failing to timely remove obvious manmade hazards, and/or otherwise failing to establish adequate procedures to provide a safe skiing environment. The complaint alleged Lavin was negligent for breaching his duty to others to ski in a reasonably safe manner by skiing in a reckless manner and/or intentionally colliding into plaintiff and causing her injuries.
Prior to the incident, Lavin signed an equipment rental agreement (Rental Agreement) and lift ticket agreement (Release Agreement) in which he agreed to defend and indemnify Mountain Creek from any claims related to his own conduct and use of the property’s equipment facilities. On August 7, 2019, Mountain Creek filed an answer and cross-claims seeking defense and indemnification from Lavin based on the executed Rental and Release Agreements. Mountain Creek previously tendered the defense to Lavin on July 16, 2019.
Plaintiff’s counsel served a report from plaintiff’s liability expert, who concluded that Lavin violated the New Jersey Ski Statute, N.J.S.A. 5:13-1 to -12, and the Skier’s Responsibility Code by failing to control his speed and course and by failing to yield to the skiers ahead of him. The expert opined that Lavin’s reckless conduct caused the accident. On March 27, 2020, Judge Stephan C. Hansbury entered an order granting Mountain Creek’s motion for summary judgment dismissing plaintiff’s claims that Mountain Creek was negligent. Lavin and plaintiff settled and filed a stipulation of dismissal with prejudice dated May 29, 2020.
After plaintiff’s settlement with Lavin, Mountain Creek filed its motion seeking reimbursement from Lavin for defending plaintiff’s allegations and indemnification from Lavin.[1] Lavin filed a cross-motion for summary judgment on September 1. That led to the order under review.
The judge concluded that, as a matter of law, the indemnification provisions were ambiguous and thus unenforceable to compel indemnification in favor of Mountain Creek for claims of its own negligence. The motion judge denied Lavin’s cross-motion for summary judgment in part and granted it in part. The motion judge requested the parties submit the detail and extent of defense costs incurred by Mountain Creek for costs incurred for which liability was only vicarious.
Mountain Creek’s attorneys stipulated that there were no fees or costs incurred from defending vicarious liability claims. On December 14, 2020, Judge Robert J. Brennan entered a consent order resolving all remaining issues as to all parties.
Mountain Creek raises the following arguments on appeal:
POINT I
STANDARD OF REVIEW-DE NOVO[.]
POINT II
THE [MOTION JUDGE] CORRECTLY RULED THAT THE TWO AGREEMENTS WERE NOT CONTRACTS OF ADHESION NOR WERE THEY CONTRARY TO PUBLIC POLICY.
POINT III
THE [MOTION JUDGE] ERRED IN FINDING THAT THE LANGUAGE IN THE AGREEMENTS SIGNED BY . . . LAVIN IS AMBIGUOUS AND INSUFFICIENT TO COMPEL . . . LAVIN TO INDEMNIFY AND DEFEND MOUNTAIN CREEK FOR CLAIMS OF ITS OWN NEGLIGENCE.
A. Special Status Of A Ski Operator.
B. The Two Agreements Were Unambiguous And Should Be Enforced.[2]
Mountain Creek raises the following points in reply, which we have renumbered:
POINT IV
. . . LAVIN’S REQUEST THAT THE APPELLATE DIVISION REVERSE THE [MOTION JUDGE]’S JUDGMENT THAT THE CONTRACTS WERE NOT UNCONSCIONABLE SHOULD BE REJECTED AS NO CROSS-APPEAL WAS FILED.
POINT V
THE AGREEMENTS IN QUESTION ARE ENFORCEABLE AND NOT UNCONSCIONABLE CONTRACTS OF ADHESION.
POINT VI
THE INDEMNIFICATION LANGUAGE IS SUFFICIENT AND EXPRESSLY PROVIDES FOR INDEMNIFICATION FOR CLAIMS ASSERTING MOUNTAIN CREEK’S OWN NEGLIGENCE.
We review the motion judge’s grant of a motion for summary judgment de novo. Branch v. Cream-O-Land Dairy, 244 N.J. 567, 582 (2021). We apply the same standard as the motion judge and consider “whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party.” Brill v. Guardian Life
Ins. Co. of Am., 142 N.J. 520, 540 (1995).
I.
Mountain Creek contends the motion judge erred in ruling the indemnification provisions in the Release and Rental Agreements were ambiguous and unenforceable to compel Lavin to indemnify Mountain Creek for Mountain Creek’s own negligence. Mountain Creek also contends that it should be permitted to obtain indemnification from Lavin based on its special status as a ski area operator under the Ski Statute.
The judge’s role “in construing a contractual indemnity provision is the same as in construing any other part of a contract-it is to determine the intent of the parties.” Kieffer v. Best Buy, 205 N.J. 213, 223 (2011). Generally, courts give contractual provisions “their plain and ordinary meaning.” Ibid. (quoting M.J. Paquet, Inc. v. N.J. Dep’t of Transp., 171 N.J. 378, 396 (2002)). “However, indemnity provisions differ from provisions in a typical contract in one important aspect. If the meaning of an indemnity provision is ambiguous, the provision is ‘strictly construed against the indemnitee.'” Ibid. (quoting Mantilla v. NC Mall Assocs., 167 N.J. 262, 272 (2001)).
We have characterized this approach as a “bright line” rule requiring “explicit language” when “indemnification includes the negligence of the indemnitee.” Azurak v. Corp. Prop. Invs., 347 N.J.Super. 516, 523 (App. Div. 2002). Azurak involved a contract between a janitorial company (PBS) and a shopping mall owner (the Mall) that contained the following provision:
Contractor [PBS] shall indemnify, defend and hold harmless each Indemnitee [the Mall] from and against any claim (including any claim brought by employees of Contractor), liability, damage or expense (including attorneys’ fees) that such Indemnitee may incur relating to, arising out of or existing by reason of (i) Contractor’s performance of this Agreement or the conditions created thereby (including the use, misuse or failure of any equipment used by Contractor or its subcontractors, servants or employees) or (ii) Contractor’s breach of this Agreement or the inadequate or improper performance of this Agreement by Contractor or its subcontractors, servants or employees.
[Azurak v. Corp. Prop. Invs., 175 N.J. 110, 111 (2003) (alterations in original).]
The plaintiff sued the Mall and PBS for injuries she sustained when she slipped on the Mall’s floor. Ibid. The trial judge granted the Mall’s summary judgment motion on the issue of indemnification based on the contract provision. Ibid. At trial, the jury determined “that plaintiff was 30% negligent; the Mall, 30%; and PBS, 40%.” Ibid. This court disagreed with the trial judge, finding that the indemnification provision did not encompass the Mall’s negligence because the provision’s language was neither explicit nor unequivocal as to claims of the Mall’s own negligence. Id. at 111-12. Our Court affirmed and held that “in order to allay even the slightest doubt on the issue of what is required to bring a negligent indemnitee within an indemnification agreement, we reiterate that the agreement must specifically reference the negligence or fault of the indemnitee.” Id. at 112-13.
Mountain Creek’s Release Agreement contained a provision that states:
INDEMNIFICATION. To the fullest extent permitted by law, I agree to DEFEND, INDEMNIFY AND HOLD HARMLESS Mountain Creek from any and all claims, suits, costs and expenses including attorneys’ fees asserted against Mountain Creek by me or third parties arising or allegedly arising out of or resulting from my conduct while utilizing Mountain Creek’s facilities WHETHER OR NOT MOUNTAIN CREEK’S NEGLIGENCE contributed thereto in whole or in part.
One provision of the Rental Agreement states:
To the fullest extent permitted by law, I also agree to DEFEND, INDEMNIFY AND HOLD HARMLESS Mountain Creek from any and all claims, suits, costs and expenses including attorneys’ fees for personal injury, death or property damage against it by me or third parties arising or allegedly arising out of or resulting from my conduct while utilizing Mountain Creek’s facilities or the use of this equipment whether or not MOUNTAIN CREEK’S NEGLIGENCE contributed thereto in whole or in part.
We agree with the motion judge that the indemnity provisions in the agreements are ambiguous as to claims of Mountain Creek’s independent negligence. Although the provisions reference Mountain Creek’s negligence in bold and capitalized letters, the language “arising out of or resulting from my conduct . . . whether or not MOUNTAIN CREEK’S NEGLIGENCE contributed thereto in whole or in part” is insufficient to meet the Azurak standard. One could reasonably interpret the provisions to require indemnification and defense of Mountain Creek for any claims of negligence against it caused by Lavin’s conduct even when Mountain Creek is partially at fault or to require Lavin to indemnify and defend Mountain Creek for separate claims of its own negligence. See Nester v. O’Donnell, 301 N.J.Super. 198, 210 (App. Div. 1997) (noting that a contract is ambiguous if it is “susceptible to at least two reasonable alternative interpretations” (quoting Kaufman v. Provident Life & Cas. Ins. Co., 828 F.Supp. 275, 283 (D.N.J. 1992), aff’d, 993 F.2d 877 (3d Cir. 1993))).
An indemnitor may expect to indemnify and defend an indemnitee for claims caused by its negligent conduct when the indemnitee may also be at fault but may not expect to be solely responsible to indemnify and defend the indemnitee when the indemnitee has committed separate acts of negligence. That is the case here, as plaintiff’s complaint alleged Mountain Creek was separately negligent for failing to provide adequate instructions to skiers and a safe ski environment. A better-and likely enforceable-provision would explicitly state that the indemnitor indemnifies Mountain Creek for claims arising out of indemnitor’s conduct and for claims of Mountain Creek’s independent negligence.
The provisions at issue do not meet the bright line rule requiring “unequivocal terms” that the duty to indemnify extends to the indemnitee’s own negligence. Thus, the provisions are ambiguous and must be strictly construed against Mountain Creek. The same reasoning and standards apply with equal force to Mountain Creek’s defense costs. The provisions’ ambiguity precludes their enforcement against Lavin for recovery of the costs incurred by Mountain Creek for defending its own negligence claims.
We also conclude Mountain Creek’s argument that the Ski Statute supports enforcement of the indemnification provisions is without merit. While the Ski Act may emphasize the inherent risk that skiers assume when skiing, the Act provides separate duties to the ski operator, which include establishing and posting a system for identifying slopes and their difficulty, ensuring the availability of information to skiers, and removing hazards as soon as practicable. N.J.S.A. 5:13-3(a). The allegations in plaintiff’s complaint, which include failing to provide adequate signage and failing to instruct skiers properly, do not fall under the risks that “are essentially impractical or impossible for the ski area operator to eliminate” defined in the statute. N.J.S.A. 5:13-1(b). In fact, plaintiff’s complaint addressed the responsibilities of a ski area operator as prescribed by the Act. Requiring indemnification in favor of a ski resort for claims of its own independent negligence does not further the Ski Act’s purpose of allocating the inherent risk of skiing between the skier and ski resort. Moreover, the public policy of the Ski Act has no bearing on our interpretation of the indemnity provisions and our conclusion that the provisions are ambiguous.
II.
Lavin argues, on an alternative basis, that the Rental and Release Agreements are unconscionable contracts of adhesion. Lavin was not required to file a Notice of Cross-Appeal to preserve this argument for appeal because “appeals are taken from judgments, not opinions, and, without having filed a cross-appeal, a respondent can argue any point on the appeal to sustain the trial [judge’s] judgment.” Chimes v. Oritani Motor Hotel, Inc., 195 N.J.Super. 435, 443 (App. Div. 1984). Even if Lavin were required to file a cross-appeal, we will address the merits of his argument.
As a threshold issue, we determine that the Release and Rental Agreements were contracts of adhesion. If a contract is characterized as a contract of adhesion, “nonenforcement of its terms may be justified on other than such traditional grounds as fraud, duress, mistake, or illegality.” Rudbart v. N. Jersey Dist. Water Supply Comm’n, 127 N.J. 344, 353 (1992). An adhesion contract is one that “is presented on a take-it-or-leave-it basis, commonly in a standardized printed form, without opportunity for the ‘adhering’ party to negotiate except perhaps on a few particulars.” Vitale v. Schering-Plough Corp., 231 N.J. 234, 246 (2017) (quoting Rudbart, 127 N.J. at 355). “Although a contract of adhesion is not per se unenforceable, a [judge] may decline to enforce it if it is found to be unconscionable.” Ibid.
We agree with the motion judge that “the Agreements at issue evidence characteristics of contracts of adhesion.” The Release and Rental Agreements were standardized form contracts that fit our Court’s definition as “take-it-or-leave-it” adhesion contracts. See ibid. All potential skiers at Mountain Creek’s resort are obligated to sign the Release Agreement, and there is little to no negotiating done before the agreements’ execution. However, an agreement found to be an adhesion contract may nevertheless be enforced if it is not unconscionable. See ibid.
When determining whether an adhesion contract is unconscionable, we evaluate four factors that “focus on procedural and substantive aspects of the contract to determine whether the contract is so oppressive, or inconsistent with the vindication of public policy, that it would be unconscionable to permit its enforcement.” Id. at 247 (internal quotation marks omitted) (quoting Rodriguez v. Raymours Furniture Co., Inc., 225 N.J. 343, 367 (2016)). Those factors include “the subject matter of the contract, the parties’ relative bargaining positions, the degree of economic compulsion motivating the ‘adhering’ party, and the public interests affected by the contract.” Rudbart, 127 N.J. at 356. The first three factors speak to procedural unconscionability, and the last factor speaks to substantive unconscionability. See Rodriguez, 225 N.J. at 367. We consider these factors using a “sliding scale analysis.” Stelluti v. Casapenn Enters., LLC, 203 N.J. 286, 301 (2010).
The motion judge correctly relied on Stelluti in determining the agreements are not procedurally unconscionable. In Stelluti, the plaintiff was injured in a spinning class at a private fitness center and argued that the pre-injury waiver of liability she signed was unenforceable on unconscionability grounds. Id. at 291, 300. The Court found that although the pre-printed form was an adhesion contract, it was not procedurally unconscionable. Id. at 301-02. The Court reasoned the plaintiff was not in a position of unequal bargaining power, despite being a layperson and not being fully informed of the legal effect of an adhesion contract, when she had the ability to take “her business to another fitness club,” to find a form of exercise different than joining a private gym, or to contemplate the agreement for some time before joining the gym and using its equipment. Id. at 302.
Under the Court’s reasoning in Stelluti and applying the four-factor test, the Release and Rental Agreements are not procedurally unconscionable. At the time of the incident, Lavin was twenty years old and a layperson without specialized knowledge of the law. He maintains he did not read the agreements before signing them despite having the opportunity to do so. Lavin also stated that he did not have the opportunity to negotiate the terms of the agreement. However, Lavin was engaging in a recreational activity like the adhering party in Stelluti, and he was under no economic duress or obligation to consent to the agreements. Lavin could have chosen to take his business to another ski resort, rented skis from a different facility, or could have simply read the agreements or contemplated them before signing.
As for the remaining factor-the impact on public interest-Mountain Creek points to the “strong public policy of protecting ski operators and allocating the risks and costs of inherently dangerous recreational activities” under the Ski Statute. The Act’s purpose
is to make explicit a policy of this State which clearly defines the responsibility of ski area operators and skiers, recognizing that the sport of skiing and other ski area activities involve risks which must be borne by those who engage in such activities and which are essentially impractical or impossible for the ski area operator to eliminate. It is, therefore, the purpose of this act to state those risks which the skier voluntarily assumes for which there can be no recovery.
We agree that the Agreements are not substantively unconscionable. The agreements do not contain terms that are so “harsh” or “one-sided” to render them unconscionable and unenforceable. See Muhammad v. Cnty. Bank of
Rehoboth Beach, Del., 189 N.J. 1, 15 (2006). Construing the indemnity provision against Mountain Creek due to its ambiguity, the provision requires that Lavin indemnify and defend Mountain Creek for claims arising out of Lavin’s conduct while using Mountain Creek’s equipment and facilities, even when Mountain Creek is partially at fault. This indemnification scheme is consistent with the Ski Act’s purpose to promote “the allocation of the risks and costs of skiing” as “an important matter of public policy.” N.J.S.A. 5:13-1(a). Moreover, in Stelluti, the Court considered that “some activities involve a risk of injury and thus require risk sharing between the participants and operators” and that our Legislature has enacted statutes to address the allocation of risk in those circumstances. 203 N.J. at 308. It would not be against public policy to require indemnification of Mountain Creek by Lavin for claims of vicarious liability due to Lavin’s reckless conduct; however, Mountain Creek stipulated that it did not incur any costs in defending claims of vicarious liability.
Affirmed.
———
Notes:
[1] Mountain Creek did not contribute towards plaintiff’s settlement with Lavin.
[2] To comport with our style conventions, we altered the capitalization of Mountain Creek’s Points A and B but omitted the alterations for readability.
———.
G-YQ06K3L262
Indemnification fails again in a release. Parent of child having a birthday at climbing gym signed release for the injured child, not her own child.
Posted: September 14, 2020 Filed under: Climbing Wall, Connecticut, Minors, Youth, Children, Release (pre-injury contract not to sue) | Tags: adhesion, Adhesion Contract, apportionment, bargaining, Birthday Party, Climb, Climbing Wall, common law, contractual, discovery, Electronic Signature, genuine, Horseback, Indemnification, Indemnification Clause, indemnify, Indemnity, negotiation, patron's, quotation, recreational, Release, riding, rock, Rock Climb Fairfield, safe, signor, Snow Tubing, Third Party, training, visitor, Waiver Leave a commentIndemnification is rarely upheld in a release. The language does not meet the requirements needed under the law in most states to be an indemnification agreement.
Cannon v. Rock Climb Fairfield, LLC, 2020 Conn. Super. LEXIS 261
State: Connecticut, Superior Court of, Judicial District of Fairfield At Bridgeport
Plaintiff: Cindy Cannon PPA Emma Cannon
Defendant: Rock Climb Fairfield, LLC, Carabiners Fairfield, LLC and Matthew Conroy
Plaintiff Claims: Negligence
Defendant Defenses: Indemnification by third party
Holding: for the Plaintiff
Year: 2020
Summary
Connecticut Climbing Gym had a mother of a group of girls at a gym for a birthday party sign release for all the girls. After one of the girls was injured and sued, the climbing gym attempted to recover money from the mother who signed the release based on the language of the release in its indemnification clause. That failed.
If failed so badly the court voided the entire release finding it to be an adhesion contract.
Indemnification agreements in releases never work to recover damages from an injured plaintiff.
Facts
We are never made aware of the facts that gave rise to the injury that created this decision. However, since the issue is solely who is liable under contract (release) for the injury it is not really relevant.
The case arises from an incident where the minor plaintiff, Emma Cannon, fell from a climbing wall at the Rock Climb defendant’s indoor rock climbing facility located in Fairfield, Connecticut. The minor plaintiff claims she sustained personal injuries. On behalf of her minor child, Cindy Cannon instituted the present action alleging the facility, its agents and employees were negligent in supervising the rock climbing activities, thereby causing the minor plaintiff’s injuries. The defendants have filed an answer and eight special defenses to the amended complaint.
Thereafter, the Rock Climb defendants filed an apportionment complaint against the defendant Kate Licata, who brought the minor plaintiff, Emma Cannon, and several other girls to the facility for a group birthday party event. The apportionment complaint is dated February 6, 2019.4 The apportionment complaint alleges that Licata was negligent in numerous ways and seeks an apportionment of liability and damages as to Licata for the percentage of negligence attributable to her. The apportionment complaint is not the subject of the motion for summary judgment that is presently before the court. The Rock Climb defendants also filed a cross claim against Licata alleging contractual and common-law indemnity. The cross claim, which is the subject of Licata’s motion for summary judgment, is dated February 22, 2019.
So, the parent of the birthday child signed releases for the children attending the birthday party. When one child was injured and sued the climbing gym, the climbing gym brought the parent who signed the release into the lawsuit based on the indemnification language in the releases she signed.
The release was signed electronically; however, this was not an issue the court seemed interested in looking at.
Analysis: making sense of the law based on these facts.
The cross claim alleges that the Rock Climb defendants, who are the third-party plaintiffs, require all invitees to its facility to complete a “Release of Liability and Assumption of Risk” form before participating in rock climbing activities. If the participant is a minor, the form must be signed by the minor’s parent or court-appointed guardian, which Licata was not.
The defendant Climbing Gym filed a motion for summary judgment arguing the mother should be liable for any damages they pay out on behalf of the injured minor child. This was based on two legal theories the first was the indemnification language found in the release itself.
The release form contains language to the effect that the parent or guardian of the minor has explained the inherent risks of the activity to the minor and the minor understands the said risks and that the minor, nonetheless, wishes to participate in the activities. The release form further provides that “the parent of the minor visitor . . . forever discharge, and agree to indemnify . . . Carabiners Fairfield, LLC, its agents, owners, officers, volunteers, employees, and all other persons or entities acting in any capacity on its behalf . . . from any and all claims, suits, demands, causes of action, which are in any way connected with my or the minor visitor’s visit to the RCF activity site . . . My agreement of indemnity is intended to include claims arising out of losses suffered by me (an adult climber or parent) or the child and losses caused by me or the child. The agreements of indemnity and release include claims of negligence . . . of a Released Party.” The Rock Climb defendants allege that Licata completed an online version of the Release form and electronically signed it on behalf of the minor plaintiff Emma Cannon on October 3, 2016. Thus, Licata is contractually obligated to defend and indemnify the Rock Climb defendants for the injuries and damages resulting from Emma Cannon’s fall at the Rock Climb defendants’ facility pursuant to General Statutes §52-102a.5
The second defense or reason why the mother should be liable was based on common-law indemnification.
The Rock Climb defendants also allege Licata is liable for common-law indemnification, claiming that any injuries sustained by the minor plaintiff were proximately caused, in whole or part, by Licata’s negligence and carelessness in multiple ways. Among these allegations are failing to supervise and monitor the minor; failing to instruct the minor; and failing to warn the minor of the dangerous nature and risks of the activity. Lastly, the Rock Climb defendants argue that a substantial amount of discovery remains outstanding and various issues of fact are yet to be settled, and therefore, it argues that Licata’s summary judgment motion should be denied.
To succeed on an indemnification agreement the court found under Connecticut law the defendant climbing gym must show the following.
A party may bring an indemnification claim based on the terms of an indemnity agreement . . . [A]llegations of contractual indemnification must be supported by the terms of the contract or the contract itself . . . Under Connecticut law, to state a contract-based indemnification claim, the claimant must allege either an express or implied contractual right to indemnification . . . There is no requirement that a party seeking indemnification must assert allegations of exclusive control (or any of the other elements of a claim for indemnification based on active-passive negligence) in order to state a legally sufficient claim for contractual indemnification.
An indemnification agreement in Connecticut has four elements.
“The essential elements for a cause of action based on breach of contract are (1) the formation of an agreement, (2) performance by one party, (3) breach of the agreement by the opposing party, and (4) damages . . . [and] causation.”
The plaintiff argued that the entire release was void because of two prior Connecticut court decisions.
Lastly, the Reardon court noted that the release that the plaintiff signed broadly indemnifying the defendants from liability for damages resulting from the defendants’ own negligence was a classic contract of adhesion of the type that this court found to be in violation of public policy in Hanks.
(See Reardon v. Windswept Farm, LLC, et al., 280 Conn. 153; 905 A.2d 1156; 2006 Conn. LEXIS 330
and States that do not Support the Use of a Release.)
The release stated the mother who signed the release knew that “the defendants’ [facilities or equipment] were maintained in a reasonably safe condition. The court found this to be utterly bogus (as do I). The mother had no knowledge or experience rock climbing and no clue, whether the facility was in good condition.
To the contrary, it was the defendants, not the plaintiff or the other customers, who had the “expertise and opportunity to foresee and control hazards, and to guard against the negligence of their agents and employees. They alone [could] properly maintain and inspect their premises, and train their employees in risk management.” In particular, the defendants acknowledged that they were responsible for providing their patrons with safe horses, qualified instructors, as well as properly maintained working equipment and riding surfaces.
This was the same position a Connecticut court in Hanks v. Powder Ridge Restaurant Corporation et al., 276 Conn. 314; 885 A.2d 734; 2005 Conn. LEXIS 500, that the requirements in the release were absurd because the knowledge necessary to know and understand if the activity was safe or the equipment was in good working order was solely within the knowledge and experience of the defendant.
As we concluded in Hanks, it is illogical to relieve the defendants, as the party with greater expertise and information concerning the dangers associated with engaging in horseback riding at their facility, from potential claims of negligence surrounding an alleged failure to administer properly the activity.
The court then, using the issue of the ability of the mother who signed the release to contract about the equipment found the release to be a contract of adhesion.
Specifically, we have noted that the most salient feature of adhesion contracts is that they are not subject to the normal bargaining processes of ordinary contracts, and that they tend to involve a standard form contract prepared by one party, to be signed by the party in a weaker position, usually a consumer, who has little choice about the terms.
The issue of whether or not the release was an adhesion contract had been touched on lightly; however, the court eventually unloaded on the defendant finding the release to be a contract of adhesion, which voids releases in most states.
…that the release that the plaintiff signed broadly indemnifying the defendants from liability for damages resulting from the defendants’ own negligence was a classic contract of adhesion of the type that this court found to be in violation of public policy in Hanks.
Most states look at recreation, and since it is not a necessity, something needed for the modern survival of a person or family as not being contacts of adhesion. However, in Connecticut, there is no review of why the release is signed, just a review of the specific language in the release to determine if it is an adhesion contract.
The court then looked at the release under the requirements of the Connecticut Supreme Court and found the release lacking as well as the indemnification language in the release.
In the present case, the defendant’s facility was open to the general public regardless of a patron’s experience level. The minor plaintiff was a ten-year-old female. The defendants have admitted that they provided instruction to the group of minors attending the birthday celebration at the defendants’ facility. Neither the minor plaintiff or Licata provided any of the equipment to be used. Licata, herself, did not provide training, guidance or supervision to the minors, including the minor plaintiff. Licata possessed no special knowledge regarding rock climbing or bouldering activities including training and safety procedures other than an initial orientation by RCF employees. Maklad testified at her deposition that the orientation lasted only five to ten minutes. The RCF defendants/third-party plaintiffs admit that there was zero expectation that Licata would “train and guide climbers” or to inspect various facility equipment. RCF argues that they did expect that parents and guardians would supervise children. Thus, there is a question of fact as to whether or not Licata was adequately supervising the minor plaintiff Cannon when she fell. The court disagrees.
And then tore the release apart based on the lack of bargaining power between the parties.
In this case, signing the release provided by RCF was required as a condition of the plaintiff’s participation in the bouldering and rock climbing activities at the RCF facility. There was no opportunity for negotiation by the plaintiff, and if she was unsatisfied with the terms of the release, her only option was to not to allow the minor guests who accompanied her to the birthday party to participate. Licata had no bargaining power with respect to the negotiation of the release and in order to participate in the activity, she was required to assume the risk of the defendants’ negligence. “This condition of participation violates the stated public policy of our tort system because the plaintiff was required to bear an additional risk despite her status as a patron who was not in a position to foresee or control the alleged negligent conduct that she was confronted with, or manage and spread the risk more effectively then the defendants.”
The court then looked at the common-law indemnification argument of the climbing gym. For one party to hold the other party liable under common law, the following facts must be in place.
(1) the third party against whom indemnification is sought was negligent; (2) the third party’s active negligence, rather than the defendant’s own passive negligence, was the direct, immediate cause of the accident and the resulting harm; (3) the third party was in control of the situation to the exclusion of the defendant seeking reimbursement; and (4) the defendant did not know of the third party’s negligence, had no reason to anticipate it, and reasonably could rely on the third party not to be negligent.”
Just looking at these requirements at a climbing wall, you know the mother of a child hosting a birthday party, there is not going to meet any of these requirements.
The defendant climbing wall could not produce any evidence that the mother was in exclusive control of the situation to the exclusion of all others.
The mother’s motion for summary judgment was granted, and the plaintiff’s indemnification claims failed.
So Now What?
Overall, the language in this release did not meet Connecticut law on many counts. However, the court found the language to be so one-sided and so bad that it found multiple ways to void it. Releases must be written for the activity, the guests and the law of the state where the release will be used. When you have a state like Connecticut, where releases are always on a thing line between valid and void, the language is critical to success.
Indemnification claims in a release have never worked. The only way that the claims may work, would be against third parties when the liability is created by the guest. An example of something like that might be a guest on a trip starts a forest fire. The special-use permit or concession agreement generally holds the outfitter/permittee/concessionaire liable for the damages caused by the fire. The indemnification clause might work in that situation to recover some of the money to reimburse the outfitter.
(Always make sure your outfitter liability policy provides coverage for actions to third parties by your guests.)
However, I have never found a case where indemnification has worked to recover damages for an injury from parents, friends or the leader of the group of kids. Maine looked at the language of indemnification in a release and seemed to indicate it would be supported if written correctly. See Maine follows the majority and does not allow a parent to sign away a minor’s right to sue.
The situation that created this mess is classic. A group of kids is coming to your business or program, and no one has notified the parents of a requirement to sign a release in advance. Upon arrival, someone who does not know or understand or a facility that does not care just has the adult with the kids sign the paperwork. That does not work.
Either get the parent’s signatures on documents or spend most of the time creating an assumption of the risk defense by educating the kids.
Don’t waste the paper or electrons having a youth leader or mother responsible of the group sign the release for the rest of the children in attendance. It just does not work.
This will be the fourth article I’ve written about Connecticut courts voiding releases. If you work or operate in Connecticut you are probably working in a state that does not support the use of a release.
For more information about indemnification see:
Indemnification agreements? What are you signing?
What do you think? Leave a comment.
 |
Jim Moss is an attorney specializing in the legal issues of the outdoor recreation community. He represents guides, guide services, and outfitters both as businesses and individuals and the products they use for their business. He has defended Mt. Everest guide services, summer camps, climbing rope manufacturers; avalanche beacon manufacturers, and many more manufacturers and outdoor industries. Contact Jim at Jim@Rec-Law.us |
Jim is the author or co-author of eight books about the legal issues in the outdoor recreation world; the latest is Outdoor Recreation Insurance, Risk
Outdoor Recreation Insurance, Risk Management and Law
To see Jim’s complete bio go here and to see his CV you can find it here. To find out the purpose of this website go here.
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indemnification, Climb, Rock, contractual, quotation, snow-tubing, common-law, third-party, recreational, genuine, visitor, indemnify, indemnity, patrons, discovery, riding, signor, bargaining, safe, apportionment, negotiation, horseback, adhesion, training
Words and Phrases Defined in an Articles
Posted: May 9, 2018 Filed under: Uncategorized | Tags: Adhesion Contract, Amicus Curiae, Assumption of risk, Certiorari, Definitions, Derivative Claim, Duty of care, Express Assumption of risk, Failure to Warn, Foreseeability, Forum non conveniens, Fraudulent Misrepresentation, Gross negligence, Implied Assumption of the Risk, Inherently Dangerous, Lex loci contractus, Negligence, Negligence per se, Negligent Misrepresentation, Open and Obvious, Phrases, Primary Assumption of Risk, Product liability, Public Policy, Punitive damages, recklessness, Release, Remittitur, Rescue Doctrine, Respondeat Superior, Secondary Assumption of Risk, Sudden Emergency Doctrine, Unconscionable, Wanton or Reckless, willful, Wrongful Death Leave a commentThe articles next to the term or phrase and state identify an article where the court has defined the term in the legal decision and it is quoted in the article.
This does not cover every decision posted on Recreation-law.com. However, you might find it helpful to understand some terms.
Last Updated April 24, 2018
Louisiana does not allow the use or releases. A trampoline park tried to use an assumption of risk agreement with an arbitration clause and liquidated damage’s clause which the LA Supreme Court found to be a contract of Adhesion.
Posted: March 26, 2018 Filed under: Louisiana | Tags: Adhesion Contract, Contract of Adhesion, Indoor Trampoline Park, Louisiana, Louisiana Supreme Court, Trampoline, Trampoline Park Leave a commentIf you are going to have check boxes, then every paragraph has to have check boxes.
Duhon v. Activelaf, LLC and Lloyds, London, 2016-0818 (La. 10/19/16); 2016 La. LEXIS 2089
State: Louisiana, Supreme Court of Louisiana
Plaintiff: James Duhon
Defendant: Activelaf, LLC, D/B/A Skyzone Lafayette and Underwriters at Lloyds, London
Plaintiff Claims: Negligence
Defendant Defenses: Mandatory Arbitration
Holding: for the Plaintiff
Year: 2016
Summary
Louisiana does not allow the use of a release so amusement and recreation businesses always scramble to find ways to protect themselves. However, you can go too far.
This trampoline park had an arbitration clause hidden in a paragraph. The Louisiana Supreme Court determined that made the agreement and adhesion contract and voided the agreement.
Facts
The plaintiff sued. The defendant filed a motion to require mandatory arbitration as required under the agreement. The trial court denied the motion, and the defendant appealed. The defendant appealed the trial court decision to the appellate court which upheld the mandatory arbitration clause. The plaintiff appealed, and the Supreme Court of Louisiana reversed the appellate court and held the arbitration clause was not enforceable.
Louisiana does not allow the use of a release. See States that do not Support the Use of a Release. Louisiana Civil Code Art. 2004 (2015) voids all releases.
The contract, as explained by the court, has terms that become important in this decision’s analysis. The contract included a video and photography release, allowed the defendant to email the signors, waives the signor’s right to sue, mandatory arbitration clause and a liquidated damage’s clause requiring the signor to pay the defendant $5,000 if the plaintiff sued.
Three paragraphs then had boxes next to them had that to be checked. The rest of the paragraphs did not.
The total issues of the agreement, the fact the important clauses were not identified, and only three paragraphs required check boxes were of issue before the court.
Analysis: making sense of the law based on these facts.
The court found that signing the agreement electronically did not mean anything.
As an initial matter, we note the electronic nature of the Agreement in this case is of no legal consequence and does not fundamentally change the principles of contract. Louisiana law gives legal effect to both electronic contracts and signatures. We interpret and analyze the terms of the Agreement using the same rules that we would apply to oral and written contracts.
Louisiana law, like federal law, favor arbitration clauses. Arbitration does not require on the court system, allows hiring of an agreeable arbiter by the parties, is much cheaper and much quicker than a trial.
The plaintiff argued the agreement in this case was adhesive. If a contract is found to be an adhesion contract, the contract is void. The court defined an adhesion contract as:
Broadly defined, a contract of adhesion is a standard contract, usually in printed form, prepared by a party of superior bargaining power for adherence or rejection of the weaker party. Often in small print, these contracts sometimes raise a question as to whether or not the weaker party actually consented to the terms.
The court stated that just because a contract was a standard form contract does not immediately mean it was an adhesion contract. “Therefore, we are not willing to declare all standard form contracts adhesionary; rather, we find standard form serves merely as a possible indicator of adhesion.”
The court then looked at other cases and came up with the following test to determine if the arbitration clause in a contract was adhesionary. The court must look at:
(1) the physical characteristics of the arbitration clause, (2) the distinguishing features of the arbitration clause, (3) the mutuality of the arbitration clause, and (4) the relative bargaining strength of the parties.
The test is not a definitive test, but one that the court must use and apply to all arbitration clauses and evaluate each clause.
Using those four requirements the court looked at the clause in this agreement.
The first problem the court found was the arbitration clause was hidden in the agreement. There was no check box for the paragraph which contained the clause, no heading, no bold type, nothing to indicate there was an important clause in the paragraph.
However, the lack of distinguishing features and the specific placement of the arbitration clause serve to conceal the arbitration language from Sky Zone patrons. The Agreement is structured with check boxes next to the first three paragraphs, followed by five additional paragraphs without corresponding check boxes.
Additionally, the paragraph containing the arbitration clause contained several different legal points. Consequently, the court thought the arbitration clause was hidden in the agreement and difficult to find.
Thus, looking at the Agreement as a whole, the arbitration language appears to be the only specific provision not relegated to a separate paragraph or set apart in some explicit way. Here, the two-sentence provision mandating arbitration is camouflaged within the confines of an eleven-sentence paragraph, nine of which do not discuss arbitration. The effect of the placement of the arbitration language is to cloak it within a blanket of boilerplate language regarding rules and risks of participating in the Sky Zone activities.
Consequently, the court held the plaintiff did not consent to the arbitration clause.
The court then went on to find more issues with the agreement. The court found there was no mutuality in the arbitration clause. Meaning the plaintiff was bound to arbitrate and the defendants were not.
The court was also disturbed when it found a punitive provision which required an injured patron, if they sued, to pay the defendant $5,000.00 within sixty days of filing a lawsuit. The $5,000 would earn interest at 12% per year.
Even more troublesome in this case is the punitive provision compelling patrons to pay Sky Zone liquidated damages of $5,000 within sixty days should the patron file suit, with legal interest added at 12% per year. Sky Zone has no mutual obligation in the Agreement.
The court found the arbitration clause was adhesionary and unenforceable.
Considering the lack of mutuality together with the obscure placement of the arbitration language in the Agreement, and in comparison to the contract in Aguillard, we are compelled to find the arbitration clause in the Sky Zone Agreement is adhesionary and unenforceable.
The case could proceed to trial.
The decision had two short concurring decisions and one dissenting decision.
So Now What?
Here three items doomed the defendant. The first was the check boxes. Electronically, the check boxes do not provide the same problems as with a paper agreement. However, having three check boxes next to relatively unimportant clauses and no check boxes next to the clause at issue disturbed the court and found it an attempt to hide the arbitration clause from signors.
The second was the fact a major clause in a contract was hidden. It was mixed in a paragraph with other legal clauses and not pointed out as an important clause.
The third was the clause requiring the plaintiff to pay the defendant if they filed suit. Honestly, this one caught me off guard. There was no legal basis for it. Nothing was required by a party to do or not to do such as sue and lose. Filing a lawsuit was going to cost the plaintiff $5,000.
Arbitration clauses are good in those states that do not recognize a release. See States that do not Support the Use of a Release. You do not want to use an arbitration clause if you are in a state where releases are valid. Arbitration does not allow motions; you just go to a hearing. When you have the opportunity to win by using the release, the arbitration clause may set you up for a longer fight. Also, arbitrators are more than likely to split decisions, providing some benefit to both sides of the arbitration.
Many state laws encouraging arbitration clauses also limit the types of damages an arbitrator can award. Many do not allow an arbitrator to award punitive damages. If you are in a recreation industry where damages may be excessive, arbitration may provide a benefit.
A release allows you to win without having to pay the plaintiff anything. If you have a state that supports a release, use a release.
Arbitration clauses require more work than simply requiring arbitration. You need to define what type of arbitration, where and how the rules will be applied. You just can’t require it without knowing what you are getting yourself into.
For other cases looking at Louisiana law on releases and recreation see:
Louisiana State University loses climbing wall case because or climbing wall manual and state law.
Articles looking at arbitration clauses in outdoor recreation.
What do you think? Leave a comment.
|
James H. “Jim” Moss |
Jim Moss is an attorney specializing in the legal issues of the outdoor recreation community. He represents guides, guide services, and outfitters both as businesses and individuals and the products they use for their business. He has defended Mt. Everest guide services, summer camps, climbing rope manufacturers; avalanche beacon manufacturers, and many more manufacturers and outdoor industries. Contact Jim at Jim@Rec-Law.us |
Jim is the author or co-author of eight books about legal issues in the outdoor recreation world; the latest is Outdoor Recreation Insurance, Risk Management,
Outdoor Recreation Insurance, Risk Management, and Law
To see Jim’s complete bio go here and to see his CV you can find it here. To find out the purpose of this website go here.
If you are interested in having me write your release, download the form and return it to me.
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Colorado Federal District Court judge references a ski area lift ticket in support of decision granting the ski area’s motion for summary judgment and dismissing the lawsuit.
Posted: August 7, 2017 Filed under: Colorado, Release (pre-injury contract not to sue), Ski Area, Skiing / Snow Boarding | Tags: Adhesion Contract, bargaining, Chair Lift, collectively, equipment rental, exculpation, exculpatory, language contained, Lift Ticket, lift tickets, loading, loss of consortium, moving party, negligence claims, question of law, recreational, Release, Rental Agreement, riding, safely, service provided, Ski, ski area, Ski lift, Ski Resort, Ski Safety Act, Ski Sunlight, skiing, Snow, Sports, Standard of Care, Summary judgment, unambiguous language, unambiguously, Unloading Leave a commentThe Federal District Court in this case used the language of the lift ticket to support the defendant ski area’s motion for summary judgment. The decision also says the release is valid for lift accidents in Colorado closing one of the last gaps in suits against ski areas in Colorado.
Rumpf v. Sunlight, Inc., 2016 U.S. Dist. LEXIS 107946
State: Colorado, United States District Court for the District of Colorado
Plaintiff: Sally Rumpf & Louis Rumpf
Defendant: Sunlight, Inc.
Plaintiff Claims: negligence, negligence per se, and loss of consortium
Defendant Defenses: (1) they are barred by the exculpatory language contained in both the ski rental agreement and the lift ticket; (2) they fail for a lack of expert testimony; and (3) that Sally Rumpf
was negligent per se under the Ski Safety Act.
Holding: for the Defendant
Year: 2016
The plaintiff traveled to Glenwood Springs, Colorado to visit family and ski. She rented equipment from the
defendant ski area, Ski Sunlight and purchased a lift ticket. As required to rent the ski equipment, the plaintiff signed a release.
While attempting to board a chair lift, the plaintiff injured her shoulder. The defendant filed a motion for summary judgment which the court granted with this decision.
Analysis: making sense of the law based on these facts.
In the statement of the facts, the court quoted from the language on the lift ticket.
Holder understands that he/she is responsible for using the ski area safely and for having the physical dexterity to safely load, ride and unload the lifts. Holder agrees to read and understand all signage and instructions and agrees to comply with them. Holder understands that he/she must control his/her speed and course at all times and maintain a proper lookout. Holder understands that snowmobiles, snowcats, and snowmaking may be encountered at any time. In consideration of using the premises, Holder agrees to ASSUME ALL RISKS associated with the activities and to HOLD HARMLESS the Ski Area and its representatives for all claims for injury to person or property. Holder agrees that any and all disputes between Holder and the Ski Area regarding an alleged incident shall be governed by COLORADO LAW and EXCLUSIVE JURISDICTION shall be in the State or Federal Courts of the State of Colorado.
What is interesting is the Colorado Skier Safety Act, C.R.S. §§ 33-44-107(8)(b) requires specific language to be on the lift ticket.
WARNING
Under Colorado law, a skier 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 any ski area operator for any injury resulting from any of the inherent dangers and risks of skiing, including: Changing weather conditions; existing and changing snow conditions; bare spots; rocks; stumps; trees; collisions with natural objects, man-made objects, or other skiers; variations in terrain; and the failure of skiers to ski within their own abilities.
It is unclear from the decision, and I do not have a copy of the Ski Sunlight lift ticket, to know if the required language is on the lift ticket. However, the language that was on the lift ticket was important and used by the court to make its decision.
The language required by the Colorado Skier Safety Act speaks to the risks assumed by a skier while skiing and does not speak to any risks of a chair lift. This creates an obvious conflict in the law for a ski area. Do you use the language required by the statute or use different language that a federal judge has said was instructive in stopping the claims of a plaintiff.
The court found the plaintiff had read and understood the release and knew she was bound by it. The plaintiff’s argument centered on the theory that the release did not cover lift accidents based on a prior case, Bayer v. Crested Butte Mountain Resort, Inc., 960 P.2d 70 (1998). That case held that a ski area owes the highest degree of care to skiers on the lift.
Plaintiffs further argue that the exculpatory language at issue is “only applicable to ski cases when the accident or injury occurs while the plaintiff is skiing or snowboarding on the slopes,” and not when loading the ski lift.
The Bayer decision changed the liability issues for Colorado Ski Areas. It also created the only gap in protection for Colorado Ski Areas between the Colorado Skier Safety Act and release law. However, this was significantly modified by Brigance v. Vail Summit Resorts, Inc., 2016 U.S. Dist. LEXIS 31662, reviewed in Question answered; Colorado Premises Liability Act supersedes Colorado Ski Area Safety act. Standard of care owed skiers on chairlift’s reasonable man standard?
The court then reviewed the requirements under Colorado law for releases to be valid.
Exculpatory agreements, which attempt to insulate a party from liability for its own negligence, are generally recognized under Colorado law, but are construed narrowly and “closely scrutinized” to ensure that the agreement was fairly entered into and that the intention of the parties is expressed in clear and unambiguous language. Additionally, the terms of exculpatory agreements must be strictly construed against the drafter.
The court reiterated several times that it was the intent of the parties within the language of the release that was the important aspect of the release, more than the specific language of the release. This intent was supported by the language on the lift ticket. Colorado has a 4 factor test to determine the validity of a release.
…in determining the validity of an exculpatory agreement, the Court must consider the following factors: (1) whether the service provided involves a duty to the public; (2) the nature of the service provided; (3) whether the agreement was fairly entered into; and (4) whether the intention of the parties is expressed in clear and unambiguous language.
Skiing in Colorado is recreational and not a service, so there is no public duty that would void a release. Because it is a service, and the plaintiff is free to go ski else where there is no adhesion so the agreement was entered into by the parties fairly.
Adhesion was defined by the court in Colorado as:
…Colorado defines an adhesion contract as “generally not bargained for, but imposed on the public for a necessary service on a take it or leave it basis.” However, printed form contracts offered on a take it or leave it basis, alone, do not render the agreement an adhesion contract.
For the plaintiff to win her argument, the plaintiff must show “, “that the parties were greatly disparate in bargaining power, that there was no opportunity for negotiation, or that [the] services could not be obtained elsewhere.”
The court then applied contract law to determine if the agreement was ambiguous.
“Interpretation of a written contract and the determination of whether a provision in the contract is ambiguous are questions of law.” Under Colorado law, I must examine the actual language of the agreements 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.
The court in reviewing the release found the release to clearly and unambiguously set forth the party’s intent to release the ski area from liability.
The court again backed up its decision by referring to the language on the lift ticket.
Furthermore, the ski lift ticket specifically references safely loading, riding and unloading Sunlight’s ski lifts and provides that the “Holder agrees to ASSUME ALL RISKS associated with the activities and to HOLD HARMLESS the Ski Area and its representatives for all claims for injury to person or property.”
As such the release was valid and stopped the claims of the plaintiff and her spouse.
So Now What?
Although the basics of the decision are familiar under Colorado law, the court’s reference to the language on the lift ticket is a departure from Colorado law and the law of most other states. See Lift tickets are not contracts and rarely work as a release in most states.
Whether or not a lift ticket standing by itself is enough to stop a claim is still in the air and probably will be. The language on this lift ticket may have been different than the language required by law, which basically states the skier assumes the risk of skiing. The required statutory language does not cover any issues with loading, unloading or riding chair lifts.
This creates a major conflict for ski areas. What do you put on the lift ticket. The statute requires specific language; however, there are no penalties for failing to put the language on the lift ticket. However, it is negligence to violate any part of the statute, if that negligence caused an injury.
C.R.S. §§ 33-44-104. Negligence – civil actions.
(1) A violation of any requirement of this article shall, to the extent such violation causes injury to any person or damage to property, constitute negligence on the part of the person violating such requirement.
(2) A violation by a ski area operator of any requirement of this article or any rule or regulation promulgated by the passenger tramway safety board pursuant to section 25-5-704 (1) (a), C.R.S., shall, to the extent such violation causes injury to any person or damage to property, constitute negligence on the part of such operator.
Failing to put the language on the lift ticket by itself could not cause an injury. The language required on the lift ticket is the same language required to be posted where ever lift tickets are sold and posted at the bottom of all base area lifts. Base area lifts are the lifts used to get up the mountain. Lifts that start further up the mountain, which require a lift right to reach don’t need the warning signs.
My advice is to include the statutory language and much of the language of this decision on lift tickets. You just don’t want to walk into a courtroom and be accused of failing to follow the law. You might be right, but you will look bad and looking bad is the first step in writing a check. The biggest limitation is going to be the size of the lift ticket and print size.
This case, although decided before Question answered; Colorado Premises Liability Act supersedes Colorado Ski Area Safety act. Standard of care owed skiers on chairlift’s reasonable man standard? and was quoted in this decision, it adds another block into what is now an almost impregnable wall against claims from skiers in Colorado.
What do you think? Leave a comment.
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Every time someone comes to your business or every time they sign up again they should sign a release. This time it got rid of a major problem.
Posted: March 19, 2012 Filed under: New Jersey, Release (pre-injury contract not to sue), Ski Area | Tags: Adhesion Contract, Exculpatory Agreement, Federal Rules of Civil Procedure, Injury, Mountain Creek, Plaintiff, Pre-injury Release, Release, ski area, skiing, Summary judgment, Unconscionability Leave a commentDearnley v. Mountain Creek, 2012 N.J. Super. Unpub. LEXIS 527
Releases work for future injuries and for injuries that may have all ready occurred.
This is a case where as part of the employment at a ski area, the family of the employee was able to get season passes. A requirement for the season pass was to sign a release.
In this case, the plaintiff was injured skiing on a season pass issued to the family member of an employee. The plaintiff sued the ski resort for his injuries. After the lawsuit had commenced but before trial, the plaintiff got another season pass and signed another release. The second release language was sufficient to stop the lawsuit.
The release was called a post injury release now because it stopped a lawsuit after the injury. Normally, I discuss pre-injury releases. Pre-Injury releases are releases that are signed in case someone is injured in a negligent manner.
Summary of the case
After it was discovered the plaintiff had signed a second release, the defense moved to amend their answer and filed a motion for summary judgment. The trial court granted the motion to amend and add the defense of release and accord and satisfaction. The plaintiff appealed.
“Release” is an affirmative defense. An affirmative defense is one that must be plead immediately in the answer of the defendant or the defense is waived. Release as a defense means that the parties have executed an agreement that releases the defendant from any claims.
“Accord and Satisfaction” are also an affirmative defense. Accord and Satisfaction means the party have come to an agreement, an accord and resolved their differences to the satisfaction of all parties.
The plaintiff argued that the post injury release was unconscionable. The contract should not be enforced because of:
“….inadequacies, such as age, literacy, lack of sophistication, hidden or unduly complex contract terms, bargaining tactics, and the particular setting existing during the contract formation process.”
An unconscionable contract or a contract of adhesion is one that the terms were offered on a take or leave it basis the terms are unjust to the point the court cannot allow the contract to stand. The contract must be so bad as to shock the conscience of the court. However, the contract cannot just be bad to one party.
Here, there are several factors that would not make the contract unconscionable. The contract is not for a necessary service. The services could be received from the same party in other ways. (Instead of signing a release and getting a season pass, the plaintiff could have purchased daily lift tickets and not signed a release.) The services were available from other providers.
The court found there were no coercion, duress, fraud or “sharp practices” by the defendant. The agreement did not change the duty of care nor did it “incentivize negligence.” Each of the contracting parties gained or gave away something of value.
So Now What?
Here the defendant was lucky. The plaintiff unknowingly signed a release to get his season pass that had the language necessary to stop a claim that had already occurred. There are two important points to bring up from this case.
1 Make sure your release has language to top future claims and past claims.
2. Every single time have every single-person sign a release. Get a new season pass, you sign the release again. Go rafting again, you sign the release. Buy another widget sign the release.
You just never know when a release from the future may stop a claim from the past.
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Dearnley v. Mountain Creek, 2012 N.J. Super. Unpub. LEXIS 527
Posted: March 19, 2012 Filed under: Legal Case, Release (pre-injury contract not to sue), Ski Area | Tags: Adhesion Contract, Appeal, Defendant, Exculpatory Agreement, Law Division, Mountain Creek, New Jersey Superior Court, Pre-injury Release, Release, ski area, skiing, Summary judgment, Unpub Leave a commentDearnley v. Mountain Creek, 2012 N.J. Super. Unpub. LEXIS 527
Derek Dearnley and Vicky Dearnley, his wife, Plaintiffs-Appellants, v. Mountain Creek, its agents, servants and employees, Defendant-Respondent.
Docket no. A-5517-10T1
Superior Court of New Jersey, Appellate Division
2012 N.J. Super. Unpub. LEXIS 527
February 29, 2012, Argued
March 12, 2012, Decided
Notice: not for publication without the approval of the appellate division.
Please consult new jersey rule 1:36-3 for citation of unpublished opinions.
Prior History: [*1]
On appeal from the Superior Court of New Jersey, Law Division, Sussex County, Docket No. L-540-09.
CORE TERMS: season, summary judgment, ski area, unconscionability, unconscionable, affirmative defenses, resort, Law Division, contract of adhesion, exculpatory provisions, releasor’s, surgery, ski, pass holder, bold, tort liability, de novo, contracting party’s, public policy, sliding scale, unenforceable, snowboarding, exculpatory, non-moving, favorable, equitable, adhesion, binding, bargain, quod
COUNSEL: Evan D. Baker argued the cause for appellants (Law Offices of Rosemarie Arnold, attorneys; Mr. Baker, of counsel and on the brief).
Samuel J. McNulty argued the cause for respondent (Hueston McNulty, P.C., attorneys; Mr. McNulty, of counsel and on the brief; John F. Gaffney and Stephen H. Shaw on the brief).
JUDGES: Before Judges Harris and Koblitz.
OPINION
PER CURIAM
Plaintiffs Derek Dearnley and Vicky Dearnley appeal from the June 16, 2011, summary judgment dismissal of their six-count complaint. Plaintiffs sought tort remedies for injuries suffered by Mr. Dearnley while snowboarding at defendant Mountain Creek Resort, Inc.’s ski area in Vernon. We affirm.
I.1
1 This appeal arises from the motion court’s grant of summary judgment in defendant’s favor. Accordingly, we present the evidence in the light most favorable to plaintiffs. See Durand v. The Nutley Sun, N.J. , (2012) (slip op. at 3 n.1) (citing G.D. v. Kenny, 205 N.J. 275, 304 (2011) (citations omitted); R. 4:46-2(c)).
Between 1998 and 2010, Mrs. Dearnley was employed by defendant in its retail department. As part of her compensation benefits, [*2] she and her family members were entitled to apply for, and obtain, a free season pass to use defendant’s facilities at its Vernon ski resort. On November 25, 2008, because her husband desired to take advantage of this benefit for the 2008-2009 winter season, Mrs. Dearnley applied for, and obtained, the pass. She signed, on his behalf, a document entitled, “Season Pass Contract, Student Ski & Ride Voucher Program, Rules and Conditions of Sale, Release of Liability and Indemnity Agreement” (the 2008 agreement). The 2008 agreement contained exculpatory provisions purporting to release tort claims before they occurred. For example, the pass holder “fully release[d] Mountain Creek FROM ANY AND ALL LIABILITY for personal injury, death or property damage arising out of or resulting from [the pass holder’s] participation in this sport, MOUNTAIN CREEK’S NEGLIGENCE, conditions on or about the premises and facilities or the operations of the ski area” (capitalization in the original). The outcome of this appeal, however, does not turn on this language.
On January 4, 2009, Mr. Dearnley was snowboarding at the Mountain Creek ski area when he suffered an accident that he attributes to defendant’s [*3] negligence and breach of its duties under N.J.S.A. 5:13-1 to -11 (the Ski Act). As a result of the accident, Mr. Dearnley incurred serious injuries, which required immediate emergency surgery to stabilize his back by the implantation of metal rods and screws. According to his answers to interrogatories, Mr. Dearnley ultimately spent approximately six weeks in the hospital, had to endure three surgeries, and underwent weeks of physical therapy and rehabilitation.
On October 13, 2009, plaintiffs filed their personal injury and per quod complaint against defendant in the Law Division, Sussex Vicinage. Defendant’s answer listed ten affirmative defenses, but did not assert that the 2008 agreement’s exculpatory provisions barred the action.
Two months later, on December 21, 2009, while his wife was still employed by defendant, Mr. Dearnley applied for a season pass for the 2009-2010 winter season. He was presented with, and signed, a two-page document entitled, “Mountain Creek Resort, Inc. 2009-’10 Season Pass Wavier” (the 2009 agreement). In bold, capitalized print at the top of the first page, the 2009 agreement stated, “RELEASE, WARNINGS AND DISCLAIMERS ON SKIING.”
At the top of the second [*4] page, to which Mr. Dearnley affixed his signature, the following appeared in bold typeface:
I FURTHER RELEASE AND GIVE UP ANY AND ALL CLAIMS AND RIGHTS THAT I MAY NOW HAVE AGAINST MOUNTAIN CREEK RESORT, INC. THIS RELEASES ALL CLAIMS, INCLUDING THOSE OF WHICH I AM NOT AWARE AND THOSE NOT MENTIONED IN THIS RELEASE. THIS RELEASE APPLIES TO CLAIMS RESULTING FROM ANYTHING WHICH HAS HAPPENED UP TO NOW.
The 2009 agreement also stated in bold typeface: “I AM AWARE THAT THIS CONTRACT IS LEGALLY BINDING AND THAT I AM RELEASING LEGAL RIGHTS BY SIGNING IT.”
During discovery, the 2008 and 2009 agreements were exchanged between the parties’ attorneys. Upon the realization of what Mr. Dearnley had signed, plaintiffs filed a motion “for an Order barring the affirmative defenses related to two adhesion contracts.” Defendant filed a cross-motion seeking (1) summary judgment, (2) permission to file an amended answer, and (3) denial of plaintiffs’ motion.
On April 29, 2011, Judge Edward V. Gannon heard oral argument. The judge granted defendant’s motion to amend its answer to permit the pleading of (1) release and (2) accord and satisfaction as affirmative defenses. The judge noted that the 2009 agreement [*5] was executed after both the filing of plaintiffs’ complaint and defendant’s answer, and therefore could not have been contemplated by the first exchange of pleadings. Reciprocally, he denied plaintiff’s motion to bar the affirmative defenses. Finally, he reserved decision on what he called “a matter of first impression with regard to this particular type of release.”
On June 16, 2011, Judge Gannon entered an order granting summary judgment dismissing plaintiffs’ complaint with prejudice. He explained his decision in a thorough ten-page statement of reasons, taking pains to carefully explicate the two agreements and then analyze them under the lens of applicable law. This appeal ensued.
II.
Orders granting summary judgment pursuant to Rule 4:46-2 are reviewed de novo, and we apply the same legal standard employed by the Law Division. Canter v. Lakewood of Voorhees, 420 N.J. Super. 508, 515 (App. Div. 2011). In performing our appellate function we consider, as did the motion court, “‘whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in [*6] favor of the non-moving party.'” Advance Hous., Inc. v. Twp. of Teaneck, 422 N.J. Super. 317, 327 (App. Div. 2011) (quoting Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995)), certif. granted, N.J. (Jan. 24, 2012).
Similarly, when the legal conclusions of a motion court’s Rule 4:46-2 summary judgment decision are reviewed on appeal, “‘[a] trial court’s interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference[,]’ and, hence, an ‘issue of law is subject to de novo plenary appellate review.'” Estate of Hanges v. Metro. Prop. Cas. Ins. Co., 202 N.J. 369, 382-83 (2010) (quoting City of Atl. City v. Trupos, 201 N.J. 447, 463 (2010)).
Judge Gannon dismissed plaintiffs’ claims based upon the release contained in the 2009 agreement, which was personally executed by Mr. Dearnley months after his injuries and surgeries, months after he hired a lawyer, and months after he filed suit. From our review of the undisputed factual record, we are satisfied that this case does not present any novel or first impression issues. Rather, it revolves around an ordinary release —- not exculpatory —- clause and is governed [*7] by familiar principles of contract interpretation. As Judge Gannon stated,
Invalidating the agreed upon waiver would signal judicial mistrust of our citizen’s ability to intelligently enter contracts, in which benefits derive from the assumptions of burdens. In this case, Mr. Dearnley surrendered his right to maintain this suit in exchange for the benefits afforded to season pass holders. A contracting party’s assumption of a substantial burden is no basis for interfering with our citizens’ right to freely contract.
We affirm substantially for the reasons expressed by Judge Gannon, and add only the following brief comments.
Plaintiffs condemn the 2009 agreement as a contract of adhesion, fraught with unconscionabilty, and contrary to public policy. We emphasize that our review is limited to the 2009 agreement, not the 2008 agreement. We are not concerned with defendant’s efforts to exculpate itself from tort liability before an invitee becomes injured at its ski area. Instead, we parse Mr. Dearnley’s release of a claim after it allegedly accrued.
We begin our analysis of the enforceability of the release contained in the 2009 agreement with recognition of the deep-seated principle that [*8] contracts will be enforced as written. Vasquez v. Glassboro Serv. Ass’n, Inc., 83 N.J. 86, 98-100 (1980). Ordinarily, courts will not rewrite contracts to favor a party, for the purpose of giving that party a better bargain. Relief is not available merely because enforcement of the contract causes oppression, improvidence, or unprofitability, or because it produces hardship to one of the parties. Brunswick Hills Racquet Club, Inc. v. Route 18 Shopping Ctr. Assocs., 182 N.J. 210, 223 (2005). A court cannot “‘abrogate the terms of a contract unless there is a settled equitable principle, such as fraud, mistake, or accident, allowing for such intervention.'” Id. at 223-24 (quoting Dunkin’ Donuts of America, Inc. v. Middletown Donut Corp., 100 N.J. 166, 183-84 (1985)).
Rational personal and economic behavior in the modern post-industrial world is only possible if agreements between parties are respected. The reasonable expectations created by mutual assent ought to receive the protection of the law and courts should not be encouraged to fashion a better arrangement for a party because of a gaffe to which the other party is not privy. In other words, avoidance of a contract is a very stern [*9] remedy that requires clear evidence demonstrating that the consequences of the mistake are so grave that enforcement of the contract would be unconscionable. That formidable threshold has not been surmounted here.
Notwithstanding the foregoing, a contract provision that is procedurally and substantively unconscionable can be set aside. See Muhammad v. Cnty. Bank of Rehoboth Beach, 189 N.J. 1, 15 (2006), cert. denied, 549 U.S. 1338, 127 S. Ct. 2032, 167 L. Ed. 2d 763 (2007). “[P]rocedural unconscionability . . . ‘can include a variety of inadequacies, such as age, literacy, lack of sophistication, hidden or unduly complex contract terms, bargaining tactics, and the particular setting existing during the contract formation process[.]'” Ibid. (quoting Sitogum Holdings, Inc. v. Ropes, 352 N.J. Super. 555, 564-66 (Ch. Div. 2002). A contract of adhesion, presented by the drafting party to the other party on a take-it-or-leave-it basis, as here, typically involves “some characteristics of procedural unconscionability[.]” Id. at 16. The determination “that a contract is one of adhesion, however, ‘is the beginning, not the end, of the inquiry’ into whether a contract, or any specific term therein, [*10] should be deemed unenforceable based on policy considerations.” Id. at 28 (citing Rudbart v. N. Jersey Dist. Water Supply Comm., 127 N.J. 344 (1992)).
Substantive unconscionability essentially refers to the inclusion within a contract of “harsh or unfair one-sided terms.” Id. at 15 (citing Sitogum, supra, 352 N.J. Super. at 564-66). It is also described as “‘the exchange of obligations so one-sided as to shock the court’s conscience.'” B & S Ltd., Inc. v. Elephant & Castle Intern., Inc., 388 N.J. Super. 160, 176 (Ch. Div. 2006)(quoting Sitogum, supra, 352 N.J. Super. at 565).
Generally, courts must undertake “a careful fact sensitive examination into [claims of] substantive unconscionability.” Id. at 16 (footnote omitted). “When making the determination that a contract of adhesion is unconscionable and unenforceable, we consider, using a sliding scale analysis, the way in which the contract was formed and, further, whether enforcement of the contract implicates matters of public interest.” Stelluti v. Casapenn Enters., LLC, 203 N.J. 286, 301 (2010).
The release provisions of the 2009 agreement are not the analytical equivalent of its exculpatory provisions. “The law does not favor exculpatory [*11] agreements because they encourage a lack of care.” Gershon v. Regency Diving Ctr., Inc., 368 N.J. Super. 237, 247 (App. Div. 2004). For that reason, courts closely scrutinize attempts to contract in advance to release tort liability. “‘[C]ourts have not hesitated to strike limited liability clauses that are unconscionable or in violation of public policy.'” Hojnowski v. Vans Skate Park, 187 N.J. 323, 333 (2004) (quoting Lucier v. Williams, 366 N.J. Super. 485, 491 (App. Div. 2004)).
The subject release does not call forth any of the foregoing concerns. Mr. Dearnley’s 2009 agreement with defendant neither eroded defendant’s duty of care nor did it incentivize negligence. Each of the contracting parties gained or gave away something of value. There was no coercion, duress, fraud, or sharp practices afoot. Public policy is not offended by requiring a non-incapacitated adult to honor the type of promise given here. See Raroha v. Earle Fin. Corp., 47 N.J. 229, 234 (1966) (holding that in the absence of fraud, misrepresentation or overreaching by the releasee, in the absence of a showing that the releasor was suffering from an incapacity affecting his ability to understand the meaning of [*12] the release and in the absence of any other equitable ground, it is the law of this State that the release is binding and that the releasor will be held to the terms of the bargain he willingly and knowingly entered).
Judge Gannon properly calibrated the “sliding scale” of our unconscionabilty jurisprudence and correctly determined that the 2009 agreement’s release was enforceable. Mr. Dearnley’s releasor’s remorse is an insufficient basis to return this matter to the Law Division for trial.2
2 Mrs. Dearnley’s claims are entirely derivative of her husband’s and consequently her per quod action must fall in the wake of Mr. Dearnley’s release. See Ryan v. Renny, 203 N.J. 37, 62 n.1 (2011) (noting that “the viability of [that claim] is subject to the survival of [her husband]’s claim” (quoting Sciarrotta v. Global Spectrum, 194 N.J. 345, 350 n.3 (2008)).)
Affirmed.
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