Nevada Appellate court voids release because statements made between the riders & the mechanical bull operator creates a requirement to maneuver the bull in an easy fashion which voided the release. Plaintiff also claimed battery from the actions of the defendant.

A strong and well written dissent argued to enforce the release on general contract principals.

Kuchta v. Opco, 2020 Nev. App. Unpub. LEXIS 549, 2020 WL 3868434

State:
Nevada, Court of Appeals of Nevada

Plaintiff: Joseph Kuchta

Defendant: Sheltie Opco, LLC, a Nevada Limited Liability Company, d/b/a John Ascuaga’s Nugget, d/b/a Gilley’s Nightclub; and Wolfhound Holdings, LLC, a Delaware Limited Liability Company

Plaintiff Claims: Negligence, Negligence Per Se, Negligent Hiring and Respondent Superior, Negligent Supervision, Negligent Entrustment, and Battery

Defendant Defenses: Release

Holding: For the Plaintiff

Year: 2020

Summary

Bar patrons wanted to ride the mechanical bull. Before doing so they made the bull operator agree to an easy ride. After one of the riders was thrown and suffered an injury, they sued saying the agreement between the operator and the riders for an easy ride voids the release. The Nevada Court of Appeals agreed.

Facts

While socializing with friends at Gilley’s Nightclub in Sparks, Nevada, a bar owned by respondent Sheltie Opco, Kuchta and his friends observed an employee riding a mechanical bull. As the employee was riding the bull, another employee used a joystick to control the bull’s movements. After the employee demonstrated how easy and non-challenging it was to engage safely in a slow ride, she stepped off the bull.

Sometime later that night, Kuchta and his friends were considering riding the bull. Kuchta’s group approached the same employee, who they had watched ride the bull earlier, and who was now operating the joystick and controlling the ride. Two different people within the group that Kuchta was part of conversed with the employee about riding the mechanical bull.

Viewing all factual allegations in a light most favorable to Kuchta, his friends told the employee that each person in their group wanted an easy ride, which based on a difficulty scale of one to ten, they described as a two (with one meaning not moving at all), which the employee said she could provide. The friends indicated that everyone in the group was a novice and wanted a ride similar to the ride the employee had demonstrated. Furthermore, they told the employee that everyone should be able to step off the bull once the ride concluded, just as the employee had been able to do earlier that night after her ride. The employee agreed to provide the type of a ride Kuchta’s group requested. Thus, Kuchta’s and the employee’s understandings and expectations regarding Kuchta’s ride were that it would be easy, at a level two or at a low speed, and that Kuchta would be able to dismount after the ride was finished.

Before any person could ride the mechanical bull, however, Gilley’s required each patron to sign a previously prepared Assumption of Risk, Release, Indemnity, and Medical Treatment Authorization Agreement (Agreement), also known as a written waiver. The Agreement listed potential risks and possible injuries involved in riding the bull, including broken bones, and also released Sheltie Opco from any and all liability for injuries or negligence that occur from all risks, both known and unknown. Kuchta signed the Agreement, although the record does not reveal when it was signed in relation to the conversations described above.

According to Kuchta, once on the bull, the ride was initially slow, as had been requested. However, after approximately 20 seconds, the operator significantly increased the speed and violence of the bull’s movements. Kuchta was thrown from the bull and suffered a fractured pelvis.

Kuchta sued Sheltie Opco alleging: negligence, negligence per se, negligent hiring and respondent superior, negligent supervision, negligent entrustment, and battery. Sheltie Opco moved for summary judgment on all claims, arguing there was no genuine issue of fact because Kuchta expressly assumed the risks of the ride and consented to the battery when he signed the Agreement before riding the bull. The district court granted Sheltie Opco’s motion for summary judgment finding that Kuchta expressly assumed the risks of riding the bull by signing the Agreement, including consenting to the touching that was the basis for his battery claim.

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

The basic issue that pops up in this case is the conversation between the operator of the mechanical bull and the plaintiff who set the conditions for the plaintiff to ride the bull. Normally, verbal agreements are void and only the paper agreements are valid when a contract is signed. This is called the Parol Evidence rule. Oral statements made prior to the signing of the written agreement are of no value in interpreting the contract. Only the information contained in the four corners of the paperwork are reviewed.

This is a scary issue because any statement made by your staff could be used to defeat a release.

Kuchta argues that he did not expressly assume the risk because the operator specifically agreed to provide the requested slow ride (i.e., an intensity of two out of ten) and the operator instead ultimately conducted a wild ride exceeding his expectations.

Does a conversation between a customer and an employee, (or staff member) change a release? More importantly, does it create a modification of the experience so that the release does not cover the risk. Normally no, but in this case, Yes.

The court then looked at the requirements for a valid release under Nevada’s law.

(1) Contracts providing for immunity for liability for negligence must be construed strictly since they are not favorite[s] of the law . . . (2) such contracts must spell out the intention of the party with the greatest particularity . . . and show the intent to release from liability beyond doubt by express stipulation and no inference from the words of general import can establish it . . . (3) such contracts must be construed with every intendment against the party who seeks immunity from liability . . . (4) the burden to establish immunity from liability is upon the party who asserts such immunity . . . .

Taken as a whole, the requirements are not different in most states. However, the Nevada Appellate court looked further at the requirements to determine whether the plaintiff did assume the risk. Where the risks identified in the release or known by the plaintiff.

However, our inquiry does not stop here as it pertains to the waiver’s validity; we must determine whether Kuchta expressly assumed the risks contemplated by the waiver.

In Nevada, releases are looked at as proof, the plaintiff assumed the risk. These are one-way courts look at releases; however, it is a minority view. The release must then contain the necessary language for the defendant to prove the plaintiff knew and assumed the risk that caused his or her injury.

The court has combined, under Nevada’s law, the relationship of contract, the release, and the risks outlined or assumed by contract in the release. Meaning, not only must you agree not to sue, the risks you assume must be specific in the release.

“Express assumption of risk[‘s] . . . vitality stems from a contractual undertaking that expressly relieves a putative defendant from any duty of care to the injured party; such a party has consented to bear the consequences of a voluntary exposure to a known risk.”

A release under Nevada’s law is an express assumption of risk agreement. Express meaning written.

Generally, “[a]ssumption of the risk is based on a theory of consent.” For a party to assume the risk there are two requirements. “First, there must have been voluntary exposure to the danger. Second, there must have been actual knowledge of the risk assumed.” Actual knowledge of the danger by the party alleged to have assumed the risk is the essence of the express assumption of risk doctrine.

The plaintiff in this case did not consent to the ride he was given, even though he signed away his right to sue. The failure of the defendant to prove the plaintiff assented to the ride he received, which was not in the written release, was cause for the release to fail, possibly.

To determine whether the party signing had actual knowledge of the risks assumed, courts must consider “[(1)] the nature and extent of the injuries, [(2)] the haste or lack thereof with which the release was obtained, and [(3)] the understandings and expectations of the parties at the time of signing.”

The first two requirements were met in this case. However, the third requirement was not met. The plaintiff did not have an understanding or expectations of the parties at the time the release was signed.

These conflicting allegations create a genuine dispute of material fact as to the expectations of the parties and as to whether the bull operator’s conduct failed to meet those expectations. Because Kuchta and Sheltie Opco each presented consistent and conflicting facts regarding both parties’ expectations of the ride, and knowledge of the risks involved in a level two-of-ten or easy ride, a trier of fact should have resolved this issue. Thus, the district court erred by granting summary judgment in favor of Sheltie Opco as to Kuchta’s negligence claims.

No party, who signs a release, expects to be injured or killed. So, this third requirement is different. No guest signs the release with an understanding they can’t sue. They sign the release because it is part of the paperwork needed to engage in the activity. If you made the effort to make sure the person signing the release understood the expectations of them from you when signing the release, many might not.

So, this decision in Nevada does not void releases. It does, however, create an additional requirement in the relationship between your guests and your operations. The risks the client is undertaking must be known and assumed by the plaintiff prior to undertaking the activity. That risk must be expressed in the release.

The second argument the plaintiff made that the court undertook was the battery claim. Most people understand the TV term assault and battery as a criminal charge. However, battery has been an intentional tort for centuries. “A battery is an intentional and offensive touching of a person who has not consented to the touching.”

In this case, the touching is not an actual contact between the plaintiff and the defendant but causing the plaintiff to be “touched” by the landing surface which caused his injury.

The court looked at this intentional tort as greater than normal negligence.

“[G]eneral clauses exempting the defendant from all liability for negligence will not be construed to include intentional or reckless misconduct, or extreme and unusual kinds of negligence, unless such intention clearly appears.”

This phrase is quite interesting. Like all other states, a release does not cover intentional, reckless, or extreme conduct on the part of the defendant. At the same time, the court seemed to open the idea that a release under Nevada’s law could stop a claim for intentional, reckless, or extreme conduct if it was intentional and clear in the release.

Because there was a conflict between the plaintiff and the defendant as to the facts surrounding the battery, the Appellate court found the motion for summary judgment should not have been granted.

The dissent in this case would have upheld the release based on basic contract law. The dissent sets out a thorough review of contract law in Nevada.

Summing up, what 500 years of contract law tell us is this:

(1) a contract means what its words say and an unambiguous contract “will be enforced as written”;

(2) what the contractual words say is what they objectively convey in their ordinary sense regardless of what the parties might have personally thought or intended in their heads;

(3) the final contract supersedes all earlier verbal negotiations;

(4) parol evidence may only be used to clarify a term that is ambiguous, and an ambiguity does not arise merely because the parties disagree on what they think the contract means;

(5) parol evidence may never be used to contradict an express term of a contract, whether the contract is integrated or not;

(6) parol evidence may never consist of earlier negotiations inconsistent with the final contract, whether the final document is integrated or not;

(7) when there is no dispute regarding what the words of the contract consist of (and there is no dispute regarding what any parol evidence admitted to clarify an ambiguity actually is), and the only remaining dispute is over what those undisputed words and parol evidence mean, then all that remains is a pure question of law for the court.

The dissent specifically focused on the Parol Evidence Rule which in most cases have prevented the conversation between the patrons and the mechanical bull operator from being offered into evidence.

The court voided the release and allowed the intentional tort of battery to proceed.

So Now What?

This upends release law in Nevada. Your release must be able to prove the guest understood the risks they may encounter, All of the risks.

Any statements made by your staff, could alter your release, worse, alter the understanding of the release or the risks, creating an issue that will have to go to trial to determine.

Bringing an intentional tort into a lawsuit is another game changer. Raft guides that intentional hit a rock, bump a boat, or even flip a boat will create liability in Nevada for any injury their customers receive.

What do you think? Leave a comment.

Copyright 2020 Recreation Law (720) 334 8529

If you like this let your friends know or post it on FB, Twitter or LinkedIn

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

Author: Outdoor Recreation Insurance, Risk Management and Law

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By Recreation Law    Rec-law@recreation-law.com    James H. Moss

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The interaction between a release and worker’s compensation laws for an employee

If you are injured at work and covered by worker’s compensation you cannot sue your employer. However, you might be able to sue a third party who may be liable for injury.

However, the employer of the plaintiff had the plaintiff sign a release that prevented the employee from suing the place where he was injured, which was upheld by the court.

Merlien v. JM Family Enters, 2020 Fla. App. LEXIS 10525

State: Florida, Court of Appeal of Florida, Fourth District

Plaintiff: Diveston Merlien, Appellant

Defendant: JM Family Enterprises, Inc., Sheridan 441, LLC and Bendles Rentals, LLC

Plaintiff Claims: premises liability

Defendant Defenses: release

Holding: for the defendant

Year: 2020

Summary

The defendant security firm provided onsite security personnel to its clients. The security firm required its employees to sign a release that limited their recovery for an injury to their worker’s compensation benefits. The release would not be effective necessarily against the employer. However, it was effective in keeping the employee from suing the customer of the security firm.

Facts

The plaintiff was employed by AlliedBarton, a firm that provides security services for various clients. He was assigned to work as a security guard for one of those clients. The plaintiff was allegedly injured due to a slip and fall on stairs at the JM facility where he was assigned to work. He subsequently filed a premises liability suit against JM, alleging that his slip and fall was proximately caused by JM’s negligent maintenance of the stairs.

The primary focus of this appeal is the enforceability of a waiver which the plaintiff signed as a condition of employment that prohibits suit against any customer of AlliedBarton for injuries covered by the workers’ compensation statutes.

Two years after the plaintiff filed his complaint, JM filed a motion for summary judgment, arguing that the plaintiff waived his right to bring suit by executing the above waiver at the commencement of his employment. After hearing argument from both parties, the trial court granted JM’s motion for summary judgment. This timely appeal followed.

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

Worker’s compensation is an insurance system created to take care of the medical bills and lost wages of workers who are injured on the job. Before the creation of the worker’s compensation system, an injured worker had to sue an employer to recover their damages from the injury.

In return for receiving the benefits of worker’s compensation, you give up your right to sue the employer. You can waive those benefits, pay back any benefits or money paid and sue the employer, but that is usually an unwise investment in time and money.

In this case, the employer requested the employees to sign a release, so they could not sue third party customers of the employer. In this case, the security company that employed the plaintiff had their employees, such as the plaintiff, on the property of the customers. The release provided if the employee was injured in a claim that was covered by worker’s compensation, that was the extent of the recovery they could receive. They could not sue the customer of the employer for damages.

This is a smart move on the part of the employer. The employer would lose a customer every time an employee was hurt on the job if the employee sued the customer.

It is important to understand the release did not stop lawsuits against the employer, only customers of the employer. Worker’s compensation statutes stop lawsuits against the employer.

The plaintiff first argued the release was ambiguous and unenforceable. In Florida for a release was enforceable when the release could be read by an ordinary and knowledgeable person who understood what they were contracting away.

Florida courts have upheld the enforceability of exculpatory provisions in contracts only when the language of the provision clearly and unambiguously communicates the scope and nature of the disclaimer.

The law also required a clear an understandable intent.

…provisions are deemed to be unambiguous and enforceable when the language unequivocally demonstrates a clear and understandable intention for the defendant to be relieved from liability such that an ordinary and knowledgeable person will know what he or she is contracting away.

The court found the release was easily read, understood and had no confusing language or made any promises to the signor.

The next argument the plaintiff made was the release was void because it violated Florida’s public policy.

Public policy disfavors exculpatory contracts because they relieve one party of the obligation to use due care. . . . Nevertheless, because of a countervailing policy that favors the enforcement of contracts, as a general proposition, unambiguous exculpatory contracts are enforceable unless they contravene public policy.”

A release violates Florida’s public policy “it is injurious to the interests of the public or contravenes some established interest of society.” The plaintiff argued that Florida’s law allowed employees who received worker’s compensation payments to sue third parties and recover those benefits if the third parties were negligent.

The appellate court held that the law allowing those third-party lawsuits were not a mandatory law but a permissive law. It allowed the lawsuits but did not require them.

The court did open up one area that it might have sided with the plaintiff. If the release was mandatory for employment, the court stated the plaintiff could have rejected the release.

The court concluded by noting that the plaintiff voluntarily entered into the agreement and declined to invalidate the contract on the basis that it was offered on a “take it or leave it” basis.

However, the plaintiff did not plead that in this case or argue it at the time of his employment; Therefore, it was moot. The court also, in one effect closed the loop hole.

…the plaintiff here was not coerced into signing the agreement and voluntarily agreed, as a condition of employment, to limit his avenues for recovery with respect to any future injuries to the State’s workers’ compensation program. The disclaimer was limited in both scope and application and did not prevent the “the quick and efficient delivery of disability and medical benefits to an injured worker.”

The court held the release was valid and prevented the lawsuits against the customer of his employer.

So Now What?

This is a very interesting and carefully thought-out use of a release. The purpose is to keep the clients of the firm happy at the expense of its own employees.

However, it shows another way a release can be used to stop litigation.

What do you think? Leave a comment.

Copyright 2020 Recreation Law (720) 334 8529

If you like this let your friends know or post it on FB, Twitter or LinkedIn




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

Author: Outdoor Recreation Insurance, Risk Management and Law

To Purchase Go Here:

Facebook Page: Outdoor Recreation & Adventure Travel Law

Email: Jim@Rec-Law.US

By Recreation Law    Rec-law@recreation-law.com    James H. Moss

#AdventureTourism, #AdventureTravelLaw, #AdventureTravelLawyer, #AttorneyatLaw, #Backpacking, #BicyclingLaw, #Camps, #ChallengeCourse, #ChallengeCourseLaw, #ChallengeCourseLawyer, #CyclingLaw, #FitnessLaw, #FitnessLawyer, #Hiking, #HumanPowered, #HumanPoweredRecreation, #IceClimbing, #JamesHMoss, #JimMoss, #Law, #Mountaineering, #Negligence, #OutdoorLaw, #OutdoorRecreationLaw, #OutsideLaw, #OutsideLawyer, #RecLaw, #Rec-Law, #RecLawBlog, #Rec-LawBlog, #RecLawyer, #RecreationalLawyer, #RecreationLaw, #RecreationLawBlog, #RecreationLawcom, #Recreation-Lawcom, #Recreation-Law.com, #RiskManagement, #RockClimbing, #RockClimbingLawyer, #RopesCourse, #RopesCourseLawyer, #SkiAreas, #Skiing, #SkiLaw, #Snowboarding, #SummerCamp, #Tourism, #TravelLaw, #YouthCamps, #ZipLineLawyer, #RecreationLaw, #OutdoorLaw, #OutdoorRecreationLaw, #SkiLaw,

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Kuchta v. Opco, 2020 Nev. App. Unpub. LEXIS 549, 2020 WL 3868434

Kuchta v. Opco, 2020 Nev. App. Unpub. LEXIS 549, 2020 WL 3868434

Court of Appeals of Nevada

July 8, 2020, Filed

No. 76566-COA

Reporter

2020 Nev. App. Unpub. LEXIS 549 *; 2020 WL 3868434

Joseph Kuchta, an Individual, Appellant, vs. Sheltie Opco, LLC, A Nevada Limited Liability Company, d/b/a John Ascuaga’s Nugget, d/b/a Gilley’s Nightclub; and Wolfhound Holdings, Llc, A Delaware Limited Liability Company, Respondents.

Notice: NOT DESIGNATED FOR PUBLICATION. PLEASE CONSULT THE NEVADA RULES OF APPELLATE PROCEDURE FOR CITATION OF UNPUBLISHED OPINIONS.

Judges:  [*1] Gibbons, C.J., Bulla, J. TAO, J., dissenting.

Opinion by: Gibbons

Opinion

ORDER OF REVERSAL AND REMAND

Joseph Kuchta appeals a district court order granting Sheltie Opco, LLC’s (Sheltie Opco) motion for summary judgment in a tort action. Second Judicial District Court, Washoe County; Scott N. Freeman, Judge.

While socializing with friends at Gilley’s Nightclub in Sparks, Nevada, a bar owned by respondent Sheltie Opco, Kuchta and his friends observed an employee riding a mechanical bull. As the employee was riding the bull, another employee used a joystick to control the bull’s movements. After the employee demonstrated how easy and non-challenging it was to engage safely in a slow ride, she stepped off the bull.

Sometime later that night, Kuchta and his friends were considering riding the bull. Kuchta’s group approached the same employee, who they had watched ride the bull earlier, and who was now operating the joystick and controlling the ride. Two different people within the group that Kuchta was part of conversed with the employee about riding the mechanical bull.

Viewing all factual allegations in a light most favorable to Kuchta, his friends told the employee that each person in their group wanted an easy [*2]  ride, which based on a difficulty scale of one to ten, they described as a two (with one meaning not moving at all), which the employee said she could provide. The friends indicated that everyone in the group was a novice and wanted a ride similar to the ride the employee had demonstrated. Furthermore, they told the employee that everyone should be able to step off the bull once the ride concluded, just as the employee had been able to do earlier that night after her ride. The employee agreed to provide the type of a ride Kuchta’s group requested. Thus, Kuchta’s and the employee’s understandings and expectations regarding Kuchta’s ride were that it would be easy, at a level two or at a low speed, and that Kuchta would be able to dismount after the ride was finished.

Before any person could ride the mechanical bull, however, Gilley’s required each patron to sign a previously prepared Assumption of Risk, Release, Indemnity, and Medical Treatment Authorization Agreement (Agreement), also known as a written waiver. The Agreement listed potential risks and possible injuries involved in riding the bull, including broken bones, and also released Sheltie Opco from any and all liability for [*3]  injuries or negligence that occur from all risks, both known and unknown. Kuchta signed the Agreement, although the record does not reveal when it was signed in relation to the conversations described above.

According to Kuchta, once on the bull, the ride was initially slow, as had been requested. However, after approximately 20 seconds, the operator significantly increased the speed and violence of the bull’s movements. Kuchta was thrown from the bull and suffered a fractured pelvis.

Kuchta sued Sheltie Opco alleging: negligence, negligence per se, negligent hiring and respondent superior, negligent supervision, negligent entrustment, and battery. Sheltie Opco moved for summary judgment on all claims, arguing there was no genuine issue of fact because Kuchta expressly assumed the risks of the ride and consented to the battery when he signed the Agreement before riding the bull. The district court granted Sheltie Opco’s motion for summary judgment finding that Kuchta expressly assumed the risks of riding the bull by signing the Agreement, including consenting to the touching that was the basis for his battery claim.

On appeal, Kuchta argues that the district court erred in granting summary [*4]  judgment because even though he signed the Agreement, under the doctrine of express assumption of risk, there are genuine issues of fact. He further contends that the district court erred in granting summary judgment to Sheltie Opco on his battery claim because battery is not covered by the Agreement. We agree that under the facts of this case, genuine issues of material fact remain as to Kuchta’s negligence and battery claims, and therefore, we reverse and remand.

Standard of review

We review a district court order granting summary judgment de novo. Wood v. Safeway, Inc., 121 Nev. 724, 729, 121 P.3d 1026, 1029 (2005). Summary judgment is proper if the pleadings and all other evidence on file, viewed in the light most favorable to the non-moving party, demonstrate that no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Id. “A factual dispute is genuine when the evidence is such that a rational trier of fact could return a verdict for the nonmoving party.” Id. at 731, 121 P.3d at 1031.

The district court erred by granting summary judgment to Sheltie Opco on the negligence claims

Kuchta argues that he did not expressly assume the risk because the operator specifically agreed to provide the requested slow ride (i.e., an intensity [*5]  of two out of ten) and the operator instead ultimately conducted a wild ride exceeding his expectations. Sheltie Opco argues that the Agreement was a valid written waiver and that Kuchta understood the risks when he got on the bull. Specifically, he understood that the bull could “jerk[ ] and spin[ ] violently and unexpectedly” resulting in “broken bones.” And, as counsel for Sheltie Opco pointed out at oral argument, Kuchta could have declined to ride the bull if he had any concerns about the possibility of injury as fully explained in the Agreement. Moreover, no one forced Kuchta to sign the Agreement and ride the bull.

In Nevada, an exculpatory agreement is a “valid exercise of the freedom of contract.” Miller v. A&R Joint Venture, 97 Nev. 580, 582, 636 P.2d 277, 278 (1981). Though generally enforceable, exculpatory clauses in a contract must meet four standards before a party seeking to enforce the clause can be absolved of liability:

(1) Contracts providing for immunity for liability for negligence must be construed strictly since they are not favorite[s] of the law . . . (2) such contracts must spell out the intention of the party with the greatest particularity . . . and show the intent to release from liability beyond doubt by express stipulation [*6]  and no inference from the words of general import can establish it . . . (3) such contracts must be construed with every intendment against the party who seeks immunity from liability . . . (4) the burden to establish immunity from liability is upon the party who asserts such immunity . . . .

Agric. Aviation Eng’g Co. v. Bd. of Clark Cty. Comm’rs, 106 Nev. 396, 399-400, 794 P.2d 710, 712-13 (1990) (quoting Richard’s 5 & 10, Inc. v. Brooks Harvey Realty Inv’rs, 264 Pa. Super. 384, 399 A.2d 1103, 1105 (Pa. Super. Ct. 1979)).

Looking to the Agreement’s exculpatory clause, it warns that any ride participant will:

FULLY RELEASE FROM ALL LIABILITY ARISING FROM MY PARTICIPATION IN THE MECHANCIAL BULL RIDING PROGRAM the Nugget Hotel and Casino, Gilley’s, and their respective owners . . . . I AGREE NEVER TO SUE ANY RELEASEE . . . for any cause of action arising from my participation in the MECHANICAL BULL RIDING PROGRAM . . . . ALL PROVISIONS OF THIS AGREEMENT APPLY IRRESPECTIVE OF AND EVEN IN THE CASE OF [ ] NEGLIGENCE. . . .

Even when strictly construed, the language in the Agreement expressly states, with particularity, Sheltie Opco’s intent to release itself and others designated from any and all liability. The Agreement also specifically states that Sheltie Opco would be released from liability for any negligence on its part that may occur while a person rides the mechanical bull, Further, [*7]  the parties concede that Kuchta voluntarily signed the Agreement, which included the exculpatory clause.

However, our inquiry does not stop here as it pertains to the waiver‘s validity; we must determine whether Kuchta expressly assumed the risks contemplated by the waiver. Renaud v. 200 Convention Ctr. Ltd., 102 Nev. 500, 501,102 Nev. 500, 728 P.2d 445, 446 (1986) (analyzing an exculpatory waiver under the doctrine of express assumption of the risk).1 “Assumption of the risk is based on a theory of consent.” Id.

Next, reviewing the Agreement’s express waiver, it warns in relevant part:

There is a significant risk that I will be seriously injured as a result of my participating in the MECHANICAL BULL RIDING PROGRAM, including permanent paralysis, head injury, broken neck, other broken bones and death, whether or not I am thrown from or fall from the MECHANICAL BULL . . . . I KNOWINGLY AND FREELY ASSUME ALL RISKS ARISING FROM MY PARTICIPATION IN THE MECHANICAL BULL RIDING PROGRAM, including all risks to my life, health, safety and property, both known and unknown.

“Express assumption of risk[‘s] . . . vitality stems from a contractual undertaking that expressly relieves a putative defendant [*8]  from any duty of care to the injured party; such a party has consented to bear the consequences of a voluntary exposure to a known risk.” Mizushima v. Sunset Ranch, Inc., 103 Nev. 259, 262, 737 P.2d 1158, 1159 (1987), overruled on other grounds by Turner v. Mandalay Sports Entm’t, LLC, 124 Nev. 213, 180 P.3d 1172 (2008). Generally, “[a]ssumption of the risk is based on a theory of consent.” Renaud, 102 Nev. at 501, 728 P.2d at 446. For a party to assume the risk there are two requirements. “First, there must have been voluntary exposure to the danger. Second, there must have been actual knowledge of the risk assumed.” Id. Actual knowledge of the danger by the party alleged to have assumed the risk is the essence of the express assumption of risk doctrine. Id. To determine whether the party signing had actual knowledge of the risks assumed, courts must consider “[(1)] the nature and extent of the injuries, [(2)] the haste or lack thereof with which the release was obtained, and [(3)] the understandings and expectations of the parties at the time of signing.” Id. at 502, 728 P.2d at 446 (emphasis added).

Here, Kuchta’s injuries were severe, but were injuries a person would associate with being thrown from a bull. Furthermore, there is nothing in the record to suggest that Kuchta was rushed into signing the exculpatory agreement. However, the third factor weighs heavily in Kuchta’s favor. According [*9]  to Kuchta’s responses to Sheltie Opco’s interrogatories,2 the bull operator was told that they all wanted a slow ride, similar to the ride the operator had while demonstrating the use of the bull.3 Kuchta and former co-plaintiff Rebecca Bodnar both alleged in their responses to Sheltie Opco’s interrogatories that their rides on the bull started gently before the bull operator significantly increased the intensity, leading them to suffer injury. The bull ride operator, in an affidavit, states that she did not “operate the bull in a fashion that was intended to exceed Plaintiffs’ expectations of how intense the bull’s motions would be,” thereby suggesting that expectations had been set for Kuchta’s ride that may have been different than those described in the waiver.4

These conflicting allegations create a genuine dispute of material fact as to the expectations of the parties and as to whether the bull operator’s conduct failed to meet those expectations.5 Because Kuchta and Sheltie Opco each presented consistent and conflicting facts regarding [*10]  both parties’ expectations of the ride, and knowledge of the risks involved in a level two-of-ten or easy ride, a trier of fact should have resolved this issue.6 Thus, the district court erred by granting summary judgment in favor of Sheltie Opco as to Kuchta’s negligence claims.7

The district court erred by granting summary judgment in favor of Sheltie Opco on Kuchta’s battery claim

Kuchta argues that the district court erred in granting summary judgment in favor of Sheltie Opco on his battery claim because the Agreement did not contemplate gross negligence or intentional misconduct. Sheltie Opco contends that uncontroverted facts show that Kuchta consented to any conduct resulting from the bull ride, and thus, summary judgment was appropriate on his battery claim.

“A battery is an intentional and offensive touching of a person who has not consented to the touching . . . .” Humboldt Gen. Hosp. v. Sixth Judicial Dist. Court, 132 Nev. 544, 549, 376 P.3d 167, 171 (2016) (internal quotation marks omitted). “[G]eneral clauses exempting the defendant from all liability for negligence will not be construed to include intentional or reckless misconduct, or extreme and unusual kinds of negligence, unless such intention [*11]  clearly appears.” Restatement (Second) of Torts § 496B cmt. d (1965).

Here, Kuchta consented to a bull ride, but he claims he only consented to a mild ride, and therefore, any contact associated with a mild ride was allowed and could not be a battery. However, if the ride went beyond a mild ride, then there is a material question of fact as to the nature of the ride and to whether Kuchta consented to the resulting physical contact as the result of the unexpectedly rough ride. Further, Kuchta presented facts from two interrogatory responses that the bull rider intentionally increased the intensity of the bull machine, possibly attempting to throw him from the bull despite his understanding that the ride would be of mild intensity.8 Sheltie Opco provided an affidavit from the bull ride operator that stated that she did not intentionally increase the intensity of the bull ride beyond Kuchta’s expectations (which could also imply that she did in fact increase the intensity and understood his expectations). Viewing these assertions in a light most favorable to Kuchta, the nonmoving party, a rational trier of fact could find that the bull operator committed a battery by intentionally increasing the speed of the ride thereby deliberately [*12]  failing to meet the agreed upon expectations.9

Based on the parties’ conflicting factual assertions, it was inappropriate for the district court to grant summary judgment in favor of Sheltie Opco, as the trier of fact should resolve the conflict. Thus, the district court erred in granting summary judgment in favor of Sheltie Opco as to Kuchta’s battery claim. Accordingly, we

ORDER the judgment of the district court REVERSED AND REMAND this matter to the district court for proceedings consistent with this order.10

/s/ Gibbons, C.J.

Gibbons

/s/ Bulla, J.

Bulla

Dissent by: TAO

Dissent

TAO, J., dissenting:

Although ostensibly arising from a personal injury suit, the only question at issue in this appeal is whether Kuchta’s tort claims were contractually waived, which presents a question of contract law. The majority reverses by concluding that a genuine issue of fact exists under NRCP 56. But this can only be true if the scope of the waiver contract isn’t limited to its express words, but rather depends upon Kuchta’s verbal testimony, proffered during a deposition many months after the fact, regarding his intentions — even though those supposed intentions are contained nowhere in the contractual words and actually [*13]  contradict those words. Respectfully, I dissent.

I.

Liability waivers must mean something in Nevada, even if they might be allowed to mean less in other states. What Nevada has always represented is the opportunity to try things that aren’t available anywhere else. One hundred fifty years ago, it was the chance to strike gold and silver ore in the desert. Then it became the chance to strike it rich on a roulette wheel or a slot machine. But more and more nowadays, it’s the chance to experience an adventure that you simply can’t have anywhere else. With an economy now driven largely by tourism, what Nevada offers are things that other states and cities do not. Gambling, of course. Concerts, shows, and world-class restaurants also. Convention space, surely. Quick marriages and no-fault divorces too. But, also, the chance, for some, to engage in derring-do — to fly a fighter plane in aerial combat; to ride a zipline over city streets and steep canyons; to engage in gun battles armed with simunition; to skydive 30,000 feet to the desert; to swim with dolphins in their habitat; to fire a real machine gun or ride in an armored tank; to bungee jump from a tower; to ride a roller-coaster suspended [*14]  500 feet in the air; to race luxury cars around a track at breakneck speed. One could argue that mining and gaming aren’t our real stock in trade, but rather novelty.

But with some novel experiences comes some level of danger. Jumping out of an airplane is an activity fraught with risk no matter how carefully the parachute was packed. There’s no way to entirely eliminate all of the risk from ziplines, bungee jumps, and rafting through whitewater rapids. If Nevada intends to remain the premier tourist destination in a fast-evolving and competitive world, then our law must permit some proprietors to operate businesses that are, at least at some level, inherently risky and dangerous. If we ever lose our reputation for remaining on the cutting edge, then there’ll be no more reason for millions of tourists to visit. And if that day ever comes, Nevada will no longer be what it always has been.

Liability waivers thus serve an important role in a state like ours: they allow proprietors to stay on the cutting edge by allowing them to operate with some level of risk, so long as they take the time to apprise their customers of those risks. Here, Kuchta signed a written liability waiver whose terms [*15]  unambiguously cover the precise injuries he suffered (broken bones) and the precise way he incurred them (being thrown) using the precise apparatus (a mechanical bull) that the waiver precisely addressed. The district court granted summary judgment, concluding that this waiver barred his tort claims.

Let’s briefly summarize the facts and the arguments that Kuchta makes in appealing from the district court’s order. I’ll return to analyze these arguments later in more detail, so for now just a synopsis will do. Viewing the facts in the light most favorable to Kuchta, he contends that he and his friends arrived at Gilley’s, watched a demonstration of the mechanical bull, and then spoke with the ride operator who verbally agreed to provide him with a ride that equated to a difficulty level of 2 out of 10. The majority describes Kuchta’s testimony as follows:

Viewing all factual allegations in a light most favorable to Kuchta, his friends told the employee that each person in their group wanted an easy ride, which based on a difficulty scale of one to ten, they described as a two (with one meaning not moving at all), which the employee said she could provide. The friends indicated that everyone [*16]  in the group was a novice and wanted a ride similar to the ride the employee had demonstrated. Furthermore, they told the employee that everyone should be able to step off the bull once the ride concluded, just as the employee had been able to do earlier that night after her ride. The employee agreed to provide the type of a ride Kuchta’s group requested. (Order, page 2).

Kuchta and his friends then ate dinner. After dinner, they decided to get a ride, and Kuchta signed a written waiver stating as follows:

I AM FULLY INFORMED OF ALL RISKS ARISING FROM MY PARTICIPATION IN THE MECHANICAL BULL RIDING PROGRAM, including the risks described in this paragraph. The mechanical bull jerks and spins violently and unexpectedly. There is a significant risk that I will be seriously injured . . . [i]ncluding permanent paralysis, head injury, broken neck, other broken bones, and death, whether or not I am thrown from or fall.

Note that, by signing this, Kuchta acknowledged that the mechanical bull “jerks and spins violently and unexpectedly” and that riding it created a “significant risk” of injury from being “thrown,” including “broken bones.” Note also that this isn’t a generic catch-all waiver that [*17]  purports to cover the entire panoply of any kind of negligence that could conceivably occur on the premises, such as wet floors, rotten food, or debris falling from the roof. Quite to the contrary, it’s a narrow waiver that specifically covers one thing and one thing only, the mechanical bull and nothing else. After signing the waiver and mounting the bull, Kuchta was thrown from the bull in the very way that the waiver warned might happen, suffering one of the very injuries (broken bones) that the waiver warned might result. The district court granted summary judgment, concluding that the waiver covered Kuchta’s injuries.

On appeal, Kuchta argues that the words of the written waiver do not mean what they seem to so plainly say, not because any words of the waiver actually agree with him, but rather because when the ride operator verbally agreed to provide a level 2 ride, he changed Kuchta’s understanding and expectations” regarding the meaning of the waiver. But as the cliche goes, apples are not oranges, and here the verbal conversation had nothing to do with the waiver. Note what’s omitted from even the majority’s summary of the verbal conversation: any mention of the waiver whatsoever. [*18]  Just because the ride operator verbally agreed to try to provide a level 2 ride does not mean that he legally changed the waiver so that it only covered a level 2 ride and nothing more. Indeed, the truth at the heart of this case is that nobody (not even Kuchta) contends that the verbal discussion between Kuchta and the ride operator constituted a negotiation of the waiver; everyone agrees that it was only a conversation about the kind of ride Kuchta wanted. What Kuchta requested was a particular kind of ride, not a particular kind of waiver.

Kuchta tries to bootstrap the conversation about the ride into the contract about the waiver by arguing that it’s “parol evidence” regarding his “understanding and expectations” of what the contract covered. But a verbal conversation about the kind of ride Kuchta requested isn’t “parol evidence” for two reasons: first, the verbal conversation occurred before Kuchta signed the waiver, which means that the written contract supersedes any and all earlier alleged negotiations. Second, the kind of ride he requested isn’t a term of the waiver contract. The kind of ride he wanted, and the kind of ride he agreed to waive, are two very different things, [*19]  only one of which was ever the subject of the written waiver contract. Kuchta argues that merely because the ride he got was not the ride he requested, it fell outside of the scope of the waiver. But the waiver says nothing remotely like that.

The proper analysis here is to compare the ride he got to the plain words of the waiver. The very question in this case (not the answer, but the question) is whether the ride that Kuchta actually got was encompassed within the scope of the waiver that he signed. Kuchta tries to mix up the question with its answer, and make it all a circularity, by arguing that the waiver must only cover the ride he asked for. But nothing in the written waiver (and nothing in the verbal conversation either) indicates that the scope of waiver was supposed to be a moving target that ratcheted up or down to whatever kind of ride Kuchta personally wanted and, likewise, ratchets up or down for every other customer who requests a different level of ride. Reading the contract that way means that it lacks any fixed or objective meaning whatsoever but instead changes its meaning for each different customer even though the words themselves remain exactly the same, reducing [*20]  the contract to nothing more than a Rorshach ink blot having no intrinsic meaning apart from what any reader wants to see in it.

But this isn’t how contract law tells us to read a contract. The district court interpreted the contract correctly as a matter of law according to the objective meaning of its words – and I would affirm.

II.

Here’s how contract law actually works and how this appeal should have been analyzed.

To start with, it’s well-settled that interpreting the meaning of a contract is a question of law, not a question of fact. Redrock Valley Ranch, LLC v. Washoe County, 127 Nev. 451, 460, 254 P.3d 641, 647 (2011). Disputes regarding the scope and meaning of a contract do not preclude summary judgment because such disputes present pure questions of law for the court, not the jury, to resolve. “[I]n the absence of ambiguity or other factual complexities, contract interpretation presents a question of law that the district court may decide on summary judgment.” Galardi v. Naples Polaris LLC, 129 Nev. 306, 309, 301 P.3d 364, 366 (2013) (internal quotation marks omitted).

So, if there is no dispute over what the words of a contract consist of, and the only dispute is over what those words mean, the court is presented with a question of law that it may dispose of on summary judgment. Here, there are no factual disputes that a jury must sort [*21]  out. The parties do not dispute what words the written waiver consists of; Kuchta does not, for example, contend that any pages are missing or any clauses are blurry or incomplete. The parties also do not dispute what the words of the verbal conversation between Kuchta and the ride operator consist of; accept what Kuchta says to be true and agree with him that the operator agreed to try to provide a level 2 ride. There may exist some disagreement over what legal effect those words may have, if any; but there is no dispute regarding what the words of the conversation were. There are thus no factual disputes, only legal ones. The only thing left in dispute is what those words (both the undisputed words of the document and the undisputed words of the verbal conversation) mean about the scope of the waiver, which is a pure question of law that we must answer ourselves in this appeal de novo. May v. Anderson, 121 Nev. 668, 672, 119 P.3d 1254, 1257 (2005).

To answer that purely legal question, we start with the words of the contract. Bielar v. Washoe Health Sys., Inc., 129 Nev. 459, 465, 306 P.3d 360, 364 (2013). “A basic rule of contract interpretation is that ‘[e]very word must be given effect if at all possible.’ Id., 306 P.3d at 364. (quoting Musser v. Bank of Am., 114 Nev. 945, 949, 964 P.2d 51, 54 (1998) (alteration in original). Those words will either be unambiguous, or they will be ambiguous. Am. First Fed. Credit Union v. Soro, 131 Nev. 737, 739, 359 P.3d 105, 106 (2015). If the [*22]  words are unambiguous, then we look no farther than the four corners of the written document for its meaning. Id., 359 P.3d at 106. The court “has no authority to alter the terms of an unambiguous contract.” Canfora v. Coast Hotels and Casinos, Inc., 121 Nev. 771, 776, 121 P.3d 599, 603 (2005). Rather, an unambiguous contract “will be enforced as written.” Am. First Fed. Credit Union, 131 Nev. at 739, 359 P.3d at 106. “[T]he words of the contract must be taken in their usual and ordinary signification.” Traffic Control Svcs., Inc. v. United Rentals Northwest, Inc., 120 Nev. 168, 174, 87 P.3d 1054., 120 Nev. 168, 87 P.3d 1054, 1058 (2004). Only if the words are ambiguous do we venture outside of the document itself to examine such extrinsic things as parol evidence and settled rules of construction in order to determine the intent of the parties. M.C. Multi-Family Dev., LLC v. Crestdale Assocs., Ltd., 124 Nev. 901, 913-14, 193 P.3d 536, 544-45 (2008). An ambiguity must be inherent within the contractual term itself, and “does not arise simply because the parties disagree on how to interpret their contract.” Galardi, 129 Nev. at 309, 301 P.3d at 366.

Kuchta contends that the conversation regarding the level 2 ride must be considered “parol evidence” of contractual meaning. But “parol evidence” is only admissible when some contractual term is facially ambiguous. “The parol evidence rule does not permit the admission of evidence that would change the contract terms when the terms of a written agreement are clear, definite, and unambiguous.” Ringle v. Bruton, 120 Nev. 82, 91, 86 P.3d 1032, 1037 (2004). Further, even when such an ambiguity exists, courts can utilize parol evidence to [*23]  clear up what those ambiguous words mean but they cannot use parol evidence “to add to, subtract from, vary, or contradict” the words of the contract itself. M.C. Multi-Family Dev., LLC,124 Nev. at 913-14, 193 P.3d at 544-45. “[P]arol evidence may not be used to contradict [express] terms.” Galardi, 129 Nev. at 309, 301 P.3d at 366 (Quoting Kaldi v. Farmers Ins. Exch., 117 Nev. 273, 281, 21 P.3d 16, 21 (2001)). Thus, even when admissible (i.e., only when there’s an ambiguity), parol evidence is only meaningful to the extent that it clarifies and does not contradict or re-write the plain words of the contract itself. Id. And this is true whether the final document is integrated or not: if a contract is integrated then it may neither be supplemented nor contradicted by any additional evidence of any kind. If a contract is not integrated, then it may be supplemented by “consistent additional terms” but it still may never be contradicted by any extrinsic evidence. John D. Calamari & Joseph M. Perillo, Contracts § 3-2, “The Parol Evidence Rule”, 135-36 (3d ed. 1987) (text cited as authority in Matter of Kern, 107 Nev. 988. 991, 107 Nev. 988, 823 P.2d 275, 277 (1991).

Here, no term of the written waiver is facially ambiguous. Rather than identify some particular term that might be inherently ambiguous, Kuchta (and the majority) seem to contend instead that the entire contract was effectively re-written through the verbal conversation. [*24]  But that’s using “parol evidence” beyond its permissible purpose: not to clarify the meaning of an ambiguous term, but to change the scope and meaning of the entire contract. The majority uses the supposed “parol evidence” not to clarify the written words of the contract, but to make the entire contract mean only what the parol evidence says it means regardless of what the written words actually say. Not to illuminate the written words, but to replace them; not to make the written words clear, but to make them meaningless.

That isn’t how “parol evidence” works. There are several layers of problems here. First, parol evidence can never be used to contradict a writing, whether or not the writing was integrated. Galardi, 129 Nev. at 309, 301 P.3d at 366. Yet that’s exactly what Kuchta proposes. The written words, taken in their “usual and ordinary signification,” are clear. Traffic control Svcs., Inc. v. United Rentals Northwest, inc., 120 Nev. 168, 174, 87 P.3d 1054., 120 Nev. 168, 87 P.3d 1054, 1058 (2004). They expressly inform Kuchta that the ride will be violent with “unexpected” movements that may cause injury, and Kuchta’s signature acknowledges that he understood this. But Kuchta now says that he misunderstood this and the verbal conversation led him to “expect” a less-violent ride that [*25]  couldn’t cause injury. This isn’t using extrinsic evidence to clarify the words of a contract; it’s abusing extrinsic evidence to re-write the words of a contract to mean their exact opposite.

Second, the sequence of events matters. As the majority itself notes, the conversation between Kuchta and the rider operator occurred first. Only well after the conversation ended did Kuchta later sign the written waiver. And the law is clear that a written contract supersedes and obliterates all prior negotiations:

“an earlier tentative agreement will be rejected in favor of a later expression. More simply stated, the final agreement made by the parties supersedes tentative terms discussed in earlier negotiations. Consequently, in determining the content of the contract, earlier tentative agreements and negotiations are inoperative.”

Calamari & Perillo, supra at 135. So the verbal conversation isn’t “parol evidence” at all, but rather was nothing more than an early negotiation that never found its way into the written contract and now has no legal importance to what the parties signed later. (This, by the way, is the problem with footnote 2 of the majority’s order, which concludes that the verbal conversation constituted its [*26]  own separate contract: if the alleged verbal agreement covered the same subject matter as the signed contract (i.e., it was a negotiation over the waiver rather than the ride), then the earlier unsigned agreement was legally superseded by the later signed writing. If it covered some other subject matter (i.e., it was not a negotiation of the waiver but only covered the ride), then it was not superseded, but it has no relevance to the signed contract. Beyond that, if indeed there existed a contract requiring the operator to provide a level 2 ride, then the failure to do so was a breach of contract, not a tort, and the majority order now thoroughly confuses the standard of care by violating the “fundamental boundary between contract law, which is designed to enforce the expectancy interests of the parties, and tort law, which imposes a duty of reasonable care and thereby [generally] encourages citizens to avoid causing physical harm to others.” Terracon Consultants W., Inc. v. Mandalay Resort Grp., 125 Nev. 66, 206 P.3d 81. 72-73, 125 Nev. 66, 206 P.3d 81, 86 (2009). On remand, should the defendant be held to the words of the alleged oral contract, or the standard of a reasonable person, when only tort claims and no contract claims have been asserted? Good luck sorting that out.).

Third, even assuming [*27]  that the verbal conversation is “parol evidence” at all (which it isn’t, but let’s skip past that hurdle), it proves nothing relevant to the waiver contract. Kuchta acknowledged during oral argument that the conversation did not overtly represent a negotiation of the waiver; indeed, the words of the conversation never reference the waiver at all, only the kind of ride Kuchta wanted. Rather, Kuchta only alleges that the conversation affected his “understanding and expectation” of what the waiver contract was supposed to mean. See Renaud v. 200 Convention Cor. Ltd., 102 Nev. 500, 501, 102 Nev. 500, 728 P.2d 445, 446 (1986). What he’s saying is this: the contract must be read to mean not what the words of the document say, but only what he intended them to mean in his mind. But under principles of contract law, whether we read the four corners of an unambiguous contract or whether we look at parol evidence outside of an ambiguous one, what we’re looking for is not “intent” in the sense of the subjective intention of the parties (i.e., what the parties may have thought in their minds), but only the objective meaning conveyed by the words they used in the agreement. “[T]he making of a contract depends not on the agreement of [*28]  two minds in one intention, but on the agreement of two sets of external signs, not on the parties’ having meant the same thing but on their having said the same thing.” Hotel Riviera, Inc. v. Torres, 97 Nev. 399, 401, 632 P.2d 1155, 1157 (1981) (alteration in original, internal quotation marks omitted). In the oft-cited words of Holmes, “we ask, not what this man meant, but what those words would mean in the mouth of a normal speaker of English, using them in the circumstances in which they were used.” Oliver W. Holmes, The Theory of Legal Interpretation, 12 Harv. L. Rev. 417, 417-18 (1899). “[T]he words of the contract must be taken in their usual and ordinary signification,” not twisted around to mean some personal peculiarity at odds with accepted English usage. Traffic Control Svcs., Inc. v. United Rentals Northwest, Inc., 120 Nev. 168, 174, 87 P.3d 1054, 1058 (2004). That the words of a contract are interpreted objectively according to normal rules of grammar, rather than subjectively according to the parties’ personal thoughts, has been the law for centuries. See Calamari & Perillo, supra, § 2-2, “Offer and Acceptance” at 26. “Objective manifestations of intent of the party should be viewed from the vantage point of a reasonable man in the position of the other party,” not the party alleging that his own words meant something else. Id. Thus, if one party offers to sell his car for $500 and the other says, “I accept,” [*29]  a contract is formed because of what they said, not what they thought; once they uttered the objective words of offer, acceptance, and consideration, a contract was created by operation of law. This is true even if one party later claims that he was only kidding. Id. at 27. The inquiry is not into what the parties may have intended in their minds to convey but rather the most reasonable meaning to be given to the words they utilized in the contract itself. The issue is not what Kuchta claims he meant, but what his words objectively conveyed to the other party, and the agreement must be “ascertained from the writing alone” (unless the writing is ambiguous). Oakland-Alameda Cty. Coliseum, Inc. v. Oakland Raiders, Lid., 197 Cal. App. 3d 1049, 243 Cal. Rptr. 300, 304 (Ct. App. 1988). But here, Kuchta proposes the opposite: that we ignore the words of the written document and instead make the contract only mean what was in his mind rather than what everyone signed on paper.

Finally, even if we skip past all of that and assume that parol evidence could be used the way that Kuchta proposes (even though it can’t be, but let’s ignore that for a moment), the content of both the document and the alleged “parol evidence” is wholly undisputed: nobody contests what words were written in the document or spoken during the conversation. [*30]  So what we’re left with is only a question of law regarding what those words mean, something that appellate courts are supposed to answer themselves as a matter of law and not leave to the jury. Thus, even if parol evidence was supposedly useable this way (again, ignoring settled principles of contract law), then the appropriate disposition is for us to just say, as a matter of law, whether the waiver contract covers the incident or not, without remanding a pure question of law back to the district court to grapple with during a jury trial. “[I]n the absence of ambiguity or other factual complexities, contract interpretation presents a question of law [appropriate for] summary judgment.” Galardi, 129 Nev. at 309, 301 P.3d at 366 (internal quotation marks omitted).

III.

Summing up, what 500 years of contract law tell us is this:

(1) a contract means what its words say and an unambiguous contract “will be enforced as written”;

(2) what the contractual words say is what they objectively convey in their ordinary sense regardless of what the parties might have personally thought or intended in their heads;

(3) the final contract supersedes all earlier verbal negotiations;

(4) parol evidence may only be used to clarify a term that is [*31]  ambiguous, and an ambiguity does not arise merely because the parties disagree on what they think the contract means;

(5) parol evidence may never be used to contradict an express term of a contract, whether the contract is integrated or not;

(6) parol evidence may never consist of earlier negotiations inconsistent with the final contract, whether the final document is integrated or not;

(7) when there is no dispute regarding what the words of the contract consist of (and there is no dispute regarding what any parol evidence admitted to clarify an ambiguity actually is), and the only remaining dispute is over what those undisputed words and parol evidence mean, then all that remains is a pure question of law for the court.

Applying these seven principles leads to an obvious and straightforward outcome. Here, nobody disputes what the words of the written waiver are; there’s not even any dispute about what the words of the “parol evidence” were, only what legal effect those words have or do not have. There’s no dispute that the alleged verbal agreement was never intended to be final, never mentioned the waiver in any way, and occurred before the signing of the written waiver contract. There [*32]  is no factual question left to work out. The only question before us is what all of the undisputed evidence means. That’s a pure question of law that we, not the jury, are supposed to answer.

IV.

With no dispute about what words the contract consisted of, what remains is solely a question of contractual interpretation. Redrock Valley Ranch., LLC v. Washoe County, 127 Nev. 451, 460, 254 P.3d 641, 647 (2011).

Here, the written words say that Kuchta waived the right to pursue any liability arising from broken bones that may result from being thrown from the “violent and unexpected” jerking of the mechanical bull. The parol evidence (assuming that the verbal conversation was any such thing) is that Kuchta asked for a level 2 ride and the operator agreed to try to provide one. None of this is in dispute. What does this all mean as a matter of law?

In the context of liability waivers, there are a couple of additional rules of construction to follow. In Nevada, an exculpatory agreement is a “valid exercise of the freedom of contract.” Miller v. A&R Joint Venture, 97 Nev. 580, 582, 636 P.2d 277, 278 (1981). Though generally enforceable, exculpatory clauses in a contract must meet four standards before a party seeking to enforce the clause can be absolved of liability:

(1) Contracts providing for immunity for liability for negligence must be construed [*33]  strictly since they are not favorite[s] of the law . . . ; (2) such contracts must spell out the intention of the party with the greatest particularity . . . and show the intent to release from liability beyond doubt by express stipulation and no inference from the words of general import can establish it . . . (3) such contracts must be construed with every intendment against the party who seeks immunity from liability . . . (4) the burden to establish immunity from liability is upon the party who asserts such immunity . .

Agric. Aviation Eng’g Co. v. Bd. of Clark Cty. Comm’rs,, 106 Nev. 396, 399400, 794 P.2d 710, 712-13 (1990) (quoting Richard’s 5 & 10, Inc. v. Brooks Harvey Realty Inv’rs, 264 Pa. Super. 384, 399 A.2d 1103, 1105 (Pa. Super. Ct. 1979)).

Here, all four requirements are met. Indeed, the majority seems to fully agree, as it does not conclude that the waiver contract is invalid or illegal, only that some dispute of facts exists regarding its meaning. So everyone agrees that the contract is valid; the only disagreement is over what it covers or does not cover.

It seems pretty clear to me that, whatever else this agreement covers, it covers what happened to Kuchta. Kuchta alleges in his lawsuit that, due to the unexpected and violent jerking of the bull, he was thrown and suffered broken bones. In other words, the appellant alleges that he suffered the exact injury (broken [*34]  bones) from the exact outcome (being thrown from the bull) caused by the exact movement (unexpected and violent jerking) expressly warned about in the waiver. Kuchta’s “parol evidence” (assuming it is any such thing) only shows that he asked for a level 2 ride, not that he asked for the waiver to only encompass a level 2 ride, so it tells us nothing about what the terms of the waiver contract were. The legal answer seems clear to me: Kuchta waived the right to sue for his injuries.

This all seems obvious under settled principles of contract law. So how does the majority come to a different conclusion? By reading Renaud v. 200 Convention Ctr. Ltd., 102 Nev. 500, 501, 102 Nev. 500, 728 P.2d 445, 446 (1986) in an astonishingly broad way that demolishes and re-writes much of existing contract law in Nevada.

V.

Based upon Renaud, Kuchta argues (and the majority agrees) that summary judgment was inappropriate. But I don’t read Renaud the way that either Kuchta or the majority do. There are two ways to read what Renaud supposedly says. The first is to read it broadly to overrule virtually the entirety of Nevada contract law in a way that requires reversal of this appeal. The second is to read it narrowly in a way that fits in quite [*35]  nicely with existing principles of Nevada contract law, but requires affirmance of this appeal. The majority chooses the former, but I think it’s the latter.

Before we get to the larger questions, here are some preliminary observations about Renaud. First, it’s a 1986 case decided under the old summary judgment standard that was expressly overruled in Wood v. Safeway, Inc., 121 Nev. 724, 731, 121 P.3d 1026, 1029 (2005), under which summary judgment could only be granted if no reasonable doubt exists that the plaintiff must lose and the “truth” is “clear.” See In re Hilton Hotel, 101 Nev. 489, 492, 706 P.2d 137, 138 (1985) (overruled by Wood). Indeed, the opinion hinges on the overruled pre-Wood language: “summary judgment is appropriate only when it is quite clear what the truth is.” Renaud, 728 P.2d at 446. It seems pretty clear to me that, just because summary judgment was improper in Renaud under the old standard — a standard that made summary judgment pretty much impossible to obtain, which is exactly why it was overruled, see Wood, 121 Nev. at 729-32, 121 P.3d at 1029-31 — that says nothing about whether we should follow its reasoning under the very different standard that exists today.

Second, the facts of Renaud are quite different than the facts of this case in a way that seriously undermines its relevance. The liability waiver at issue in Renaud was a blanket one that “purported [*36]  to exculpate Flyaway of any liability for negligence that might occur while [plaintiff] was on its premises.” 102 Nev. at 501, 728 P.2d at 446. The plaintiff contended that this release failed to apprise her of any specific risk associated with the free-fall simulator that injured her, a contention that was obviously quite true as the waiver failed to identify any particular risk of injury or even mention the simulator at all. Indeed, the waiver in Renaud consisted of the very “words of general import” that the Nevada Supreme Court disapproved in the four-prong test articulated in Agric. Aviation Eng’g Co., 106 Nev. at 399-400, 794 P.2d at 712-13. Consequently, summary judgment was inappropriate (especially under the old pre-Wood standard) because a serious question existed whether the waiver apprised the plaintiff of the particular risks specifically associated with the free-fall simulator when it never even mentioned the simulator or any risks at all. There’s no other way the case could have come out (which is probably why Renaud was so unimportant that it was issued as an unsigned per curiam opinion). If a waiver fails to even mention the apparatus that caused the injury, then there exists a dispute right on the face of the waiver itself as to what risks it identifies when the [*37]  waiver itself says barely anything at all one way or the other. Under principles of contract law alone, let alone tort law, such a waiver contains a facial ambiguity necessitating the evaluation of parol evidence to determine what the contract was supposed to cover or not cover. See M.C. Multi-Family Dei, 124 Nev. at 913-14, 193 P.3d at 544-45. Thus, under either contract law or tort law, whenever a waiver is facially vague and unclear, summary judgment was inappropriate because the waiver clearly failed to apprise the plaintiff of any risks in particular.

But that’s not anything like the case at hand. In stark contrast to Renaud, the release at issue here was far from a blanket one purporting to absolve the landowner from “all” unspecified and unnamed potential liability in some vague and incredibly generic way without bothering to identify what those risks were. Rather, the release here was narrowly and specifically targeted to the mechanical bull that described its operation and listed its particular hazards in detail, including the very injuries (broken bones from being thrown) that the plaintiff actually suffered. Indeed, the waiver covered nothing but the mechanical bull, and only people wishing to ride the mechanical bull were required [*38]  to sign it; patrons wishing only to have a drink at the bar weren’t required to sign it and weren’t asked to waive anything.

So there exist very different sets of facts between Renaud and this appeal. But the question becomes what that means: does Renaud apply only to vague blanket waivers that fail to identify any particular risks, or does it articulate a standard that broadly applies to all waivers including the narrow targeted one at issue here?

VI.

Renaud observes that two things are required for a plaintiff to have assumed the risk of an injury: “First, there must have been voluntary exposure to the danger. Second, there must have been actual knowledge of the risk assumed.” Renaud, 102 Nev. at 501, 728 P.2d at 446. To determine whether the party signing a liability waiver had actual knowledge of the risks assumed, courts must consider “the nature and extent of the injuries, the haste or lack thereof with which the release was obtained, and the understandings and expectations of the parties at the time of signing.” Id. at 502, 728 P.2d at 446.

The majority agrees that the first two factors strongly favor affirmance, but concludes that summary judgment is not warranted as to the third because factual disputes exist. In other words, the majority interprets [*39]  this language as a standalone three-part test that must be satisfied regardless of how detailed the language of the waiver happens to be. It becomes a test that exists apart from and outside of the contract itself, under which the words of the contract itself have no independent legal significance but are reduced to merely being one small piece of evidence among other evidence tending to prove the three prongs of the test. In addition to making it a standalone test, the majority interprets the three-part test as fundamentally factual. It becomes an inquiry focused upon what was said between the Kuchta and the ride operator regardless of what the waiver itself said or didn’t say within its four corners; and when those understandings and expectations are disputed, summary judgment cannot be granted.

Indeed, that’s how the majority order is structured: it recites the written words of the waiver on page 6, but then after launching into Renaud, it never cites those words again — they just disappear from the analysis for the rest of the order — instead only concluding that the third prong of the three-part test was factually disputed in a way having nothing to do with those words.

Well, that’s [*40]  one way to read Renaud. But it’s not how I read it, and here’s why: it deeply conflicts with long-settled principles of contract law.

Here’s the problem in a nutshell. If Renaud sets forth the standalone fact-based test that the majority proposes, then it requires the court to always, every single time, look outside of the four corners of the waiver to investigate the parties’ understandings and expectations, whether the words of the contract are ambiguous or not. And that judicial investigation must include superseded earlier negotiations that would otherwise be evidence of nothing under contract law. Maybe summary judgment could still sometimes still be granted if no dispute exists regarding that evidence; but the evidence must always be admitted and at least considered in some way whether there was any textual ambiguity in the contract or not. That’s a major re-writing of contract law, which starts with the fundamental proposition that contracts are enforced as written based upon the words contained within their four corners, and going outside of them is the exception, not the rule, an exception that only arises in the event of an ambiguity.

And there’s more. If Renaud is indeed the [*41]  standalone factual test that Kuchta proposes, then courts must always admit extrinsic evidence whether or not it qualifies as admissible “parol evidence” in contract law. Beyond that, here’s what the court would use that extrinsic evidence to do: not to clear up the meaning of an ambiguity in the text (because under this test no such ambiguity would be required as a trigger anyway), but to determine what the parties thought and expected the waiver contract to mean in the first place regardless of the words used. But this violates the idea that “[t]he making of a contract depends not on the agreement of two minds in one intention, but on the agreement of two sets of external signs, not on the parties’ having meant the same thing but on their having said the same thing.” Hotel Riviera, 97 Nev. at 401, 632 P.2d at 1157 (alteration in original, internal quotation marks omitted). Here, Kuchta reads Renaud as requiring the exact opposite: courts must read contracts not according to their words, but rather according to the personal “understandings and expectations of the parties at the time of signing.” It replaces the objective test of contract law with an entirely subjective approach that focuses not upon the plain and ordinary meaning [*42]  of the words of the document that everyone signed but, instead, upon what everyone thought regardless of the written words that they agreed upon. The old rule has long been that “we ask, not what this man meant, but what those words would mean in the mouth of a normal speaker of English, using them in the circumstances in which they were used,” Oliver W. Holmes, The Theory of Legal interpretation, 12 Harv. L. Rev. 417, 417-18 (1899), and “the words of the contract must be taken in their usual and ordinary signification,” Traffic Control Svcs., 120 Nev. at 174, 87 P.3d at 1058. But the majority’s new rule is that we ask not what words were used, but only what the parties imagined in their heads.

This is revolutionary. Make no mistake about how far-reaching this is. But it’s the only way to reverse summary judgment here, because all of the factual disputes that Kuchta (and the majority) point to lie entirely outside of the four corners of the written contract and consist entirely of a prior, superseded verbal conversation that nobody even asserts was a negotiation of the waiver contract itself. And those supposed factual disputes serve not to clarify a term of the contract, but to contradict those terms.

In short, Kuchta and the majority read Renaud as supplanting (or at least [*43]  creating an unprecedented major exception to) settled law: when it comes to liability waivers, courts do something entirely different than they’ve done with every other contract since the time of Blackstone.

That’s an incredibly broad reading of Renaud. But accepting it is the only way to reverse summary judgment in this case, because if we apply traditional contract law and stay within the four corners of the waiver itself — or, alternatively, even if we concede some kind of ambiguity but limit ourselves to parol evidence consistent with the written words in order to clarify the written words — Kuchta must lose. For what Kuchta now claims he believed about the waiver comes very close to representing the exact opposite of what its written words actually say: the written waiver says that the movements of the bull are “violent” and “unexpected” and may cause injury, but Kuchta now asserts that he had a specific expectation that the ride would be non-violent and could not cause injury.

VII.

Let’s ask a practical question: under this standard, what kind of trial will this be? The answer is: not one in which the jury will be instructed to honor the written words of the waiver contract even [*44]  if the words are clear and unambiguous. If any parol evidence is deemed admissible in the event of ambiguity, not one in which the jury will be instructed to consider only parol evidence that doesn’t flatly contradict the written words or re-write the entire contract. In sum, not one in which the words of the contract matter much at all.

Instead, the trial will consist (as the interrogatory responses and deposition testimony before us currently do) of dueling, uncorroborated, and self-serving testimony regarding a single verbal conversation that occurred years ago that was never memorialized and never referenced in any way in the final writing, one that Kuchta himself agrees was not a negotiation of the terms of the waiver. In weighing that conversation, the jury will be asked to determine not what contractual terms Kuchta agreed to and signed, but only what inner thoughts he secretly harbored at the time.

VIII.

I don’t read Renaud that way. It’s a two-page unsigned per curiam opinion, and nothing in it suggests that it was meant to broadly overrule so much clear and established law. It’s axiomatic that we do not read statutes as if Legislatures decided to “hide elephants in mouseholes.” [*45]  Whitman v. American Trucking Association, 531 U.S. 457, 468, 121 S. Ct. 903, 149 L. Ed. 2d 1 (2001). I doubt that we ought to read Renaud as if the Nevada Supreme Court intended to do exactly that.

Instead, I read Renaud as saying something much simpler that overrules nothing and fits very happily within existing tenets of contract law. Courts must determine whether a waiver warns of the risk and injury at issue, just as Renaud says they must; but they do so within the context of settled law by examining the terms of the waiver itself. If the words of the waiver contain a sufficient warning, then no extrinsic evidence is needed and the inquiry stops there because the contract must be interpreted according to the four corners of its text as a matter of law. Only if the waiver is ambiguous as to what is covered can the court go outside of the four corners of the document to examine parol evidence to clear up the ambiguity.

Renaud itself was a straightforward application of this simple idea. In it, the waiver at stake was so generically written that it fails to mention the free-fall simulator at all, much less describe any particular injuries that could occur from using it. Thus, the written contract itself was silent on whether it covered either the plaintiffs particular injury or the [*46]  risk that inflicted that injury. In that event, established principles of contract law dictate that the written waiver could either be read as ambiguous regarding whether it covered the free-fall simulator, or it could also be read, as a matter of law, as not covering the free-fall simulator. In the first instance, parol evidence must be considered to resolve the ambiguity and, in the second instance, any evidence of a waiver, if there was one, must exist entirely outside of the written contract in the form of an oral contract. Either way, and especially under the old pre-Wood standard for granting summary judgment, summary judgment was not warranted because no such evidence had been presented or considered.

So I read Renaud not as some sweeping and revolutionary holding inconsistent with contract law in any way, but as a simple and straightforward application of clearly established law. If a waiver is so poorly worded or generic as to be ambiguous, then summary judgment cannot be granted absent consideration of parol evidence. On the other hand, if the written waiver is sufficiently clear and precise that its terms convey that there was “voluntary exposure to the danger as well as [*47]  actual knowledge of the risk assumed” — including that “the nature and extent of the injuries” were of the kind warned about in the waiver, and the ‘understandings and expectations of the parties at the time of signing” are clearly conveyed in the document — then the only question presented is one of contract interpretation (a question of law). If the written words meet all of these tests, then as a matter of law the waiver operates to bar any claim arising from any injury specifically warned of in the waiver. Renaud, 102 Nev. at 501, 728 P.2d at 446.

Consequently, summary judgment was properly granted in this case. The waiver is specific and precise, there are no ambiguities in it, and it covered the very injuries suffered by the very means warned about in the waiver. I would conclude as a matter of law that summary judgment was properly granted as the only question before us is one of contract interpretation, which presents a pure question of law. The only factual “disputes” that appellant cites relate to inadmissible extrinsic evidence lying outside of the contract that both pre-dates and contradicts the writing, and therefore are neither “genuine” nor “material.” See Wood, 121 Nev. at 731, 121 P.3d at 1029 (“A factual dispute is genuine when the evidence is [*48]  such that a rational trier of fact could return a verdict for the nonmoving party.”). See
NRCP 56 (summary judgment warranted when plaintiff not “entitled to judgment as a matter of law”). I would affirm and respectfully dissent.

/s/ Tao, J.

Tao


Merlien v. JM Family Enters, 2020 Fla. App. LEXIS 10525

Merlien v. JM Family Enters, 2020 Fla. App. LEXIS 10525

Court of Appeal of Florida, Fourth District

July 22, 2020, Decided

No. 4D19-2911

Reporter

2020 Fla. App. LEXIS 10525 *

DIVESTON MERLIEN, Appellant, v. JM FAMILY ENTERPRISES, INC., SHERIDAN 441, LLC and BENDLES RENTALS, LLC, Appellees.

Notice: NOT FINAL UNTIL DISPOSITION OF TIMELY FILED MOTION FOR REHEARING.

Prior History: [*1] Appeal from the Circuit Court for the Seventeenth Judicial Circuit, Broward County; Raag Singhal, Judge; L.T. Case No. CACE17-007427 21.

Counsel: Neil Rose, Esq., Hollywood, and Morgan Weinstein of Weinstein Law, P.A., Fort Lauderdale, for appellant.

Kansas R. Gooden of Boyd & Jenerette, P.A., Miami, and Ian E. Waldick of Boyd & Jenerette, P.A., Jacksonville, for appellee JM Family Enterprises, Inc.

Judges: FORST, J. LEVINE, C.J., and DAMOORGIAN, J., concur.

Opinion by: FORST

Opinion

Forst, J.

Appellant Diveston Merlien (“the plaintiff”) appeals from the trial court’s final summary judgment entered in favor of JM Family Enterprises (“JM”). The trial court found that the plaintiff’s negligence lawsuit was precluded by an exculpatory clause in his employment agreement. On appeal, the plaintiff argues that the disclaimer at issue was void for ambiguity and, even if the disclaimer was properly considered and not void for ambiguity, it was nevertheless unenforceable because it contravenes Florida public policy. We disagree and affirm.1

Background

The plaintiff was employed by AlliedBarton, a firm that provides security services for various clients. He was assigned to work as a security guard for one of those clients, JM The plaintiff [*2] was allegedly injured due to a slip and fall on stairs at the JM facility where he was assigned to work. He subsequently filed a premises liability suit against JM, alleging that his slip and fall was proximately caused by JM’s negligent maintenance of the stairs.

The primary focus of this appeal is the enforceability of a waiver which the plaintiff signed as a condition of employment that prohibits suit against any customer of AlliedBarton for injuries covered by the workers’ compensation statutes. The waiver provides:

WORKER’S COMPENSATION DISCLAIMER Payment on Work-Related Injuries

I understand that state Workers’ Compensation statues [sic] cover work-related injuries that may be sustained by me. If I am injured on the job, I understand that I am required to notify my manager immediately. The manager will inform me of my state’s Workers’ Compensation law as it pertains to seeking medical treatment. This is to assure that reasonable medical treatment for an injury will be paid for by Alliedbarton’s [sic] Workers’ Compensation insurance.

As a result, and in consideration of AlliedBarton Security Services offering me employment, I hereby waive and forever release any and all rights I may [*3] have to:

– make a claim, or

– commence a lawsuit, or

– recover damages or losses

from or against any customer (and the employees of any customer) of AlliedBarton Security Services to which I may be assigned, arising from or relating to injuries which are covered under the Workers’ Compensation statues [sic].

Two years after the plaintiff filed his complaint, JM filed a motion for summary judgment, arguing that the plaintiff waived his right to bring suit by executing the above waiver at the commencement of his employment. After hearing argument from both parties, the trial court granted JM’s motion for summary judgment. This timely appeal followed.

Analysis

HN1[] “The standard of review of an order granting summary judgment is de novo.” Fini v. Glascoe, 936 So. 2d 52, 54 (Fla. 4th DCA 2006). When “the enforceability of [a] pre-injury release is a question of law arising from undisputed facts, the standard of review is de novo.” Kirton v. Fields, 997 So. 2d 349, 352 (Fla. 2008).

Brooks v. Paul, 219 So. 3d 886, 887 (Fla. 4th DCA 2017); see also Sanislo v. Give Kids the World, Inc., 157 So. 3d 256, 260 (Fla. 2015) (“The enforceability of a pre-injury exculpatory clause arising from undisputed facts is reviewed de novo.”).

I. Whether the disclaimer was ambiguous and unenforceable.

HN2[] “Public policy disfavors exculpatory contracts because they relieve one party of the obligation to use due care. . . . Nevertheless, because of a [*4] countervailing policy that favors the enforcement of contracts, as a general proposition, unambiguous exculpatory contracts are enforceable unless they contravene public policy.” Sanislo, 157 So. 3d at 260 (internal citations omitted).

HN3[] Florida courts have upheld the enforceability of exculpatory provisions in contracts only when the language of the provision clearly and unambiguously communicates the scope and nature of the disclaimer. See id. at 260-61; Fresnedo v. Porky’s Gym III, Inc., 271 So. 3d 1185, 1186 (Fla. 3d DCA 2019); Brooks, 219 So. 3d at 888. “Such provisions are deemed to be unambiguous and enforceable when the language unequivocally demonstrates a clear and understandable intention for the defendant to be relieved from liability such that an ordinary and knowledgeable person will know what he or she is contracting away.” Pillay v. Pub. Storage, Inc., 284 So. 3d 566, 569 (Fla. 4th DCA 2019) (citing Sanislo, 157 So. 3d at 260-61).

In addressing the trial court’s determination that the AlliedBarton release was clear and unambiguous, the plaintiff cites to UCF Athletics Ass’n Inc. v. Plancher, 121 So. 3d 1097 (Fla. 5th DCA 2013), quashed in part on other grounds, 175 So. 3d 724 (Fla. 2015), and argues that the waiver at issue in that case is analogous to AlliedBarton’s current disclaimer. We disagree and find the case to be distinguishable.

In Plancher, the parents of a University of Central Florida football player brought a negligence action against the university after their son collapsed and died during [*5] conditioning drills during practice. Id. at 1099. In affirming the decision of the trial court, the Fifth District found the exculpatory clause contained in “the agreement to participate clause of the Medical Examination and Authorization Waiver” to be ambiguous and unenforceable. Id. at 1099, 1103.

In pertinent part, the exculpatory clause at issue in Plancher contained the following language:

I recognize the importance of following all instructions of the coaching staff, strength and conditioning staff, and/or Sports Medicine Department. Furthermore, I understand that the possibility of injury, including catastrophic injury, does exist even though proper rules and techniques are followed to the fullest. . . .

In consideration of the University of Central Florida Athletic Association, Inc. permitting me to participate in intercollegiate athletics and to engage in all activities and travel related to my sport, I hereby voluntarily assume all risks associated with participation and agree to exonerate, save harmless and release the University of Central Florida Athletic Association, Inc., its agents, servants, trustees, and employees from any and all liability, any medical expenses not covered by the University of [*6] Central Florida Athletic Association’s athletics medical insurance coverage, and all claims, causes of action or demands of any kind and nature whatsoever which may arise by or in connection with my participation in any activities related to intercollegiate athletics.

The terms hereof shall serve as release and assumption of risk for my heirs, estate, executor, administrator, assignees, and all members of my family.

Id. at 1100-01. The Fifth District explained its determination that the release language was ambiguous, and the release was thus unenforceable:

This preamble, when coupled with a clause that does not expressly state that [the decedent] would be waiving a negligence action, could have easily led [the decedent] to believe that UCFAA would be supervising his training and instructing him properly (non-negligently), and that he was only being asked to sign the exculpatory clause to cover injuries inherent in the sport-that could occur “even though proper rules and techniques are followed to the fullest.”

Id. at 1102.

The ruling in Plancher is similar to the rulings of two other cases cited in the plaintiff’s initial brief. In Brooks, we invalidated an exculpatory clause in an agreement between a surgeon [*7] and patient because the language was unclear and ambiguous. 219 So. 3d at 891. In so holding, we explained that the release was unenforceable because the disclaimer was “qualified” by the statement that the surgeon would “do the very best to take care of [the patient] according to community medical standards”; this rendered the “purported release” contradictory and ambiguous. Id. We compared the release to the waiver in Goyings v. Jack & Ruth Eckerd Foundation, 403 So. 2d 1144 (Fla. 2d DCA 1981), disapproved of on other grounds by Sanislo, 157 So. 3d 256, which also included “additional language” that “create[d] ambiguity about exactly what type of claims are being released.” Brooks, 219 So. 3d at 891. In Goyings, ambiguity arose in a children’s camp contract in which the camp agreed to take reasonable precautions to assure the safety of the children, yet also sought to disclaim all liability. Goyings, 403 So. 2d at 1145-46. The court held this language to be ambiguous and contradictory because the camp “[b]y their own choice of language . . . agreed to take reasonable precautions to assure [the child’s] safety.” Id. at 1146.

The instant case is clearly distinguishable from Plancher, Brooks, and Goyings, as the disclaimer at issue here does not contain a misleading preamble or otherwise suggest that either AlliedBarton or its clients will take responsibility for [*8] an employee’s safety when working at client facilities. The disclaimer is limited to injuries which are covered under the workers’ compensation statutes and makes no promises or representations other than “state Workers’ Compensation statu[t]es cover work-related injuries that may be sustained by [the employee],” and that “reasonable medical treatment for an injury will be paid for by [AlliedBarton’s] Workers’ Compensation insurance.”

One other case cited by the plaintiff to support his ambiguity argument is Tatman v. Space Coast Kennel Club, Inc., 27 So. 3d 108 (Fla. 5th DCA 2009). In that case, there was some ambiguity as to whether the disclaimer released claims for injuries caused by one dog to another dog and/or to a person. Id. at 110-11. The court faulted the waiver agreement for its failure to “define whose injuries are covered in a circumstance, even though there are multiple possibilities.” Id.

No such ambiguity exists here, as the disclaimer specifically explains the rights released (“all rights . . . to make a claim, or commence a lawsuit, or recover damages or losses”); the beneficiaries of that release (“any customer (and the employees of any customer) of AlliedBarton Security Services to which I may be assigned”); and the situations in which this release [*9] applies (“arising from or relating to injuries which are covered under the Workers’ Compensation statu[t]es”). As in Sanislo, the exculpatory clause here is “unambiguous and enforceable [because] the intention to be relieved from liability was made clear and unequivocal and the wording was so clear and understandable that an ordinary and knowledgeable person w[ould] know what he or she is contracting away.” 157 So. 3d at 260-61.

II. Whether the disclaimer violates Florida public policy.

HN4[] Even waivers that are clear and unambiguous may nevertheless be unenforceable if they contravene Florida public policy. See id. at 260. However, “[a] contract is not void, as against public policy, unless it is injurious to the interests of the public or contravenes some established interest of society.” Griffin v. ARX Holding Corp., 208 So. 3d 164, 170 (Fla. 2d DCA 2016) (quoting Atl. Coast Line R.R. Co. v. Beazley, 54 Fla. 311, 45 So. 761, 785 (Fla. 1907)) (alteration omitted).

The plaintiff argues that even if AlliedBarton’s disclaimer is not void for ambiguity, it should be found unenforceable based on public policy considerations. Specifically, the plaintiff argues that “part of the purpose of the workers’ compensation statute is to permit negligence claims against a third-party tortfeasor—in this case the customers of AlliedBarton.”

In making this argument, the plaintiff [*10] references section 440.39, Florida Statutes (2017), which provides that an employee injured in the course of his or her employment by the negligent actions of a third-party tortfeasor “may accept compensation benefits under the provisions of this law, and at the same time such injured employee . . . may pursue his or her remedy by action at law or otherwise against such third-party tortfeasor.” § 440.39, Fla. Stat. (2017) (emphasis added).

HN5[] The plain language of this section establishes a permissive rather than mandatory option on the part of the employee to pursue an action at law. Agile Assurance Grp. Ltd. v. Palmer, 147 So. 3d 1017, 1018 (Fla. 2d DCA 2014) (“Generally, use of the word may deems relevant language permissive.”). Here, the plaintiff contracted away his right under section 440.39 to assert a claim against a third-party tortfeasor. HN6[] “[B]ecause of a . . . policy that favors the enforcement of contracts, as a general proposition, unambiguous exculpatory contracts are enforceable unless they contravene public policy.” Sanislo, 157 So. 3d at 260.

The disclaimer did not “contravene public policy.” It conforms to public policy. Section 440.015, Florida Statutes (2017), states:

It is the intent of the Legislature that the Workers’ Compensation Law be interpreted so as to assure the quick and efficient delivery of disability and medical benefits to an injured worker and to facilitate [*11] the worker’s return to gainful reemployment at a reasonable cost to the employer. . . . The workers’ compensation system in Florida is based on a mutual renunciation of common-law rights and defenses by employers and employees alike.

§ 440.015, Fla. Stat. (2017). HN7[] Our Supreme Court offered a similar view:

Fundamentally, the workers’ compensation system establishes a system of exchange between employees and employers, as well as employees and insurance carriers, that is designed to promote efficiency and fairness. Our governing precedent, as well as that of our district courts, has recognized that under this no-fault system, the employee relinquishes certain common-law rights with regard to negligence in the workplace and workplace injuries in exchange for strict liability and the rapid recovery of benefits.

Aguilera v. Inservices, Inc., 905 So. 2d 84, 90 (Fla. 2005).

Here, it is undisputed that the plaintiff’s injury fell under the scope of the workers’ compensation statutes and that he received payment for his injuries under AlliedBarton’s policy. HN8[] This result places the plaintiff in the same position as any AlliedBarton employee who may be injured while working directly for the employer on the employer’s premises. See Suarez v. Transmontaigne Servs., Inc., 127 So. 3d 845, 847 (Fla. 4th DCA 2013) (“Where an employee covered by the workers’ compensation [*12] act is injured on the job, the employee’s sole remedy against his employer is through the provisions of the act. His employer is immune from negligence claims arising out of the same injury.” (citing § 440.11(1), Fla. Stat. (2012)). AlliedBarton’s disclaimer does not subvert the workers’ compensation scheme, but rather, fully utilizes the statutory scheme as the plaintiff’s sole means of recovery. In no way does the disclaimer interfere with “the quick and efficient delivery of disability and medical benefits to an injured worker.” See § 440.015, Fla. Stat. (2017).

We also note that this waiver extends only to negligent conduct and does not infringe on the public policy prohibition of waiving liability for intentional torts, as the waiver only extends to injuries covered by workers’ compensation. See Aguilera, 905 So. 2d at 90 (“Functionally, the worker’s compensation system limits liability only for negligent workplace conduct which produces workplace injury, but does not extend to immunize intentional tortious conduct.”); Turner v. PCR, Inc., 754 So. 2d 683, 687 (Fla. 2000) (“Today we reaffirm our prior decisions recognizing, as have our district courts and many jurisdictions around the country, that workers’ compensation law does not protect an employer from liability for an intentional tort against [*13] an employee.”), superseded by statute on other grounds, § 440.11(1)(b), Fla. Stat. (2003), as noted in R.L. Haines Constr., LLC v. Santamaria, 161 So. 3d 528, 530-31 (Fla. 5th DCA 2014); see also § 440.11(1)(b), Fla. Stat. (2017) (the intentional tort exception).

At least two courts from other states have considered this same AlliedBarton disclaimer and found that it did not contravene public policy. See Bowman v. Sunoco, Inc., 620 Pa. 28, 65 A.3d 901 (Pa. 2013); Brown v. 1301 K Street Ltd. P’ship, 31 A.3d 902 (D.C. 2011).2

In Bowman, the Pennsylvania Supreme Court accepted jurisdiction to determine whether AlliedBarton’s disclaimer contravened Pennsylvania public policy. 65 A.3d at 908. The court ruled that the waiver did not violate the text of section 204(a) of Pennsylvania’s Workers’ Compensation Act—a statutory provision prohibiting agreements that waive a claim for damages prior to an injury. Id. The court explained that the workers’ compensation statute was intended to apply to agreements barring a claim against an employer, rather than to claims against a third party. Id. After examining the history of the Pennsylvania workers’ compensation statute, the court determined that the legislature provided two alternative tracks by which an employee could recover for a workplace injury. Id. The employee could recover under a statutory scheme or through a traditional action at law. Id. The court held:

 [*14] [B]ecause the Act once provided for a dual system of recovery, which made it a violation of public policy for an employer to avoid both recovery tracks, and continues to provide for an action at law when the employer is uninsured, we conclude public policy is not violated where, as here, the employee is absolutely covered under one of those two tracks, namely, the compensation scheme provided by Article III.

Id. The court concluded by noting the similar decisions of other courts and stated:

Appellant was not forced to sign the release, and the release did not in any way prevent her from receiving compensation for her work-related injuries as provided by the Act. As the Appeals Court of Massachusetts found in Horner v. Boston Edison Company, 45 Mass. App. Ct. 139, 695 N.E.2d 1093 (1998), the disclaimer here “extinguishes only the employee’s right to recover additional amounts as a result of a work-related injury for which the employee has already received workers’ compensation benefits.” Id. at 1095. Similarly, the Supreme Court of Arkansas found, with facts nearly identical to the present case, a similar disclaimer did not violate public policy because it did not indicate the employer was “attempting to escape liability entirely, but [was] instead, attempting to shield its [*15] clients from separate tort liability for those injuries that are covered by workers’ compensation . . . .” Edgin v. Entergy Operations, Inc., 331 Ark. 162, 961 S.W.2d 724, 727 (1998).

Id. at 910 (alteration in original) (footnote omitted).

Similar to the Pennsylvania decision, the District of Columbia Court of Appeals found that the exculpatory clause at issue here did not violate public policy. See Brown, 31 A.3d at 906-07. The court explained that it had invalidated exculpatory clauses disclaiming liability for self-dealing by a personal representative of a will and in the housing context with landlords trying to contract around the implied warranty of habitability. Id. The court continued, however, by explaining: “[i]n this case . . . we find nothing violative of public policy in an employer’s choice to protect its customers from liability for workplace injuries, choosing instead to compensate its employees itself exclusively through workers’ compensation.” Id. at 907. The court concluded by noting that the plaintiff voluntarily entered into the agreement and declined to invalidate the contract on the basis that it was offered on a “take it or leave it” basis. See id. at 907, n.4 (quoting Moore v. Waller, 930 A.2d 176, 182 (D.C. 2007)).

Here, as in Bowman and Brown, the plaintiff here was not coerced into signing the agreement and voluntarily agreed, as a condition [*16] of employment, to limit his avenues for recovery with respect to any future injuries to the State’s workers’ compensation program. The disclaimer was limited in both scope and application and did not prevent the “the quick and efficient delivery of disability and medical benefits to an injured worker.” See § 440.015, Fla. Stat. (2017). As such, we hold that AlliedBarton’s disclaimer is not void based on public policy considerations.

Conclusion

We agree with the trial court that the disclaimer signed by the plaintiff is unambiguous, not in violation of Florida public policy and, thus, enforceable. Accordingly, the trial court’s final summary judgment is affirmed.

Affirmed.

Levine, C.J., and Damoorgian, J., concur.


Have you ever read your insurance policy? You should! The one at issue in this case specifically excluded the risks the policy was bought to cover.

An event organizer of a 5K Extreme Rampage purchased an insurance policy that specifically excluded coverage for a 5K run with obstacles, mud runs and tough-guy races.

Johnson v. Capitol Specialty Ins. Corp., 2018 Ky. App. Unpub. LEXIS 447

State: Kentucky, Court of Appeals of Kentucky

Plaintiff: Chris Johnson D/B/A Extreme Rampage, and Chris Johnson, and Christopher Johnson, Rampage LLC, Christopher Johnson D/B/A Rampage, LLC, and/or Extreme Rampage, Casey Arnold, Individually and as Administratrix Of the Estate of Chad Arnold, and as Next Friend and Guardian/ Conservator for Miles Arnold, and as Assignee for All Claims Held By “The Johnson Parties

Defendant: Capitol Specialty Insurance Corporation

Plaintiff Claims: negligence; violation of the Kentucky Consumer Protection Act and the Unfair Claims Settlement Practices Act; fraud; and breach of contract

Defendant Defenses:

Holding:

Year: 2018

Summary

Insurance litigation about a claim for an event, service, trip or liability is much costlier and time-consuming than any litigation concerning an injury.

In this case, the event owner and organizer of a mud run obstacle course in Kentucky purchased insurance for the event, which excluded all coverage needed for the event. Effectively, the plaintiff in this case paid for paper that had no value.

The trial courts and the appellate court agreed with the insurance company because the exclusions were in the policy that was available to the insured prior to the event.

Facts

The plaintiff in this appeal created an owned a mud run obstacle course the Extreme Rampage. Johnson the individual created Extreme Rampage LLC, which then organized and ran the event.

The event was a 3K obstacle race, similar if not identical to mud runs, death races, etc., The race was to be held at the Kentucky Horse Park. The horse park required a $1 million-dollar policy covering them.

Johnson contacted an insurance agent over the phone who completed an application and sent it off. A quote was received and accepted. The cost was $477.00, which should have been the first clue; it was too cheap. The only part of the application or proposal that Johnson saw was the “subjectivities page” which stated the policy was to be issued after a list of things were verified. The items to be verified list things as rallies, cattle drives, etc., but did not list obstacle course, running events or the like.

When the policy was issued it contained two exclusions. The first was labeled the sponsor exclusion by the court and stated:

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY

EXCLUSION — ATHLETIC OR SPORTS PARTICIPANTS

This endorsement modifies insurance provided under the following:

COMMERCIAL GENERAL LIABILITY COVERAGE PART.

SCHEDULE

Description of Operations:

Special event — 5K run with obstacles.

. . .

With respect to any operations shown in the Schedule, this insurance does not apply to “bodily injury” to any person while practicing for or participating in any sports or athletic contest or exhibition that you sponsor.

And the second exclusion labeled by the court as the participant exclusion provided as follows:

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY EXCLUSION — PARTICIPANTS

(SPECIFIED ACTIVITIES/OPERATIONS)

SCHEDULE

Descriptions of Activity/Operations

Mud Runs and Tough Guy Races

This insurance does not apply to “bodily injury,” “property damage,” “personal or advertising injury” or medical expense arising out of any preparation for or participation in any of the activities or operations shown in the schedule above.

During the race, one of the participants collapsed and died. His wife sued. The insurance company denied coverage. That means the insurance company was not only not going to pay the claim, they were not going to pay for attorneys to defend the case.

The Insurance Company filed a declaratory action. This lawsuit was between Johnson, the policyholder and the insurance company where the insurance company was looking for a ruling stating it had no duty to provide coverage. This is a request for immediate decision from the court on the interpretation of the policy.

Johnson, the insured and Arnold the family of the deceased participant both filed suit against the insurance company. The trial court combined the two lawsuits into one. Both filed motions for summary judgment and the insurance company filed its motion for summary judgment.

After reading the exclusions, the policy only covered spectators at the event. The spectators had to be 100′ from the event so any spectator injured that was closer than 100′ to the event could sue, and Johnson would have no coverage for that claim either. Basically, the policy was a worthless piece of paper for the event.

The trial court granted the insurance companies motion for summary judgment, and this appeal ensued. Both Johnson and the Arnold family appealed.

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

Insurance policies have their own set of laws. Even though they are contracts, after the contract is formed, new ways of interpreting a policy are created.

One such rule is any ambiguity in the policy will be ruled or interpreted against the insurance company. Since policies are presented as a take it or leave it contract, any mistakes in the contract are ruled so the policy holder wins.

The first claim is a quasi-fraud claim based on the lack of information concerning the exclusions. The court looked at this more as a situation where the event organizer did not read the policy.

Johnson cannot avoid the terms of the insurance contract by pleading ignorance of its contents. It is axiomatic that “insured persons are charged with knowledge of their policy’s contents.

Because Johnson signed the policy (? Application not the policy, in reality) Johnson was held to the terms of the policy.

Although Johnson claims, based on his interaction with Delre, that the terms of the policy were not what he had anticipated, no genuine issue of material fact exists that Johnson signed the policy and, as a matter of law, was presumed to know its contents.

The next argument was the insurance agent the event organizer worked with was an agent of the insurance company Capitol. As such, the agents could be liable and the agents could create liability for Capitol. An agency is created when the principal, the insurance company, grants specific authority to the agent.

“Actual authority arises from a direct, intentional granting of specific authority from a principal to an agent.” The Restatement (Third) of Agency § 2.02(1) (2006) provides that “[a]n agent has actual authority to take action designated or implied in the principal’s manifestations to the agent and acts necessary or incidental to achieving the principal’s objectives, as the agent reasonably understands the principal’s manifestations and objectives when the agent determines how to act.”

However, there was no evidence in the record to show any agency between the insurance sales person and the insurance company, even though the sales person is called an agent.

The next argument was over the language in the policy. The event organizer argued the exclusion should not apply because the term “sponsor” was ambiguous.

Exclusions in insurance contracts are to be narrowly interpreted, and all questions resolved in favor of the insured. Exceptions and exclusions are to be strictly construed so as to render the insurance effective. Any doubt as to the coverage or terms of a policy should be resolved in favor of the insured. And since the policy is drafted in all details by the insurance company, it must be held strictly accountable for the language used.

After narrowly interpreting the policy, any ambiguity in the language of the policy must be interpreted in favor of the policy holder and against the insurance company.

…[t]he rule of strict construction against an insurance company certainly does not mean that every doubt must be resolved against it and does not interfere with the rule that the policy must receive a reasonable interpretation consistent with the parties’ object and intent or narrowly expressed in the plain meaning and/or language of the contract. Neither should a nonexistent ambiguity be utilized to resolve a policy against the company. We consider that courts should not rewrite an insurance contract to enlarge the risk to the insurer.

However, the court found the term in this case, was not ambiguous.

The event organizer then argued that the Concurrent Proximate Cause Doctrine should apply in this case. The concurrent proximate cause doctrine holds that when an insured event flows from an insured event, the protection afforded by the insurance policy flows with to the new event.

Where the loss is essentially caused by an insured peril with the contribution of an excluded peril merely as part of the chain of events leading to the loss, there is coverage under the policy. Stated alternately, coverage will exist where a covered and noncovered peril join to cause the loss provided that the covered peril is the efficient and dominant cause.

The court found that there was no insured event to begin with so nothing could “flow” to the uninsured event.

The appellate court upheld the motion in the declaratory action by the trial court stating the insurance company Capitol had no duty to defend the event organizer Johnson and thus any liability to the Arnold family.

So Now What?

This is simple. You MUST do the following things if you are the owners, sponsor, organizer or insured with an insurance policy.

  1. Read it
  2. Understand it
  3. Make sure it covers what you need it to cover.
  4. Find an agent who understands what you need and can communicate that to all the insurance companies he may be working with.
    1. If that means getting the insurance company out from behind their desk and down the river, to an event, or in your factory do that.
  5. Always confirm in writing or electronically that the coverage you requested and need is covered in the policy you are purchasing.
  6. Ask to see the policy and any exclusions, prerequisites or other requirements before paying for it. Once you open your wallet, you won’t get your money back.
  7. If the price of the policy is too good to be true, start investigating. On average a policy should cost $5 to $10 per person per day for outdoor recreation coverage. That amount is the bottom line and can go beyond that. If you are purchasing a policy at 1980 prices $2.00 per person per day, you are buying worthless paper.

You cannot be in business without an insurance policy. Contrary to popular believe, insurance policies do not attract lawsuits. How do people know if you are insured? If they do not know you are insured, how can someone decided to sue just because you have money.

If for no other reason, you need a policy that will pay to prove you are right. The attorney fees, court costs, exhibits, witness fees alone on a small case will exceed $50K. That means with no policy or a bad policy, you are out $50 to $100K before you even begin to pay a claim.

Insurance policies are difficult. I spent six years, three before and three after working for Nationwide Insurance. Reading a policy, let alone understanding it is mind numbing and hard. But you better or you will be standing in the cold, because someone took your house.

What do you think? Leave a comment.

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Johnson v. Capitol Specialty Ins. Corp., 2018 Ky. App. Unpub. LEXIS 447

Johnson v. Capitol Specialty Ins. Corp.

Court of Appeals of Kentucky

June 22, 2018, Rendered

NO. 2017-CA-000171-MR, NO. 2017-CA-000172-MR

Reporter

2018 Ky. App. Unpub. LEXIS 447 *; 2018 WL 3090503CHRIS JOHNSON D/B/A EXTREME RAMPAGE, AND CHRIS JOHNSON, AND CHRISTOPHER JOHNSON, RAMPAGE LLC, CHRISTOPHER JOHNSON D/B/A RAMPAGE, LLC, AND/OR EXTREME RAMPAGE (COLLECTIVELY KNOWN AS “THE JOHNSON PARTIES”) BY AND THROUGH ASSIGNEE CASEY ARNOLD, APPELLANTS v. CAPITOL SPECIALTY INSURANCE CORPORATION, APPELLEE;CASEY ARNOLD, INDIVIDUALLY AND AS ADMINISTRATRIX OF THE ESTATE OF CHAD ARNOLD, AND AS NEXT FRIEND AND GUARDIAN/ CONSERVATOR FOR MILES ARNOLD, AND AS ASSIGNEE FOR ALL CLAIMS HELD BY “THE JOHNSON PARTIES”, APPELLANTS v. CAPITOL SPECIALTY INSURANCE CORPORATION, APPELLEE

Notice: THIS OPINION IS DESIGNATED “NOT TO BE PUBLISHED.” PURSUANT TO THE RULES OF CIVIL PROCEDURE PROMULGATED BY THE SUPREME COURT, CR 76.28(4)(C), THIS OPINION IS NOT TO BE PUBLISHED AND SHALL NOT BE CITED OR USED AS BINDING PRECEDENT IN ANY OTHER CASE IN ANY COURT OF THIS STATE; HOWEVER, UNPUBLISHED KENTUCKY APPELLATE DECISIONS, RENDERED AFTER JANUARY 1, 2003, MAY BE CITED FOR CONSIDERATION BY THE COURT IF THERE IS NO PUBLISHED OPINION THAT WOULD ADEQUATELY ADDRESS THE ISSUE BEFORE THE COURT. OPINIONS CITED FOR CONSIDERATION BY THE COURT SHALL BE SET OUT AS AN UNPUBLISHED DECISION IN THE FILED DOCUMENT AND A COPY OF THE ENTIRE DECISION SHALL BE TENDERED ALONG WITH THE DOCUMENT TO THE COURT AND ALL PARTIES TO THE ACTION.

Prior History:  [*1] APPEAL FROM FAYETTE CIRCUIT COURT. HONORABLE KIMBERLY N. BUNNELL, JUDGE. ACTION NOS. 14-CI-00948 & 15-CI-00777. APPEAL FROM FAYETTE CIRCUIT COURT. HONORABLE KIMBERLY N. BUNNELL, JUDGE. ACTION NOS. 14-CI-00948 & 15-CI-00777.

Counsel: BRIEFS FOR APPELLANTS, CHRIS JOHNSON D/B/A EXTREME RAMPAGE, AND CHRIS JOHNSON, AND CHRISTOPHER JOHNSON, RAMPAGE LLC, CHRISTOPHER JOHNSON D/B/A RAMPAGE, LLC, AND/OR EXTREME RAMPAGE: Don A. Pisacano, Lexington, Kentucky.

BRIEFS FOR APPELLANTS, CASEY ARNOLD, INDIVIDUALLY AND AS ADMINISTRATRIX OF THE ESTATE OF CHAD ARNOLD, AND AS NEXT FRIEND AND GUARDIAN/ CONSERVATOR FOR MILES ARNOLD, AND AS ASSIGNEE FOR ALL CLAIMS HELD BY “THE JOHNSON PARTIES”: A. Neal Herrington, Christopher H. Morris, Louisville, Kentucky.

BRIEFS FOR APPELLEE, CAPITOL SPECIALTY INSURANCE CORPORATION: Richard J. Rinear, Zachary D. Bahorik, Cincinnati, Ohio.

Judges: BEFORE: CLAYTON, CHIEF JUDGE; MAZE AND THOMPSON, JUDGES. MAZE, JUDGE, CONCURS. THOMPSON, JUDGE, CONCURS IN RESULT ONLY.

Opinion by: CLAYTON

Opinion

AFFIRMING

CLAYTON, CHIEF JUDGE: These consolidated appeals1 are taken from a Fayette Circuit Court order entering declaratory summary judgment in favor of Capitol Specialty Insurance Corporation. The primary issue is whether a [*2]  general commercial liability insurance policy issued by Capitol covers potential damages stemming from the death of a participant in an obstacle race, or whether exclusions in the policy bar recovery.

The obstacle race, known as “Extreme Rampage,” was organized and presented by Chris Johnson, the owner of Rampage, LLC. The 5K race, which included a climbing wall and mud pits, was held at the Kentucky Horse Park on March 2, 2013. Under the terms of his contract with the Horse Park, Johnson was required to “provide public liability insurance issued by a reputable company, which shall cover both participants and spectators with policy coverage of one million dollars ($1,000,000.00) minimum for each bodily injury[.]”

Johnson purchased the policy from Stephen Delre, an insurance agent employed at the Tim Hamilton Insurance Agency (“THIA”). Delre filled out an application for insurance on Johnson’s behalf and submitted it to Insurance Intermediaries, Inc. (“III”). III submitted the application to Capitol. Capitol prepared a proposal for coverage which III gave to THIA. Johnson accepted the proposal and III produced the policy based upon the terms offered by Capitol.

The policy contained two [*3]  provisions excluding bodily injury to the event participants from its coverage. For purposes of this opinion, the exclusions will be referred to as the “sponsor” exclusion and the “arising out of” exclusion.

The sponsor exclusion provided as follows:

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY

EXCLUSION — ATHLETIC OR SPORTS PARTICIPANTS

This endorsement modifies insurance provided under the following:

COMMERCIAL GENERAL LIABILITY COVERAGE PART.

SCHEDULE

Description of Operations:

Special event — 5K run with obstacles.

. . .

With respect to any operations shown in the Schedule, this insurance does not apply to “bodily injury” to any person while practicing for or participating in any sports or athletic contest or exhibition that you sponsor.

The participant exclusion provided as follows:

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY EXCLUSION — PARTICIPANTS

(SPECIFIED ACTIVITIES/OPERATIONS)

SCHEDULE

Descriptions of Activity/Operations

Mud Runs and Tough Guy Races

This insurance does not apply to “bodily injury,” “property damage,” “personal or advertising injury” or medical expense arising out of any preparation for or participation in any of the activities or operations [*4]  shown in the schedule above.

During the course of the Extreme Rampage race, one of the participants, Chad Arnold, collapsed and died. His wife, Casey Arnold, acting individually, as the administratrix of his estate and as guardian/conservator for their minor son Miles (“Arnold”), filed a wrongful death suit naming numerous defendants, including Johnson. Johnson sought defense and indemnity under the Capitol policy. Capitol denied coverage and filed a declaratory judgment complaint in Fayette Circuit Court on March 17, 2014, asserting it had no duty to defend or indemnify Johnson because the policy expressly excluded coverage for event participants.

Johnson and Arnold subsequently filed a complaint in a different division of Fayette Circuit Court against Capitol, THIA, Delre, and III, asserting claims of negligence; violation of the Kentucky Consumer Protection Act and the Unfair Claims Settlement Practices Act; fraud; and breach of contract. On April 15, 2015, the two actions were consolidated by court order. Johnson and Arnold filed a motion for summary judgment; Capitol filed a motion for summary declaratory judgment. The trial court held extensive hearings on the motions and thereafter [*5]  entered an order granting Capitol’s motion and dismissing with prejudice all claims asserted against Capitol by Johnson and Arnold. Additional facts will be set forth as necessary later in this opinion.

In granting summary declaratory judgment to Capitol, the trial court held that that the policy issued by Capitol to Johnson excluded coverage to the Johnson defendants for the underlying claims of the Arnold defendants because the sponsor exclusion was clear and unambiguous and the Johnson defendants are a “sponsor” within the plain meaning of the word as used in the exclusion. The trial court further held that, as a matter of law, neither the concurrent proximate cause doctrine nor the efficient proximate cause doctrine applies to afford coverage under the policy to the Johnson defendants for the claims of the Arnold defendants; that neither Delre nor THIA is an agent of any kind of Capitol; and finally, that no other oral or written contract modified and/or superseded the policy to afford coverage by Capitol.

These appeals by Johnson and Arnold followed.

In reviewing a grant of summary judgment, our inquiry focuses on “whether the trial court correctly found that there were no genuine [*6]  issues as to any material fact and that the moving party was entitled to judgment as a matter of law.” Scifres v. Kraft, 916 S.W.2d 779, 781, 43 1 Ky. L. Summary 17 (Ky. App. 1996) (citing Kentucky Rules of Civil Procedure (CR) 56.03). Summary judgment may be granted when “as a matter of law, it appears that it would be impossible for the respondent to produce evidence at the trial warranting a judgment in his favor and against the movant.” Steelvest, Inc. v. Scansteel Serv. Ctr., Inc., 807 S.W.2d 476, 483 (Ky. 1991) (internal quotation marks and citation omitted). “The record must be viewed in a light most favorable to the party opposing the motion for summary judgment and all doubts are to be resolved in his favor.” Id. at 480. On the other hand, “a party opposing a properly supported summary judgment motion cannot defeat it without presenting at least some affirmative evidence showing that there is a genuine issue of material fact for trial.” Id. at 482. “An appellate court need not defer to the trial court’s decision on summary judgment and will review the issue de novo because only legal questions and no factual findings are involved.” Hallahan v. The Courier-Journal, 138 S.W.3d 699, 705 (Ky. App. 2004).

We have grouped the Appellants’ arguments into the following six categories: first, that the terms of the policy do not reflect what Johnson requested from Delre; second, that Delre and THIA were actual or apparent agents of Capitol whose alleged misrepresentations [*7]  or omissions to Johnson about the policy bound their principal; third, that neither the “sponsor” exclusion nor the “arising out of” exclusion in the policy was applicable; fourth, that the exclusions create an ambiguity in the policy when read with the coverage endorsements; fifth, that the concurrent proximate cause doctrine provides coverage under the policy; and sixth, that the trial court erred in dismissing all claims against Capitol.

1. The purchase of the policy

Johnson denies that the insurance policy attached to Capitol’s declaratory judgment complaint is a true and accurate copy of the policy he purchased and admits only that the document attached to the complaint is the document he received in the mail after he had paid for the policy.

According to deposition testimony, Johnson first spoke with Delre about obtaining insurance coverage for the Extreme Rampage event in a telephone conversation in December 2012. Johnson had purchased an insurance policy for a similar race event from Delre approximately six months earlier. Delre questioned Johnson about the type of coverage he was seeking. Johnson was unaware that Delre was simultaneously filling out a “special event” insurance [*8]  application. According to Johnson, he told Delre he needed participant coverage and Delre specifically asked him how many participants would be involved in the event. Delre nonetheless left blank on the “special event” application form whether athletic participant coverage was requested. Delre signed Johnson’s name to the application for insurance without Johnson reviewing the document. After the insurance application was submitted, Delre sent a proposal to Johnson which he claims he never received.

On February 8, 2013, Johnson visited Delre and THIA’s office to pay for the policy in the amount of $477. He signed a “subjectivities page” which stated that the policy quote was subject to verification of the following:

No events involving the following: abortion rights, pro choice or right-to-life rallies/parades or gatherings, air shows or ballooning events, auto racing regardless of vehicle size (including go-karts, motorcycles and snowmobiles), cattle drives, events involving inherently dangerous or stunting activities, events with water rides/slides etc., political demonstrations or protest rallies by groups with a history of violent incidents, [n]o events with fireworks displays. AND [*9]  — Spectators must be a safe distance (100 feet minimum) from the obstacle course.

Johnson was not shown the actual policy, nor was he informed of the participation exclusions in the insurance proposal.

A copy of the complete policy containing the “sponsor” exclusion and the “arising out of” exclusion was mailed to Johnson on February 27, 2013. Johnson asserts that the policy did not conform to what he agreed to in his conversation with Delre and that he was never informed that participants would be excluded from coverage. He points out that the policy was also later unilaterally modified by Delre after the Horse Park requested a certificate of insurance indicating that it was an “additional insured” on the policy.

Johnson cannot avoid the terms of the insurance contract by pleading ignorance of its contents. It is axiomatic that “insured persons are charged with knowledge of their policy’s contents[.]” Bidwell v. Shelter Mut. Ins. Co., 367 S.W.3d 585, 592 (Ky. 2012) (citing National Life & Accident Ins. Co. v. Ransdell, 259 Ky. 559, 82 S.W.2d 820, 823 (1935)). “In Midwest Mutual Insurance Company v. Wireman, 54 S.W.3d 177 (Ky. App. 2001), the Court of Appeals held an insured can waive UM coverage by signing the application for liability coverage, even if the insured alleges the agent never explained the meaning of UM coverage to him.” Moore v. Globe Am. Cas. Co., 208 S.W.3d 868, 870 (Ky. 2006). “All persons are presumed to know the law and the mere lack of knowledge [*10]  of the contents of a written contract for insurance cannot serve as a legal basis for avoiding its provisions.” Id. (internal quotation and citation omitted).

Although Johnson claims, based on his interaction with Delre, that the terms of the policy were not what he had anticipated, no genuine issue of material fact exists that Johnson signed the policy and, as a matter of law, was presumed to know its contents. The trial court did not err in ruling that there was no genuine issue of material fact concerning the policy and that no other oral or written contract modified or superseded the policy to afford coverage to Johnson for Arnold’s claims.

2. Were Delre and THIA agents of Capitol

Arnold seeks to hold Capitol liable for any omissions or misrepresentations of Delre and THIA by arguing that they were Capitol’s actual or apparent agents. “Under common law principles of agency, a principal is vicariously liable for damages caused by torts of commission or omission of an agent or subagent, . . . acting on behalf of and pursuant to the authority of the principal.” Williams v. Kentucky Dep’t of Educ., 113 S.W.3d 145, 151 (Ky. 2003), as modified (Sept. 23, 2003) (internal citations omitted).

“Actual authority arises from a direct, intentional granting of [*11]  specific authority from a principal to an agent.” Kindred Healthcare, Inc. v. Henson, 481 S.W.3d 825, 830 (Ky. App. 2014). The Restatement (Third) of Agency § 2.02(1) (2006) provides that “[a]n agent has actual authority to take action designated or implied in the principal’s manifestations to the agent and acts necessary or incidental to achieving the principal’s objectives, as the agent reasonably understands the principal’s manifestations and objectives when the agent determines how to act.” Kentucky’s Insurance Code provides that “[a]ny insurer shall be liable for the acts of its agents when the agents are acting in their capacity as representatives of the insurer and are acting within the scope of their authority.” Kentucky Revised Statutes (KRS) 304.9-035.

There is no evidence in the record that Capitol made a direct, intentional grant of authority to THIA and Delre to act as its agents or representatives; nor is there evidence that Capitol made any manifestations of its objectives to THIA or Delre with the expectation that they would act to achieve those objectives. Furthermore, as elicited in the hearing before the trial court, Capitol does not have a written agreement with THIA or Delre establishing them as its agents nor is there a registration or filing with the Kentucky Department of Insurance designating them as licensed [*12]  agents of Capitol. By contrast, Delre and THIA are registered, authorized agents of Nationwide Insurance in Kentucky and Johnson actually believed he would be purchasing a Nationwide policy from Delre.

As evidence of an actual agency relationship, Arnold points to the fact that THIA and Capitol both have contracts with III, the intermediary brokerage company which sent Johnson’s application for insurance to Capitol, seeking a policy proposal. The existence of contracts with the same third party was not sufficient in itself to create an actual agency relationship between THIA and Delre and Capitol. Capitol prepared the insurance proposal in reliance on the information contained in the application submitted by III; Capitol had no contact with or control over Delre or THIA. Consequently, Capitol could not be bound by what Johnson believed Delre had promised.

Similarly, there is no evidence that THIA and Delre were apparent agents of Capitol. “Apparent authority . . . is not actual authority but is the authority the agent is held out by the principal as possessing. It is a matter of appearances on which third parties come to rely.” Mark D. Dean, P.S.C. v. Commonwealth Bank & Tr. Co., 434 S.W.3d 489, 499 (Ky. 2014) (quoting Mill St. Church of Christ v. Hogan, 785 S.W.2d 263, 267 (Ky. App. 1990)). “One who represents that another is his servant [*13]  or other agent and thereby causes a third person justifiably to rely upon the care or skill of such apparent agent is subject to liability to the third person for harm caused by the lack of care or skill of the one appearing to be a servant or other agent as if he were such.” Paintsville Hosp. Co. v. Rose, 683 S.W.2d 255, 257 (Ky. 1985) (quoting Restatement (Second) of Agency § 267 (1958)).

The only representations made to Johnson by Capitol were in the form of the proposal and written policy he signed. Capitol never held out Delre and THIA as its agents. Johnson admitted he had no contact with Capitol whatsoever and did not even know the policy he purchased was provided by Capitol until after the Extreme Rampage event.

The trial court did not err in holding that no agency relationship, actual or apparent, existed between Capitol and Delre and THIA.

3. Applicability of the policy exclusions

The trial court ruled that the “sponsor” exclusion was clear and unambiguous and the Johnson defendants were a “sponsor” within the plain meaning of the word as it was used in the exclusion. The Appellants disagree, arguing that the multiple definitions of the term “sponsor,” which is not defined in the policy, render it ambiguous.

“Interpretation and construction of an insurance contract is a matter [*14]  of law for the court.” Kemper Nat’l Ins. Companies v. Heaven Hill Distilleries, Inc., 82 S.W.3d 869, 871 (Ky. 2002). Exclusions in insurance contracts

are to be narrowly interpreted and all questions resolved in favor of the insured. Exceptions and exclusions are to be strictly construed so as to render the insurance effective. Any doubt as to the coverage or terms of a policy should be resolved in favor of the insured. And since the policy is drafted in all details by the insurance company, it must be held strictly accountable for the language used.

Eyler v. Nationwide Mut. Fire Ins. Co., 824 S.W.2d 855, 859-60 (Ky. 1992) (internal citations omitted).

On the other hand,

[t]he rule of strict construction against an insurance company certainly does not mean that every doubt must be resolved against it and does not interfere with the rule that the policy must receive a reasonable interpretation consistent with the parties’ object and intent or narrowly expressed in the plain meaning and/or language of the contract. Neither should a nonexistent ambiguity be utilized to resolve a policy against the company. We consider that courts should not rewrite an insurance contract to enlarge the risk to the insurer.

St. Paul Fire & Marine Ins. Co. v. Powell-Walton-Milward, Inc., 870 S.W.2d 223, 226-27 (Ky. 1994).

The Appellants rely on an opinion of the federal district court for the Eastern District of Pennsylvania, Sciolla v. West Bend Mut. Ins. Co., 987 F. Supp. 2d 594 (E.D. Pa. 2013) which held an identical insurance exclusion [*15]  to be inapplicable after concluding the term “sponsor” is ambiguous due to the lack of a universally accepted definition of the term by dictionaries and the courts. Sciolla, 987 F. Supp. 2d at 603. The Sciolla court assembled the following dictionary definitions of “sponsor:”

The full definition given by Merriam-Webster is: “a person or an organization that pays for or plans and carries out a project or activity; especially: one that pays the cost of a radio or television program usually in return for advertising time during its course.” Merriam-Webster’s Collegiate Dictionary, 1140 (9th ed. 1983). . . .

. . . [T]he American Heritage Dictionary defines sponsor, in relevant part, as “[o]ne that finances a project or an event carried out by another person or group, especially a business enterprise that pays for radio or television programming in return for advertising time.” American Heritage Dictionary of the English Language, 1679, (4th ed., 2009). Other dictionaries defines sponsor as “[o]ne that finances a project or an event carried out by another,” The American Heritage College Dictionary, 1315 (3d ed. 1993), or, as a verb, “to pay or contribute towards the expenses of a radio or television program, a performance, [*16]  or other event or work in return for advertising space or rights.” Oxford English Dictionary, 306 (2d ed. 1989).

Id. at 602.

The Sciolla court grouped the definitions into two categories: “The first concept is that of a person or an organization that pays for a project or activity. . . . The second concept is of a person or an organization that plans and carries out a project or activity.” Id. (italics in original).

As recognized by the Sciolla court, in order to be found ambiguous, a term with multiple definitions must be subject to more than one interpretation when applied to the facts of the case before it. Id. at 603. “Because a word has more than one meaning does not mean it is ambiguous. The sense of a word depends on how it is being used; only if more than one meaning applies within that context does ambiguity arise.” Board of Regents of Univ. of Minnesota v. Royal Ins. Co. of Am., 517 N.W.2d 888, 892 (Minn. 1994). As the United States Supreme Court has observed in the context of statutory interpretation, “[a]mbiguity is a creature not of definitional possibilities but of statutory context[.]” Brown v. Gardner, 513 U.S. 115, 118, 115 S. Ct. 552, 555, 130 L. Ed. 2d 462 (1994).

It is the Appellants’ position that Johnson did not “sponsor” the Extreme Rampage but actually organized, promoted, and ran the event. In his deposition, Johnson stated that he was not a “sponsor” of the [*17]  Extreme Rampage event but that he “owned” the event, and that he actually discovered Delre and THIA while seeking sponsorships for Rampage events. Delre in his deposition confirmed that Johnson asked him to be a sponsor. When he was asked how he got started funding Rampage, LLC, Johnson replied “Sponsorships and my own pocket.” Thus, the evidence indicates that Johnson helped to fund Extreme Rampage and also planned and carried it out. There is no evidence that he financed a project carried out by another or that he paid for the project in exchange for advertising space.

The fact that Johnson’s actions do not meet each and every one of the multiple definitions of “sponsor” does not render the term ambiguous, however, when the term is viewed in the context of the language of the exclusion, which applies to “bodily injury to any person while practicing for or participating in any sports or athletic contest or exhibition that you sponsor.” (Emphasis added.)

The policy provides the following definition of “you”: “Throughout this policy the words ‘you’ and ‘your’ refer to the Named Insured shown in the declarations, and any other person or organization qualifying as a Named Insured under [*18]  this policy. The words ‘we’, ‘us’ and ‘our’ refer to the company providing this insurance.” Thus, Johnson, the Named Insured, is “you.” When the term “sponsor” is viewed within the context of an insurance policy covering one discrete event sponsored by the Named Insured, Johnson, it was plainly intended to refer to Johnson and to the specific Extreme Rampage event he was sponsoring.

The Appellants argue that the trial court did not have the right to choose which of the multiple competing definitions of sponsor applied. When viewed in the context of the exclusion, however, the definition is plainly limited to the sponsorship activities of the Name Insured, Johnson.

Because the trial court did not err in holding that the “sponsor” exclusion is applicable, we need not address the validity of the “arising out of” exclusion.

4. The applicability of the concurrent proximate cause doctrine

Johnson argues that even if the policy exclusions apply, the concurrent proximate cause doctrine provides coverage under the policy. Johnson contends that the doctrine was adopted by the Kentucky Supreme Court in Reynolds v. Travelers Indem. Co. of Am., 233 S.W.3d 197, 203 (Ky. App. 2007). Reynolds is an opinion of the Court of Appeals, and it did not officially adopt the doctrine; [*19]  it approved of the reasoning in a case from our sister state in Bowers v. Farmers Insurance Exchange, 99 Wash. App. 41, 991 P.2d 734 (2000), which applied the “efficient proximate cause doctrine.” Reynolds, 233 S.W.3d at 203.

The doctrine holds that

Where the loss is essentially caused by an insured peril with the contribution of an excluded peril merely as part of the chain of events leading to the loss, there is coverage under the policy. Stated alternately, coverage will exist where a covered and noncovered peril join to cause the loss provided that the covered peril is the efficient and dominant cause.

10A Couch on Insurance 3d § 148:61 (2005).

Applying the doctrine, Johnson argues that even if Chad Arnold’s participation in the race was an excluded peril, the loss was essentially caused by a peril that was insured. He contends that the allegations of Arnold’s complaint, such as failure to provide reasonable medical treatment; failure to plan and have proper policies and procedures; and failure to train, instruct, and supervise are not predicated upon a cause of action or risk that is excluded under the policy. He points to the affidavit of a doctor who reviewed Chad Arnold’s medical records and post-mortem examination and concluded that he died of a pre-existing heart condition unconnected [*20]  with his participation in the race.

This argument ignores the fact that the “sponsor” exclusion does not reference causation or a specific “peril”; it merely excludes participants in the covered event from recovery for bodily injury, whatever the cause. It does not require a finding that the bodily injury was caused by participation in the event.

We agree with the reasoning of the federal district court for the Western District of Kentucky, which addressed a factually-similar situation involving a student who collapsed and died while practicing for his college lacrosse team. Underwriters Safety & Claims, Inc. v. Travelers Prop. Cas. Co. of Am., 152 F. Supp. 3d 933 (W.D. Ky. 2016), aff’d on other grounds, 661 F. App’x 325 (6th Cir. 2016). The college’s insurance policy contained an exclusion for athletic participants. The plaintiffs argued that the allegations of their complaint were focused on the college’s failure to provide pre-participation medical forms to physicians who examined the student and on the college’s failure to render proper medical treatment. The district court described these arguments as “red herrings” that attempted “to re-contextualize the fatal injury as a result of medical malpractice or concurrently caused by medical malpractice and engagement in athletic activity.” Underwriters, 152 F. Supp. 3d at 937. The complaint filed by the [*21]  student’s estate “did not seek redress for a bodily injury that occurred during pre-participation athletic medical screenings. The policy specifically excludes bodily injury while engaged in athletic or sports activities. Passfield [the student] was engaged in such an activity at the time of the injury. While the Court liberally construes insurance policies in favor of the insured, the Court also strictly construes exclusions. This is an instance of the latter.” Id. Similarly, in the case before us, the exclusion applies specifically to bodily injury while participating in the Extreme Rampage. The exclusion does not require a causal link between the participation and the injury to apply. There is no genuine issue of fact that Chad Arnold was a participant in the race and that, as the complaint alleges, “during the course of the event, the decedent collapsed, consciously suffered for an undetermined amount of time, and died.”

5. Do the two exclusions create an ambiguity in the policy

Johnson further argues that the two exclusions create an ambiguity in the policy when read in conjunction with two coverage endorsements. Johnson claims that the “Combination Endorsement-Special Events” and [*22]  the “Limitation-Classification Endorsement” provide unfettered coverage while the two exclusions limit coverage, thus creating an ambiguity. Johnson’s brief gives no reference to the record to show where the endorsements are found, nor does it indicate when or how the trial court addressed this issue. CR 76.12(4)(c)(v) requires an appellate brief to contain “ample supportive references to the record and . . . a statement with reference to the record showing whether the issue was properly preserved for review and, if so, in what manner.” The purpose of this requirement “is so that we, the reviewing Court, can be confident the issue was properly presented to the trial court and therefore, is appropriate for our consideration.” Oakley v. Oakley, 391 S.W.3d 377, 380 (Ky. App. 2012). “[E]rrors to be considered for appellate review must be precisely preserved and identified in the lower court.” Skaggs v. Assad, 712 S.W.2d 947, 950 (Ky. 1986). We are simply “without authority to review issues not raised in or decided by the trial court.” Regional Jail Authority v. Tackett, 770 S.W.2d 225, 228 (Ky. 1989). Nor is it the task of the appellate court to search the record for pertinent evidence “not pointed out by the parties in their briefs.” Baker v. Weinberg, 266 S.W.3d 827, 834 (Ky. App. 2008).

We recognize that the hearing on August 25, 2016, at which this issue may have been argued before the trial court, was not recorded. [*23]  Nonetheless, “when the complete record is not before the appellate court, that court must assume that the omitted record supports the decision of the trial court.” Commonwealth v. Thompson, 697 S.W.2d 143, 145 (Ky. 1985).

6. Dismissal of all claims against Capitol.

Finally, Arnold argues that the trial court erred in dismissing all causes of action against Capitol. Arnold contends that the arguments before the trial court only concerned the applicability of the insurance policy, but never addressed the additional allegations in the complaint of negligence, consumer protection, unfair claims settlement practices, and fraud. Arnold does not explain what the grounds for Capitol’s liability on these claims would be if, as the trial court ruled, the “sponsor” exclusion is valid and Delre and THIA were not acting as Capitol’s agents. Under these circumstances, the trial court did not err in dismissing all claims against Capitol.

For the foregoing reasons, the order of the Fayette Circuit Court granting summary declaratory judgment to Capitol is affirmed.

MAZE, JUDGE, CONCURS.

THOMPSON, JUDGE, CONCURS IN RESULT ONLY.

Bibliography

CHRIS JOHNSON D/B/A EXTREME RAMPAGE, AND CHRIS JOHNSON, AND CHRISTOPHER JOHNSON, RAMPAGE LLC, CHRISTOPHER JOHNSON D/B/A RAMPAGE, LLC, AND/OR EXTREME RAMPAGE (COLLECTIVELY KNOWN AS “THE JOHNSON PARTIES”) BY AND THROUGH ASSIGNEE CASEY ARNOLD, APPELLANTS v. CAPITOL SPECIALTY INSURANCE CORPORATION, APPELLEE;CASEY ARNOLD, INDIVIDUALLY AND AS ADMINISTRATRIX OF THE ESTATE OF CHAD ARNOLD, AND AS NEXT FRIEND AND GUARDIAN/ CONSERVATOR FOR MILES ARNOLD, AND AS ASSIGNEE FOR ALL CLAIMS HELD BY “THE JOHNSON PARTIES”, APPELLANTS v. CAPITOL SPECIALTY INSURANCE CORPORATION, APPELLEE, 2018 Ky. App. Unpub. LEXIS 447, 2018 WL 3090503, (Court of Appeals of Kentucky June 22, 2018, Rendered).


Release for a health club which had a foam pit included language specific to the injury the plaintiff suffered, which the court used to deny the plaintiff’s claim.

Argument made that the word inherent limited the risks the release covered and as such did not cover the injury the plaintiff received.

Macias, v. Naperville Gymnastics Club, 2015 IL App (2d) 140402-U; 2015 Ill. App. Unpub. LEXIS 448

State: Illinois, Appellate Court of Illinois, Second District

Plaintiff: Kamil Macias

Defendant: Naperville Gymnastics Club

Plaintiff Claims: negligent in its failure to properly supervise the open gym, train participants, and warn participants of hazards and dangers accompanied with activities and use of equipment in the open gym

Defendant Defenses: Release

Holding: For the Defendant

Year: 2015

Summary

Plaintiff was injured jumping headfirst into a foam pit at the defendant’s gym. The plaintiff had signed a release relieving the defendant of liability, which was upheld by the trial court and the appellate court.

For the first time, the plaintiff argued the release was limited by the language in the release because it used the term inherent in describing the risks. Inherent limits the risks, to those that are part and parcel of the activity and the injury that befell the plaintiff was a freak accident.

Facts

The plaintiff went to the defendant club during open hours when the public could attend with a friend. He paid an admission fee and signed a release. The club had a foam pit. The plaintiff watched other people jump into the pit then tried it himself. He jumped off the springboard and instead of landing feet first he landed head first in the pit.

The plaintiff broke his neck requiring extensive surgery and rehabilitation.

The defendant club filed a motion to dismiss based upon the release signed by the plaintiff. The trial court denied the motion to dismiss because the release was ambiguous.

During discovery, the plaintiff admitted he did not see the rules of the gym but did understand the risks of landing in the pit head first.

Walk around all pits and trampolines,” and he stated that he understood what this meant. The rules also stated: “Do not play on any equipment without proper supervision,” and “Do not do any gymnastics without proper supervision,” and plaintiff stated that he understood what these meant. Plaintiff also stated that he did not see a sign painted on the wall in the gym titled, “Loose foam pit rules.” That sign stated: “Look before you leap,” “No diving or belly flops,” and “Land on feet, bottom or back only.” Plaintiff acknowledged that he understood what these meant

After discovery, the defendant club filed a motion for summary judgment based on the additional information collected during discovery. The trial court granted that motion, and this appeal was dismissed.

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

The appellate court looked at contract law in Illinois.

The primary objective in construing a contract is to give effect to the parties’ intent, and to discover this intent the various contract provisions must be viewed as a whole. Words derive meaning from their context, and contracts must be viewed as a whole by examining each part in light of the other parts. Id. Contract language must not be rejected as meaningless or surplusage; it is presumed that the terms and provisions of a contract are purposely inserted and that the language was not employed idly.

A release is a contract. For the release to be valid and enforceable, it should:

…contain clear, explicit, and unequivocal language referencing the types of activities, circumstances, or situations that it encompasses and for which the plaintiff agrees to relieve the defendant from a duty of care. In this way, the plaintiff will be put on notice of the range of dangers for which he assumes the risk of injury, enabling him to minimize the risks by exercising a greater degree of caution.

The court found the injury suffered by the plaintiff fell within the scope of the possible injuries of the release and contemplated by the plaintiff upon signing the release.

Two clauses in the release stated the plaintiff was in good physical health and had proper physical condition to participate. The plaintiff argued these clauses made the release ambiguous; however, the appellate court did not find that to be true.

Here is the interesting argument in the case.

I have repeatedly stated that releases that limit releases to the inherent risk are limited in their scope. The plaintiff made that argument here.

Plaintiff argues that the use of “inherent risk” language throughout the release creates an ambiguity as to whether the language covers only dangers inherent in gymnastics and not freak accidents. We also reject this argument. As previously stated, the release specifically lists landing on landing surfaces as an inherent risk. Thus, there is no ambiguity as to whether plaintiff’s injury was covered by the release.

The plaintiff also argued his injury was not foreseeable because:

… (1) he lacked specialized knowledge of gymnastics and, in particular, foam pits, to appreciate the danger and foresee the possibility of injury, and (2) his injury was not the type that would ordinarily accompany jumping into a foam pit.

The argument on whether the injury was foreseeable is not whether the plaintiff knew of the risk but:

The relevant inquiry is not whether [the] plaintiff foresaw [the] defendants’ exact act of negligence,” but “whether [the] plaintiff knew or should have known” the accident “was a risk encompassed by his [or her] release.

The court found the injury the plaintiff received was on that was contemplated by the release.

Thus, the issue here is whether plaintiff knew or should have known that the accident was a risk encompassed by the release which he signed. As previously determined, the language of the release in this case was specific enough to put plaintiff on notice. In discussing inherent risks in the sport of gymnastics and use of the accompanying equipment, the release lists injuries resulting from landing on the landing surfaces, which includes injuries to bones, joints, tendons, or death.

The plaintiff also argued the release violated public policy because the release was presented to “opened its gym to the unskilled and inexperienced public” when it opened its gym to the public.

The court struck down this argument because the freedom to contract was greater than the limitation on damages issues.

The appellate court affirmed the trial court’s granting of the summary judgment for the defendant based on the release.

So Now What?

The inherent risk argument here was made but either not effectively argued by the plaintiff or ignored by the court. However, for the first time, the argument that the word inherent is a limiting word, not a word that expands the release was made in an argument.

What do you think? Leave a comment.

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Macias, v. Naperville Gymnastics Club, 2015 IL App (2d) 140402-U; 2015 Ill. App. Unpub. LEXIS 448

Macias, v. Naperville Gymnastics Club, 2015 IL App (2d) 140402-U; 2015 Ill. App. Unpub. LEXIS 448

Kamil Macias, Plaintiff-Appellant, v. Naperville Gymnastics Club, Defendant-Appellee.

No. 2-14-0402

APPELLATE COURT OF ILLINOIS, SECOND DISTRICT

2015 IL App (2d) 140402-U; 2015 Ill. App. Unpub. LEXIS 448

March 10, 2015, Order Filed

NOTICE: THIS ORDER WAS FILED UNDER SUPREME COURT RULE 23 AND MAY NOT BE CITED AS PRECEDENT BY ANY PARTY EXCEPT IN THE LIMITED CIRCUMSTANCES ALLOWED UNDER RULE 23(e)(1).

PRIOR HISTORY: [**1] Appeal from the Circuit Court of Du Page County. No. 11-L-1418. Honorable Judges Hollis L. Webster and John T. Elsner, Judges, Presiding.

DISPOSITION: Affirmed.

CORE TERMS: gym, pit, landing, summary judgment, foam, exculpatory clause, gymnastics, release agreement, surface, inherent risk, jumping, discovery, ambiguity, exculpatory, deposition, injury resulting, public policy, risk of injury, physical condition, releasing, ambiguous, sport, bones, supervision, de novo, springboard, encompassed, notice, undersigned, climbing

JUDGES: JUSTICE BURKE delivered the judgment of the court. Presiding Justice Schostok and Justice Zenoff concurred in the judgment.

OPINION BY: BURKE

OPINION

ORDER


Held: Release agreement for the gym was sufficiently clear, explicit, and unequivocal to show intent to protect facility from liability arising from use of its “foam pit”; it was proper for the gym to raise the issue it had raised in the section 2-619 motion in a summary judgment motion as it alleged new facts which were developed during discovery that affected the validity of the release; affirmed.

[*P2] Plaintiff, Kamil Macias, filed a complaint against defendant, Naperville Gymnastics Club (the Club), for injuries he received after jumping off a springboard and landing head first into a “foam pit.” The trial court denied the Club’s motion to dismiss, pursuant to section 2-619 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619 (West 2010)), but it later granted the Club’s motion for summary judgment based on a liability release agreement signed by plaintiff. Plaintiff raises several issues on appeal concerning the release and the effect of the earlier [**2] section 2-619 motion to dismiss. We affirm.

[*P3] I. BACKGROUND

[*P4] On January 15, 2011, plaintiff came to the Club with his friend. The Club offers “open gym” hours where members of the Club and the general public can attend. Plaintiff, who was not a member of the Club, paid a $10 admission fee and he signed a liability release agreement.

[*P5] A foam pit was located in the gym. After seeing participants jumping into the pit, plaintiff jogged up to a springboard in front of the pit, jumped onto the board and into the pit. While attempting to jump feet first, plaintiff’s body moved in the air, causing him to land head first, striking the bottom of the pit. Plaintiff immediately lost all feeling in his body below the neck. He remained in the pit covered by pieces of foam until he was extracted by the Naperville Fire Department. At the time, plaintiff was 20 years old, about 6 feet tall, and weighed 310 pounds. As a result of the accident, plaintiff suffered a broken neck, requiring extensive surgery and rehabilitation. Plaintiff filed a complaint alleging the Club was negligent in its failure to properly supervise the open gym, train participants, and warn participants of hazards and dangers accompanied with activities [**3] and use of equipment in the open gym.

[*P6] The Club filed a section 2-619(a)(9) motion to dismiss (735 ILCS 5/2-619(a)(9) (West 2010)), alleging that plaintiff signed a two-page liability release agreement that contained an exculpatory clause releasing the Club from liability for any acts of negligence.

[*P7] The trial court found the release ambiguous and denied the section 2-619(a)(9) motion without prejudice. In denying the motion, the judge stated that she felt it was inappropriate to dismiss the suit at that point, that there was case law on both sides of “these exculpatory clauses,” and the judge agreed that it was something that could be developed through discovery. She further stated, “But I think it’s something that is better suited for a summary judgment motion if the facts do bear that out from the defense’s perspective.”

[*P8] During discovery, plaintiff was questioned by defense counsel and testified to the following:

“Q. Okay. That first part of the form it says, ‘To gain admission to the activity areas of [the Club], all parts of this form must be read, understood, and signed.’ Do you see that?

A. Yes.

Q. And did you understand what that means?

A. Yes.

* * *

Q. Did you understand this to be an agreement on January 15th, 2011[,] between you and [the [**4] Club]?

A. Had I read this agreement I would have understood.

* * *

Q. And you understand that [the release] means that when you sign it that you’re agreeing to not bring any lawsuit against [the Club]?

A. Correct.

Q. And if you had read it on January 15th of 2011, that’s what you would have understood it to mean?

A. Correct.

* * *

Q. And you agree that the sport of gymnastics is a risky sport?

A. Correct.

Q: And you would have felt the same on January 15th, 2011[,] before your accident?

A. Yes.”

[*P9] At the entrance to the gym was a closed door with a window pane in it. Plaintiff did not recall seeing a sign on the door entitled, “Rules of the Gym.” Plaintiff reviewed the rules at his deposition and admitted that it said to “Walk around all pits and trampolines,” and he stated that he understood what this meant. The rules also stated: “Do not play on any equipment without proper supervision,” and “Do not do any gymnastics without proper supervision,” and plaintiff stated that he understood what these meant. Plaintiff also stated that he did not see a sign painted on the wall in the gym titled, “Loose foam pit rules.” That sign stated: “Look before you leap,” “No diving or belly flops,” and “Land on [**5] feet, bottom or back only.” Plaintiff acknowledged that he understood what these meant.

[*P10] After discovery, the Club filed a motion for summary judgment, arguing that plaintiff’s claim was barred by the exculpatory clause of the release signed by plaintiff. The motion included the deposition testimony and that (1) plaintiff denied being given any verbal instructions and denied seeing the warning signs or rules posted in the gym before he was injured, and (2) plaintiff admitted that he would have understood the terms of the liability release, had he read it. Following argument, the trial court granted the Club’s motion for summary judgment. This timely appeal follows.

[*P11] II. ANALYSIS

[*P12] A. Standard of Review

[*P13] Summary judgment is appropriate “if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” 735 ILCS 5/2-1005(c) (West 2010). The motion should be denied if there are disputed facts, but also if reasonable people could draw different inferences from the undisputed facts. Wood v. National Liability & Fire Insurance Co., 324 Ill. App. 3d 583, 585, 755 N.E.2d 1044, 258 Ill. Dec. 225 (2001). We review an order granting summary judgment de novo. Pielet v. Pielet, 2012 IL 112064, ¶ 30, 978 N.E.2d 1000, 365 Ill. Dec. 497.

[*P14] We review the parties’ [**6] liability release agreement in accordance with well-established contract principles. Joyce v. Mastri, 371 Ill. App. 3d 64, 74, 861 N.E.2d 1102, 308 Ill. Dec. 537 (2007). The primary objective in construing a contract is to give effect to the parties’ intent, and to discover this intent the various contract provisions must be viewed as a whole. Kerton v. Lutheran Church Extension Fund, 262 Ill. App. 3d 74, 77, 634 N.E.2d 16, 199 Ill. Dec. 416 (1994). Words derive meaning from their context, and contracts must be viewed as a whole by examining each part in light of the other parts. Id. Contract language must not be rejected as meaningless or surplusage; it is presumed that the terms and provisions of a contract are purposely inserted and that the language was not employed idly. Id.

[*P15] In order for an exculpatory clause to be valid and enforceable, it should contain clear, explicit, and unequivocal language referencing the types of activities, circumstances, or situations that it encompasses and for which the plaintiff agrees to relieve the defendant from a duty of care. Calarco v. YMCA, 149 Ill. App. 3d 1037, 1040, 501 N.E.2d 268, 103 Ill. Dec. 247 (1986). In this way, the plaintiff will be put on notice of the range of dangers for which he assumes the risk of injury, enabling him to minimize the risks by exercising a greater degree of caution. Neumann v. Gloria Marshall Figure Salon, 149 Ill. App. 3d 824, 827, 500 N.E.2d 1011, 102 Ill. Dec. 910 (1986). The precise occurrence which results in injury need not have been contemplated by the parties at the time the contract [**7] was entered into. Schlessman v. Henson, 83 Ill. 2d 82, 86, 413 N.E.2d 1252, 46 Ill. Dec. 139 (1980). It should only appear that the injury falls within the scope of possible dangers ordinarily accompanying the activity and, thus, reasonably contemplated by the plaintiff. Garrison v. Combined Fitness Centre, Ltd., 201 Ill. App. 3d 581, 585, 559 N.E.2d 187, 147 Ill. Dec. 187 (1990). Further, when interpreting a contract containing an exculpatory clause, the court must interpret the scope of the exculpatory provision in the “context of the entire agreement.” Shorr Paper Products, Inc. v. Aurora Elevator, Inc., 198 Ill. App. 3d 9, 13, 555 N.E.2d 735, 144 Ill. Dec. 376 (1990). We review the interpretation of an exculpatory agreement or release of liability authorization de novo. Stratman v. Brent, 291 Ill. App. 3d 123, 137, 683 N.E.2d 951, 225 Ill. Dec. 448 (1997).

[*P16] In Garrison, a member of a health club who was injured when lifting weights on a bench press brought suit against the club and the manufacturer of the press. The trial court entered summary judgment in favor of the club, and the plaintiff appealed. The First District Appellate Court held that the exculpatory clause could not have been more clear or explicit, as it stated that each member bore the “sole risk” of injury that might result from the use of weights, equipment, or other apparatus provided and that the selection of the type of equipment to be used would be the “entire responsibility” of the member. The court found that the injury the plaintiff sustained clearly fell within the scope of possible dangers [**8] ordinarily accompanying the activity of weightlifting. Id. at 585. The court observed that the injury was of a type that would normally be contemplated by the parties at the time the contract was made and, therefore, the court held that it clearly fell within the parameters of the exculpatory clause. Id. See also Hussein v. L.A. Fitness International, LLC, 2013 IL App (1st) 121426, 987 N.E.2d 460, 369 Ill. Dec. 833; Neumann v. Gloria Marshall Figure Salon, 149 Ill. App. 3d 824, 500 N.E.2d 1011, 102 Ill. Dec. 910 (1986).

[*P17] Similar to Garrison and the cases cited above, the release agreement in the present case is clear and specific regarding the risks it covers and the release of the Club’s negligence. It specifically references the inherent risk of injury resulting from landing on landing surfaces, and plaintiff acknowledged in his deposition that this phrase includes the foam pit in which he was injured. The agreement also releases the Club from any and all claims, including those caused by its negligence. Furthermore, plaintiff’s signature certified that he recognized the dangers inherent with climbing and jumping activities and that he voluntarily assumed the risks.

[*P18] Nevertheless, plaintiff raises several arguments regarding the validity of the release and the effect of the earlier section 2-619 motion.

[*P19] B. Ambiguity of the Release

[*P20] 1. First Clause

[*P21] The first clause of the release, which is typed in capital letters, states: [**9]

“BY SIGNING THIS DOCUMENT YOU ACKNOWLEDGE THAT UNSUPERVISED USE OF ANY AREA OF FACILITY IS STRICTLY PROHIBITED AND COMPLETELY AT THE RISK OF THE PARTICIPANT AND THAT THE RULES [OF] EACH AREA BEING UTILIZED ARE UNDERSTOOD PRIOR TO PARTICIPATION!”

Plaintiff asserts that this clause is ambiguous as to whether supervision and a full understanding of the rules of the Club is a condition precedent to releasing defendant from liability. We agree that the first clause, standing alone, might be construed as stating that supervision and a full understanding of the rules of the Club is a condition preceding releasing the Club from liability. However, case law teaches that we must review the language of the release in its entirety in order to interpret the parties’ intent.

[*P22] The release contains a “Covenant Not to Sue for Injury or Damages,” which provides, in relevant part:

“Notice: This is a legally binding agreement. By signing this agreement, you waive your right to bring a court action to recover compensation or to obtain any other remedy for any injury to yourself *** however caused arising out of use of the facilities of [the Club].

I hereby acknowledge and agree that the sport of gymnastics [**10] and the use of the accompanying equipment has INHERENT RISKS. I have full knowledge of the nature and extent of all of the risks inherent in gymnastics and the use of the facilities of the gym, including but not limited to:

***

5. Injuries resulting from landing on the landing surfaces; and

6. Injuries to bones, joints, tendons, or death.

[*P23] The section of the release agreement entitled “Release Indemnification Liquidation Damages and Agreement to Arbitrate” states, in relevant part:

“In consideration of my use of the GYM, I the undersigned user, agree to release on behalf of myself *** [the Club] *** including but not limited to a claim of NEGLIGENCE.”

[*P24] The clause of the release immediately preceding plaintiff’s signature provides that “the undersigned recognize[s] the dangers inherent with climbing and jumping activities,” and the undersigned is “assuming the hazard of this risk upon myself because I wish to participate. I realize that I am subject to injury from this activity and that no form of pre-planning can remove all of the danger to which I am exposing myself.”

[*P25] In reading the release in its entirety, it is clear that the first clause of the release cannot be construed as plaintiff argues. The [**11] release contains no such limitations as it covers a number of activities, including “[i]njuries resulting from landing on the landing surfaces” (i.e. the “foam pit”), releasing the Club from negligence, and “the dangers inherent with climbing and jumping activities.”

[*P26] 2. Physical Condition Clause

[*P27] Two clauses of the release request the participant to agree that he or she is in good physical health and proper physical condition to participate. Plaintiff cites Calarco v. YMCA of Greater Metropolitan Chicago, 149 Ill. App. 3d 1037, 501 N.E.2d 268, 103 Ill. Dec. 247 (1986), and Macek v. Schooner’s Inc., 224 Ill. App. 3d 103, 586 N.E.2d 442, 166 Ill. Dec. 484 (1991), for the proposition that these types of clauses render the release ambiguous, as it is unclear whether the release only applies to injuries resulting from a participant’s physical ailments. In other words, the release does not apply to participants without physical ailments.

[*P28] We fail to follow the logic of plaintiff’s argument. However, the cases relied on by plaintiff are readily distinguishable. In Calarco, the plaintiff had been injured when metal weights from an exercise machine fell on her hand, breaking her bones. The plaintiff had agreed “to hold free from any and all liability the [defendant] *** for damages which [the plaintiff] may have or which may hereafter accrue to [the plaintiff] arising out of or connected with [the plaintiff’s] participation [**12] in any of the activities of the [defendant].” We held that the exculpatory clause in the membership application for the defendant’s facility was insufficient to protect the defendant from liability as a matter of law because the clause did not adequately describe the covered activities to clearly indicate that defendant’s negligence would be covered by the release. Calarco, 149 Ill. App. 3d at 1043-44. We further noted that the statement immediately following the alleged exculpatory language contained a declaration of physical health by the signer, and that the combination of the two provisions further complicated the interpretation of the release. Id.

[*P29] In Macek, the plaintiff participated in an arm wrestling contest with a machine that broke his arm. The court held that summary judgment was inappropriate because the release did not specify the covered activities but rather merely indicated that damages for “all injuries suffered” are waived. The court found further that the line immediately following the exculpatory language regarding the signer’s physical condition provided additional ambiguity. Id. at 106.

[*P30] In both Calarco and Marek, the releases did not specify the covered activities and did not specifically cover the defendants’ [**13] negligence. Both courts held that the physical condition clause simply added to the ambiguity of the release. However, contrary to Calarco and Marek, the release in this case clearly covers the activities in question and specifically releases defendant from liability for its negligence.

[*P31] 3. Inherent Risk Language

[*P32] Plaintiff argues that the use of “inherent risk” language throughout the release creates an ambiguity as to whether the language covers only dangers inherent in gymnastics and not freak accidents. We also reject this argument. As previously stated, the release specifically lists landing on landing surfaces as an inherent risk. Thus, there is no ambiguity as to whether plaintiff’s injury was covered by the release.

[*P33] C. Forseeability

[*P34] Plaintiff argues that his injury was not foreseeable because (1) he lacked specialized knowledge of gymnastics and, in particular, foam pits, to appreciate the danger and foresee the possibility of injury, and (2) his injury was not the type that would ordinarily accompany jumping into a foam pit.

[*P35] A plaintiff who expressly consents to relieve a defendant of an obligation of conduct toward the plaintiff assumes the risk of injury as a result of the [**14] defendant’s failure to adhere to the obligation. Larsen v. Vic Tanny International, 130 Ill. App. 3d 574, 576, 474 N.E.2d 729, 85 Ill. Dec. 769 (1984). The doctrine of assumption of risk presupposes, however, that the danger which causes the injury is such that it ordinarily accompanies the activities of the plaintiff, and that the plaintiff knows or should know both the danger and the possibility of injury prior to its occurrence. Id. at 576. The standard is a subjective one geared to a particular plaintiff, and the determination ordinarily will be made by a jury. Id. at 576-77.

[*P36] “The foreseeability of a specific danger defines the scope.” Cox v. U.S. Fitness, LLC, 2013 IL App (1st) 122442, ¶ 14, 377 Ill. Dec. 930, 2 N.E.3d 1211. “The relevant inquiry *** is not whether [the] plaintiff foresaw [the] defendants’ exact act of negligence,” but “whether [the] plaintiff knew or should have known” the accident “was a risk encompassed by his [or her] release.” Hellweg v. Special Events Management, 2011 IL App (1st) 103604, ¶ 7, 956 N.E.2d 954, 353 Ill. Dec. 826.

[*P37] Thus, the issue here is whether plaintiff knew or should have known that the accident was a risk encompassed by the release which he signed. As previously determined, the language of the release in this case was specific enough to put plaintiff on notice. In discussing inherent risks in the sport of gymnastics and use of the accompanying equipment, the release lists injuries resulting from landing on the landing surfaces, which includes [**15] injuries to bones, joints, tendons, or death. Plaintiff agreed that the foam pit was a landing surface and that some of the possible injuries that he could sustain at the gym from gymnastics activities included injuries to his bones, and he admitted at deposition that he had not read the release and that, had he read the release, he would have understood it to mean that he could not sue the gym for any injuries he sustained. Based on these facts, plaintiff should have known the risks of injury associated with the activity of jumping into the foam pit. Plaintiff participated in open gym, which reasonably contemplates participating in the use of the accompanying equipment. Plaintiff could have reasonably presumed that, should he jump from a springboard into the foam pit, he might land on his head. It is entirely foreseeable that, if plaintiff accidently fell on his head, he would be hurt by “landing on the landing surfaces,” a risk encompassed by the release agreement. See Oelze v. Score Sports Venture, 401 Ill. App. 3d 110, 121, 927 N.E.2d 137, 339 Ill. Dec. 596 (2010). Although plaintiff suffered a serious injury, we are bound by the release agreement. Accordingly, we find the trial court properly granted summary judgment on the basis that the release barred plaintiff’s negligence [**16] claim.

[*P38] D. Public Policy

[*P39] Plaintiff next argues that it would be against public policy to enforce the release in this case because the Club opened its gym to the unskilled and inexperienced public. Plaintiff does not cite any cases in support of this argument. In fact, the only case he cites, Hamer v. City Segway Tours of Chicago, LLC, 402 Ill. App. 3d 42, 930 N.E.2d 578, 341 Ill. Dec. 368 (2010), is inapposite to his position.

[*P40] Several cases have rejected plaintiff’s argument in the fitness club setting. See, e.g., Kubisen v. Chicago Health Clubs, 69 Ill. App. 3d 463, 388 N.E.2d 44, 26 Ill. Dec. 420 (1979); Owen v. Vic Tanny’s Enterprises, 48 Ill. App. 2d 344, 199 N.E.2d 280 (1964). Had plaintiff, an adult, read the release and disagreed with it, he could have simply refused to participate in open gym. “While exculpatory or limitation of damages clauses are not favored and must be strictly construed against a benefitting party [citation] the basis for their enforcement is the strong public policy favoring freedom of contract.” Rayner Covering Systems, Inc. v. Danvers Farmers Elevator Co., 226 Ill. App. 3d 507, 512, 589 N.E.2d 1034, 168 Ill. Dec. 634 (1992). There does not seem to be any reason in this case to depart from the strong public policy of allowing parties to freely enter into contracts.

[*P41] E. Section 2-619 Motion to Dismiss

[*P42] The Club filed a section 2-619 motion, alleging that plaintiff signed a two-page liability release that contained an exculpatory clause, which released the Club from liability for any acts of negligence. The trial court found the release was ambiguous and denied the motion. However, [**17] the court recognized that disputed facts might affect the validity of the release and indicated that the Club was free to raise the issue again in a summary judgment motion after facts surrounding the execution of the release were developed in discovery.

[*P43] Citing Makowski v. City of Naperville, 249 Ill. App. 3d 110, 117-18, 617 N.E.2d 1251, 187 Ill. Dec. 530 (1993), plaintiff acknowledges that a trial court may allow a party to reassert a defense after previously ruling on the merits only when new evidence is presented. Plaintiff claims that the summary judgment motion did not allege new facts but simply relied on the language of the release as it did in the Club’s section 2-619 motion. We disagree.

[*P44] The Club did allege additional facts in its summary judgment motion that were developed during discovery that affected the validity of the release. Those facts included plaintiff’s acknowledgment that he understood the meaning of the terms of the release, that he understood the inherent risks, and that he understood that the risk of “landing on landing surfaces” would include the foam pit where he was injured. He also testified that had he read the release he would have understood its language to mean that he could not sue the gym for any injuries he sustained. Since we review a summary judgment motion [**18] de novo (Pielet, 2012 IL 112064, ¶ 30), this evidence tends to defeat plaintiff’s ambiguity arguments.

[*P45] III. CONCLUSION

[*P46] For the reasons stated, we affirm the judgment of the Circuit Court of Du Page County granting the Club’s motion for summary judgment.

[*P47] Affirmed.


Just because you have a piece of paper saying you are an additional insured, it does not mean there is any coverage under any policy to protect you.

Additional insured certificates are limited by two things, what the underlying policy provides coverage for and what the certificate of insurance says it will cover. Lacking  coverage under the policy or lacking the necessary language in the additional insured certificate you are hanging in the wind without any insurance coverage.

For an additional insured certificate to be valid, you must put together three things. A contract which identifies the requirements or insurance you are looking for. An insurance policy that insures those requirements and a certificate of insurance that covers those requirements or better states as the requirements are set forth in the original contract. Lacking any, one of those and you are just wasting paper.

When you get a certificate of insurance, you must then read it to make sure you meet the requirements it may set out. If there is a limitation on the amount of time you have to file a claim or a specific way to notify the insured, make sure you follow those procedures. 

Finally, whenever you file any claim with any insurance company for coverage, follow the procedures the policy requires then follow up with a letter providing notice the insurance company in writing.

Great American Alliance Insurance Company, v. Windermere Baptist Conference Center, Inc., et al., 2017 U.S. Dist. LEXIS 103148

State: Missouri, United States District Court for the Western District of Missouri, Central Division 

Plaintiff: Great American Alliance Insurance Company 

Defendant: Windermere Baptist Conference Center, Inc., et al. 

Plaintiff Claims: Great American now moves for summary judgment on its requested declaratory judgment that: (1) no liability coverage exists under its policy issued to Student Life for any claims asserted in the underlying lawsuit against Windermere or Windermere’s employees, including Kendra Brown; (2) Great American owes no duty to defend Windermere, Kendra Brown, or any other Windermere employees in the underlying lawsuit; and
(3) no medical payments coverage exists for Karlee Richards. 

Defendant Defenses:   No coverage provided under the policy or certificate of insurance

Holding: Split decision, however the insurance company will not pay anything under the certificate of insurance 

Year: 2017 

This is a legally complicated case with simple facts. A church rented a camp from Student Life, which had contracted with a church camp called Windermere. The reservation form and simple agreement between the camp and the church required the issuance of a certificate of insurance. 

A camper, part of the church group fell while riding the zip line. She sued. That lawsuit was still pending when this lawsuit was started to determine whose insurance was required to defend against the camper’s lawsuit. 

In that case, damages are being sought against them for injuries sustained by Karlee Richards after she fell while zip-lining at The Edge, a ropes course at Windermere’s Conference Center. Kendra Brown was an employee of Windermere, working at the Edge at the time of  the accident.

 The injured camper Richards was with the Searcy Baptist Church. They rented the camp through Student Life. Student Life rented the camp from Windermere. The contract between Student Life and Windermere is the one at question here. Windermere required a certificate of insurance from Student Life. 

June 2014, Karlee Richards and her Searcy Baptist Church youth group were attending a summer camp at Windermere’s Conference Center, which was sponsored by Lifeway Christian Resources of the Southern Baptist Conference, d.b.a. Student Life. Student Life contracted with Windermere to hold the church camp at Windermere’s facility in Missouri. Student Life had a liability policy with Great American, and Windermere was an additional insured on that policy. The additional insured endorsement provides that the additional insured, in this case Windermere, is only covered for “liability arising out of the ownership, maintenance or use of that portion of the premises leased to Great American contends that Windermere is not entitled to coverage for Kaylee Richards’s injuries because Windermere did not “lease” the Edge to Student Life because the Edge was not specifically mentioned in Student Life’s written agreement with Windermere.

 The first issue the court skipped was the policy that Student Life had, was restrictive and had minimal coverage. It had a requirement that all claims had to be made in one year. This may not be bad, but if the statute of limitations for the type of injury is two years or three, you may not have coverage for a claim because you did not know you had one until after the time period had run. 

Student Life is the named insured on a Commercial General Liability policy with Great American. The policy requires that all requests for medical payments be made within one year of the accident that gives rise to the insurance claim. Also, when there is other valid and collectible excess insurance coverage, the Great American policy provides that Great American will have no duty to defend its insured against a claim for damages.

 On top of the claim limitation period, the coverage was solely excess coverage. Meaning the coverage did on top of any other coverage the insured had and had no duty to defend or pay for attorneys. It only had to pay for a claim after the
limits of the underlying policy were exhausted. No underlying policy was ever mentioned in the case so it is unknown if one existed.

If this is the only policy, Student Life purchased, they bought the wrong one! 

Another issue was whether the student life policy would provide coverage for employees of Windermere that were sued based on the accident. 

This suit was brought by the Student Life insurance company, Great American Alliance Insurance Company, asking the court to tell Student Life it was not going to pay or defend any of the claims brought by the injured camper against Windermere. 

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

 The court first looked at whether the additional insured certificate was ambiguous. If so, then the court had to interpret the ambiguity under Missouri’s law.

An ambiguity is an uncertainty in the meaning of the policy.

  If an ambiguity exists, the policy language will be construed against the insurer. Mendota, “‘An ambiguity exists when there is
duplicity, indistinctness, or uncertainty in the meaning of the language of the policy.'” “‘To test whether the language used in the policy is ambiguous, the language is considered in the light in which it would normally be understood by the lay person who bought and paid for the policy.'” Whether an insurance policy is ambiguous is a question of law.” 

The burden of proving there is coverage falls on the party seeking it, in this case, Windermere. An ambiguity exists if there are different interpretations of the language in the policy. There are two types of Ambiguities, Latent and patent. 

A policy is ambiguous if it is “fairly open to different interpretations” because it contains “duplicity, indistinctness, or uncertainty of meaning.” Importantly, there are two types of ambiguities in the law: patent and latent. “A patent ambiguity is detected from the face of the document, whereas a latent ambiguity is found ‘when the particular words of a document apply equally well to two different objects or some external circumstances make their meaning uncertain.'” 

Here the court found that a patent ambiguity existed. 

For these reasons, a patent ambiguity exists. The disputed phrase not only should be interpreted in favor of the Defendants, but the Defendants’ interpretation is arguably the only one that would make sense to an ordinary person under these circumstances. 

The court also found a latent ambiguity existed in the certificate of insurance. 

A latent ambiguity exists when a contract “on its face appears clear and unambiguous, but some collateral matter makes the meaning
uncertain.” Id. In other words, an ambiguity is “latent if language, which is plain on its face, becomes uncertain upon application.”

 If an ambiguity is found in an insurance policy, the ambiguity is construed against the insurance company. “In the
alternative, it is well-settled that an ambiguity within an insurance policy must be construed against the insurer
.”

Consequently, the court ruled on this issue, that there was coverage for Windermere from the Student Life Policy. However, the court found against Student Life and Windermere on the other issues.

Windermere requested coverage for defending its employees, which the court denied. 

Great American argues that no coverage exists for Brown or any other Windermere employee because the Additional Insured Endorsement does not provide additional insured status and/or coverage for an additional insured’s employees. Brown is not identified anywhere in Student Life’s Great American policy nor is she listed as an Additional Insured on a Certificate of Liability. Therefore, any coverage for Brown would necessarily derive from her status as Windermere’s employee, and employees are not covered as insureds by the Additional Insured Endorsement. 

The court agreed with Great American that no coverage was described in the certificate of insurance. 

The next issue was, whether or not there was a duty to defend. A duty to defend is to pay the cost of the lawsuit; attorney fees, expert witness fees, etc. 

Under Missouri law, the duty to defend “arises whenever there is a potential or possible liability to pay based on the facts at the outset of the case and is not dependent on the probable liability to pay based on the facts ascertained through trial.” 

Because there was no coverage for the Windermere employees, there was no duty to defend them either. A duty to defend must be specifically identified in the policy. In this case the policy specifically stated, there was no duty to defend. 

As to whether Great American owes a duty to defend Windermere, the Endorsement makes clear that any coverage for Windermere as an additional insured would be excess, and the policy does not afford a defense when (1) its coverage is excess and (2) when the insured is being provided a defense by another carrier. 

The last issue was whether medical expenses of the injured camper were owed by Great American to Windermere. Again, since the policy specifically stated there was no coverage for medical expenses this was denied. The court also found the
requirement under the policy to make a claim for medical expenses had to be done within one year, and that time had lapsed; therefore, no medical expenses were owed by the Student Life Policy with Great American. 

The decision was split, however, in reality; Windermere got nothing from the decision. If Windermere lost its suit or exhausted its own liability insurance policy protection, it could, then see money from the Student Life policy with Great American, but no other coverage was owed by Great American. However, that meant the camper was going to have to win millions probably to exhaust the Windermere policy and Windermere or its insurance company was going to foot the bill with no help from the policy under the certificate of insurance. 

So Now What? 

This is a classic case were not knowing or checking what happens when you receive an additional insured certificate ends up costing you more money than not having one. 

The underlying policy by the group coming into the camp was crap. On top of that it had major restrictions on when it would pay. Add to those issues the certificate of insurance was badly written and the company receiving the additional insured certificate received a worthless piece of paper. On top of that it cost them a lot of money I’m guessing to sue to find out they were not going to get anything from the policy.

 1.       Issue a request for a Certificate of Insurance in a contract or the contract. Set forth in the contract everything you must have and the type of insurance policy that must be underlying the certificate of insurance.

2.      Request a copy of the insurance policy be delivered with the certificate of insurance. Again, if the policy is crap, you are getting crap. 

3.      Make sure the insurance policy covers what the contract says it should cover. 

4.      Make sure the certificate of insurance covers what the contract says it must cover. 

Just collecting certificates of insurance to put in a box or file cabinet are only killing trees. It is probably not providing you any protection as in this case.

 What do you think? Leave a comment.

 To Comment Click on the Heading and go to the bottom of the page. 

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Great American Alliance Insurance Company, Plaintiff, vs. Windermere Baptist Conference Center, Inc., et al., 2017 U.S. Dist. LEXIS 103148

Great American Alliance Insurance Company, Plaintiff, vs. Windermere Baptist Conference Center, Inc., et al., 2017 U.S. Dist. LEXIS 103148

Great American Alliance Insurance Company, Plaintiff, vs. Windermere Baptist Conference Center, Inc., et al., Defendants.

No. 2:16-cv-04046-NKL

United States District Court for the Western District of Missouri, Central Division

2017 U.S. Dist. LEXIS 103148

July 5, 2017, Decided

July 5, 2017, Filed

PRIOR HISTORY: Great Am. Alliance Ins. Co. v. Windermere Baptist Conf. Ctr., Inc., 2016 U.S. Dist. LEXIS 92701 (W.D. Mo., July 18, 2016)

COUNSEL: [*1] For Great American Alliance Insurance Company, Plaintiff: John S. Sandberg, LEAD ATTORNEY, Kenneth R. Goleaner, Sandberg, Phoenix & von Gontard, PC-St. Louis, St. Louis, MO.

For Windermere Baptist Conference Center, Inc., Defendant: Amber Joy Simon, Lauren E. Tucker McCubbin, LEAD ATTORNEYS, Lisa A. Weixelman, Polsinelli PC – KCMO, Kansas City, MO.

For Kendra Brown, Defendant: Christopher P. Rackers, LEAD ATTORNEY, Kaci R Peterson, Schreimann, Rackers & Francka, LLC, Jefferson City, MO.

For Jeremy Richards, Karlee Richards, Defendants: Patrick M. Martucci, LEAD ATTORNEY, Johnson, Vorhees & Martucci – Joplin, Joplin, MO.

JUDGES: NANETTE K. LAUGHREY, United States District Judge.

OPINION BY: NANETTE K. LAUGHREY

OPINION

ORDER

This case principally concerns whether Defendants, Windermere Baptist Conference Center and Kendra Brown, have insurance coverage under a Great American policy for potential liability in a suit pending in Morgan County. In that case, damages are being sought against them for injuries sustained by Karlee Richards after she fell while zip-lining at The Edge, a ropes course at Windermere’s Conference Center. Kendra Brown was an employee of Windermere, working at the Edge at the time of the accident.

In [*2] June 2014, Karlee Richards and her Searcy Baptist Church youth group were attending a summer camp at Windermere’s Conference Center, which was sponsored by Lifeway Christian Resources of the Southern Baptist Conference, d.b.a. Student Life.1 Student Life contracted with Windermere to hold the church camp at Windermere’s facility in Missouri. Student Life had a liability policy with Great American, and Windermere was an additional insured on that policy. The additional insured endorsement provides that the additional insured, in this case Windermere, is only covered for “liability arising out of the ownership, maintenance or use of that portion of the premises leased to [Student Life] [by Windemere].” [Doc. 35-17, p.1 (“Endorsement”)]. Great American contends that Windermere is not entitled to coverage for Kaylee Richards’s injuries because Windermere did not “lease” the Edge to Student Life because the Edge was not specifically mentioned in Student Life’s written agreement with Windermere.

1 Lifeway Christian Resources of the Southern Baptist Convention does business as Student Life. The Court refers to Lifeway and Student Life interchangeably throughout the remainder of this Order as simply, “Student Life.”

Pending before the Court is Great American’s Motion for Summary Judgment. [Doc. 34]. For the following reasons, the Motion is granted in part and denied in part.

I. Undisputed Facts2

2 Unless otherwise noted, the facts recited are those which are properly supported and undisputed.

A. The Student Life [*3] Camp at Windermere

Windermere Baptist Conference Center is a large Conference Center on the Lake of the Ozarks with over 300 acres and 126 buildings, including group lodging, a dining hall, conference space, cabins, a chapel, and a gift shop. Windermere also offers various recreational facilities and activities at its campus, including the Edge. Organizations like Student Life use Windermere’s facilities for summer church camps.

Student Life had been conducting camps at Windermere for about ten years prior to its June 2014 camp. In January 2014, Student Life and Windermere executed an Amended Conference Contract. The “Amended Conference Contract,” provides:

Amended Conference Contract

. . .

EVENT INFORMATION

Event Name: Student Life #1 ’14 (June 2-6, 2014)

Expected #: 1000

Arrive Date: Saturday, May 31, 2014

(Check in begins at 3:00 PM. Rooms may not be available until 6:00 PM. . .)

Depart Date: Saturday, June 7, 2014

Lodging Check out time is 11:00 AM. Keys must be turned in by this time. . .)

LODGING INFORMATION

Lodging Type Start End Nights Units Cost Total
Per Person (Student Life Extra) 5/31/14 6/2/14 2 25 $17.50 $825.00
Per Person (Student Life Extra) 6/1/14 6/2/14 1 15 $17.50 $262.50
Per Person (Student Life [*4] ’14) 6/2/14 6/5/14 4 1,000 $70.00 $70,000
Minimum
Total for Lodging: $71,137.50 $56,910.00

You will need to provide Windermere a rooming list (names of individuals occupying each room) and a copy of your conference or retreat schedule at the time of check-in.

. . .

MEAL INFORMATION

Minimum
Total for Meals: $76,570.00 $61,733.00

. . .

All guests eating in the dining hall must have a meal ticket or wrist band to be

admitted into the Dining Hall.

. . .

CONFERENCE SPACE INFORMATION

Facility/Room Start End Cost
Wilderness Creek Auditorium (1500) 6/1/14 8:00am 6/6/14 12:00pm
Deer Ridge Conf Rm 1 (30) 6/2/14 3:00pm 6/6/14 12:00pm
Total for Conference Space: $0.00

. . .

Use of conference space and facilities begins at the start time stated in the contract. Conference or facility space usage time ends at the time stated in the contract and must be empty of all guests and guest items.

. . .

ENTITY OBLIGATION

Estimated Total Payment $147,707.50
Total Minimum Payment $118,643.00
Property Damage/Abuse

The above named group will have financial responsibility for any damages and excessive wear and tear it incurs to the Windermere grounds, facilities or property to the extent that such damage or excessive wear and tear arises [*5] from the negligence or willful misconduct of the above named group. Cleanup of any facilities or grounds that are excessively dirty will be the financial responsibility of the group.

[Doc. 35-5 (“Amended Conference Contract”)].

The parties’ Amended Conference Contract does not identify every building or activity that was available to campers during Student Life’s camp at Windermere. For example, the chapel, which is made available to any group attending a camp at Windermere, is not listed. In addition, the dining hall is not specifically listed under the “Conference Space Information” heading, despite the Amended Conference Contract listing a price for meals Windermere is to provide.

In addition, it is undisputed that Windermere offered various free recreational activities to its guest campers, including those who attended the Student Life camp. Windermere also offered some special recreational activities that required an additional fee and reservations. The Edge was one such activity. The Edge, a ropes and zip-lining course, is not accessible to campers at Windermere without special scheduling, the purchase of tickets, and the execution of a “Recreational Release” form. Student Life [*6] advertised Windermere’s recreational facilities, including “The Edge,” as available for use to its campers, and it was Student Life’s expectation that these facilities would be available.

In addition to the Amended Conference Contract, Student Life also completed a Facilities Request Form, and Windermere completed a Fax Back Response Sheet. [Docs. 40-3 and 40-4]. The Fax Back Response Sheet provides:

Student Life Camp

Windermere Conference Center

Recreation:

. . .

What are some free-time options on your campus?

o Sand Volleyball, Outdoor Basketball, Tennis, Mini Golf, Disc Golf, Pool, Hiking, The Edge (low/high ropes course), Paintball, Waterfront Activities (Inflatable water park, kayak, canoe, paddle boats, fishing, etc) (See attached PDF on available Recreation Packages).

[Doc. 40-4, p. 3].

B. Great American Insurance Policy

Student Life is the named insured on a Commercial General Liability policy with Great American. The policy requires that all requests for medical payments be made within one year of the accident that gives rise to the insurance claim. [Doc. 42-2, p. 62 of 166]. Also, when there is other valid and collectible excess insurance coverage, the Great American policy provides [*7] that Great American will have no duty to defend its insured against a claim for damages. [Doc. 42-2, p. 67-68 of 166].

Because Student Life was contracting with Windermere for its event, Windermere was named as an additional insured on Student Life’s Great American policy. The Certificate of Liability Insurance was issued by Great American on May 8, 2014, and Windermere accepted. The Certificate referenced Great American’s policy issued to Student Life, Policy No.: GLP 0310189 and stated:

Event: Student Life Event Dates: May 31-June 7 and June 14-20, 2014 Windermere Conference Center is included as Additional Insured on the General Liability policy, as per endorsement #CG 82 24, ed. 12/01, and on the Automobile Liability policy, as per endorsement #CA 8518, ed. 6/09.

[Doc. 35-7 (“Certificate of Liability Insurance”)].

C. The Underlying Lawsuit

The Searcy Baptist Church youth group was one of the groups of campers that attended Student Life’s camp at Windermere in June of 2014. Karlee Richards and the rest of the Searcy youth group were scheduled to ride The Edge on June 4, 2014. They paid Windermere an additional fee for this activity. While zip-lining at The Edge that day, Richards fell [*8] and was injured. Kendra Brown, a Windermere employee, was working at the Edge at the time of the accident.

Following Karlee Richards’s accident at The Edge, her father, Jeremy Richards, both individually and as Next Friend, brought suit against Windermere and several of Windermere’s employees, including Kendra Brown. This lawsuit is currently pending in the Circuit Court of Morgan County, Missouri and seeks damages for Karlee Richards’s physical injuries sustained at The Edge.

On November 17, 2015, Windermere and Kendra Brown tendered claims to Great American for defense and indemnity of the underlying lawsuit, seeking coverage as additional insureds under Student Life’s Great American policy. [Doc. 35-15 (“Demand Letter”)]. The letter also demanded Medical Payments coverage for Karlee Richards’s medical expenses. The demand for Medical Payments coverage was made more than one year after Richards’s June 4, 2014 accident at The Edge. [Docs. 35-15 (“Demand Letter”) and 35-18 (“Feb. 4, 2016 Denial Letter”)].

Great American responded to the parties’ demand letter with a request for additional information, including information regarding Windermere’s coverage through Church Mutual Insurance [*9] Company. Windermere’s insurer, Church Mutual, was defending Windermere in the underlying lawsuit. [Doc. 35-14, p. 1 of 7 (“Dec. 17, 2015 Letter”)]. In subsequent correspondence with Great American, Windermere also stated, “Church Mutual, the insurer for ‘Windermere’ has tendered its full two million dollars in liability insurance.” [Doc. 35-14, p. 1 of 7 (“Dec. 17, 2015 Letter”)].

In its February 4, 2016 denial letter to Windermere and Brown, Great American concluded that Richards’s accident did not arise out of the ownership, maintenance, or use of the premises Windermere leased to Student Life and denied Windermere’s tender. Great American’s letter also provided that:

[E]ven if indemnity coverage did exist for Windermere and Kendra Brown under the Lifeway Policy, it is also clear that that [sic] Great American owes no defense obligation of the pending lawsuit. Your December 17, 2015 correspondence renewing the tender of defense on behalf of both Windermere and Kendra Brown makes clear that Windermere is being afforded a defense by Church Mutual and that Kendra Brown is being defended by both Church Mutual and Shelter. . . . [T]he Social Service Agency General Liability Broadening Endorsement [*10] makes clear that any coverage that did exist would be excess over all other insurance, including both the Church Mutual and Shelter policies. The “Other Insurance” provision of the Lifeway Policy makes clear that, where its coverage is excess and a defense is being provided by another carrier, Great American owes no duty to defend. Hence, Windermere’s and Kendra Brown’s tender of the defense of the pending lawsuit is denied for this additional reason.

[Doc. 35-18, p. 6 (“Feb. 4, 2016 Denial Letter”)]. Great American also denied Brown’s tender, stating that she was not an additional insured on the policy. Id.

II. Discussion

Windermere seeks coverage in the underlying Morgan County lawsuit as an additional insured under the Great American policy issued to Student Life. After denying Windermere’s tender, Great American filed suit before this Court seeking a declaratory judgment regarding its obligations under the policy. Great American now moves for summary judgment on its requested declaratory judgment that: (1) no liability coverage exists under its policy issued to Student Life for any claims asserted in the underlying lawsuit against Windermere or Windermere’s employees, including Kendra [*11] Brown; (2) Great American owes no duty to defend Windermere, Kendra Brown, or any other Windermere employees in the underlying lawsuit; and (3) no medical payments coverage exists for Karlee Richards.

A movant is entitled to summary judgment “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c). The rule requires summary judgment to be entered “against a party who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986).

A federal court sitting in diversity applies the choice-of-law rules of the state where the court sits, in this case, Missouri. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); American Guarantee Liability Ins. Co. v. U.S. Fidelity & Guaranty Co., 668 F.3d 991, 996 (8th Cir.2012). But a court need not undertake a choice-of-law inquiry unless an actual conflict of law is demonstrated. Prudential Ins. Co. of Am. v. Kamrath, 475 F.3d 920, 924 (8th Cir.2007) (citation omitted). Because the parties do not raise any actual conflict and because they do not dispute that Missouri law applies, the Court applies Missouri law.3

3 Plaintiff Great American contends no choice of law analysis is necessary because the outcome is the same under the law of the three states that could potentially apply: Missouri, Tennessee, and Alabama. Because Defendants Windermere, Brown, and the Richards contend Missouri law should apply, the Court concludes that the parties agree to the application of Missouri law.

A. Interpretation of Insurance Policies in Missouri

The interpretation [*12] of an insurance policy is a question of law to be determined by the Court. Mendota Ins. Co. v. Lawson, 456 S.W.3d 898, 903 (Mo. Ct. App. 2015). The ultimate goal of contract interpretation is to determine the intent of the parties. Bolinger v. Clarks Mut. Ins. Co., 485 S.W.3d 803, 809 (Mo. Ct. App. 2016). To determine the intent of the parties, the language in the contract is to be read according to its plain and ordinary meaning. Mendota, 456 S.W.3d at 903.

In interpreting an insurance policy, “[t]he key is whether the contract language is ambiguous or unambiguous.” Todd v. Mo. United Sch. Ins. Council, 223 S.W.3d 156, 160 (Mo. banc 2007). If an ambiguity exists, the policy language will be construed against the insurer. Mendota, 456 S.W.3d at 904. “‘An ambiguity exists when there is duplicity, indistinctness, or uncertainty in the meaning of the language of the policy.'” Fanning v. Progressive Northwestern Ins. Co., 412 S.W.3d 360, 364 (Mo. Ct. App. 2013) (quoting Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129, 132 (Mo. banc 2007)). “‘To test whether the language used in the policy is ambiguous, the language is considered in the light in which it would normally be understood by the lay person who bought and paid for the policy.'” Blumer v. Automobile Club Inter–Ins, 340 S.W.3d 214, 219 (Mo. Ct. App. 2011) (quoting Heringer v. Am. Family Mut. Ins. Co., 140 S.W.3d 100, 102 (Mo. Ct. App. 2004)). “Whether an insurance policy is ambiguous is a question of law.” Todd, 223 S.W.3d at 160.

“[T]he parties seeking to establish coverage under the insurance policy have the burden of proving that the claim is within the coverage afforded by the policy . . . even though they are denominated as defendants in a declaratory judgment action.” State Farm Fire & Cas. Co. v. D.T.S., 867 S.W.2d 642 (Mo. Ct. App. 1993).

B. Liability Coverage [*13] for Windermere as Additional Insured

The Great American policy’s declarations page lists Student Life as the named insured. Windermere is listed as an additional Insured as follows:

5. AUTOMATIC ADDITIONAL INSURED(S)

a. Additional Insured — Manager or Lessor of Premises

(1) This policy is amended to include as an insured any person or organization (hereinafter called Additional Insured) from whom you lease or rent property and which requires you to add such person or organization as an Additional Insured

***

(2) With respect to the insurance afforded the Additional Insured identified in Paragraph A.(1) of this endorsement, the following additional provisions apply:

(a) This insurance applies only to liability arising out of the ownership, maintenance or use of that portion of the premises leased to [Student Life].

[Doc. 35-17, p. 1 (“Endorsement”)]

Great American contends that the reference in Section 5.a.(2)(a) to “premises leased to you” refers to the specific places identified in the Amended Conference Contract between Windermere and Student Life. According to Great American, because the Edge is not listed, Windermere’s potential liability for the accident at the Edge is not covered. In contrast, Windermere [*14] argues that “premises lease” includes all the places on its property that Student Life campers were authorized to access, including the Edge.

1. Interpretation of Section 5.a.(2)(a)4

4 Defendants Brown and the Richards argue that the limitation of liability in Section 5.a.(2)(a) does not apply to Windermere because that section refers to Paragraph A.(1), and Windermere is identified as an Additional Insured by Paragraph a.(1). In other words, these Defendants reason that the parties must be referring to something other than the preceding paragraph a.(1) because capital A.(1) rather than lower case a.(1) was used. Defendants further reason that the only “Paragraph A.(1)” in the endorsement is located in Section 7A.(1) which limits liability to $300,000 for personal property and building damage rented to an additional insured. The Court rejects this argument because the reference to “A” instead of “a” is clearly a minor typographical error, and the Defendants’ strained interpretation of Section 7 in this context makes no sense. In Mendota Insurance Company v. Ware, 348 S.W.3d 68 (Mo. Ct. App. 2011), the Missouri Court of Appeals rejected a similar argument based on a typographical error because the “policy’s intended meaning, would be apparent to an ordinary reader.” Id. at 73. In the context of the Great American policy, it would not be reasonable for an ordinary reader to think that the use of A.(1), immediately after a section labeled a.(1), would be referring to 7A.(1) when 7A.(1) has nothing to do with identifying an additional insured and is not located in close proximity to the paragraph that does deal with the additional insured.

Whether an insurance provision is ambiguous is a question of law for the Court. General Am. Life Ins. Co. v. Barrett, 847 S.W.2d 125, 131 (Mo. Ct. App. 1993). A policy is ambiguous if it is “fairly open to different interpretations” because it contains “duplicity, indistinctness, or uncertainty of meaning.” Id. Importantly, there are two types of ambiguities in the law: patent and latent. Cent. United Life Ins. Co. v. Huff, 358 S.W.3d 88, 95 (Mo. Ct. App. 2011). “A patent ambiguity is detected from the face of the document, whereas a latent ambiguity is found ‘when the particular words of a document apply equally well to two different objects or some external circumstances make their meaning uncertain.'” Id. (quoting Jake C. Byers, Inc. v. J.B.C. Invs., 834 S.W.2d 806, 816 (Mo. Ct. App. 1992)).

a. Patent Ambiguity

The key phrase that this Court must interpret and apply is “portion of the premises leased to [Student Life].” “The words of a policy must be given their plain and ordinary meaning consistent with the reasonable expectation and objectives of the parties, unless it is obvious that a technical meaning was intended.” Bolinger v. Clarks Mut. Ins. Co., 485 S.W.3d 803, 809 (Mo. Ct. App. 2016). (internal quotation marks removed). Counsel for Great American argues that the term “lease” is understood by everyone [*15] to be a premise over which one has exclusive or near exclusive control. [Oral Argument Transcript, p. 3]. Therefore, the word “lease” would only cover the property over which Student Life had exclusive control by the terms of the Amended Conference Contract. In contrast, Windermere effectively argues that all of the documents surrounding the formation of the insurance policy demonstrate that an ordinary person would not intend the technical meaning of the term “lease,” i.e. exclusive possession, but instead, would expect it to cover all of the Windermere property to which Student Life campers had authorized access.

Under Missouri law, a lease gives exclusive5 use of property for a determined period of time to the lessee. Chubb Group of Ins. Cos. v. C.F. Murphy & Associates, Inc., 656 S.W.2d 766, 777 (Mo. Ct. App. 1983). The term “lease” gives rise to a landlord-tenant relationship, whereby the tenant has “exclusive possession of the premises as against all the world,” including the landlord. Santa Fe Trail Neighborhood Redevelopment Corp. v. W.F. Coen & Co., 154 S.W.3d 432, 439 (Mo. Ct. App. 2005) (internal quotation marks and citations removed). In contrast, “[a] license is only a privilege to enter certain premises for a specific purpose. Kimack v. Adams, 930 S.W.2d 505, 507 (Mo. Ct. App. 1996). The difference between a lease and a license is technical and difficult to determine. Santa Fe, 154 S.W.3d at 439.

5 Great American did not cite to a case that says “near exclusive” possession is enough, and the Court has found no such statement in Missouri law.

When there is a conflict between the technical definition [*16] of a term in a policy and what a reasonable person would understand, the lay definition controls unless it is obvious that a technical definition was intended. Mansion Hills Condo. Ass’n v. Am. Fam. Mut. Ins. Co., 62 S.W.3d 633, 638 (Mo. Ct. App. 2001). “To determine the [lay definition] of a term, courts will consult standard English language dictionaries.” Id. Merriam Webster’s New College Dictionary defines “leased” as “property occupied or used under the terms of a lease.” Webster’s II New College Dictionary (1995). “Lease” is defined as “a contract granting occupation or use of property during a certain period in exchange for a specified rent.” Id. “Premises” is defined as “land and the buildings on it.” Id. Those definitions do not indicate possession is exclusive.

In this context, did the parties intend the phrase “premises leased to you” to have a technical meaning–i.e. the formation of a landlord-tenant relationship between Windermere and Student Life whereby Student Life would have exclusive control over the property listed in the Amended Conference Contract, even as to Windermere? The Certificate of Insurance6 suggests otherwise. [Doc. 35-7]. It states:

Event: Student Life Event Dates: May 31-June 7 and June 14-20, 2014 Windermere Conference Center is included as [*17] Additional Insured on the General Liability policy, as per endorsement #CG 82 24, ed. 12/01, and on the Automobile Liability policy, as per endorsement #CA 8518, ed. 6/09.

This language does not suggest that the parties intended a landlord-tenant relationship being created between Student Life and Windermere. Rather, it suggests that Great American knew it was providing liability insurance to Windermere for an event — the camp — being held by Student Life on the Windermere campus. At a minimum, there is a conflict between the technical meaning of the word lease and what an ordinary person would understand under these circumstances, taking into account the dictionary definitions. In those circumstances, the technical definition does not control. See Mansion Hills Condo. Ass’n v. Am. Fam. Mut. Ins. Co., 62 S.W.3d 633, 638 (Mo. Ct. App. 2001).

6 Because the Certificate of Liability was issued to Windermere for the purpose of adding Windermere as an additional insured, “as per endorsement #CG 82 24 ed. 12/01,” the Certificate arguably became a part of the insurance contract. See Corder v. Morgan Roofing Co., 355 Mo. 127, 195 S.W.2d 441 (Mo. 1946) (finding certificate of insurance that doubled liability coverage, added insurance for property damage, and certified complete coverage of all operations in connection with the insured’s construction contract was part of the insurance contract); see also, Section 1.5.a.(1) of this endorsement:

This policy is amended to include as an insured any person or organization (hereinafter called Additional Insured) from whom you lease or rent property and which requires you to add such person or organization as an Additional Insured on this policy.

Further, State ex rel. State Highway Commission v. Johnson, 592 S.W.2d 854, 857-8 (Mo. Ct. App. 1979), says that a court may consider the circumstances under which the contract was made. These circumstances, as discussed below in the section on latent ambiguity, also support [*18] a finding that an ordinary person would expect to be covered for camp activities, not just for dorm rooms and conference space.

For these reasons, a patent ambiguity exists. The disputed phrase not only should be interpreted in favor of the Defendants, but the Defendants’ interpretation is arguably the only one that would make sense to an ordinary person under these circumstances.

b. Latent Ambiguity

Even if there were no patent ambiguity, the Court can look at extrinsic evidence to determine if there is a latent ambiguity.7 Royal Banks of Mo. v. Fridkin, 819 S.W.2d 359, 362 (Mo. banc 1991) (“A latent ambiguity . . . must be developed by extrinsic evidence.”).

7 Although Defendants do not use the term latent ambiguity, this appears to be the crux of Defendants’ argument: that even if the “premises leased” term is not ambiguous on its face, it is ambiguous when applied to the facts at hand.

A latent ambiguity exists when a contract “on its face appears clear and unambiguous, but some collateral matter makes the meaning uncertain.” Id. In other words, an ambiguity is “latent if language, which is plain on its face, becomes uncertain upon application.” Gen. Am. Life Ins. Co. v. Barrett, 847 S.W.2d 125, 131 (Mo. Ct. App. 1993). For example, “[a] latent ambiguity may be one in which the description of the property is clear upon the face of the instrument, but it turns out that there is more than one estate to which the description applies; or it may be one where the property is imperfectly or in some respects erroneously described, so as not to refer with precision [*19] to any particular object.” Muilenburg, Inc. v. Cherokee Rose Design & Build, LLC, 250 S.W.3d 848, 854-55 (Mo. Ct. App. 2008) (quoting Prestigiacamo v. Am. Equitable Assur. Co. of N.Y., 240 Mo. App. 839, 221 S.W.2d 217, 221 (1949) (internal quotation marks omitted)). The case of Royal Banks of Mo. v. Fridkin, 819 S.W.2d 359, 362 (Mo. banc 1991) provides another example. In Royal Banks, the Missouri Supreme Court found a latent ambiguity in an otherwise unambiguous contract where the contract described a $10,000.00 promissory note but where no $10,000.00 promissory note actually existed. Id. Looking to extrinsic evidence, the court concluded, “Evidence of a promissory note that fits the description in the guaranty in all respects except for principal amount, coupled with the fact that a $10,000.00 note did not exist, is a collateral matter that renders the meaning of the guaranty uncertain. Once it became apparent that there was no $10,000.00 note but instead only a $50,000.00 note, a latent ambiguity existed.” Id.

Although parol evidence may not ordinarily be considered to create an ambiguity, the Court may consider such evidence to demonstrate the existence of collateral matters that create a latent ambiguity. Royal Banks of Mo. v. Fridkin, 819 S.W.2d 359, 362 (Mo. banc. 1991) (“A latent ambiguity is not apparent on the face of the writing and therefore, must be developed by extrinsic evidence.”). Therefore, the Court may consider extrinsic evidence to determine if a latent ambiguity exists. In this case, [*20] in the absence of a definition of “premises leased,” the surrounding facts suggest a latent ambiguity about what was intended by this term.

The plain language of the Amended Conference Contract alludes to Student Life’s use of and access to many more properties than merely conference space and lodging units during its event. For example, the Contract’s plain language contemplates Student Life’s use of a dining hall8 because the meals they contracted for were to be served there. Yet, the Contract does not specifically list the dining hall. Likewise, the Contract does not mention the chapel, despite Windermere’s title as Windermere Baptist Conference Center and its practice of contracting with church groups to conduct summer church camps. At a minimum, a jury could find the parties intended that campers would have access to the chapel, even though it was not listed. Finally, the Contract, like the Certificate of Insurance, refers to an “Event,” and Great American’s interpretation of the Contract considers only part of what was going to occur at that event.

8 The Contract’s “Meal Information” section provides start and end times for specific meals and alludes to Student Life’s use of the Dining Hall, stating, “All guests eating in the dining hall must have a meal ticket or wrist band to be admitted into the Dining Hall.” [Doc. 35-5, p. 2].

The Court also considers the parties’ Fax Back Response Sheet. [Doc. 40-4]. This document confirms that the purpose of the parties’ [*21] agreement was to host an event, referred to by the Sheet as “Student Life Camp.” [Doc. 40-4]. In addition, the Sheet shows the parties’ understanding that Student Life’s campers would have access to not only conference and dorm space, but also a church for worship, recreational fields, a gymnasium, hiking trails, a body of water for “waterfront activities,” and as is relevant in this case, The Edge ropes course:

What are some free-time options on your campus?

o Sand Volleyball, Outdoor Basketball, Tennis, Mini Golf, Disc Golf, Pool, Hiking, The Edge (low/high ropes course), Paintball, Waterfront Activities (Inflatable water park, kayak, canoe, paddle boats, fishing, etc) . . .

See generally [Doc. 40-4 and p. 3 (emphasis added)]. Because Student Life was contracting with Windermere for an event–to host a camp complete with various camp activities and facilities–the Court cannot find that a reasonable insured would have intended the term, “premises leased,” to limit its coverage only to liability arising out of conference rooms and lodging units.

There is no dispute that Student Life camper, Karlee Richards, was authorized to access The Edge at the time of her accident. Based on the Fax [*22] Back Response Sheet, alone, which suggests that Student Life would expect to have access to The Edge during its event, a reasonable juror could conclude that The Edge was a “portion of the premises leased,” which would entitle Windermere to coverage as an additional insured for its liability to Richards. Therefore, summary judgment must be denied.9

9 Although Defendants did not file their own motions for summary judgment, Defendants ask the Court to grant summary judgment in their favor, citing Fed. R. Civ. P. 56(f)(1), which provides: “After giving notice and a reasonable time to respond, the court may: (1) grant summary judgment for a nonmovant.” [Doc. 53]. Granting summary judgment for the non-movants under this rule is discretionary. Due to the fact that the focus of this briefing has been on Great American’s request for summary judgment, the Court declines to exercise its discretion under this provision. However, the Court will permit Defendants to file their own motions for summary judgment within 20 days of the date of this Order, not inconsistent with this order as to the issues ruled against them.

In the alternative, it is well-settled that an ambiguity within an insurance policy must be construed against the insurer. Krombach v. Mayflower Ins. Co., Ltd., 827 S.W.2d 208, 210 (Mo. banc 1992). As already discussed, an ambiguity exists as to what the parties intended “premises leased” to refer to. Therefore, construing this ambiguous term against Great American requires the Court to apply the meaning “which would be attached by an ordinary person of average understanding if purchasing insurance.” Id. An ordinary insured could reasonably understand this phrase to refer to the areas to which Student Life had access during its event at Windermere. Therefore, Great American’s Motion for Summary Judgement must be denied on this issue.

Great American’s cited authorities do not require a different outcome. First, the coverage disputes in many of Great American’s authorities center on how to interpret “arising out of,” [*23] without any dispute as to what properties the parties understood to be the “leased premises” covered by the additional insured endorsement at issue. In contrast to the facts before this Court, each of these cases involved an undisputed lease contract between a landlord and tenant, rather than an event contract between two organizations, and there was no dispute or ambiguity surrounding what property was meant by the “premises leased” or a similar term. See, e.g., Belz Park Place v. P.F. Chang’s China Bistro, Inc., 2015 WL 11145058 (W.D. Tenn. Mar. 23, 2015) (within context of landlord-tenant relationship, involving a lease contract, and no dispute about the leased premises); Liberty Mut. Ins. Co. v. Michigan Mut. Ins. Co., 891 N.E.2d 99 (Ind. Ct. App. 2008) (same); Northbrook Ins. Co. v. American States Ins. Co., 495 N.W.2d 450 (Minn. Ct. App. 1993) (same); Hilton Hotels Corp v. Employers Ins. of Wausau, 629 So.2d 1064 (Fla. Dist. Ct. App. 1994) (same); SFH, Inc. v. Millard Refrigerated Svcs., Inc., 339 F.3d 738 (8th Cir. 2003) (same).

For example, in U.S. Fidelity & Guar. v. Drazic, 877 S.W.2d 140 (Mo. Ct. App. 1994). the Missouri Court of Appeals considered additional insured coverage within the context of a landlord-tenant relationship and an unambiguous lease contract. The Drazics leased a portion of their basement to the Brewers, and the Drazics were named as additional insureds under the Brewers’ liability insurance policy. Id. at 141. After the Brewers’ employee fell in a parking lot near the Drazics’ building and injured herself, she filed suit alleging that the Drazics negligently discharged steam from their dry cleaning business, which formed ice on the parking area [*24] causing her fall. Id. at 141-42. The policy’s additional insured endorsement provided coverage to the Drazics as additional insureds “but only with respect to liability arising out of the ownership, maintenance or use of that part of the premises designated below leased to the named insured.” Id. at 142-43 (emphasis added). The court considered the parties’ lease contract, which identified the premises leased as a “designated portion of a commercial building known and numbered as 418 Manchester Road, Ballwin, Missouri 63011, plus the area adjacent to the entrance of Brewer’s Quilt Shop for installation of their office.” Id. at 142. The court reasoned that the endorsement’s “plain language contemplated coverage for the Drazics as additional insureds for liability arising out of incidents taking place in that part of the building leased to the Brewers pursuant to the lease contract” and that there was no coverage because the accident at issue “took place on a parking area outside the building.” Id. at 143.

In contrast to Drazic, the Great American policy does not limit coverage to the “premises designated below” accompanied by a lease that specifically identifies an address or description of the area unambiguously covered by this [*25] clause. Also unlike the facts before this Court, there is no dispute or uncertainty in Drazic about what is meant by the “premises [leased].”

In addition, the Court rejects Great American’s reliance on Drazic for the separate proposition that “the purpose of additional insured endorsements obtained in a landlord-tenant context is to provide landlords protection from vicarious liability due to a tenant‘s action which takes place on the premises that the tenant has leased.” [Doc. 35, p. 16 (quoting Drazic, 877 S.W.2d at 143)]. Despite articulating this theory, the Drazic court did not resolve the coverage question based on vicarious liability: “The injury to Leary occurred due to alleged negligence on the part of the landlords’ business . . . and it did not occur on the premises leased to the [tenants].” Drazic, 877 S.W.2d at 143 (emphasis added). Furthermore, to the extent Great American contends that additional insured coverage is limited to acts for which Windermere is vicariously liable, the Court disagrees. The case from which this theory originated involved an insurance contract materially different from the one at issue here because the policy language in that case specifically limited coverage for additional insureds “against [*26] vicarious liability for the acts of the named insured.” See Hormel Foods Corp. v. Northbrook Property and Cas. Ins. Co., 938 F. Supp. 555, 558-560 (D. Minn. 1996) (quoting Harbor Ins. Co. v. Lewis, 562 F. Supp. 800, 802 (E.D. Pa. 1983) and explaining the origins and inapplicability of this theory). In contrast, coverage under the Great American policy cannot be said to turn on “vicarious liability” because the policy provision does not use this language.

As for other cases cited by Great American, these cases are distinguishable because they involve starkly different contract language than the term, “premises leased,” which this Court has found to be ambiguous. See, e.g., Lancaster v. Ferrell Paving, Inc., 397 S.W.3d 606 (Tenn. Ct. App. 2012) (involving different endorsement language: “liability arising out of your ongoing operations performed for the [additional] insured”) (emphasis added). Finally, Great American’s reliance on contract cases outside of the insurance context is misplaced because these cases also interpret contract provisions that are unlike the policy language at issue here. See, e.g., Once Upon a Time, LLC v. Chappelle Properties, LLC, 209 So. 3d 1094, 2016 WL 3031347 (Ala. 2016) (applying Alabama law to an indemnity agreement that did not contain the language “arising out of” or “premises leased” and did not involve insurance policy); Union Realty Co., Ltd. v. Family Dollar Stores of Tennessee, Inc., 255 S.W.3d 586 (Tenn. Ct. App. 2008) (interpreting contract language regarding the landlord’s and tenant’s obligations to procure insurance but no interpretation of insurance policy language at [*27] issue); Pilla v. Tom-Boy, Inc., 756 S.W.2d 638 (Mo. Ct. App. 1988) (interpreting indemnity provision in a lease that did not contain the language “arising out of” outside of insurance context and no dispute surrounding what constituted the leased premises).

Finally, the Court rejects Great American’s separate argument that whether a tenant has “shared” versus “exclusive” use of an area controls whether that area is part of the “premises leased” covered by an insurance endorsement. For example, in Colony Ins. Co. v. Pinewoods Enterprises, Inc., 29 F. Supp. 2d 1079 (E.D. Mo. 1998), a district court found insurance coverage for liability arising out of an area shared between the additional insured and other parties. In Colony, Bledsoe and Pinewoods entered a leasing contract in which Bledsoe (the lessee) leased portions of Pinewood’s campgrounds for a concert. Id. at 1081. Pinewoods was named as an additional insured under Bledsoe’s general liability policy with Colony Insurance. Id. During the concert, a rain storm caused many of the concert goers to take shelter on and under a deck attached to a lodge at the campground. Id. The lodge’s deck collapsed, injuring numerous concertgoers. Id. At issue was whether Colony Insurance’s coverage of Pinewoods as an additional insured extended to this accident. Id.

The court considered both the insurance [*28] policy endorsement and the parties’ lease contract. The endorsement provided additional insured coverage “but only with respect to liability arising out of your [Bledsoe’s] operations or premises owned by or rented to you.” Id. at 1082. The leasing contract specifically provided that Bledsoe “shall have the exclusive use of the Pinewoods Park” for a specific time period with the exception of the Lodge area. Id. at 1081-82. The contract also provided:

(5) LESSEE [Bledsoe], its customers, guests and invitees will share the Lodge area and facilities, i.e. store, gift shop, bait and tackle area . . . with the fishermen and permanent guests and any campers reserved prior to June 10, 1995.

Id. at 1082. The court concluded that Bledsoe leased the lodge area because the contract “specifically (albeit not exclusively) lease[d] the lodge area to Bledsoe,” and the endorsement provided that coverage extended to “the premises owned by or rented to you.” Id. at 1083 (emphasis added). The court concluded that “Colony’s additional insured endorsement extend[ed] coverage to Pinewoods for any liability arising out of the collapse of the lodge’s deck because the lodge was part of the premises leased to Bledsoe.” Id. In contrast to Great American’s contention that exclusivity [*29] is required, the Colony court still found the lodge premises to be “rented to” Bledsoe for purposes of additional insured coverage, despite the fact that the parties’ lease agreement provided that Bledsoe would “share” the lodge area premises at issue “with the fishermen and permanent guests and any campers.” Id. (emphasis added).

C. Liability Coverage for Kendra Brown or Other Windermere Employees

Great American also moves for summary judgment on the issue of coverage for Kendra Brown, Windermere’s employee. Great American argues that no coverage exists for Brown or any other Windermere employee because the Additional Insured Endorsement does not provide additional insured status and/or coverage for an additional insured’s employees. Brown is not identified anywhere in Student Life’s Great American policy nor is she listed as an Additional Insured on a Certificate of Liability. Therefore, any coverage for Brown would necessarily derive from her status as Windermere’s employee, and employees are not covered as insureds by the Additional Insured Endorsement.

Brown does not dispute that the Additional Insured Endorsement fails to provide coverage for an additional insured’s employees. Instead, [*30] Brown argues that Windermere should be considered a “Named Insured,” which in turn, makes the provisions applicable to “Named Insureds” also applicable to Windermere, including the provision that expands coverage for “Named Insureds” to their employees. The Court rejects this argument as based on an unreasonable interpretation of the policy.

Brown contends that the policy does not define “Named Insured,” and thus, it must be given the meaning that would be attached by an ordinary person. Brown reasons that an ordinary person would define “Named Insured” as a person or entity that is actually named as an insured. In turn, Brown says, because the Certificate of Liability names Windermere as an additional insured, Windermere must be a “Named Insured.” Brown next points to the following provision:

Throughout this Policy the words “you” and “your” refer to the Named Insured shown in the Declarations, and any other person or organization qualifying as a named insured under this Policy.

The word “insured” means any person or organization qualifying as such under

SECTION II — WHO IS AN INSURED.

***

[Doc. 42-2, p. 65 of 166 (“CGL Policy”)]. Brown contends that because she has established that Windermere [*31] is a “Named Insured,” “you” and “your” throughout the policy must also refer to Windermere. Next, Brown points to Section II of the policy:

SECTION II — WHO IS AN INSURED

2. Each of the following is also an Insured:

a. Your . . . “employees,” . . . but only for acts within the scope of their employment by you or while performing duties related to the conduct of your business.

[Doc. 42-2, p. 65 of 166 (“CGL Policy”)]. Brown argues that if the Court accepts her contention as true that Windermere is a “Named Insured,” then “your” refers to Windermere, which means that Brown “is also an Insured” as “[y]our [Windermere’s] ’employee,'” according to Section II.2.a.

Brown’s argument fails because it is based on an unreasonable interpretation that Windermere is somehow a “Named Insured,” a status unsupported by the policy’s clear language.10 First, the policy distinguishes between mere “insureds” and those insureds that are “Named Insureds.” Compare “The word ‘insured’ means any person or organization qualifying as such under SECTION II — WHO IS AN INSURED” with “Throughout this Policy the words ‘you’ and ‘your’ refer to the Named Insured shown in the Declarations, and any other person or organization qualifying [*32] as a named insured under this Policy.” [Doc. 42-2, p. 65 of 166 (“CGL Policy”)]. The fact that the policy differentiates between the two statuses shows that they are different terms, despite Brown’s contention that all insureds named are “Named Insureds.”

10 Furthermore, even if the Court accepted Brown’s contention that Windermere, an Additional Insured, was in fact, a Named Insured, Brown still has not shown that she is entitled to coverage under the policy as a Windermere employee because she has not alleged any facts or argument that her liability to Richards arose from “acts within the scope of [her] employment . . . or while performing duties related to the conduct of [Windermere’s] business.” Section II.(2).a.; [Doc. 42-2, p. 65 of 166 (“CGL Policy”)].

Furthermore, the policy’s plain language identifies which insureds are “Named Insureds.” First, the top of the policy’s Declarations page states:

NAMED INSURED LIFEWAY CHRISTIAN RESOURCES OF THE SOUTHERN BAPTIST CONVENTION

[Doc. 42-2, p. 29 of 166]. Therefore, because Student Life is “shown in the Declarations,” it is a “Named Insured.” The policy also includes a Named Insured Endorsement, which amends the Declarations by providing, “It is agreed that the Named Insured shown in the Declarations is amended to read as follows.” [Doc. 42-2, p. 41 of 166]. This statement is followed by a list of various organizations’ names related to Lifeway, which the endorsement provides are also included as Named Insureds. Id. Accordingly, it is reasonable to conclude that these organizations constitute “any other . . . organization qualifying as a named insured under this Policy” and therefore are also “Named Insureds.” [Doc. 42-2, p. 65 of 166 (“CGL [*33] Policy”)]. Based on the policy’s plain language, an ordinary person would understand “Named Insured” to refer to those insureds identified on the Declarations Page next to “NAMED INSURED” and those insureds identified in the Named Insured Endorsement. To interpret the policy to mean that anyone named as an insured, including those named as Additional Insureds, were also entitled to the same expansive level of coverage as the “Named Insureds” would be unreasonable.

In contrast to those entities that are clearly designated as “Named Insureds,” Windermere is not listed as a Named Insured on either the Declarations page or on the endorsement adding Named Insureds to the Declarations page. Instead, the policy’s only reference to Windermere is located in the Certificate of Liability it was issued prior to Student Life’s 2014 camp, which included it as an “Additional Insured,” providing:

Windermere Conference Center is included as Additional Insured on the General Liability policy, as per endorsement #CG 82 24, ed. 12/01, and on the Automobile Liability policy, as per endorsement #CA 8518, ed. 6/09.

[Doc. 35-7 (“Certificate of Liability Insurance”) (emphasis added)]. The Additional Insured Endorsement [*34] provides that it “is added to SECTION II — WHO IS AN INSURED, 5. AUTOMATIC ADDITIONAL INSURED(S).” [Doc. 35-17, p.1 (“Endorsement”).] Had Great American intended to make Windermere a “Named Insured,” it could have identified it as a “Named Insured” within the Certificate of Liability, or it could have provided that Windermere be added to the Named Insured Endorsement, rather than merely “Section II — Who is an Insured.” It did neither. For these reasons, an ordinary person would understand Windermere to be an “insured,” not a “Named Insured,” and thus, the words “you” and “your” throughout the policy do not refer to Windermere. Accordingly, the provision that expands coverage for “Named Insureds” to cover their employees as insureds does not apply to Windermere. Because Brown is not an insured under the policy and therefore not entitled to coverage, summary judgment is granted in favor of Great American on this point.

D. Duty to Defend

Great American also contends that it owes no duty to defend Windermere or Brown and it should be granted summary judgment on this claim. Under Missouri law, the duty to defend “arises whenever there is a potential or possible liability to pay based on [*35] the facts at the outset of the case and is not dependent on the probable liability to pay based on the facts ascertained through trial.” Columbia Cas. Co. v. HIAR Holding, L.L.C., 411 S.W.3d 258, 265 n.10 (Mo. 2013) (internal quotation marks removed). Because the Court has already found that Brown and other Windermere employees are not insureds under Great American’s policy and thus, not entitled to coverage, it follows that Great American has no duty to defend Brown.11

11 This rationale was also articulated in Great American’s denial letter, which provided:

First, as to Kendra Brown, she is not listed as an additional insured on the Certificate of Liability Insurance, nor is there any indication on the [Certificate] that additional insured status is to be afforded to employees of Windermere. Finally, there is nothing in the specific form referenced on the Certificate . . . nor anywhere else in the Lifeway Policy, that affords additional insured status to Kendra Brown or any other Windermere employee. . . . Kendra Brown is simply not an additional insured under the Lifeway Policy such that Great American is denying the tender made on behalf of Kendra Brown.

[Doc. 35-18, p. 5-6 of 12 (“Feb. 4, 2016 Denial Letter”)].

As to whether Great American owes a duty to defend Windermere, the Endorsement makes clear that any coverage for Windermere as an additional insured would be excess, and the policy does not afford [*36] a defense when (1) its coverage is excess and (2) when the insured is being provided a defense by another carrier.12 Under Missouri law, “‘an insurer’s duty to defend is purely contractual.'” Markel Am. Ins. Co. v. Unnerstall, 2009 U.S. Dist. LEXIS 3430, 2009 WL 57451 at *4 (E.D. Mo. 2009) (quoting Crown Ctr. Redevelopment Corp. v. Occidental Fire, 716 S.W.2d 348 (Mo. Ct. App. 1986)). “If there is no contract to defend, there is no duty to defend.” Id. In relevant part, the Endorsement provides:

5. AUTOMATIC ADDITIONAL INSURED(S)

a. Additional Insured — Manager or Lessor of Premises

***

(2) With respect to the insurance afforded the Additional Insured identified in Paragraph A.(1) of this endorsement, the following additional provisions apply:

***

(d) Coverage provided herein is excess over any other valid and collectible insurance available to the Additional Insured whether the other insurance is primary, excess, contingent or on any other basis unless a written contractual arrangement specifically requires this insurance to be primary.

12 This rationale was also articulated in Great American’s denial letter, which provided:

[E]ven if indemnity coverage did exist for Windermere and Kendra Brown under the Lifeway Policy, it is also clear that that [sic] Great American owes no defense obligation of the pending lawsuit. Your December 17, 2015 correspondence renewing the tender of defense on behalf of both Windermere and Kendra Brown makes clear that Windermere is being [*37] afforded a defense by Church Mutual and that Kendra Brown is being defended by both Church Mutual and Shelter. . . . [T]he Social Service Agency General Liability Broadening Endorsement makes clear that any coverage that did exist would be excess over all other insurance, including both the Church Mutual and Shelter policies. The “Other Insurance” provision of the Lifeway Policy makes clear that, where its coverage is excess and a defense is being provided by another carrier, Great American owes no duty to defend. Hence, Windermere’s and Kendra Brown’s tender of the defense of the pending lawsuit is denied for this additional reason.

[Doc. 35-18, p. 6 (“Feb. 4, 2016 Denial Letter”)].

The Additional Insured Endorsement’s Section 5.a.(2)(d) is clear that any coverage afforded is “excess over any other valid and collectible insurance,” regardless of the priority of coverage of the insurance–be it “primary, excess, [or] contingent.” In this case, Church Mutual had already tendered, or attempted to tender its policy limits on Windermere’s behalf in the underlying lawsuit. Therefore, although Windermere is entitled to coverage under the Great American policy, this coverage is excess.

The Other Insurance provision then states that where coverage is excess [*38] and the insured is being provided a defense by another carrier, Great American has no defense obligation. [Doc. 42-2, p. 66-68 of 166 (“CGL Policy”)]. Specifically, this provision provides:

SECTION IV — COMMERCIAL GENERAL LIABILITY CONDITIONS

***

4. Other Insurance

***

(2) When this insurance is excess we will have no duty under Coverages A or B to defend the Insured against any “suit” if any other insurer has a duty to defend the Insured against the “suit.” . . .

Windermere is currently being defended by its own insurance carrier, Church Mutual. Because the policy is clear that there is no defense obligation where coverage is excess and a defense is being provided by another carrier, which is the case here, the Court rejects Windermere’s contention that it is entitled to a defense based on a potential for coverage. Therefore, summary judgment is granted for Great American on its duty to defend.

E. Medical Payments Coverage

Finally, Great American moves for summary judgment as to the Medical Payments coverage for Richards’s medical expenses. In its November 17, 2015 letter to Great American, Windermere demanded the Coverage C Medical Payments limits for Richards. The provision governing Medical [*39] Payments provides in relevant part:

COMMERCIAL GENERAL LIABILITY COVERAGE FORM

***

Coverage C — Medical Payments

1. Insuring Agreement

a. We will pay medical expenses as described below for “bodily injury” caused by an accident:

***

provided that:

***

(b) the expenses are incurred and reported to us within one year of the date of the accident; and

***

[Doc. 42-2, p. 62 of 166 (“CGL Policy”)].

Great American argues that it is entitled to summary judgment as to this coverage because medical expenses were not reported to Great American within the time limit provided in Paragraph 1.a.(b). This provision provides that Great American will pay medical expenses for bodily injury “provided that . . . (b) the expenses are incurred and reported to us within one year of the date of the accident.” Section 1.a.(b) (emphasis added).

Richards’s accident occurred on June 4, 2014. Neither she nor anyone on her behalf made claim for Medical Payments coverage until Windermere’s November 17, 2015 demand letter more than one year after the date of the accident. Therefore, Great American is entitled to summary judgment as to the Medical Payments coverage.

III. Conclusion

For the reasons set forth above, Plaintiff Great American Alliance [*40] Insurance Company’s motion for summary judgment is granted in part and denied in part. [Doc. 34]. Summary judgment is granted on Great American’s liability coverage for Kendra Brown, individually, as an additional insured; Great American’s duty to defend Kendra Brown and Windermere; and Great American’s Medical Payments coverage for Karlee Richards’s injuries. Summary judgment is denied on Great American’s coverage for Windermere as an additional insured. It is further ordered that on or before July 25, 2017, Defendants may file any motions for summary judgment not inconsistent with this order as to the issues ruled against them.

/s/ Nanette K. Laughrey

NANETTE K. LAUGHREY

United States District Judge

Dated: July 5, 2017

Jefferson City, Missouri


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

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

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

State: New Hampshire, Supreme Court of New Hampshire

Plaintiff: Colony Insurance Company

Defendant: Dover Indoor Climbing Gym& a.

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

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

Holding: For the Plaintiff Insurance Company

Year: 2009

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

So Now What?

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

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

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

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

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

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

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

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

What do you think? Leave a comment.

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Author: Outdoor Recreation Insurance, Risk Management and Law

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

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

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

No. 2008-759

SUPREME COURT OF NEW HAMPSHIRE

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

March 18, 2009, Argued

April 24, 2009, Opinion Issued

HEADNOTES NEW HAMPSHIRE OFFICIAL REPORTS HEADNOTES

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

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

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

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

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

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

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

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

OPINION BY: DUGGAN

OPINION

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

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

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

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

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

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

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

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

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

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

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

Reversed and remanded.

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

 


Release valid to stop a claim for an injury on a tubing hill in Iowa

Attempt to reclassify a tubing hill as a carnival or amusement ride also failed by the plaintiff.

Lathrop vs. Century, Inc., 2002 Iowa App. LEXIS 1136

State: Iowa

Plaintiff: Pamela J. Lathrop, Individually and as Next Friend of D. Scott Lathrop, a Minor, and Sarah N. Lathrop, a Minor

Defendant: Century, Inc., d/b/a Mt. Crescent

Plaintiff Claims:

Defendant Defenses: Release

Holding: For the defendant

Year: 2002

The opportunity to analyze an outdoor recreation case in Iowa is rare. Writing about one concerning a tubing hill is probably a once in a lifetime opportunity.

A mother and her two children went tubing at the defendant’s tubing hill. Before entering the premises “they” signed a release. Later, the court clarified this and stated the mother and two children signed the release.

After taking several trips down the hill, the mother went down going faster than she expected. She went over a bump and was thrown from the tube landing on her back and head.

All three signed the form. They entered, and took several trips up and down the hill. After they had been snow tubing for roughly an hour, Pamela, on a trip down the hill, traveled faster than she expected. She went over a bump at a high speed, became airborne and was thrown from the snow tube. She landed on her back and hit her head on the ramp. She was later diagnosed with a compression/explosion fracture of L2 with canal compromised.

The mother on her own behalf and on behalf of her two children filed a lawsuit. The district court granted the defendant tubing hill’s motion to dismiss, and this appeal followed.

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

The plaintiff’s appeal was based on six allegations. The appellate court took each allegation and through it out with simple response. The first allegation was the release was ambiguous.

The ambiguity in the release was based on the use of the terms “event” and “restricted area.” However, the trial court and the appellate court found there was no ambiguity in the release.

Lathrop entered a restricted area, as defined by the release, when she entered the tubing park. She was not allowed to enter until she paid the admission price and signed the release and the area was therefore restricted from the general public. We find no error with the district court’s conclusion that the release applied to Lathrop.

The second argument was the plaintiff’s lack of awareness about the risks of tubing should void the release. Under Iowa law, the parties to a release must not have known of the precise circumstances leading to the injury to the plaintiff, only that there could be a broad range of accidents that could occur. She argued a jury should have the right to decide if she contemplated the injury she received.

The court did not agree with this argument.

We conclude a reasonable juror could not find the Lathrop’s assertion of ignorance plausible. One need not be an experienced snow tuber to anticipate that, while sliding down a snow-covered hill at a fast rate on an inflated tube, one might be thrown from the tube. Accordingly, we find no error on this issue by the district court.

The third argument of the plaintiff was the Iowa Amusement or Carnival statute. The statute requires carnivals to carry liability insurance. Therefore, the plaintiff argued the use of a release is against public policy.

However, the court found that the statute referred did not refer to tubing hills. As such, there was no need to determine if the statute and public policy prevented the use of a release.

We agree with the ruling of the district court that the Mt. Crescent snow tubing facilities do not fall under the definition of carnival or amusement ride or device in Iowa Code section 88A. We therefore need not decide whether the provisions of this code chapter implicitly preclude the use of releases of liability by such facilities.

The fourth argument was the specific release fell within an exception to the general enforceability of releases. There could not be an exception to the rule, “unless there preservation of the general public welfare imperatively so demands.”

While the court in Baker does not provide a precise framework for analyzing the appropriateness of a public policy exception in a specific situation, it does suggest, as an example, that a professional providing a service of great importance to the public would not be allowed to contract to avoid liability for negligence. We conclude snow tubing, a purely recreational activity, is not of such great importance to the public as to justify an exception to the general rule. The district court did not err by failing to recognize a public policy exception to the general enforceability of releases of liability in this case.

The fifth argument was if the release was enforceable, it only released the defendant from unavoidable and inherent risks of tubing and not from unnecessarily dangerous conditions or general negligence. The plaintiff could find no legal support for this claim, and the appellate court dismissed it with the statement: “The appellate courts of this state have consistently upheld the validity of broadly worded releases.”

The final argument was the minor’s claims could not be waived because a parent could not waive a minor’s claims. However, due to technical requirements, the issue was not properly addressed, and the error was not preserved for appeal.

The appellate court upheld the trial court’s dismissal of the claims.

So Now What?

The only issue of interest raised in the appeal was whether or not the injured plaintiff could understand the risks she was signing away. However, the court looked at this not as a requirement the release lists all the possible injuries a plaintiff could suffer, but only that the plaintiff has a general knowledge that she could be injured.

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Lathrop vs. Century, Inc., 2002 Iowa App. LEXIS 1136

Lathrop vs. Century, Inc., 2002 Iowa App. LEXIS 1136

Pamela J. Lathrop, Individually and as Next Friend of D. Scott Lathrop, a Minor, and Sarah N. Lathrop, a Minor, Plaintiffs-Appellants, vs. Century, Inc., d/b/a Mt. Crescent, Defendant-Appellee.

No. 2-243 / 01-1058

COURT OF APPEALS OF IOWA

2002 Iowa App. LEXIS 1136

October 30, 2002, Filed

NOTICE:

NO DECISION HAS BEEN MADE ON PUBLICATION OF THIS OPINION. THE OPINION IS SUBJECT TO MODIFICATION OR CORRECTION BY THE COURT AND IS NOT FINAL UNIL THE TIME FOR REHEARING OR FURTHER REVIEW HAS PASSED. AN UNPUBLISHED OPINION MAY BE CITED IN A BRIEF; HOWEVER, UNPUBLISHED OPINIONS SHALL NOT CONSTITUTE CONTROLLING LEGAL AUTHORITY.

PRIOR HISTORY: Appeal from the Iowa District Court for Pottawattamie County, Timothy O’Grady, Judge. The plaintiffs appeal from the district court’s grant of summary judgment in favor of the defendant.

DISPOSITION: Affirmed.

 

COUNSEL: James E. Harris and Britany S. Shotkoski of Harris Feldman Law Offices, Omaha, Nebraska, and Laura Laubenthal Pattermann of Law Offices of Gallner & Pattermann, P.C., Council Bluffs, for appellants.

John M. McHale of Peters Law Firm, P.C., Council Bluffs, for appellee.

JUDGES: Heard by Hecht, P.J., and Vaitheswaran and Eisenhauer, JJ.

OPINION BY: HECHT

OPINION

HECHT, P.J.

The plaintiffs appeal from a district court order granting defendant’s motion for summary judgment. We affirm.

I. BACKGROUND FACTS AND PROCEEDINGS

On December 30, 1999, Pamela Lathrop and her two minor children, Scott and Sarah, visited the Mt. Crescent tubing park. Before they were allowed to enter the premises, [*2] they signed a form entitled “Release and Waiver of Liability Assumption of Risk and Indemnity Agreement.” Key portions of the release read as follows.

In consideration of being permitted to compete, officiate, observe, work for, or participate in any way in the EVENT(S) (i.e., snow-tubing, skiing, snowboarding), being permitted to enter for any purpose any RESTRICTED AREA (defined as any area requiring special authorization, credentials, or permission TO enter or an area to which admission by the general public is restricted or prohibited), EACH OF THE UNDERSIGNED, for himself, his personal representatives, heirs, and next of kin:

. . . .

2. HEREBY RELEASES, WAIVES, DISCHARGES AND COVENANTS NOT TO SUE the . . . operators, owners, officials . . . of premises used to conduct the EVENT(S) (i.e., snow-tubing, snowboarding, skiing) . . . FROM ALL LIABILITY TO THE UNDERSIGNED, his personal representatives, assigns, heirs, and next of kin FOR ANY AND ALL LOSS OR DAMAGE, AND ANY CLAIM OR DEMANDS THEREOF ON ACCOUNT OF INJURY TO THE PERSON OR PROPERTY OR RESULTING IN DEATH OF THE UNDERSIGNED ARISING OUT OF OR RELATED TO THE EVENT(S) (i.e., snow-tubing, snowboarding, skiing) WHETHER CAUSED [*3] BY THE NEGLIGENCE OF THE RELEASEES OR OTHERWISE.

. . . .

4. HEREBY ASSUMES FULL RESPONSIBILITY FOR ANY RISK OF BODILY INJURY, DEATH OR PROPERTY DAMAGE arising out of or related to the EVENT(S) (i.e., snow-tubing, snowboarding, skiing) whether caused by the NEGLIGENCE OF RELEASEES OR OTHERWISE.

5. HEREBY acknowledges that THE ACTIVITIES OF THE EVENT(S) (i.e., snow-tubing, snowboarding, skiing) ARE VERY DANGEROUS and involve the risk of serious bodily injury and/or death and/or property damage. . . .

6. HEREBY agrees that this Release and Waiver of Liability, Assumption of Risk and Indemnity Agreement extends to all acts of negligence by the Releasees . . . and is intended to be as broad and inclusive as is permitted by the law of the County or State in which the EVENT(S) (i.e., snow tubing, snowboarding, skiing) is/are conducted and that if any portion thereof is held invalid, it is agreed that the balance shall, notwithstanding, continue in full legal force and effect.

I HAVE READ THIS RELEASE AND WAIVER OF LIABILITY, ASSUMPTION OF RISK AND INDEMNITY AGREEMENT, FULLY UNDERSTAND ITS TERMS, UNDERSTAND THAT I HAVE GIVEN UP SUBSTANTIAL RIGHTS BY SIGNING IT, AND HAVE SIGNED IT FREELY [*4] AND VOLUNTARILY WITHOUT ANY INDUCEMENT, ASSURANCE, OR GUARANTEE BEING MADE TO ME AND INTEND MY SIGNATURE TO BE A COMPLETE AND UNCONDITIONAL RELEASE OF ALL LIABILITY TO THE GREATEST EXTENT ALLOWED BY LAW.

All three signed the form. They entered, and took several trips up and down the hill. After they had been snow tubing for roughly an hour, Pamela, on a trip down the hill, traveled faster than she expected. She went over a bump at a high speed, became airborne and was thrown from the snow tube. She landed on her back and hit her head on the ramp. She was later diagnosed with a compression/explosion fracture of L2 with canal compromised.

Pamela, individually and on behalf of her two children, filed a lawsuit against Mt. Crescent alleging negligence. Mt. Crescent moved the court for summary judgment. The district court granted this motion and dismissed the case on June 18, 2001. Plaintiffs appealed, alleging the district court erred in granting summary judgment to the defendant.

II. STANDARD OF REVIEW

[HN1] A grant of summary judgment is reviewed for correction of errors of law. Wright v. American Cyanamid Co., 599 N.W.2d 668, 670 (Iowa 1999). “Summary [*5] judgment is only appropriate when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law.” Id. “We review the record in the light most favorable to the party opposing summary judgment, and the moving party carries the burden of showing the absence of a material fact issue.” Id. (citations omitted).

III. ANALYSIS

Lathrop makes six allegations of error by the district court in granting summary judgment. We will address each in turn.

A. The release is ambiguous. Lathrop argues that the language of the release is ambiguous. Specifically, she contends the references in the release to “EVENT” and “RESTRICTED AREA” are subject to differing interpretations. For example, she argues “EVENT” can be understood to refer to a competition or special occurrence, and that she never participated in a competition while at Mt. Crescent. She also argues that “RESTRICTED AREA” is ambiguous and that she at no time entered any restricted areas, as she understood them. She contends then, that the district court erred by applying the terms of the release to her. We, however, find no error by the district court. The two terms Lathrop [*6] points to are defined in the release. An “EVENT” is defined as “snow tubing, snowboarding, [or] skiing” and “RESTRICTED AREA” is defined as “any area requiring . . . permission . . . to enter or an area to which admission by the general public is restricted or prohibited.” There is no doubt that Lathrop participated in snow tubing. Lathrop entered a restricted area, as defined by the release, when she entered the tubing park. She was not allowed to enter until she paid the admission price and signed the release and the area was therefore restricted from the general public. We find no error with the district court’s conclusion that the release applied to Lathrop.

B. Lathrop’s lack of awareness of the risks involved in snow tubing rendered the release void. Lathrop acknowledges that Korsmo v. Waverly Ski Club, 435 N.W.2d 746 (Iowa Ct. App. 1988) provides the guiding principles when determining the applicability of releases. [HN2] “Parties need not have contemplated the precise occurrence which occurred as long as it is reasonable to conclude the parties contemplated a similarly broad range of accidents.” Id. at 749. Lathrop, however, contends [*7] she was unaware of the risks involved in snow tubing because she had never snow tubed before. She argues that she could not, and did not, contemplate the accident that occurred while she was snow tubing at Mt. Crescent. She contends then that the district should have permitted a jury to decide whether this type of accident was within her contemplation. We conclude a reasonable juror could not find the Lathrop’s assertion of ignorance plausible. One need not be an experienced snow tuber to anticipate that, while sliding down a snow-covered hill at a fast rate on an inflated tube, one might be thrown from the tube. Accordingly, we find no error on this issue by the district court.

C. The release is contrary to applicable provisions of Iowa Code chapter 88A and is void and unenforceable. Lathrop argues Mt. Crescent is a carnival and the tubing sponsored by Mt. Crescent is an amusement device or ride as contemplated by Iowa Code chapter 88A (2001). Because the statute requires carnivals to carry liability insurance, Lathrop argues it is against public policy to allow them to waive their liability in a release.

Mt. Crescent contends Lathrop failed to preserve error on this [*8] issue. Lathrop first raised this issue in her supplemental resistance to Mt. Crescent’s motion for summary judgment, presented to Mt. Crescent a mere four days before the scheduled hearing. It was argued in the hearing, and the district court ruled on it. We conclude the issue was preserved for our review.

Iowa Code section 88A.1 defines a carnival as [HN3] “an enterprise offering amusement or entertainment to the public in, upon, or by means of amusement devices or rides or concession booths.” Clearly, Mt. Crescent offers entertainment and amusement. The question, then, is whether it accomplishes this by means of amusement devices or rides. [HN4] An amusement device is “any equipment or piece of equipment, appliance or combination thereof designed or intended to entertain or amuse a person.” Iowa Code § 88A.1 (2001). An amusement ride is “any mechanized device or combination of devices which carries passengers along, around, or over a fixed or restricted course for the purpose of giving its passengers amusement, pleasure, thrills or excitement.” Iowa Code § 88A.1. The [HN5] snow tubing runs at Mt. Crescent are not mechanized [*9] and do not carry its passengers over a fixed or restricted course. We agree with the ruling of the district court that the Mt. Crescent snow tubing facilities do not fall under the definition of carnival or amusement ride or device in Iowa Code section 88A. We therefore need not decide whether the provisions of this code chapter implicitly preclude the use of releases of liability by such facilities.

D. This release falls within a public policy exception to the general enforceability of releases. [HN6] “Contracts exempting a party from its own negligence are enforceable, and are not contrary to public policy.” Huber v. Hovey, 501 N.W.2d 53, 54 (Iowa 1993). Despite this clear statement from our supreme court, Lathrop argues the Mt. Crescent release falls within a public policy exception to this rule. Lathrop relies upon language found in Bashford v. Slater, 250 Iowa 857, 96 N.W.2d 904 (Iowa 1959) and Baker v. Stewarts’ Inc., 433 N.W.2d 706 (Iowa 1988). Both of these cases acknowledge the possibility of an exception to the general enforceability of releases in Iowa, but neither case finds a public policy exception [*10] applicable. Baker provides guidance for the recognition of a public policy exception. [HN7] “We will not ‘curtail the liberty to contract by enabling parties to escape their valid contractual obligation on the ground of public policy unless the preservation of the general public welfare imperatively so demands.'” Id. at 707 (quoting Tschirgi v. Merchants Nat’l Bank of Cedar Rapids, 253 Iowa 682, 113 N.W.2d 226, 231 (Iowa 1962). While the court in Baker does not provide a precise framework for analyzing the appropriateness of a public policy exception in a specific situation, it does suggest, as an example, that a professional providing a service of great importance to the public would not be allowed to contract to avoid liability for negligence. See id. We conclude [HN8] snow tubing, a purely recreational activity, is not of such great importance to the public as to justify an exception to the general rule. The district court did not err by failing to recognize a public policy exception to the general enforceability of releases of liability in this case.

E. If the release is enforceable, it only releases Mt. Crescent from unavoidable and inherent [*11] risks of snow tubing. Lathrop argues that if the exculpatory contract is enforceable, it only releases Mt. Crescent from unavoidable and inherent risks of snow tubing and not from unnecessarily dangerous conditions or general negligence. However, Lathrop cites no controlling authority for the proposition that broad exculpatory contracts which purport to release the drafters from “all liability … for any and all loss or damage … arising out of snow tubing … whether caused by the negligence of releasees or otherwise” should not be interpreted as written. [HN9] The appellate courts of this state have consistently upheld the validity of broadly worded releases. See Huber, 501 N.W.2d at 55; Bashford, 96 N.W.2d at 909-910; Weik v. Ace Rents, 249 Iowa 510, 87 N.W.2d 314, 317 (Iowa 1958); and Korsmo, 435 N.W.2d at 748. We find no error by the district court for applying the clear language of the release.

F. The children’s claims cannot be dismissed because a parent cannot waive a child’s future cause of action. The final claim of district court error urged by Lathrop is that the district court erred by dismissing [*12] Lathrop’s children’s causes of action. She argues that a parent cannot waive a child’s right to bring a future cause of action. However, as Lathrop acknowledges in her brief, the [HN10] district court did not address this issue in its ruling. Lathrop did not move the court to enlarge its findings under Iowa Rule of Civil Procedure 1.904(2). Therefore, Lathrop has failed to preserve error on this issue and cannot raise it now on appeal. State Farm Mut. Auto. Ins. Co. v. Pflibsen, 350 N.W.2d 202, 206-207 (Iowa 1984).

IV. CONCLUSION

We conclude the district court committed no legal error in granting Mt. Crescent’s motion for summary judgment, and therefore affirm.

AFFIRMED.