Good advice but bad releases can be found at this website.

The disclaimers at the bottom of the free documents are the most important part; you need YOUR attorney to write your release.

I check out this site for information I can pass on: Sadler Sports & Recreation Insurance. A couple of times a year, I pass on good information. At the same time, all websites (even this one) can pass on bad information and Sadler Sports & Recreation Insurance is no exception. They are offering free releases. Here is the disclaimer.

This is a SAMPLE WAIVER FORM only. Final wording should be as directed by the insured’s counsel, but must observe the principles represented within the above. This form provided courtesy of K&K Insurance Group.

The releases are from K&K Insurance Group. K&K is a great insurance company in the outdoor recreation industry. At the same time, by providing bad releases, they are creating their own claims.

The first release offered is a release for a parent to waive a minor’s claims. That only work in a few states. (See States that allow a parent to sign away a minor’s right to sue.) So in every other state, you need an assumption of risk form. This “release” is not that. In those few states that do accept a release to stop a minor’s claims, this release does not meet the requirements of two of the states.

Neither release has a jurisdiction and venue clause. That would allow the injured plaintiff to bring a suit and argue the lawsuit should be in a state where releases are not supported. (See States that do not Support the Use of a Release.) The adult release also includes a place for a parent to sign for a child. (???)

Find an attorney that knows what you do, understands release law and can write a release for you. If you want to print and hand the attorney, these releases (as a joke) do so. If the attorney uses them…..find another attorney.

See Sadler Sports & Recreation Insurance

What do you think? Leave a comment.

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

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Warning Labels or Signs: Do yours make sense and do they work?

The only constant in life is the speed of light (so they say) so your warning labels need to be written to be alive and changing.

clip_image002

We write warning labels so that they are designed to last forever and cover everything. Again, like a constant, nothing lasts forever. So how do you write warning labels?

Identify three different warnings you need to tell your customers about.

1.     Those they need to see every time they use the product.

2.     Those labels your customers need to read to cover your butt and the legal ones (warranty disclaimers).

3.     Those you don’t know about

Group One

Let’s start with the first group. These warnings can be broken down into several questions to help you identify them.

A.           Does your product work the same way every time? If not you may need a warning label.

B.           Does your product have something that if used incorrectly will cause an injury and is done in such a way that the consumer needs reminded of it every time your product is used?

C.           Is there a warning that all of your competitors are using.

Group Two

The second group is a mix of information your customer needs to know, the information your customer can only learn from you; the information needed to protect your customer from every aspect of your product, including hitting someone on the head with it.

Finally add the legal disclaimers needed to CYA.

The label should state the maximum load the product can handle, divided by 3, the maximum stress labeled at 25%. You need to give yourself room for bad testing on your part and wild accusations on the part of your customer. The basics; hot, cold, electrical, wet, storage, heat, sun, freezing, those things that hurt or could kill your customers or ruin your product.

The final thing is the newest and the scariest. You must keep your customers informed of any changes or updates to your product as well anything new you discover about your product. A critical part of this is learning that your product is being used in a way that you did not anticipate or used incorrectly.

The good news is you can use your company website to inform people of the risks.

This is an emerging area of the law, now well-formed and not in all states. However, you can either take a marketing opportunity and make it possible CYA or be late to the game.

Your warnings must sense.

clip_image004

One of my favorite signs.

Rules for riding the amusement ride. The ride is for little kids, who CAN’T READ! The sign says you can’t weight more than 170 pounds, but your knees would be bumping on the floor.

So is a warning sign effective if it can’t be seen? What if it can’t be understood? What if it can’t be read because the reader cannot read?

Do Something

Rules for Warning Labels

1.   They have to be readable, the first day through the last day of the product.

2.   They have to be found, easily, by someone using the product properly and if used improperly is a real possibility, seen by those using the improperly.

3.   They have to be readable. The print size must be large enough so that you can read them without glasses at the distance appropriate for the product and the warning.

4.   Labels have to be warning labels and marked as such. It can’t be cuddly bears showing what not to do or kittens. It should say Warning in big bright bold letters with the warning under it.

5.   You don’t search for warning labels; they are in your face.

6.   Any warning not to do something is the possible injury or problem is located. If sticking a pin in a hole would cause an injury the warning label needs to be next to the hole.

7.   All Warning Labels must be repeated in the owner’s manual. Important warning labels may need to be on a hangtag.

8.   The packaging, the owner’s manual and the warning label all must say to read all warnings.

What do you think? Leave a comment.

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Keeter v. Alpine Towers International, Inc., 399 S.C. 179; 730 S.E.2d 890; 2012 S.C. App. LEXIS 171

Keeter v. Alpine Towers International, Inc., 399 S.C. 179; 730 S.E.2d 890; 2012 S.C. App. LEXIS 171

Lawrence Keeter, Ronald Travis Keeter, and Rebecca Keeter, Appellants/Respondents, v. Alpine Towers International, Inc., and Ashley Sexton, Defendants, Of Whom Alpine Towers International, Inc., is Respondent/Appellant.

Opinion No. 4995

COURT OF APPEALS OF SOUTH CAROLINA

399 S.C. 179; 730 S.E.2d 890; 2012 S.C. App. LEXIS 171

December 6, 2011, Heard

June 27, 2012, Filed

SUBSEQUENT HISTORY: Rehearing denied by Keeter v. Alpine Towers Int’l, Inc., 2012 S.C. App. LEXIS 248 (S.C. Ct. App., July 31, 2012)

PRIOR HISTORY: [***1]

Appeal From York County. Appellate Case No. 2009-137246. John C. Hayes, III, Circuit Court Judge.

DISPOSITION: AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

COUNSEL: Richard A. Harpootlian and Graham L. Newman, both of Richard A. Harpootlian, P.A., of Columbia, for Appellants/Respondents.

Charles E. Carpenter, Jr., and Carmon V. Ganjehsani, of Carpenter Appeals & Trial Support, LLC, of Columbia, and Thomas C. Salane, of Turner, Padget, Graham & Laney, P.A., of Columbia, for Respondent/Appellant.

JUDGES: FEW, C.J. KONDUROS, J., concurs. THOMAS, J., concurring in a separate opinion.

OPINION BY: FEW

OPINION

[*184] [**893] FEW, C.J.: Lawrence “Larry” Keeter and his parents brought this action against Alpine Towers International, Inc., for strict liability, negligent design, and negligent training after Larry broke his back and became a paraplegic as a result of a fall to the ground from a climbing tower designed, manufactured, and installed by Alpine Towers. The jury awarded actual and punitive damages in favor of Larry and actual damages in favor of his parents for Larry’s medical bills. After both sides filed post-trial motions, the trial court entered separate judgments in favor of Larry and his parents. Alpine Towers appeals the trial court’s decision [***2] to deny its motions for directed verdict and judgment notwithstanding the verdict (JNOV) as to actual and punitive damages, and its motion for a new trial due to an alleged error as to apportionment. Larry appeals the trial court’s ruling requiring him to elect between his three causes of action. We affirm the denial of Alpine Towers’ motions. However, we hold the trial court incorrectly interpreted the jury’s verdict and erred in requiring [*185] Larry to elect. We remand to the trial court with instructions to enter judgment in Larry’s favor against Alpine Towers in the amount of $3,400,500.00 actual damages and $1,110,000.00 punitive damages. 1

1 The judgment in favor of Larry’s parents is not affected by this appeal.

I. Facts

On May 5, 2006, the senior students at Fort Mill High School (Fort Mill) participated in a spring fling recreational field day. During field day, Larry fell more than twenty feet from the climbing tower to the ground. When he hit the ground, Larry broke a vertebra and was rendered a permanent paraplegic. He was seventeen.

Alpine Towers originally sold the climbing tower to Carowinds amusement park near Charlotte, North Carolina. Fort Mill bought the tower from Carowinds [***3] in July 2004 and hired Alpine Towers to move it, install it, and train Fort Mill’s faculty to safely use it. Fort Mill’s contract with Alpine Towers identifies Alpine Towers as “seller” and provides: “Installation includes all hardware, materials, . . . labor, . . . design work, . . . and staff training.” The wooden climbing tower is fifty feet tall, has three sides, and is shaped liked an hourglass. The central safety feature of any climbing tower is the belay system. 2 Alpine Towers designed the belay system on this climbing tower to include four participants–the climber, a primary belayer, a back-up belayer, and a faculty supervisor. The system requires the climber to wear a harness, which is secured to a climbing rope. The rope passes through a pulley at the top of the tower and down to a belay device secured to the ground at the base of the tower. The rope is threaded through the belay device, which uses bends in the rope to create friction to control the speed at which the rope passes through the device. As the [**894] climber ascends, the belayer guides the rope through the belay device to keep the rope taut. If the climber falls from the tower while climbing, [*186] the belayer uses the friction [***4] the belay device creates on the rope to keep the rope from passing back through the device, and thus protects the climber from falling all the way to the ground.

2 Alpine Towers’ instruction manual defines “belay” as “the rope or technique . . . that is used to protect a climber from falling to the ground.” See also Merriam-Webster Collegiate Dictionary 111 (11th ed. 2004) (defining belay as “the securing of a person or a safety rope to an anchor point (as during mountain climbing)”).

After a successful climb, or in the event the climber falls before completing the climb, the belayer lowers the climber to the ground in a controlled fashion by guiding the rope back through the belay device. The friction created on the rope allows the belayer to control the speed of the climber’s descent. 3 Because of the hourglass shape of the tower, a climber being lowered to the ground by the belayer is suspended in air, away from the side of the tower.

3 Alpine Towers’ CEO explained that “not very much” strength is required to hold a climber in the air because the weight is transferred through the belay device to the rope attached to the ground, so that a lightweight belayer can easily lower even a heavy [***5] climber.

Ashley Sexton, a senior at Fort Mill, served as Larry’s primary belayer. Fort Mill trained Ashley to belay as a part of the Junior ROTC program. Larry had never been trained in belaying or climbing, but successfully climbed to the top of the tower. Ashley testified that while she was lowering Larry to the ground “the rope . . . got[] tight in the [belay device] almost as if it were stuck” and would not move. Neither Ashley nor anyone at Fort Mill had been taught what to do if the rope became stuck in the belay device. When Ashley tried to free the rope, she lost the assistance of the device, was unable to control the rope, and Larry fell more than twenty feet to the ground.

Alpine Towers designed the belay system on the climbing tower and trained Fort Mill’s faculty how to use it. Alpine Towers provided no notice or warning to Fort Mill’s faculty that the climbing rope could get stuck in the belay device it designed into the system. Alpine Towers also provided no training or instruction on how the belayer or faculty supervisor should handle the situation if it did. Alpine Towers chose not to incorporate into the design a readily available, automatically locking belay device [***6] Larry’s experts testified would have stopped Larry’s fall. Alpine Towers did not train Fort Mill’s faculty to require the faculty supervisor to stand directly beside the belayer, which Alpine Towers admitted at trial [*187] should always be done to ensure that proper procedures were followed in the climb and to assist the belayers in the event of a situation like the one that resulted in Larry’s fall. When Larry fell, no back-up belayer was present, and no faculty supervisor was close enough to assist Ashley.

II. Procedural History

All of Larry’s damages were caused by the broken back he suffered as a result of his fall. Larry asserted three causes of action presenting three alternative theories of Alpine Towers’ liability for those damages: (1) Alpine Towers was strictly liable for the manufacture and sale of a defective and unreasonably dangerous product; (2) Alpine Towers negligently designed the climbing tower without adequate safety equipment, instructions, and warnings; 4 and (3) Alpine Towers was negligent in failing to properly train Fort Mill’s faculty on how to safely use the climbing tower, particularly in failing to train the faculty to teach student belayers to safely use the belay [***7] system.

4 Because Alpine Towers did the “design work” for the installation of the tower at Fort Mill, Larry’s negligent design theory includes allegations of negligence in failing to design the tower to meet the specific safety needs of Fort Mill.

Larry also filed suit against Ashley for negligence. Larry’s parents filed suit against Alpine Towers and Ashley for Larry’s medical bills. Larry and his parents settled with Fort Mill before filing suit and dismissed Ashley as a defendant before trial. The jury returned a verdict for Larry on each cause of action. It awarded $500.00 for strict liability, 5 $900,000.00 in actual damages and $160,000.00 in punitive damages for negligent design of the tower, and $2,500,000.00 in actual damages and $950,000.00 in punitive [**895] damages for Alpine Tower’s negligence in training Fort Mill’s faculty. The jury also returned a verdict for Larry’s parents for $240,000.00 in actual damages.

5 The jury originally returned a verdict on the strict liability cause of action in favor of Larry, but with zero damages. After the trial court instructed the jury that it must either award damages to Larry or find in favor of Alpine Towers, it returned a $500.00 award.

[*188] Alpine [***8] Towers filed a post-trial motion seeking (1) judgment notwithstanding the verdict as to all causes of action and punitive damages, (2) a new trial, (3) an order requiring Larry to elect between the three causes of action, (4) set-off of the settlement paid by Fort Mill, and (5) apportionment under the Contribution Among Joint Tortfeasors Act. The trial court denied the JNOV, new trial, and apportionment motions. The court required Larry to elect between his causes of action and ordered that the settlement from Fort Mill be set-off against Larry’s recovery from Alpine Towers. Larry also filed a post-trial motion asking the trial court to enter judgment in the cumulative amount of the damage awards rather than require him to elect. The court denied Larry’s motion and ordered that judgment be entered in the amount of $2,500,000.00 in actual damages and $950,000.00 in punitive damages on the negligent training cause of action.

III. Alpine Towers’ Appeal

A. Directed Verdict and JNOV–Actual Damages

[HN1] “In ruling on motions for directed verdict and JNOV, the trial court is required to view the evidence and the inferences that reasonably can be drawn therefrom in the light most favorable to the [***9] party opposing the motions.” McMillan v. Oconee Mem’l Hosp., Inc., 367 S.C. 559, 564, 626 S.E.2d 884, 886 (2006). “When we review a trial judge’s . . . denial of a motion for directed verdict or JNOV, we reverse only when there is no evidence to support the ruling or when the ruling is governed by an error of law.” Austin v. Stokes-Craven Holding Corp., 387 S.C. 22, 42, 691 S.E.2d 135, 145 (2010).

In its motions for directed verdict and JNOV, Alpine Towers contested all liability issues, including the sufficiency of the evidence supporting each of Larry’s causes of action. In its Statement of Issues on Appeal, Alpine Towers contends only that the trial court should have granted its motions because the chain of causation was broken as a matter of law. Specifically, Alpine Towers contends the chain of causation was broken by (1) “the intervening and superseding negligent [*189] acts of Fort Mill High School and Ashley Sexton in failing to follow the warnings, directions, and instructions for proper use of the Tower” and (2) “the intervening and superseding negligent acts of Fort Mill High School in failing to undertake its independent duty to properly supervise its students.” However, because [***10] both Larry and Alpine Towers address in their briefs the sufficiency of the evidence supporting each of Larry’s causes of action, we do as well. We find ample evidence to support the jury’s verdict as to each. We also find ample evidence that Ashley’s negligence and any negligence by Fort Mill was foreseeable to Alpine Towers, and thus their negligence does not break the chain of causation from Alpine Towers’ tortious conduct.

1. Strict Liability

In his strict liability theory, Larry focused on Alpine Towers’ design of the climbing tower to incorporate a belay device called Trango Jaws. The Trango Jaws is operated manually and requires the belayer to properly position the climbing rope in the Trango Jaws to create the friction necessary to stop the rope and then control the rate of the climber’s descent. Larry’s expert witness in biomechanics and sports safety, Gerald George, Ph.D., testified that the Trango Jaws relies on the absence of human error to safely belay a climber. He explained that it was feasible to use an alternative design for the climbing tower incorporating a belay device called a GriGri. 6

6 The GriGri costs approximately $75, and the Trango Jaws costs approximately $24. [***11] The CEO of Alpine Towers testified the difference in cost is an “inconsequential amount of money.”

The GriGri is a mechanical device that, when properly threaded, does not rely on the absence of human error. In the event the belayer loses control of the rope, the GriGri automatically stops the rope, and thus protects the climber from falling to the ground. Larry’s climbing wall safety expert, Dan Hague, testified that the GriGri “locks up automatically, . . . you’re not relying on the actions of the belayer to lock the device up.” [**896] He emphasized that the automatic stopping feature of the GriGri is particularly important when students are belaying climbers because of the heightened likelihood of human error. To account for this foreseeable risk, Hague “always uses the GriGri with kids.” In Hague’s opinion, “this injury would not have occurred had a GriGri [*190] been in use that day.” As a normal part of its business, Alpine Towers sells the GriGri for a variety of uses, including on its own climbing towers. Dr. George testified that without incorporating a “fail-safe” belay device such as the GriGri into the design of a climbing tower used for students, the climbing tower is defective and unreasonably [***12] dangerous.

Alpine Towers’ argument that the evidence in support of Larry’s strict liability cause of action is insufficient is that there is no evidence the tower “was in a defective condition, unreasonably dangerous to the user . . . when it left the hands of the defendant.” See Bragg v. Hi-Ranger, Inc., 319 S.C. 531, 539, 462 S.E.2d 321, 326 (Ct. App. 1995). However, the evidence discussed above amply supports the jury’s finding that it was. Moreover, the GriGri qualifies as a “reasonable alternative design” as required under Branham v. Ford Motor Co., 390 S.C. 203, 225, 701 S.E.2d 5, 16 (2010). The trial court correctly denied Alpine Towers’ directed verdict and JNOV motions as to strict liability.

2. Negligent Design

[HN2] “A negligence theory imposes the additional burden on a plaintiff ‘of demonstrating the defendant . . . failed to exercise due care in some respect, and, unlike strict liability, the focus is on the conduct of the seller or manufacturer, and liability is determined according to fault.'” Branham, 390 S.C. at 210, 701 S.E.2d at 9 (quoting Bragg, 319 S.C. at 539, 462 S.E.2d at 326). In his negligent design theory, Larry also relied on the evidence that Alpine Towers should [***13] have used the GriGri in designing a climbing tower to be used by students, particularly student belayers. However, in addition to evidence that the tower was defective and unreasonably dangerous without the GriGri, Larry presented evidence that Alpine Towers failed to exercise reasonable care in the design. Specifically, Larry presented evidence that Alpine Towers conducted a ten-year study ending in 1999 that concluded the majority of accidents on its climbing towers were caused by human error, specifically belayers dropping their climbers. Despite this knowledge, Alpine Towers chose not to design for human error by including a belay device that would automatically lock and prevent the rope from passing back through the [*191] device, thus preventing a fall to the ground such as the one Larry suffered.

Moreover, Larry’s experts testified to several breaches of Alpine Towers’ duty of reasonable care in designing the warnings and instructions on the tower. In particular, Larry’s experts testified faculty supervisors should be instructed to remain within reaching distance of active belay ropes. Alpine Towers’ employee John Mordhurst conceded this instruction was necessary. Mordhurst testified [***14] a faculty supervisor should be at each belay point, and “[t]hey should be . . . in a position to intervene to grab a rope, . . . so they should be right next to the belayers and belay monitors.” In the 1997 edition of Alpine Towers’ instruction manual for the climbing tower, the section entitled “The Belay System” includes this requirement: “[P]rograms should require staff to check the belayer’s and climber’s systems prior to climbing and lowering; . . . the staff member should stand directly beside the climber.” However, Alpine Towers omitted the statement containing this requirement from the 2004 edition of the instruction manual, the edition it provided to Fort Mill.

Additionally, Dr. George testified Alpine Towers should have placed end user warnings on the tower for someone like Larry, who climbed for the first time without any instruction, and Ashley, who never received an instruction manual. Dr. George explained this was necessary to ensure an inexperienced climber such as Larry will know the dangers of climbing and understand how the belay system is designed to work before deciding to begin a climb. This evidence amply supports the jury’s finding that Alpine Towers failed to [***15] exercise reasonable care in designing a defective and unreasonably dangerous climbing tower. Therefore, the trial court was correct to deny Alpine Towers’ motions as to negligent design.

[**897] 3. Negligent Training

In his negligent training theory, Larry presented evidence that despite knowing Fort Mill’s faculty would not be doing most of the belaying, but rather would be teaching students to belay, Alpine Towers did not instruct the faculty how to teach belaying. Larry proved several key facts in support of this claim. First, Alpine Towers uses a written [*192] syllabus when it conducts classes to teach adults how to belay. However, it did not provide the syllabus to Fort Mill to enable Fort Mill to effectively teach students. Second, the belay system designed by Alpine Towers relies on a faculty supervisor to ensure the students are properly belaying the climbers. In addition to Mordhurst’s testimony as to where the faculty supervisor should be positioned, the CEO of Alpine Towers, Joe Lackey, testified, “the staff member should stand directly behind the climber, . . . not thirty feet away.” The obvious purpose of this requirement is to enable the supervisor to keep the students from making errors [***16] and, if they do, to prevent the tragic consequences Larry suffered. However, Larry presented evidence that Alpine Towers did not teach this to the faculty at Fort Mill. One member of Fort Mill’s faculty who attended the Alpine Towers course testified he did not recall being told that a faculty supervisor should stand beside the belayer. When asked why the requirement that “the staff member should stand directly beside the climber” in the 1997 instruction manual was not included in the 2004 edition, Lackey responded, “I’m not sure why it was taken out.”

Moreover, despite knowing that Fort Mill would be teaching students to belay and that students were more susceptible to making belaying errors than adults, Alpine Towers did not teach Fort Mill that it should test the students’ competency before allowing them to belay a climber. Hague testified “as a matter of course in my industry, participants are tested,” including whether they are “able to . . . belay in a competent manner, catch falls, lower somebody . . . off a climb.” He explained:

In a climbing setting you have to be able to assess whether or not the group as a whole is making progress. . . . Since we’re talking about life safety [***17] here and not about math, if someone is not learning at the same rate as the group, you can’t just move to the next topic. You have to slow down. You have to be able to address that one person until everybody’s caught up. In addition, at the end of the training, there needs to be some type of discrete competency test.

Alpine Towers has several employees who serve on the standards committee for the Association for Challenge [*193] Courses Technology, which Lackey called a “climbing society.” Despite evidence of this standard climbing industry practice, Alpine Towers did not teach Fort Mill that it needed to test, how the tests should be conducted, or what particular skills should be tested. 7

7 Ashley testified she was not given a written test, but was required to do a “demonstration” and be watched by a faculty member to make sure she “knew how to do it.” There was no evidence, however, that Alpine Towers took any steps to ensure Fort Mill gave an adequate test of her competency. In fact, Alpine Towers’ instruction manual says only that students “will demonstrate proficiency in belaying before being permitted to belay.”

This evidence provides ample support for the jury’s finding that Alpine Towers [***18] was negligent in failing to properly train the Fort Mill faculty on how to safely use the tower, and thus the trial court properly denied Alpine Towers’ motions as to negligent training.

We affirm the trial court’s decision to deny Alpine Towers’ motions for directed verdict and JNOV as to the sufficiency of the evidence supporting all three of Larry’s causes of action.

4. Intervening Causation

[HN3] The test for whether a subsequent negligent act by a third party breaks the chain of causation to insulate a prior tortfeasor from liability is whether the subsequent actor’s negligence was reasonably foreseeable. “For an intervening act to break the causal link and insulate the tortfeasor from further liability, the intervening act must be unforeseeable.” McKnight v. S.C. Dep’t of Corr., 385 S.C. 380, 387, 684 S.E.2d 566, 569 [**898] (Ct. App. 2009) (internal quotation marks omitted). The trial court properly charged the jury as follows:

The chain of causation between a defendant’s negligence and the injury itself may be broken by the independent intervening acts or omissions of another person over whom the defendant had no control. In order to decide whether an intervening act breaks the chain of causation, [***19] you must determine whether the intervening act or omission was reasonably foreseeable by the defendant. If the intervening act or omission was a probable consequence of the defendant’s negligence, the defendant is responsible for the plaintiff’s [*194] injuries. If, however, you find that the intervening act or omission was not foreseeable, the defendant is not liable.

By finding in favor of Larry, the jury necessarily found the actions of Ashley and Fort Mill were foreseeable, and therefore the chain of causation was not broken to insulate Alpine Towers from liability. There is ample evidence to support this finding. See Cody P. v. Bank of Am., N.A., 395 S.C. 611, 621-22, 720 S.E.2d 473, 479 (Ct. App. 2011) (“Only in rare or exceptional cases may the question of proximate cause be decided as a matter of law. . . . If there may be a fair difference of opinion regarding whose act proximately caused the injury, then the question of proximate cause must be submitted to the jury.” (internal quotation marks and citations omitted)).

Larry presented evidence that Alpine Towers knew Fort Mill would be using high school students to belay climbers, that adolescents are more susceptible to belaying errors [***20] than adults, and that Alpine Towers conducted a study concluding human error is the most common cause of falls to the ground from climbing towers. Dr. George testified Alpine Towers “knew or should have known . . . of these risks.” He stated it was not merely foreseeable, but “almost predictable,” that high school students would not follow proper procedures for belaying climbers. Hague testified that he has trained “thousands and thousands” of people in belaying over fifteen years, including “many hundreds” of adolescents, he takes different approaches to training depending on the maturity level of the belaying student, adolescents “routinely do not” follow procedures, and Alpine Towers “could easily foresee that adolescents aren’t going to follow all the procedures.”

Therefore, the primary risk associated with the use of a climbing tower is that the belayer, back-up, or faculty supervisor might make an error belaying the climber. Each of Larry’s theories of recovery focused on the allegation that Alpine Towers failed to design for and train against human error in belaying and the supervision of students belaying. This is not a “rare or exceptional” case in which the issue of proximate [***21] cause may be decided as a matter of law. Alpine Towers’ argument that “the intervening and superseding negligent acts of Fort Mill High School and Ashley Sexton” broke the chain of causation fails because there is ample evidence in [*195] the record that precisely the same human error that resulted in Larry’s injury was not only foreseeable to Alpine Towers, but was actually foreseen. Accordingly, we find the trial court properly submitted the question of proximate cause to the jury, and we affirm its decision to deny Alpine Towers’ motions for directed verdict and JNOV as to intervening causation.

B. Directed Verdict and JNOV–Punitive Damages

Alpine Towers also argues the trial court erred in denying its directed verdict and JNOV motions as to punitive damages. We disagree.

[HN4] “When ruling on a directed verdict motion as to punitive damages, the circuit court must view the evidence and the inferences that reasonably can be drawn therefrom in the light most favorable to the nonmoving party.” Hollis v. Stonington Dev., LLC, 394 S.C. 383, 393-94, 714 S.E.2d 904, 909 (Ct. App. 2011) (internal quotation marks omitted). This court applies the same standard as the circuit court. 394 S.C. at 394, 714 S.E.2d at 910. [***22] “The issue of punitive damages must be submitted to the jury if more than one reasonable inference can be drawn from the evidence as to whether the defendant’s behavior was reckless . . . .” Mishoe v. QHG of Lake City, Inc., 366 S.C. 195, 201, 621 S.E.2d 363, 366 (Ct. App. 2005). “Recklessness implies the doing of a negligent [**899] act knowingly; it is a conscious failure to exercise due care. If a person of ordinary reason and prudence would have been conscious of the probability of resulting injury, the law says the person is reckless . . . .” Berberich v. Jack, 392 S.C. 278, 287, 709 S.E.2d 607, 612 (2011) (internal citation and quotation marks omitted).

Larry made two separate claims for punitive damages against Alpine Towers: (1) for reckless behavior in its design of the climbing tower and (2) for reckless behavior in its failure to properly train the Fort Mill faculty on how to safely use the climbing tower. The jury awarded punitive damages on each claim, so we address each independently.

As to Larry’s claim for punitive damages based on Alpine Towers’ reckless behavior in designing the tower, Larry presented evidence that Alpine Towers knew the majority [*196] of accidents occurring on its [***23] climbing towers were caused by human error by belayers and back-up belayers. Mordhurst conceded that of the three options for a belay device in the design of a climbing tower, “the GriGri has [the] highest likelihood of arresting the fall” of a climber and thus protecting him from falling to the ground if the belayer loses control of the rope. Lackey testified the additional cost of a GriGri is “inconsequential.” Alpine Towers’ decision to design its climbing tower to incorporate the Trango Jaws instead of the GriGri under these circumstances is sufficient evidence Alpine Towers was “conscious of the probability of resulting injury” from its negligence, and therefore was reckless. The trial court was correct to submit the issue of punitive damages for reckless design to the jury. 392 S.C. at 287, 709 S.E.2d at 612.

As to Larry’s claim for punitive damages based on Alpine Towers’ reckless behavior in failing to properly train the Fort Mill faculty, in addition to the evidence discussed above, Alpine Towers knew Fort Mill would be using student belayers, whom Alpine Towers knew to be less attentive to following procedures and more susceptible to errors in belaying than adults. Nevertheless, [***24] Alpine Towers (1) chose not to train Fort Mill’s faculty to teach others, particularly students; (2) did not include in the training materials given to Fort Mill the syllabus Alpine Towers uses to teach belaying; (3) removed from its training manual the specific instruction for faculty supervisors to “stand directly behind the climber”; (4) did not teach Fort Mill to follow the industry practice of testing belayers on the basic skills of belaying before allowing them to belay climbers; and (5) did not inform Fort Mill it had the option of an automatically locking belay device such as the GriGri to compensate for the greater risk posed by the use of student belayers. This also is sufficient evidence Alpine Towers was “conscious of the probability of resulting injury” from its negligence, and therefore was reckless. The trial court was correct to submit the issue of punitive damages for reckless training to the jury. Id.

Accordingly, we affirm the trial court’s decision to deny Alpine Towers’ directed verdict and JNOV motions as to punitive damages.

[*197] C. Apportionment of Fort Mill’s Fault

Alpine Towers contends it is entitled to a new trial because the trial court did not allow the jury to [***25] consider the fault of Fort Mill when it apportioned fault under section 15-38-15 of the South Carolina Code (Supp. 2011). 8 However, our ruling affirming the jury’s award of punitive damages makes it unnecessary to address this issue as [HN5] the apportionment statute “does not apply to a defendant whose conduct is determined to be . . . reckless.” § 15-38-15(F).

8 After the jury’s verdict as to liability, the trial court required it to apportion fault between Alpine Towers and Ashley. The jury determined that Ashley was 60% at fault and Alpine Towers was 40% at fault. The jury was not asked to consider the fault of Fort Mill.

IV. Larry’s Appeal

Larry appeals the trial court’s post-trial ruling entering judgment in his favor in the amount of $2,500,000.00 in actual damages and $950,000.00 in punitive damages. He contends the trial court erred in interpreting the verdicts as “three awards” and requiring him to elect which cause of action would be his remedy. We agree.

[HN6] “Election of remedies involves a choice between different forms of redress [**900] afforded by law for the same injury . . . . It is the act of choosing between inconsistent remedies allowed by law on the same set of facts.” Taylor v. Medenica, 324 S.C. 200, 218, 479 S.E.2d 35, 44-45 (1996). [***26] Larry asserted three causes of action, but sought only one remedy–damages–for only one injury–a broken back. When a plaintiff seeks only one remedy, there is nothing to elect. See Adams v. Grant, 292 S.C. 581, 586, 358 S.E.2d 142, 144 (Ct. App. 1986) (“Where a plaintiff presents two causes of action because he is uncertain of which he will be able to prove, but seeks a single recovery, he will not be required to elect.”).

The trial court in this case recognized that Larry’s three causes of action sought only one remedy. In its post-trial order, the court wrote:

Here, both products liability claims and the negligence claim represent three theories for recovery for the same injury and damages–personal injuries sustained by [Larry] in his [*198] fall. [Larry] had one fall and all his injury and damages flow therefrom regardless of the number of acts of omission or commission of [Alpine Towers].

Because Larry sought only one remedy, the doctrine of election of remedies does not apply. [HN7] “As its name states, the doctrine applies to the election of ‘remedies’ not the election of ‘verdicts.'” Austin, 387 S.C. at 57, 691 S.E.2d at 153 (defining a “‘remedy’ as ‘[t]he means by which . . . the violation [***27] of a right is . . . compensated.'” (quoting Black’s Law Dictionary 1163 (5th ed. 1979))).

This court addressed a similar situation in Creach v. Sara Lee Corp., 331 S.C. 461, 502 S.E.2d 923 (Ct. App. 1998). The plaintiff in Creach “bit down on a hard substance in a steak biscuit made by Sara Lee Corporation,” “experience[d] severe pain,” and had to undergo “extensive dental work.” 331 S.C. at 463, 502 S.E.2d at 923-24. She sued Sara Lee and others “alleging negligence, breach of warranty, and strict liability.” 331 S.C. at 463, 502 S.E.2d at 923. After a verdict for Creach on all three causes of action, Sara Lee asked the trial judge to require her to elect her remedy. The judge refused to do so, and this court affirmed, holding “while the complaint stated three different causes of action, only one recovery was sought and only one recovery was awarded. Under these circumstances, no election was required.” 331 S.C. at 464, 502 S.E.2d at 924 (citing Taylor, 324 S.C. at 218, 479 S.E.2d at 44-45). Creach supports our holding that because Larry sought one remedy for one injury, the trial court erred in requiring him to elect.

Nevertheless, the trial court and this court must ensure that Larry [***28] does not receive a double recovery. See Collins Music Co. v. Smith, 332 S.C. 145, 147, 503 S.E.2d 481, 482 (Ct. App. 1998) ( [HN8] “It is well settled in this state that there can be no double recovery for a single wrong and a plaintiff may recover his actual damages only once.” (internal quotation marks omitted)). The determination of whether a verdict grants a double recovery begins with the trial court’s responsibility to interpret the verdict in order to ascertain the jury’s intent. The trial court interpreted the jury’s verdict in this case to be “three awards,” and therefore “inconsistent” because [*199] it allowed Larry a double recovery. We find the trial court erred in its interpretation of the verdict.

The error arose from the verdict form. Because Larry asserted three causes of action, the trial court correctly fashioned the verdict form to require the jury to write its verdict for each cause of action. However, because Larry sought only one remedy–damages–and because the amount of those damages could not vary from one cause of action to another, the trial court should have required the jury to write one amount for Larry’s actual damages, and should not have permitted the jury to write [***29] a damages amount for each of the three causes of action. The use of the three blanks for damages in the verdict form left the verdict ambiguous as to the amount of damages the jury intended to award.

[HN9] To determine the jury’s intent in an ambiguous verdict, the court should consider the entire proceedings, focusing on the events and circumstances that reasonably indicate what the jury intended. See Durst v. S. Ry. Co., 161 S.C. 498, 506, 159 S.E. 844, 848 (1931) (stating “the construction of a verdict should, and can, depend upon, not only the language used by the jury, but other things occurring in the trial may be, and [**901] should be, properly regarded in determining what a jury intended to find”); Howard v. Kirton, 144 S.C. 89, 101, 142 S.E. 39, 43 (1928) (stating it is “the duty of the trial judge to decide what the verdict meant, and, in reaching his conclusion thereabout, it was his duty to take into consideration not only the language of the verdict, but all the matters that occurred in the course of the trial”); see also 75B Am. Jur. 2d Trial § 1545 (2007) (“In the interpretation of an ambiguous verdict, the court may make use of anything in the proceedings that serves to show with [***30] certainty what the jury intended, and, for this purpose, reference may be had, for example, to the pleadings, the evidence, the admissions of the parties, the instructions, or the forms of verdict submitted.”).

To correctly interpret the verdict in this case, the trial court was required to consider several indications of the jury’s intention as to damages. First, the court should have considered its own conclusion that Larry sought only one remedy–damages–and that all of his damages flowed from the broken back resulting from his fall from the tower. Thus, it was not [*200] possible for the damages to vary from one cause of action to another. Second, after the jury returned the verdicts, Larry made a motion asking the court to inquire of the jury whether it meant for the damages awarded to be cumulative. Alpine Towers did not object to the request. While the jury was still in the courtroom, the judge asked the forelady if the jury intended the verdicts to be cumulative.

The Court: . . . Before you leave, I’ve got one last question. On the three causes of action you have awarded different amounts of damages. . . . Was it the jury’s intention to award those cumulatively, that is they add up to [***31] [$3.4 million and $500.00] . . . or did you simply mean that the damages as to each cause of action were to be separate . . . .

Forelady: Ask me that again.

. . .

The Court: . . . You have ordered [$500.00] on one, [$900,000.00] on one, and [$2.5 million] on one. Is it the jury’s intention that those are to be added, that is cumulative, or is the jury’s intention that as to each cause of action that award applies only to that cause of action?

Forelady: It’s cumulative.

The Court: Okay. How about . . . as to the punitive, you had [$160,000.00] and [$950,000.00], which adds up . . . to [$1.1 million] [sic]. Is it the same for that also?

Forelady: It’s cumulative.

The trial court then asked each side separately if there was “anything else before the jury’s dismissed?” Both Larry and Alpine Towers answered that they had nothing further, and the trial court dismissed the jury. 9

9 The trial court found, and Alpine Towers argues on appeal, that Larry should have sought further inquiry into the jury’s intent and that his failure to do so forecloses his argument that the jury intended the verdicts to be cumulative. We disagree. Larry is the party who initially asked the court to inquire whether the [***32] jury intended the verdict to be cumulative. Larry’s counsel stated to the court “you can either inquire of the jury here in the courtroom or you can send them out, whatever you’re comfortable with.” Alpine Towers’ counsel stated, “I wouldn’t oppose that request.” The trial court then made the decision to ask only the forelady. The forelady’s answer, “It’s cumulative,” was the answer Larry was looking for, and therefore Larry had no reason to inquire further on that subject. Alpine Towers, who at that point did have reason to inquire further, said nothing. Therefore, to the extent the lack of further inquiry should be considered, we believe it should be held against Alpine Towers.

[*201] In the context that Larry sought, and could obtain, only one damages award for the same injury, this dialogue adequately demonstrates the jury intended the damage amounts written in the three blanks on the verdict form to be added together for a total award to Larry of $3,400,500.00 actual damages and $1,110,000.00 punitive damages. However, there was more to indicate this was the jury’s intention. During deliberations the jury sent a note to the court stating the jurors were deadlocked as to whether to award [***33] $4.5 million or $5 million and asking for suggestions. The court responded that it had no suggestions. The total amount of damages awarded, including the amount awarded to Larry’s parents, was $4.75 million, 10 which is between the two amounts [**902] listed in the note. Further, the court should have considered that it gave the jury no basis on which to find different damage awards on different causes of action. In fact, the only place in the damages instruction where the court differentiated between the causes of action at all was to explain to the jury it may award punitive damages only on the negligence theories of recovery.

10 At the point of the trial when the jury sent this note, the court had not instructed the jury it must award damages on the strict liability claim or find for the defendant. Thus, the $500.00 damages awarded on that cause of action is not included in this figure.

This court has stated that [HN10] “it is the duty of the court to sustain verdicts when a logical reason for reconciling them can be found.” Daves v. Cleary, 355 S.C. 216, 231, 584 S.E.2d 423, 430 (Ct. App. 2003). In fulfilling this duty, we may not substitute our judgment for that of the jury. See Lorick, 153 S.C. at 319, 150 S.E. at 792 [***34] (stating the court has a right to give “effect to what the jury unmistakably found” but cannot “invade the province of the jury”). The jury’s verdict in this case is readily reconciled as we have explained. We can discern no other way to interpret the verdict consistent with the applicable law and the facts of this case, nor can we find in the record any reason to believe this interpretation does not reflect the intent of the jury. Moreover, during arguments on post-trial motions, counsel for Alpine Towers explained to the trial court what he believed the jury did:

[*202] Let me tell you what I think happened. . . . [When they sent the note asking for suggestions,] they advised that they had arrived at a general block of the amount of the damages that they wanted to give to compensate Mr. Keeter. What they then did because the verdict form is listed in such a way that it says actual damages and punitive damages leaving both blank that they went through and parceled out the total amount of compensatory damages that they wanted to award . . . . And the damages for all three claims are identical . . . , there is no differentiation on the damages . . . . [T]hey arrived at a larger figure then [***35] they parceled it up to fill in the blanks. 11

Interpreting the verdict based on “all the matters that occurred in the course of the trial,” Howard, 144 S.C. at 101, 142 S.E. at 43, we disagree with the trial court and find the jury did not make an “inconsistent damages award.” See 75B Am. Jur. 2d Trial § 1556 (2007) (“In order for a verdict to be deemed inconsistent, there must be inconsistencies within each independent action rather than between verdicts in separate and distinct actions.”). Rather, we find that the jury intended the amounts to be added together for a total verdict in Larry’s favor of $3,400,500.00 actual damages and $1,110,000.00 punitive damages. Accordingly, we hold the trial court erred in its interpretation of the verdicts and judgment should have been entered in the cumulative amount of actual and punitive damages the jury wrote on the verdict form for each of Larry’s causes of action.

11 In fairness to counsel, the statement was made as part of his argument that the verdicts were inconsistent. However, we believe the statement accurately explains why the jury put different damage amounts in different blanks.

V. Conclusion

For the reasons explained above, we affirm [***36] the trial court’s decision to deny Alpine Towers’ motions for directed verdict, JNOV, and for a new trial. We reverse the trial court’s interpretation of the jury verdict and remand with instructions that judgment be entered against Alpine Towers in favor of Larry Keeter in the amount of $3,400,500.00 actual damages and $1,110,000.00 punitive damages.

[*203] AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

KONDUROS, J., concurs.

CONCUR BY: THOMAS

CONCUR

THOMAS, J., concurring in a separate opinion.

THOMAS, J.: I concur with the majority as to Alpine Towers’ appeal. As to Larry’s appeal, I concur in result. I agree that this case does not involve the need to elect remedies or an inconsistent verdict. I write separately to clarify that questioning the entire jury and then conforming the jury’s verdict to the jury’s intent are the best practices for ensuring a valid verdict.

[**903] First, when a party raises a question about the jury’s intent for the verdict, the best practice is to poll all of the jurors or allow the foreperson to answer the court’s questions after consulting with the entire jury. Lorick & Lowrance, Inc. v. Julius H. Walker Co., 153 S.C. 309, 314-15, 150 S.E. 789, 791 (1929). The need to clarify the jury’s [***37] intent almost invariably arises when the language used on the verdict form is problematic. Without an inquiry of the remaining jurors, questioning only the foreperson unnecessarily risks that the jury’s precise intent will remain unknown. This danger is heightened by the likelihood of arguments that the foreperson misunderstood the court’s questions or provided a response not reflecting the entire jury’s intent.

Second, if the initial inquiry shows the jury’s intent differs from what the jury wrote on the verdict form, the best practice is to either send the jury back to conform the verdict to the jury’s intent or have the correction made in open court with the jury’s consent. Id. at 314-15, 150 S.E. at 791. After the jury is discharged, the court may construe the verdict in a manner that diverges from the language used by the jury only when the surrounding circumstances make the jury’s intent unmistakable and the court’s construction reflects that intent. Id. at 319-20, 150 S.E. at 792-93.

I disagree with the majority’s statement in footnote 9 that Larry had no reason to seek further inquiry of the jury’s intent after the foreperson testified the actual and punitive damages amounts [***38] were cumulative. The movant has the most [*204] incentive to ask the court to send the jury back to conform the verdict to the jury’s intent or have the correction made in open court with the jury’s consent. These practices best ensure the verdict reflects the jury’s intent, and a verdict rendered in accordance with them is nearly impossible to attack by arguing the jury’s intent is unclear. See Billups v. Leliuga, 303 S.C. 36, 39, 398 S.E.2d 75, 76 (Ct. App. 1990) (stating “a jury verdict should be upheld when it is possible to do so and carry into effect the jury’s clear intention,” and holding the jury’s intent was clear despite “some confusion in the jury’s initial written verdict” because the foreperson testified as to the jury’s intent, the clerk published the jury’s intent after the foreperson put the intent in writing, and the remaining jurors were polled to ensure their intent complied with the published intent); cf. Joiner v. Bevier, 155 S.C. 340, 351, 354-55, 152 S.E. 652, 656-57 (1930) (stating the court has the “duty to enforce a verdict, not to make it” and holding that despite some initial difficulty in getting the jury to render a verdict proper in form, the jury’s intent [***39] was “entirely clear” when the verdict after a second set of deliberations “corresponded exactly” with the special findings obtained prior to sending the jury back to deliberate). Moreover, if the above practices are not used, the movant risks having to meet its burden of establishing that the jury’s intent is absolutely clear using solely the surrounding circumstances of the case. Lorick, 153 S.C. at 319-20, 150 S.E. at 792-93. Here, the jury did not conform the verdict to its intent, nor was the jury polled. 12 Therefore, because the burden to establish the jury’s intent remains on Larry as the movant, 13 he must establish the jury’s intent was unmistakable based on the surrounding circumstances of the case.

12 In fairness to Larry, he asked the trial court to determine whether the verdict in his favor was intended to be cumulative. He suggested to the trial court, “[E]ither inquire of the jury . . . in the courtroom or . . . send them out.” The trial court instead only questioned the foreperson in the presence of the other jurors.

13 In discussing the movant’s incentive and burden, I am not referring to our rules of preservation. This issue is preserved because Larry sufficiently raised [***40] it to the trial court by seeking to clarify the jury’s intent in the above-suggested manner before the jury was discharged and the trial court ruled on his motion.

[*205] Despite the uphill battle undertaken in this case to establish the jury’s intent, I agree to remand for an entry of judgment against Alpine Towers in favor of Larry for $3,400,500.00 actual damages and $1,110,000.00 punitive damages. The surrounding circumstances of this case make the jury’s intent unmistakable. Taken together, the forelady’s testimony, the jury note, the jury charge, the total damages awarded, and the single injury alleged can lead to only one conclusion: the jury intended to award Larry [**904] $3,400,000 in actual damages 14 and $1,110,000 in punitive damages.

14 This amount omits the damages awarded for the strict liability claim because the jury note was sent before the jury re-deliberated the strict liability claim.

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Indemnification agreements? What are you signing?

Suddenly, indemnification agreements are flying around the outdoor industry. Make sure you know what you are signing.

Indemnification agreements, either as part of another document or individually are being tossed around the outdoor industry. So far, they have all been written by non-attorneys. By that I mean they are written badly or by someone who does not understand what they are and how they work. Before you sign an indemnification agreement, you need to understand what you are signing and the ramifications of signing it.

An indemnification agreement is similar, not like, but similar, to an insurance policy. Most times an indemnification agreement says you will pay us (indemnify) for any money we spend because of your actions that have cost us money, including our costs and attorney’s fees.

An insurance policy is slightly different than indemnification policy for two reasons.

1.   An insurance policy is very specific on what if covers. If it is not written in the policy as something that is insured, then you will not get money.

2.   You pay for a policy. The amount of money you pay is based on the risk; the greater the risk, the more money you pay for the policy.

Indemnification agreements in the past have been narrow and focused on specific issues that the parties negotiate. The indemnification agreement said if something you did brings us into a lawsuit, you have to reimburse us for our costs if we are sued because of what you did. Indemnification agreements were written into contracts as part of the overall deal.

An Example would be:

A manufacturer makes a product with a defect, and the retailer is sued because of the defect by the consumer who purchased the product. The liability issues are set forth because the agreement says the retailer must be sued or there must be liability or a claim.

First Problem: Consideration

For a contract to be valid there must be consideration. Consideration is a benefit flowing from one party to the other party. Normally, consideration is money. If a contract and a course of dealing exist between two parties, if one party now wants an indemnification agreement signed, there must be new consideration. You have to pay for the new agreement to be a contract and to be binding. No consideration, no contract.

Second Problem: Overly Broad

The indemnification agreements I am seeing recently have been very broad and cover everything. There are major issues with a document this broad because it is impossible to comply with. By that I mean there are realistic limits to what can be indemnified. The major item controlling indemnification agreements is money. If you don’t have a bank account with enough cash in the account to cover the indemnification bill when it comes due, why sign the agreement to begin with?

1.   You can only sign what you can pay for.

Unless you are dealing with broken products (replacement) or fixed amounts (breach of contract), you can only sign an indemnification agreement that has limits that you can afford. If you sign an indemnification agreement knowing there are no way you can pay for it, you are creating additional problems; misrepresentation and fraud (see below). If you can’t pay the bill when it comes due, you will either file bankruptcy and or go out of business.

Make sure you know how much indemnification will cost you and whether or not you can deal with the bill. If you don’t have the cash, then you better have an insurance policy.

2.   You can only sign what your insurance policy says it will cover.

99% of the time, an indemnification agreement is really based on your insurance company stepping up and writing a check. The insurance company does that because:

A.   There is a legitimate claim covered by the policy.

B.   The claim is within the limits of the policy.

C.  The insurance company knew about the indemnification and agreed to it in advance! (Oh?)

If your policy is not broad enough, does not cover everything covered in the indemnification, you are again on the hook yourself. Your commercial policy is very different from your homeowner’s policy. Your commercial policy says it covers everything on the list of covered items in the policy. If the claim is not on the list, you have no insurance coverage.

Your insurance policy is written to pay claims, not necessarily contracts. If the indemnification is not based on a claim or legal liability, your insurance policy may just ignore the issue. The insurance company is not contractually required to pay what is not covered in the policy.

3.   If your insurance company does not know about the indemnification and agree to it, you still may not have coverage. You are back to writing a check.

Your insurance company in many cases can cover indemnification; however, many policies require knowledge in advance or in some cases need to approve indemnification. Sending an indemnification claim to an insurance company based on a contract you signed without the insurance company knowing about the indemnification agreement in advance is an easy way to get the claim denied or the policy non-renewed the next time it comes up for renewal.

4.   Signing an indemnification agreement without the ability to back it up is a misrepresentation in some states.

Misrepresentation pierces the corporate veil making you personally liable for the claims. (The sole exception to this MAYBE if you are an LLC; however several states have not ruled that an LLC can be pierced for misrepresentation and fraud.) Simply put, you sign a contract knowing you cannot complete the contract that is called misrepresentation and maybe fraud. Misrepresentation and fraud on the part of the owner of a corporation, when dealing with monetary issues, is a way to pierce the corporate veil. Piercing the corporate veil is one way of making your personal assets liable for the claims against your business.

This might be a stretch in some cases, but it is clearly within the realm of possibilities, especially if you have a lot of personal assets. Attorneys and insurance companies work harder if they know there is a payoff.

If you can’t fulfill the indemnification agreement, and you have no insurance to cover it, you better not sign it.

5.   You should not indemnify someone for something that you are not liable for.

This is simple. If you don’t owe the money, why would you say you owe the money? Many of these agreements are asking for indemnification for issues that you have no legal liability for. It is hard to be liable for how a product is used if they do not read the instructions. An example would be an employee of a retailer store is demonstrating your product without reading the instructions, attending the tech clinic or understanding the product. During the demonstration to the consumer, he injures the consumer.

Why would that be your fault and why should you pay for it? Yet a few indemnification agreements I’ve read lately would require the manufacture to pay for the injuries.

As a manufacturer you are not legally liable for that claim. It is not your fault; you were not negligent. However, the indemnification agreement you signed said you would pay for any claim based on your product. The consumer has a claim against the retailer, because of the product, but not because the product was defective. The retailer is solely liable for the claim, and you should not be.

A.  You should only indemnify someone for what you are responsible for.

Conversely, you should agree to indemnify someone for what you are liable for. If it is your fault, you should pay. Many indemnification agreements are being written because the cost of getting a manufacturer or liable party to pay up exceeds the amount owed. I understand that reasoning, and it is sound and smart.

A good example of these is: you are running an event on property owned by a third party. You accept the money for the event, set up the course, review the entrants and totally control the event. The landowner’s sole responsibility in the event was providing the land and pointing out any known or reasonably foreseeable dangers on the land.

If someone is hurt in the event and sues the landowner, the event promoter should protect the landowner.

B.  You should not indemnify someone for what you do not have control over.

If the landowner is told by the event promoter that he cannot tell the event promoter how to run the event, the landowner should not be liable. The landowner has no control over the event. Therefore, the landowner should not be liable.

The manufacturer can only be liable for the product. If the sales person working for the retailer tells the consumer that this product will save their lives and prevent all injuries contrary to the manufacturer’s warnings, manual, instructions and marketing, then the manufacturer should not pick up the tab for the injured consumer. The manufacturer had no control over the salesperson, did not even know the salesperson existed, and therefore, should not be liable for someone they have no control over.

A manufacture could be liable if they have not disclaimed the warranty of merchantability or the warranty of fitness for a particular purpose, but that is for another article.

C.  You should only indemnify someone for what your insurance company agrees to indemnify someone for.

That means you should only indemnify someone for:

a.   What you can control.

b.   What you are liable for.

c.   What insurance policy says it will cover?

But they are my friends; they would never sue me based on the agreement!

They might not, but your friend may not always be in control of that agreement. Anyone who becomes a beneficiary or an owner of the contract can use the indemnification to sue you. The two best examples of this are:

A Bankruptcy Trustee: A bankruptcy trustee is an attorney whose job is to find every dime that may be owed to the bankrupt business. Any contract that has not been fulfilled, any invoice that has not been paid, and any indemnification agreement that may have money tied available, will be fair game. If the Bankruptcy Trustee can determine if the business that signed the indemnification agreement owes the bankrupt business money, the Trustee by law, must get the money back.

The Bankruptcy Trustee will sue in the name of the Bankrupt Company claiming indemnification for an earlier claim. You will think you are free and clear because the company you signed the indemnification agreement with filed bankruptcy. However, the Bankruptcy Trustee will come rowing back to the courtroom and hold you liable to the point of forcing you to file bankruptcy.

The Insurance Company under the Subrogation clause of an insurance policy believing the indemnification agreement allows them to collect from you. Every insurance policy has a subrogation clause. That means that the insurance company has the right to recover from anyone who caused the claim that the insurance company wrote a check for. Insurance companies will spend days looking for anyone who they can recover money from, and an indemnification agreement is a perfect opportunity. I would guess that 30% or more of the lawsuits in the US are insurance company subrogation claims.

Subrogation claims can be filed by worker’s comp accidents, car accidents, general liability or health insurance claims.

Again, the lawsuit will be in the name of the company you signed the indemnification agreement with, and that company has no choice. If the company does not cooperate with the insurance company, the original claim may not get paid. Insurance companies will finance the lawsuit, so there are no legal games to be played; they know what they want, and they understand the cost of getting it.

If you want Indemnification Agreements…. And you should then get them in a way that works for everyone.

Spending time money legal fees on an agreement that won’t be used or cannot be collected on is a waste of time.

1.   Be realistic.

a.   With you asking to indemnify for what

b.   What they can pay or what insurance they can purchase and afford.

c.   With what you need indemnified, with what someone other than you is legally liable for.

2.   Be prepared to offer one in return. Why should I sign yours if you are going to leave me out in the cold for any claim or liability you cause? Besides mutual indemnification, agreements take out the consideration issue if written correctly.

3.   Make sure it is signed by the right person. A corporation has officers. The board of directors of the corporation authorizes the officers to sign agreements for the corporation. An indemnification agreement is a big deal so make sure the person signing it has the authority to sign the agreement. Having a sales person or sales manager sign the agreement is a waste of trees.

4.   An indemnification agreement without a Certificate of Insurance or an Additional Insured document that is tied to the Indemnification Agreement, not just with it, is worthless.

The certificate of insurance must be legally tied to the indemnification agreement or both are worthless. There is no insurance to cover the indemnification and not money to indemnify the problem.

5.   Have an attorney write your indemnification agreement so it works.

One last point

Signing indemnification agreements may increase your insurance rates. Basically, instead of insuring you, your policy is not insuring dozens of other businesses and their employees. Your insurance company, if they continue to renew your policy, may increase your premium because the risk has increased.

(Insurance companies also do this based on the number of Additional Insured’s you issue and the coverage you make available to the Additional insured’s. Again, that is another article for another day.)

Indemnification agreements work, but only if written correctly and written with knowledge of how and why they work.

What do you think? Leave a comment.

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Copyright 2012 Recreation Law (720) Edit Law

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Wisconsin Sales Rep Statute

Wisconsin Sales Rep Statute

REGULATION OF TRADE

CHAPTER 134. MISCELLANEOUS TRADE REGULATIONS

Wis. Stat. § 134.93 (2012)

134.93. Payment of commissions to independent sales representatives.

(1) DEFINITIONS.

In this section:

(a) “Commission” means compensation accruing to an independent sales representative for payment by a principal, the rate of which is expressed as a percentage of the dollar amount of orders or sales made by the independent sales representative or as a percentage of the dollar amount of profits generated by the independent sales representative.

(b) “Independent sales representative” means a person, other than an insurance agent or broker, who contracts with a principal to solicit wholesale orders and who is compensated, in whole or in part, by commission. “Independent sales representative” does not include any of the following:

1. A person who places orders or purchases products for the persons own account for resale.

2. A person who is an employee of the principal and whose wages must be paid as required under s. 109.03(3) “Principal” means a sole proprietorship, partnership, joint venture, corporation or other business entity, whether or not having a permanent or fixed place of business in this state, that does all of the following:

1. Manufactures, produces, imports or distributes a product for wholesale.

2. Contracts with an independent sales representative to solicit orders for the product.

3. Compensates the independent sales representative, in whole or in part, by commission.

(2) COMMISSIONS; WHEN DUE.

(a) Subject to pars. (b) and (c), a commission becomes due as provided in the contract between the principal and the independent sales representative.

(b) If there is no written contract between the principal and the independent sales representative, or if the written contract does not provide for when a commission becomes due, or if the written contract is ambiguous or unclear as to when a commission becomes due, a commission becomes due according to the past practice used by the principal and the independent sales representative.

(c) If it cannot be determined under par. (a) or (b) when a commission becomes due, a commission becomes due according to the custom and usage prevalent in this state for the particular industry of the principal and independent sales representative.

(3) NOTICE OF TERMINATION OR CHANGE IN CONTRACT.

Unless otherwise provided in a written contract between a principal and an independent sales representative, a principal shall provide an independent sales representative with at least 90 days prior written notice of any termination, cancellation, nonrenewal or substantial change in the competitive circumstances of the contract between the principal and the independent sales representative.

(4) COMMISSIONS DUE; PAYMENT ON TERMINATION OF CONTRACT.

A principal shall pay an independent sales representative all commissions that are due to the independent sales representative at the time of termination, cancellation or nonrenewal of the contract between the principal and the independent sales representative as required under sub. (2)

(5) CIVIL LIABILITY.

Any principal that violates sub. (2) by failing to pay a commission due to an independent sales representative as required under sub. (2) is liable to the independent sales representative for the amount of the commission due and for exemplary damages of not more than 200% of the amount of the commissions due. In addition, the principal shall pay to the independent sales representative, notwithstanding the limitations specified in s. 799.25 or 814.04, all actual costs, including reasonable actual attorney fees, incurred by the independent sales representative in bringing an action, obtaining a judgment and collecting on a judgment under this subsection.

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Alabama Sales Representative

MICHIE’S ALABAMA CODE ANNOTATED

TITLE 8 Commercial Law and Consumer Protection

CHAPTER 24 Sales Representative’s Commission Contracts

Go to the Alabama Code Archive Directory

Code of Ala. § 8-24-1 (2012)

§ 8-24-1. Definitions.

As used in this chapter, the following terms shall have the following meanings, respectively, unless the context clearly indicates otherwise:

(1) Commission. Compensation accruing to a sales representative for payment by a principal, the rate of which is expressed as a percentage of the dollar amount of certain orders or sales.

(2) Principal. Any person who does all of the following:

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

b. Utilizes sales representatives to solicit orders for the product or products.

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

(3) Sales representative. Any person who engages in the business of soliciting, on behalf of a principal, orders for the purchase at wholesale of the product or products of the principal, but does not include a person who places orders or purchases for his or her own account for resale, or a person engaged in home solicitation sales.

(4) Termination. The end of services performed by the sales representative for the principal, whether by discharge, resignation, or expiration of a contract.

§ 8-24-2. Sales representative’s commission contracts; commission due.

(a) The terms of the contract between the principal and sales representative shall determine when a commission is due.

(b) If the time when the commission is due cannot be determined by a contract between the principal and sales representative, the past practices between the parties shall control, or if there are no past practices, the custom and usage prevalent in this state for the business that is the subject of the relationship between the parties shall control.

(c) All commissions that are due at the time of termination of a contract between a sales representative and principal shall be paid within thirty days after the date of termination. Commissions that become due after the termination date shall be paid within thirty days after the date on which the commissions become due.

§ 8-24-3. Failure to pay commission; damages; attorney’s fees.

A principal who fails to pay a commission as required by Section 8-24-2 is liable to the sales representative in a civil action for three times the damages sustained by the sales representative plus reasonable attorney’s fees and court costs.

§ 8-24-4. Nonresident principal; personal jurisdiction.

A principal who is not a resident of this state and who enters into a contract subject to this chapter is considered to be doing business in this state for purposes of the exercise of personal jurisdiction over the principal.

§ 8-24-5. Waiver void; unrestricted rights or remedies.

(a) This chapter may not be waived, whether by express waiver or by any provision in a contract attempting to make the contract or agreement subject to the laws of another state. A waiver of any provision of this chapter is void.

(b) This chapter does not invalidate or restrict any other right or remedy available to a sales representative or preclude a sales representative from seeking to recover in one action on all claims against a principal.

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Arizona Sales Representative

ARIZONA REVISED STATUTES

TITLE 44. TRADE AND COMMERCE

CHAPTER 11. REGULATIONS CONCERNING PARTICULAR BUSINESSES

ARTICLE 15. SALES REPRESENTATIVE CONTRACTS

Go to the Arizona Code Archive Directory

A.R.S. § 44-1798.01 (2012)

§ 44-1798.01. Sales representative contract

A. The sales representative and the principal shall enter into a written contract. The contract shall set forth the method by which the sales representative’s commission is to be computed and paid.

B. The principal shall provide each sales representative with a signed copy of the contract. The principal shall obtain a signed receipt for the contract from each sales representative.

§ 44-1798.02. Termination of sales representative contract; payment of earned commissions

A. If an agreement of services is terminated for any reason both of the following apply:

1. All the commissions due through the time of termination shall be paid to the sales representative within a period of not to exceed thirty days after termination.

2. All the commissions that become due after the effective date of termination shall be paid to the sales representative within fourteen days after they become due.

B. The principal shall pay the sales representative all commissions due while the business relationship is in effect in accordance with the agreement between the parties.

C. A principal who fails to comply with subsections A and B of this section is liable to the sales representative for damages in the amount of three times the sum of the unpaid commissions owed to the sales representative.

D. The prevailing party in an action brought under this section is entitled to the cost of the suit, including reasonable attorney fees.

E. Commissions shall be paid at the usual place of payment unless the sales representative requests that the com-missions be sent by registered mail. If, in accordance with a request by the sales representative, the sales representative’s commissions are sent by mail, the commissions are deemed to have been paid as of the date of the registered postmark on the envelope.

F. Unless payment is made pursuant to a binding and final written settlement agreement and release, the acceptance by a sales representative of a commission payment from the principal does not constitute a release as to the balance of any commissions claimed due. A full release of all commission claims that is required by a principal as a condition to a partial commission payment is null and void.

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Arkansas Sales Representative

Arkansas Code of 1987 Annotated Official Edition

© 1987-2012 by the State of Arkansas

All rights reserved.

Title 4 Business and Commercial Law

Subtitle 6. Business Practices

Chapter 70 General Provisions

Subchapter 3 — Sales Representatives

A.C.A. § 4-70-306 (2012)

4-70-301. Definitions.

As used in this subchapter, unless the context otherwise requires:

(1) “Commission” means compensation paid a sales representative by a principal in an amount based on a percentage of the dollar amount of certain orders for, or sales of, the principal’s product;

(2) “Principal” means a person who:

(A) Does not have a permanent or fixed place of business in this state;

(B) Manufactures, produces, imports, or distributes a product for sale to customers who purchase the product for resale;

(C) Uses a sales representative to solicit orders for the product; and

(D) Compensates the sales representative in whole or in part by commission; and

(3) “Sales representative” means a person who solicits on behalf of a principal orders for the purchase at wholesale of the principal’s product. The term “sales representative” does not include a person who places orders for or purchases the product for his or her own account for resale, or is engaged in door-to-door sales regulated by § 4-89-101 et seq.

4-70-302. Sales representatives’ contracts — Limitation.

(a) A contract between a principal and a sales representative under which the sales representative is to solicit wholesale orders within this state must be in writing and set forth the method by which the sales representative’s commission is to be computed and paid.

(b) The principal shall provide the sales representative with a copy of the contract.

(c) A provision in the contract establishing venue for an action arising under the contract in a state other than this state is void.

4-70-303. Payment in absence of contract.

If a compensation agreement between a sales representative and a principal that is not in writing is terminated, the principal shall pay all commissions due the sales representative within thirty (30) working days after the date of the termination.

4-70-304. Jurisdiction.

A principal who is not a resident of this state and who enters into a contract subject to this subchapter is considered to be doing business in this state for purposes of the exercise of personal jurisdiction over the principal.

4-70-305. Waivers prohibited.

A provision of this subchapter may not be waived, whether by express waiver or by attempt to make a contract or agreement subject to the laws of another state. A waiver of a provision of this subchapter is void.

4-70-306. Damages and attorney’s fees.

A principal who fails to comply with a provision of a contract under § 4-70-302 relating to payment of a commission or fails to pay a commission as required by § 4-70-303 is liable to the sales representative in a civil action for three (3) times the damages sustained by the sales representative, plus reasonable attorney’s fees and costs.

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California Sales Representative

Deering’s California Codes Annotated

CIVIL CODE

Division 3. Obligations

Part 4. Obligations Arising from Particular Transactions

Title 1A. Independent Wholesale Sales Representatives

GO TO CALIFORNIA CODES ARCHIVE DIRECTORY

Cal Civ Code § 1738.10 (2013)

§ 1738.10. Legislative findings and declarations

The Legislature finds and declares that independent wholesale sales representatives are a key ingredient to the California economy. The Legislature further finds and declares the wholesale sales representatives spend many hours developing their territory in order to properly market their products, and therefore should be provided unique protection from unjust termination of the territorial market areas. Therefore, it is the intent of the Legislature, in enacting this act to provide security and clarify the contractual relations between manufacturers and their nonemployee sales representatives.

§ 1738.11. Citation of chapter

This chapter shall be known and cited as the Independent Wholesale Sales Representatives Contractual Relations Act of 1990.

§ 1738.12. Definitions

For purposes of this chapter the following terms have the following meaning:

(a) “Manufacturer” means any organization engaged in the business of producing, assembling, mining, weaving, importing or by any other method of fabrication, a product tangible or intangible, intended for resale to, or use by the consumers of this state.

(b) “Jobber” means any business organization engaged in the business of purchasing products intended for resale and invoicing to purchasers for resale to, or use by, the consumers of this state.

(c) “Distributor” means any business organization engaged in offering for sale products which are shipped from its inventory, or from goods in transit to its inventory, to purchasers and intended for resale to, or use by the consumers of this state.

(d) “Chargeback” means any deduction taken against the commissions earned by the sales representative which are not required by state or federal law.

(e) “Wholesale sales representative” means any person who contracts with a manufacturer, jobber, or distributor for the purpose of soliciting wholesale orders, is compensated, in whole or part, by commission, but shall not include one who places orders or purchases exclusively for his own account for resale and shall not include one who sells or takes orders for the direct sale of products to the ultimate consumer.

§ 1738.13. Requirement of written contract; Contents

(a) Whenever a manufacturer, jobber, or distributor is engaged in business within this state and uses the services of a wholesale sales representative, who is not an employee of the manufacturer, jobber, or distributor, to solicit wholesale orders at least partially within this state, and the contemplated method of payment involves commissions, the manufacturer, jobber, or distributor shall enter into a written contract with the sales representative.

(b) The written contract shall include all of the following:

(1) The rate and method by which the commission is computed.

(2) The time when commissions will be paid.

(3) The territory assigned to the sales representative.

(4) All exceptions to the assigned territory and customers therein.

(5) What chargebacks will be made against the commissions, if any.

(c) The sales representative and the manufacturer, jobber, or distributor shall each be provided with a signed copy of the written contract and the sales representative shall sign a receipt acknowledging receipt of the signed contract.

(d) The sales representative shall be provided with the following written information and documentation with payment of the commission:

(1) An accounting of the orders for which payment is made, including the customer’s name and invoice number.

(2) The rate of commission on each order.

(3) Information relating to any chargebacks included in the accounting.

(e) No contract shall contain any provision which waives any rights established pursuant to this chapter. Any such waiver is deemed contrary to public policy and void.

§ 1738.14. Doing business in state

A manufacturer, jobber, or distributor who is not a resident of this state, and who enters into a contract regulated by this chapter is deemed to be doing business in this state for purposes of personal jurisdiction.

§ 1738.15. Civil action for damages

A manufacturer, jobber, or distributor who willfully fails to enter into a written contract as required by this chapter or willfully fails to pay commissions as provided in the written contract shall be liable to the sales representative in a civil action for treble the damages proved at trial.

§ 1738.16. Attorney fees and costs

In a civil action brought by the sales representative pursuant to this chapter, the prevailing party shall be entitled to reasonable attorney’s fees and costs in addition to any other recovery.

§ 1738.17. Application of chapter

This chapter shall not apply to any person licensed pursuant to Division 9 (commencing with Section 23000) of the Business and Professions Code.

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Colorado Sales Rep

Colorado Revised Statutes

ARTICLE 66

WHOLESALE SALES REPRESENTATIVES

12-66-101. Legislative declaration.

The general assembly hereby finds, determines, and declares that independent wholesale sales representatives are a key ingredient to the Colorado economy. The general assembly further finds and declares that wholesale sales representatives spend many hours developing their territory in order to properly market their products. Therefore, it is the intent of the general assembly to provide security and clarify the relations between distributors, jobbers, or manufacturers and their wholesale sales representatives.

12-66-102. Jurisdiction over nonresident representatives

A distributor, jobber, or manufacturer who is not a resident of Colorado and who enters into any written contract or written sales agreement regulated by this article shall be deemed to be doing business in Colorado for purposes of personal jurisdiction.

12-66-103. Damages.

(1) A distributor, jobber, or manufacturer who knowingly fails to pay commissions as provided in any written contract or written sales agreement shall be liable to the wholesale sales representative in a civil action for treble the damages proved at trial.

(2) In a civil action brought by a wholesale sales representative pursuant to this section, the prevailing party shall be entitled to reasonable attorney fees and costs in addition to any other recovery.

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Illinois Sales Representative

ILLINOIS COMPILED STATUTES ANNOTATED

CHAPTER 820. EMPLOYMENT

WAGES AND HOURS

SALES REPRESENTATIVE ACT

GO TO THE ILLINOIS STATUTES ARCHIVE DIRECTORY

820 ILCS 120/0.01 (2012)

[Prior to 1/1/93 cited as: Ill. Rev. Stat., Ch. 48, para. 2250]

§ 820 ILCS 120/0.01. Short title

Sec. 0.01. Short title. This Act may be cited as the Sales Representative Act.

§ 820 ILCS 120/1. [Terms defined]

Sec. 1. As used in this Act:

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

(2) When a commission becomes due shall be determined in the following manner:

(A) The terms of the contract between the principal and salesperson shall control;

(B) If there is no contract, or if the terms of the contract do not provide when the commission becomes due, or the terms are ambiguous or unclear, the past practice used by the parties shall control;

(C) If neither (A) nor (B) can be used to clearly ascertain when the commission becomes due, the custom and usage prevalent in this State for the parties’ particular industry shall control.

(3) “Principal” means a sole proprietorship, partnership, corporation or other business entity whether or not it has a permanent or fixed place of business in this State and which:

(A) Manufactures, produces, imports, or distributes a product for sale;

(B) Contracts with a sales representative to solicit orders for the product; and

(C) Compensates the sales representative, in whole or in part, by commission.

(4) “Sales representative” means a person who contracts with a principal to solicit orders and who is compensated, in whole or in part, by commission, but shall not include one who places orders or purchases for his own account for resale or one who qualifies as an employee of the principal pursuant to the Illinois Wage Payment and Collection Act [820 ILCS 115/1 et seq.].

§ 820 ILCS 120/2. [Commissions due after termination of contract]

Sec. 2. All commissions due at the time of termination of a contract between a sales representative and principal shall be paid within 13 days of termination, and commissions that become due after termination shall be paid within 13 days of the date on which such commissions become due. Any provision in any contract between a sales representative and principal purporting to waive any of the provisions of this Act shall be void.

§ 820 ILCS 120/3. [Exemplary damages; payment of attorney’s fees and court costs]

Sec. 3. A principal who fails to comply with the provisions of Section 2 [820 ILCS 120/2] concerning timely payment or with any contractual provision concerning timely payment of commissions due upon the termination of the contract with the sales representative, shall be liable in a civil action for exemplary damages in an amount which does not exceed 3 times the amount of the commissions owed to the sales representative. Additionally, such principal shall pay the sales representative’s reasonable attorney’s fees and court costs.

WordPress Tags: Illinois,Sales,Representative,STATUTES,CHAPTER,EMPLOYMENT,WAGES,HOURS,ARCHIVE,DIRECTORY,ILCS,Prior,Stat,Short,HISTORY,Source,NOTES,DERIVATION,Title,Cite,Date,September,NOTE,CASE,ANALYSIS,Choice,Commission,Payment,Legislative,Intent,Motion,complaint,employer,dismissal,Weyent,Vertical,Networks,Supp,Dist,LEXIS,amendment,Circuit,Mescalero,policy,Florida,Reinherz,Summary,judgment,corporation,failure,Conrad,Vacuum,Instrument,Corp,legislature,representation,agreements,connection,State,jurisdiction,LEGAL,PERIODICALS,article,Punitive,Damages,Under,Invalidation,Forum,Selection,Provisions,Disputes,Terms,compensation,percentage,dollar,manner,salesperson,custom,usage,industry,Principal,partnership,Manufactures,product,sale,Contracts,Compensates,person,account,employee,Wage,Collection,Insurance,Jury,Trial,Limitations,Period,Cause,Wholesale,testimony,automobile,manufacturer,retailer,termination,payments,Assocs,Coni,Seal,action,plaintiff,defendant,capital,equipment,manufacturers,contention,settlement,agreement,definition,amounts,Turner,Fuji,lawyers,English,Northwest,Envirocon,Hammond,Group,Evenflo,purpose,enactment,items,Kenebrew,Connecticut,Life,consultant,Installco,protection,Darovec,Mktg,Genics,statute,Dawson,Voortman,Salesmen,carrier,goods,Wujec,Court,denial,Given,States,District,Northern,Eastern,Division,Supreme,sellers,principals,products,construction,context,Agent,August,Clinton,Imperial,China,Lippert,Distribution,owners,distributor,ISRA,fact,Rowell,Cookies,Sept,IWPCA,manager,diction,Pfeifer,Metro,Windows,Former,employers,employees,violation,Nicor,Energy,Dillon,nonpayment,relationship,contractor,assertion,Mach,basis,participants,corporations,entities,Assoc,Mark,Evan,Prods,users,Holtz,Commissions,provision,Shown,predecessor,Fararo,Sink,Reliance,clause,Code,Yamada,Yasuda,Fire,Marine,Plaintiffs,money,Although,protections,lawsuit,venue,Wilkinson,Krups,agency,Minnesota,Texas,cabinets,litigation,Maher,Award,attorney,refusal,Staebell,Hosiery,June,controversy,York,requirements,Cole,Haddon,Drew,Philips,Where,Arizona,deductions,Tool,Tech,Techs,PRACTICE,GUIDES,TREATISES,Jurisprudence,Labor,Civil,Procedure,clauses,Exemplary,Section,Fees,Faith,Costs,General,Federal,Wilful,Wanton,Conduct,Necessary,attorneys,decision,exposure,reduction,Needham,Innerpac,Representa,recovery,accordance,vexations,imposition,Hedrick,Walker,Viktron,Technologies,Initial,measurement,zero,motive,indifference,Repre,argument,inferences,Whether,mission,discretion,institution,Zavell,Indus,para,salesman,resale,pursuant,five,tive,whom,overpaid,behalf,caselaw,amour,putes,upon,lodestar


Indiana Sales Representative 24-4-7-0.1

BURNS INDIANA STATUTES ANNOTATED

Title 24 Trade Regulations; Consumer Sales and Credit

Article 4 Regulated Businesses

Chapter 7 Contracts with Wholesale Sales Representatives

Go to the Indiana Code Archive Directory

Burns Ind. Code Ann. § 24-4-7-0.1 (2012)

24-4-7-0.1. Applicability of IC 24-4-7 to contracts formed before September 1, 1985.

The addition of this chapter by P.L.238-1985 does not apply to contracts formed before September 1, 1985.

24-4-7-1. “Commission” defined.

As used in this chapter, “commission” means compensation that accrues to a sales representative, for payment by a principal, at a rate expressed as a percentage of the dollar amount of orders taken or sales made by the sales representative.

24-4-7-2. “Person” defined.

As used in this chapter, “person” means an individual, corporation, limited liability company, partnership, unincorporated association, estate, or trust.

24-4-7-3. “Principal” defined.

As used in this chapter, “principal” means a person who:

(1) Manufactures, produces, imports, sells, or distributes a product for wholesale;

(2) Contracts with a sales representative to solicit wholesale orders for the product; and

(3) Compensates the sales representative, in whole or in part, by commission.

24-4-7-4. “Sales representative” defined.

As used in this chapter, “sales representative” means a person who:

(1) Contracts with a principal to solicit wholesale orders in Indiana; and

(2) Is compensated, in whole or in part, by commission.

The term does not include a person who places orders or purchases on the person’s own account for resale.

24-4-7-5. Payment of commissions following termination of contract — Civil action — Attorney’s fees.

(a) If a contract between a sales representative and a principal is terminated, the principal shall, within fourteen (14) days after payment would have been due under the contract if the contract had not been terminated, pay to the sales representative all commissions accrued under the contract.

(b) A principal who in bad faith fails to comply with subsection (a) shall be liable, in a civil action brought by the sales representative, for exemplary damages in an amount no more than three (3) times the sum of the commissions owed to the sales representative.

(c) In a civil action under subsection (b), a principal against whom exemplary damages are awarded shall pay the sales representative’s reasonable attorney’s fees and court costs. However, if judgment is entered for the principal and the court determines that the action was brought on frivolous grounds, the court shall award reasonable attorney’s fees and court costs to the principal.

24-4-7-6. Doing business in Indiana.

For purposes of Indiana trial rule 4.4, a principal who contracts with a sales representative to solicit wholesale orders for a product in Indiana is doing business in Indiana.

24-4-7-7. Revocable offer of commission.

(a) If a principal makes a revocable offer of a commission to a sales representative who is not an employee of the principal, the sales representative is entitled to the commission agreed upon if:

(1) the principal revokes the offer of commission and the sales representative establishes that the revocation was for a purpose of avoiding payment of the commission;

(2) the revocation occurs after the sales representative has obtained a written order for the principal’s product because of the efforts of the sales representative; and

(3) the principal’s product that is the subject of the order is shipped to and paid for by a customer.

(b) This section may not be construed:

(1) to impair the application of IC 32-21-1 (statute of frauds);

(2) to abrogate any rule of agency law; or

(3) to unconstitutionally impair the obligations of contracts.

24-4-7-8. Waiver of statutory provision.

A provision in a contract between a sales representative and a principal that waives a provision of this chapter by:

(1) An express waiver; or

(2) A contract subject to the laws of another state; is void.

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Iowa Sales Representative

TITLE III. PUBLIC SERVICES AND REGULATION

SUBTITLE 2. EMPLOYMENT SERVICES

CHAPTER 91A. WAGE PAYMENT COLLECTION

Iowa Code § 91A.1 (2012)

 91A.1 Short title.

This chapter shall be known and may be referred to as the “Iowa Wage Payment Collection Law”.

91A.2 Definitions.

As used in this chapter:

1. “Commissioner” means the labor commissioner or a designee.

2. “Days” means calendar days.

3. “Employee” means a natural person who is employed in this state for wages by an employer. Employee also includes a commission salesperson who takes orders or performs services on behalf of a principal and who is paid on the basis of commissions but does not include persons who purchase for their own account for resale. For the purposes of this chapter, the following persons engaged in agriculture are not employees:

a. The spouse of the employer and relatives of either the employer or spouse residing on the premises of the employer.

b. A person engaged in agriculture as an owner-operator or tenant-operator and the spouse or relatives of either who reside on the premises while exchanging labor with the operator or for other mutual benefit of any and all such persons.

c. Neighboring persons engaged in agriculture who are exchanging labor or other services.

4. “Employer” means a person, as defined in chapter 4, who in this state employs for wages a natural person. An employer does not include a client, patient, customer, or other person who obtains professional services from a licensed person who provides the services on a fee service basis or as an independent contractor.

5. “Health benefit plan” means a plan or agreement provided by an employer for employees for the provision of or payment for care and treatment of sickness or injury.

6. “Liquidated damages” means the sum of five percent multiplied by the amount of any wages that were not paid or of any authorized expenses that were not reimbursed on a regular payday or on another day pursuant to section 91A.3 multiplied by the total number of days, excluding Sundays, legal holidays, and the first seven days after the regular payday on which wages were not paid or expenses were not reimbursed. However, such sum shall not exceed the amount of the unpaid wages and shall not accumulate when an employer is subject to a petition filed in bankruptcy.

7. “Wages” means compensation owed by an employer for:

a. Labor or services rendered by an employee, whether determined on a time, task, piece, commission, or other basis of calculation.

b. Vacation, holiday, sick leave, and severance payments which are due an employee under an agreement with the employer or under a policy of the employer.

c. Any payments to the employee or to a fund for the benefit of the employee, including but not limited to payments for medical, health, hospital, welfare, pension, or profit-sharing, which are due an employee under an agreement with the employer or under a policy of the employer. The assets of an employee in a fund for the benefit of the employee, whether such assets were originally paid into the fund by an employer or employee, are not wages.

d. Expenses incurred and recoverable under a health benefit plan.

91A.3 Mode of payment.

1. An employer shall pay all wages due its employees, less any lawful deductions specified in section 91A.5, at least in monthly, semimonthly, or biweekly installments on regular paydays which are at consistent intervals from each other and which are designated in advance by the employer. However, if any of these wages due its employees are determined on a commission basis, the employer may, upon agreement with the employee, pay only a credit against such wages. If such credit is paid, the employer shall, at regular intervals, pay any difference between a credit paid against wages determined on a commission basis and such wages actually earned on a commission basis. These regular intervals shall not be separated by more than twelve months. A regular payday shall not be more than twelve days, excluding Sundays and legal holidays, after the end of the period in which the wages were earned. An employer and employee may, upon written agreement which shall be maintained as a record, vary the provisions of this subsection.

2. The wages paid under subsection 1 shall be paid in United States currency or by written instrument issued by the employer and negotiable on demand at full face value for such currency, unless the employee has agreed in writing to receive a part of or all wages in kind or in other form.

3. a. The wages paid under subsection 1 shall be paid at the employee’s normal place of employment during normal employment hours or at a place and hour mutually agreed upon by the employer and employee, or the employee may elect to have the wages sent for direct deposit, on or by the regular payday of the employee, into a financial institution designated by the employee. Upon written request by the employee, wages due may be sent to the employee by mail. The employer shall maintain a copy of the request for as long as it is effective and for at least two years thereafter. An employee hired on or after July 1, 2005, may be required, as a condition of employment, to participate in direct deposit of the employee’s wages in a financial institution of the employee’s choice unless any of the following conditions exist:

(1) The costs to the employee of establishing and maintaining an account for purposes of the direct deposit would effectively reduce the employee’s wages to a level below the minimum wage provided under section 91D.1.

(2) The employee would incur fees charged to the employee’s account as a result of the direct deposit.

(3) The provisions of a collective bargaining agreement mutually agreed upon by the employer and the employee organization prohibit the employer from requiring an employee to sign up for direct deposit as a condition of hire.b. If the employer fails to pay an employee’s wages on or by the regular payday in accordance with this subsection, the employer is liable for the amount of any overdraft charge if the overdraft is created on the employee’s account because of the employer’s failure to pay the wages on or by the regular payday. The overdraft charges may be the basis for a claim under section 91A.10 and for damages under section 91A.8.

4. The wages paid under subsection 1 may be delivered to a designee of the employee who is so designated in writing or may be sent to the employee by any reasonable means requested by the employee in writing. A designee under this subsection shall not also be an assignee or buyer of wages under section 539.4 nor a garnisher of the employee under chapter 642, unless the designee complies with the provisions of section 539.4 and chapter 642.

5. If an employee is absent from the normal place of employment on the regular payday, the employer shall, upon demand of the employee made within the first seven days following the regular payday, pay the wages, less any lawful deductions specified in section 91A.5, which were due on that regular payday. However, if demand is not made within this seven-day period, the employer shall, upon demand of the employee, pay the wages which were due on a regular payday within the first seven days following the day on which demand is made.

6. Expenses by the employee which are authorized by the employer and incurred by the employee shall either be reimbursed in advance of expenditure or be reimbursed not later than thirty days after the employee’s submission of an expense claim. If the employer refuses to pay all or part of each claim, the employer shall submit to the employee a written justification of such refusal within the same time period in which expense claims are paid under this subsection.

7. If a farm labor contractor contracts with a person engaged in the production of seed or feed grains to remove unwanted or genetically deviant plants or corn tassels or to hand pollinate plants, and fails to pay all wages due the employees of the farm labor contractor, the person engaged in the production of seed or feed grains shall also be liable to the employees for wages not paid by the farm labor contractor.

91A.4 Employment suspension or termination — how wages are paid.

When the employment of an employee is suspended or terminated, the employer shall pay all wages earned, less any lawful deductions specified in section 91A.5 by the employee up to the time of the suspension or termination not later than the next regular payday for the pay period in which the wages were earned as provided in section 91A.3. However, if any of these wages are the difference between a credit paid against wages determined on a commission basis and the wages actually earned on a commission basis, the employer shall pay the difference not more than thirty days after the date of suspension or termination. If vacations are due an employee under an agreement with the employer or a policy of the employer establishing pro rata vacation accrued, the increment shall be in proportion to the fraction of the year which the employee was actually employed.

91A.5 Deductions from wages.

1. An employer shall not withhold or divert any portion of an employee’s wages unless:

a. The employer is required or permitted to do so by state or federal law or by order of a court of competent juris-diction; or

b. The employer has written authorization from the employee to so deduct for any lawful purpose accruing to the benefit of the employee.

2. The following shall not be deducted from an employee’s wages:

a. Cash shortage in a common money till, cash box, or register operated by two or more employees or by an em-ployee and an employer. However, the employer and a full-time employee who is the manager of an establishment may agree in writing signed by both parties that the employee will be responsible for a cash shortage that occurs within forty-five days prior to the most recent regular payday. Not more than one such agreement shall be in effect per establishment.

b. Losses due to acceptance by an employee on behalf of the employer of checks which are subsequently dishon-ored if the employee has been given the discretion to accept or reject such checks and the employee does not abuse the discretion given.

c. Losses due to breakage, damage to property, default of customer credit, or nonpayment for goods or services rendered so long as such losses are not attributable to the employee’s willful or intentional disregard of the employer’s interests.

d. Lost or stolen property, unless the property is equipment specifically assigned to, and receipt acknowledged in writing by, the employee from whom the deduction is made.

e. Gratuities received by an employee from customers of the employer.

f. Costs of personal protective equipment, other than items of clothing or footwear which may be used by an em-ployee during nonworking hours, needed to protect an employee from employment-related hazards, unless provided otherwise in a collective bargaining agreement.

g. Costs of more than twenty dollars for an employee’s relocation to the place of employment. This paragraph shall apply only to an employer as defined in section 91E.1.

91A.5A Holiday time off — Veterans Day.

1. An employer shall provide each employee who is a veteran, as defined in section 35.1, with holiday time off for Veterans Day, November 11, if the employee would otherwise be required to work on that day, as provided in this section.

2. An employer, in complying with this section, shall have the discretion of providing paid or unpaid time off on Veterans Day, unless providing time off would impact public health or safety or would cause the employer to experience significant economic or operational disruption.

3. a. An employee shall provide the employer with at least one month’s prior written notice of the employee’s intent to take time off for Veterans Day and shall also provide the employer with a federal certificate of release or discharge from active duty, or such similar federal document, for purposes of determining the employee’s eligibility for the benefit provided in this section.

b. The employer shall, at least ten days prior to Veterans Day, notify the employee if the employee shall be provided paid or unpaid time off on Veterans Day. If the employer determines that the employer is unable to provide time off for Veterans Day for all employees who request time off, the employer shall deny time off to the minimum number of employees needed by the employer to protect public health and safety or to maintain minimum operational capacity, as applicable.

91A.6 Notice and recordkeeping requirements.

1. An employer shall after being notified by the commissioner pursuant to subsection 2:

a. Notify its employees in writing at the time of hiring what wages and regular paydays are designated by the employer.

b. Notify, at least one pay period prior to the initiation of any changes, its employees of any changes in the arrangements specified in subsection 1 that reduce wages or alter the regular paydays. The notice shall either be in writing or posted at a place where employee notices are routinely posted.

c. Make available to its employees upon written request, a written statement enumerating employment agreements and policies with regard to vacation pay, sick leave, reimbursement for expenses, retirement benefits, severance pay, or other comparable matters with respect to wages. Notice of such availability shall be given to each employee in writing or by a notice posted at a place where employee notices are routinely posted.

d. Establish, maintain, and preserve for three calendar years the payroll records showing the hours worked, wages earned, and deductions made for each employee and any employment agreements entered into between an employer and employee.

2. The commissioner shall notify an employer to comply with subsection 1 if the employer has paid a claim for unpaid wages or nonreimbursed authorized expenses and liquidated damages under section 91A.10 or if the employer has been assessed a civil money penalty under section 91A.12. However, a court may, when rendering a judgment for wag-es or nonreimbursed authorized expenses and liquidated damages or upholding a civil money penalty assessment, order that an employer shall not be required to comply with the provisions of subsection 1 or that an employer shall be required to comply with the provisions of subsection 1 for a particular period of time.

3. Within ten working days of a request by an employee, an employer shall furnish to the employee a written, itemized statement or access to a written, itemized statement as provided in subsection 4, listing the earnings and deductions made from the wages for each pay period in which the deductions were made together with an explanation of how the wages and deductions were computed.

4. On each regular payday, the employer shall send to each employee by mail or shall provide at the employee’s normal place of employment during normal employment hours a statement showing the hours the employee worked, the wages earned by the employee, and deductions made for the employee. However, the employer need not provide information on hours worked for employees who are exempt from overtime under the federal Fair Labor Standards Act, as defined in 29 C.F.R. pt. 541, unless the employer has established a policy or practice of paying to or on behalf of exempt employees overtime, a bonus, or a payment based on hours worked, whereupon the employer shall send or otherwise provide a statement to the exempt employees showing the hours the employee worked or the payments made to the employee by the employer, as applicable. An employer who provides each employee access to view an electronic statement of the employee’s earnings and provides the employee free and unrestricted access to a printer to print the employee’s statement of earnings, if the employee chooses, is in compliance with this subsection.

91A.7 Wage disputes.

If there is a dispute between an employer and employee concerning the amount of wages or expense reimbursement due, the employer shall, without condition and pursuant to section 91A.3, pay all wages conceded to be due and reimburse all expenses conceded to be due, less any lawful deductions specified in section 91A.5. Payment of wages or reimbursement of expenses under this section shall not relieve the employer of any liability for the balance of wages or expenses claimed by the employee.

91A.8 Damages recoverable by an employee.

When it has been shown that an employer has intentionally failed to pay an employee wages or reimburse expenses pursuant to section 91A.3, whether as the result of a wage dispute or otherwise, the employer shall be liable to the employee for any wages or expenses that are so intentionally failed to be paid or reimbursed, plus liquidated damages, court costs and any attorney’s fees incurred in recovering the unpaid wages and determined to have been usual and necessary. In other instances the employer shall be liable only for unpaid wages or expenses, court costs and usual and necessary attorney’s fees incurred in recovering the unpaid wages or expenses.

91A.9 General powers and duties of the commissioner.

1. The commissioner shall administer and enforce the provisions of this chapter. The commissioner may hold hearings and investigate charges of violations of this chapter.

2. The commissioner may, consistent with due process of law, enter any place of employment to inspect records concerning wages and payrolls, to question the employer and employees, and to investigate such facts, conditions, or matters as are deemed appropriate in determining whether any person has violated the provisions of this chapter. How-ever, such entry by the commissioner shall only be in response to a written complaint.

3. The commissioner may employ such qualified personnel as are necessary for the enforcement of this chapter. Such personnel shall be employed pursuant to chapter 8A, subchapter IV.

4. The commissioner shall, in consultation with the United States department of labor, develop a database of the employers in this state utilizing special certificates issued by the United States secretary of labor as authorized under 29 U.S.C. § 214, and shall maintain the database.

5. The commissioner shall promulgate, pursuant to chapter 17A, any rules necessary to carry out the provisions of this chapter.

91A.10 Settlement of claims and suits for wages — prohibition against discharge of employee.

1. Upon the written complaint of the employee involved, the commissioner may determine whether wages have not been paid and may constitute an enforceable claim. If for any reason the commissioner decides not to make such determination, the commissioner shall so notify the complaining employee within fourteen days of receipt of the complaint. The commissioner shall otherwise notify the employee of such determination within a reasonable time and if it is determined that there is an enforceable claim, the commissioner shall, with the consent of the complaining employee, take an assignment in trust for the wages and for any claim for liquidated damages without being bound by any of the technical rules respecting the validity of the assignment. However, the commissioner shall not accept any complaint for unpaid wages and liquidated damages after one year from the date the wages became due and payable.

2. The commissioner, with the assistance of the office of the attorney general if the commissioner requests such assistance, shall, unless a settlement is reached under this subsection, commence a civil action in any court of competent jurisdiction to recover for the benefit of any employee any wage, expenses, and liquidated damages’ claims that have been assigned to the commissioner for recovery. The commissioner may also request reasonable and necessary attorney fees. With the consent of the assigning employee, the commissioner may also settle a claim on behalf of the assigning employee. Proceedings under this subsection and subsection 1 that precede commencement of a civil action shall be conducted informally without any party having a right to be heard before the commissioner. The commissioner may join various assignments in one claim for the purpose of settling or litigating their claims.

3. The provisions of subsections 1 and 2 shall not be construed to prevent an employee from settling or bringing an action for damages under section 91A.8 if the employee has not assigned the claim under subsection 1.

4. Any recovery of attorney fees, in the case of actions brought under this section by the commissioner, shall be remitted by the commissioner to the treasurer of state for deposit in the general fund of the state. Also, the commissioner shall not be required to pay any filing fee or other court costs.

5. An employer shall not discharge or in any other manner discriminate against any employee because the employee has filed a complaint, assigned a claim, or brought an action under this section or has cooperated in bringing any action against an employer. Any employee may file a complaint with the commissioner alleging discharge or discrimination within thirty days after such violation occurs. Upon receipt of the complaint, the commissioner shall cause an investigation to be made to the extent deemed appropriate. If the commissioner determines from the investigation that the provisions of this subsection have been violated, the commissioner shall bring an action in the appropriate district court against such person. The district court shall have jurisdiction, for cause shown, to restrain violations of this subsection and order all appropriate relief including rehiring or reinstatement of the employee to the former position with back pay.

91A.11 Wage claims brought under reciprocity.

1. The commissioner may enter into reciprocal agreements with the labor department or corresponding agency of any other state or its representatives for the collection in such other states of claims or judgments for wages and other demands based upon claims assigned to the commissioner.

2. The commissioner may, to the extent provided for by any reciprocal agreement entered into by law or with an agency of another state as provided in this section, maintain actions in the courts of such other state to the extent permitted by the laws of that state for the collection of claims for wages, judgments and other demands and may assign such claims, judgments and demands to the labor department or agency of such other state for collection to the extent that such an assignment may be permitted or provided for by the laws of such state or by reciprocal agreement.

3. The commissioner may, upon the written consent of the labor department or other corresponding agency of any other state or its representatives, maintain actions in the courts of this state upon assigned claims for wages, judgments and demands arising in such other state in the same manner and to the same extent that such actions by the commissioner are authorized when arising in this state. However, such actions may be maintained only in cases in which such other state by law or reciprocal agreement extends a like comity to cases arising in this state.

91A.12 Civil penalties.

1. Any employer who violates the provisions of this chapter or the rules promulgated under it shall be subject to a civil money penalty of not more than five hundred dollars per pay period for each violation. The commissioner may recover such civil money penalty according to the provisions of subsections 2 to 5. Any civil money penalty recovered shall be deposited in the general fund of the state.

2. The commissioner may propose that an employer be assessed a civil money penalty by serving the employer with notice of such proposal in the same manner as an original notice is served under the rules of civil procedure. Upon service of such notice, the proposed assessment shall be treated as a contested case under chapter 17A. However, an employer must request a hearing within thirty days of being served.

3. If an employer does not request a hearing pursuant to subsection 2 or if the commissioner determines, after an appropriate hearing, that an employer is in violation of this chapter, the commissioner shall assess a civil money penalty which is consistent with the provisions of subsection 1 and which is rendered with due consideration for the penalty amount in terms of the size of the employer’s business, the gravity of the violation, the good faith of the employer, and the history of previous violations.

4. An employer may seek judicial review of any assessment rendered under subsection 3 by instituting proceedings for judicial review pursuant to chapter 17A. However, such proceedings must be instituted in the district court of the county in which the violation or one of the violations occurred and within thirty days of the day on which the employer was notified that an assessment has been rendered. Also, an employer may be required, at the discretion of the district court and upon instituting such proceedings, to deposit the amount assessed with the clerk of the district court. Any moneys so deposited shall either be returned to the employer or be forwarded to the commissioner for deposit in the general fund of the state, depending on the outcome of the judicial review, including any appeal to the supreme court.

5. After the time for seeking judicial review has expired or after all judicial review has been exhausted and the commissioner’s assessment has been upheld, the commissioner shall request the attorney general to recover the assessed penalties in a civil action.

91A.13 Travel time to worksite — when compensable.

Unless a collective bargaining agreement provides otherwise, an employee is not entitled to compensation for the time that an employee spends traveling to and from the worksite on transportation provided by the employer, when during that time, the employee performs no work, the transportation is provided by the employer as a convenience for the employee, and the employee is not required by the employer to use that means of transportation to the worksite. An employee is entitled to compensation for the time that an employee spends traveling between worksites if the travel is done during working hours.

91A.14 Former employees.

The rights and obligations outlined in this chapter continue until they are fulfilled, even though the employ-er-employee relationship has been severed.

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NPS is chasing a squirrel up a tree and it’s lost in Canyonlands NP.

Outside parties suggest insurance limits of $5 million for concessionaires.

The National Park Service has hired outside firms to determine that concessionaires should have $5 million in liability insurancecoverage. The article does not say how

National Park Service emblem

that number was determined. However, how the limit was determined was wrong.

You determine the amount of insurance you need by determining your insurable interest. How much is your business worth? By that I mean you determine the value of your business, what is worth it, if you were to sell the business.   then buy a little more insurance than that.

Say your business is worth $1 million. Based on all the property, land, income, permits (which allegedly have no value) your CPA has determined that your business valuation is $1 million. You should buy $1.1 million in insurance coverage. Probably, you will end up buying $1.5 or $2 million because polices are rarely written for $1.1 million, usually just big round numbers.

Why? Because you are protecting what you own. That is what insurance is for, to protect an asset. You buy fire insurance to replace a building if it was to burn down. If it cost you $500,000 to rebuild the building, it would be stupid to insure the building for $400,000 and just as stupid to insure it for $600,000. In the first case, you would only have a $400,000 building when you were done, not what you needed. In the second case, you would have a $500,000 building and nothing more. You would have paid a premium on an extra $100,000 of insurance that you will never get.

You can’t insure what you don’t own or for an inflated value.

The same goes for liability insurance. Why insure your business for more than it is worth. All you want to do is keep your business. You don’t want to pay for insurance that you don’t need. All that does with liability insurance provide an incentive to sue and a bigger payoff if they do.  

The last think you want to do is to have less insurance than the value of your business. If your business is worth $1 million, and you have $500,000 in liability insurance, the plaintiff will sue and take your business. That is $500,000 more than your insurance.

You buy the amount of insurance that you need to protect your business from fire, wind, hail and lawsuits.

So what is the NPS going to do?

First, they could bankrupt large business that only buys the minimum to maintain their concession contract. If they are worth more than $5 million, then they will lose their business if a guest has a claim greater than $5 million.

The NPS may also bankrupt businesses if they ask a business with a value of $100,000 to buy a $5 million-dollar policy. They could not afford it.

The only people who will not suffer are those businesses that are worth more than $3.5 million. The $5 million limits are about right.

Based on the article, the NPS will bankrupt a lot of its concessionaires.

The NPS currently has 515 concession contracts in 130 parks, with 60 percent of those contracts generating less than $250,000 in annual revenue.

As stupid as that sounds, this quote from the “insurance professionals” that the NPS hired is even stupider from an insurance standpoint.

Insurance Journal obtained a copy of the Aon Global report dated January 11, 2011. “In our opinion, business operations that potentially could result in serious injury to multiple parties should consider liability limits of at least $5 million,” the Aon report says. “Based on the loss potential, we consider the $5 million limit to be reasonable for most river rafting and guide situations.”

Why is that a stupid statement? Because insurance claims are based on a real value in the end. You total the medical bills, the future medical bills, the lost wages and an amount for pain and suffering and that amount is what a claim amount boils down too. If 99% of your clients make about $50,000, a year and 99% of your injuries are sprained ankles than your claims limits would be $10,000. Someone who can’t work for months and only makes $50,000 a year would after one year out of work, only recover $40,000 or so. The amount earned is discounted because you would not have costs of working and there is a value of getting the money in one lump sum in advance.

To determine the insurance limits an actuary would look at claims. And the claims don’t justify the limits the “experts” are requesting.

Besides insurance is not based on what someone is owed, insurance is based on what you are worth as a business.

Based on the quote above, the value the “experts” came up with is based on a mythical future claim with multiple injured parties.

I’m still waiting for that to happen. Reality and the “experts” have not met. Read the article, the “experts” look pretty bad. Even worse, the NPS admitted that they had no claims like this in testimony before Congress.

Insurance is not determined by guesses or experts, except a business’s CPA. How much is the business worth that is the amount of insurance you need!

See New National Parks’ Insurance Requirements Ignite Controversy or New National Parks Outfitters & Guides Insurance Requirements.

For more articles on the insurance issues see: Insurance 101

What do you think? Leave a comment.

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Copyright 2012 Recreation Law (720) Edit Law

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My Letter posted in Bicycle Retailer and Industry News as a Guest Editorial

clip_image002

February 1, 2012

Marc Sani

Bicycle Retailer and Industry News

25431 Cabot Road, Suite 204

Laguna Hills, CA  92653

Via Email:      msani@bicycleretailer.com

Re: Termination of Andy Tompkins

Dear Marc:

I received the email from Andy Tompkins like many announcing his termination from Nielsen and Interbike. I felt sorry for Andy and more so for the industry. When I read your guest editorial in the January 1, 2012 issue of BRAIN, I had a big smile on my face as well as the tug in my heart.

I understand budgets and the need to create a bottom line that meets with management and shareholder expectations. Andy brought many things to the table that cannot be immediately calculated or identified on a spreadsheet. I suspect he did not survive this long in the industry without meeting the bottom line expectations as well.

Andy stood out among a group of talented people at Nielsen. He had an enviable ability to listen to every compliment, complaint or “suggestion,” no matter how it was delivered and leave the person feeling like their time had not been wasted. In the trade show industry that many are saying is dying, Andy and his team kept Interbike coming back, getting better and growing. The excitement that you feel when you attend a tradeshow when retailers want to find out what is new each year still existed at Interbike even though many other venues had popped up to steal Interbike’ s luster.

Your piece pointed out many of those skills and issues that Andy brought to his job each morning. Your piece also will provide a basis to evaluate and see where the trade show industry, Interbike and Andy are going.

The bike industry needs Interbike. Not for the big manufactures for the name brands but for the retailers who leave the big booths and walk around the walls. The new exhibitors bring the excitement, the ideas and what will eventually be the next big thing to the show. They do not have the opportunity to show their products to a nationwide audience anywhere but Interbike. For those new and upcoming manufactures Interbike is the only opportunity. For retailers, those new manufacturers are the next opportunity.

Andy Tompkins provided that opportunity, big or small, for manufacture or retailer and he will be missed. Your article did a great job of make sure the cycling industry knows it.

Sincerely,

James H. Moss, JD

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What is a Release?

All outdoor recreation, travel, tourism and fitness businesses use a release, (or should use a release). However, the legal description of what is a release is rarely explained to the business clients using them or the clients of the business signing them.

A Release is also known as Waiver. Some parts of the country also use the term Covenant Not to Sue to identify the clause in a release that prevents lawsuits. The Negligence Clause is another term for the actual part of the contract that prevents the possible lawsuit. Therefore, in most cases the term Release, Waiver or Covenant Not to Sue are interchangeable and have more of a geographic definition rather than a different legal definition.

Release is the word that is adopted as the term to describe the types of agreements we are discussing here by the majority of states. Waiver and covenant not to sue are used by a few southern states to describe these documents.

A release is a contract. A contract is an agreement between two or more parties, with consideration flowing to both parties and a meeting of the minds as to the terms of the contract. Contracts cannot be for illegal activities or things and most be enforceable by the courts.

Contracts are the basis for commerce in the world; how one party sells goods or services and the other party buys goods or services.

There must be two and can be thousands of parties to a contract. Each party must receive something of value or benefit. Each party must understand the basic terms of the contract. Not every term must be known or understood in the contract.

Consideration, the benefit or value in a contract, is easily defined as money, and in most contacts makes up one part of the transaction. With a local shopkeeper, a contact to buy a t-shirt consists of consideration (money) flowing to the shopkeeper and the purchaser receiving the t-shirt. Both parties knew the terms of the contract and both understood that was the purpose of the contract. The contract by the way was oral. Contracts can be in writing or can be oral. Oral contacts are hard to prove in a court.

In an outdoor recreation case, the consideration is money flowing to the outfitter and the opportunity to engage in the activity by the guest.

Contracts cannot be for illegal activities. Gambling debts are not enforceable in most states so a contract to pay a gambling debt is illegal. Most states, but not all, have done away with contracts for marriage also. (Marriage is not illegal, just to contract for a marriage is illegal.) Courts are reluctant to force people to act or do something specific such as standing on their head as an easy example.

A release then is a contract that covers something that may or may not happen in the future. It is the fact that the contract may not actually be enforced because of some future date that gives releases their special place in the law.

A release is also different from most contracts because the release is a contract where one party gives up or releases a future right, the right to sue. This possibility of giving up a future right is one of the issues that courts are divided on and that cause courts problems. The right is the right to sue, a right that is given to US citizens in our constitution. As such, the courts scrutinize any constitutional right that is given up by a party. However, most courts have agreed that if the right is in writing and voluntarily given up for consideration, the release will be upheld. The right to contract between parties is greater and more important than the right to sue in most, but not all state supreme courts.

As stated earlier, contracts can be oral or written. Because a future right is at stake in releases, most courts will not enforce an oral release, such as reading the release over the phone to someone and having them agree to the terms of the release. At the same time, you should review electronic contracts and agreements, which are valid.

Release law is determined by each state; as such, it is difficult to define a release in an article written for the masses because of the different requirements of some states. In addition, some states have different requirements or statutory requirements for releases in some activities or recreational sports then other. Also, states are changing their stands on releases each year. Wisconsin, Arizona and Connecticut have done so in the past couple of years.

However, there are some general issues common to all releases and required in most states that support releases.

A release should use the magic word negligence. Negligence is the legal term for an accident that gives rise to a lawsuit. The release should state that your guests release you from any negligence on your part. Lacking this term, your release is a piece of paper with little value in the majority of states.

The second most important clause is the jurisdiction and venue clause. This clause defines the law of the state that will be applied to the case to interpret the release and the place where the lawsuit will be held. Your state law may uphold releases. However, your customer maybe from a state that does not support releases. Jurisdiction and venue clauses prevent your customer from dragging you into a different state and voiding your release.

The signature is also critical. For someone to sue on a breach of contract or to enforce a contract, the person who is being sued or the release that is being enforced must be signed. Therefore, the injured guest is the person who must sign the contract to have the release enforced. It is not necessary to witness the signature. The date and time of the accident along with the type of payment, usually a credit card will confirm the person was there and signed a release. In addition, handwriting experts can verify a signature.

Initialing paragraphs is also of no value and may cause problems. The courts look for a signature and nothing else. It does not matter to the courts if the release has been read. Initialing paragraphs may create a problem if one paragraph is not initialed. Does that mean that paragraph does not apply? Nor has the author ever found a case where the court commented on the initialed paragraphs as being necessary or important.

Initials, however, may be necessary if the paper that is being used has different contracts on it. The classic is a car rental contract. Part of the contract is a release and a promise to pay. That gets a signature. Declining additional insurance or promising to bring the car back full of gas are different contracts and as such initials might help prove those parts of the contract. However, if your document is one or two pieces of paper with one purpose and no white spaces or added information, you only need a signature.

There is a real difference of opinions between some attorneys as to the need to identify the risks of the activity. Most activities have so many possible risks that the release would be endless if it listed them all. However, there are two valid reasons for putting at least some of the possible risks in a release. The release has better “legal balance” if some of the risks are listed. It provides a background or a basis for the release if the document states some of the reasons for the reason behind the release. Courts always comment that the injury the plaintiff is complaining about was listed in the release.

A release with risks in it can also be used as assumption of the risk document. If the release is thrown out, the release can be used to prove the person assumed the risks and either eliminate a lawsuit or reduce the damages. For this to work, the risks of the activity must be in the release.

Because of state and federal laws concerning a release of medical information and the possibility of an injury, you should probably include a release for first aid care and release of medical information. Although federal HIPPA laws may not affect you, many states medical information privacy acts may. First aid negligence lawsuits rare, but they occur occasionally and are very dangerous. As such, you should include a release for any medical care you provide and any medical information you collect or pass on to other people.

There are dozens of other factors and clauses that may need to be included in your release. These are going to be dependent the state that is identified in your jurisdiction and venue clause, any state statutes that control releases or state laws that control the activity that the release covers. The type of activity you are providing, the guests you are recruiting and how close medical care is, may also change your release. Finally, any release for activities outside of the US must be written carefully.

Any article about releases always ends with a disclaimer and an admonition. The disclaimer is releases work in most states. However, release law changes every month. New state statures or Supreme Court justices can change the law affecting releases and subsequently your business.

The admonition is your release must be written by an attorney. The easiest example of this admonition is the courts. Releases written by attorneys are rarely contested in court. The releases you see in appellate and Supreme Court decisions are always those written by non-attorneys. The attorney you choose should also be one that understands release law and your business to give you the best chance at staying out of court.

What do you think? Leave a comment.

© 2010 Recreation Law (720) Edit Law, Recreaton.Law@Gmail.com

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MA proposed stupid bill to promote litigation in kayaking

I always love it when people who have no idea what they are talking about, tell others how to do something. I’m not talking about tourists at Devils Tower

English: Modern sea kayak in west Wales

Image via Wikipedia

Monument; in this case I’m talking the Massachusetts‘s legislation and how to teach sea kayaking.

Want proof? This was reported as testimony before a legislative committee.

“beginners are most at risk when they are fully strapped into a kayak….”

Rep. William M. Straus, D-Mattapoisett is the sponsor of the bill and author of the quote above. As a member of the board of directors of the Trade Association of Paddlesports (but speaking for myself) and a boater for 45 years, I’ve never seen a kayak that I was “strapped into” fully or not fully.

The Massachusetts legislation is proposing that kayaking schools must teach someone how to wet exit.

That is as dumb as it sounds!

The idea is based on, of course, a grieving family person, who is guessing that there relative died when he could not wet exit from his overturned boat. So we need to make sure no one else suffers that same fate, I guess.

First off, no reports show how or why the person died. But that does not matter, the legislature needs to act.

What’s worse is the witness reports about the accident state he victim was upright when he died, that he had rolled back up. Kayak student drowns off West Island. Consequently the new law about teaching wet exiting is not even based on events the law attempts to cure.

Things get worse. A kayak instructor would have to have the following to teach kayaking:

Is this measure going to save a life? No. What this measure will do is three things.

First it will make the widow feel better. She will feel like she has done something to keep someone from dying. She will feel like her husband did not die in vain. Our loved ones are not allowed to die without a cause or accomplishment in the US we must go out with either a bang or a legacy.

Second it will create lawsuits. We now have rules that will give anyone injured kayaking the opportunity to start a lawsuit. The first aid card of the instructor was out of date, the class did not fully cover wet exiting, the ACA certified instructor left the class for a minute and the non-ACA certified assistant was the only person there. I was not taught correctly therefore I can sue.

Third we will also have more government regulation. We have a state agency sticking their nose into kayaking schools and telling them how to do things. Again, another group of people who know nothing about what they are talking about, telling someone else how to do it. This blog seems to be coming around full circle: People with no clue telling those with the necessary education and experience how to do something.

See House endorses kayak wet-exit training

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Another Litigation versus Criminal example

I’ve all ready commented about this issue length in Litigation v. Jail Time; however this article caught my eye. At the very bottom it

English: Jet skis at Downhill. A bit of action...

Image via Wikipedia

mentions another boating accident. The owner of the jet skis who rented the jet skis was fined £450 for renting the jet skis.

Again another example of how in the US we sue, in Europe they charge criminally. Although in this case a £450 fine is probably much easier to deal with than protracted litigation, it still is a criminal charge that will be on someone’s record for life.

However the basic issue is who is going to take responsibility for dealing with problems. In Europe the government deals with the liability between two people. In the US, most of the time the victim is in charge of his life and any money someone may owe him.

See: Brit held after death of Cypriot diver

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Staying Current

Legal Reasons Why You Should be at your Industry Conference

You also do not want to miss out on all the fun!

People attend conferences for numerous reasons. To see old friends, meet new friends or to save money. The money you can save by buying equipment at a conference will usually pay for the trip. However, many people miss a very and important reason for attending their industry conference. Attending could keep you from being sued. This is a hidden, but very important benefit of attending a conference that most people do not appreciate until they are sitting on the witness stand in a courtroom.

There are several defenses you can use in running your outdoor recreation business. Releases and Assumption of the Risk are the two biggest and the ones most frequently use. Both to some extent revolve around the question whether you met the “reasonable standard for the industry.” Reasonable is defined as what a reasonable person would do in the same situation. Standard is the level of safety or knowledge and practice of safety required Industry is the paddling business industry. The definition combines to create a safety requirement that is the absolute minimum that a reasonable person running an outdoor recreation business would do. Standards are not goals; however, falling below the standard will almost always guaranty a losing lawsuit or at least increasing the cost of winning one.

Standards are floating. It is not always the same for a state, region or the nation. The standard will also change based on the water level, the type of river you are on, the equipment you are using and in several cases the types of guests to whom you are marketing. A recreation business in a rural area with a slow mellow stream that market’s to local people may have a different standard then when on a stream with small rapids near a large city and marketing to the masses. As such, you need to meet other people who are applying the same standard in the industry that you are using. You may also need to converse with people who are applying higher standards. History shows that companies move up to meet the standards for better operations or operations with higher standards.

Standards are not made, written down or created in courtrooms. They are constantly changing and they can only be found in the eyes and actions of everyone else in the industry. In trials, expert witnesses are brought in to tell the jury what the standard of care in a particular situation should have been. These expert opinions are based on the knowledge of the accident and a broad knowledge of the industry. You need to maintain your knowledge level of the industry at the same level as the experts. You are required to know the standard of the industry and your standards when running any business.

“Why does attending a conference change the way I do business?” Because the only way you can find out about a change in the standards is by meeting and greeting other people in the industry. If you have not attended a conference in several years, you may not know that the majority of states now require Personal Flotation Devices‘ for children. Even though your state may not require them, the standard has changed. You may not be required by law to provide a PFD, however, the standard is that one will be required and as such you have dropped below what the reasonable person would do in your situation.

Without attending a conference and seeing what everyone else is doing, you will not stay current in the industry. As such, you are wearing a target on your back that says sue me. Only personal injury attorneys can see that target. But see it they will when someone is hurt at your business.


There are other reasons for attending the conference. Unless you have hired an attorney to stay current on the issues or a lobbyist, you may have missed a change in the law. Many laws are passed each year that do not make the news. Old laws may also change. A great example of that is how courts have interpreted laws in West Virginia and Colorado recently. Unless you attend a conference, you may not know how new or interpreted laws have changed over the past year. What was a defense to the horseback riding industry in Colorado is now a welcome mat for lawsuits.

New ways to promote safety show up at conferences. New ideas that one business develops in their program can be a great way to keep your guests safe. New equipment is debuted, with the plusses and minuses at conferences.

New ideas also change the legal environment. A new product by a manufacture showing at the Conference can quickly change the standard for an industry. A new design of boat, Personal Flotation Device or trailer may suddenly make your system a risky liability issue.

These changes will not only affect whether a guest can sue you for injuries but also whether your own employees can sue you. Lifting canoes to the top level of a trailer may cause worker’s compensation injuries. A new design that promotes employee health and welfare could save thousands in worker’s compensation benefits.

The final legal reason for attending a conference is the overall education you receive. Judges and juries look at witnesses and examine their credibility. People who are honest are the witnesses’ juries believe. Honesty is not just how you are on the stand when you are testifying, but how you ran your business. An honest and upstanding member of the business community is going to continually want to improve his business. Being a member of your professional organization and attending the yearly conferences shows a jury that you care enough about your business and your clients to spend the extra time and money to run your business the best way possible. If you are willing to show an interest in your clients by receiving the most up to date education, you must not be as bad as you are being portrayed by the opposing attorney.

Some insurance companies give discounts on premium for attending a conference. They know that the company that attends a conference is concerned about staying current with the industry and keeping their operation as top notch as possible. Companies that attend conferences and get the most possible from a conference are less likely to have accidents that cost insurance company’s money.

Go to this year’s Conference and increase your chances of not going to court!

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