There are dozens of reasons, read on.
There are dozens of reasons why you would create multiple limited liability companies for your business.
- A Limited Liability Company, (LLC), is easy and inexpensive to set up and operate.
- Each LLC protects the assets in it.
- Each LLC protects the assets of the other LLC’s
- Each LLC protects the assets of the parent LLC.
- Each LLC makes it harder to sue the parent and other LLC’s
- Like not having all of your eggs in one basket, separate LLC’s provide better protection for all of your assets.
- If you lose a lawsuit above your insurance limits, only the LLC that was sued is as risk not your other assets, locations or companies.
- Each LLC can be taxed a different way.
- You can take money out of each LLC a different way.
- Setting up different LLC’s for each state you may operate in provides more options for the LLC in that state.
- Setting up a different LLC for each state you operate in provides more tax advantages for the LLC in that state.
- Overall, you create more barriers to losing your business because of creditors.
And there are many more reasons beyond these twelve.
As an example let’s look at a small outfitter or climbing wall with the following assets:
- Two locations (leased)
- Equipment share by both operations
- Equipment at each operation
You would set up the LLC’s this way probably.
Each separate business operation or real estate address should have it’s own LLC. Any equipment that is used by both LLC’s can be in a separate LLC that is rented to the business LLC’s when needed. The equipment rental company can also be used to buy all equipment and products needed by the operations to get better deals. Any management, operations, etc., are done out of the Parent LLC that owns the other three LLCs. If either businesses gets sued, the assets of the other LLC, the joint Equipment and the management assets are protected from that lawsuit.
If you operate a business that is based on permits you may want a separate LLC for each permit you own.
If you owned land under your businesses, you would want those in separate LLC’s. You can lose the business and start the next day because you still own a lot of the equipment and the land.
There are some negative issues with this type of set up.
The relationship between each LLC and the other LLC’s must be in writing with a proper agreement and proper accounting. That means there needs to be a management contract between the parent company and the different LLCs. There needs to be a rental agreement between the equipment company and the operating LLCs.
If you are an outfitter with this set up, and you transport your guests in vehicles you would want to add a transportation LLC. Your greatest liability is in moving guests to the activity location. Always keep your liabilities separate from your assets.
In this situation, you would need a lease agreement between the Operations and the Real Estate LLCs.
If you start to grow to the point that this gets unwieldy, you can consolidate and combine assets.
Your situation and growth are going to be different and will vary on how well you, and your CPA can work together. Other than increased accounting costs, you will achieve significant protection from any possible lawsuit by using multiple LLCs with little additional work.
If you have a good CPA, you can also have the LLC’s taxed differently to provide different benefits or income to you. You can take money out of some LLC’s as income, some as rent, others as an independent contractor based on how you initially set them up and how they are recognized by the IRS.
One final idea is you may have assets that are so valuable and small that you do not want to keep them in any LLC that could get sued. An example would be a federal permit or concession contract. You could keep those in your own name or in a different LLC that does nothing but leases those permits to your LLC’s. That way, no matter what, you can start again because you have a valid permit.
The final issue might be if you decided to take your company public someday. Contrary to popular belief, incorporating in Delaware is NOT the place to set up your business. Incorporating in Delaware until you have decided to go public has many negatives.
- People think you are a bigger company, there fore they will sue for more money.
- The cost of incorporating in Delaware is several times more expensive than most other states.
- The yearly costs of maintain a corporation in Delaware is expensive.
- You have to hire a statutory agent in Delaware who adds to your cost.
- You have to follow Delaware law in running your company or corporation.
- Your LLC or Corporation will have to follow Delaware laws so you may have to hire an additional attorney.
What if you want to go public someday? Then at that time, create a Delaware corporation. Have that corporation become the owner of all the other LLCs you have created. Now you are a Delaware corporation ready to go public and have delayed the cost of creating a Delaware corporation until you can afford it.
Save your money when you are starting out, start your LLC in the state where you are going to operate so you understand the state laws your LLC will be operating under.
What do you think? Leave a comment.
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Lynam v. Blue Diamond LLC, 2016 Del. Super. LEXIS 495
Thomas A Lynam, III and Antoinette M. Lynam, as Parents and Natural Guardians of Thomas A. Lynam, IV, a minor,
Blue Diamond LLC and Parkway Gravel Inc. and Houghton’s Amusement Park, LLC
C.A. No. N14C-11-121 RRC
Superior Court of Delaware, New Castle
October 4, 2016
Submitted: July 6, 2016
On Defendants Blue Diamond LLC’s and Parkway Gravel, Inc.’s Motion for Judgment on the Pleadings.
Tabatha L. Castro, Esquire The Castro Firm, Inc. Attorney for Plaintiffs
Leonard G. Villari, Esquire Villari, Lentz & Lynam, LLC Attorney Pro Hac Vice for Plaintiffs
Marc S. Casarino, Esquire Dana Spring Monzo, Esquire Nicholas Wynn, Esquire White and Williams, LLP Attorneys for Defendants Blue Diamond LLC and Parkway Gravel, Inc.
Pending before this Court is Defendants Blue Diamond LLC’s and Parkway Gravel, Inc.’s (“Defendants”) Motion for Judgment on the Pleadings. In their complaint, Plaintiffs allege that minor Thomas Lynam, IV (“Tommy”) was riding his motocross bicycle on Defendants’ motocross track. After riding off a jump, Tommy landed, lost control of his motocross bicycle, and collided with a metal shipping container near the track. Tommy apparently sustained serious injuries. Plaintiffs’ complaint raises one count of “negligence” as a theory for liability.Although not listed as a separate count in their complaint, Plaintiffs allude in their general “negligence” claim to a theory of reckless conduct by Defendants in connection with the operation of the motocross track.
In their motion, Defendants assert that their alleged behavior was, as a matter of fact and law, neither negligent nor reckless. Alternatively, Defendants raise an affirmative defense that they are released from any liability for negligent or reckless conduct due to a release agreement (the “Release”) signed by the Plaintiffs. Additionally, Defendants raise the doctrine of assumption of the risk as a separate affirmative defense as a bar to recovery.
Plaintiffs agree that they released Defendants from liability for Defendants’ own “negligence.” However, Plaintiffs contend that Defendants’ conduct amounted to recklessness, and that Plaintiffs never released Defendants from liability for their allegedly reckless conduct. In response to Defendants’ claim that Plaintiffs assumed the risk of injury, Plaintiffs contend that the risk of a collision with a metal shipping container was not contemplated at either the signing of the Release or when Tommy began using the facilities.
This Court concludes that the Release was not specifically tailored so as to release Defendants from liability for their allegedly reckless conduct. The Court also finds that the factual record is insufficiently developed to make a legal determination of whether Defendants’ conduct as a matter of law amounted to recklessness. Finally, the Court concludes that it is premature at this juncture to consider Defendant’s affirmative defense. Accordingly, the Court denies Defendants’ Motion for Judgment on the Pleadings.
II.FACTUAL AND PROCEDURAL HISTORY
On January 6, 2013, Tommy, then thirteen years old, was riding a motocross bicycle at Blue Diamond Motocross near New Castle. Plaintiffs allege that the track was advertised as being composed of “safe jumps.” While riding, Tommy rode off a jump, made a hard landing, and was unable to stop in time before colliding with a large metal shipping container.
Prior to granting Tommy admission to the Blue Diamond facilities to ride his motocross bicycle, Blue Diamond required Tommy’s father to sign a release agreement. The Release, entitled “Parental Consent, Release and Waiver of Liability, Assumption of Risk and Indemnity Agreement, ” stated that Plaintiffs understood the “risks and dangers of serious bodily injury” posed by motocross and relieved Defendants from liability for their own negligence. The Release also released Defendants from liability for injuries suffered by Plaintiffs through their own negligence.
In their complaint, Plaintiffs allege that Defendants negligently allowed the container to remain on the premises at an unsafe distance from the motocross track. While Plaintiffs do not specifically allege recklessness as a separate claim for recovery, but rather include it in a single count of “Negligence, ” Plaintiffs’ complaint references reckless conduct as another potential theory of recovery.Plaintiffs, however, now agree that their claims of negligence are barred by the Release. But Plaintiffs assert that the Release did not specifically address or contemplate potential claims against Defendants for “reckless” behavior.
A. Standard of Review
Under Superior Court Civil Rule 12(c), a party may move for judgment on the pleadings after the pleadings are closed. The standard of review in the context of a motion for judgment on the pleadings requires a court to “accept all the complaint’s well-pleaded facts as true and construe all reasonable inferences in favor of the non-moving party.” “The motion will be granted when no material issues of fact exist, and the moving party is entitled to judgment as a matter of law.” “The standard for a motion for judgment on the pleadings is almost identical to the standard for a motion to dismiss.”
B. The Parties Agree that the Release Bars Plaintiffs’ Recovery Against Defendants for Any Negligence
Defendants contend that the executed Release bars recovery for negligence. At oral argument on this motion, Plaintiffs agreed (Plaintiffs’ filings were not explicit on this point) that the Release bars recovery for injuries resulting from Defendants’ allegedly negligent conduct. Although Plaintiffs are residents of Pennsylvania, the parties agree that Delaware law applies to the present motion, as Defendants are Delaware businesses and the incident giving rise to the case at bar occurred in Delaware.
Under Delaware law, parties may enter into an agreement that relieves a business owner of liability for injuries to business invitees that result from the owner’s negligent conduct. However, the release must be unambiguous, not unconscionable, and not against public policy.  Further, the release must be “‘crystal clear and unequivocal’ to insulate a party from liability for possible future negligence.”
In Ketler v. PFPA, LLC, the Delaware Supreme Court recently determined the validity of a release waiving liability for negligence. The release in Ketler provided:
‘I understand and voluntarily accept this risk and agree that [the defendant] . . . will not be liable for any injury, including, without limitation, personal, bodily, or mental injury . . . resulting from the negligence of [the defendant] or anyone on [the defendant’s] behalf whether related to exercise or not. Accordingly, I do hereby forever release and discharge [the defendant] from any and all claims, demands, injuries, damages, actions, or causes of action.'
The Delaware Supreme Court held that the release was sufficiently clear and unequivocal, and that it expressly released the defendant from any and all causes of actions relating to the defendant’s own negligence. Defendants rely heavily on this case, asserting that it applies to claims of reckless conduct.
The Release that Plaintiffs executed in this case is also sufficiently “clear and unequivocal.” The Release provides:
3. I consent to the Minor’s participation in the Event(s) and/or entry into restricted areas and HEREBY ACCEPT AND ASSUME ALL SUCH RISKS, KNOWN AND UNKNOWN, AND ASSUME ALL RESPONSIBILITY FOR THE LOSSES, COSTS, AND/OR DAMAGES FOLLOWING SUCH INJURY, DISABILITY, PARALYSIS OR DEATH, EVEN IF CAUSED, IN WHOLE OR IN PART, BY THE NEGLIGENCE OF THE “RELEASEES” NAMED BELOW.
4. I HEREBY RELEASE, DISCHARGE AND COVENANT NOT TO SUE the . . . track owners, [and] owners and lessees of premises used to conduct the Event(s) . . . all for the purposes herein referred to as “Releasees, ” FROM ALL LIABILITY TO ME, THE MINOR, [and] my and the minor’s personal representatives . . . FOR ANY AND ALL CLAIMS, DEMANDS, LOSSES, OR DAMAGES ON ACCOUNT OF INJRY, including, but not limited to, death or damage to property, CAUSED . . . BY THE NEGLIGENCE OF THE “RELEASEES” OR OTHERWISE.
Similar to the language at issue in Ketler, the Release expressly states that the signor assumes responsibility for injuries caused by Defendants’ own negligent conduct. The release also expressly states that the Defendants are released from any and all causes of action that may arise from Defendants’ negligent conduct. Accordingly, this Court agrees with the parties that the Release validly exculpates Defendants from liability for their own negligence.
Defendants also rely on Lafate v. New Castle County and Devecchio v. Delaware Enduro Riders, Inc. to support their position that the Release waives claims of reckless conduct. Both Lafate and Devecchio concern agreements that released the tortfeasors from liability for their own negligent conduct. Both cases also discussed whether the language of the releases was sufficiently tailored to release the tortfeasor’s negligent conduct. In Lafate, this Court refused to grant the defendant’s motion for summary judgment on grounds that the release did not clearly and unambiguously release the tortfeasor from claims that it was negligent. In Devecchio, this Court granted the defendant’s motion for summary judgment because the plaintiff signed a valid covenant not to sue for injury resulting from the plaintiffs own negligence.
Defendants’ reliance on these cases in light of Plaintiffs’ potential claim of reckless conduct is inapposite. Because the parties have agreed that Defendants are insulated from claims of negligence, the question of whether the release clearly and unambiguously insulates the defendants from liability for their own negligent conduct is moot. Neither the holding in Lafate nor in Devecchio relate to allegations of reckless conduct. Accordingly, because Plaintiffs now assert that Defendant’s conduct was reckless, Lafate and Devecchio are distinguishable from the case at bar.
Finally, the Court considers whether, for purposes of this motion, recklessness is subsumed in negligence, and is therefore barred as a form of negligence. Prosser and Keeton on Torts is particularly informative, providing that “such [exculpatory] agreements [that expressly exempt defendants from liability for their negligent conduct] generally are not construed to cover the more extreme forms of negligence, described as willful, wanton, reckless or gross, and to any conduct which constitutes an intentional tort.” Adopting Prosser and Keeton’s interpretation, this Court finds that although the Release does insulate Defendants from liability for negligent conduct, it does not bar claims of “more extreme forms of negligence, ” such as “reckless” conduct.
C. A Motion for Judgment on the Pleadings is Inappropriate at this Juncture in Light of any Undeveloped Claims of Reckless Conduct
Although Tommy’s father’s execution of the Release precludes recovery from Defendants on a theory of “negligence, ” Plaintiffs assert that the Defendants’ conduct was “reckless.” Plaintiffs did not explicitly allege in a separate count of the complaint that Defendant’s conduct was reckless, but Plaintiffs did make it apparent in the complaint that it was an intended theory of liability. In their briefing and at oral argument, Plaintiffs suggested that Defendants, among other things, had been aware of previous collisions with the shipping container, and that their ignorance of these prior incidents amounts to reckless behavior.Accordingly, the Court must determine whether the Release bars Plaintiffs from asserting claims resulting from injuries caused by Defendants’ reckless conduct.
Courts in Delaware have a strong preference for resolving cases on their merits, or at least allowing discovery to proceed such that additional evidence in support of the parties’ contentions can be developed. While this preference is not outcome-determinative, the preference for resolving cases on the merits is a strong factor in determining whether to grant or deny a dispositive motion.
Plaintiffs, at oral argument and in their response to the motion, argue that they are entitled to recovery based on Defendants’ allegedly reckless conduct. The parties agree that this theory is separate from the one count of “negligence” listed in the complaint. The operative language of the Release does not explicitly enumerate or contemplate recklessness as a theory of recovery barred by the Release. Under Delaware law, as provided in Ketler, a release must be “clear and unambiguous” in order to effectively release the business owner from liability.
This Court finds that the language of the release is not “clear and unambiguous” with respect to Defendants’ liability for their own allegedly reckless conduct. In Ketler, the release at issue specifically used the word “negligence, ” and stated that Defendants “will not be liable for any injury, including, without limitation, personal, bodily, or mental injury . . . resulting from the negligence of [the defendants].” The Delaware Supreme Court held that this language satisfied the “clear and unequivocal” standard and upheld the language of the agreement.
Turning to the Release that Plaintiffs executed, this Court finds that the Release is silent as to claims of recklessness. The Release does not mention “reckless” conduct, and instead only expressly refers to injury caused by Defendants’ “negligence.” In the absence of such language, the Release does not clearly and unambiguously exculpate Defendants from liability for their own reckless conduct. Accordingly, the Release does not operate to bar Plaintiffs’ claim of recklessness.
This Court holds that the Release does not bar claims of reckless conduct. This Court expresses no opinion at this juncture as to whether Plaintiffs ultimately can establish claims against for recklessness. Accordingly, the Court denies Defendants’ Motion for Judgment on the Pleadings, and will grant Plaintiffs leave to conduct further discovery with the option of potentially amending the complaint in support of their contention that Defendants’ conduct was “reckless.”
D. The Court does Not Reach Defendant’s Argument under the Doctrine of Assumption of the Risk
Finally, Defendants’ contend that Plaintiffs assumed the risk of injury from Defendants’ alleged reckless conduct. However, the record has not been sufficiently developed to determine whether Defendants’ conduct was reckless or whether Plaintiffs assumed the risk of injury from Defendants’ allegedly reckless conduct. Accordingly, the Court does not reach this contention at this stage of the litigation.
Defendant’s Motion for Judgment on the Pleadings is DENIED. The Court has enclosed an Order establishing a Scheduling Conference in this case.
Very truly yours,
Richard R. Cooch Resident Judge
 Defendant Houghton’s Amusement Park, LLC did not make an appearance in this case and had a default judgment taken against it on June 21, 2016.
Compl. ¶¶ 79-87.
Compl. ¶ 48.
Defs.’ Mot. for J. on the Pleadings, Ex. A.
Defs.’ Mot. for J. on the Pleadings, Ex. A. Tommy also signed an agreement, titled “Minor’s Assumption of the Risk Acknowledgment, ” that Defendants reference in their motion as another reason they are not liable for Plaintiffs’ injuries. However, it appears from the motion and subsequent filings that the release signed by Tommy is only mentioned in passing, and is not relied upon by Defendants. The release signed by Tommy’s father is the determinative release in the case at bar.
Compl. ¶¶ 79-87.
Compl. ¶¶ 49, 51, 77, 87. Specifically, the Complaint alleges that “Defendants’ failure to exercise reasonable care as alleged above comprised outrageous conduct under the circumstances, manifesting a wanton and reckless disregard of the rights of the Plaintiffs.” Compl. ¶ 87. The Complaint also alleges that Tommy’s injuries were caused by the “reckless indifference” of Defendants. Compl. ¶¶ 51, 77. Moreover, the Complaint alleges that the track was “reckless[ly] design[ed].” Compl. ¶ 49.
At oral argument, Plaintiffs’ counsel answered in the affirmative when the Court asked “Am I understanding Plaintiffs’ position correctly when I read the papers to say that Plaintiffs are not alleging ordinary negligence, but rather recklessness?” Lynam et al. v. Blue Diamond LLC Motocross et al, C.A. No. N14C-11-121 RRC, at 6 (Del. Super. July 6, 2016) (TRANSCRIPT) [hereinafter Oral Arg. Tr.].
 Defs.’ Mot. for J. on the Pleadings, Ex. A.
 A judgment on the pleadings is based only upon a review of Plaintiffs’ complaint and Defendants’ answer. However, under Rule 12(c), “If, on a motion for judgment on the pleadings, matters outside the pleadings are presented to and not excluded by the Court, the motion shall be treated as one for summary judgment.” Super. Ct. Civ. R. 12(c). In the case at bar, Defendants introduced the two executed releases as exhibits to their motion. However, the releases were not a part of the pleadings. Nevertheless, the parties agree that this motion should be treated as a motion for judgment on the pleadings.
 Silver Lake Office Plaza, LLC v. Lanard & Axilbund, Inc., 2014 WL 595378, at *6 (Del. Super. Jan. 17, 2014) (quoting Blanco v. AMVAC Chem. Corp., 2012 WL 3194412, at *6 (Del. Super. Aug. 8, 2012)).
 Id. (quoting Velocity Exp., Inc. v. Office Depot, Inc., 2009 WL 406807, at *3 (Del. Super. Feb. 4, 2009).
 Id. (internal quotation marks omitted).
 See Oral Arg. Tr. at 6.
 Ketler v. PFPA, LLC, 132 A.3d 746 (Del. 2016) (upholding “hold harmless” agreements and releases that relieve a proprietor from liability for its own negligent activities).
 Id. at 747-48.
 Riverbend Cmty., LLC v. Green Stone Eng’g, LLC, 55 A.3d 330, 336 (Del. 2012) (internal quotation marks omitted) (quoting State v. Interstate Amiesite Corp., 297 A.2d 41, 44 (Del. 1972)).
 Ketler, 132 A.3d at 747.
 Oral Arg. Tr. at 14-16.
 Defs.’ Mot. for J. on the Pleadings, Ex. A (emphasis added).
 1999 WL 1241074 (Del. Super. Oct. 22, 1999).
 2004 Del. Super. LEXIS 444 (Del. Super. Nov. 30, 2004).
 The plaintiff in Lafate was injured by a metal bar used to divide a basketball court. This Court found that while the agreement did “speak of ‘any and all injuries which may be suffered by [players] during [their] participation, ‘” the absence of the word “negligence” insufficiently insulated the defendants from liability for their own negligent conduct. Lafate, 1999 WL 1241074, at *4.
 In Devecchio, the defendant owned a motorcycle race track that required riders to sign agreements releasing the defendant from liability for injuries resulting from both the riders and the defendant’s negligence. The release pertaining to the defendant’s negligence expressly used the word “negligence.” This Court found that the release using the word “negligence” was sufficiently clear and unambiguous, and therefore insulated the defendant from liability for its own negligent conduct. Devecchio v. Enduro Riders, Inc., 2004 Del. Super. LEXIS 444 (Del. Super. Nov. 30, 2004).
 W. Page Keeton, et al., Prosser and Keeton on Torts, § 68 at 483-84 (5th ed. 1984)). Delaware courts often rely on Prosser and Keeton on Torts in reaching their conclusions. See, e.g., Culver v. Bennett, 588 A.2d 1094, 1097 (Del. 1991); Lafate v. New Castle County, 1999 WL 1241074 (Del. Super. Oct. 22, 1999); Brzoska v. Olson, 668 A.2d 1355, 1360 (Del. 1995).
 Additionally, the Delaware Civil Pattern Jury Instructions for negligence and recklessness are substantially different. The Delaware Civil Pattern Jury Instruction for negligence provides:
This case involves claims of negligence. Negligence is the lack of ordinary care; that is, the absence of the kind of care a reasonably prudent and careful person would exercise in similar circumstances. That standard is your guide. If a person’s conduct in a given circumstance doesn’t measure up to the conduct of an ordinarily prudent and careful person, then that person was negligent. On the other hand, if the person’s conduct does measure up to the conduct of a reasonably prudent and careful person, the person wasn’t negligent.
Del. Super. P.J.I. Civ. § 5.1 (2003), http://courts.delaware.gov/forms/download.aspx?id=85928. On the other hand, the Delaware Civil Pattern Jury Instruction for reckless conduct states:
Reckless conduct reflects a knowing disregard of a substantial and unjustifiable risk. It amounts to an “I don’t care” attitude. Recklessness occurs when a person, with no intent to cause harm, performs an act so unreasonable and so dangerous that he or she knows, or should know, that harm will probably result.
Del. Super. P.J.I. Civ. § 5.9 (2003), http://courts.delaware.gov/forms/download.aspx?id=85928. It is apparent from a comparison of the two different jury instructions that negligence conduct requires a departure from the ordinary standard of care exhibited by the reasonably prudent person, an objective standard. However, in contrast, it appears from the pattern jury instructions that reckless conduct requires a subjective “I don’t care” attitude that evidences an even greater departure from the ordinary standard of care, amounting to an unreasonable conscious disregard of a known risk.
 Compl. ¶¶ 49, 51, 77, 87. For example, Plaintiffs allege that “The reckless design of the track, which was intentionally constructed next to the pre-existing intermodal container, requires riders to land from a jump and immediately decelerate in order to execute a 90° right turn.” Compl. ¶ 49. Moreover, Plaintiffs allege that Tommy’s injuries were “a direct and proximate result of the negligence, carelessness and reckless indifference of Defendants.” Compl. ¶ 77.
 Pl.’s Suppl. Resp. in Opp’n to the Mot. for J. on the Pleadings, at 2.
 Keener v. Isken, 58 A.3d 407, 409 (Del. 2013); see also Wallace v. Wood, 2007 WL 3331530 (Del. Ch. Oct. 31, 2007); DeSantis v. Chilkotowsky, 2004 WL 2914314, at *2 (Del. Super. Nov. 18, 2004), Sup. Ct. Civ. R. 56.
 Plaintiffs did not plead any explicit claim of recklessness. See, e.g., J.L. v. Barnes, 33 A.3d 902, 916 n.77 (De. 2011) (treating recklessness and gross negligence as interchangeable and noting, “In order for a plaintiff to plead gross negligence with the requisite particularity, the plaintiff must articulate ‘facts that suggest a wide disparity between the process  used . . . and that which would have been rational.'” J.L. states that a complaint pleading ten pages of facts to support a claim of gross negligence or recklessness was sufficient to meet the pleading standard). Defendants argue that Plaintiffs have not properly pleaded reckless conduct under Superior Court Civil Rule 9(b). However, the Court need not reach that issue since it will give Plaintiffs the opportunity to amend their complaint.
 Ketler, 132 A.3d at 747.
 Because the Court finds that Defendants’ release does not explicitly bar claims of “reckless” conduct, this Court does not reach the question of whether such a release is potentially permissible under Delaware law. However, this Court notes that other jurisdictions have differing perspectives on whether exculpatory agreements barring claims for recklessness, gross negligence, willful acts, or strict liability are enforceable. See Randy J. Sutton, Annotation, Validity, Construction, and Effect of Agreement Exempting Operator of Amusement Facility from Liability for Personal Injury or Death of Patron, 54 A.L.R.5th 513 (1997). For example, in Barker v. Colo. Region-Sports Car Club of Am., the Colorado Court of Appeals held that exculpatory agreements can release a party only for simple negligence, and not from willful and wanton negligence. 532 P.2d 372, 377 (Colo.App. 1974). Similarly, in Wheelock v. Sport Kites, Inc., the United States District Court for the District of Hawaii held that a release was invalid with respect to claims of gross negligence and strict liability. 839 F.Supp. 730, 736 (D. Haw. 1993). The above annotation suggests that a common reason to not enforce such an agreement is because they are void against the state’s public policy.
Alternatively, other jurisdictions have upheld agreements that exculpate business owners for reckless conduct or strict liability. For example, in Murphy v. N. Am. River Runners, Inc., the West Virginia Supreme Court discussed the matter, stating:
Generally, in the absence of an applicable safety statute, a plaintiff who expressly and, under the circumstances, clearly agrees to accept a risk of harm arising from the defendant’s negligent or reckless conduct may not recover for such harm, unless the agreement is contrary to public policy. When such an express agreement is freely and fairly made, between two parties who are in equal bargaining position, and there is no public interest with which the agreement interferes, it will generally be upheld.
412 S.E.2d 504, 508-09 (W.Va. 1991).
Delaware Courts have previously allowed such an amendment to be made. As this Court held in Guy v. Phillips, a party may amend a complaint following additional discovery when the amended count arises out of the same factual basis for the original complaint. 1997 WL 524124 (Del. Super. July 2, 1997).
 In support of this defense, the Court notes that Defendants rely solely on Deuley v. DynCorp Int’l, Inc., 2010 WL 704895 (Del. Super. Feb. 26, 2010). However, Deuley is distinguishable from the case at bar. In Deuley, surviving relatives of decedents killed by an improvised explosive device (“IED”) in Afghanistan filed a wrongful death action. As part of the employment agreement, the decedents signed an agreement that provided employees expressly assumed the risk of injury or death. In reaching its conclusion that the decedents assumed the risk of death, the Court found that “when [the decedents] signed the releases, even a poorly informed American had to have appreciated that working in Afghanistan involved the general risk of insurgent or terrorist attacking by an IED.” Deuley, 2010 WL 704895, at *4. “The complaint offers no reason to find that any plaintiff here was probably unaware of the general risk of being injured or killed by a bomb.” Id. In the case at bar, drawing inferences in the light most favorable to the Plaintiffs, it is unlikely that Plaintiffs were aware of the risk posed by the shipping container, since they allege that they were unable to inspect the track prior to Tommy using it. Accordingly, Defendants’ reliance on Deuley is inapposite since it could be determined that a collision with the metal shipping container was not contemplated by the Plaintiffs when they signed the Release.
Delaware Supreme Court decision quickly determines a health club release is not void because of public policy issues and is clear and unequivocal.Posted: July 18, 2016
The decision is very short and very clear. Write a clear and direct release and it will be upheld in Delaware.
State: Delaware, Supreme Court of Delaware
Plaintiff: Deshaun Ketler and Brittany Ketler
Defendant: PFPA, LLC, a Delaware Corporation, d/b/a Planet Fitness
Plaintiff Claims: negligence
Defendant Defenses: Release
Holding: For the defendant
This is a Delaware Supreme Court decision on release law in Delaware from a lawsuit against a health club.
The plaintiff sued the defendant Planet Fitness because she was injured at the health club, a cable broke on a seated rowing machine she was using.
The trial court granted the defendant’s motion for judgment on the pleadings finding the release stopped the claims of the plaintiff. The plaintiff appealed.
Analysis: making sense of the law based on these facts.
The Delaware Supreme Court did not waste a single sentence in this very short very instructive decision.
Releases are valid in Delaware. They must be clear and unequivocal if a release is to be valid.
This Court has previously recognized that a release of prospective negligence may be valid. Such a release must be “‘clear and unequivocal’ to insulate a party from liability
The court looked to the language of the release, and without comment stated the language was clear and unequivocal. The court then looked at the other issues that may void a release.
The release may not be unconscionable.
Unconscionability is a concept that is used sparingly. Traditionally, an unconscionable contract is one which “no man in his senses and not under delusion would make on the one hand, and as no honest or fair man would accept, on the other.”
Unconscionable in Delaware means more than a just a disparity between the party’s ability to bargain. There must be no real choice for the party being offered the release or agreement.
But mere disparity between the bargaining powers of parties to a contract will not support a finding of unconscionability.” “[T]here must be an absence of meaningful choice and contract terms unreasonably favorable to one of the parties.” There is no deprivation of meaningful choice if a party can walk away from the contract. Here, DeShaun was free to accept the Planet Fitness membership or not. The Superior Court did not err in concluding that the release is not unconscionable.
Because the plaintiff was not being forced to sign the contract and a health club contract was not a necessity, the plaintiff could have walked away from the release. Thus the release was not unconscionable.
The next issue was whether the release violated public policy. In Delaware to violate public policy, there must be a statute specifically saying that a release for this activity violates public policy.
The public policy of this state is typically determined by the Delaware General Assembly. No Delaware statute has been identified which bears on the validity of a release of prospective negligence.
The statute must not only look at the issues identified in the release, but must specifically say a release is void for these issues.
However, a general release by its nature releases a party from a potential liability otherwise imposed by law. The public policy involved must be one which disapproves of the release.
The judgement of the lower court was affirmed.
So Now What?
There is very little instructional language in this decision. However, what information is provided is very clear and very easy to understand. Releases in Delaware if they are clear and unequivocal will be upheld in the state.
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Deshaun Ketler and Brittany Ketler, his wife, Plaintiff-Below, Appellant, v. PFPA, LLC, a Delaware Corporation, d/b/a Planet Fitness, Defendant-Below, Appellee.
No. 319, 2015
SUPREME COURT OF DELAWARE
2016 Del. LEXIS 19
December 2, 2015, Submitted
January 15, 2016, Decided
THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION IN THE PERMANENT LAW REPORTS. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL.
PRIOR HISTORY: [*1] Court Below: Superior Court of the State of Delaware. C.A. No. N14C-12-235.
Ketler v. PFPA, LLC, 2015 Del. Super. LEXIS 270 (Del. Super. Ct., June 3, 2015)
DISPOSITION: Upon appeal from the Superior Court. AFFIRMED.
COUNSEL: Edward T. Ciconte, Esquire, Adam F. Wasserman, Esquire, Ciconte, Scerba & Kerrick, LLC, Wilmington, Delaware, for Appellant.
Gary H. Kaplan, Esquire, Jessica L. Tyler, Esquire, Marshall Dennehey Warner Coleman & Goggin, Wilmington, Delaware, for Appellee.
JUDGES: Before STRINE, Chief Justice; VALIHURA, and VAUGHN, Justices.
OPINION BY: VAUGHN
Plaintiffs-Below/Appellants DeShaun Ketler and Brittany Ketler appeal from a Superior Court order granting Defendant-Below/Appellee PFPA, LLC’s (“Planet Fitness”) motion for judgment on the pleadings. DeShaun Ketler was injured while using exercise equipment in a Planet Fitness facility. The Ketlers claim that the injuries were caused by negligence on the part of Planet Fitness. The Superior Court found that the Ketlers claim was barred by a signed release of liability. It determined that a release which allows a party to avoid liability for its own negligence is permissible under Delaware Law if the release is unambiguous, not unconscionable, and not against public policy. It further determined that the release satisfied all three criteria. [*2] On appeal, the Ketlers contend that the Superior Court erred because the release is ambiguous, unconscionable, and against public policy. We approve the Superior Court’s determinations and affirm.
In 2010, DeShaun joined Planet Fitness at a cost of $10 per month.1 DeShaun signed a membership agreement, which contained the following:
I understand and expressly agree that my use of this Planet Fitness facility . . . involves the risk of injury to me or my guest whether caused by me or not. I understand that these risks can range from minor injuries to major injuries including death. In consideration of my participation in the activities and use of the facilities offered by Planet Fitness, I understand and voluntarily accept this risk and agree that Planet Fitness . . . will not be liable for any injury, including, without limitation, personal, bodily, or mental injury. . . resulting from the negligence of Planet Fitness or anyone on Planet Fitness’ behalf whether related to exercise or not. Accordingly, I do hereby forever release and discharge Planet Fitness from any and all claims, demands, injuries, damages, actions or causes of action. I further understand and acknowledge that Planet [*3] Fitness does not manufacture fitness or other equipment in its facilities, but purchases and/or leases equipment, and therefore Planet Fitness may not be held liable for defective products.2
In April 2013, DeShaun was injured when a cable broke on a seated rowing machine that he was using at Planet Fitness.
1 Devana Fitness, LLC was the franchisee of the Planet Fitness location on the date the Membership Agreement was executed. On July 31, 2012, prior to Ketler’s incident, Devana Fitness, LLC assigned its rights and interests in, and under, all Membership Agreements to PFPA, LLC.
2 Appellant’s Op. Br. App. at A8.
This Court has previously recognized that [HN1] a release of prospective negligence may be valid.3 Such a release must be “‘clear and unequivocal’ to insulate a party from liability . . . .”4 The release provision involved here expressly releases Planet Fitness from any liability for any injury resulting from the negligence of Planet Fitness, whether related to exercise or not. It expressly releases Planet Fitness from any and all claims or causes of action. The provision’s language is clear and unequivocal.
3 Riverbend Cmty., LLC v. Green Stone Eng’g, LLC, 55 A.3d 330, 336 (Del. 2012).
4 Id. (quoting State v. Interstate Amiesite Corp., 297 A.2d 41, 44 (Del. 1972)).
[HN2] It must also not be unconscionable. Unconscionability is a concept that [*4] is used sparingly.5 Traditionally, an unconscionable contract is one which “no man in his senses and not under delusion would make on the one hand, and as no honest or fair man would accept, on the other.”6 “But mere disparity between the bargaining powers of parties to a contract will not support a finding of unconscionability.”7 “[T]here must be an absence of meaningful choice and contract terms unreasonably favorable to one of the parties.”8 There is no deprivation of meaningful choice if a party can walk away from the contract.9 Here, DeShaun was free to accept the Planet Fitness membership or not. The Superior Court did not err in concluding that the release is not unconscionable.
5 See Progressive Int’l Corp. v. E.I. DuPont de Nemours & Co., 2002 Del. Ch. LEXIS 91, 2002 WL 1558382, at *11 (Del. Ch. July 9, 2002) (discussing the reluctance of courts to apply the doctrine).
6 Reserves Mgmt., LLC v. Am. Acquisition Prop., LLC, 86 A.3d 1119, 2014 WL 823407, at *9 (Del. 2014) (internal quotations omitted).
8 Tulowitzki v. Atl. Richfield Co., 396 A.2d 956, 960 (Del. 1978).
9 See Graham v. State Farm Mut. Auto. Ins. Co., 565 A.2d 908, 913 (Del. 1989) (finding the doctrine of unconscionability inapplicable, in part, because the plaintiffs had the opportunity to cancel the insurance policy); Progressive, 2002 Del. Ch. LEXIS 91, 2002 WL 1558382, at *11 (rejecting the plaintiff’s unconscionability argument, in part, because nothing had prevented the plaintiff from walking away from a contract with allegedly unfavorable terms).
Finally, [HN3] the release must not violate public policy. The public policy of this state is typically [*5] determined by the Delaware General Assembly. No Delaware statute has been identified which bears on the validity of a release of prospective negligence. The Ketlers argue that the release violates the public policy embodied in the principle that a property owner has a duty to make his property safe for business invitees. However, a general release by its nature releases a party from a potential liability otherwise imposed by law. The public policy involved must be one which disapproves of the release.
For the foregoing reasons, the judgment of the Superior Court is AFFIRMED.
DELAWARE CODE ANNOTATED
Copyright 2015 by The State of Delaware
TITLE 10. COURTS AND JUDICIAL PROCEDURE
PART V. LIMITATION OF ACTIONS
CHAPTER 81. PERSONAL ACTIONS
GO TO DELAWARE STATUTES ARCHIVE DIRECTORY
10 Del. C. § 8140 (2015)
§ 8140. Liability of persons involved in equine activities
(a) For purposes of this section, the following terms shall have the meaning ascribed herein:
(1) a. “Engages in an equine activity” means riding, training, assisting in medical treatment of, driving, or being a passenger upon an equine, whether mounted or unmounted or any person assisting a participant or show management.
b. “Engages in an equine activity” does not include being a spectator at an equine activity, except in cases where the spectator places such spectator’s person in an unauthorized area and in immediate proximity to the equine activity;
(2) “Equine” means a horse, pony, mule, donkey or hinny;
(3) “Equine activity” means:
a. Equine shows, fairs, competitions, performances or parades that involve any or all breeds of equines and any of the equine disciplines, including, but not limited to, dressage, hunter and jumper horse shows, grand prix jumping, 3-day events, combined training, rodeos, driving, pulling, cutting, polo, steeplechasing, English and western performance riding, endurance trail riding and western games, and hunting;
b. Equine training or teaching activities, or both;
c. Boarding equines;
d. Riding, inspecting or evaluating an equine belonging to another, whether or not the owner has received some monetary consideration or other thing of value for the use of the equine or is permitting a prospective purchaser of the equine to ride, inspect or evaluate the equine;
e. Rides, trips, hunts or other equine activities of any type, however informal or impromptu, that are sponsored by an equine activity sponsor; and
f. Placing or replacing horseshoes on an equine;
(4) “Equine activity sponsor” means an individual, group, club, partnership or corporation, whether or not the sponsor is operating for profit or nonprofit, which sponsors, organizes or provides the facilities for an equine activity, including, but not limited to, pony clubs, 4-H clubs, hunt clubs, riding clubs, school and college-sponsored classes, programs and activities, therapeutic riding programs, and operators, instructors and promoters of equine facilities, including, but not limited to, stables, clubhouses, ponyride strings, fairs and arenas at which the activity is held;
(5) “Equine professional” means a person engaged for compensation:
a. In instructing a participant or renting to a participant an equine for the purpose of riding, driving or being a passenger upon the equine; or
b. In renting equipment or tack to a participant;
(6) “Inherent risks of equine activities” means those dangers or conditions which are an integral part of equine activities, including, but not limited to:
a. The propensity of an equine to behave in ways that may result in injury, harm or death to persons on or around them;
b. The unpredictability of an equine’s reaction to such things as sounds, sudden movements, and unfamiliar objects, persons or other animals;
c. Certain hazards such as surface and subsurface conditions;
d. Collisions with other equines or objects; and
e. The potential of a participant to act in a negligent manner that may contribute to injury to the participant or others, such as failing to maintain control over the animal or not acting within the participant’s ability;
(7) “Participant” means any person, whether amateur or professional, who engages in an equine activity, whether or not a fee is paid to participate in the equine activity.
(b) Except as provided in subsection (c) of this section, an equine activity sponsor, an equine professional or any other person, which shall include a corporation or partnership, shall not be liable for an injury to or the death of a participant resulting from the inherent risks of equine activities. Except as provided in subsection (c) of this section, no participant or participant’s representative shall make any claim against, maintain an action against or recover from an equine activity sponsor, an equine professional or any other person for injury, loss, damage or death of the participant resulting from any of the inherent risks of equine activities.
(c) (1) This section shall not apply to the horse racing industry as regulated in Title 3.
(2) Nothing in subsection (b) of this section shall prevent or limit the liability of an equine activity sponsor, an equine professional, or any other person if the equine activity sponsor, equine professional or person:
a. 1. Provided the equipment or tack, and knew or should have known that the equipment or tack was faulty, and such equipment or tack was faulty to the extent that it did cause the injury; or
2. Provided the equine and failed to make reasonable and prudent efforts to determine the ability of the participant to engage safely in the equine activity and determine the ability of the participant to safely manage the particular equine based on the participant’s representations of the participant’s ability;
b. Owns, leases, rents or otherwise is in lawful possession and control of the land or facilities upon which the participant sustained injuries because of a dangerous latent condition which was known or should have been known to the equine activity sponsor, equine professional or person and for which warning signs have not been conspicuously posted;
c. Commits an act or omission that constitutes wilful or wanton disregard for the safety of the participant, and that act or omission caused the injury; or
d. Intentionally injures the participant.
(3) Nothing in subsection (b) of this section shall prevent or limit the liability of an equine activity sponsor or an equine professional under either product liability or trespass claims.
(d) (1) Every equine professional shall post and maintain signs which contain the warning notice specified in paragraph (d)(2) of this section. Such signs shall be placed in clearly visible locations on or near stables, corrals or arenas where the equine professional conducts equine activities if such stables, corrals or arenas are owned, managed or controlled by the equine professional. The warning notice specified in paragraph (d)(2) of this section shall appear on the sign in red and white, with each letter to be a minimum of 1 inch in height. Every written contract entered into by an equine professional for the providing of professional services, instruction or the rental of equipment or tack or an equine to a participant, whether or not the contract involves equine activities on or off the location or site of the equine professional’s business, shall contain in clearly readable print the warning notice specified in paragraph (d)(2) of this section.
(2) The signs and contracts described in paragraph (d)(1) of this section shall contain the following warning notice:
Under Delaware law, an equine professional is not liable for an injury to or the death of a participant in equine activities resulting from the inherent risks of equine activities, pursuant to 10 Delaware Code § 8140.
Sanctioning body said you must do XYZ, which creates a standard of care you will be judged by
Plaintiff: Arthur Mcdonough and Linda Mcdonough, in their own right and as Parents of Bradley Alan Mcdonough, deceased
Defendant: National Off-Road Bicycle Assn. (NORBA), U.S. Cycling Fed., and Delaware Trail Spinners
Plaintiff Claims: negligence
Defendant Defenses: release
Holding: for the plaintiff, sent back for trial
In this case the deceased was racing in an Off Road [Mountain] Bike Race when he died of dehydration. The lawsuit was started by his parents against the organizations that sanctioned the race, NORBA, the race, and the race course owner. The suit alleged failure of the standards created by the sanctioning organization even though race had agreed to follow the standards.
The decedent died racing in a mountain bike race after being discovered along the race course unconscious. This was the deceased second NORBA race. There were no water or aid stations along the course. However the riders had access to their own water bottles on their bikes.
The plaintiffs argued there was no way for a beginner to access their water bottle on the course because it was so difficult unless they stopped riding. The only water available was what the participants brought with them. No physician, ambulance or emergency medical personnel at the race.
As a sanctioned race, NORBA provided defendant Delaware Trail Spinners the race organizer, with a “Pre-Event Planning Checklist.” In order to host the event the defendant Trail Spinners had to go through the checklist and agree to abide or provide the items on the checklist. The race director for Trail Spinners specifically stated that “there would be an ambulance on site and adequate water or fluids for participants and spectators before, during, and after the race.” NORBA also sends an official who according to the checklist will confirm issues and sign off on the checklist. In this case the NORBA representative did not sign off on the checklist.
To be able to race participants had to sign a one day membership to NORBA and sign a release. The court pointed out that no one explained the release to the participants. The back of the trial membership form said that everyone had to carry 8 ounces of water and that if the race exceeded sixty minutes NORBA would provide water to the race participants.
Before the race began one of the Trail Spinners race organizers, spoke to the 80 to 100 race participants. He told them without a bullhorn or PA system that there was no ambulance on site, but that one could be called if needed. He also told the contestants to be “”careful, . . . take their time” and not to “ride over your head, which means going beyond your ability.” McGroerty also told them to “watch their bodies, make sure they didn’t push themselves too hard because it was hot out.” Finally, he told them that “if they felt dizzy or nauseous, to back off, stay cool and keep from going too hard.”
The deceased was found after a search in an unconscious state off the trail. The friend called 911 from his cell phone and went and got assistance back at the race headquarters. When he arrived back with two people to help him they started CPR. The deceased bike still had a water bottle with water in it. The deceased died of heat stroke fifteen days later.
Summary of the case
Delaware law, the state where the race was held, was the law applied to this case. The defendants filed a motion for summary judgment based on the release and the defense of primary assumption of the risk. Delaware merged secondary assumption of risk with comparative negligence, however Primary or express (written) assumption of risk is still a defense. The court defined the differences as:
Primary assumption, sometimes referred to as express assumption of risk, “involves the express consent to relieve the defendant of any obligation of care while secondary assumption [of risk] consists of voluntarily encountering a known unreasonable risk which is out of proportion to the advantage gained.”
The court quickly concluded that the summary judgment granted by the lower court should be overturned. The court felt that
…genuine issue of material fact exists as to whether McDonough understood that the release included a waiver against the hazards created by defendants’ alleged negligent and reckless conduct in promoting the race.
The court reviewed the record of the case pointing out every place where the requirements set forth by the sanctioning body, NOBA were not met by the race. (Whether those issues would have made a difference was never discussed.)
The court then shifted and wrote that because it could be argued that the deceased did not understand the release was a waiver of the risks that it was a material fact, which voided the release.
In the present case, plaintiffs assert that a genuine issue of material fact exists as to whether McDonough understood that the release included a waiver against the hazards created by defendants’ alleged negligent and reckless conduct in promoting the race. The court agrees.
The court arrived at this decision by stating the law and then interpreting it differently than all other courts had interpreted the law.
However, for the release to be effective, it must appear that the plaintiff understood the terms of the agreement, or that a reasonable person in his position would have understood the terms.
Thus, the understanding of the parties when the release was executed, in light of all the facts and circumstances, is paramount in determining whether the language is clear and unambiguous.
If you don’t understand what you are signing, then the release was not clear and unambiguous. I know of no other case that has argued that before.
So Now What?
The obvious issue here was the written documentation that required water and first aid and the documentation given to the deceased that stated water would be available where not available. Every race, camp, organization needs to develop a checklist or risk management plan so they can operate. However, as in this case, failing to follow any checklist was enough to lose the defenses of Primary Assumption of the Risk and Release and send your case to trial.
ØIf it is written down and you agree to it, you must follow it.
ØIf it is written down by an organization that you belong to or are sanctioned by, then you must agree to it.
ØIf an organization that you belong to writes a standard, then you must meet the standard!
The court then looked at these facts and was not happy. It then applied the facts in such a way that the court could find the release invalid and send it back for trial.
To see other cases where the defendant lost because they violated their trade associations standard of care see:
ACA Standards are used by Expert for the Plaintiff in a lawsuit against a Camp http://rec-law.us/zmKgoi
Expert Witness Report: ACA “Standards” are used by Expert for the Plaintiff in a lawsuit against a Camp http://rec-law.us/y7QlJ3
Marketing Makes Promises that Risk Management (or in this case an insurance policy) must pay for. http://rec-law.us/14MebM4
Plaintiff uses standards of ACCT to cost defendant $4.7 millionhttp://rec-law.us/11UdbEn
Trade Association Standards sink a Summer Camp when plaintiff uses them to prove Camp was negligent http://rec-law.us/wszt7N
To Read other articles about standards see:
Can a Standard Impeded Inventions? http://rec-law.us/yOcca2
Playgrounds will be flat soon http://rec-law.us/zGC4DZ
Staying Current http://rec-law.us/ArdsVk
Stop Feuding, I doubt, move forward anyway, I think you can. http://rec-law.us/P763zu
This is how a standard in the industry changes http://rec-law.us/w76X3K
Words: You cannot change a legal definition http://rec-law.us/AbJ540
What do you think? Leave a comment.
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McDonough v. National Off-Road Bicycle Assn. (NORBA), 1997 U.S. Dist. LEXIS 8036 (Dist. Del 1997)
Arthur Mcdonough and Linda Mcdonough, in their own right and as Parents of Bradley Alan Mcdonough, deceased, and Arthur Mcdonough in his own right and as Administrator of the Estate of Bradley Alan Mcdonough, Plaintiffs, v. National Off-Road Bicycle Assn. (NORBA), U.S. Cycling Fed., and Delaware Trail Spinners, Defendants.
C.A. No. 95-504-SLR
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE
1997 U.S. Dist. LEXIS 8036
June 2, 1997, Decided
NOTICE: [*1] FOR ELECTRONIC PUBLICATION ONLY
DISPOSITION: Defendants’ motion for summary judgment denied.
COUNSEL: For plaintiffs: Donald Eilhu Evans, Esquire, Wilmington, Delaware. Of Counsel: Edwin F. McCoy, Esquire., Philadelphia, Pennsylvania.
For defendants: Mason E. Turner, Esquire, of Prickett, Jones, Elliott, Kristol & Schnee, Wilmington, Delaware.
JUDGES: Sue L. Robinson, District Judge
OPINION BY: Sue L. Robinson
Date: June 2, 1997
ROBINSON, District Judge
This case is a wrongful death/survival action filed as a result of Bradley McDonough’s (“McDonough”) death on August 30, 1993. Plaintiffs are Arthur and Linda McDonough, the parents of the decedent (collectively referred to as “plaintiffs”). Defendants are The National Off-Road Bicycle Association (“NORBA”), United States Cycling Federation (“Federation”), and the Delaware Trail Spinners (“Trail Spinners”). The court has diversity jurisdiction pursuant to 28 U.S.C. § 1332(a). Presently before the court is defendants’ motion for summary judgment. (D.I. 66) For the following reasons, defendants’ motion for summary judgment shall be denied.
[*2] In the summer of 1993, Bradley McDonough developed an interest in off-road bicycle competition. In the spring or early summer of 1993, McDonough acquired an off-road bike (also known as a mountain bike) and rode with his college friends, Randall Blaker (“Blaker”), Michael Odenwald (“Odenwald”), and Kenny Steidle (“Steidle”). (D.I. 71 at A51-A52) On August 8, 1993, McDonough, Blaker, Odenwald and Steidle participated in a NORBA sanctioned event in Windham, New York (“Windham race”). (D.I. 71 at A51) In all NORBA events, participants are required to obtain a permanent membership or a one-day trial membership. The application for the one-day membership contains a section entitled “Agreement and Release of Liability” (“release”). (D.I. 68 at A3)
On the day of the Windham race, McDonough, along with his friends, paid for a one-day trial membership and signed the release. (D.I. 71 at A 54-55; D.I. 68 at A5) In signing the release, Blaker stated that he did not really read it, but simply skimmed through it. (D.I. 71 at A54) Blaker stated that he assumed it was a release “to some degree and we understood that we were involved in a sport.” (D.I. 71 at A54-A55)
The Windham race course was [*3] basically a two lap course. (D.I. 71 at A56) McDonough and Steidle quit after one lap because they were tired. (D.I. 71 at A56) Blaker, who was behind McDonough and Steidle, also stopped after the first lap since his friends had stopped. (D.I. 71 at A56) Odenwald did not complete the race either, because his bicycle broke. (D.I. 71 at A56) All four friends had water bottles on their bikes during the race. (D.I. 71 at A54)
On August 15, 1993, McDonough and Blaker participated in another NORBA sanctioned event in Delaware, called the C & D Canal Classic (“C & D race”). (D.I. 84 at A109) The C & D race consisted of three race levels: (1) Beginners’; (2) Sport; and (3) Pro/Expert. (D.I. 71 at A22) McDonough and Blaker both entered the Beginners’ level. (D.I. 71 at A23 and A59) The Beginners’ course was a 14 mile course “over the local terrain which included steep and gradual hills, open gravel and dirt roads, and wooded trails.” (D.I. 71 at A23) The Sport and Pro/Expert courses also used the same 14 miles designated for the Beginners’ course. (D.I. 71 at A38)
The Beginners’ course was difficult because of its layout. (D.I. 71 at A38) The terrain on the Beginners’ course made it difficult [*4] for riders to access their own water without stopping. (D.I. 71 at A38) Some areas on the course were smoothed out so that riders could stop or ride slowly and access their water bottles. (D.I. 71 at 38) The course, however, did not have any neutral area where water was given out to the race contestants. (D.I. 71 at A38) The only water the race contestants could drink was the water that they brought themselves. (D.I. 71 at A38) No physician was present at the race. (D.I. 71 at A24) There was neither an ambulance nor emergency medical personnel present at the race site. (D.I. 71 at A23) Denise Dowd (“Dowd”), another participant in the Beginners’ level, stated that the course was “difficult due to the heat and humidity and layout.” (D.I. 71 at A87) Although Dowd is an avid biker and had participated in approximately 20 mountain bike races, it took her over an hour and fifteen minutes to complete the course. (D.I. 71 at A87)
Defendant Trail Spinners, a NORBA club member, received sanctioning from NORBA to promote the C & D race. In order to receive sanctioning, defendant Trail Spinners had to complete a “Pre-Event Planning Checklist” (“Checklist”) provided by NORBA. (D.I. 84 at A109-A110) [*5] The Checklist contains several questions relating to the safety precautions taken for the event. Trail Spinners, through its race director William Bowen (“Bowen”), represented on the Checklist that there would be, inter alia, emergency medical assistance on site and adequate water for the participants and spectators. (D.I. 84 at A110) Bowen specifically represented that there would be an ambulance on site and adequate water or fluids for participants and spectators before, during, and after the race. (D.I. 84 at A110) The Checklist also provided that: “A NORBA Official must be present at your event. The NORBA Official will complete their portion of the checklist before allowing the event to proceed.” (D.I. 84 at A109) The Checklist identifies Elizabeth Small (“Small”) as the NORBA Official. Small, however, did not complete her portion of the Checklist and did not sign it. (D.I. 84 at A110)
When McDonough arrived at the race site, he again paid for a one-day trial membership and signed the release. (D.I. 68 at A7) Blaker also paid for a one-day trial membership and signed the release. (D.I. 71 at A59) No one at the race site explained the documents to the race participants. (D.I. [*6] 71 at A41) The release provides in part:
I acknowledge that cycling is an inherently dangerous sport in which I participate at my own risk and that NORBA is a non-profit corporation formed to advance the sport of cycling, the efforts of which directly benefit me. In consideration of the agreement with NORBA to issue an amateur license to me, hereby on behalf of myself, my heirs, assigns and personal representatives, I release and forever discharge NORBA and the United States Cycling Federation, its employees, agents, members, sponsors, promoters, and affiliates from any and all liability, claim, loss, cost or expense, and waive any such claims against any such person or organization, arising directly or indirectly from or attributable in any legal way to any action or omission to act of any such person or organization in connection with sponsorship, organization or execution of any bicycle racing or sporting event, in which I may participate as a rider, team member or spectator.
(D.I. 68 at A5) On the back of the trial membership and release certain “Racing Regulations” are set forth. (D.I. 68 at A8). At section 4.6, NORBA recommends that each participant carry “at least [*7] 8 ounces of water.” (D.I. 68 at A8) Section 5.6 provides that neutral water will be provided for any race that exceeds 60 minutes in length. (D.I. 68 at A8)
According to James McGroerty (“McGroerty”), the President, Officer, and Co-Founder of Trail Spinners, it is commonly understood by those who participate in races that they are required to sign the release. (D.I. 71 at A45) McGroerty stated that: “Most of [his] friends who are avid racers look at the form as you are signing this paper basically saying yes, I am doing this race at my own risk on the course. If I get hurt, it’s my own fault. It’s basically the way we look at it when we sign these forms and compete in an event.” (D.I. 71 at A45) Dowd, who also signed the release that day, stated that she understood that the release was intended to protect the defendants from liability. (D.I. 71 at A89) Dowd, however, did not believe that the release was intended to relieve the defendants from providing “common sense safety precautions, particularly on site trained medical personnel with an ambulance.” (D.I. 71 at A89) Dowd stated that she would not have signed the release if she had known there was no medical assistance immediately [*8] available. (D.I. 71 at A89)
Before the start of the race, McGroerty addressed the race contestants from the hood of his car. (D.I. 71 at A38 and A42) He addressed the participants without a bullhorn. (D.I. 71 at A37) There were approximately 80 to 100 total participants in the group that raced with McDonough and Blaker. (D.I. 71 at A37 and A62) McGroerty told the race contestants that there was no ambulance on site, but that one could be called. (D.I. 71 at A42) McGroerty did not specifically warn the participants about heat exhaustion. (D.I. 71 at A42) Instead, McGroerty told the contestants to be “careful, . . . take their time” and not to “ride over your head, which means going beyond your ability.” (D.I. 71 at A42) McGroerty also told them to “watch their bodies, make sure they didn’t push themselves too hard because it was hot out.” (D.I. 71 at A42) Finally, he told them that “if they felt dizzy or nauseous, to back off, stay cool and keep from going too hard.” (D.I. 71 at A42) McGroerty did not get any questions after he addressed the participants. (D.I. 71 at A37) McGroerty testified that he does not have Red Cross, CPR or EMT certification of any kind. (D.I. 71 at A43) He [*9] also does not know the signs of exertional heat stroke. (D.I. 71 at A43)
At approximately 9:00 a.m., McDonough and Blaker left the starting line with other contestants. (D.I. 71 at A23 and A62) Both McDonough and Blaker had brought water bottles with them. (D.I. 71 at A61) The temperature on that day was “extremely hot  with high humidity.” (D.I. 71 at A85) Although McDonough and Blaker began the race together, they were separated because Blaker had a flat tire. (D.I. 71 at A63) After Blaker changed his flat tire, he continued in the race and eventually completed the course. (D.I. 71 at A64) McDonough, however, did not. (D.I. 71 at A64)
McGroerty found McDonough when he went to investigate whether some participants had accidently or deliberately missed the course markings. (D.I. 71 at A44) McGroerty first saw McDonough’s bike. As he approached the bike, he saw McDonough who was about five or six feet from his bike. (D.I. 71 at A44) According to McGroerty, other participants would not have seen McDonough since he was off to the side of the course, but could have seen his bike. (D.I. 71 at A44)
When McGroerty found McDonough, he was on the ground lying on his side and his breathing [*10] was heavy and labored. (D.I. 71 at A44) McDonough appeared to have trouble breathing and was not responsive. (D.I. 71 at A44) According to McGroerty, McDonough appeared to be unconscious. (D.I. 71 at A44) Based on these observations, McGroerty called 911 from his cellular phone. (D.I. 71 at A44) After calling 911, McGroerty went to the start/finish area and sought assistance. (D.I. 71 at A42 and A87) He led two people back to where McDonough was found and they administered CPR until an ambulance arrived. (D.I. 71 at A42 and A87-A88) According to Dowd, one of the two people who administered CPR, no one gave McDonough any water before the ambulance arrived because no water was provided. (D.I. 71 at A88) Blaker, however, testified that when McDonough’s bike was brought back from where McDonough had been found, it still had a water bottle attached to it that was half full. (D.I. 71 at A65)
Dowd stated that the race was “generally disorganized” and that there was a lot of confusion. (D.I. 71 at A86) According to Dowd, the race was delayed for 30 minutes and no maps of the course were given to the participants or posted. (D.I. 71 at A87-A88) Small, the NORBA official on duty at the race, [*11] reported to NORBA that the “race director [Bowen] was ‘light’ in the emergency medical area.” (D.I. 84 at A110) Small also reported that no course maps were available, but that the course was adequately marked. (D.I. 84 at A110) Overall, Small stated that mistakes were made since no water was provided, no emergency medical personnel were on site, and the course was too long. (D.I. 84 at A114)
Dowd stated that it took her about 5 minutes to reach McDonough and that the ambulance arrived 10 to 15 minutes after she began administering CPR. (D.I. 71 at A88) When the ambulance arrived, McDonough was treated by paramedics and helicoptered to the Medical Center of Delaware in Christiana, Delaware. (D.I. 71 at A23) Although hospitalized, McDonough died of heat stroke on August 30, 1993. (D.I. 70 at 1)
1. Summary Judgment Standard
[HN1] Summary judgment should be granted only if a court concludes that “there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). [HN2] The moving party bears the burden of proving that no genuine issue of material fact is in dispute. Matsushita Elec. Indus. [*12] Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 n.10, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986). Once the moving party has carried its initial burden, the nonmoving party “must come forward with ‘specific facts showing that there is a genuine issue for trial.'” Id. at 587. “Facts that could alter the outcome are ‘material,’ and disputes are ‘genuine’ if evidence exists from which a rational person could conclude that the position of the person with the burden of proof on the disputed issue is correct.” Horowitz v. Federal Kemper Life Assurance Co., 57 F.3d 300, 302 n.1 (3d Cir. 1995) (citations omitted). If the nonmoving party fails to make a sufficient showing on an essential element of his case with respect to which he has the burden of proof, the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). The mere existence of some evidence in support of the nonmoving party will not be sufficient for denial of a motion for summary judgment; there must be enough evidence to enable a jury reasonably to find for the nonmoving party on that factual issue. Anderson v. Liberty Lobby, [*13] Inc., 477 U.S. 242, 249, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). This court, however, must “view the underlying facts and all reasonable inferences therefrom in the light most favorable to the party opposing the motion.” Pennsylvania Coal Ass’n v. Babbitt, 63 F.3d 231, 236 (3d Cir. 1995) (citation omitted).
2. Express or Primary Assumption of Risk
[HN3] Since Delaware adopted a comparative negligence statute, 1 it has become necessary to distinguish between primary and secondary assumption of the risk. Koutoufaris v. Dick, 604 A.2d 390, 397 (Del. 1992); cf. Bib v. Merlonghi, 252 A.2d 548, 550 (Del. 1969) Primary assumption, sometimes referred to as express assumption of risk, “involves the express consent to relieve the defendant of any obligation of care while secondary assumption [of risk] consists of voluntarily encountering a known unreasonable risk which is out of proportion to the advantage gained.” Koutoufaris, 604 A.2d at 397-398. With the adoption of the comparative negligence statute in Delaware, secondary assumption of risk became “totally subsumed within comparative negligence.” Id. at 398. Primary assumption of risk, however, still exists as [*14] a complete bar to recovery. See id. (stating that primary assumption of risk “might well constitute a complete bar to recover, as a matter of law, even in a comparative negligence jurisdiction”) (citation omitted); see also Patton v. Simone, 626 A.2d 844, 852 (Del. Super. Ct. 1992); see also Staats v. Lawrence, 576 A.2d 663, 668 (Del. Super. Ct. 1990).
1 In 1984, Delaware adopted a modified comparative negligence statute, which allows a jury to apportion liability where both parties are negligent only if the plaintiff’s negligence is less than fifty percent. 10 Del. C. § 8132 (1984).
Defendants argue that plaintiffs’ action is barred, as a matter of law, because McDonough expressly assumed the risks inherent in an off-road bicycle race when he signed the release. Defendants contend that the release, in plain and unambiguous language, is intended to protect defendants from all liability arising out of any hazards encountered in an off-road bike race. (D.I. 78 at 9) Defendants assert that McDonough, [*15] as a college graduate and former participant in a NORBA event, must have had an understanding of the these inherent dangers when he signed the release. As further support, defendants note that McDonough signed an identical Agreement and Release just one week prior to the C & D race. Based on these facts, defendants assert that summary judgment is appropriate.
In considering the facts and making all reasonable inferences in plaintiffs’ favor, the court finds to the contrary. [HN4] A release will not be set aside if the language is clear and unambiguous. Hallman v. Dover Downs, Inc., 1986 U.S. Dist. LEXIS 15708, Civ. A. No. 85-618 CMW, 1986 WL 535 at *2 (D. Del., Dec. 31, 1986) (citing Chakov v. Outboard Marine Corp., 429 A.2d 984, 985 (Del. 1981); see Bennett v. United States Cycling Federation, 193 Cal. App. 3d 1485, 239 Cal. Rptr. 55, 58 (Cal. Ct. App. 1987). [HN5] Where the language of a release is ambiguous, it must be construed strongly against the party who drafted it. Hallman, 1986 WL 535 at *2; Bennett, 239 Cal. Rptr. at 58. [HN6] In an express agreement to assume a risk, a plaintiff may undertake to assume all risks of a particular relation or situation, whether they are known or unknown to him. [*16] Restatement (Second) of Torts, § 496D, cmt. a, (1965). However, for the release to be effective, it must appear that the plaintiff understood the terms of the agreement, or that a reasonable person in his position would have understood the terms. Bennett, 239 Cal. Rptr. at 58. As the Bennett court stated, “there is little doubt that a subscriber of a bicycle release . . . must be held to have waived any hazards relating to bicycle racing that are obvious or that might reasonably have been foreseen.” Id. These hazards include “collisions with other riders, negligently maintained equipment, bicycles which were unfit for racing but nevertheless passed by organizers, [and] bad road surfaces . . . .” Id. Thus, the understanding of the parties when the release was executed, in light of all the facts and circumstances, is paramount in determining whether the language is clear and unambiguous. Hallman, 1986 WL 535 at *2. The evidence must establish that the parties intended the release to apply to the particular conduct of the defendant which has caused the harm. Restatement (Second) of Torts, § 496B, cmt. d, (1965).
In the present case, plaintiffs assert that [*17] a genuine issue of material fact exists as to whether McDonough understood that the release included a waiver against the hazards created by defendants’ alleged negligent and reckless conduct in promoting the race. The court agrees.
For the reasons stated above, the court shall deny defendants’ motion for summary judgment. An order will issue consistent with this memorandum opinion.
Hong, v. Hockessin Athletic Club, 2012 Del. Super. LEXIS 340
Jahndee Hong, as Guardian/Next Friend of Jaden Hong, a minor, Plaintiff, v. Hockessin Athletic Club, and Eastern Athletic Clubs, Llc, a Delaware limited liability company, Defendants.
C.A. No. N12C-05-004 PLA
SUPERIOR COURT OF DELAWARE, NEW CASTLE
2012 Del. Super. LEXIS 340
June 4, 2012, Submitted
July 18, 2012, Decided
JUDGES: Peggy L. Ableman, Judge.
OPINION BY: Peggy L. Ableman
This 18th day of July, 2012, it appears to the Court that:
1. Defendants Hockessin Athletic Club (“HAC”) and Eastern Athletic Clubs, LLC (collectively, “Defendants”) have filed a Motion to Dismiss pursuant to Superior Court Civil Rule 12(b)(6), asserting that Plaintiff’s negligence claim is barred by a liability waiver that was executed as part of the club’s Membership Agreement. For the reasons set forth below, the Court agrees that the liability waiver bars Plaintiff’s claim. Accordingly, Defendants’ Motion to Dismiss is GRANTED.
2. Plaintiff Jahndee Hong (“Hong”) brought this negligence action against Defendants on behalf of her son Jaden Hong (“Jaden”). On March 16, 2011, when he was three years old, Jaden fell from indoor playground equipment at the HAC and broke his right arm. 1 On October 30, 2010, Hong and her husband Minsuk Hong executed a Membership Application and Agreement (“Agreement”) with the HAC. The membership application listed the names and ages of the Hongs’ three children, including Jaden. The Agreement includes a waiver and release of [*2] liability. The Agreement defines a Member as “the individual signer and any and all other persons included in his/her membership with HAC.” Under the heading “WAIVER AND RELEASE OF LIABILITY AND INDEMNITY AGREEMENT,” the Agreement provides as follows:
Member hereby acknowledges that in using the facilities, programs and equipment of HAC, he/she does so entirely at his/her own risk and assume[s] the risk of any injury and/or damage while engaging in any physical exercise or activity or use of any club facility on the premises. This assumption of the risk included, without limitation, Member’s use of any exercise equipment (mechanical or otherwise), the locker room, sidewalk, parking lot, stairs, pool, whirlpool, sauna, steam room, racquet courts, lobby hallways, or any equipment in the facility. Member further agrees to assume the risk in participating in any activity, class, program, instruction, or any event sponsored by HAC. Insurance liability conditions and HAC prohibit any personal training lessons or services by non-HAC staff. Violations of such can result in membership termination.
By executing this Agreement, Member does HEREBY WAIVE, RELEASE AND FOREVER DISCHARGE, HAC and its [*3] past, present and future subsidiaries, affiliates, successors, predecessors, executors, committees, fiduciaries, trustee, employee benefit plans, workers compensation carriers, plan administrators, administrators, partners, employees, insureds, assigns, agents, and representatives in their personal and professional capacities (collectively “HAC”), from all claims, demands, injuries, damages, actions or causes of action, and from all acts of active or passive negligence on the part of such company, corporation, club, its servants, agents, or employees of any nature whatsoever, including attorneys’ fees and costs arising out of or connection with the aforementioned activities. Member further agrees to indemnify and hold harmless HAC from any claims, demands, injuries, damages, actions or causes of action, loss, liability, damage or cost which HAC may incur due to Members[‘] presence at or use of the facility. Member further agrees that the foregoing warranty, waiver and indemnity agreement is intended to be as broad and inclusive as permitted by the law of the State of Delaware and that if any portion is deemed to be invalid, it is expressly agreed that the remaining terms shall remain [*4] in full legal force and effect.
MEMBER ACKNOWLEDGES THAT HE/SHE HAS CAREFULLY READ THIS AGREEMENT AND FULLY UNDERSTANDS THAT IT IS A RELEASE OF LIABILITY AND EXPRESS ASSUMPTION OF RISK AND INDEMNIFICATION. MEMBER IS AWARE AND AGREES THAT BY EXECUTING THIS WAIVER AND RELEASE, HE/SHE IS GIVING UP THE RIGHT TO BRING LEGAL ACTION OR ASSERT A CLAIM AGAINST HAC FOR ITS NEGLIGENCE AND/OR FOR ANY DEFECTIVE PRODUCT THAT MAY BE IN THE FACILITY OR ON ITS PREMISES. BY SIGNING BELOW, MEMBER SIGNIFIES THAT HE/SHE HAS READ AND VOLUNTARILY SIGNED THIS AGREEMENT AND THAT NO ORAL REPRESENTATIONS, STATEMENTS OR INDUCEMENTS APART FROM THIS FOREGOING AGREEMENT HAVE BEEN MADE.
HAC contends that the liability waiver bars Plaintiff’s suit. Plaintiff responds that the waiver does not bar Plaintiff’s claim because the waiver, which refers to “all acts of active or passive negligence […] arising out of or in connection with the aforementioned activities,” is ambiguous and can be interpreted as applying only to the Member’s assumption of the risk of HAC’s negligence in participating in “any activity, class, program, instruction, or any event sponsored by HAC.”
1 Complaint at ¶ 8. The Complaint makes no specific [*5] allegations as to what was wrong with the playground equipment or how HAC’s negligence caused or contributed to Jaden’s injury. Rather, the Complaint alleges that HAC was negligent in that they (a) failed to take reasonable measures to make premises safe for invitees; (b) failed to properly and reasonably inspect the premises; (c) failed to take reasonable measures to make the premises safe; (d) failed to supervise the plaintiff and other invitees on the property to make sure the invitees were safe at all relevant times herein; and (e) were otherwise negligent. See Compl. at ¶ 9. The Court observes that [HN1] playground injuries are a fairly typical hazard of childhood and that the mere fact that a child broke his arm while at the playground ordinarily would not, by itself, demonstrate negligence on the part of the owner of the premises. The Court further notes that [HN2] Delaware’s rules of pleading prohibit plaintiffs from using a complaint as a fishing expedition to see whether a wrong has been committed. See, e.g., Leary v. Eschelweck, 2012 Del. Super. LEXIS 206, 2012 WL 1664236, at *2 (Del. Super. May 8, 2012). The Complaint as presented in this case comes dangerously close to running afoul of that rule.
3. The Court [*6] must first determine whether to adjudicate Defendants’ motion as presented or convert it to a motion for summary judgment. 2 [HN3] Superior Court Civil Rule 12(b)(6) provides that a motion to dismiss shall be treated as a motion for summary judgment under Rule 56 if “matters outside the pleadings are presented to and not excluded by the Court.” 3 HAC has submitted a copy of the signed liability waiver at issue, which Hong also addresses in her Response. Therefore, this motion will be treated as one for summary judgment.
2 Slowe v. Pike Creek Court Club, Inc., 2008 Del. Super. LEXIS 377, 2008 WL 5115035, at 2 (Del. Super. Dec. 4, 2008).
3 Super. Ct. Civ. R. 12(b)(6).
[HN4] When considering a motion for summary judgment, the Court examines the record to determine whether genuine issues of material fact exist and to determine whether the moving party is entitled to judgment as a matter of law. 4 [HN5] Summary judgment will be granted if, after viewing the evidence in the light most favorable to the non-moving party, there are no material facts in dispute or judgment as a matter of law is appropriate. 5
4 Super. Ct. Civ. R. 56(c).
5 Storm v. NSL Rockland Place, LLC, 898 A.2d 874, 879-80 (Del. Super. 2005).
4. In the factual context of this [*7] case, the question of whether the liability waiver that Hong signed as part of the Membership Agreement with HAC now bars her claim against Defendants is an easy one. In Slowe v. Pike Creek Court Club, which involved a guest who fell on a set of negligently maintained stairs in the swimming pool at the Pike Creek Court Club, a forerunner to the Hockessin Athletic Club, this Court held that [HN6] “a provision exonerating a party for its own negligence will only be given effect if the language makes it crystal clear and unequivocal that the parties specifically contemplated such a release.” 6 [HN7] Delaware courts have held that the requirement of “crystal clear and unequivocal” language is satisfied where contractual provisions include language “specifically refer[ring] to the negligence of the protected party.” 7 The Court found that the liability release at issue in Slowe included no specific language indicating that the parties contemplated that the waiver would extend to PCCC’s own acts of negligence. 8 Moreover, as the Court noted in Slowe, PCCC’s liability release lacked “alternative language expressing that PCCC would be released for its own fault or wrongdoing,” concluding that the plaintiff [*8] could reasonably have concluded that the release would only relieve PCCC of liability for injuries or losses resulting from risks inherent in his use of the club. 9
6 Id. (quoting J.A. Jones Constr. Co. v. City of Dover, 372 A.2d 540, 553 (Del. Super. 1977)) (internal quotation marks omitted).
7 Id.; see also Hallman v. Dover Downs, Inc., 1986 U.S. Dist. LEXIS 15708, 1986 WL 535, at *4 (D. Del. Dec. 31, 1986) (collecting cases).
8 Slowe, 2008 Del. Super. LEXIS 377, 2008 WL 5115035, at *3.
5. The Court similarly found that Slowe did not expressly assume the risk of PCCC’s negligence by signing the liability waiver because the waiver did not “clearly, explicitly and comprehensibly notify Slowe that he was assuming the risk that PCCC would negligently fail to maintain and inspect the premises.” 10 The Slowe Court left open the possibility, however, that “a properly-worded release might effect a waiver of premises liability.” 11
10 2008 Del. Super. LEXIS 377, [WL] at *5.
11 Id. The Slowe Court cited to Benedek v. PLC Santa Monica LLC, 104 Cal. App. 4th 1351, 129 Cal.Rptr. 2d 197 (Cal. Ct. App. 2002), which held that the defendant health club’s release barred plaintiff’s claim for negligence and premises liability arising out of injuries he sustained when he tried to catch a falling television set. The [*9] Benedek court reasoned, “[t]he release Benedek signed was clear, unambiguous, and explicit. It released [the health club] from liability for any personal injuries suffered while on [the health club’s] premises, ‘whether using exercise equipment or not.'” The court further noted that given the unambiguous broad language of the release, it “reached all personal injuries suffered by Benedek on [the health club’s] premises, including the injury Benedek suffered because of the falling television” and rejected as “not semantically reasonable” plaintiff’s argument that the release applied or should be interpreted to apply only to injuries suffered while actively using exercise equipment. 129 Cal.Rptr.2d at 204.
6. Here, Hong signed a comprehensive waiver of liability and release in connection with her Membership Agreement that expressly stated that she (and all others on her membership) assumed the risk of “any injury or damage incurred while engaging in any physical exercise or activity or use of any club facility on the premises,” including the use of “any equipment in the facility” and participation “in any activity, class, program, instruction, or any event sponsored by HAC.” Plaintiff’s [*10] suggestion that “the aforementioned activities” specified in the second paragraph of the liability waiver applies only to activities sponsored by HAC, such as a group exercise class, is an implausible reading of the contract. Accordingly, the Court finds that the Membership Agreement and the included liability waiver and release bar Plaintiff’s claims against HAC.
7. Alternatively, notwithstanding the liability waiver, summary judgment should still be granted based on Plaintiff’s failure to make a prima facie case of negligence against Defendants. 12 The Complaint contains no specific allegations about the nature of HAC’s negligence and how it caused Jaden’s injury. Rather, the Complaint asserts, in vague and conclusory fashion, that Defendants negligently
(a) failed to take reasonable measures to make premises safe for invitees;
(b) failed to properly and reasonably inspect the premises;
(c) failed to take reasonable measures to make their premises safe;
(d) failed to supervise the plaintiff and other invitees on the property to make sure the invitees were safe at all relevant times herein; and
(e) were otherwise negligent. 13
In the absence of specific, particularized allegations about [*11] the nature of HAC’s negligence and how it caused Jaden’s injuries, the Complaint must fail.
12 To the extent that Plaintiff believes that she is entitled to discovery to meet her burden, the Court considers the allegations of negligence in the Complaint too vague and generic to allow Plaintiff to conduct what would essentially be a fishing expedition to discover evidence of Defendants’ unspecified negligence. See supra note 1. Summary judgment is therefore appropriate even at this early stage of the litigation.
13 Compl. at ¶9.
8. The Delaware Supreme Court recently upheld this Court’s grant of summary judgment in favor of a car dealership where a would-be customer walked into a plate-glass window at the dealership, noting that while owners and occupiers of commercial property have a duty to maintain their premises in a reasonably safe condition for their customers, patrons also have an affirmative obligation to exercise reasonable care while on the business owner’s premises. 14 [HN8] In a personal injury action, the plaintiff-customer bears the burden of proving that: (i) there was an unsafe condition on the defendant’s premises; (ii) the unsafe condition caused the plaintiff’s injuries; and [*12] (iii) the defendant had notice of the unsafe condition or should have discovered it by reasonable inspection. 15
14 Talmo v. Union Park Automotive, 38 A.3d 1255, 2012 WL 730332, at *3 (Del. Mar. 7, 2012) (TABLE); see also DiOssi v. Maroney, 548 A.2d 1361, 1366-7 (Del. 1988); Howard v. Food Fair Stores, New Castle, Inc., 57 Del. 471, 201 A.2d 638, 640, 7 Storey 471 (Del. 1964); Walker v. Shoprite Supermarket, Inc., 864 A.2d 929 (Del. 2004) (holding that it is negligent for a patron not to see what is plainly visible when there is nothing obscuring the patron’s view).
15 Talmo, 38 A.3d 1255, 2012 WL 730332, at *3.
9. Plaintiff here has failed to make any allegations that even raise a clear issue of fact with regard to Defendants’ negligence. Unlike in Slowe, Plaintiff has not alleged the existence of any dangerous condition on the premises that was the result of the health club’s failure to perform its duties, which were statutory and could not have been disclaimed by liability waiver in any event. 16 Here, Plaintiff has made no allegation that the playground equipment was defective, that the premises otherwise suffered from a latent defect that HAC should have known about and either repaired or warned its invitees [*13] to avoid, or that HAC failed to fulfill a duty to supervise Jaden. Rather, this appears to be a typical incident of a child who was injured on a playground. Such incidents, while unfortunate, do not indicate negligence on the part of the premises-owner any more than does the case of the man who walked into a plate-glass window at a car dealership. Accordingly, based upon Plaintiff’s failure to make a prima facie case of negligence under a theory of premises liability, summary judgment should be granted in favor of Defendants.
16 Slowe, 2008 Del. Super. LEXIS 377, 2008 WL 5115035, at *5-*6.
10. For all of the reasons set forth above, Defendants’ motion for summary judgment is GRANTED.
IT IS SO ORDERED.
/s/ Peggy L. Ableman
Peggy L. Ableman, Judge
One more state recognizes the need to allow people to decide to waive a claim to allow their children to participate.
In this case, the mother of the injured child filed a claim after the child was hurt on playground equipment at a health club. The child was three years old when he fell and broke his arm.
The release was contained in the Membership Application and Agreement. Both parents signed the agreement and listed their three children on the agreement as members of the club.
The plaintiffs sued for negligence, which was not clearly defined in the case or as set forth by the court in the complaint.
Summary of the case
Delaware requires that the language in a release be crystal clear and unequivocal. The parties to the release must contemplate a release when they make the agreement. The crystal clear and unequivocal language is met if the contract provisions include language “specifically referring to the negligence of the protected party.” The court in reviewing the release stated:
Here, Hong signed a comprehensive waiver of liability and release in connection with her Membership Agreement that expressly stated that she (and all others on her membership) assumed the risk of “any injury or damage incurred while engaging in any physical exercise or activity or use of any club facility on the premises,” including the use of “any equipment in the facility” and participation “in any activity, class, program, instruction, or any event sponsored by HAC.”
HAC is the acronym for the defendant health club, Hockessin Athletic Club.
The plaintiff argued that the release only applied to activities “sponsored” by HAC such as classes, not just injuries from being there.
The court then looked at the complaint on its whole and found the complaint failed to allege any claim of negligence with specificity. Consequently, the court found the complaint also was to be dismissed because the complaint failed to state a claim.
So Now What?
Maybe this will place Delaware in the category of a state where a parent can sign away a minor’s right to sue. However, this is a decision of the trial court, and this case can still be appealed to the Delaware Supreme Court. If this case is not appealed, it may be the start.
So for the time being, you cannot rely on this case, and you probably can only rely on it if it is not appealed for the County of New Castle Delaware.
This case also points out the importance of making sure your release is written correctly. Here the court stated that a release must include the word negligence of the defendant or person to be protected.
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Doe v. Cedars Academy, LLC, 2010 Del. Super. LEXIS 559
John Doe and Jane Doe, individually, and as Guardian and Next Friend of John Doe, a minor, Plaintiffs, v. Cedars Academy, LLC, and Aspen Education Group, Inc., Defendants.
C.A. No. 09C-09-136 JRS
Superior Court of Delaware, New Castle
2010 Del. Super. LEXIS 559
July 20, 2010, Submitted
October 27, 2010, Decided
This opinion has not been released for publication. Until released, it is subject to revision or withdrawal.
SUBSEQUENT HISTORY: Reargument denied by Doe v. Cedars Acad., LLC, 2011 Del. Super. LEXIS 18 (Del. Super. Ct., Jan. 19, 2011)
PRIOR HISTORY: [*1]
Upon Consideration of Defendants’ Motions to Dismiss.
PROCEDURAL POSTURE: The court considered a motion to dismiss (Del. Super. Ct. R. Civ. P. 12(b)(6)) filed by the defendants, a limited liability company (LLC) and a corporation, seeking an order dismissing a complaint filed by plaintiffs, a mother and her son, in which plaintiffs alleged the mother entered into a contract with the LLC to enroll her son in a boarding school and that, while a student there, he was sexually assaulted and threatened by a fellow student.
OVERVIEW: A fair reading of the complaint indicated plaintiffs alleged defendants were liable for damages for breach of the contract and for breach of common law duties of care. The court found a reasonable person would conclude that the mother objectively manifested her assent to be bound by the terms of the contract by paying tuition to the school and entrusting her son to the school as contemplated by the contract. The son, a minor, was also bound by the agreement, entered into on his behalf. Even if a pre-injury release was invalid, it would not render the entire agreement unenforceable. After reviewing the provisions within the four corners of the contract, the court concluded the parties intended to consent to the exclusive jurisdiction of California courts or arbitration panels to litigate their claims, based on a forum selection clause. Other than arguing that the contract was invalid because it was unconscionable, plaintiffs did not provide any support for their claim that the court should ignore the forum selection clause. Given the law in Delaware that choice of forum provisions were enforceable absent a showing of unreasonableness, the court declined to exercise jurisdiction.
OUTCOME: The motion to dismiss was granted.
COUNSEL: Joseph J. Rhoades, Esquire, Stephen T. Morrow, Esquire, LAW OFFICE OF JOSEPH J. RHOADES, Wilmington, Delaware. Attorneys for Plaintiffs.
Norman H. Brooks, Jr., MARKS, O’NEILL, O’BRIEN & COURTNEY, P.C., Wilmington, Delaware. Attorney for Defendants.
JUDGES: Joseph R. Slights, III, Judge.
OPINION BY: Joseph R. Slights, III
Before the Court is a Motion to Dismiss filed by the Defendants, Cedars Academy, LLC (“Cedars”) and Aspen Education Group, Inc. (“Aspen”) (collectively “the Defendants”). The motion seeks an order dismissing the Complaint filed by John Doe and his mother Jane Doe (collectively “Plaintiffs”), 1 in which Plaintiffs allege that Jane Doe entered into a contract with Cedars to enroll her son in the Cedars Academy Boarding School (“Cedars Academy”) and that, while a student there, John Doe was sexually assaulted and threatened by a fellow student. 2
1 Plaintiffs have used pseudonyms, presumably because of the sensitive nature of the allegations.
2 Compl. ¶ 7.
The Complaint contains five counts: three counts raise tort-based claims including negligence, gross negligence, and recklessness; 3 one count raises a [*2] breach of contract claim, 4 and one count raises a claim that Defendants violated John Doe’s substantive due process right to bodily integrity. 5 Defendants move to dismiss all counts for lack of subject matter jurisdiction and improper venue, and also based on a pre-injury release signed by Jane Doe. Defendant Aspen also moves to dismiss for lack of personal jurisdiction. Upon review of the motion, and the responses thereto, the Court determines that the forum selection clause of the operative contract (selecting California as the exclusive forum) is enforceable as to all of the parties and, as such, the motion to dismiss this action must be GRANTED.
3 Compl. ¶¶ 11-20, 26-29, 30-31.
4 Compl. ¶¶ 21-25.
5 Compl. ¶¶ 32-39.
On September 15, 2007, Jane Doe entered into a contract with Cedars (hereinafter “the Agreement”) to enroll her minor son, John Doe, as a full time student at the Cedars Academy in Bridgeville, Delaware. 6 Cedars Academy is a private preparatory boarding school for students who demonstrate a need for academic and social skill development. 7 The Agreement between Ms. Doe and Cedars contained the following provisions relevant to the controversy sub judice:
5. Assumption of [*3] the Risks; Releases and Indemnities: Sponsor acknowledges serious hazards and dangers, known and unknown, inherent in the Program, including but not limited to vocational activities, emotional and physical injuries, illness or death that may arise from strenuous hiking, climbing, camping in a natural environment, exposure to the elements, plants and animals, running away from the Program, “acts of God” (nature), physical education activities, water sports, stress, involvement with other students, self-inflicted injuries, and transportation to and from activities. Sponsor understands that in participating in the Program Student will be in locations and using facilities where many hazards exist and is aware of and appreciates the risks, [sic] which may result. Sponsor understands that accidents occur during such activities due to the negligence of others, which may result in death or serious injury. Sponsor and Student are voluntarily participating in the Program with knowledge of the dangers involved and agree to accept any and all risks. In consideration for being permitted to participate in the Program, Sponsor agrees to not sue, to assume all risks and to release, hold harmless, [*4] and indemnify Cedars and any and all of its predecessors, successors, officers, directors, trustees, insurers, employees … including, but not limited to, Aspen Education Group, Inc. (collectively all of these above persons and entities shall be referred to as the “Released Parties” hereafter) who, through negligence, carelessness or any other cause might otherwise be liable to Sponsor or Student under theories of contract or tort law. Sponsor intends by this Waiver and Release to release, in advance, and to waive his or her rights and discharge each and every one of the Released Parties, from any and all claims for damages for death, personal injury or property damage which Sponsor may have, or which may hereafter accrue as a result of Student’s participation in any aspect of the Program, even though that liability may arise from negligence or carelessness on the part of the persons or entities being released, from dangerous or defective property or equipment owned, maintained, or controlled by them, or because of their possible liability without fault. Additionally, Sponsor covenants not to sue any of the Released Parties based upon their breach of any duty owed to Sponsor or Student [*5] as a result of their participation in any aspect of the Program. Sponsor understands and agrees that this Waiver and Release is binding on his or her heirs, assigns and legal representatives. 8
15. Binding Arbitration: Any controversy or claim arising out of or relating to this contract, except at Cedars’ option the collection of monies owed by Sponsor to Cedars, shall be settled by binding arbitration conducted in the State of California in accordance with the rules of the American Arbitration Association; 9 and
21. Governing Law/Venue: This Agreement, and all matters relating hereto, including any matter or dispute arising between the parties out of this Agreement, tort or otherwise, shall be interpreted, governed and enforced according to the laws of the State of California; and the parties consent and submit to the exclusive jurisdiction and venue of the California Courts in Los Angeles County, California, and any qualified (American Arbitration Association-approved) arbitration service in the State of California, County of Los Angeles, to enforce this Agreement. The parties acknowledge that this Agreement constitutes a business transaction within the State of California. 10
6 Compl. [*6] ¶ 2.
7 Pls.’ Resp. Defs.’ Mot. to Dismiss Ex. A.
8 Agreement ¶ 5.
9 Agreement ¶ 15.
10 Agreement ¶ 21.
On September 21, 2007, John Doe began attending Cedars Academy and residing in one of its dormitories. 11 While there, John Doe was propositioned by another student to perform sexual acts. According to the Complaint, on one or more occasion, the other student (not named as a defendant or otherwise in the Complaint) entered John Doe’s dormitory room, threatened him and sexually assaulted him. 12 Plaintiffs allege that these sexual assaults resulted in physical and emotional injuries to John Doe and economic damages to both Plaintiffs. 13 A fair reading of the Complaint indicates that Plaintiffs allege Defendants are liable for their damages both as a result of having breached the Agreement and having breached common law duties of care. 14
11 Compl. ¶ 7.
13 Compl. ¶¶ 7-10.
14 See Id. (Counts I through IV).
In support of their motion, Defendants argue that the Agreement is enforceable against Jane Doe as the signatory and John Doe as a third party beneficiary. 15 Because both parties are bound by the Agreement, Defendants argue that Delaware’s preference for enforcing choice of forum provisions [*7] should prevail when, as here, the selected jurisdiction (California) has a “material connection” with the transaction. 16 Finally, Defendants assert that the arbitration provision of the Agreement should be honored because Jane Doe freely entered into the Agreement for the benefit of her minor son and John Doe received the benefit of the Agreement in the form of student housing, meals, and education. 17 According to the Defendants, he “who accepts the benefits of the contract, is also bound by any burdens or restrictions created by it.” 18
15 Defs.’ Letter Mem. pgs. 1-4.
16 Id. at 5.
17 Id. at 4.
In response, Plaintiffs first argue that the Agreement is not enforceable as to Jane Doe or John Doe because its “assumption of the risks; releases and indemnities” provision is invalid as a matter of law. According to Plaintiffs, Delaware courts look with disfavor upon clauses which exculpate a party from the consequences of that party’s own negligence. 19 Moreover, Plaintiffs argue that parents do not have the authority to execute a pre-injury release on behalf of their children. Such pre-injury releases “deprive children of the legal relief necessary to redress negligently inflicted injuries,” [*8] according to Plaintiffs, and are thus void as against public policy. 20 Because the Agreement contains a pre-injury release provision that purports to release a minor’s claim, and an invalid indemnification provision, Plaintiffs contend that the entire Agreement is unenforceable. 21
19 Pls.’ Resp. Defs.’ Letter Mem. pg. 2.
20 Id. at 7.
21 Id. at 6-7.
Plaintiffs next argue that even if the Agreement is enforceable against Jane Doe, it is not enforceable against John Doe because he is not a party to the Agreement. In this regard, Plaintiffs contend that the Agreement fails to identify John Doe as a party to the Agreement, that John Doe is not a signatory to the Agreement, and that there is no language in the Agreement to suggest that Jane Doe was contracting on John Doe’s behalf. 22 Thus, according to the Plaintiffs, the Agreement is between Jane Doe and Cedars only and does not bind John Doe. 23 Plaintiffs further contend that even if John Doe is considered a third party beneficiary, he is still not bound to the Agreement because he did not sign it. 24
22 Id. at 4.
24 Id. at 6.
Finally, Plaintiffs assert that the choice of forum and arbitration provisions of the Agreement are unenforceable [*9] against both Plaintiffs because the Agreement is over-broad and unconscionable. 25 The Plaintiffs contend that the Agreement is too broad because there is no evidence that the parties contemplated “Cedars’ common law duty to prevent sexual assaults on John Doe or the manner in which breaches of that duty would be redressed when they entered into the Agreement.” 26 In addition, they argue that the Agreement is unconscionable because “John Doe was in need of specialized care and Cedars purported to be uniquely qualified to render such care,” leaving Jane Doe with little choice but to “sign on the dotted line.” 27
25 Id. at 8-10.
26 Id. at 9.
27 Id. at 10.
[HN1] In evaluating a Motion to Dismiss under Superior Court Civil Rule 12(b)(6), the Court must assume all well plead facts in the complaint to be true. 28 A complaint will not be dismissed unless the plaintiff would not be entitled to recover under any reasonable set of circumstances susceptible of proof. 29 Stated differently, a complaint may not be dismissed unless it is clearly not viable, which may be determined as a matter of law or fact. 30
28 Ramunno v. Cawley, 705 A.2d 1029, 1034 (Del. 1998).
29 Nix v. Sawyer, 466 A.2d 407, 410 (Del. Super. 1983).
30 Diamond State Tel. Co. v. Univ. of Del., 269 A.2d 52, 58 (Del. 1970).
Plaintiffs’ [*10] Motion and the Defendants’ response implicate the following issues, which the Court will address seriatim: (A) whether the Agreement is binding as to Jane Doe; (B) whether the Agreement is binding as to John Doe; (C) whether the pre-injury release provision renders the entire Agreement unenforceable; and, if not (D) whether the choice of law, choice of forum, and/or arbitration provisions of the Agreement are controlling.
A. Jane Doe Is Bound By The Agreement She Entered Into With Cedars On Behalf Of Her Son
[HN2] Both Delaware and California measure the formation of a contract by an objective test. 31 Specifically, a contract is formed if “a reasonable person would conclude, based on the objective manifestations of assent and the surrounding circumstances, that the parties intended to be bound to their agreement on all essential terms.” 32 At the outset, the Court notes that [HN3] it is counter-intuitive to seek enforcement of an agreement that one alleges to be invalid. Stated differently, a party cannot “simultaneously seek to avoid the contract … and at the same time sue for damages for breach of [that] contract ….” 33 And yet, this is precisely what the Plaintiffs are attempting to do in [*11] this case. 34
31 The Court has considered both Delaware and California law in construing the Agreement given the Agreement’s choice of California law. See Leeds v. First Allied Conn. Corp., 521 A.2d 1095, 1097 (Del. Ch. 1986); Founding Members of Newport Beach Country Club v. Newport Beach Country Club, Inc., 109 Cal. App. 4th 944, 955, 135 Cal. Rptr. 2d 505 (Cal. Ct. App. 2003).
32 Leeds, 521 A.2d at 1101. See also Founding Members, 109 Cal. App. 4th at 955 (“California recognizes the objective theory of contracts, under which [it] is the objective intent, as evidenced by the words of the contract, rather than the subjective intent of one of the parties, that controls interpretation.”).
33 In re Verilink Corp., 405 B.R. 356, 378 (N.D. Ala. 2009).
34 Compl. ¶¶ 21-25.
Moreover, a reasonable person would conclude that Jane Doe objectively manifested her assent to be bound by the terms of the Agreement by paying tuition to Cedars Academy as required by the Agreement and entrusting her son to the school as contemplated by the Agreement. 35 As a person with the capacity to contract, and in the absence of allegations of fraud, duress, or undue influence, Jane Doe is bound to the Agreement she signed with Cedars so that [*12] her son could attend Cedars Academy. 36
35 Compl. ¶¶ 5 and 22.
36 2 Williston on Contracts § 6:44 (4th ed.) (“Because the offeree’s action naturally indicates assent, at least in the absence of an invalidating cause such as fraud, duress, mutual mistake, or unconscionability, where an offeree signs a document it is generally held to be bound by the document’s terms, even if the offeree signs in ignorance of those terms.”). See, e.g., Indus. Am., Inc v. Fulton Indus., Inc., 285 A.2d 412, 415 (Del. 1971) (“Where an offeror requests an act in return for his promise and the act is performed, the act performed becomes the requisite overt manifestation of assent if the act is done intentionally; i.e., if there is a ‘conscious will’ to do it.”); Main Storage & Trucking Inc. v. Benco Contracting and Eng’g Inc., 89 Cal. App. 4th 1042, 1049, 107 Cal. Rptr. 2d 645 (Cal. Ct. App. 2001)( [HN4] “Every contract requires mutual assent or consent, and ordinarily one who signs an instrument which on its face is a contract is deemed to assent to all its terms.”).
B. John Doe Is Bound By The Agreement Entered Into On His Behalf By His Mother
The parties focused much of their energy on whether John Doe should be considered a third party [*13] beneficiary of the Agreement. This focus, however, misses the mark in that it ignores the realities of the relationship between parent and child. As a matter of law, and as a practical matter, John Doe, a minor, could not obtain a private boarding school education from a facility like Cedars Academy without his mother contracting for such services on his behalf. 37 As the guardian of John Doe, Jane Doe was authorized to provide for her minor son’s education in the manner she saw fit. 38
37 6 Del. C. § 2705 ( [HN5] A person does not have the capacity to contract until he or she reaches the age of majority); Cal. Fam. Code Ann. § 6700 (West 1994)(“A minor may make a contract … subject to the power of disaffirmance.”); Cal. Fam. Code Ann. § 6500 (“A minor is an individual who is under 18 years of age.”).
38 Ide v. Brown, 178 N.Y. 26, 70 N.E. 101, 102 ( N.Y.1904) (“As guardian, we assume that [father] had the power to provide for her support and maintenance during [daughter’s] minority.”); Pierce v. Soc’y of the Sisters of the Holy Names of Jesus & Mary, 268 U.S. 510, 534-35, 45 S. Ct. 571, 69 L. Ed. 1070 (1925) (Parents have the liberty “to direct the upbringing and education of children under their control.”); Hohe v. San Diego Unified Sch. Dist., 224 Cal. App. 3d 1559, 1565, 274 Cal. Rptr. 647 (Cal. Ct. App. 1990)(same).
To [*14] conclude that John Doe is not bound by the Agreement’s otherwise enforceable terms, as Plaintiffs contend, simply because he is a minor would be tantamount to concluding that a parent can never contract with a private school (or any other service provider) on behalf and for the benefit of her child. As a practical matter, no service provider would ever agree to a contract with a parent if a child could ignore the provisions of the contract that pertain to him without recourse. 39 Such a result is inconsistent with the law’s concept of the family which “rests on a presumption that parents possess what a child lacks in maturity, experience, and capacity for judgment required for making life’s difficult decisions.” 40 In this case, as a parent, Jane Doe was authorized to enter into the Agreement with Cedars on behalf of her minor son and to bind him to its enforceable terms.
39 For instance, in this case, Cedars reserved the right to terminate John Doe’s enrollment in Cedars Academy if he engaged in “illegal, uncontrollable, or dangerous behavior” or “for any other reason … deem[ed] necessary for the protection of [John Doe], any other student(s) or the integrity of Cedar’s program.” [*15] Agreement, ¶ 9. This provision implicitly imposes upon John Doe certain obligations to behave in an appropriate manner. If this obligation was deemed by the Court to be non-binding upon John Doe simply because he is a minor, then Cedars, in turn, would lose its authority to discharge him or any other student whose behavior justified termination from the program. No private school would ever enroll a student under such circumstances.
40 Parham v. J.R., 442 U.S. 584, 602, 99 S. Ct. 2493, 61 L. Ed. 2d 101 (1979).
C. Even If The Pre-Injury Release Provision Is Invalid, It is Severable and Does Not Affect The Overall Enforceability Of The Agreement
Plaintiffs argue that parents do not possess the authority to bind their children to pre-injury releases. 41 According to Plaintiffs, the pre-injury release is invalid, 42 and, therefore, John Doe should not be bound by the balance of the Agreement’s terms. 43
41 Agreement ¶ 5.
42 Pls.’ Resp. Defs.’ Letter Mem. pg. 7.
43 Pls.’ Resp. Defs.’ Mot. to Dismiss ¶ 8.
It appears that no Delaware court has specifically addressed whether parents can bind their children to a pre-injury release. Further, it appears that there is a split among those jurisdictions that have addressed the issue. 44 This [*16] Court need not weigh in on behalf of Delaware, however, because even if the pre-injury release is invalid, the presence of the provision would not render the entire Agreement unenforceable. 45 [HN6] When “determining whether a contract is divisible … the essential question … is ‘did the parties give a single assent to the whole transaction, or did they assent separately to several things?'” 46 If there is evidence that clearly shows that the parties intended to enter into an integrated contract, then the contract should be read in its entirety. 47 In this regard, Delaware courts recognize that “[t]he parties’ intent to enter into a divisible contract may be expressed in the contract directly, through a severability clause.” 48 The Agreement between the parties in this case contains a clear and unambiguous severability clause. 49 Accordingly, the invalidity of the pre-injury release would not render the remainder of the Agreement unenforceable.
44 Compare Cooper v. Aspen Skiing Co., 48 P.3d 1229 (Colo. 2002)(holding that Colorado’s public policy affords minors significant protections which preclude parents or guardians from releasing a minor’s own prospective claim for negligence); Hawkins ex rel. Hawkins v. Peart, 2001 UT 94, 37 P.3d 1062 (Utah 2001)(holding [*17] that a parent cannot release a child’s causes of action against a third party before or after an injury); with Sharon v. City of Newton, 437 Mass. 99, 769 N.E.2d 738 (Mass. 2002)(holding that releases of liability for ordinary negligence involving private parties are valid as a general proposition in the Commonwealth and, thus, it was not contrary to the purposes of the Tort Claims Act to allow city to use releases as a precondition for student’s participation in voluntary, nonessential activities, such as cheerleading at public school activities); Zivich v. Mentor Soccer Club, Inc., 82 Ohio St. 3d 367, 1998 Ohio 389, 696 N.E.2d 201 (Ohio 1998) (Holding that mother had authority to bind her minor child to exculpatory agreement in favor of volunteers and sponsors of nonprofit soccer organization, where cause of action sounded in negligence; agreement could not be disaffirmed by child on whose behalf it was executed).
45 See McInerney v. Slights, 1988 Del. Ch. LEXIS 47, 1988 WL 34528, *7 (Del. Ch. Apr. 13, 1988)(“… where a contract as negotiated cannot be enforced by reason of a legally-recognized policy, a court should simply [imply] a severability clause in the contract if to enforce such an implied term may be done sensibly.”); Abramson v. Juniper Networks, Inc. 115 Cal. App. 4th 638, 658-59, 9 Cal. Rptr. 3d 422 (Cal. Ct. App. 2004)(“Where [*18] a contract has several distinct objects, of which one at least is lawful, and one at least is unlawful, in whole or in part, the contract is void as to the latter and valid as to the rest.”).
46 Orenstein v. Kahn, 13 Del. Ch. 376, 119 A. 444, 446 (Del. Ch. 1922) (“Although the consideration is apportioned on the face of a contract, if there be a special agreement to take the whole or nothing, or if the evidence clearly shows that such was the purpose of the parties, the contract should be entire.”).
48 15 Williston on Contracts § 45:6 (4th ed.). See also Evans, 872 A.2d at 552 (“Generally, a severability clause is enforceable.”).
49 Agreement ¶ 22 (“In the event that any provision of this agreement, or any operation contemplated hereunder, is found by a court of competent jurisdiction to be inconsistent with or contrary to any law, ordinance, or regulation, the latter shall be deemed to control and the Agreement shall be regarded as modified accordingly and, in any event, the remainder of this agreement shall continue in full force and effect.”).
D. The Choice of Forum Provision is Controlling
Having determined that the pre-injury release provision may be excised, the Court now turns to the balance of [*19] the Agreement to determine if any remaining provisions support the Defendants’ motion. In this regard, the Court’s attention is drawn immediately to provisions of the Agreement which suggest that the parties intended to resolve their disputes in California, not Delaware. Not surprisingly, Defendants interpret these provisions as requiring the Court to dismiss this action so that Plaintiffs’ claims may be brought in California as intended. Plaintiffs, not surprisingly, argue that the Agreement’s arbitration and choice of forum provisions do not apply here. The parties’ differing views of these provisions require the Court to interpret the Agreement and to determine in which forum this controversy belongs.
[HN7] Both Delaware and California courts honor the parol evidence rule. 50 This rule provides that “[w]hen two parties have made a contract and have expressed it in a writing to which they have both assented as to the complete and accurate integration of that contract, evidence . . . of antecedent understandings and negotiations will not be admitted for the purpose of varying or contradicting the writing.” 51 To ensure compliance with the parol evidence rule, the court first must determine [*20] whether the terms of the contract it has been asked to construe clearly state the parties’ agreement. 52 In this regard, the court must remember that a contract is not rendered ambiguous simply because the parties disagree as to the meaning of its terms. 53 “Rather, a contract is ambiguous only when the provisions in controversy are reasonably or fairly susceptible of different interpretations or may have two or more different meanings.” 54 Upon concluding that the contract clearly and unambiguously reflects the parties’ intent, the court’s interpretation of the contract must be confined to the document’s “four corners.” 55 The court will interpret the contract’s terms according to the meaning that would be ascribed to them by a reasonable third party. 56
50 See Rhone-Poulenc Basic Chem. Co. v. American Motorists Ins. Co., 616 A.2d 1192, 1196 (Del. 1992); Wolf v. Walt Disney Pictures & Television, 162 Cal. App. 4th 1107, 1126, 76 Cal. Rptr. 3d 585 (Cal. Ct. App. 2008).
51 26 Corbin on Contracts § 573 (1960).
52 Comrie v. Enterasys Networks, Inc., 837 A.2d 1, 13 (Del. Ch. 2003)(citing In Re. Explorer Pipeline Co., 781 A.2d 705, 713 (Del. Ch. 2001)); Wolf, 162 Cal. App. 4th at 1126 (“[w]hen a contract is reduced [*21] to writing, the intention of the parties is to be ascertained from the writing alone, if possible….”)(citation omitted).
53 See Rhone-Poulenc Basic Chem. Co. v. American Motorists Ins. Co., 616 A.2d 1192, 1196 (Del. 1992)(“A contract is not rendered ambiguous simply because the parties do not agree upon its proper construction.”); Curry v. Moody, 40 Cal. App. 4th 1547, 1552, 48 Cal. Rptr. 2d 627 (Cal. Ct. App. 1995)(“When the parties dispute the meaning of a contract term, the trial court’s first step is to determine whether the term is ambiguous … “).
54 Id. (citation omitted).
55 See O’Brien v. Progressive Northern, Ins. Co., 785 A.2d 281, 288-89 (Del. 2001); Wolf, 162 Cal. App.4th at 1126.
56 Comrie, 837 A.2d at 13 (citations omitted); Wolf, 162 Cal. App. 4th at 1126.
As directed by the parol evidence rule, the Court looks first to the Agreement itself (the text within the “four corners”) to determine if it unambiguously reflects the parties’ intent with respect to choice of forum. To discern the parties’ intent, the Court has utilized certain settled tenets of contract interpretation. 57 The first, and [HN8] perhaps most fundamental, tenet of contract interpretation requires the court to render a “reasonable, [*22] fair and practical” interpretation of the contract’s clear and unambiguous terms. 58 In addition, the court must be mindful that “[a] contract should be read as a whole and every part should be interpreted with reference to the whole, and if possible should be so interpreted as to give effect to its general purpose.” 59 In this regard, the court must interpret the contract “so as to conform to an evident consistent purpose” and “in a manner that makes the contract internally consistent.” 60
57 “An abstract distinction exists between ‘construction’ and ‘interpretation,’ in that ‘construction’ is the drawing of conclusions from elements known from, given in, and indicated by the language used, while ‘interpretation’ is the art of finding the true sense of the language itself ….” 17A Am. Jur. 2d Contracts §328.
58 Id. at §338.
59 Id. at §376.
Here, the Agreement’s choice of law and choice of forum provisions are combined in one paragraph, and together they state, in pertinent part, as follows: “This Agreement, and all matters pertaining hereto, including any matter or dispute arising between the parties out of this Agreement, tort or otherwise, shall be interpreted, governed and enforced [*23] according to the laws of the State of California; and the Parties consent and submit to the exclusive jurisdiction and venue of the California Courts … to enforce this Agreement.” 61 After reading this provision, the Court can mine only two sources of possible ambiguity in relation to the facts sub judice: (1) whether the choice of forum provision applies only to actions “to enforce the Agreement;” and, if not (2) whether Plaintiffs’ claims, including their tort claims, “aris[e] out of the Agreement” such that they implicate the choice of law and choice of forum provisions. As discussed below, neither of these phrases render the Agreement ambiguous.
61 Agreement ¶ 21.
As the Court considers whether Plaintiffs’ claims implicate the Agreement’s choice of forum provision, the Court takes notice of the placement of the semicolon to separate the choice of law and choice of forum provisions. At first glance, the semicolon might suggest an intent to separate the two provisions such that one will not modify the other. And, if the provisions are separated, one might read the choice of forum provision as applying only to actions “to enforce the Agreement.” But this reading would run counter to [*24] the theme of the entire Agreement, which is designed to ground all aspects of the parties’ relationship in California. For instance, the Agreement provides that payments, notices, and correspondence between Jane Doe and Cedars are to be mailed to a California location; 62 disputes between the parties are to be resolved by arbitration that must occur in California; and California law is to apply to all disputes between the parties, whether based in tort or contract. 63 Given the parties’ clear intent to base their relationship in California, the Court will not read the placement of a semicolon as an intent to limit the scope of the choice of forum provision. 64
62 Id. at ¶ 17.
63 Id. at ¶ 21.
64 See Reliance-Grant Elevator Equipment Corp. v. Reliance Ball-Bearing Door Hanger Co., 205 A.D. 320, 199 N.Y.S. 476, 478 (N.Y. App. Div. 1923) (“If for the comma we substitute a period, and make the phrase an independent sentence, all ambiguity will disappear, and the cancellation proviso will clearly refer to the duration of the agreement, and not to the making of extensions.”). See also 11 Williston on Contracts § 32:9 (4th ed.) (“Attention is often paid to grammar and punctuation in determining the proper interpretation [*25] of a contract, but a court will disregard both grammatical constructs and the punctuation used in the written agreement where the context of the contract shows that grammatical or punctuation errors have occurred.”); 17A Am. Jur. 2d Contracts § 365 ( [HN9] “while a court, in construing a contract, will give due force to the grammatical arrangement of the clauses, it will disregard the grammatical construction if it is at variance with the intent of the parties as indicated by the contract as a whole.”).
The semicolon issue aside, the choice of law/choice of forum paragraph, according to its terms, applies to all actions that “aris[e] out of the Agreement.” The question, then, is whether Plaintiffs’ tort and contract claims may properly be said to “aris[e] out of the Agreement.” [HN10] “Where there is a contractual relationship between the parties, a cause of action in tort may sometimes arise out of the negligent manner in which the contractual duty is performed, or out of a failure to perform such duty.” 65 The Agreement mandates that “[o]n the arrival date, [Jane Doe] shall transfer, by a Power of Attorney … temporary custody of the Student [John Doe] to Cedars ….” 66 From the moment Jane Doe [*26] dropped her son off at Cedars Academy, therefore, the school was entrusted with “duties correspondent to the role of a caregiver.” 67 All of Plaintiffs’ claims, based as they are on an alleged failure to protect John Doe while he resided in a Cedars Academy dormitory, directly involve Cedars’ contractual undertaking to care for John Doe as “temporary custod[ian].” As such, the Court is satisfied that the claims “aris[e] out of the Agreement.”
65 Eads v. Marks, 39 Cal. 2d 807, 810-11, 249 P.2d 257 (Cal.1952). See also N. Am. Chem. Co. v. Superior Court, 59 Cal. App. 4th 764, 775, 69 Cal. Rptr. 2d 466(Cal. Ct. App. 1997); Southgate Recreation & Park Dist. v. California Assn. for Park & Recreation Ins., 106 Cal. App. 4th 293, 301-02, 130 Cal. Rptr. 2d 728 (Cal. Ct. App. 2003).
66 Agreement ¶ 3.
67 People v. Toney, 76 Cal. App. 4th 618, 621-22, 90 Cal. Rptr. 2d 578 (Cal. Ct. App. 1999)(citing People v. Cochran, 62 Cal.App. 4th 826, 832, 73 Cal. Rptr. 2d 257 (Cal. Ct. App. 1998))(” The terms ‘care or custody’ do not imply a familial relationship but only a willingness to assume duties correspondent to the role of a caregiver.”).
After reviewing all of the provisions within the four corners of the Agreement, the Court concludes that the parties intended to consent to the exclusive jurisdiction [*27] of California courts or arbitration panels to litigate their claims. [HN11] When “there is a forum selection clause in a contract, even when the venue where the suit is filed is proper, the court should decline to proceed when the parties freely agreed that litigation should be conducted in another forum.” 68 Unless the forum selection clause “is shown by the resisting party to be unreasonable under the circumstances,” such clauses are prima facie valid. 69 A choice of forum provision will be deemed “unreasonable” only when its enforcement would seriously impair the plaintiff’s ability to pursue its cause of action.” 70 Mere inconvenience or additional expense is not sufficient evidence of unreasonableness. 71
68 Eisenmann Corp. v. Gen. Motors Corp., 2000 Del. Super. LEXIS 25, 2000 WL 140781, *7 (Del. Super. Jan. 28, 2000) (citing Elia Corp. v. Paul N. Howard Co., 391 A.2d 214, 216 (Del. Super. 1978)).
69 Id. (citing M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10, 92 S. Ct. 1907, 32 L. Ed. 2d 513 (1972)). Defendants have argued that the forum selection provision should be enforced if California has a “material connection” to the controversy. This inquiry is implicated by a choice of law analysis, but not by a choice of forum analysis. See Weil v. Morgan Stanley DW, Inc., 877 A.2d 1024 (Del. Ch. 2005).
71 Elia Corp., 391 A.2d at 216.
Other [*28] than arguing that the Agreement is invalid in its entirety because it is unconscionable, Plaintiffs do not provide any support for their contention that the Court should ignore the forum selection clause. 72 They have not, for instance, pointed to any circumstance that would suggest that litigating their claims in California “would seriously impair [their] ability to pursue [their] cause of action.” 73 Having determined that the Agreement is valid and enforceable as to both Jane Doe and John Doe, the Court is left with no basis in fact or law to suggest that the forum selection clause seriously impairs the Plaintiffs’ ability to pursue their cause of action. 74 Accordingly, given the well settled law [HN12] in Delaware that choice of forum provisions are enforceable absent a showing of unreasonableness, the Court must enforce the provision here and decline to exercise jurisdiction in this matter.
72 Beyond the pre-injury release provision, Plaintiffs have pointed to nothing in the Agreement to support an unconscionability argument, and the Court has discerned no basis for the argument on its own.
73 Eisenmann Corp., 2000 Del. Super. LEXIS 25, 2000 WL 140781 at 7 (citing M/S Bremen, 407 U.S. 1 at 10, 92 S. Ct. 1907, 32 L. Ed. 2d 513).
74 Here again, Plaintiffs [*29] have not argued that their ability to pursue their claims in California would be “seriously impaired,” e.g. by virtue of a statute of limitations that would bar their claims there or otherwise, and the Court can fathom no reason why the identical claims sub judice could not be raised in California.
Since the Court has determined that it should decline to exercise its jurisdiction over this dispute for the reasons set forth above, the Court need not decide the validity of the mandatory arbitration provision, nor whether Aspen should be dismissed based upon a lack of personal jurisdiction. These questions will be left to the California forum (be it a court or arbitration panel) that ultimately decides this case.
Based on the foregoing, Defendants’ Motion to Dismiss is hereby GRANTED.
IT IS SO ORDERED.
/s/ Joseph R. Slights, III
Joseph R. Slights, III, Judge