One paragraph would have eliminated this lawsuit.
Posted: January 3, 2022 Filed under: Colorado, Release (pre-injury contract not to sue), Rock Climbing | Tags: fatality, Forum selection clause, Hameric, Jurisdiction and Venue, Keller Church of Christ, Novation, Rappelling, Release, Rock climbing, Waiver, WEI, Wilderness Expeditions Inc. 2 CommentsBadly written release and a bad attempt to tie two documents together almost cost outfitter
Hamric v. Wilderness Expeditions, Inc
State: Colorado, United States Court of Appeals, Tenth Circuit
Plaintiff: Alicia Hamric, individually, as representative of the Estate of Robert Gerald Hamric, and as next friend of Ava Hamric, a minor
Defendant: Wilderness Expeditions, Inc.
Plaintiff Claims: Negligence
Defendant Defenses: Release
Holding: For the defendant
Year: 2021
Summary
Badly written release and medical form with release language in them give the plaintiff the opportunity to win a lawsuit. However, a lawsuit where Colorado law is applied is going to support the release.
Facts
Members of the Keller Church of Christ in Keller, Texas, scheduled an outdoor excursion to Colorado, contracting with WEI for adventure planning and guide services. WEI is incorporated in Colorado and has its headquarters in Salida, Colorado. Jamie Garner served as the coordinator for the church group and the point-of-contact between the church members and WEI. The experience WEI provided included guides taking participants rappelling. WEI required all participants, before going on the outdoor excursion, to complete and initial a “Registration Form” and complete and sign a “Medical Form.”
WEI made the forms available to Mr. Garner for downloading and completion by the individual church members several months prior to the booked trip. Mr. Hamric initialed both blanks on the Registration Form and signed the Medical Form, dating it April 5, 2017. Andrew Sadousky, FNP-C, completed and signed the “Physician’s Evaluation” section of the Medical Form, certifying that Mr. Hamric was medically capable of participating in the outdoor activities listed on the form, including rappelling. Mr. Hamric’s signed forms were delivered to WEI upon the church group’s arrival in Colorado in July 2017.
After spending a night on WEI property, WEI guides took the church group, including Mr. Hamric, to a rappelling site known as “Quarry High.” Because the rappelling course had a section that WEI guides considered “scary,” the guides did not describe a particular overhang at the Quarry High site during the orientation session or before taking the church group on the rappelling course. Id. at 203.
Several members of the church group successfully descended Quarry High before Mr. Hamric attempted the rappel. As Mr. Hamric worked his way down the overhang portion of the course, he became inverted and was unable to right himself. Efforts to rescue Mr. Hamric proved unsuccessful, and he died of positional asphyxiation.
Analysis: making sense of the law based on these facts.
The Tenth Circuit Court of Appeals is an appellate court that sits in Denver. The Tenth Circuit hears cases from Colorado, Kansas, New Mexico, Oklahoma, Utah and Wyoming. The court, consequently, hears a few appeals of recreation cases.
This appealed covered four different legal issues. Three of the issues were procedural and won’t be reviewed. The fourth was the dismissal of the case by the lower-court magistrate on a motion for summary judgement because of the release.
The plaintiff argued the release should be read using Texas law because the release was read and signed in Texas.
There was no Jurisdiction and Venue Clause in the Release!
The defendant had the deceased sign two forms. One was a release, and the second was a medical form. Having a medical information formed signed is a quick give away that the defendant does not understand the legal issues involved. The defendant wrote both forms, so they conflicted with each other in some cases and attempted to tie the forms together. Neither really worked.
The plaintiff argued the forms were one because they conflicts would have made both forms basically invalid.
Further, language on the Medical Form is conflicting and ambiguous as to whether the two forms comprise a single agreement: Individuals who have not completed these forms will not be allowed to participate. I have carefully read all the sections of this agreement, understand its contents, and have initialed all sections of page 1 of this document. I have examined all the information given by myself, or my child. By the signature below, I certify that it is true and correct. Should this form and/or any wording be altered, it will not be accepted and the participant will not be allowed to participate.
Both the italicized language and the use of “forms” in the plural to describe the agreement support the conclusion that the Registration Form and the Medical Form are a single agreement. But the underlined language, using “form” in the singular, suggests the forms might constitute separate agreements. Otherwise, the singular use of “form” would suggest the unlikely result that a participant could not alter the wording of the Medical Form but could alter the wording of the Registration Form.
The plaintiff’s argument in many jurisdictions might have prevailed. However, the 10th circuit covers the outdoor recreation center of the universe, and state laws protect outdoor recreation, and outdoor recreation is a major source of income for these states. Consequently, any issues are going to lean towards protecting recreation.
After a lengthy review, the court found the forms were two different documents and ignored the medical form and the release like language in it.
We conclude, however, that this dispute of fact is not material to resolution of the primarily legal question regarding whether Mr. Hamric entered into a valid liability release with WEI.
The next issue is what law should apply to determine the validity of the release. Choice of laws is a complete course you can take in law school. I still have my Choice of Laws’ textbook after all these years because it is a complicated subject that hinges on minutia in some cases to determine what court will hear a case and what law will be applied.
The case was filed in the Federal Court covering Colorado. Since the defendant was not a Texas business or doing business in Texas, the lawsuit needed to be in the defendant’s state. Federal Court was chosen because disputes between citizens of two states should be held in a neutral court, which are the federal courts. A Texan might not feel they are getting a fair deal if they have to sue in a Colorado state court. That is called the venue. What court sitting where, will hear the case.
So, the decision on what court to sue in was somewhat limited. However, that is not the end. Once the court is picked the next argument is what law will be applied to the situation. The plaintiff argued Texas Law. Texas has stringent requirements on releases. The defendant argued Colorado law, which has much fewer requirements for releases.
Ms. Hamric further contends that under contract principles in the Restatement (Second) of Conflicts of Laws, Texas law applies because Mr. Hamric was a Texas resident who completed the Registration Form and the Medical Form while in Texas.
Here is the court’s analysis on what states laws should apply.
A more specific section of the Restatement addressing contracts lacking a choice-of-law provision provides additional guidance: (1) The rights and duties of the parties with respect to an issue in contract are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the transaction and the parties under the principles stated in § 6. (2) In the absence of an effective choice of law by the parties . . ., the contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include: (a) the place of contracting, (b) the place of negotiation of the contract, (c) the place of performance, (d) the location of the subject matter of the contract, and (e) the domicile, residence, nationality, place of incorporation and place of business of the parties. These contacts are to be evaluated according to their relative importance with respect to the particular issue.
It is not a slam dunk for Colorado law. In this case, the plaintiff made a very good argument that Texas law should apply. The deceased was a Texas resident recruited in Texas by the defendant. The release had been given to the deceased in Texas, and he signed it in Texas. If the analysis ended there, Texas law would have applied.
There was more to the investigation the court is required to do.
We conclude that, under the Restatement, a Colorado court would apply Colorado law to determine the validity and enforceability of the liability release relied upon by WEI. First looking at § 6 of the Restatement, the liability release was drafted by a Colorado corporation to cover services provided exclusively in Colorado.
This argument switched the discussion from applying Texas law to Colorado law.
Applying out-of-state law to interpret the liability release would hinder commerce, as it would require WEI and other outdoor-recreation companies to know the law of the state in which a given participant lives. Such a rule would place a significant burden on outdoor-recreation companies who depend on out-of-state tourists for revenue because it would require a company like WEI to match the various requirements of the other forty-nine states. This approach would not give WEI the benefit of having logically molded its liability release to comply with Colorado law, the law of the state where WEI does business. Furthermore, Ms. Hamric’s primary argument for applying Texas law is that Mr. Hamric signed the forms in Texas. But a rule applying out-of-state law on that basis is likely to deter WEI from furnishing the liability release until a participant enters Colorado. And, while not providing participants the forms until arrival in Colorado might lessen WEI’s liability exposure under out-of-state law, such a practice would not benefit participants because it would pressure participants into a last-minute decision regarding whether to sign the liability release after having already traveled to Colorado for the outdoor excursion.
It is significant to note that the court looked at the issue of waiting until customers arrive in the state of Colorado to have them sign the release. The court intimated that doing so would put pressure on them to sign after already traveling to Colorado. Legally, that could be argued as duress, which voids a release or contract.
It is important to remember this point. If you are marketing out of state and book travel from out of state, you need to get your release in the hands of your out of state clients when they book the travel.
In a rare statement, the court also commented on the outdoor recreation industry in Colorado and the need for releases.
Colorado also has a strong interest in this matter. Colorado has a booming outdoor-recreation industry, in the form of skiing, hiking, climbing, camping, horseback riding, and rafting excursions. Colorado relies on tax receipts from the outdoor-recreation industry. And while many out-of-state individuals partake in these activities within Colorado, they often purchase their tickets or book excursion reservations before entering Colorado. If we applied Texas law because it is the state where Mr. Hamric signed the liability release, we would essentially allow the other forty-nine states to regulate a key industry within Colorado.
So Now What?
This was a badly written set of documents. Probably the attempt was made to cover as many legal issues as possible as many was as possible. Writing to documents that both contained release language. However, as written here and in Too many contracts can void each other out; two releases signed at different times can render both release’s void.
Write too many documents with release language in them and you can void all the releases.
The second major disaster is not having a venue and jurisdiction clause. The only real attempt to win the plaintiff had, was the release did not have a venue and jurisdiction clause. Never sign any contract without one, or if signing a contract written by someone else, find out where you have to sue and what law is applied to the contract. It makes a major difference.
Sad, so much time, energy and money were wasted on poorly written contracts (Yes, a release is a contract).
Sadder yet the plaintiff died.
What do you think? Leave a comment.
Who am I
Jim Moss
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Hamric v. Wilderness Expeditions, Inc.,
Posted: January 3, 2022 Filed under: Colorado, Release (pre-injury contract not to sue), Rock Climbing | Tags: Colorado, fatality, Forum selection clause, Hamric, Inc., Jurisdiction and Venue, Medical Form, Rappelling, Registration Form, Release, Rock climbing, Tenth Circuit, Texas, Waiver, Wilderness Expedtions Leave a commentALICIA HAMRIC, individually, as representative of the Estate of Robert Gerald Hamric, and as next friend of Ava Hamric, a minor, Plaintiff – Appellant,
v.
WILDERNESS EXPEDITIONS, INC., Defendant-Appellee.
No. 20-1250
United States Court of Appeals, Tenth Circuit
July 26, 2021
Appeal from the United States District Court for the District of Colorado (D.C. No. 1:19-CV-01442-NYW)
William J. Dunleavy, Law Offices of William J. Dunleavy, Allen, Texas (Stephen A. Justino, Boesen Law, Denver, Colorado, on the briefs), for Plaintiff – Appellant.
Malcolm S. Mead (Peter C. Middleton and Jacob R. Woods with him on the brief), Hall & Evans, Denver, Colorado, for Defendant – Appellee.
Before TYMKOVICH, Chief Judge, HOLMES, and McHUGH, Circuit Judges.
McHUGH, CIRCUIT JUDGE
Gerald Hamric, a Texas resident, joined a church group on an outdoor recreation trip to Colorado. The church group employed the services of Wilderness Expeditions, Inc. (“WEI”) to arrange outdoor activities. Before the outdoor adventure commenced, WEI required each participant, including Mr. Hamric, to complete a “Registration Form” and a “Medical Form.” On the first day, WEI led the church group on a rappelling course. In attempting to complete a section of the course that required participants to rappel down an overhang, Mr. Hamric became inverted. Attempts to rescue Mr. Hamric proved unsuccessful, and he died.
Alicia Hamric, Mr. Hamric’s wife, sued WEI for negligence. WEI moved for summary judgment, asserting the Registration Form and the Medical Form contained a release of its liability for negligence. Ms. Hamric resisted WEI’s motion for summary judgment in four ways. First, Ms. Hamric moved for additional time to conduct discovery under Federal Rule of Civil Procedure 56(d). Second, Ms. Hamric moved for leave to amend her complaint to seek exemplary damages based on willful and wanton conduct. Third, Ms. Hamric filed a motion for leave to disclose an expert out of time. Fourth, Ms. Hamric argued Texas law controlled the validity of the purported liability release in the Registration Form and the Medical Form, and additionally that the release was not conspicuous as required by Texas law.
In a single order, a magistrate judge addressed each of the pending motions. The magistrate judge first declined to grant leave to amend the complaint due to Ms. Hamric’s failure to (1) sustain her burden under Federal Rule of Civil Procedure 16(b) because the deadline for amendments had passed; and (2) make out a prima facie case of willful and wanton conduct as required by Colorado law to plead a claim seeking exemplary damages. Next, the magistrate judge concluded WEI was entitled to summary judgment, holding the liability release was valid under both Colorado law and Texas law. Finally, the magistrate judge denied as moot Ms. Hamric’s motions for additional discovery and to disclose an expert out of time.
We affirm the magistrate judge’s rulings. As to Ms. Hamric’s motion for leave to amend, a party seeking to amend a pleading after the deadline in a scheduling order for amendment must satisfy the standard set out by Federal Rule of Civil Procedure 16(b). But Ms. Hamric concedes she has never sought to satisfy the Rule 16(b) standard. Turning to the discovery motions, where this case hinges on the validity of the liability release and all facts necessary to this primarily legal issue appear in the record, we reject Ms. Hamric’s contentions that further discovery or leave to belatedly disclose an expert were warranted. Finally, while the magistrate judge’s summary judgment analysis was not free of error, we apply de novo review to that ruling. And, under de novo review, we conclude (1) relying on contract law to resolve the choice-of-law issue, as argued for by the parties, Colorado law, rather than Texas law, controls whether the Registration Form and the Medical Form contain a valid liability release; and (2) the forms contain a valid release for negligence by WEI, barring Ms. Hamric’s action.
I. BACKGROUND
A. The Rappelling Excursion, Mr. Hamric’s Death, and the Liability Release
Members of the Keller Church of Christ in Keller, Texas, scheduled an outdoor excursion to Colorado, contracting with WEI for adventure planning and guide services. WEI is incorporated in Colorado and has its headquarters in Salida, Colorado. Jamie Garner served as the coordinator for the church group and the point-of-contact between the church members and WEI. The experience WEI provided included guides taking participants rappelling. WEI required all participants, before going on the outdoor excursion, to complete and initial a “Registration Form” and complete and sign a “Medical Form.”[ 1]
The Registration Form has three sections. The first section requires the participant to provide personally identifiable information and contact information. The second section is entitled “Release of Liability & User Indemnity Agreement for Wilderness Expeditions, Inc.” App. Vol. I at 57, 83.[ 2] The text under this bold and underlined header reads, in full: I hereby acknowledge that I, or my child, have voluntarily agreed to participate in the activities outfitted by Wilderness Expeditions, Inc. I understand that the activities and all other hazards and exposures connected with the activities conducted in the outdoors do involve risk and I am cognizant of the risks and dangers inherent with the activities. I (or my child) and (is) fully capable of participating in the activities contracted for and willingly assume the risk of injury as my responsibility whether it is obvious or not. I understand and agree that any bodily injury, death, or loss of personal property and expenses thereof as a result of any, or my child’s, negligence in any scheduled or unscheduled activities associated with Wilderness Expeditions, Inc. are my responsibilities. I understand that accidents or illness can occur in remote places without medical facilities, physicians, or surgeons, and be exposed to temperature extremes or inclement weather. I further agree and understand that any route or activity chosen may not be of minimum risk, but may have been chosen for its interest and challenge. I agree to defend, indemnify, and hold harmless Wilderness Expeditions. Inc., the USDA Forest Service, Colorado Parks and Recreation Department, and any and all state or government agencies whose property the activities may be conducted on, and all of their officers, members, affiliated organizations, agents, or employees for any injury or death caused by or resulting from my or my child’s participation in the activities, scheduled and unscheduled, whether or not such injury or death was caused by my, or their, negligence or from any other cause. By signing my initials below, I certify this is a release of liability.
Id.[ 3] Immediately after this paragraph, the form reads, “Adult participant or parent/guardian initial here:(Initials).” Id. The third and final section of the form is entitled: “Adult Agreement or Parent’s/Guardian Agreement for Wilderness Expeditions, Inc.” Id. The text of this provision states: I understand the nature of the activities may involve the physical demands of hiking over rough terrain, backpacking personal and crew gear, and voluntarily climbing mountains to 14, 433 feet in elevation. Having the assurance of my, or my child’s, good health through a current physical examination by a medical doctor, I hereby give consent for me, or my child, to participate in the activities outfitted by Wilderness Expeditions, Inc. I have included in this form all necessary medical information about myself, or my child, that should be known by the leadership of the program. I assure my, or my child’s, cooperation and assume responsibility for my, or my child’s, actions. I understand that I am responsible for any medical expenses incurred in the event of needed medical attention for myself, or my child. I further agree that I will be financially responsible to repair or replace all items lost or abused by myself or my child. In the event of an emergency, I authorize my consent to any X-ray examination, medica1, dental, or surgical diagnosis, treatment, and/or hospital care advised and supervised by a physician, surgeon, or dentist licensed to practice. I understand that the designated next of kin will be contacted as soon as possible. By signing my initials below, I certify this is a release of liability.
Id. And, as with the second section, the form then provides a line for the participant or the parent or guardian of the participant to initial.
The Medical Form has four sections. The first section seeks information about the participant. The second section is entitled “Medical History.” Initially, this section asks the participant if he suffers from a list of medical conditions, including allergies, asthma, and heart trouble. If the participant does suffer from any medical conditions, the form requests that the participant explain the affirmative answer. Thereafter, the section includes the following language: Note: The staff will not administer any medications, including aspirin, Tums, Tylenol, etc. If you need any over the counter medications, you must provide them. Be sure to tell your staff members what medications you are taking. List any medications that you will have with you: Note about food: Trail food is by necessity a high carbohydrate, high caloric diet. It is high in wheat, milk products, sugar, com syrup, and artificial coloring/flavoring. If these food products cause a problem to your diet, you will be responsible for providing any appropriate substitutions and advise the staff upon arrival. * Doctor’s signature is required to participate. No other form can be substituted. By signing below a physician is verifying the medical history given above and approving this individual to participate.
Id. at 58, 84. The form then includes a section titled “Physician’s Evaluation.” Id. This section seeks certification of the participant’s medical capability to partake in the outdoor activities and asks the physician for contact information. It reads: The applicant will be taking part in strenuous outdoor activities that may include: backpacking, rappelling, hiking at 8-12, 000 feet elevation, and an all day summit climb up to 14, 433 feet elevation. This will include high altitude, extreme weather, cold water, exposure, fatigue, and remote conditions where medical care cannot be assured. The applicant is approved for participation. Physician Signature: ___ Date: ___ Physician Name: ___ Phone Number: ___ Office Address: ___ City: ___ State: ___ Zip: ___
Id. The final section of the form is entitled “Participant or Parent/Guardian Signature – All sections of these forms must be initialed or signed.” Id. The text of the section reads: Individuals who have not completed these forms will not be allowed to participate. I have carefully read all the sections of this agreement, understand its contents, and have initialed all sections of page 1 of this document[.] I have examined all the information given by myself, or my child. By the signature below, I certify that it is true and correct. Should this form and/or any wording be altered, it will not be accepted and the participant will not be allowed to participate.
Id.
WEI made the forms available to Mr. Garner for downloading and completion by the individual church members several months prior to the booked trip. Mr. Hamric initialed both blanks on the Registration Form and signed the Medical Form, dating it April 5, 2017. Andrew Sadousky, FNP-C, completed and signed the “Physician’s Evaluation” section of the Medical Form, certifying that Mr. Hamric was medically capable of participating in the outdoor activities listed on the form, including rappelling. Mr. Hamric’s signed forms were delivered to WEI upon the church group’s arrival in Colorado in July 2017.
After spending a night on WEI property, WEI guides took the church group, including Mr. Hamric, to a rappelling site known as “Quarry High.” Because the rappelling course had a section that WEI guides considered “scary,” the guides did not describe a particular overhang at the Quarry High site during the orientation session or before taking the church group on the rappelling course. Id. at 203.
Several members of the church group successfully descended Quarry High before Mr. Hamric attempted the rappel. As Mr. Hamric worked his way down the overhang portion of the course, he became inverted and was unable to right himself. Efforts to rescue Mr. Hamric proved unsuccessful, and he died of positional asphyxiation.
B. Procedural History
In the District of Colorado, Ms. Hamric commenced a negligence action against WEI, sounding in diversity jurisdiction. As a matter of right, Ms. Hamric amended her complaint shortly thereafter. See Fed. R. Civ. P. 15(a)(1)(A) (permitting plaintiff to file amended complaint “as a matter of course” within twenty-one days of serving original complaint). The parties, pursuant to 28 U.S.C. § 636(c), consented to a magistrate judge presiding over the case. WEI answered Ms. Hamric’s First Amended Complaint, in part raising the following affirmative defense: “Decedent Gerald Hamric executed a valid and enforceable liability release. Decedent Gerald Hamric also executed a medical evaluation form which Defendant relied upon. The execution of these document [sic] bars or reduces [Ms. Hamric’s] potential recovery.” Id. at 31-32.
The magistrate judge entered a Scheduling Order adopting several deadlines: (1) August 31, 2019, for amendments to the pleadings; (2) January 31, 2020, for Ms. Hamric to designate her expert witnesses; and (3) April 10, 2020, for the close of all discovery. The Scheduling Order also noted WEI’s defense based on the purported liability release, stating “[t]he parties anticipate that mediation . . . may be useful to settle or resolve the case after meaningful discovery and summary judgment briefing on the issue of the validity and enforceability of the liability release.” Id. at 38 (emphasis added). Finally, the Scheduling Order concluded with language reminding the parties that the deadlines adopted by the order “may be altered or amended only upon a showing of good cause.” Id. at 42 (italicized emphasis added).
In November 2019, after the deadline for amendments to the pleadings but before the discovery deadlines, WEI moved for summary judgment based on its affirmative defense that both the Registration Form and Medical Form contained a liability release that barred Ms. Hamric’s negligence claim. In support of its motion, WEI contended Colorado law controlled the interpretation and validity of the liability release. Ms. Hamric opposed summary judgment, arguing that because Mr. Hamric completed the forms in Texas, a Colorado court would apply Texas law and that, under Texas law, the liability release was not adequately conspicuous to be valid.
Ms. Hamric also sought to avoid disposition of WEI’s motion for summary judgment and dismissal of her action by filing three motions of her own. First, Ms. Hamric moved under Federal Rule of Civil Procedure 56(d) for additional time to conduct discovery, contending further discovery would, among other things, reveal details about Mr. Hamric’s completion of the forms and whether Colorado or Texas law should control the interpretation and validity of the purported liability release. Second, in February 2020, Ms. Hamric moved pursuant to Federal Rule of Civil Procedure 15(a), for leave to file a second amended complaint to seek exemplary damages under § 13-21-102 of the Colorado Revised Statutes based on new allegations of WEI’s willful and wanton conduct.[ 4] Ms. Hamric’s motion to amend, however, did not cite Federal Rule Civil Procedure 16(b) or seek leave to amend the August 31, 2019, Scheduling Order deadline for amendments to the pleadings. Third, in March 2020, Ms. Hamric moved for leave to disclose out of time a “‘Rappelling/Recreational Activities Safety’ expert.” App. Vol. II at 37. Ms. Hamric contended the expert’s opinions about the training, knowledge, and rescue efforts of the WEI guides supported her contention in her proposed second amended complaint that WEI acted in a willful and wanton manner.
The magistrate judge disposed of the four pending motions in a single order. Starting with Ms. Hamric’s motion for leave to amend her complaint, the magistrate judge concluded Ms. Hamric (1) “failed to meet her burden under Rule 16(b) of establishing good cause to generally amend the operative pleading” and (2) had not made out a prima facie case of wanton and willful conduct. Id. at 94. The magistrate judge then turned to WEI’s motion for summary judgment. The magistrate judge concluded WEI’s affirmative defense raised an issue sounding in contract law such that principles of contract law controlled the choice-of-law analysis. Applying contract principles, the magistrate judge determined that although Texas law imposed a slightly more rigorous standard for enforcing a liability release, the difference between Texas law and Colorado law was not outcome-determinative and the court could, therefore, apply Colorado law. The magistrate judge read Colorado law as holding that a liability release is valid and enforceable “so long as the intent of the parties was to extinguish liability and this intent was clearly and unambiguously expressed.” Id. at 106 (citing Heil Valley Ranch v. Simkin, 784 P.2d 781, 785 (Colo. 1989)). Applying this standard, the magistrate judge held the liability release used clear and simple terms such that, even though Mr. Hamric was inexperienced at rappelling, the release was valid and foreclosed Ms. Hamric’s negligence claim. Therefore, the magistrate judge granted WEI’s motion for summary judgment. And, having denied Ms. Hamric’s motion for leave to amend and granted WEI’s motion for summary judgment, the magistrate judge denied both of Ms. Hamric’s discovery motions as moot.
Ms. Hamric moved for reconsideration, which the magistrate judge denied. Ms. Hamric timely appealed.
II. DISCUSSION
On appeal, Ms. Hamric contests the denial of her motion for leave to amend and the grant of summary judgment to WEI. Ms. Hamric also tacitly challenges the magistrate judge’s denial of her discovery motions. We commence our analysis with Ms. Hamric’s motion for leave to amend, holding the magistrate judge did not abuse her discretion in denying the motion where the motion was filed after the Scheduling Order’s deadline for amendments to pleadings and Ms. Hamric did not attempt to satisfy Federal Rule of Civil Procedure 16(b)’s standard for amending a deadline in a scheduling order. Next, we discuss Ms. Hamric’s two discovery motions, concluding the magistrate judge did not abuse her discretion by denying the motions because (1) WEI’s motion for summary judgment presented a largely legal issue on which all facts necessary for resolution already appeared in the record; and (2) consideration of the proposed expert’s opinions potentially capable of supporting allegations of willful and wanton conduct was mooted upon Ms. Hamric failing to satisfy Rule 16(b)’s standard for amending her complaint to allege such conduct. Finally, we analyze WEI’s motion for summary judgment. Although the magistrate judge’s decision was not free of error, the errors are not outcome determinative on appeal given our de novo standard of review. Exercising de novo review, we conclude Colorado law governs the validity of the liability release. And considering the entirety of both the Registration Form and the Medical Form, we conclude the liability release satisfies the factors in Colorado law for enforceability. Therefore, we affirm the magistrate judge’s grant of summary judgment.
A. Ms. Hamric’s Motion for Leave to Amend
1. Standard of Review
“We review for abuse of discretion a district court’s denial of a motion to amend a complaint after the scheduling order’s deadline for amendments has passed.” Birch v. Polaris Indus., Inc., 812 F.3d 1238, 1247 (10th Cir. 2015). “An abuse of discretion occurs where the district court clearly erred or ventured beyond the limits of permissible choice under the circumstances.” Id. (quotation marks omitted). “A district court also abuses its discretion when it issues an arbitrary, capricious, whimsical or manifestly unreasonable judgment.” Id. (internal quotation marks omitted).
2. Analysis
“A party seeking leave to amend after a scheduling order deadline must satisfy both the [Federal Rule of Civil Procedure] 16(b) and Rule 15(a) standards.” Tesone v. Empire Mktg. Strategies, 942 F.3d 979, 989 (10th Cir. 2019). Under the former of those two rules, “[a] schedule may be modified only for good cause and with the judge’s consent.” Fed.R.Civ.P. 16(b)(4). To satisfy this standard a movant must show that “the scheduling deadlines cannot be met despite the movant’s diligent efforts.” Gorsuch, Ltd., B.C. v. Wells Fargo Nat’l Bank Ass’n, 771 F.3d 1230, 1240 (10th Cir. 2014) (internal quotation marks omitted). We have observed the “good cause” standard for amending deadlines in a scheduling order is “arguably [a] more stringent standard than the standards for amending a pleading under Rule 15.” Bylin v. Billings, 568 F.3d 1224, 1231 (10th Cir. 2009).
In moving for leave to file a second amended complaint, Ms. Hamric discussed Federal Rule of Civil Procedure 15 and how Colorado law did not permit a plaintiff to seek exemplary damages until after commencement of discovery. But Ms. Hamric did not advance an argument for amending the Scheduling Order as required by Rule 16(b). Nor does Ms. Hamric cite Rule 16(b) in her briefs on appeal, much less explain how she satisfied, in her papers before the magistrate judge, the Rule 16(b) standard. In fact, Ms. Hamric conceded at oral argument that, before the magistrate judge, she sought only to amend her complaint and “did not seek to amend the scheduling order.” Oral Argument at 7:42-7:46; see also id. at 7:31-9:10. Ms. Hamric also conceded at oral argument that she had not advanced an argument on appeal regarding satisfying Rule 16(b).
This omission by Ms. Hamric is fatal to her argument. Specifically, when a party seeking to amend her complaint fails, after the deadline for amendment in a scheduling order, to present a good cause argument under Rule 16(b), a lower court does not abuse its discretion by denying leave to amend. Husky Ventures, Inc. v. B55 Invs. Ltd., 911 F.3d 1000, 1019-20 (10th Cir. 2018). Even if a party who belatedly moves for leave to amend a pleading satisfies Rule 15(a)’s standard, the party must also obtain leave to amend the scheduling order. But Rule 16(b) imposes a higher standard for amending a deadline in a scheduling order than Rule 15(a) imposes for obtaining leave to amend a complaint. Thus, as Husky Ventures suggests, a party’s ability to satisfy the Rule 15(a) standard does not necessitate the conclusion that the party could also satisfy the Rule 16(b) standard. Id. at 1020; see also Bylin, 568 F.3d at 1231 (observing that Rule 16(b) imposes “an arguably more stringent standard than the standards for amending a pleading under Rule 15”). Accordingly, where Ms. Hamric did not attempt to satisfy the Rule 16(b) standard for amending the Scheduling Order, we affirm the district court’s denial of Ms. Hamric’s motion for leave to amend.
B. Ms. Hamric’s Discovery Motions
After WEI moved for summary judgment, Ms. Hamric filed a pair of discovery-related motions-a motion for additional discovery before disposition of WEI’s motion for summary judgment and a motion to disclose an expert out of time. The magistrate judge denied both motions as moot. After stating the applicable standard of review, we consider each motion, affirming the magistrate judge’s rulings.
1. Standard of Review
We review the denial of a Federal Rule of Civil Procedure 56(d) motion for additional discovery for an abuse of discretion. Ellis v. J.R.’s Country Stores, Inc., 779 F.3d 1184, 1192 (10th Cir. 2015). Likewise, we review the denial of a motion to revisit a scheduling order and allow the disclosure of an expert out of time for an abuse of discretion. Rimbert v. Eli Lilly & Co., 647 F.3d 1247, 1253-54 (10th Cir. 2011). “We will find an abuse of discretion when the district court bases its ruling on an erroneous conclusion of law or relies on clearly erroneous fact findings.” Ellis, 779 F.3d at 1192 (internal quotation marks omitted). “A finding of fact is clearly erroneous if it is without factual support in the record or if, after reviewing all of the evidence, we are left with the definite and firm conviction that a mistake has been made.” Id. (quotation marks omitted).
2. Analysis
a. Motion for additional discovery
Before the April 10, 2020, deadline for discovery, WEI filed its motion for summary judgment based on the liability release. Ms. Hamric moved under Federal Rule of Civil Procedure 56(d) to delay resolution of WEI’s motion for summary judgment, asserting additional discovery would allow her to learn further information about the liability release. The magistrate judge denied the motion as moot, concluding further discovery was not needed to assess the validity of the liability release.
Under Rule 56(d), a party opposing a motion for summary judgment may seek additional time for discovery. To do so, a party must “submit an affidavit (1) identifying the probable facts that are unavailable, (2) stating why these facts cannot be presented without additional time, (3) identifying past steps to obtain evidence of these facts, and (4) stating how additional time would allow for rebuttal of the adversary’s argument for summary judgment.” Cerveny v. Aventis, Inc., 855 F.3d 1091, 1110 (10th Cir. 2017). “[S]ummary judgment [should] be refused where the nonmoving party has not had the opportunity to discover information that is essential to his opposition.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 n.5 (1986). “Requests for further discovery should ordinarily be treated liberally.” Cerveny, 855 F.3d at 1110. “But relief under Rule 56(d) is not automatic.” Id. And Rule 56’s provision allowing a non-moving party to seek additional discovery before disposition on a motion for summary judgment “is not a license for a fishing expedition.” Lewis v. City of Ft. Collins, 903 F.2d 752, 759 (10th Cir. 1990); see also Ellis, 779 F.3d at 1207-08 (affirming denial of Rule 56(d) motion where party “required no further discovery to respond to the . . . summary-judgment motion” and additional discovery sought was speculative).
Through the affidavit supporting her Rule 56(d) motion, Ms. Hamric sought four areas of additional discovery. First, she sought discovery on “the drafting of the purported liability release forms” and the meaning of language on the forms. App. Vol. I at 94. Regardless of whether Colorado or Texas law applies, the four corners of the Registration Form and Medical Form, not WEI’s thought process when drafting the forms, controls the validity of the liability release. See B & B Livery, Inc. v. Riehl, 960 P.2d 134, 138 (Colo. 1998) (requiring that intent of parties to extinguish liability be “clearly and unambiguously expressed” (quoting Heil Valley Ranch, 784 P.2d at 785)); Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 508 (Tex. 1993) (“[A] party seeking indemnity from the consequences of that party’s own negligence must express that intent in specific terms within the four corners of the contract.”). Therefore, the drafting process employed by WEI and its understanding of the language of the forms is not relevant to whether the forms included sufficiently specific language to foreclose a claim for negligence.
Second, Ms. Hamric sought to discover information about WEI’s process for distributing the forms and how the church group members, including Mr. Hamric, completed and submitted the forms. Ms. Hamric also requested time to discover matters related to the choice-of-law issue, including the “place of contracting,” “the place of performance,” and “the domicile, residence nationality, place of incorporation and place of business of the parties.” App. Vol. I at 95. Information on these matters, however, was known to Ms. Hamric prior to the magistrate judge’s summary judgment ruling. For instance, the record shows Mr. Hamric received and completed the forms in Texas a few months before the WEI-led excursion and that the church group provided WEI the completed forms upon its arrival at WEI’s location in Colorado. Accordingly, there was no need to delay summary judgment proceedings to discover matters already known to the parties. See Ellis, 779 F.3d at 1207-08.
Third, Ms. Hamric, as part of a challenge to the authenticity of the forms, initially sought to discover information regarding anomalies and alterations on the forms attached to WEI’s motion for summary judgment, as well as evidence of fraud by WEI. Subsequent to Ms. Hamric filing her motion for additional discovery, WEI provided her the original forms signed by Mr. Hamric, and she withdrew her challenge to the authenticity of the forms. Accordingly, by the time the district court ruled on WEI’s motion for summary judgment and Ms. Hamric’s motion for additional discovery, the requests for discovery regarding the authenticity of the forms was moot.
Fourth, Ms. Hamric sought time to discover “evidence of willful and wanton conduct by Defendant WEI and/or by its agents, servants and/or employees.” Id. Discovery on this matter, however, became moot with the magistrate judge’s denial of Ms. Hamric’s motion for leave to amend her complaint to seek exemplary damages and add allegations of willful and wanton conduct, a ruling we affirm. See supra at 12-14, Section II(A).
Having considered each additional discovery request advanced by Ms. Hamric, we conclude the magistrate judge did not abuse her discretion by ruling on WEI’s motion for summary judgment without permitting Ms. Hamric additional time for discovery. Accordingly, we affirm the magistrate judge’s denial of Ms. Hamric’s Rule 56(d) motion.
b. Motion for leave to disclose expert out of time
Ms. Hamric moved for leave to disclose a “‘Rappelling/Recreational Activities Safety’ expert” out of time. App. Vol. II at 37. Attached to the motion was a Federal Rule of Civil Procedure 26(a)(2) expert disclosure, offering opinions about the alleged negligent and/or willful and wanton conduct of WEI and its employees. The magistrate judge denied this motion as moot. Considering the magistrate judge’s other rulings and our holdings on appeal, we conclude the magistrate judge did not abuse her discretion. Any opinion offered by the expert as to willful and wanton conduct lost relevance with the denial of Ms. Hamric’s motion for leave to amend her complaint to add allegations of willful and wanton conduct and to seek exemplary damages-a ruling we affirmed supra at 12-14, Section II(A). And the expert’s opinion about WEI acting in a negligent manner lost relevance upon the magistrate judge concluding the liability release was valid and barred Ms. Hamric from proceeding on her negligence claim-a ruling we affirm infra at 19-37, Section II(C). Accordingly, we affirm the magistrate judge’s denial of Ms. Hamric’s motion for leave to disclose an expert out of time.
C. WEI’s Motion for Summary Judgment
After stating our standard of review, we discuss Ms. Hamric’s contentions that the magistrate judge (1) applied the wrong standard when considering WEI’s affirmative defense based on the liability release and (2) resolved issues of disputed fact in favor of WEI. Although we conclude the magistrate judge’s ruling is not free of error, the errors do not bind us because we need not repeat them when conducting our de novo review of the grant of summary judgment. Thus, we proceed to consider the validity of the liability release. In conducting our analysis, we hold that, where the parties contend contract principles provide the framework for our choice-of-law analysis, Colorado law governs the validity of the release.[ 5] And we conclude that, under Colorado law, the liability release is valid and enforceable so as to foreclose Ms. Hamric’s negligence claim. Therefore, we affirm the magistrate judge’s grant of summary judgment.
1. Standard of Review
We review the district court’s rulings on summary judgment de novo. Universal Underwriters Ins. Co. v. Winton, 818 F.3d 1103, 1105 (10th Cir. 2016). Summary judgment is appropriate if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); accord Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Anderson, 477 U.S. at 250. “In reviewing a grant of summary judgment, we need not defer to factual findings rendered by the district court.” Lincoln v. BNSF Ry. Co., 900 F.3d 1166, 1180 (10th Cir. 2018) (internal quotation marks omitted). For purposes of summary judgment, “[t]he nonmoving party is entitled to all reasonable inferences from the record.” Water Pik, Inc. v. Med-Sys., Inc., 726 F.3d 1136, 1143 (10th Cir. 2013). Finally, “we can affirm on any ground supported by the record, so long as the appellant has had a fair opportunity to address that ground.” Alpine Bank v. Hubbell, 555 F.3d 1097, 1108 (10th Cir. 2009) (internal quotation marks omitted).
2. Alleged Errors by the Magistrate Judge
Ms. Hamric argues the magistrate judge (1) applied the incorrect standard when considering WEI’s affirmative defense and (2) resolved disputed issues of material fact in favor of WEI. We consider each contention in turn.
a. Standard applicable to affirmative defenses
Ms. Hamric contends the magistrate judge announced an incorrect standard of review and impermissibly shifted evidentiary burdens onto her, as the non-moving party. The disputed language in the magistrate judge’s opinion states: When, as here, a defendant moves for summary judgment to test an affirmative defense, it is the defendant’s burden to demonstrate the absence of any disputed fact as to the affirmative defense asserted. See Helm v. Kansas, 656 F.3d 1277, 1284 (10th Cir. 2011). Once the defendant meets its initial burden, the burden shifts to the nonmovant to put forth sufficient evidence to demonstrate the essential elements of her claim(s), see Anderson, 477 U.S. at 248; Simms v. Okla. ex rel. Dep’t of Mental Health & Substance Abuse Servs., 165 F.3d 1321, 1326 (10th Cir. 1999), and to “demonstrate with specificity the existence of a disputed fact” as to the defendant’s affirmative defense, see Hutchinson v. Pfeil, 105 F.3d 562, 564 (10th Cir. 1997).
App. Vol. II at 100 (emphasis added). Ms. Hamric takes issue with the emphasized phrase.
Nothing on the pages the magistrate judge cited from Anderson and Simms requires a plaintiff responding to a motion for summary judgment based on an affirmative defense to identify evidence supporting each element of her claim. See Anderson, 477 U.S. at 248 (requiring nonmoving party in face of “properly supported motion for summary judgment” to “‘set forth specific facts showing that there is a genuine issue for trial'” (quoting First Nat’l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 288 (1968))); Simms, 165 F.3d at 1326, 1328 (discussing summary judgment standard in context of employment discrimination claim and burden-shifting framework from McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973)). In fact, the standard announced by the magistrate judge would unnecessarily require a plaintiff, in response to a motion for summary judgment based on an affirmative defense, to identify evidence supporting elements of her claim never drawn into question by the defendant. Placing such a burden on a plaintiff is all the more problematic where, as here, the parties contemplated a bifurcated summary judgment process initially focused on the validity of the liability release, and WEI filed its motion for summary judgment before the close of discovery.
We have previously stated that a district court errs by requiring a party opposing summary judgment based on an affirmative defense to “establish at least an inference of the existence of each element essential to the case.” Johnson v. Riddle, 443 F.3d 723, 724 n.1 (10th Cir. 2006) (quotation marks omitted). We reaffirm that conclusion today. To defeat a motion for summary judgment, a plaintiff, upon the defendant raising and supporting an affirmative defense, need only identify a disputed material fact relative to the affirmative defense. Id.; Hutchinson, 105 F.3d at 564; see also Leone v. Owsley, 810 F.3d 1149, 1153-54 (10th Cir. 2015) (discussing defendant’s burden for obtaining summary judgment based on an affirmative defense). Only if the defendant also challenges an element of the plaintiff’s claim does the plaintiff bear the burden of coming forward with some evidence in support of that element. See Tesone, 942 F.3d at 994 (“The party moving for summary judgment bears the initial burden of showing an absence of any issues of material fact. Where . . . the burden of persuasion at trial would be on the nonmoving party, the movant may carry its initial burden by providing ‘affirmative evidence that negates an essential element of the nonmoving party’s claim’ or by ‘demonstrating to the Court that the nonmoving party’s evidence is insufficient to establish an essential element of the nonmoving party’s claim.’ If the movant makes this showing, the burden then shifts to the nonmovant to ‘set forth specific facts showing that there is a genuine issue for trial.'” (first quoting Celotex Corp., 477 U.S. at 330, then quoting Anderson, 477 U.S. at 250)); Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670-71 (10th Cir. 1998) (if summary judgment movant carries its initial burden of showing a lack of evidence in support of an essential element of plaintiff’s claim, “the burden shifts to the nonmovant to go beyond the pleadings and set forth specific facts” supporting the essential element (internal quotation marks omitted)).
The magistrate judge’s erroneous statement regarding Ms. Hamric’s burden, however, does not foreclose our ability to further review the grant of summary judgment. Rather, in accord with the applicable de novo standard of review, we review WEI’s motion for summary judgment under the standard that “should have been applied by the [magistrate judge].”[ 6] Nance v. Sun Life Assurance Co. of Can., 294 F.3d 1263, 1266 (10th Cir. 2002) (quotation marks omitted).
b. Resolution of disputed issues of material fact
Ms. Hamric contends the magistrate judge impermissibly resolved two issues of disputed fact in WEI’s favor. We discuss each asserted factual issue in turn, concluding factual disputes existed and the magistrate judge incorrectly resolved one of the disputes against Ms. Hamric. However, even if this factual dispute were material, we may proceed to analyze the validity of the liability release after resolving the dispute in Ms. Hamric’s favor. See Lincoln, 900 F.3d at 1180 (“In reviewing a grant of summary judgment, we need not defer to factual findings rendered by the district court.” (internal quotation marks omitted)).
i. Language of Registration Form and Medical Form
In moving for summary judgment, WEI’s brief contained edited versions of the Registration Form and Medical Form that focused the reader’s attention on the language most pertinent to Mr. Hamric’s participation in the outdoor excursion and the release of liability. For instance, the version of the forms in WEI’s brief left out phrases such as “(or my child)” and the accompanying properly-tensed-and-conjugated verb that would apply if the forms were completed by a parent or guardian of the participant, rather than by the participant himself. Compare App. Vol. I at 46, with id. at 57, 83.
Although WEI and Ms. Hamric attached full versions of the forms to their papers on the motion for summary judgment, the magistrate judge’s quotation of the language in the forms mirrored that which appeared in WEI’s brief. Ms. Hamric contends the magistrate judge, in not quoting the full forms, resolved a dispute of fact regarding the language of the forms in WEI’s favor. It is not uncommon for a court to focus on the pertinent language of a contract or liability release when putting forth its analysis. In this case, Ms. Hamric claims the forms should be reviewed on the whole. Although there is no indication the magistrate judge did not review the forms in their entirety, despite her use of incomplete quotations, we attach full versions of the Registration Form and Medical Form completed by Mr. Hamric as an appendix to this opinion. And we consider all the language on the forms when assessing whether the forms contain a valid liability release.
ii. Registration Form and Medical Form as single form
The magistrate judge viewed the Registration Form and the Medical Form as a single, “two-page agreement.” App. Vol. II at 103; see also id. at 101 (“Adult customers are required to execute a two-page agreement with WEI before they are permitted to participate in WEI-sponsored activities. The first page of the agreement is a ‘Registration Form’, followed by a ‘Medical Form’ on page two.”). Ms. Hamric contends the two forms are separate agreements, not a single agreement. While a jury could have concluded that the Registration Form and Medical Form were separate agreements, this dispute of fact is not material given applicable law regarding the construction of agreements that are related and simultaneously executed.
It is clear from the record that a participant needed to complete both forms before partaking in the WEI-lead excursion. Further, while the Medical Form required a signature and a date, the Registration Form required only that a participant place his initials on certain lines, suggesting the forms were part of a single agreement. However, the forms do not contain page numbers to indicate they are part of a single agreement. Further, language on the Medical Form is conflicting and ambiguous as to whether the two forms comprise a single agreement: Individuals who have not completed these forms will not be allowed to participate. I have carefully read all the sections of this agreement, understand its contents, and have initialed all sections of page 1 of this document. I have examined all the information given by myself, or my child. By the signature below, I certify that it is true and correct. Should this form and/or any wording be altered, it will not be accepted and the participant will not be allowed to participate.
App., Vol. I at 58, 84 (emphases added). Both the italicized language and the use of “forms” in the plural to describe the agreement support the conclusion that the Registration Form and the Medical Form are a single agreement. But the underlined language, using “form” in the singular, suggests the forms might constitute separate agreements. Otherwise the singular use of “form” would suggest the unlikely result that a participant could not alter the wording of the Medical Form but could alter the wording of the Registration Form.[ 7] Accord Navajo Nation v. Dalley, 896 F.3d 1196, 1213 (10th Cir. 2018) (describing the cannon of expressio unius est exclusio alterius as providing “that the ‘expression of one item of an associated group or series excludes another left unmentioned'” and that “the enumeration of certain things in a statute suggests that the legislature had no intent of including things not listed or embraced.” (quoting NLRB v. SW Gen., Inc., 137 S.Ct. 929, 940 (2017))). Thus, a reasonable jury could have found the Registration Form and the Medical Form were separate agreements.
We conclude, however, that this dispute of fact is not material to resolution of the primarily legal question regarding whether Mr. Hamric entered into a valid liability release with WEI. Under Colorado law, it is well established that a court may, and often must, construe two related agreements pertaining to the same subject matter as a single agreement. See Bledsoe v. Hill, 747 P.2d 10, 12 (Colo.App. 1987) (“If a simultaneously executed agreement between the same parties, relating to the same subject matter, is contained in more than one instrument, the documents must be construed together to determine intent as though the entire agreement were contained in a single document. Although it is desirable for the documents to refer to each other, there is no requirement that they do so.” (citing In re Application for Water Rights v. N. Colo. Water Conservancy Dist., 677 P.2d 320 (Colo. 1984); Harty v. Hoerner, 463 P.2d 313 (Colo. 1969); Westminster v. Skyline Vista Dev. Co., 431 P.2d 26 (Colo. 1967))).[ 8] Thus, although a jury could conclude the Registration Form and Medical Form technically constitute separate agreements, we consider the agreements together when determining if Mr. Hamric released WEI for its negligent acts.
3. Choice-of-Law Analysis
At the heart of WEI’s motion for summary judgment was whether Colorado or Texas law controls and whether the release is valid under the appropriate law. On appeal, Ms. Hamric contends “contract principles” control the choice-of-law analysis because WEI’s affirmative defense “was a contract issue on a purported agreement to release liability.” Opening Br. at 26-27. Ms. Hamric further contends that under contract principles in the Restatement (Second) of Conflicts of Laws, Texas law applies because Mr. Hamric was a Texas resident who completed the Registration Form and the Medical Form while in Texas. WEI agrees that if contract principles govern the choice-of-law issue, the Restatement (Second) on Conflict of Laws provides the appropriate factors for this court to consider. But WEI contends (1) the liability release is valid under both Colorado and Texas law and (2) the relevant factors in §§ 6 and 188 of the Restatement favor application of Colorado law if this court is inclined to resolve the conflict-of-law issue.
Outdoor recreation and tourism is a growing industry in Colorado, as well as several other states within our circuit. And many outdoor tourism outfitters, like WEI, require participants to complete forms containing liability releases. See Redden v. Clear Creek Skiing Corp., ___ P.3d ___, 2020 WL 7776149, at *2 (Colo.App. Dec. 31, 2020); Hamill v. Cheley Colo. Camps, Inc., 262 P.3d 945, 947-48 (Colo.App. 2011); see also Dimick v. Hopkinson, 422 P.3d 512, 515-16 (Wyo. 2018); Penunuri v. Sundance Partners, Ltd., 301 P.3d 984, 986 (Utah 2013); Beckwith v. Weber, 277 P.3d 713, 716-17 (Wyo. 2012). With the prevalence and recurrence of questions regarding the validity of liability releases in mind, and viewing the choice-of-law issue as sounding in contract law as urged by the parties, we consider whether the law of the state where the outdoor recreation company is based and the outdoor excursion occurs controls or whether the law of the state of residence of the participant controls.
a. Framework for choice-of-law analysis
“In a diversity action we apply the conflict-of-laws rules of the forum state.” Kipling v. State Farm Mut. Auto. Ins. Co., 774 F.3d 1306, 1310 (10th Cir. 2014). “This is true even when choice of law determinations involve the interpretation of contract provisions.” Shearson Lehman Brothers, Inc. v. M & L Invs., 10 F.3d 1510, 1514 (10th Cir. 1993). Accordingly, this court must look to Colorado choice-of-law rules to determine if Colorado or Texas law applies.
“Colorado follows the Restatement (Second) of Conflict of Laws (1971) . . . for both contract and tort actions,” Kipling, 774 F.3d at 1310 (citing Wood Brothers Homes, Inc. v. Walker Adjustment Bureau, 601 P.2d 1369, 1372 (Colo. 1979); First Nat’l Bank v. Rostek, 514 P.2d 314, 319-20 (Colo. 1973)). Absent a forum-state “statutory directive,” the Restatement advises a court to consider seven factors: (a) the needs of the interstate and international systems, (b) the relevant policies of the forum, (c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue (d) the protection of justified expectations, (e) the basic policies underlying the particular field of law, (f) certainty, predictability and uniformity of result, and (g) ease in the determination and application of the law to be applied.
Restatement (Second) of Conflict of Laws: Choice-of-Law Principles § 6 (Am. L. Inst. 1971). The commentary to § 6 identifies the first factor as “[p]robably the most important function of choice-of-law rules” because choice-of-law rules are designed “to further harmonious relations between states and to facilitate commercial intercourse between them.” Id. § 6 cmt. d. Meanwhile, the second factor takes into account any special interests, beyond serving as the forum for the action, that the forum state has in the litigation. Id. § 6 cmt. e. As to the fourth factor-“the protection of justified expectations, “- the comments to § 6 note: This is an important value in all fields of the law, including choice of law. Generally speaking, it would be unfair and improper to hold a person liable under the local law of one state when he had justifiably molded his conduct to conform to the requirements of another state.
Id. § 6 cmt. g.
A more specific section of the Restatement addressing contracts lacking a choice-of-law provision provides additional guidance: (1) The rights and duties of the parties with respect to an issue in contract are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the transaction and the parties under the principles stated in § 6. (2) In the absence of an effective choice of law by the parties . . ., the contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include: (a) the place of contracting, (b) the place of negotiation of the contract, (c) the place of performance, (d) the location of the subject matter of the contract, and (e) the domicile, residence, nationality, place of incorporation and place of business of the parties. These contacts are to be evaluated according to their relative importance with respect to the particular issue.
Restatement (Second) of Conflict of Laws: Law Governing in Absence of Effective Choice by the Parties § 188.
b. Colorado law controls
We conclude that, under the Restatement, a Colorado court would apply Colorado law to determine the validity and enforceability of the liability release relied upon by WEI. First looking at § 6 of the Restatement, the liability release was drafted by a Colorado corporation to cover services provided exclusively in Colorado. Applying out-of-state law to interpret the liability release would hinder commerce, as it would require WEI and other outdoor-recreation companies to know the law of the state in which a given participant lives. Such a rule would place a significant burden on outdoor-recreation companies who depend on out-of-state tourists for revenue because it would require a company like WEI to match the various requirements of the other forty-nine states. This approach would not give WEI the benefit of having logically molded its liability release to comply with Colorado law, the law of the state where WEI does business. Furthermore, Ms. Hamric’s primary argument for applying Texas law is that Mr. Hamric signed the forms in Texas. But a rule applying out-of-state law on that basis is likely to deter WEI from furnishing the liability release until a participant enters Colorado. And, while not providing participants the forms until arrival in Colorado might lessen WEI’s liability exposure under out-of-state law, such a practice would not benefit participants because it would pressure participants into a last-minute decision regarding whether to sign the liability release after having already traveled to Colorado for the outdoor excursion.
Colorado also has a strong interest in this matter. Colorado has a booming outdoor-recreation industry, in the form of skiing, hiking, climbing, camping, horseback riding, and rafting excursions. Colorado relies on tax receipts from the outdoor-recreation industry. And while many out-of-state individuals partake in these activities within Colorado, they often purchase their tickets or book excursion reservations before entering Colorado. If we applied Texas law because it is the state where Mr. Hamric signed the liability release, we would essentially allow the other forty-nine states to regulate a key industry within Colorado. Such an approach is impractical and illogical.
Further, the considerations and contacts listed in § 188 of the Restatement favor application of Colorado law. As to the first contact, in accord with the commentary, a contract is formed in “the place where occurred the last act necessary to give the contract binding effect.” Id. § 188 cmt. e. Here, that act occurred when the church group provided the forms to WEI in Colorado; for, before the forms were provided to WEI, Mr. Hamric had not conveyed his acceptance to WEI and WEI did not know whether Mr. Hamric would complete the forms and agree to the liability release. See Scoular Co. v. Denney, 151 P.3d 615, 619 (Colo.App. 2006) (discussing means of accepting an offer and stating “general rule that communication is required of the acceptance of the offer for a bilateral contract”). The second contact consideration is not applicable because the terms of the Medical Form precluded alteration, and there is no suggestion in the record Mr. Hamric attempted to negotiate the terms of the liability release before signing the forms. The third and fourth factors heavily favor application of Colorado law because WEI provides outdoor excursion services in Colorado, not Texas, and Mr. Hamric knew such when he signed the forms. Finally, the fifth factor is neutral because Mr. Hamric was a resident of Texas and WEI has its place of business in Colorado. With three factors favoring Colorado law, one factor inapplicable, and one factor neutral, the overall weight of the § 188 factors favors application of Colorado law.
Concluding that both § 6 and § 188 of the Restatement strongly support application of Colorado law, we hold that a Colorado court would choose to apply Colorado law, not Texas law, when determining whether the Registration Form and Medical Form contain a valid liability release. We, therefore, proceed to that analysis.
4. The Liability Release Is Valid under Colorado Law
Under Colorado law, “[a]greements attempting to exculpate a party from that party’s own negligence have long been disfavored.” Heil Valley Ranch, 784 P.2d at 783.But, such “[e]xculpatory agreements are not necessarily void,” as courts recognize that “[t]hey stand at the crossroads of two competing principles: freedom of contract and responsibility for damages caused by one’s own negligent acts.” Id. at 784.In assessing the validity of a release, “a court must consider: (1) the existence of a duty to the public; (2) the nature of the service performed; (3) whether the contract was fairly entered into; and (4) whether the intention of the parties is expressed in clear and unambiguous language.” Jones v. Dressel, 623 P.2d 370, 376 (Colo. 1981); see also Chadwick v. Colt Ross Outfitters, Inc., 100 P.3d 465, 467 (Colo. 2004) (a release agreement “must be closely scrutinized to ensure that the intent of the parties is expressed in clear and unambiguous language and that the circumstances and the nature of the service involved indicate that the contract was fairly entered into”).
Ms. Hamric challenges only WEI’s ability to show “whether the intention of the parties is expressed in clear and unambiguous language.”[ 9] “To determine whether the intent of the parties is clearly and unambiguously expressed, [the Colorado Supreme Court has] examined the actual language of the agreement for legal jargon, length and complication, and any likelihood of confusion or failure of a party to recognize the full extent of the release provisions.” Chadwick, 100 P.3d at 467. In general accord with this statement, federal district courts in Colorado have discerned five factors from Colorado Supreme Court decisions to determine if a release is unambiguous: (1) “whether the agreement is written in simple and clear terms that are free from legal jargon”; (2) “whether the agreement is inordinately long or complicated”; (3) “whether the release specifically addresses the risk that caused the plaintiff’s injury”; (4) “whether the contract contains any emphasis to highlight the importance of the information it contains”; and (5) “whether the plaintiff was experienced in the activity making risk of that particular injury reasonably foreseeable.” Salazar v. On the Trail Rentals, Inc., Civil Action No. 11-cv-00320-CMA-KMT, 2012 WL 934240, at *4 (D. Colo. Mar. 20, 2012) (deriving factors from Heil Valley Ranch, 784 P.2d at 785; Chadwick, 100 P.3d at 467); see also Eburn v. Capitol Peak Outfitters, Inc., 882 F.Supp.2d 1248, 1253 (D. Colo. 2012) (citing factors set forth in Salazar). Each and every factor, however, need not be satisfied for a court to uphold the validity of a liability release, as the Colorado Supreme Court has upheld the validity of a release where the signor was a novice at the outdoor activity in question. See B & B Livery, Inc., 960 P.2d at 138 (upholding liability release without finding every factor favored validity); id. at 139-40 (Hobbs, J., dissenting) (discussing signor’s inexperience riding horses).
The first four factors taken from Heil Valley Ranch and Chadwick support the validity of the liability release in the Registration Form and Medical Form. The forms span a mere two pages, with language pertinent to the liability release in only four sections of the forms. And those four sections are generally free of legal jargon. For instance, in detailing the scope of the release, the Registration Form required the participant/signor to “hold harmless Wilderness Expeditions, Inc. . . . for any injury or death caused by or resulting from my or my child’s participation in the activities.”[ 10] App. Vol. I at 57, 83. And this language comes after the form describes several of the risks associated with the activities, including “that accidents or illness can occur in remote places without medical facilities” and that “any route or activity chosen [by WEI] may not be of minimum risk, but may have been chosen for its interest and challenge.” Id. The Registration Form also twice places bolded emphasis on the fact that a participant was releasing WEI from liability: “By signing my initials below, I certify this is a release of liability.”Id. Finally, although not explicitly a factor identified by Colorado courts, we observe WEI provided the church group with the forms, and Mr. Hamric completed the forms, months before the booked excursion. Thus, if Mr. Hamric personally had difficulty understanding any of the language on the forms, he had ample time to contact WEI for an explanation or consult legal counsel.
The sole factor clearly cutting against enforcement of the liability release is Mr. Hamric’s lack of rappelling experience. However, as noted above, the Colorado Supreme Court has not found this consideration to be dispositive against the enforcement of a liability waiver. See B & B Livery, Inc., 960 P.2d at 138-39. And, where the liability release between Mr. Hamric and WEI is otherwise clear, specific, and uncomplicated, Mr. Hamric’s lack of experience rappelling is insufficient to defeat the release as a whole.
Accordingly, applying Colorado law, we hold the liability release is valid and its enforcement bars Ms. Hamric’s negligence claim. Therefore, we affirm the magistrate judge’s grant of summary judgment in favor of WEI.
III. CONCLUSION
We affirm the denial of Ms. Hamric’s motion for leave to amend her complaint because the magistrate judge did not abuse her discretion where Ms. Hamric did not attempt to satisfy the Federal Rule of Civil Procedure 16(b) standard for amending the Scheduling Order. We also affirm the denial of Ms. Hamric’s discovery motions, holding the magistrate judge did not abuse her discretion where the items Ms. Hamric sought to discover were either already in the record, were not necessary to determine the validity of the liability release, or went to Ms. Hamric’s effort to obtain exemplary damages, which she could not pursue given the denial of her motion for leave to amend her complaint. Finally, applying de novo review to the choice-of-law issue and the issue regarding the validity of the liability release, we conclude Colorado law applies and the release is valid and enforceable under that law. Therefore, we affirm the magistrate judge’s grant of summary judgment to WEI.
———
Notes:
[ 1]Here, we summarize the Registration Form and the Medical Form. Copies of the full forms, taken from the Appendix submitted by Ms. Hamric, are attached to this opinion. We rely on the full forms, and all of the language thereon, when conducting our analysis. Further, as discussed infra at 25-27, Section II(C)(2)(b)(ii), while the Registration Form and Medical Form could be viewed as separate forms, Colorado law requires us to consider both forms together when conducting our analysis.
[ 2]Throughout our opinion, we cite simultaneously to the Registration Form or Medical Form attached to WEI’s motion for summary judgment, App. Vol. I at 57- 58, and the Registration Form or Medical Form attached to Ms. Hamric’s response to WEI’s motion for summary judgment, id. at 83-84. Although the language of the two sets of forms are identical, the clarity of the text varies somewhat, seemingly based on the proficiency of the respective copy machines used by the parties.
[ 3]In quoting the forms, we seek to replicate the font size, spacing, and bolding of the text of the Registration Form and Medical Form completed by Mr. Hamric.
[ 4] Under Colorado law: A claim for exemplary damages in an action governed by [§ 13-21-102 of the Colorado Revised Statutes] may not be included in any initial claim for relief. A claim for exemplary damages in an action governed by this section may be allowed by amendment to the pleadings only after the exchange of initial disclosures . . . and the plaintiff establishes prima facie proof of a triable issue.
Colo. Rev. Stat. § 13-21-102(1.5)(a).
[ 5]Although Ms. Hamric’s action sounds in tort law, on appeal, the parties do not contend that tort principles provide the framework for the choice-of-law analysis regarding the liability release. Thus, we reach no conclusion as to whether Colorado law or Texas law would govern if tort principles played a role in the choice-of-law analysis.
[ 6]While the magistrate judge incorrectly stated the standard governing WEI’s motion for summary judgment, it is not apparent the magistrate judge’s analysis and conclusion that WEI was entitled to summary judgment hinged on Ms. Hamric’s failure to identify evidence supporting each element of her negligence claim. Rather, the magistrate judge correctly granted WEI summary judgment based on the liability release and WEI’s affirmative defense.
[ 7]WEI has advanced inconsistent positions on whether the Registration Form and Medical Form comprised a single agreement. Although on appeal WEI argues the forms constitute a single agreement releasing liability, WEI’s Answer to Ms. Hamric’s Complaint treats the two forms as separate agreements, stating that “[d]ecedent Gerald Hamric executed a valid and enforceable liability release. Decedent Gerald Hamric also executed a medical evaluation.” App. Vol. I at 32 (emphasis added).
[ 8]Although we conclude that Colorado law, not Texas law, controls the validity of the liability release, infra at 28-33, Section II(C)(3), Texas law likewise permits a court to read separate but related documents together when determining the intent of the parties, see Fort Worth Indep. Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831, 840 (Tex. 2000) (“The City’s argument ignores well-established law that instruments pertaining to the same transaction may be read together to ascertain the parties’ intent, even if the parties executed the instruments at different times and the instruments do not expressly refer to each other, and that a court may determine, as a matter of law, that multiple documents comprise a written contract. In appropriate instances, courts may construe all the documents as if they were part of a single, unified instrument.” (footnotes omitted)).
[ 9]Ms. Hamric also argues that the question of whether Mr. Hamric and WEI entered into a liability release was a question of fact for a jury. But Ms. Hamric withdrew her fact-based challenge to the authenticity of the forms. Further, under Colorado law, “[t]he determination of the sufficiency and validity of an exculpatory agreement is a question of law for the court to determine.” Jones v. Dressel, 623 P.2d 370, 376 (Colo. 1981). And, where a liability release has force only if it is “clear and unambiguous,” id., the question of the existence of a liability release and its validity are one in the same because if the language relied on by a defendant does not form a valid release, then no liability release exists.
[ 10] The omitted language marked by the ellipses also required a signor/participant to hold federal and state agencies harmless for injuries or death that might occur as a result of WEI-led activities on federal or state land. Like the rest of the release, this language is plain and clear such that any reasonably educated individual would understand the nature of the release as to these third parties.
Paperwork, the death of trees and in this case the only defense the defendant had at this stage of the trial because the paperwork was not taken care of properly.
Posted: March 11, 2019 Filed under: Jurisdiction and Venue (Forum Selection), Minors, Youth, Children, Pennsylvania, Summer Camp | Tags: 1.I.L., applies, conspicuous, enforceability, factors, Forum selection clause, improper venue, Inc., Independent Lake Camp, invalid, legible, Motion to Dismiss, Notice, parties, print, terms, Venue Leave a commentThe youth camp failed to keep a good copy of the registration paperwork. What was presented to the court as a forum selection clause was illegible so the court held it was not valid.
State: Pennsylvania, United States District Court, Eastern District of Pennsylvania
Plaintiff: Ben Epps, et al.
Defendant: 1.I.L., INC., d/b/a Independent Lake Camp
Plaintiff Claims: Negligence
Defendant Defenses: Motion to Dismiss because of improper venue
Holding: For the Plaintiff
Year: 2007
Summary
Lawsuits are not games; they are not invitations to parties, there is a lot of money riding on the outcome in most cases. Documents needed for the case must be given to the attorneys defending the case in the condition in which they are maintained. In this case, a document was faxed to the defense attorneys and in such a bad way the court could not read the document. Since the court could not read the document, the court assumed the original was the same, and therefore, the document was not valid.
At the same time, if you are collecting and keeping documents that may end up in court, you need to create a system that preserves these documents in perfect condition so if they do get to court the judge can read them.
Finally, you must get the documents from the people you need a signature from in a condition the court will accept.
Facts
Plaintiffs allege that on June 24, 2005, their son, Axel, fell from a bike and was seriously injured while attending Defendant’s Independent Lake Camp located in Orson, Wayne County, Pennsylvania. Plaintiffs allege that Axel’s accident was caused by Defendant’s negligence while Defendant was acting in loco parentis. Specifically, Plaintiffs allege that Defendant: 1) failed to provide proper supervision and safeguards; 2) gave Axel a bike, helmet, and other equipment without properly training him to use them; 3) allowed Axel to use a bike track, which was inappropriate for his age and experience; and 4) failed to obtain parental consent for its actions.
Plaintiffs further allege that Axel suffered serious and permanent physical injuries, including permanent cognitive and psychological damage, several fractures, lacerations resulting in scarring, cervical and lumbar sprain, and a shock to his nervous system. Plaintiffs also claim that Axel’s injuries include severe financial losses in the form of future costs of treatment and therapy, loss of earnings, and loss of earning capacity.
Defendant brought its motion to dismiss for improper venue alleging that the Registration Agreement, which Plaintiffs had to sign for Axel to attend camp, contained a forum selection clause. Defendant attached a blank, unsigned version of the Independent Lake Camp Registration 2005 (“Registration Agreement”) to its motion to dismiss. Defendant alleges that under the Registration Agreement, the proper forum would be a court in Wayne County, which is located in the Middle District of Pennsylvania.
In Plaintiffs’ response to Defendant’s motion to dismiss, Plaintiffs argued that the blank Registration Agreement was unsigned and thus that Defendant failed to show that Plaintiffs had agreed to the terms in the document, including the forum selection clause. Plaintiffs averred by affidavit that they did not agree and would not have agreed to such a forum selection clause.
Defendant then provided a signed copy of the Registration Agreement, in which the information requested had been filled in and which was signed by Plaintiff Ben Epps. Defendant submitted an affidavit by Daniel Gould, the president of Defendant and Director of Independent Lake Camp. Mr. Gould avers that, after an exhaustive and diligent search, Defendant could only locate a photocopy of the signed Registration Agreement and was unable to locate the original. He avers that the original agreement is presumed lost and/or destroyed through no bad faith or improper act on the part of Defendant. The photocopy of the agreement provided to the court also appears to be a faxed copy, as evident from a fax header across the top margin.
In the copy of the signed Registration Agreement submitted by Defendant, the small print containing the terms of the agreement is blurry and barely legible. As Defendant concedes, the right-side margin, toward the bottom, is cut off, truncating the forum selection clause.
Analysis: making sense of the law based on these facts.
The defendants filed a motion to dismiss because the plaintiffs had filed the case in the wrong court according to the agreement, the registration form signed by the parents of the injured youth. The forum selection clause as defined by the courts or agreement to hold the trial at a specific court, allegedly stated the trial was to be held in Wayne County Court, Pennsylvania. The plaintiffs filed the case in the federal district our in Pennsylvania. The defendants filed a motion to dismiss from federal court and force the case to the state court.
The jurisdiction in the case was going to be Pennsylvania law no matter what; however, the trial would not be held in the back yard of the defendant, which is normally a good thing for the defendant.
When in the federal district court system, if a forum selection clause is upheld the case is simply transferred to the proper court. However, in this case because the selection clause stated a state court the case could not be transferred. The case would be dismissed at the federal court. The case could be refiled in the state court at that time if the statute of limitations had not run.
However, here, the document that was presented to the court that was the alleged agreement by the parents to only sue in state court was not legible.
The court agrees that the small print of the forum selection clause in the photocopied and faxed signed Registration Agreement is blurry and illegible, and does not provide reasonable notice of its terms. The court cannot assume that Mr. Epps signed a clear version of the agreement that became blurry and illegible upon subsequently being photocopied and faxed, because such evidence is not before the court. There is no evidence that Plaintiff Ben Epps signed any version of the Registration Agreement other than the document provided to the court.
Further, even if the forum selection clause were legible, it’s essential term, that any cause of action be brought in Wayne County, Pennsylvania, is cut off so as to be incomprehensible. Even if legible, the term “V– County Pennsylvania” in the forum selection clause gives no reasonable notice of the location of any agreed-upon forum.
The court concludes that the forum selection clause is inconspicuous and does not give notice of its terms to a reasonable person in violation of strong Pennsylvania public policy. The forum selection clause therefore is unreasonable, invalid, and unenforceable. Because the court finds that the forum selection clause is unreasonable and invalid, it does not address the private and public factors as transfer considerations under § 1404(a).
The agreement was a copy that had been faxed, was illegible and could not be read by the court.
Since the court could not read the document, the legal wording was incomplete and the entire document had sections missing the court could not find there was an agreement. The motion to change venue was dismissed.
So Now What?
I would guess the camp had received the faxed copy from the parents. There would be no need to fax the documents around the camp. The camp probably had sent the documents to the parents for their signature, and they had faxed them back. This was mistake one, because the camp accepted a badly faxed copy of the document.
- When you receive an email, fax, or original where you cannot make out what is going on, signature seems off, the document is unreadable, you must get a good copy. Tell the signor to do it again and make the copy legible.
- Set up a system to check documents when they come in.
- Set the system up with enough time so that is time to correct problems. Don’t place yourself in a position where you are balancing the money coming in versus proper paperwork you need.
Second, the camp seemed to not locate the original fax, but only had a copy of the faxed document.
- Develop a system to store and maintain the documents. Now day’s scanners are so efficient all the documents can be scanned and maintained in seconds. The original paper documents can be preserved and kept for the statue of limitations for the state, and a good electronic copy is also available.
Don’t allow a kid or adult to come to camp, attend the program, participate in the activity unless you have all the paperwork you need, signed and in a good legible condition. Then and only then cash the check and open the gates.
What do you think? Leave a comment.
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forum selection clause, venue, parties, improper venue, enforceability, terms, legible, notice, motion to dismiss, conspicuous, applies, factors, invalid, print, 1.I.L., INC., Independent Lake Camp, forum selection clause,
Epps, et al., v. 1.I.L., INC., d/b/a Independent Lake Camp, 2007 U.S. Dist. LEXIS 93335, 2007 WL 4463588
Posted: March 10, 2019 Filed under: Jurisdiction and Venue (Forum Selection), Legal Case, Minors, Youth, Children, Pennsylvania, Summer Camp | Tags: 1.I.L., applies, conspicuous, enforceability, factors, Forum selection clause, improper venue, Inc., Independent Lake Camp, invalid, legible, Motion to Dismiss, Notice, parties, print, terms, Venue Leave a commentEpps, et al., v. 1.I.L., INC., d/b/a Independent Lake Camp, 2007 U.S. Dist. LEXIS 93335, 2007 WL 4463588
Ben Epps, et al., Plaintiffs, v. 1.I.L., INC., d/b/a Independent Lake Camp, Defendant.
Civil Action No. 07-02314
United States District Court, Eastern District of Pennsylvania
December 19, 2007
ORDER
MEMORANDUM
James T. Giles J.
I. Introduction
Before the court is Defendant 1.I.L., Inc.’s Motion to Dismiss for Improper Venue pursuant to Federal Rule of Civil Procedure 12(b)(3). Plaintiffs, Bens Epps and Amy Monroe, as parents and natural guardians of Axel Epps and in their own right, bring suit based in diversity jurisdiction, 28 U.S.C. § 1332, against Defendant 1.I.L. Inc. for personal injuries allegedly sustained by their son, Axel, while attending Defendant’s camp.
The primary issue raised by Defendant’s motion and determined by the court is whether the forum selection clause in the Registration Agreement at issue is valid and enforceable. The court finds that the forum selection clause contained in the signed Registration Agreement is not enforceable because it does not provide reasonable notice of its terms. The court concludes that Plaintiffs have brought suit in a proper venue and denies Defendant’s motion to dismiss for the reasons that follow.
II. Factual Background
Plaintiffs allege that on June 24, 2005, their son, Axel, fell from a bike and was seriously injured while attending Defendant’s Independant Lake Camp located in Orson, Wayne County, Pennsylvania. (Pls.’ Compl. ¶ 6.) Plaintiffs allege that Axel’s accident was caused by Defendant’s negligence while Defendant was acting in loco parentis. (Pls.’ Compl. ¶ 7.) Specifically, Plaintiffs allege that Defendant: 1) failed to provide proper supervision and safeguards; 2) gave Axel a bike, helmet, and other equipment without properly training him to use them; 3) allowed Axel to use a bike track, which was inappropriate for his age and experience; and 4) failed to obtain parental consent for its actions. (Pls.’ Compl. ¶ 8.)
Plaintiffs further allege that Axel suffered serious and permanent physical injuries, including permanent cognitive and psychological damage, several fractures, lacerations resulting in scarring, cervical and lumbar sprain, and a shock to his nervous system. (Pls.’ Compl. ¶ 9.) Plaintiffs also claim that Axel’s injuries include severe financial losses in the form of future costs of treatment and therapy, loss of earnings, and loss of earning capacity.
Plaintiffs, citizens of New York, brought suit in the Eastern District of Pennsylvania because Defendant is a citizen of Pennsylvania with offices in both Montgomery County and Wayne County. (Pls.’ Compl. ¶ 1-4; Pls.’ Br. in Supp. of Ans. to Mot. of Def. to Dismiss for Improper Venue (“Pls.’ Supp. Ans.”) 1; Def.’s Br. in Supp. of Mot. to Dismiss for Improper Venue (“Def.’s Supp.”) 1, 5.) Plaintiffs demand damages in excess of $150,000 for each of the two counts in the complaint as well as interest and costs of the suit.
III. Procedural History
Plaintiffs filed their Complaint on June 7, 2007. Defendant brought its motion to dismiss for improper venue alleging that the Registration Agreement, which Plaintiffs had to sign for Axel to attend camp, contained a forum selection clause. (Def.’s Mot. to Dismiss 2.) Defendant attached a blank, unsigned version of the Independent Lake Camp Registration 2005 (“Registration Agreement”) to its motion to dismiss. (Def.’s Mot. to Dismiss, Ex. A.) Defendant alleges that under the Registration Agreement, the proper forum would be a court in Wayne County, which is located in the Middle District of Pennsylvania. (Def.’s Mot. to Dismiss, Ex. A.) The blank Registration Agreement, in which the print is small but clear and legible, provides in part:
It is agreed that any dispute or cause of action arising between the parties, whether out of this agreement or other wise [sic], can only be brought in a court of competent jurisdiction located in Wayne County Pennsylvania [sic] and shall be construed in accordance with the laws of Pennsylvania.
(Def.’s Mot. to Dismiss, Ex. A.)
In Plaintiffs’ response to Defendant’s motion to dismiss, Plaintiffs argued that the blank Registration Agreement was unsigned and thus that Defendant failed to show that Plaintiffs had agreed to the terms in the document, including the forum selection clause. Plaintiffs averred by affidavit that they did not agree and would not have agreed to such a forum selection clause. (Pls.’ Supp. Ans. 2, Ex. B ¶¶ 2-3 (Ben Epps Aff.), Ex. C ¶¶ 2-3 (Amy Monroe Aff.).)
Defendant then provided a signed copy of the Registration Agreement, in which the information requested had been filled in and which was signed by Plaintiff Ben Epps. Defendant submitted an affidavit by Daniel Gould, the president of Defendant and Director of Independent Lake Camp. Mr. Gould avers that, after an exhaustive and diligent search, Defendant could only locate a photocopy of the signed Registration Agreement and was unable to locate the original. (Gould Aff. ¶¶ 5, 7-10.) He avers that the original agreement is presumed lost and/or destroyed through no bad faith or improper act on the part of Defendant. (Gould Aff. ¶ 10.) The photocopy of the agreement provided to the court also appears to be a faxed copy, as evident from a fax header across the top margin. (Gould Aff. Ex. A (Signed Registration Agreement).)
In the copy of the signed Registration Agreement submitted by Defendant, the small print containing the terms of the agreement is blurry and barely legible. As Defendant concedes, the right-side margin, toward the bottom, is cut off, truncating the forum selection clause. (Gould Aff. ¶ 6, Ex. A.) Consequently, if the print were clearly legible, when compared with the clear, blank version of the agreement, the forum selection clause would read:
It is agree [sic] any dispute or cause of action arising between the parties, whether out of this agreement or other wise [sic], can only be brought in a court of competent jurisdiction located in V [or three-quarters of a W] County Pennsylvania [sic] and shall be construed in accordance with the laws of Pennsylvania.
(Gould Aff. Ex. A.) Thus, if legible, most or all of the letters in the word “Wayne,” as in “Wayne County Pennsylvania,” are missing. (Gould Aff. ¶ 6, Ex. A.)
In Plaintiffs’ reply to Defendant’s affidavit, Plaintiffs do not dispute that Plaintiff Ben Epps’ signature appears on the copy of the Registration Agreement. Nor do Plaintiffs argue that the entire agreement itself is invalid. (Compare Pls.’ Supp. Ans. 2-3 (arguing, before Defendant’s production of a signed agreement, that the Registration Agreement was not enforceable because there was no objective manifestation of the parties’ intention to be contractually bound), with Pls.’ Reply to Def.’s Aff. 1 (arguing, after Defendant’s production of a signed Registration Agreement, that there was no meeting of the minds as to the forum selection clause because the wording of the clause was truncated and indiscernible).) Thus, the issue determined by the court is the enforceability of the forum selection clause.
III. Discussion
Federal law applies in the determination of the effect given to a forum selection clause in diversity cases. Jumara v. State Farm Ins. Co., 55 F.3d 873, 877 (3d Cir. 1995) (quoting Jones v. Weibrecht, 901 F.2d 17, 19 (2d Cir. 1990)). To evaluate the enforceability of the forum selection clause here, the court determines if the standard for dismissal or transfer is proper.[1] See id. at 877-78. If the standard for transfer applies, the court then determines if the forum selection clause is reasonable. See id. at 880 (citing M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 12-13 (1972)).
A. Dismissal or Transfer under 28 U.S.C. § 1404(a) or 1406.
Although dismissal is a “permissible means of enforcing a forum selection clause that allows suit to be filed in another federal forum,” the Third Circuit cautions that “as a general matter, it makes better sense, when venue is proper but the parties have agreed upon a not- unreasonable forum selection clause that points to another federal venue, to transfer rather than dismiss.” Salovaara v. Jackson Nat’l Life Ins. Co., 246 F.3d 289, 298-99 (3d Cir. 2001); see Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 28-29, 32 (1988) (holding that a federal court sitting in diversity jurisdiction should treat a request to enforce a forum selection clause in a contract as a motion to transfer venue under applicable federal law, 28 U.S.C. § 1404(a)); 15 Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 3803.1 (2d ed. 1986 & Supp. 2006).
Transfer, however, is not available when a forum selection clause specifies a non-federal forum. Salovaara, 246 F.3d at 298. The forum selection clause in the Registration Agreement, if valid and untruncated, would provide that “any dispute . . . can only be brought in a court of competent jurisdiction located in Wayne County Pennsylvania” and does not limit jurisdiction to state court. The provision’s plain language is construed to permit the action in any court of the county, including the federal court in the federal judicial district encompassing Wayne County, Pennsylvania, regardless of whether the federal court is physically located in the county. See Jumara, 55 F.3d at 881 (construing an arbitration provision requiring the action to transpire within a particular county to mean that the action would be permitted in any court, state or federal, with jurisdiction encompassing that county). Transfer is an available remedy because the forum selection clause, if valid and untruncated, includes a federal forum. See id. at 881-83 (applying the § 1404(a) analysis for transfer where a forum selection clause permitted any state or federal forum within a particular county).
Because transfer is the appropriate remedy, the court must then consider whether 28 U.S.C. § 1404(a) or § 1406 applies. “Section 1404(a) provides for the transfer of a case where both the original venue and the requested venue are proper. Section 1406, on the other hand, applies where the original venue is improper and provides for either transfer or dismissal of the case.” Id. at 878. Whether venue is proper in this district is governed by the federal venue statute, 28 U.S.C. § 1391. Id.
Without considering the forum selection clause, venue is proper in the Eastern District of Pennsylvania. Neither party disputes that Defendant is subject to personal jurisdiction in this district because Defendant transacts business here. See 28 U.S.C. § 1391(c); Jumara, 55 F.3d at 878-79; Stewart, 487 U.S. at 29 n.8 (“The parties do not dispute that the District Court properly denied the motion to dismiss the case for improper venue under 28 U.S.C. § 1406(a) because respondent apparently does business [there].”); see also (Pls.’ Supp. Ans. 1; Def.’s Supp. 3). This court therefore concludes that the appropriate analysis is whether the case should be transferred under § 1404(a). See Salovaara, 246 F.3d at 298-99.
B. Transfer under 1404(a) Is Improper Because the Forum Selection Clause Is Unreasonable and Unenforceable.
Section 1404(a) controls the inquiry of whether to give effect to a forum selection clause and to transfer a case.[2] Stewart, 487 U.S. at 29, 32. Before considering the factors under Section 1404(a), the court first examines the validity or reasonableness of the forum selection clause through application of the test in M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 12-13 (1972). “Where the forum selection clause is valid, which requires that there have been no ‘fraud, influence, or overweening bargaining power,’ the plaintiffs bear the burden of demonstrating why they should not be bound by their contractual choice of forum.” Jumara, 55 F.3d at 879-80 (quoting Bremen, 407 U.S. at 12-13).
A forum selection clause is unreasonable and invalid if the objecting party demonstrates that (1) the forum selection clause is the result of fraud or overreaching, (2) its enforcement would violate a strong public policy of the forum, or (3) its enforcement would result in litigation so seriously inconvenient and unreasonable that it would deprive a litigant of his or her day in court. Bremen, 407 U.S. at 15-17; In re Diaz Contracting, Inc., 817 F.2d 1047, 1051-52 (3d Cir. 1987).
To dispose of this issue, the court need only address whether the enforcement of the forum selection clause violates a strong public policy of the forum. Under Pennsylvania law, a clause in a contract must be conspicuous, so as to provide notice of its terms to a reasonable person. See, e.g., 13 Pa.C.S. § 2316 (requiring that limitation of warranties terms be conspicuous); 13 Pa.C.S. § 1201 (defining “conspicuous”); Beck-Hummel v. Ski Shawnee, Inc., 2006 Pa. Super 159, P23-24 & n.12-13 (Pa. Super. Ct. 2006) (relying on the requirement for conspicuous terms in the sale of goods context in a case involving the sale of services, and finding that disclaimer language on a ski ticket was not sufficiently conspicuous to put a purchaser on notice of its contents). Plaintiffs argue that the forum selection clause contained in the signed Registration Agreement is invalid because the wording of the clause is “truncated and indiscernible.” (Pls.’ Reply 1.)
The court agrees that the small print of the forum selection clause in the photocopied and faxed signed Registration Agreement is blurry and illegible, and does not provide reasonable notice of its terms. The court cannot assume that Mr. Epps signed a clear version of the agreement that became blurry and illegible upon subsequently being photocopied and faxed, because such evidence is not before the court. There is no evidence that Plaintiff Ben Epps signed any version of the Registration Agreement other than the document provided to the court.
Further, even if the forum selection clause were legible, its essential term, that any cause of action be brought in Wayne County, Pennsylvania, is cut off so as to be incomprehensible. Even if legible, the term “V– County Pennsylvania” in the forum selection clause gives no reasonable notice of the location of any agreed-upon forum.
The court concludes that the forum selection clause is inconspicuous and does not give notice of its terms to a reasonable person in violation of strong Pennsylvania public policy. The forum selection clause therefore is unreasonable, invalid, and unenforceable. Because the court finds that the forum selection clause is unreasonable and invalid, it does not address the private and public factors as transfer considerations under § 1404(a).
V. Conclusion
For the foregoing reasons, Defendant’s Motion to Dismiss for Improper Venue is denied. An appropriate order follows.
ORDER
AND NOW, this 19th day of December, 2007, upon consideration of Defendant 1.I.L., Inc.’s Motion to Dismiss for Improper Venue (Doc. No. 4), Plaintiffs’ Response in opposition thereto, Defendant’s Affidavit of Daniel Gould and Exhibits (Doc. Nos. 8 & 9), and Plaintiffs’ Reply, it is hereby ORDERED that said motion is DENIED for the reasons set forth in the attached memorandum.
Notes:
[1] Prior to Defendant’s production of a signed Registration Agreement, Plaintiffs argued that the forum selection clause should not be enforced because it did not meet the standard of reasonable communicativeness, as set forth in Marek v. Marpan Two, Inc., 817 F.2d 242, 245 (3d Cir. 1987), due to the agreement’s small print. Marek applies primarily in cases involving maritime law. See, e.g., Gibbs v. Carnival Cruise Lines, 314 F.3d 125, 130 (3d Cir. 2002); Hodes v. S. N.C. Achille Lauro ed Altri-Gestione, 858 F.2d 905, 906, 909-12 (3d Cir. 1988). As discussed below, the court follows more recent Third Circuit precedent on the enforceability of forum selection clauses.
[2] Section 1404(a) provides that “a district court may transfer any civil action to any other district or division where it might have been brought” for “the convenience of parties and witnesses” and “in the interest of justice.” 28 U.S.C. § 1404(a); see Stewart, 487 U.S. at 29. Courts must adjudicate motions to transfer based on an “individualized, case-by-case consideration of convenience and fairness,” weighing a number of factors. Id. (quoting Van Dusen v. Barrack, 376 U.S. 612, 622 (1964)). A court’s review is not limited to the three enumerated factors in § 1404(a) – convenience of the parties, convenience of witnesses, or interests of justice – and courts may consider various private and public interests. Jumara, 55 F.3d at 879-80.
The parties’ agreement as to the proper forum, although not dispositive, receives “substantial consideration” in the weighing of relevant factors. Id. at 880; see Stewart, 487 U.S. at 29-30 (“The presence of a forum selection clause . . . will be a significant factor that figures centrally in the district court’s calculus. . . . The flexible and individualized analysis Congress prescribed in § 1404(a) thus encompasses consideration of the parties’ private expression of their venue preferences.”). The deference generally given to a plaintiff’s choice of forum is “inappropriate where the plaintiff has already freely chosen an appropriate venue.” Jumara, 55 F.3d at 880.
If you fall down in a foreign country, and you have paid money to be there, you probably have to sue there.
Posted: June 15, 2015 Filed under: Adventure Travel, Jurisdiction and Venue (Forum Selection), Kansas | Tags: Bahamas, Forum selection clause, Jurisdiction, Jurisdiction and Venue (Forum Selection), Venue Leave a commentThe exception is cheap vacations where the hotels and resorts won’t have you sign a forum selection clause when you arrive.
Mcarthur v. Kerzner International Bahamas Limited, 2015 U.S. App. LEXIS 5058
State: Kansas, United States Court of Appeals For The Eleventh Circuit
Plaintiff: John C. Mcarthur, Sandra S. Mcarthur
Defendant: Kerzner International Bahamas Limited, Kerzner International Limited, Island Hotel Company Limited, Paradise Island Limited
Plaintiff Claims: negligence
Defendant Defenses: Forum Selection Clause
Holding: For the Defendant
Year: 2015
The plaintiffs, husband and wife, went to the Bahamas to watch a college basketball tournament. While at a resort, the husband slipped and fell near the pool injuring his back. The plaintiff’s filed a lawsuit in the federal district court in Kansas. The defendants filed a motion to dismiss based on the forum selection clause the plaintiff’s had signed.
A forum selection clause is the same as a jurisdiction and venue clause. It identifies the place and the law that will be applied to the case.
The district court dismissed the plaintiff’s claims and the plaintiff’s, husband and wife, appealed to the Eleventh Circuit Court of Appeals. This is the decision of the Eleventh Circuit Court of Appeals.
Analysis: making sense of the law based on these facts.
The plaintiff’s booked their travel through a travel agent who was hired by the university or done in conjunction with the university. The travel agent upon booking the rooms received a contract from the hotel which required the travel agent to inform the guests of the rules and contract provisions.
The relationship between a travel agent and the hotel is different from most contracts. First whether or not a contract exists is based on the relationship. If a contract exists it is to pay a commission a specific way to the travel agent and/or be based on a relationship. However, in every situation there is a third party beneficiary to the contract or third parties that are part of the contract, the travelers. Either way the travelers have an interest in the contract. The travel agent usually has requirements as part of the contract to communicate parts or the entire contract to their customers, the travelers.
Sometimes the travel agent is the agent of the travelers. In cases where the travel agent is an agent, then the travel agent must communicate all things known or required by the hotel to the traveler.
Those terms and provisions, which were to be communicated in this case included:
…two provisions in which the travel agent agrees to notify their clients that when they book their reservation through the travel agent, they are subject to certain terms and conditions governing their stay at Atlantis.
A section of the contract indicates that the additional terms and conditions are available on the Atlantis website.
The terms and conditions provide that the guest will be asked to sign a form agreeing to certain terms related to any claims the guest may have as a result of the guest’s stay at the Atlantis Resort. It specifically states that “I agree that any claim I may have against [several named defendants and others], along with their parent, related and affiliated companies at every tier, . . . resulting from any events occurring in The Bahamas shall be governed by and construed in accordance with the laws of the Commonwealth of The Bahamas, and further, irrevocably agree to the Supreme Court of The Bahamas as the exclusive venue for any such proceedings whatsoever.”
Because the travel agent is an “agent” of the plaintiff the plaintiff had constructive notice of the terms of the agreement before they arrived in the Bahamas. Constructive notice means you legally had notice of the facts or pleadings at issue even if you did not have actual notice.
When the plaintiff’s arrived at the resort, they signed a registration card titled Acknowledgement, Agreement and Release. This too had a choice of forums clause requiring all suits to be brought in the Bahamas.
The court first reviewed the law surrounding forum selection clauses.
A forum selection clause will be invalidated where “(1) its formation was induced by fraud or overreaching; (2) the plaintiff would be deprived of its day in court because of inconvenience or unfairness; (3) the chosen law would deprive the plaintiff of a remedy; or (4) enforcement of the clause would contravene public policy.”
The test on whether a forum selection clause goes too far or overreaches is:
To determine whether there was fraud or overreaching in a non-negotiated forum selection clause, the court looks to “whether the clause was reasonably communicated to the consumer. A useful two-part test of ‘reasonable communicativeness’ takes into account the clause’s physical characteristics and whether the plaintiffs had the ability to become meaningfully informed of the clause and to reject its terms.”
The court found “The Bahamas is an adequate alternative forum, and the public interest factors weigh in favor of transfer.” The court then looked at the arguments raised by the plaintiffs as to why the forum selection clause should be invalidated. However, the plaintiff’s did not argue any of the four factors necessary to overcome the selection in the clause.
Consequently, the court upheld the District Court’s dismissal of the claim. The plaintiffs were free to go to the Bahamas and file their claim again.
So Now What?
The legal term for deciding the case should be dismissed is forum non conveniens. Latin for the forum is not convenient, meaning the right one based on the contract.
There are two keys here that were critical for the court to rule this way. The first was the forum selected was reasonable for the situation. Normally, you have to choose the forum of the defendant, where the defendant is served or where you may catch the defendant temporarily. (There are classic “stories” of serving defendants in airplanes as they flew over a particular state.)
There must be a reasonable reason for the selection you choose. If you are based in one state and the plaintiff’s come from others, you cannot just choose any state with the best law or the hardest courts to find. You must choose a state where the accident happens if you are fixed, what the accident may happen if you are running trips in other states or the state where you are legally based.
The second is the plaintiff’s had the opportunity, whether or not they took it, to see the forum selection clause, and the other contractual terms, prior to leaving their homes. This might have resolved with a different result if the forum selection clause and other contracts, such as a release, had been handed to the plaintiff’s upon the arrival without any notice they would be required to sign it.
If the client had not signed the agreement at the time of check in, and if they claimed they had not read or received the contract, the plaintiff’s might still have been held to the contract because they took advantage of the benefits the contract offered.
Get your release, with its forum selection clause, in front of the plaintiff as soon as possible. Now days it can be part of the sign up process online or posted on your website or emailed to the guest when their credit card is run.
What do you think? Leave a comment.
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Mcarthur v. Kerzner International Bahamas Limited, 2015 U.S. App. LEXIS 5058
Posted: June 9, 2015 Filed under: Adventure Travel, Jurisdiction and Venue (Forum Selection), Legal Case | Tags: Atlantis, Bahamas, Forum selection clause, Jurisdiction, Venue Leave a commentMcarthur v. Kerzner International Bahamas Limited, 2015 U.S. App. LEXIS 5058
John C. Mcarthur, Sandra S. Mcarthur, his wife, Plaintiffs – Appellants, versus Kerzner International Bahamas Limited, a Bahamian company, Kerzner International Limited, a Bahamian company, Island Hotel Company Limited, a Bahamian company, Paradise Island Limited, a Bahamian company, Defendants – Appellees.
No. 14-13889 Non-Argument Calendar
UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT
2015 U.S. App. LEXIS 5058
March 30, 2015, Decided
COUNSEL: For JOHN C. MCARTHUR, SANDRA S. MCARTHUR, Plaintiffs – Appellants: Jeffrey Bradford Maltzman, Rafaela Castells, Steve Holman, Maltzman & Partners, PA, CORAL GABLES, FL; Robert L. Parks, Gabriel A. Garay, The Law Offices of Robert L. Parks, PL, MIAMI, FL.
JUDGES: Before JULIE CARNES, FAY and DUBINA, Circuit Judges.
OPINION
PER CURIAM:
Appellants John C. McArthur and his wife, Sandra S. McArthur, appeal the district court’s order dismissing their civil action under forum non conveniens. After reviewing the record and reading the parties’ briefs, we affirm the order dismissing appellants’ complaint.
I. BACKGROUND
The McArthurs were part of a group of guests who traveled to the Atlantis Resort in The Bahamas with the University of Kansas (“KU”) for a basketball tournament. Travel agent Cate and Mason Travel Partners (“travel agent”) made KU’s reservations and contracted with Atlantis. The contract includes two provisions in which the travel agent agrees to notify their clients that when they book their reservation through the travel agent, they are subject to certain terms and conditions governing [*2] their stay at Atlantis. A section of the contract indicates that the additional terms and conditions are available on the Atlantis website. [Doc. DE-16-1, Ex. 1 ¶ 5, ¶ 8.] The terms and conditions provide that the guest will be asked to sign a form agreeing to certain terms related to any claims the guest may have as a result of the guest’s stay at the Atlantis Resort. It specifically states that “I agree that any claim I may have against [several named defendants and others], along with their parent, related and affiliated companies at every tier, . . . resulting from any events occurring in The Bahamas shall be governed by and construed in accordance with the laws of the Commonwealth of The Bahamas, and further, irrevocably agree to the Supreme Court of The Bahamas as the exclusive venue for any such proceedings whatsoever.” [Id. ¶ 8.]
Upon their arrival at Atlantis, the McArthurs signed a written registration card entitled “Acknowledgement, Agreement and Release” that includes a choice of law provision and forum selection clause:
I agree that any claims I may have against the Resort Parties resulting from any events occurring in The Bahamas shall be governed by and constructed in [*3] accordance with the laws of the Commonwealth of The Bahamas, and further, I irrevocably agree to the Supreme Court of The Bahamas as the exclusive venue for such proceedings whatsoever. . . .
[Id. ¶ 10 & Exh. 4.]
During his stay at the Atlantis Resort, John McArthur slipped and fell on a sidewalk adjacent to the water park attraction known as the Rapid River. In March 2014, the McArthurs filed an amended complaint in federal district court, alleging negligence in connection with John McArthur’s fall. The amended complaint also alleged that as a result of John McArthur’s injuries, his wife suffered the diminishment of her husband’s companionship and consortium. The amended complaint invoked the district court’s diversity based subject-matter jurisdiction under 28 U.S.C. § 1332. It alleged that the McArthurs were domiciled in Kansas, defendant Kerzner International was a Bahamian company with its principal place of business in Florida, defendant Kerzner Bahamas was a Bahamian company with its principal place of business in Florida, defendant Island Hotel was a Bahamian company and a subsidiary of Kerzner International and Kerzner Bahamas, and defendant Paradise Island was a Bahamian company and a subsidiary [*4] of Kerzner International and Kerzner Bahamas.
The defendants moved to dismiss the amended complaint on the basis of forum non conveniens. The district court granted the motion. The McArthurs then perfected this appeal.1
1 This court issued a jurisdictional question asking the parties to address whether the pleadings sufficiently alleged the citizenship of the parties, in particular, Island Hotel and Paradise Island, to establish the district court’s subject-matter jurisdiction over the case. See Mallory & Evans Contractors & Eng’rs, LLC v. Tuskegee Univ., 663 F.3d 1304, 1304-05 (11th Cir. 2011) (stating that the court must sua sponte raise its concerns regarding subject-matter jurisdiction). The McArthurs concede that the amended complaint failed to allege sufficiently the citizenship of Island Hotel and Paradise Island, but move to amend the amended complaint to add the allegations that both defendants were Bahamian Companies with their principal places of business in the Bahamas. [HN1] The party invoking the court’s jurisdiction bears the burden of establishing federal jurisdiction, and when the pleadings’ allegations of citizenship and jurisdiction are insufficient, a party may amend them in this court. See 28 U.S.C. § 1653; Mallory, 663 F.3d at 1305. The McArthurs’ allegations cure the pleading deficiencies [*5] as to Island Hotel and Paradise Island, and the amended complaint sufficiently alleges that the other defendants are Bahamian companies with their principal places of business in Florida. Because the proposed amendments show that no defendant is a citizen of Kansas, where the McArthurs are domiciled, the district court’s subject-matter jurisdiction is satisfied. Thus, we grant the McArthur’s motion to amend the amended complaint and entertain the instant appeal.
II. DISCUSSION
[HN2] This court reviews a district court’s order of dismissal based on forum non conveniens for an abuse of discretion. Aldana v. Del Monte Fresh Produce N.A., 578 F.3d 1283, 1288 (11th Cir. 2009). [HN3] In addition, we review de novo a district court’s construction of a contractual forum selection clause. Global Satellite Commc’n Co. v. Starmill U.K. Ltd., 378 F.3d 1269, 1271 (11th Cir. 2004).
As a preliminary matter, forum selection clauses “are presumptively valid and enforceable unless the plaintiff makes a ‘strong showing’ that enforcement would be unfair or unreasonable under the circumstances.” Pappas v. Kerzner Int’l Bahamas Ltd., 585 F. App’x 962, 965 (11th Cir. 2014) (quoting Krenkel v. Kerzner Int’l Hotels Ltd., 579 F.3d 1279, 1281 (11th Cir. 2009)). The party seeking to avoid the forum selection clause bears the burden of showing exceptional circumstances, predicated on public interest considerations to justify disturbing the forum selection clause. Atl. Marine Const. v. U.S. Dist. Court, U.S. , , 134 S. Ct. 568, 581, 187 L. Ed. 2d 487 (2013).
A forum selection clause will be invalidated where “(1) its formation [*6] was induced by fraud or overreaching; (2) the plaintiff would be deprived of its day in court because of inconvenience or unfairness; (3) the chosen law would deprive the plaintiff of a remedy; or (4) enforcement of the clause would contravene public policy.” Krenkel v. Kerzner Int’l Hotels Ltd., 579 F.3d 1279, 1281 (11th Cir. 2009). To determine whether there was fraud or overreaching in a non-negotiated forum selection clause, the court looks to “whether the clause was reasonably communicated to the consumer. A useful two-part test of ‘reasonable communicativeness’ takes into account the clause’s physical characteristics and whether the plaintiffs had the ability to become meaningfully informed of the clause and to reject its terms.” Id.
The McArthurs contend that the forum selection clause is invalid because the contents of the forum selection clause were not reasonably communicated to them, and the travel agent never informed them about the forum selection clause. However, as the district court found, the McArthurs had constructive notice of the Atlantis Resort’s terms and conditions that the travel agent received. The travel agent, via its contract with the resort, knew that the attendees at the resort were subject to certain additional terms and conditions, [*7] agreed to notify their clients regarding the terms and conditions, and knew where to obtain the specific terms and conditions. Thus, because the McArthurs’ trip involved travel arrangements made by the travel agent, they are charged with constructive notice of the terms and conditions in the contract the travel agent had with the Atlantis Resort.
Moreover, upon their arrival at the resort, the McArthurs signed a written registration form that read, in part, that the guest agrees that any claims he may have against the resort shall be governed by the laws of The Bahamas and that the Supreme Court of The Bahamas is the exclusive venue. [R. DE 16-5.] By signing this form, the McArthurs agreed to the forum selection clause. Hence, we conclude that the forum selection clause is valid.2
2 The McArthurs also argue that the forum selection clause is invalid because it was obtained through fraud. Their argument centers on their claim that the defendants have a policy that allows guests to delete portions of the guest registration card but they do not inform the guests of that right, and therefore, the defendants obtain the signatures on the cards through fraud. This contention is meritless because [*8] they cannot show that the forum selection clause itself was included in the contract due to fraud. See Rucker v. Oasis Legal Fin., L.L.C., 632 F.3d 1231, 1236 (11th Cir. 2011 ) (noting that in order for a forum selection clause to be invalidated on the basis of fraud or overreaching, a plaintiff must specifically allege that the clause was included in the contract because of fraud).
In addition, The Bahamas is an adequate alternative forum, and the public interest factors weigh in favor of transfer. See Atl. Marine, U.S. at , 134 S. Ct. at 582 (discussing forum selection clauses in the 28 U.S.C. § 1404(a) transfer context). First, the McArthurs do not contest that The Bahamas provides an adequate alternative forum, and they do not assert that they could not reinstate their lawsuit in The Bahamas without undue inconvenience or prejudice. Second, the McArthurs fail to meet their burden to show that this case is exceptional and that the forum selection clause should not apply. Their brief is devoid of any claims as to court congestion, the burden of jury duty, or the difficulties in resolving conflict of law problems and applying foreign law. Third, the McArthurs fail to challenge the substantial interests of The Bahamas. In sum, the McArthurs cannot show that enforcement of the forum selection clause “would be unfair [*9] or unreasonable under the circumstances.” Krenkel, 579 F.3d at 1281. Accordingly, we conclude that the district court properly gave effect to the forum selection clause and granted the defendants’ motion to dismiss.3
3 The McArthurs also take issue with the district court’s order denying their motion for leave to amend the complaint to add Brookfield Asset Management, Inc., the new owner of the Atlantis Resort, as a defendant. The district court did not abuse its discretion in denying the motion because the language of the forum selection clause applies equally to any entity that has owned, operated, or marketed the Atlantis Resort. [R. DE 16-1, Ex. 4 & 16-3.] See Garfield v. NDC Health Corp., 466 F.3d 1255, 1270 (11th Cir. 2006) (stating that [HN4] court reviews for abuse of discretion a district court’s decision to grant or deny leave to amend a pleading).
III. CONCLUSION
For the foregoing reasons, we affirm the district court’s order granting defendants’ motion to dismiss based on forum non conveniens. We also grant the McArthurs’ motion for leave to amend the amended complaint to cure the deficiency in the pleadings.
AFFIRMED and Motion for leave to amend GRANTED.
Jurisdiction and Venue (Forum Selection clauses) are extremely important in your releases. Where the lawsuit will be (where/Venue) and what law will be applied (Jurisdiction) is the sole issue in this case.
Posted: May 19, 2014 Filed under: Adventure Travel, Jurisdiction and Venue (Forum Selection) | Tags: Atlantis, Atlantis Resort, Bahamas, Bermuda, Excursion, Excursion Boat, Forum selection clause, Hotel, Jurisdiction and Venue Clause, Kerzner, Release, Third Party 1 CommentAdvance notice of the jurisdiction and venue issues emailed to the plaintiff saves this resort. Plaintiff was not able to argue they were not told they had to sue in Bermuda. Bermuda does not allow contingency cases, and a Bermuda jury is not as likely to give money to foreigners (Americans) as a Miami jury.
Son v. Kerzner International Resorts, Inc., et al., 2008 U.S. Dist. LEXIS 67482
Date of the Decision: September 5, 2008
Plaintiff: Miyoung Son (“Mrs. Son”) and Youngkeun Son (“Mr. Son”)
Defendant: Kerzner International Resorts, Inc., Kerzner International North America, Inc., Kerzner International Limited, Kerzner International Bahamas Limited, Island Hotel Company Limited, and Paradise Island Limited
Plaintiff Claims: Response to Defendant’s Motion to Dismiss
Defendant Defenses: Motion to Dismiss
Holding: for the defendant
The plaintiff’s booked at trip at the defendant’s resort (Atlantis Resort) in the Bahamas. This was their second trip to this resort. After booking and prior to their arrival, the defendant sent emails stating that the plaintiff’s would have to sign several documents. One of the documents was a release which contained a forum selection clause or venue clauses.
No family members of the plaintiff opened any of the documents attached to the emails, but they did acknowledge receiving the emails.
At the resort during check-in, several documents, including the release were signed by the spouse.
Mr. Son stated that the check-in process lasted approximately two to three minutes, that he was asked to sign several forms, and that he did not read the forms. Mr. Son said that the resort’s front desk staff did not explain the contents of the forms. Mr. Sonfurther stated that he did not intend to sign a forum selection clause, nor was he authorized to sign one on his wife’s behalf. However, Mr. Son did not state that his wife had affirmatively told him not to sign any documents regarding her legal rights.
While taking an excursion “Mrs. Son received severe and extensive injuries as a result of being pulled through the churning propellers of the excursion boat.”
The plaintiff’s filed suit in Federal District Court for the Southern District of Florida. The defendant’s filed a Motion to Dismiss the case based on the forum selection clause the plaintiff’s had signed. Meaning the lawsuit should be dismissed because the lawsuit was filed in the wrong place.
Since the plaintiff files the lawsuit, the place where the plaintiff files the lawsuit is the original forum or venue of the suit. The Burden is then on the defendant to argue the location of the lawsuit is incorrect.
Summary of the case
A forum selection clause or a venue clause is a clause in a contract where the parties agree where any lawsuit will be held. A jurisdiction clause, usually heard in the same breath determines what law will be applied to the contract. For a forum selection clause to be held to be unreasonable, it must fail one of the following tests:
…1.) when the formation of the clause was induced by fraud or overreaching; 2.) when the plaintiff would be deprived of her day in court because of inconvenience or unfairness; 3.) when the chosen law would deprive the plaintiff of a remedy, or 4.) when enforcement of the provisions would contravene public policy.
Public policy, number 4, is not necessarily the same public policy that voids releases.
The plaintiff’s argued that the forum selection clause at issue was void because:
…that the forum selection clause was formed by fraud and overreaching, that Plaintiffs will be deprived of their day in court if they have to sue in the Bahamas, that Bahamian law is fundamentally unfair, and that enforcement of the forum selection clause would contravene public policy.
The court took on each of the arguments of the plaintiff individually and then tackled several arguments not raised by the plaintiff.
Fraud and Overreaching
The plaintiff’s argued the contract was signed because of fraud and over-reaching. The argument was based on the claim that the plaintiff’s did not receive notice of the clause prior to their arrival in the Bahamas so they could cancel the trip “with impunity.” They also argued the short check in time deprived the plaintiffs of the ability to read and comprehend the rights the plaintiff was giving up when he signed the contracts.
The court’s response to this argument was:
A non-negotiated contract containing a forum selection clause may be enforceable, so long as the contract was formed under “reasonable” circumstances. In particular, the clause must be reasonably communicated to the consumer such that the consumer knows that the contract contains terms and conditions which affect the consumer’s legal rights.
[A]bsent a showing of fraud or mental incompetence, a person who signs a contact cannot avoid her obligations under it by showing that she did not read what she signed.
The clause at issue was not hidden, was not disguised in the release; the plaintiff ignored the warning that stated, “read before signing,” all of which was not enough to void the contract. “This willful ignorance cannot be used to invalidate an otherwise binding provision.”
The argument that they did not receive notice was also thrown out by the court. Just because the plaintiff did not read the emails, does not mean the plaintiff did not have the opportunity to see the clause prior to the trip.
The plaintiff then argued that the injured wife did not give the husband the authority to sign away her rights.
Plaintiffs argued at the hearing that Mrs. Son did not sign the forum selection clause, nor did she grant her husband authority to sign away her legal rights. Thus, Plaintiffs claim, the forum selection clause could not apply to Mrs. Son. The Court disagrees. First, Mrs. Son admitted that she granted her husband authority to complete all procedures necessary to check-in to the Atlantis Resort. Thus, Mr. Son had “implied authority” to sign the forum selection clause on Mrs. Son’s behalf, because it was necessary for Mr. Son to sign the clause to complete check-in.
A spouse may sign for another spouse in some states. Additional, one spouse who did not sign taking advantage of the benefits of the contract may affirm the contract. Add to that the fact the plaintiff had signed a nearly identical clause during their prior trip and their argument for fraud and overreaching was denied.
Public Policy
The plaintiff did not present any case law to support the violation of Public Policy claim so the court found it had no merit.
Discouraging Legitimate Claims
The court quickly dismissed this argument. Because the forum selection clause was based where the defendants had their business, therefor, the forum selection clause was related to the dispute. The courts and the law where the accident occurred were legitimate; therefore, the forum selection clause was related to the dispute. Consequently, the court could not find bad faith.
Forum Non Conveniens
“The federal doctrine of forum non conveniens allows the Court to use its inherent power to dismiss an action because of the inconvenience of the plaintiff’s chosen forum.” Under the doctrine of forum non conveniens the court can dismiss a claim when the plaintiff’s chosen forum imposes a heavy burden on the defendant or upon the court and the plaintiff is unable to offer any specific reason of convenience to support this choice.
The decision process to support a forum non conveniens claim is:
First, the Court must consider whether an “adequate alternative forum” exists which has jurisdiction over the case. The Court must then consider whether private interest factors suggest that the Court should disturb the strong presumption in favor of a plaintiff’s choice of forum. If the Court finds that the private interest factors are indeterminate, the Court must then proceed to consider whether considerations of public interest favor a trial in the foreign forum. Dismissal is only warranted if these factors weigh heavily towards trial in the foreign forum.
An adequate alternative forum exists when the defendant is “amenable to process” in the new foreign forum. “The defendant has the burden of proving that the proposed forum is adequate, and the proposed forum has jurisdiction over the claims.” Since the defendants were based in the Bahamas and thus amenable to service of process there the plaintiff must show that they would not receive a fair trial in the Bahamas. They plaintiffs could not do that. The argued they could not afford a trial in the Bahamas since contingency fee agreements were not allowed, however, money is not part of the argument in jurisdiction and venue arguments.
Private Interest Factors
The court also reviewed the private interest factors in the case and how those applied to its decision.
Factors considered to be in a litigant’s private interest include the ease of access to sources of proof, availability of compulsory process for witnesses, cost of obtaining attendance of witnesses, ability to view the premises (if necessary), and “all other practical problems that make trial of a case easy, expeditious and inexpensive.
The court found the majority of the witnesses were located in the Bahamas were the accidents happened. The court also found the vital witnesses were all located in the Bahamas. The Florida court could not necessarily subpoena and compel the non-employee witnesses in the Bahamas to appear in court in the US. Consequently, the defendant would be at risk in defending its case because it could not compel the witnesses needed to defend its case. The witnesses in Maryland and Washington DC of the plaintiffs were for the damages’ phase of the trial and consequently, not vital.
More importantly, the plaintiff could not identify any witnesses who could testify in Florida that could not testify in the Bahamas. The distance was relatively the same to get to either place from Maryland and DC. Only one actual witness had been identified by the plaintiff as a resident of Florida, and that was an agent for the defendant.
The defendant also argued they wanted to bring the real party at interest, the excursion boat company into the trial as a third party defendant. If the excursion boat company had no interest in Florida, the Florida court could not compel the third parties to trial in Florida. The plaintiff would also argue that the defendants were agents of the third parties, and the defendants would be defending claims of agency without the benefit of the third parties to support its claims or defenses.
Public Interest Issues.
The court quoted the US Supreme Court in its analysis of the public policy issues of forum selection.
Administrative difficulties follow for courts when litigation is piled up in congested centers instead of being handled at its origin. Jury duty is a burden that ought not to be imposed upon the people of a community which has no relation to the litigation. In cases which touch the affairs of many persons, there is reason for holding the trial in their view and reach rather than in remote parts of the country where they can learn of it by report only. There is a local interest in having localized controversies decided at home. There is an appropriateness, too, in having the trial of a diversity case in a forum that is at home with the state law that must govern the case, rather than having a court in some other forum untangle problems in conflict of laws, and in law foreign to itself.
A jury in Florida has no interest in hearing or adjudicating an incident that occurred outside of its state or even the US. Bahamian law will govern the dispute because the law of the forum where the accident occurred is controlling. Forcing a Florida judge to interpret and apply Bahamian law is also an inconvenience that the court does not want to support.
Reinstatement of the Suit
The final issue that some courts, including this one reviewed is whether the plaintiffs will be foreclosed from filling suit in the proper forum if this case is dismissed. In this case, the defendant agreed to extend the statute of limitations and allow the plaintiff to file in the Bahamas after the appropriate statute had run.
Consequently, the case was dismissed.
So Now What?
Here, the only defendant the plaintiffs could catch was obviously in Florida so the trial was started in Florida. The defendant’s did not have an employee in Washington DC or Maryland, and the plaintiffs did not argue what is called minimum contacts to force the defendant to litigate in DC or Maryland.
Minimum contacts means the defendant does business in the state where the plaintiff filed the lawsuit and has the necessary minimum contacts to sue in that state. The amount of this contact is different in each state.
However, as here, a forum selection clause or jurisdiction and venue clauses are paramount and supersedes the rules governing the location of trials.
Forum selection clauses or jurisdiction and venue clauses provide immense advantages for recreational businesses.
1. It prevents litigating a release in a state where releases are invalid or void. Courts in Louisiana are going to be hesitant to apply the defense of a release because a release is void in Louisiana.
2. It makes sure the law that is important will be applied to the case. Think about applying Louisiana law to a ski accident in Colorado? Think about someone in Florida trying to understand the inherent risks of skiing as set out in the Colorado Ski Safety Statute.
3. It makes sure the area or community that has an interest in the industry or the business has control over the case. Again, a ski accident in Louisiana where the jury does not care or understand skiing versus suing in Colorado where the jury understands and has an interest in Skiing.
4. It eliminates arguments, time and costs of trying to get a trial back to the place that would serve the interest of justice best.
5. It forces the plaintiff to find legal counsel in a state or area that they may not be familiar. This may eliminate all but major claims.
6. It will force the plaintiff to expand money to prosecute a claim in a foreign (other than their own state) jurisdiction. Some of those funds may not be recoverable even if the plaintiff is successful at trial.
One interesting issue was the “impunity” argument. When you give a guest information after they have booked the trip which may change their opinion of the trip from a legal perspective, such as adding a release or another contract provisions, many states may require you to refund the guest’s money in full based on the release or additional contract terms.
Your release has limited value, if any, in many cases may be worthless, if it does not have a forum selection clauses or jurisdiction and venue clause.
IF YOU DON’T HAVE A FORUM SELECTION/JURISDICTION & VENUE CLAUSE IN YOUR RELEASE, YOUR RELEASE CAN FAIL. Contact Me.
What do you think? Leave a comment.
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Son v. Kerzner International Resorts, Inc., et al., 2008 U.S. Dist. LEXIS 67482
Posted: May 19, 2014 Filed under: Adventure Travel, Jurisdiction and Venue (Forum Selection), Legal Case | Tags: Atlantis, Atlantis Resort, Bahamas, Destination Atlantis, Excursion, Excursion Boat, Forum selection clause, Hotel, Jurisdiction and Venue Clause, Kerzner, Kerzner International Limited, Paradise Island, Release, Supreme Court of The Bahamas, Third Party Leave a commentSon v. Kerzner International Resorts, Inc., et al., 2008 U.S. Dist. LEXIS 67482
Miyoung Son and Youngkeun Son, Plaintiffs, v. Kerzner International Resorts, Inc., et al., Defendants.
NO. 07-61171-CIV-MARRA/JOHNSON
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA
2008 U.S. Dist. LEXIS 67482
September 5, 2008, Decided
September 5, 2008, Entered
COUNSEL: [*1] For Miyoung Son, Youngkeun Son, Plaintiffs: Alexander Rundlet, Victor Manuel Diaz, Jr., LEAD ATTORNEYS, Podhurst Orseck, P.A., Miami, FL; Katherine Warthen Ezell, Robert C. Josefsberg, LEAD ATTORNEYS, Podhurst Orseck Josefsberg et al, Miami, FL; Gene Locks, Jonathan W. Miller, Locks Law Firm, Philadelphia, PA; Stephen J. Nolan, Stephen J Nolan Chartered, Baltimore, MD.
For Kerzner International Resorts, Inc., a Florida corporation, in its own right, doing business as Paradise Island, doing business as Destination Atlantis, doing business as Atlantis, Kerzner International North America, Inc., a Delaware corporation, in its own right, doing business as Paradise Island, doing business as Atlantis, doing business as Destination Atlantis, Kerzner International Limited, a company of the commonwealth of the Bahamas, in its own right, doing business as Paradise Island, doing business as Atlantis, doing business as Destination Atlantis, Kerzner International Bahamas Limited, a company of the commonwealth of the Bahamas, in its own right, as a subidiary of Kerzner International Limited, doing business as Paradise Island, doing business as Atlantis, doing business as Destination Atlantis, Island [*2] Hotel Company Limited, a company of the commonwealth of the Bahamas, in its own right, as subsidiary of Kerzner International Bahamas Limited, doing business as Paradise Island, doing business as Atlantis, doing business as Destination Atlantis, Paradise Island Limited, a company of the commonwealth of the Bahamas, in its own right, as a subsidiary of Kerzner International Bahamas Limited, doing business as Paradise Island, doing business as Atlantis, doing business as Destination Atlantis, Defendants: Bruce Scott Liebman, Michelle Ioanna Bougdanos, LEAD ATTORNEYS, Akerman Senterfitt & Eidson, Fort Lauderdale, FL.
JUDGES: KENNETH A. MARRA, United States District Judge.
OPINION BY: KENNETH A. MARRA
OPINION
OPINION AND ORDER ON MOTION TO DISMISS
THIS CAUSE comes before the Court on Defendants Kerzner International Resorts, Inc., Kerzner International North America, Inc., Kerzner International Limited, Kerzner International Bahamas Limited, Island Hotel Company Limited, and Paradise Island Limited’s Motion to Dismiss Plaintiffs’ Complaint (DE 15), filed November 12, 2007. The motion is now fully briefed and is ripe for review. The Court held an evidentiary hearing on this matter on June 19, 2008. The Court has carefully [*3] considered the motion and the record and is otherwise fully advised in the premises.
Background
On August 17, 2007, Plaintiffs Miyoung Son (“Mrs. Son”) and Youngkeun Son (“Mr. Son”) ( together, “Plaintiffs”) filed a four-count Complaint (DE 1) against Defendants Kerzner International Resorts, Inc., Kerzner International North America, Inc., Kerzner International Limited, Kerzner International Bahamas Limited, Island Hotel Company Limited, Paradise Island Limited, 1 Nassau Cruses, Limited (“Nassau Cruses”), Robert Brown, Rodger Munroe, and Silvin Brown (together, “Defendants”), asserting claims of negligence and loss of consortium against all Defendants. The facts, as alleged in the Complaint and adduced at the evidentiary hearing, are as follows: Mr. and Mrs. Son, residents of Maryland, purchased a vacation package from the Kerzner Defendants for a four-night stay at the Atlantis Resort in the Commonwealth of the Bahamas in July 2005. (Compl. PP 3, 15.) The vacation was to last from August 17 to August 21, 2005. Plaintiffs were to be accompanied by their two children, Mrs. Son’s sister and brother-in-law, their three children, and a nanny. (Compl. P 15.) While in the Bahamas, Plaintiffs [*4] booked an excursion through Atlantis’s Tour and Excursions Center. (Compl. P 17.) While on the excursion, Mrs. Son received severe and extensive injuries as a result of being pulled through the churning propellers of the excursion boat. (Compl. PP 20-21.)
1 The Court will refer to the moving parties, Kerzner International Resorts, Inc., Kerzner International North America, Inc., Kerzner International Limited, Kerzner International Bahamas Limited, Island Hotel Company Limited, and Paradise Island Limited, collectively as the “Kerzner Defendants.”
Findings of Fact
1. After booking the trip, Plaintiffs received from the Kerzner Defendants a package in the mail containing information about the trip; however, the package did not contain any mention that Plaintiffs would be expected to sign a forum selection clause or choice of law clause upon check-in at the Atlantis Resort. (Pl. Ex. 1; Def. Ex. 5.)
2. On July 24, Mrs. Son received two e-mails from the Kerzner Defendants with additional information about her upcoming trip – one regarding her booking, and one regarding her sister’s family’s booking. (Pl. Ex. 3, 4; Def. Ex. 3, 4.)
3. Mrs. Son testified that she did not open the e-mails prior to [*5] departing for the Bahamas because she did not recognize the sender. Mrs. Son also testified that she did not open the e-mails and read the attached documents until very recently, but she admitted that she did receive the e-mails prior to her trip.
4. One of the documents contained in each e-mail that Mrs. Son received after making the booking stated as follows:
During guest registration at Atlantis, Paradise Island you will be asked to sign a form agreeing to the following terms related to any claims you may have as a result of your stay at the resort: I agree that any claim I may have against Atlantis, Ocean Club, or any of their officers, directors, employees or related or affiliated companies, including, without limitation, Kerzner International Limited, Kerzner International Bahamas Limited, Island Hotel Company Limited, Paradise Enterprises Limited, Paradise Island Limited and Paradise Beach Inn Limited resulting from any events occurring in The Bahamas shall be governed by and construed in accordance with the laws of the Commonwealth of The Bahamas, and further, irrevocably agree to the Supreme Court of The Bahamas as the exclusive venue for any such proceedings whatsoever. The [*6] foregoing shall apply to all persons accompanying me, and I represent that I have the authority to sign this document on their behalf.
(Pl. Ex. 3, 4; Def. Ex. 3, 4.)
5. Mrs. Son testified that she did not know she would have to sign such a document upon arrival.
6. Upon arrival, Mr. Son completed the check-in process. (Pl. Ex. 2; Def. Ex. 1.) Mr. Son signed a form on his own behalf “and the members of [his] family group or others listed below” (including Mrs. Son) which contained the following language:
I agree that any claims I may have against the Resort Parties resulting from any events occurring in The Bahamas shall be governed by and construed in accordance with the laws of the Commonwealth of The Bahamas, and further, irrevocably agree to the Supreme Court of the Bahamas as the exclusive venue for any such proceedings whatsoever.
(Pl. Ex. 2; Def. Ex. 1.) Mr. Son stated that the check-in process lasted approximately two to three minutes, that he was asked to sign several forms, and that he did not read the forms. Mr. Son said that the resort’s front desk staff did not explain the contents of the forms. Mr. Son further stated that he did not intend to sign a forum selection clause, [*7] nor was he authorized to sign one on his wife’s behalf. However, Mr. Son did not state that his wife had affirmatively told him not to sign any documents regarding her legal rights.
7. Mrs. Son testified that she did not authorize her husband to sign a forum selection clause, but Mrs. Son also did not state that she told her husband he was not to sign any legal documents on her behalf. Mrs. Son testified that she did authorize her husband to complete all necessary check in procedures on her behalf.
8. Plaintiffs previously visited the Atlantis Resort in December 2001. When completing check-in formalities in 2001, Mr. Son signed a form that states as follows:
I agree that any claim I may have against Atlantis, Ocean Club, or any of their officers, directors, employees or related or affiliated companies, including, without limitation, Sun International Hotels Limited, Sun International Bahamas Limited, Island Hotel Company Limited, Paradise Enterprises Limited, Paradise Island Limited and Paradise Beach Inn Limited resulting from any events occurring in The Bahamas shall be governed by and construed in accordance with the laws of the Commonwealth of The Bahamas, and further, irrevocably [*8] agree to the Supreme Court of The Bahamas as the exclusive venue for any such proceedings whatsoever. The foregoing shall apply to all persons accompanying me and I represent that I have the authority to sign this document on their behalf.
(DE 54.)
Standard of Review
In the Eleventh Circuit, a motion to dismiss on the basis of a forum selection clause is brought pursuant to Rule 12(b)(3) of the Federal Rules of Civil Procedure as a motion to dismiss for improper venue. Lipcon v. Underwriters at Lloyd’s, London, 148 F.3d 1285, 1290 (11th Cir. 1998). Forum selection clauses are “prima facie valid and should be enforced unless enforcement is shown by the resisting party to be ‘unreasonable’ under the circumstances.” M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10, 92 S. Ct. 1907, 32 L. Ed. 2d 513 (1972). The Court may make any findings of fact necessary to resolve a motion to dismiss for improper venue, so long as the resolution of factual disputes is not an adjudication on the merits of a case. Bryant v. Rich, 530 F.3d 1368, 2008 WL 2469405 at *5 (11th Cir. 2008). Determining the reasonableness of a forum selection clause is a fact-specific inquiry to be made on a case-by-case basis. [*9] Shankles v. Costa Armatori, S.P.A., 722 F.2d 861, 864 (1st Cir. 1983).
Because the Court is sitting in diversity, Florida substantive law applies. See, e.g., Admiral Ins. Co. v. Feit Management Co., 321 F.3d 1326, 1328 (11th Cir. 2003) (“Sitting in diversity, we apply the substantive law of the forum state unless federal constitutional or statutory law compels a contrary result.”).
Discussion
A forum selection clause will be held “unreasonable” in only four circumstances: 1.) when the formation of the clause was induced by fraud or overreaching; 2.) when the plaintiff would be deprived of her day in court because of inconvenience or unfairness; 3.) when the chosen law would deprive the plaintiff of a remedy, or 4.) when enforcement of the provisions would contravene public policy. Lipcon, 148 F.3d at 1292; see also Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 594-95, 111 S. Ct. 1522, 113 L. Ed. 2d 622 (1988). Some courts have also made prior notice of the clause an element to consider in determining reasonableness. See, e.g., Sun Trust Bank v. Sun International Hotels, Ltd., 184 F. Supp. 2d 1246, 1258 (S.D. Fla. 2001); Corna v. American Hawaii Cruises, Inc., 794 F. Supp. 1005, 1012 (D. Haw. 1992). 2 Here, Plaintiffs [*10] argue that the forum selection clause was formed by fraud and overreaching, that Plaintiffs will be deprived of their day in court if they have to sue in the Bahamas, that Bahamian law is fundamentally unfair, and that enforcement of the forum selection clause would contravene public policy. The Court will address each of these arguments in turn.
2 In Shute, the Supreme Court did not state that lack of notice of the forum selection clause was grounds for finding that the clause was unreasonable. In fact, the Court stated that it would not “address the question of whether respondents had sufficient notice of the forum clause before entering the contract for passage” because the respondents had conceded that they had sufficient notice. Shute, 499 U.S. at 590. However, the Supreme Court found notice relevant insofar as the Court found a party’s right to reject the contract “with impunity” essential to its enforceability. Id. at 595. Thus, notice is a relevant inquiry when considering a forum selection clause to determine whether the party could walk away from the contract with a minimal penalty. In Corna, for instance, the Court found that two to three days notice of the forum selection [*11] clause insufficient, because the plaintiffs would have forfeited the entire ticket price for their trip if they had canceled the trip upon first learning of the forum selection clause. Corna, 794 F. Supp. at 1011-1012; cf. Elliott v. Carnival Cruise Lines, 231 F. Supp. 2d 555, 561 (S.D. Tex. 2002) (enforcing forum selection clause where cancellation at time notice of clause received by passenger would have resulted in refund of only 50% of purchase price).
Fraud and Overreaching
Plaintiffs argue that the formation of the agreement including the forum selection provision was “induced by fraud and overreaching.” (Pl. Resp. 9.) Plaintiffs claim that they “never received . . . any notice of a forum selection clause prior to arriving at the hotel in the Bahamas.” (Id.) Plaintiffs do not argue bad faith on the Kerzner Defendants part, and their sole argument regarding fraud and overreaching relates to notice. Plaintiffs also do not argue that the forum selection clause was hidden on the forms they signed. Instead, they argue that they did not receive notice of the clause prior to their arrival in the Bahamas, so they could not cancel “with impunity.” Further, they argue that the short check-in [*12] time period effectively deprived Mr. Son of the ability to read and comprehend the rights he was surrendering when he signed the document. (See Pl. Resp. 9-10.)
A non-negotiated contract containing a forum selection clause may be enforceable, so long as the contract was formed under “reasonable” circumstances. Shute, 499 U.S. at 593-94. In particular, the clause must be reasonably communicated to the consumer such that the consumer knows that the contract contains terms and conditions which affect the consumer’s legal rights. Shankles, 722 F.2d at 864.
With respect to the time for check-in, a perusal of the “Acknowledgment, Agreement, and Release” form shows that the clause is not hidden in any way. The page contains seven paragraphs regarding limitations on liability, choice of law, and other legal provisions. (Pl. Ex. 2; Def. Ex. 1.) While the forum selection provision is not written in a larger font, in bold font, or italicized, it is still easily readable and is set off in its own paragraph in the middle of the front side of the form. Further, the form is marked at the very top “READ BEFORE SIGNING.” Thus, the Court finds that the form clearly and unmistakably conveys that it contains [*13] terms affecting the consumer’s legal rights. The clause is not hidden among other, non-legal provisions, nor is the clause physically disguised. The fact that Mr. Son chose not to read the form that is clearly marked “read before signing” does not excuse Plaintiffs from their contractual obligation. See, e.g., Coleman v. Prudential Bache Securities, Inc., 802 F.2d 1350, 1352 (11th Cir. 1986) (“[A]bsent a showing of fraud or mental incompetence, a person who signs a contact cannot avoid her obligations under it by showing that she did not read what she signed.”). The check-in process was doubtless hurried, but the Court finds that Mr. Son was not rushed through the process so as to prevent him from taking as much time as he needed or desired to review the document thoroughly. Mr. Son made a conscious choice – he chose to sign the form without reading it in order to speed the check-in process along. This willful ignorance cannot be used to invalidate an otherwise binding provision.
Plaintiffs then argue that they did not receive notice of the forum selection clause prior to their arrival at the Atlantis resort, such that they could not reject the provision “with impunity.” In Sun Trust [*14] Bank, under similar facts, the court concluded that the same forum selection clause disputed in this case was unenforceable because the plaintiffs did not have an “objectively reasonable opportunity to consider and reject” the clause. Sun Trust Bank, 184 F. Supp. 2d at 1261. The court was presented with “undisputed” evidence that the “forum-selection clause was presented to [plaintiff] for the first time upon arrival in the Bahamas.” Id.
Contrary to Plaintiffs assertions, this case is distinct, and Sun Trust Bank is inapplicable. First, Plaintiffs had both visited the Atlantis resort in 2001, and Mr. Son signed a nearly identical forum selection provision upon arriving at the resort in 2001. Having previously signed a nearly identical forum selection provision in 2001, it is reasonable to expect that Plaintiffs would be asked to sign a similar provision on their return visit. In Horberg v. Kerzner Resorts International Ltd., No. 07-20250-CIV-UNGARO, 2007 U.S. Dist. LEXIS 97693, slip op. at 5-6 (S.D. Fla. Aug. 6, 2007), the court enforced the same forum selection clause disputed in this case on the basis that the plaintiffs had visited the Atlantis resort on previous occasions and thus “had a reasonable opportunity [*15] to consider and reject the forum selection clause.”
Also making this case distinct from Sun Trust Bank is the fact that the Kerzner Defendants provided Plaintiffs with prior notice that they would be asked to sign a form requiring all suits brought against the Kerzner Defendants be brought in the Bahamas. Plaintiffs concede that Mrs. Son received two e-mails on July 24, 2005, that contained an attachment titled “Terms and Conditions.” (Pl. Ex. 4, 5.) In the section labeled “Atlantis Registration,” the attachment explained that all guests would be asked to sign a forum selection clause upon check-in.
Mrs. Son testified that she did not remember receiving these e-mails from the Kerzner Defendants, and Mrs. Son also testified that she did not open e-mails from unrecognized senders because of the threat of computer viruses. Mrs. Son further testified that she did not expect to receive e-mails regarding her Atlantis resort trip. However, Mrs. Son received these e-mails the very same day that she booked her trip, and both e-mails had “Travel Plan” in the subject line with a reservation number. Logic would dictate that Mrs. Son must have provided her e-mail address over the phone when making [*16] the reservation since she received e-mails regarding her booking shortly thereafter. Thus, while the Court finds Mrs. Son’s testimony credible, the Court does not agree that her decision not to read the e-mails was reasonable. 3 Mrs. Son chose not to read the e-mails, but the e-mails provided sufficient notice of the forum selection and choice of law clauses her family would be required to sign upon arrival at the Atlantis Resort.
3 At the hearing, Plaintiffs’ counsel consistently averred that Plaintiffs did not have a “duty” to open the e-mails they received regarding their trip but that Plaintiff had a “duty” to open packages sent to her through the U.S. Mail. However, the Court fails to see how Plaintiffs make this distinction. Plaintiffs have not identified a specific duty that Plaintiffs might have had to open regular mail versus e-mail. Plaintiffs’ could have decided not to open the package received through the U.S. Mail as freely as they decided not to open the e-mails. The Court cannot conceive of a “duty” to open a letter any more than it can conceive of a “duty” to open an e-mail. Plaintiffs’ bear the risk that they will lose valuable information or documentation when they [*17] choose not to receive a letter, e-mail, or any other form of communication. Plaintiffs weighed the risk of losing vital information against the risk of receiving a computer virus when deciding not to open the e-mails, just as Plaintiffs weighed the risk of losing vital information against the risk of receiving anthrax powder when deciding to open the mailed package. The Kerzner Defendants’ should not be held liable because Plaintiffs’ risk calculus led them not to open the documentation.
Finally, Plaintiffs argued at the hearing that Mrs. Son did not sign the forum selection clause, nor did she grant her husband authority to sign away her legal rights. Thus, Plaintiffs claim, the forum selection clause could not apply to Mrs. Son. The Court disagrees. First, Mrs. Son admitted that she granted her husband authority to complete all procedures necessary to check-in to the Atlantis Resort. Thus, Mr. Son had “implied authority” to sign the forum selection clause on Mrs. Son’s behalf, because it was necessary for Mr. Son to sign the clause to complete check-in. 4 Alternatively, by signing the form which clearly stated he had the authority to bind everyone in his party, Mr. Son acted with “apparent [*18] authority,” because the Atlantis Resort reasonably believed his representations that he had the authority to bind Mrs. Son. 5
4 The Restatement (Third) of Agency defines “implied authority” as either (1) the authority “to do what is necessary, usual, and proper to accomplish or perform an agent’s express responsibilities or (2) to act in a manner which an agent believes the principal wishes the agent to act based on the agent’s reasonable interpretation of the principal’s manifestation in light of the principal’s objectives and other facts known to the agent.” Restatement (Third) of Agency § 2.01 cmnt. b (2006).
5 “Apparent authority is the power held by an agent or other actor to affect a principal’s legal relations with third parties when a third party reasonably believes the actor has the authority to act on behalf of the princpal and that belief is traceable to the principal’s manifestations.” Restatement (Third) of Agency § 2.03.
The parties did not brief the issue of agency, but the parties proceeded to argue the issue of agency at the hearing. In Florida, the rule of lex loci contractus determines the law to be applied when determining an issue of contract law. See Sturiano v. Brooks, 523 So. 2d 1126 (Fla. 1988). [*19] Because the contract was executed in the Bahamas, Bahamian law would apply to whether Mr. Son was acting as Mrs. Son’s agent and whether she was bound by Mr. Son’s signature. The parties, however, have not provided any evidence of (nor can the Court determine on its own initiative) the scope of Bahamian agency law. The Court has turned to the Restatement (Third) of Agency as a general guideline, not as an authoritative source on the law of the Commonwealth of the Bahamas.
Moreover, a party need not sign a forum selection clause to be bound by the terms of the clause; a party can be bound if it is “closely related” to the dispute. Hugel v. Corporation of Lloyd’s, 999 F.2d 206, 209-10 (7th Cir. 1993); see also E.I. DuPont de Nemours and Co. v. Rhone Poulenc Fiber and Resin Intermediaries, S.A.S., 269 F.3d 187, 195 (3d Cir. 2001); Manetti-Farrow, Inc. v. Gucci America, Inc., 858 F.2d 509, 514 n.5 (9th Cir. 1988). Mrs. Son is at the center of this dispute (indeed, the parties are arguing over who is responsible for her injuries) and is thus “closely related.” Therefore, she can be bound to the terms of the clause whether she actually signed it or not. Again, the Court has explained that [*20] she received all the notice to which she was entitled under the law, and she should have been aware that agreeing to a forum selection clause was part of the check-in process.
In sum, the Kerzner Defendants’ burden in this situation was only to provide reasonable notice to Plaintiffs, which the Kerzner Defendants achieved. Once the Kerzner Defendants sent Plaintiffs notice of the forum selection clause, it was Plaintiffs’ decision as to whether they read the notification. The Court rejects Plaintiffs’ argument that Defendants somehow needed to do more. Plaintiffs chose not to read the notice, and the consequences are theirs to bear. Thus, the forum selection clause will not be invalidated on this ground.
Deprivation of Day in Court and Fundamental Unfairness
Plaintiffs argue that they will be “effectively deprived of their day in court” because of the “inconvenience” of litigating in the Bahamas and because of the fundamental unfairness of Bahamian law. (Pl. Resp. 10.) First, Plaintiffs claim that Mrs. Son cannot return to the Bahamas because of the “great mental and emotional anguish” she would suffer if she was forced to return there. Mrs. Son testified that she did not want to return [*21] to the Bahamas; however, she admitted that her doctors have never stated that she is physically or mentally incapable of returning. Instead, her prohibition on travel to the Bahamas appears self-imposed and, as a result, not a persuasive justification to invalidate the forum selection clause.
Likewise, Plaintiffs claim they are “financially unable to pursue litigation in the Bahamas, where contingent fees are prohibited.” (Pl. Resp. 11.) This argument is also unavailing. The Court cannot give substantial weight to fact that contingency fee arrangements are not available in foreign forums. Magnin v. Teledyne Continental Motors, 91 F.3d 1424, 1430 (11th Cir. 1996). As the Fifth Circuit Court of Appeals has stated, “If the lack of a contingent-fee system were held determinative, then a case could almost never be dismissed because contingency fees are not allowed in most foreign forums.” Coakes v. Arabian American Oil Co., 831 F.2d 572, 576 (5th Cir. 1987) (discussing contingency fee arrangements as part of forum non conveniens analysis).
Public Policy
Plaintiffs argue that “enforcement of the provisions of the Release would contravene a strong public policy, because enforcement of the forum [*22] selection clause would imply enforcement of the entire Release.” (Pl. Resp. 11.) Plaintiffs, however, have provided no cases to suggest that enforcement of the forum selection clause by this Court would compel a Bahamian court to enforce the release of liability. The Court thus finds this argument lacks merit.
Discouraging Legitimate Claims
Finally, Plaintiffs argue that Defendants “set the Bahamas as the forum ‘as a means of discouraging [hotel guests] from pursuing legitimate claims.'” (Pl. Resp. 12.) Plaintiffs point to a case in which the Kerzner Defendants chose to litigate in New Jersey state court, Paradise Enterprises Ltd. v. Sapir, 356 N.J. Super. 96, 811 A.2d 516 (N.J. Super. Ct. 2002), to show that the Kerzner Defendants can indeed litigate in U.S. forums. Plaintiffs claim that the fact that the Kerzner Defendants will litigate in New Jersey when they so choose shows bad faith selecting the Bahamas to litigate these claims. The Court also finds this argument unpersuasive. As the Supreme Court held in Shute, where the defendant selected a Florida forum, “[a]ny suggestion of such a bad-faith motive is belied by two facts: Petitioner has its principal place of business in Florida, and many of its [*23] cruises depart from and return to Florida ports.” Here, the Kerzner Defendants, who run a resort in the Bahamas, elected a Bahamian forum to litigate disputes arising out of visitors to the Bahamian resort who are injured while staying in the Bahamas. Had Defendants selected a trial court in Thailand to settle tort claims arising out of resort stays in the Bahamas, one could make a colorable argument that the selected forum was unrelated to the dispute and selected to discourage individuals from bringing legitimate claims. Where the defendant operates a business in the selected forum and the actions that would give rise to litigation would also occur in the selected forum, the Court cannot conclude that the defendant acted in bad faith.
Accordingly, the Court finds that the forum selection clause is enforceable, and this case shall be dismissed subject to Plaintiff’s ability to refile the action in the Supreme Court of the Bahamas.
Forum Non Conveniens
Alternatively, the Court believes that this action should be dismissed on the basis of the doctrine of forum non conveniens. The federal doctrine of forum non conveniens allows the Court to use its inherent power to dismiss an action because [*24] of the inconvenience of the plaintiff’s chosen forum. Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 506-07, 67 S. Ct. 839, 91 L. Ed. 1055 (1947). Under the doctrine, dismissal is “appropriate where trial in the plaintiff’s chosen forum imposes a heavy burden on the defendant or the court, and where the plaintiff is unable to offer any specific reasons of convenience supporting his choice.” Piper Aircraft v. Reyno, 454 U.S. 235, 249, 102 S. Ct. 252, 70 L. Ed. 2d 419 (1981).
Analytically, the Court’s analysis falls into three stages. First, the Court must consider whether an “adequate alternative forum” exists which has jurisdiction over the case. La Seguridad v. Transytur Line, 707 F.2d 1304, 1307 (11th Cir. 1983). The Court must then consider whether private interest factors suggest that the Court should disturb the strong presumption in favor of a plaintiff’s choice of forum. Id. If the Court finds that the private interest factors are indeterminate, the Court must then proceed to consider whether considerations of public interest favor a trial in the foreign forum. Id. Dismissal is only warranted if these factors weigh heavily towards trial in the foreign forum. Piper Aircraft, 454 U.S. at 249. This strong presumption in favor of the plaintiff’s choice [*25] of forum is strongest when the plaintiff is a citizen or resident of the U.S. SME Racks, Inc. v. Sistemas Mecanicos Para Electronica, S.A., 382 F.3d 1097, 1102 (11th Cir. 2004).
Adequate Alternative Forum
An adequate alternative forum exists when the defendant is “amenable to process” in the foreign forum. Piper Aircraft, 454 U.S. at 254 n.22. The defendant bears the burden of establishing that its proposed forum is adequate and has jurisdiction over the case. La Seguridad, 707 F.2d at 1307. Here, all but two of the Defendants in this action are Bahamian citizens or corporations. (Compl. PP 4-14.) Defendants claim that they are “undoubtedly amenable to service of process in the Bahamas.” (Def. Mot. 15.) Likewise, Defendants have presented evidence that the Bahamian legal system recognizes negligence actions like Plaintiffs’ claims in the instant case. (Pyfrom Aff. P 10.) Thus, there is no indication that Bahamian courts would not afford Plaintiffs a remedy for their claims. Moreover, courts are loathe to hold that other forums are inadequate. See Leon v. Millon Air, Inc., 251 F.3d 1305, 1312 (11th Cir. 2001). Plaintiffs have not intimated that Bahamian courts would be inadequate. Thus, [*26] the Court finds that the Supreme Court of the Bahamas is an adequate alternative forum for the instant action.
Private Interest Factors
The Supreme Court has directed district courts to consider the “private interest of the litigant.” Gulf Oil, 330 U.S. at 508. Factors considered to be in a litigant’s private interest include the ease of access to sources of proof, availability of compulsory process for witnesses, cost of obtaining attendance of witnesses, ability to view the premises (if necessary), and “all other practical problems that make trial of a case easy, expeditious and inexpensive.” Id.
The Kerzner Defendants argue that “all of the documents related to Plaintiffs’ allegations in the Complaint are in The Bahamas.” (Def. Mot. 16.) The Kerzner Defendants do not state what documents are in the Bahamas, nor do they argue that such documents could not be brought to Florida in the event that trial was conducted here. Plaintiffs, meanwhile, have noted that they are already in possession of police and medical records from the Bahamas (see Childs Aff.), and such documents could easily be disclosed to Defendants during discovery. This factor weighs in Plaintiffs’ favor.
Notwithstanding [*27] the relative ease of access to documentary evidence, the ease of access to witnesses and the ability to compel attendance at trial is not as clear. Plaintiffs have only identified one Florida citizen witness – the corporate representative of Defendant Kerzner International Resorts, Inc. The remaining witnesses Plaintiffs seek to call are largely medical professionals from Maryland or Washington, D.C. (See Pl. Resp. 14-16.) Defendants, on the contrary, note that many prospective witnesses are located in the Bahamas: the staff at Doctors Hospital in Nassau, Bahamas, who initially treated Mrs. Son; representatives of Defendant Nassau Cruises, Ltd.; Defendants Robert Brown, Rodger Munroe, and Silvin Brown; as well as employees of the Atlantis Resort. (Def. Mot. 16.)
The Court recognizes that in Ward v. Kerzner International Hotels Ltd., Judge Jordan held that the fact that several witnesses resided in the Bahamas was insufficient to overcome the strong presumption in favor of the plaintiff. No. 03-23087-CIV, 2005 U.S. Dist. LEXIS 11081, 2005 WL 2456191 at *3 (S.D. Fla. Mar. 30, 2005). In that case, like in Sun Trust Bank, a majority of the Bahamian witnesses were employees of the defendants who, defendants claimed, [*28] would appear voluntarily. Id.; see also Sun Trust Bank, 184 F. Supp. 2d at 1263-64. In Ward, only two Bahamian witnesses were not employed by the defendants. Ward, 2005 U.S. Dist. LEXIS 11081, 2005 WL 2456191 at *3. By contrast, in this case, most of the relevant witnesses are not employees of the Kerzner Defendants. Some of the prospective witnesses are Defendants in this action, but this Court cannot effectively subpoena these foreign nationals residing in the Bahamas and compel them to appear before this Court. In fact, these Bahamian witnesses are the very witnesses that will describe the events leading to Mrs. Son’s injuries (i.e., the liability phase). The U.S. witnesses, who for the most part are medical professionals, will likely be used for the damages phase of trial. Looking at the quality of the proposed witnesses, rather than absolute numbers of potential witnesses, the Court finds that none of the most vital witnesses needed to resolve the issue of liability reside in Florida, and a substantial number of these witnesses reside in the Bahamas.
The Kerzner Defendants may be able to interview agents of Nassau Cruses, Ltd., or some of the other individual Defendants, but the Kerzner Defendants would be [*29] forced to present testimony at trial in Florida in the form of depositions or letters rogatory. Were this situation limited to a pair of witnesses whose testimony was not in controversy (as in Ward), the Kerzner Defendants would be expected to proceed using these devices. Where several of the Defendants are outside of the compulsory process of this Court and where those witnesses are the Kerzner Defendants’ main witnesses to challenge Plaintiffs’ claims of liability, as in this case, the Court believes that the Kerzner Defendants would be severely prejudiced in their ability to defend their case. As the Supreme Court explained in Gulf Oil, the doctrine of forum non conveniens should be applied to avoid these situations: “Certainly to fix the place of trial at a point where litigants cannot compel personal attendance and may be forced to try their cases on deposition, is to create a condition not satisfactory to court, jury or most litigants.” 330 U.S. at 511.
Moreover, Plaintiffs’ have not identified a single witness who would be available to testify if trial were held in Florida but would not be available to testify at trial in the Bahamas. As all but one of Plaintiffs’ witnesses are [*30] coming from locations outside of this district, all but one will have to travel. The Court believes that it would be equally feasible for Plaintiffs to arrange plane tickets and hotel stays in Nassau, Bahamas, as it would in West Palm Beach, Florida. These cities are roughly 200 miles apart, a relatively short distance considering that Plaintiffs will have to travel roughly 1,000 miles to reach either forum. While there may be some inconvenience for the one Florida witness to travel to the Bahamas, Plaintiffs cannot realistically contend that the inconvenience of traveling to Nassau would vary significantly from the inconvenience of traveling to West Palm Beach. See Wiwa v. Royal Dutch Petroleum Co., 226 F.3d 88, 107 (2d Cir. 2000) (“For any nonparty witnesses, the inconvenience of a trial in New York is not significantly more pronounced than the inconvenience of a trial in England.”).
Finally, it has been widely recognized that the inability to implead other parties directly involved in a controversy is a factor weighing heavily against the plaintiff’s choice of forum. See, e.g., Reid-Walen v. Hansen, 933 F.2d 1390, 1398 (8th Cir. 1991); Fitzgerald v. Texaco, Inc., 521 F.2d 448, 453 (2d Cir. 1975). [*31] In this case, like in Piper Aircraft, the joinder of Nassau Cruises, Ltd., Robert Brown, Rodger Munroe, and Silvin Brown is “crucial to the presentation” of the Kerzner Defendants’ case. 454 U.S. at 259. Plaintiffs want to show that Nassau Cruises and these individuals are the agents of the Kerzner Defendants and that the Kerzner Defendants are vicariously liable for her injuries. Without the ability to join this corporation and these individuals meaningfully to this case, the Kerzner Defendants would be forced to defend claims of vicarious liability with limited benefit of evidence from the persons actually involved in the incident giving rise to the claim. The Court finds this burden to be substantial. 6 Conversely, the Court can find no substantial burden on Plaintiffs (other than a financial burden from Plaintiffs’ inability to retain counsel on a contingency fee basis) from having to litigate their dispute in the Bahamas.
6 Unlike all of the cases involving injuries at resorts cited by Plaintiffs, this case is distinct because it involves an injury allegedly caused by third parties. In every other case, the plaintiff alleged that the resort was directly liable for negligence. Here, [*32] Plaintiffs do not argue direct negligence by the Kerzner Defendants, and the Kerzner Defendants can only defend their own case by compelling the attendance of the alleged direct tortfeasors. While these tortfeasors are nominally part of this lawsuit and have been served, their appearance in Court cannot be guaranteed.
After considering the private interest factors, the Court finds that they weigh substantially against Plaintiffs’ selection of the Southern District of Florida as their forum. The Court will now consider the public interest factors.
Public Interest Factors
In Gulf Oil, the Supreme Court described the considerations of public interest that district courts should consider on a motion to dismiss for forum non conveniens:
Administrative difficulties follow for courts when litigation is piled up in congested centers instead of being handled at its origin. Jury duty is a burden that ought not to be imposed upon the people of a community which has no relation to the litigation. In cases which touch the affairs of many persons, there is reason for holding the trial in their view and reach rather than in remote parts of the country where they can learn of it by report only. There [*33] is a local interest in having localized controversies decided at home. There is an appropriateness, too, in having the trial of a diversity case in a forum that is at home with the state law that must govern the case, rather than having a court in some other forum untangle problems in conflict of laws, and in law foreign to itself.
Gulf Oil, 330 U.S. at 508-09. Additionally, the Court must weigh the interest of the United States in providing a U.S. forum for its citizens with the interest of the Bahamas in adjudicating a dispute that occurred in its territory. See SME Racks, 382 F.3d at 1104.
While the Court begins with the proposition that Plaintiffs (both U.S. citizens) should not be ousted from a U.S. forum, the Court finds that the public interest factors also weigh heavily in favor of trial in the Bahamas. First, in SME Racks, the court made clear that the “United States has a strong interest in providing a forum for its citizens’ grievances against an allegedly predatory foreign business that actively solicited business and caused harm within the home forum.” 382 F.3d at 1104 (emphasis added). In SME Racks, a U.S. plaintiff brought an action against a Spanish company for breach [*34] of contract and various torts in Florida. Id. at 1099. The contract was negotiated and executed in Spain, but the alleged breach and torts allegedly occurred in Florida as the plaintiff claimed it received a shipment of defective goods in Florida. Id. This case is distinguishable from SME Racks, because the “harm” did not occur in Florida (or even in the U.S.). Instead, Plaintiffs are suing (with one exception) Bahamian companies and individuals for conduct which occurred entirely within the Bahamas. Unlike SME Racks, the presumption in favor of Plaintiffs’ choice of forum here is not as strong because of the attenuated connection of this forum with the events giving rise to the claims. See, e.g., J.C. Renfroe & Sons, Inc. v. Renfroe Japan Co., Ltd., 515 F. Supp. 2d 1258, 1274 (M.D. Fla. 2007); see also Iragorri v. United Technologies Corp., 274 F.3d 65, 73 (2d Cir. 2001) (en banc) (holding that a U.S. plaintiff’s choice of forum is not automatically granted greater deference unless the choice was motivated by “legitimate reasons”).
The parties have not addressed any administrative difficulties with pursuing this case in the Bahamas, other than the fact that contingency fee agreements [*35] for Plaintiffs’ counsel are not permitted in the Bahamas. 7 This factor, as the Court has already explained, receives no consideration. The Court also agrees with Plaintiffs that a view of the site of Mrs. Son’s accident is meaningless because the “shifting sands are no longer as they were at the time of the accident.” (Pl. Resp. 14.) The remaining factors, nonetheless, weigh heavily for the Kerzner Defendants.
7 The Court notes the logic of Chierchia v. Treasure Cay Services, 738 F. Supp. 1386 (S.D. Fla. 1990), where Judge King held that “a forum in which the personal injury action arose would present a better administrative choice than one which experiences one of the busiest criminal dockets in the U.S.” Id. at 1389.
A jury composed of residents of Palm Beach County, Florida, has a minimal (if any) interest in adjudicating a dispute between citizens of Maryland and (with one exception) citizens of the Bahamas for acts that occurred in the Bahamas. As explained in Gulf Oil, the people of Florida have no relation to this case, and thus they should not bear the burden of serving on a jury to settle a dispute between Maryland residents and Bahamian corporations for activities in Bahamian [*36] territory. In contrast, the Bahamas has an interest in settling a dispute between its citizens and foreigners for activity that happened within its sovereign territory. The Commonwealth of the Bahamas has the strongest interest in protecting tourists and visitors from the conduct of its own citizens. See, e.g., Calvo v. Sol Melia, S.A., 761 So. 2d 461, 464 (Fla. Dist. Ct. App. 2000). While the State of Florida has an interest in protecting its citizens, Plaintiffs (as well as countless other visitors to the Atlantis resort) are not citizens of Florida and they have not presented a persuasive argument for needing the protection of Florida’s laws. 8
8 An argument could be made that the United States has an interest in protecting its citizens from harm abroad. Nevertheless, the Court feels that the interests of the Bahamas are stronger, because the events giving rise to the cause of action occurred in the Bahamas and because Defendants are Bahamian nationals. Further, Plaintiffs traveled to the Bahamas on their own volition and only after the fact seek the protection of U.S. courts.
Plus, Bahamian law will most likely govern this dispute. 9 While this Court is capable of applying Bahamian [*37] law, and the Bahamas is a common law country much like our own, the Court would be forced to rely on expert testimony and evidence provided by the parties as to the substance of Bahamian law, which would add substantially to the administrative burden of having trial in this forum. “The public interest factors point towards dismissal where the court would be required to ‘untangle problems in conflict of laws, and in law foreign to itself.'” Piper Aircraft, 454 U.S. at 251 (quoting Gulf Oil, 330 U.S. at 509).
9 In Florida, courts apply the “significant relationship test” to determine the substantive law applied to personal injury actions. Bishop v. Florida Specialty Paint Co., 389 So.2d 999, 1001 (Fla. 1980). While not dispositive, the law of the state where both the injury and the conduct causing the injury occurred is, in most instances, the law to be applied. Id. Since Mrs. Son’s accident occurred in the Bahamas, the Court finds it likely that Bahamian law will apply, at least in part, to this dispute. Notably, none of the other factors Florida courts consider (residence, nationality or place of incorporation of the parties and the place where the relationship between the parties is [*38] centered) indicate that Florida law should apply. Again, these factors would suggest either Bahamian law or Maryland law should be applied.
Accordingly, the Court finds that the public interest factors also weigh in favor of dismissal of this action.
Reinstatement of Suit
The Court must ultimately determine whether Plaintiffs can reinstate their lawsuit in the alternative forum without undue prejudice or inconvenience. See Leon, 251 F.3d at 1310-11. As the Court has already explained, the inconvenience of traveling from Maryland to West Palm Beach, Florida, is no greater than the inconvenience of traveling from Maryland to Nassau, Bahamas. The distance between these locations is practically the same. In addition, Plaintiffs will not be prejudiced by dismissal, as Defendants are all subject to the jurisdiction of Bahamian courts. (Def. Mot. 19.) The statute of limitations will expire in August 2008, but Defendants have agreed to waive any statute of limitations defenses they might have under Bahamian law. (Id. at 19 n.12.) The Court, therefore, dismisses this action subject to these representations.
Conclusion
It is hereby ORDERED AND ADJUDGED that the Kerzner Defendants’ Motion to Dismiss [*39] (DE 15) is GRANTED IN PART as follows:
1. The Motion to Dismiss pursuant to Fed. R. Civ. P. 12(b)(1) is DENIED. (See DE 31.)
2. The Motion to Dismiss pursuant to Fed. R. Civ. P. 12(b)(3) is GRANTED.
3. The Motion to Dismiss on the basis of the doctrine of forum non conveniens is GRANTED.
4. The Kerzner Defendants are deemed to have waived any statute of limitations and personal jurisdiction defenses they might otherwise raise in the Supreme Court of the Bahamas.
5. This case is DISMISSED WITHOUT PREJUDICE for Plaintiff to refile in the Supreme Court of the Bahamas.
DONE AND ORDERED in Chambers at West Palm Beach, Palm Beach County, Florida, this 5th day of September, 2008.
/s/ Kenneth A. Marra
KENNETH A. MARRA
United States District Judge
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Bernstein v Wysoki et al., 77 A.D.3d 241; 907 N.Y.S.2d 49; 2010 N.Y. App. Div. LEXIS 6579; 2010 NY Slip Op 6475; 244 N.Y.L.J. 43
Posted: February 13, 2012 Filed under: Legal Case, Minors, Youth, Children, New York, Summer Camp, Youth Camps | Tags: Camp, Contract, Forum selection clause, LexisNexis, Medical Malpractice, Motion (legal), New York, New York Supreme Court, New York Supreme Court Appellate Division, Summer Camp, Supreme Court 1 CommentBernstein v Wysoki et al., 77 A.D.3d 241; 907 N.Y.S.2d 49; 2010 N.Y. App. Div. LEXIS 6579; 2010 NY Slip Op 6475; 244 N.Y.L.J. 43
Jordan Bernstein, an Infant, by His Mother and Natural Guardian, Malka Bernstein, et al., Respondents, v Randee Wysoki et al., Appellants, et al., Defendants. (Index No. 20686/07)
2008-06606, 2008-09740
SUPREME COURT OF NEW YORK, APPELLATE DIVISION, SECOND DEPARTMENT
77 A.D.3d 241; 907 N.Y.S.2d 49; 2010 N.Y. App. Div. LEXIS 6579; 2010 NY Slip Op 6475; 244 N.Y.L.J. 43
August 24, 2010, Decided
PRIOR HISTORY: Appeals from orders of the Supreme Court, Nassau County (Thomas P. Phelan, J.), entered June 13, 2008 and September 30, 2008. The order entered June 13, 2008, insofar as appealed from, denied that branch of the cross motion of defendants Randee Wysoki, Dina Farrell, Michael Farrell and Gregory Scagnelli to dismiss the complaint insofar as asserted against them pursuant to CPLR 3211 (a) (1) and 501 based on a forum selection clause. The order entered September 30, 2008, insofar as appealed from, upon reargument, adhered to the original determination and denied that branch of the cross motion of defendant Julie Higgins which was to dismiss the complaint insofar as asserted against her pursuant to CPLR 3211 (a) (1) and 501 based on the forum selection clause.
Bernstein v. Wysoki, 2008 N.Y. Misc. LEXIS 10774 (N.Y. Sup. Ct., Sept. 26, 2008)
Bernstein v. Wysoki, 2008 N.Y. Misc. LEXIS 9483 (N.Y. Sup. Ct., June 10, 2008)
COUNSEL: [***1] Martin Clearwater & Bell, LLP, New York City (William P. Brady, Timothy M. Smith and Stewart G. Milch of counsel), for appellants.
Napoli Bern Ripka, LLP, New York City (Denise A. Rubin of counsel), for respondents.
JUDGES: REINALDO E. RIVERA, J.P., HOWARD MILLER, THOMAS A. DICKERSON, SHERI S. ROMAN, JJ. RIVERA, J.P., MILLER and ROMAN, JJ., concur.
OPINION BY: DICKERSON, J.
OPINION
[*243] [***2] [**51] Dickerson, J.
Factual Background and the Camp Contract
On or about June 25, 2007 the plaintiff Malka Bernstein (hereinafter Malka) entered into a contract (hereinafter the Camp Contract) with the defendant Camp Island Lake (hereinafter the Camp) for her then 13-year-old son, the plaintiff Jordan Bernstein (hereinafter Jordan), to attend the Camp during summer 2007. The Camp is located in Starrucca, Wayne County, Pennsylvania, where it also maintains a summer office. The Camp maintains a winter office in New York City.
The second paragraph of the Camp Contract provided:
“If it is necessary to obtain off-camp medical/surgical/dental services for the camper, such expenses shall be paid by the parent except the portion supplied by the camp medical staff. Authority is granted without limitation to the camp/assigns in all medical matters to hospitalize/treat/order injections/anesthesia/surgery for the camper. The parent is responsible for all pre-existing medical conditions, out of camp medical/surgical/hospital/pharmaceutical/allergy expenses and for providing [*244] adequate quantities [***3] of necessary medications and allergy serums to camp in pharmacy containers with doctor’s instructions. The parent(s) or legal guardian(s) hereby states that the camper is in good, normal health and has no abnormal physical, emotional, or mental handicaps” (emphasis added).
The Camp Contract also contained a forum selection clause. The sixth paragraph of the Camp Contract provided:
“Enclosed with this agreement is $ 1000 per child enrolled in program. Payments on account of tuition (less $ 100 registration fee) will be refunded if requested before January 1st. Cancellations of sessions will not be accepted after January 1st. Thereafter, no refunds will be made. All refunds will be made on or about May 1st. Installments on the balance will be due on January 1st, March 1st, & May 1st. A returned check fee of $ 25 will be applied to all returned checks. These rates are subject to change without notice. Any outstanding balance precludes admission to camp. The [***4] venue of any dispute that may arise out of this agreement or otherwise between the parties to which the camp or its agents is a party shall be either the local District Justice Court or the Court of Common Pleas, Wayne County, Pennsylvania” (emphasis added).
The eighth and final paragraph of the Camp Contract provided, in part, “[t]he parent represents that he/she has full authority [**52] to enroll the camper/to authorize participation in activities/medical care and to contract the aforesaid.”
On or about August 8, 2007, while enrolled at the Camp, Jordan developed a pain in his lower abdomen. The defendants Randee Wysoki and Jill Tschinkel, who were the doctor and registered nurse, respectively, working at the Camp at the time, allegedly cared for Jordan at the Camp before taking him to the defendant Wilson Memorial Regional Medical Center (hereinafter Wilson Memorial), in Johnson City, Broome County, New York, in the vicinity of the Camp. While at Wilson Memorial from August 8, 2007 through August 10, 2007, Jordan allegedly received care and treatment from the defendants Dina Farrell, M.D., Michael Farrell, M.D., Gregory Scagnelli, M.D., Julie Higgins, R.P.A., Patricia Grant, R.N., and [***5] William Kazalski, R.N. Allegedly due to the failure of the defendants to timely recognize and properly care for and treat Jordan’s condition, he sustained various injuries.
[*245] The Instant Action
In November 2007, Jordan and Malka, both as Jordan’s guardian and in her individual capacity, commenced the instant action, inter alia, to recover damages for medical malpractice in the Supreme Court, Nassau County, against, among others, the Camp, Wilson Memorial, “Randy ‘Doe,’ M.D.,” ” ‘Jane Doe’ R.N.,” Dina Farrell, and Michael Farrell. Thereafter, the plaintiffs amended their complaint to substitute Wysoki for the defendant Randy “Doe,” and to add Scagnelli as a defendant.
After joinder of issue, the Camp moved, inter alia, to dismiss the complaint insofar as asserted against it pursuant to CPLR 3211 (a) (1) and 501 based on the forum selection clause in the Camp Contract.
The plaintiffs moved for leave to serve an amended summons and complaint to add Higgins and Jill Tschinkel, R.N., as defendants.
The defendants Grant, Kazalski, and Wilson Memorial jointly cross-moved to change the venue of the action from Nassau County to Broome County pursuant to CPLR 510 and 511 (a) on the grounds that the defendants [***6] Grant, Kazalski, Dina Farrell, Michael Farrell, Scagnelli, and Higgins worked and/or resided in, or within approximately 10 minutes of, Broome County, and also because Wilson Memorial was located in Broome County.
The defendants Wysoki, Dina Farrell, Michael Farrell, and Scagnelli (hereinafter collectively the doctor defendants) jointly cross-moved, inter alia, to dismiss the complaint insofar as asserted against them pursuant to CPLR 3211 (a) (1) and 501 based on the forum selection clause in the Camp Contract. The doctor defendants observed that, pursuant to the last paragraph of the Camp Contract, Malka represented that she had the authority to bind Jordan to the Camp Contract. The doctor defendants further pointed out that the Camp Contract “outlined the terms and conditions of [Jordan’s] attendance at the Camp, including any necessary medical care and treatment or care and treatment decisions for [Jordan].” In that regard, according to the doctor defendants, “as all the parties to the instant action either provided care and treatment to [Jordan] at the Camp or at [Wilson Memorial] based on the Camp’s decision as to what care and treatment [Jordan] needed to receive, any litigation [***7] between the parties in this matter is subject to the terms and conditions of the [Camp Contract].”
[*246] Specifically, the doctor defendants argued that Wysoki was covered by the Camp Contract because she “was the physician working at the Camp who sent [Jordan] to [Wilson Memorial]” and thus “is part of this lawsuit through her work at [**53] the Camp.” The doctor defendants further argued that Dina Farrell, Michael Farrell, and Scagnelli were covered by the Camp Contract because they “treated [Jordan] at [Wilson Memorial] pursuant to the Camp’s decision as ‘in loco parentis’ and with the authority granted to the Camp . . . to have [Jordan] treated at a hospital” and thus “became involved in the care and treatment of [Jordan] based on the decision made of the Camp to take [Jordan] to [Wilson Memorial].”
The doctor defendants also argued that the Camp Contract contained a prima facie valid forum selection clause that should be enforced “absent a strong showing that it should be set aside.” The doctor defendants further argued that the forum selection clause, which by its terms applied to “any dispute that may arise out of this agreement or otherwise between the parties to which the camp or its agents [***8] is a party,” applied to the instant action, since the plaintiffs’ tort claims depended on the existence of the Camp Contract. In that regard, the doctor defendants noted that “there would be no [tort claims] had [Jordan] not been a camper at the Camp during the Summer of 2007,” and that Jordan “would not have been a camper at the Camp without the terms and conditions of the [Camp Contract] being accepted and agreed to by [Malka].” Finally, the doctor defendants “noted that the Courts have held that [HN1] non-parties to an agreement containing a forum selection clause may be entitled to enforce a forum selection clause where the relationship to the signatory is sufficiently close or where the liability of a corporation and an officer is based on the same alleged acts” (citations omitted).
In an order entered June 13, 2008, the Supreme Court, inter alia, denied that branch of the Camp’s motion which was to dismiss the complaint insofar as asserted against it based on the forum selection clause, denied that branch of the doctor defendants’ cross motion which was to dismiss the complaint insofar as asserted against them based on the forum selection clause, and granted the plaintiffs’ motion for [***9] leave to serve an amended summons and complaint (2008 N.Y. Misc. LEXIS, 9483, 2008 NY Slip Op 31711[U]).
The doctor defendants appeal, as limited by their brief, from so much of the foregoing order as denied that branch of their cross motion which was to dismiss the complaint based on the forum selection clause.
[*247] The Camp moved for leave to reargue that branch of its motion which was to dismiss the complaint insofar as asserted against it based on the forum selection clause. The Camp argued that the Supreme Court “blurred the distinctions between [a parent’s] legal ability to bind an infant plaintiff to the terms of a forum selection clause as opposed to a release of liability,” and that, “contrary to a release of liability, the law permits a parent of a minor child who signs a contract with a forum selection clause to bind the minor child to the terms and agreements set forth by the forum selection clause.”
The doctor defendants moved, inter alia, for leave to reargue that branch of their cross motion which was to dismiss the complaint insofar as asserted against them based on the forum selection clause. The doctor defendants argued that the Supreme Court erred in finding that Malka could not bind Jordan to the terms of the Camp Contract, [***10] including the forum selection clause, stating, “[t]he Courts have consistently held that non-signatory infants, who are the subject of and obtain benefit from an agreement signed by the parent, such as a camp enrollment contract, are considered to be third-party beneficiaries for the purpose of enforcing the terms of the contract.” Therefore, according to the doctor defendants, because Jordan “was a [**54] third-party beneficiary of the [Camp Contract] and as the forum selection clause in the [Camp Contract] is valid, the forum selection clause must be found to be applicable to [Jordan’s] claims as well as [Malka’s claims].”
The doctor defendants further argued that the Supreme Court erred in finding “that there was no factual predicate for the foreseeable enforcement [of the forum selection clause in the Camp Contract] by the non-signatory [doctor defendants].” Specifically, noting that the Camp Contract granted authority ” ‘without limitation to the camp/assigns in all medical matters to hospitalize/treat/order injections/anesthesia/surgery for the camper,’ ” the doctor defendants argued that the Camp “contract itself contemplated and provided the factual predicate for the medical treatment [***11] at issue.”
The doctor defendants argued that they “are exactly the ‘assigns’ that were contemplated by the [Camp Contract], as the same sentence in the contract states that the assigns may ‘hospitalize/treat’ [Jordan] and/or ‘order injections/anesthesia/surgery’ for [Jordan].” Thus, according to the doctor defendants, “the [Camp Contract] is the only mechanism by which [they as non-signatories] were able to ‘hospitalize/treat’ [Jordan] [*248] and, thus, the [Camp Contract] is the only mechanism by which there are claims for the non-signatory hospitalization and treatment at issue.”
The doctor defendants further argued that “there was a sufficiently ‘close relationship’ between the signatories to the [Camp Contract] and the non-signatory [doctor] defendants, to reasonably foresee that [the doctor defendants] or noted ‘assigns’ in the contract would seek to enforce the terms of the contract” (emphasis omitted).
Finally, regarding Wysoki in particular, the doctor defendants argued that the Supreme Court erred in finding “that the same acts are not alleged with regard to the claimed liability of the Camp and Dr. Wysoki.”
At some point in time, the plaintiffs served a supplemental summons and a second [***12] amended summons and complaint, inter alia, adding Higgins as a defendant. Higgins moved, inter alia, to dismiss the complaint insofar as asserted against her based on the forum selection clause.
In an order entered September 30, 2008, the Supreme Court, inter alia, granted leave to reargue to both the Camp and the doctor defendants, and, upon reargument, adhered to its original determination denying the respective branches of the Camp’s motion and the doctor defendants’ cross motion which were to dismiss the complaint insofar as asserted against them based on the forum selection clause (2008 N.Y. Misc. LEXIS,10774, 2008 NY Slip Op 33610[U]). The Supreme Court also denied that branch of Higgins’ motion which was to dismiss the complaint insofar as asserted against her based on the forum selection clause.
The doctor defendants appeal from so much of the second order as, upon reargument, adhered to the original determination denying that branch of their cross motion which was to dismiss the complaint based on the forum selection clause, and Higgins jointly appeals from so much of the same order as denied that branch of her motion which was to dismiss the complaint insofar as asserted against her based on the forum selection clause.
Discussion
[HN2] ” ‘A [***13] contractual forum selection clause is prima facie valid and enforceable unless it is shown by the challenging party to be unreasonable, unjust, in contravention of public policy, invalid due to fraud or overreaching, or it is shown that a trial in the [*249] selected forum would be so gravely difficult that the challenging party would, [**55] for all practical purposes, be deprived of its day in court’ ” (Stravalle v Land Cargo, Inc., 39 AD3d 735, 736, 835 NYS2d 606 [2007], quoting LSPA Enter., Inc. v Jani-King of N.Y., Inc., 31 AD3d 394, 395, 817 NYS2d 657 [2006]; see Harry Casper, Inc. v Pines Assoc., L.P., 53 AD3d 764, 765, 861 NYS2d 820 [2008]; Fleet Capital Leasing/Global Vendor Fin. v Angiuli Motors, Inc., 15 AD3d 535, 790 NYS2d 684 [2005]).
[HN3] ” ‘Absent a strong showing that it should be set aside, a forum selection agreement will control’ ” (Horton v Concerns of Police Survivors, Inc., 62 AD3d 836, 836, 878 NYS2d 793 [2009], quoting Di Ruocco v Flamingo Beach Hotel & Casino, 163 AD2d 270, 272, 557 NYS2d 140 [1990]).
The Forum Selection Clause Is Prima Facie Valid and Enforceable
In Horton v Concerns of Police Survivors, Inc. (62 AD3d 836-837, 878 NYS2d 793 [2009]), considering a forum selection clause under similar circumstances, we concluded,
“Here, the plaintiff failed to make the requisite ‘strong showing’ that the forum selection clause in her employment [***14] agreement, which requires disputes to be decided in the courts of the State of Missouri, should be set aside. Although the plaintiff averred that she is a single mother who resides with her teenaged daughter in Dutchess County, New York, this claim was insufficient, standing alone, to demonstrate that enforcement of the forum selection clause would be unjust. The plaintiff offered no evidence that the cost of commencing a wrongful discharge action in Missouri would be so financially prohibitive that, for all practical purposes, she would be deprived of her day in court. Moreover, the plaintiff did not allege that the inclusion of a forum selection clause in her employment contract was the product of overreaching, and she did not demonstrate that the clause is unconscionable.” (Citations omitted.)
[1] Similarly, here, the plaintiffs failed to demonstrate that the forum selection clause is unreasonable or unjust, or that a trial in Wayne County, Pennsylvania, would be so gravely difficult that, for all practical purposes, they would be deprived of their day in court. Moreover, the plaintiffs failed to allege, let [*250] alone demonstrate, that the forum selection clause was the [***15] result of fraud or overreaching. Under these circumstances, the plaintiffs failed to make any showing, let alone a strong showing, that the forum selection clause should be set aside on such bases (id.; see Trump v Deutsche Bank Trust Co. Ams., 65 AD3d 1329, 1331-1332, 887 NYS2d 121 [2009]; compare Yoshida v PC Tech U.S.A. & You-Ri, Inc., 22 AD3d 373, 803 NYS2d 48 [2005] [the Supreme Court properly declined to enforce a contractual forum selection clause fixing Tokyo as the forum for any litigation between the parties, since the plaintiff made “a strong showing that a trial in Tokyo would be so impracticable and inconvenient that she would be deprived of her day in court”]).
The Forum Selection Clause Applies to this Action
[2] Further, the forum selection clause applies to the instant tort action. Notwithstanding the placement of the forum selection clause in the sixth paragraph of the Camp Contract, which otherwise pertains to fees, tuition, and refund policies, the applicability of the forum selection clause does not turn on the type or nature of the dispute between the parties. Rather, by its express language, the forum selection clause applies to “any dispute that may arise out of this agreement or otherwise between the [***16] parties to which the camp or its agents is a party” (see [**56] Tourtellot v Harza Architects, Engrs. & Constr. Mgrs., 55 AD3d 1096, 1097-1098, 866 NYS2d 793 [2008] [rejecting the defendant’s claim that the subject forum selection clause in its agreement with the third-party defendant ” ‘was never intended to apply to third-party claims in personal injury and products liability actions such as . . . plaintiff’s action here,’ (since) under its broad and unequivocal terms, the applicability of the subject forum selection clause does not turn on the type or nature of the dispute between them; rather, it applies to ‘any dispute arising under or in connection with’ their agreement”]; see also Buhler v French Woods Festival of Performing Arts, 154 AD2d 303, 304, 546 NYS2d 591 [1989] [in a personal injury action to recover damages for negligence, the plaintiffs were bound by a forum selection clause in a camp enrollment contract which provided that “(t)he venue of any dispute that may arise out of this agreement or otherwise between the parties to which the camp or its agents is a party shall be either the Village of Hancock, N.Y. Justice Court or the County or State Supreme Court in Delaware County”]).
Jurisdiction and Venue
[3] Moreover, the forum [***17] selection clause is enforceable as a general matter even though it does not include any language [*251] expressly providing that the plaintiffs and the Camp intended to grant exclusive jurisdiction to Pennsylvania. The forum selection clause relates to both jurisdiction and venue, and employs mandatory venue language, providing that the venue of any dispute arising out of the agreement or otherwise between the parties “shall be either the local District Justice Court or the Court of Common Pleas, Wayne County, Pennsylvania.” Accordingly, since the forum selection clause addresses jurisdiction and contains mandatory venue language, the clause fixing venue is enforceable (see Fear & Fear, Inc. v N.I.I. Brokerage, L.L.C., 50 AD3d 185, 187, 851 NYS2d 311 [2008]; John Boutari & Son, Wines & Spirits, S.A. v Attiki Importers & Distribs. Inc., 22 F3d 51, 52 [1994]).
Enforceability of Forum Selection Clause by Nonsignatories
Notwithstanding the fact that the forum selection clause is prima facie valid and enforceable and applicable to the instant tort action as a general matter, this Court must further determine whether the defendant doctors and Higgins, who are not signatories to the Camp Contract, may enforce the forum selection clause.
[HN4] As [***18] a general rule, “only parties in privity of contract may enforce terms of the contract such as a forum selection clause found within the agreement” (Freeford Ltd. v Pendleton, 53 AD3d 32, 38, 857 NYS2d 62 [2008]; see ComJet Aviation Mgt. v Aviation Invs. Holdings, 303 AD2d 272, 758 NYS2d 607 [2003]). However,
[HN5] “there are three sets of circumstances under which a non-party may invoke a forum selection clause: First, it is well settled that an entity or individual that is a third-party beneficiary of the agreement may enforce a forum selection clause found within the agreement. Second, parties to a ‘global transaction’ who are not signatories to a specific agreement within that transaction may nonetheless benefit from a forum selection clause contained in such agreement if the agreements are executed at the same time, by the same parties or for the same purpose. Third, a nonparty that is ‘closely related’ to one of the signatories can enforce a forum selection clause. The relationship between the nonparty and the signatory in such cases must be sufficiently close so that enforcement of the clause is foreseeable by [**57] virtue of the relationship between them.” (Freeford Ltd. v Pendleton, 53 AD3d at 38-39 [citations [*252] omitted]; see Direct Mail Prod. Servs. v MBNA Corp., 2000 US Dist LEXIS 12945, *8, 2000 WL 1277597,*3 [SD NY 2000]; [***19] cf. EPIX Holding Corp. v Marsh & McLennan Cos., Inc., 410 NJ Super 453, 463, 982 A2d 1194, 1200 [2009] [“It is clear that in certain situations, a non-signatory to an arbitration agreement may compel a signatory to arbitrate. Since arbitration agreements are analyzed under traditional principles of state law, such principles allow a contract to be enforced by or against nonparties to the contract through assumption, piercing the corporate veil, alter ego, incorporation by reference, third-party beneficiary theories, waiver and estoppel” (citations and internal quotation marks omitted)].)
[4] Here, relying on the provision in the Camp Contract by which the plaintiffs granted authority to the Camp and to its “assigns” in all medical matters, inter alia, to hospitalize and treat Jordan, Dina Farrell, Michael Farrell, Scagnelli, and Higgins claim to have a sufficiently close relationship with the Camp such that enforcement of the forum selection clause by them was foreseeable to the plaintiffs by virtue of that relationship. Significantly, however, there is nothing in the Camp Contract indicating that the Camp intended to use Dina Farrell, Michael Farrell, Scagnelli, and Higgins in particular in [***20] the event Jordan required “off-camp” medical services. In fact, there is nothing in the Camp Contract indicating that the Camp intended to use Wilson Memorial–located in a different state from the Camp–and its physicians and physician assistants in the event Jordan required medical services.
Under these circumstances, Dina Farrell, Michael Farrell, Scagnelli, and Higgins do not have a sufficiently close relationship with the Camp such that enforcement of the forum selection clause by them was foreseeable to the plaintiffs by virtue of that relationship (cf. Freeford Ltd. v Pendleton, 53 AD3d at 40-41 [“Even a cursory examination of these two agreements makes clear that (defendants) Lane Pendleton and Cairnwood Management had every reason to foresee that (plaintiff) Freeford would seek to enforce the forum selection clause against them”]; Dogmoch Intl. Corp. v Dresdner Bank, 304 AD2d 396, 397, 757 NYS2d 557 [2003] [“(a)lthough defendant was a nonsignatory to the account agreements, it was reasonably foreseeable that it would seek to enforce the forum selection clause given the close relationship between itself and its (signatory) subsidiary”]; Direct [*253] Mail Prod. Servs. v MBNA Corp., 2000 US Dist LEXIS 12945, *10-14, 2000 WL 1277597, *4-5 [***21] [where “a number of . . . clauses in the Agreement between (plaintiff) Direct Mail and (nonparty) MBNA Direct indicate that the signatories intended the contract to benefit related (nonsignatory defendant) MBNA companies,” MBNA Corporation and MBNA America Bank, N.A., were sufficiently closely related to MBNA Direct such that it was foreseeable that they would seek to enforce a forum selection clause contained in the subject agreement]).
[5] Conversely, however, we conclude that Wysoki, as an employee of the Camp, is entitled to enforce the forum selection clause despite her status as a nonsignatory to the Camp Contract. The forum selection clause itself applies to “any dispute that may arise out of this agreement or otherwise between the parties to which the camp or its agents is a party” (emphasis added). Moreover, we find that the [**58] Camp’s relationship with Wysoki, its on-site medical employee, was “sufficiently close so that enforcement of the clause [was] foreseeable by virtue of the relationship between them” (Freeford Ltd. v Pendleton, 53 AD3d at 39). Thus, Wysoki, despite being a nonsignatory to the Camp Contract, was entitled to enforce the valid forum selection clause. Accordingly, [***22] the Supreme Court should have granted that branch of the doctor defendants’ cross motion which was to dismiss the complaint insofar as asserted against Wysoki based on the forum selection clause.
Conclusion
The Supreme Court properly denied that branch of Higgins’ motion which was to dismiss the complaint insofar as asserted against her pursuant to CPLR 3211 (a) (1) and 501 based on the forum selection clause. However, the Supreme Court improperly, upon reargument, adhered to its prior determination denying that branch of the doctor defendants’ cross motion which was to dismiss the complaint insofar as asserted against Wysoki pursuant to CPLR 3211 (a) (1) and 501 based on the forum selection clause.
Accordingly, the appeal from the order entered June 13, 2008 is dismissed, as that order was superseded by the order entered September 30, 2008, made upon reargument. The order entered September 30, 2008 is modified, on the law, by deleting the provision thereof, upon reargument, adhering to the determination in the order entered June 13, 2008, denying that branch of the doctor defendants’ cross motion which was to dismiss the complaint insofar as asserted against Wysoki pursuant to CPLR 3211 (a) (1) [***23] and 501 based on the forum selection clause and substituting therefor a provision, upon reargument, vacating the determination in the order entered June 13, 2008 denying that branch of the doctor defendants’ cross motion which was to dismiss the complaint [*254] insofar as asserted against Wysoki pursuant to CPLR 3211 (a) (1) and 501 based on the forum selection clause and thereupon granting that branch of the cross motion. As so modified, the order entered September 30, 2008 is affirmed insofar as appealed from.
Rivera, J.P., Miller and Roman, JJ., concur.
Ordered that the appeal from the order entered June 13, 2008 is dismissed, without costs or disbursements, as that order was superseded by the order entered September 30, 2008, made upon reargument; and it is further,
Ordered that the order entered September 30, 2008 is modified, on the law, by deleting the provision thereof, upon reargument, adhering to the determination in the order entered June 13, 2008, denying that branch of the cross motion of the defendants Randee Wysoki, Dina Farrell, Michael Farrell, and Gregory Scagnelli which was to dismiss the complaint insofar as asserted against Randee Wysoki pursuant to CPLR 3211 (a) (1) and [***24] 501 based on a forum selection clause and substituting therefor a provision, upon reargument, vacating the determination in the order entered June 13, 2008, denying that branch of the cross motion of the defendants Randee Wysoki, Dina Farrell, Michael Farrell, and Gregory Scagnelli which was to dismiss the complaint insofar as asserted against Randee Wysoki pursuant to CPLR 3211 (a) (1) and 501 based on a forum selection clause and thereupon granting that branch of the cross motion; as so modified, the order entered September 30, 2008, is affirmed insofar as appealed from, without costs or disbursements.