Tennessee still does not allow a parent to sign away a minor’s right to sue, but might enforce a jurisdiction and venue clause, maybe an arbitration clause.

The release was written poorly choosing California as the forum state for the lawsuit and applying California law. The accident occurred in Tennessee, and the defendant was based in Nevada so the court quickly through the venue and jurisdiction clauses out.

Blackwell, v. Sky High Sports Nashville Operations, LLC. 2017 Tenn. App. LEXIS 6

State: Tennessee, Court of Appeals of Tennessee, at Nashville

Plaintiff: Crystal Blackwell, as Next Friend to Jacob Blackwell, a Minor

Defendant: Sky High Sports Nashville Operations, LLC

Plaintiff Claims: negligence

Defendant Defenses: release

Holding: for the plaintiff

Year: 2017

Another trampoline case, another stretch outside the normal subject matter of these articles, however, the case is instructive on two points. (1.) The court just slammed the defendant’s release based on a jurisdiction and venue clause that had nothing to do with the place where the accident occurred and (2.) The judge stated a jurisdiction and venue clause in a release; if it met Tennessee’s law would be valid when signed by a parent to stop the claims of a child.

The minor plaintiff was injured while jumping on a trampoline at the defendant’s facility in Nashville, Tennessee. Prior to his injury, his mother signed a release. The minor plaintiff visited the defendant’s facilities on numerous occasions prior to his injury. He was injured playing a game of trampoline dodgeball.

The release included a forum selection (venue) clause, which stipulated California was the site of any lawsuit applying California law. (California allows a mother to sign away a parent’s right to sue. See States that allow a parent to sign away a minor’s right to sue).

The mother and the son sued the defendant. The defendant filed a motion to change parties, meaning the defendant named in the lawsuit was not the defendant who owned the facility where the accident occurred. The parties eventually stipulated to that, and the correct parties were identified and in the lawsuit. The defendant filed a motion to enforce the contract between the parties, meaning the lawsuit should be moved to California as stated in the release. The motion also stated the claims made by the mother should be dismissed because she signed the release.

The mother voluntarily dismissed her claims against the defendant. By doing so, the defendant was now arguing release law only against the minor plaintiff in a state with a long history of denying those releases. (See States that allow a parent to sign away a minor’s right to sue).

The trial court had a hearing on the issue of the venue and jurisdiction clauses and ruled them unenforceable.

Therein, the trial court ruled that neither the forum selection clause nor the choice of law provision were valid because their enforcement would cause a great hardship for Son to prosecute his action in California and, Tennessee, rather than California, has “a more significant relationship to the facts surrounding this case.”

The court also ruled that the release was not valid to protect against the claims of the minor, now the sole plaintiff in the case finding “The trial court also noted that Tennessee’s law included a fundamental public policy regarding the protection of children.”

The trial court eventually granted the defendant’s motion for an interlocutory appeal. An interlocutory appeal is an appeal prior to the granting of a final decision by the court. This type of appeal is rare and only done when one party can argue the issue should be decided by the appellate court prior to going to trial and has a good basis for their argument.

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

The Appellate Court found four issues to review:

1. Whether the trial court erred in refusing to enforce the forum selection clause contained in the release?

2. Whether the trial court erred in refusing to enforce the choice of law provision contained in the release?

3. Whether the trial court erred in refusing to enforce the waiver of liability against Son contained in the release signed by Mother?

4. Whether the trial court erred in refusing to allow the amendment to the complaint to allow Son to recover for pre-majority medical expenses.

Starting with issue one the court looked at the exact same issues discussed in Your Jurisdiction and Venue clause must be relevant to the possible location of the accident. Screw this up and you can void your release as occurred in this ski racing case. The court started with the general law concerning venue or forum selection clauses.

Generally, a forum selection clause is enforceable and binding on the parties entering into the contract. A forum selection clause will be upheld if it is fair and reasonable in light of all the circumstances surrounding its origin and application.

Forum selection clauses will be enforced unless:

(1) the plaintiff cannot secure effective relief in the other state, for reasons other than delay in bringing the action; (2) or the other state would be a substantially less convenient place for the trial of the action than this state; (3) or the agreement as to the place of the action was obtained by misrepresentation, duress, abuse of economic power, or other unconscionable means; (4) or it would for some other reason be unfair or unreasonable to enforce the agreement.

The forum selection clause is valid unless the party arguing against the clause proves it would be unfair and inequitable. “Tennessee law is clear, however, that the party challenging the enforcement of the forum selection clause “should bear a heavy burden of proof.”

The plaintiffs were from Tennessee, and the accident occurred in Tennessee. All the plaintiff’s witnesses were from Tennessee because that is where the injured minor received his medical treatment. The defendant was a Nevada corporation doing business in Nevada. However, the defendant’s release stated that California was the place for any litigation. The reason for that is California allows a parent to sign away a minor’s right to sue. (See States that allow a parent to sign away a minor’s right to sue).

California was obviously a “less convenient place” to have a trial because the majority, if not all the witnesses, were based in Tennessee. However, inconvenience or annoyance is not enough to invalidate a venue clause, nor will increased cost of litigating the case.

Still, the Tennessee Supreme Court has previously held that where neither company at issue was a resident of the proposed forum and none of the witnesses were residents of the proposed forum, the party resisting a forum selection clause had met its burden to show that the proposed forum was a substantially less convenient forum.

What triggered the court in its decision is the total lack of any real relationship of the parties to the case or the facts of the case to California. Add to that California first issue, the law would allow the release to be effective. Under Tennessee’s law, California would not provide a fair forum for the plaintiff. The release was signed in Tennessee, which the court stated was the default location for the litigation. “Tennessee follows the rule of lex loci contractus. This rule provides that a contract is presumed to be governed by the law of the jurisdiction in which it was executed absent a contrary intent.”

The choice of law or jurisdiction question sunk for the same reason.

Instead, the choice of law provision fails for largely the same reason that the forum selection clause fails: no material connection exists between the transaction at issue and California. As previously discussed, the contract at issue was signed in Tennessee, between Tennessee residents and a Nevada company, concerning activities taking place in Tennessee. Black’s Law Dictionary defines “material” as “[h]aving some logical connection with the consequential facts.” The simple fact that Sky High’s parent company was founded in California over a decade ago and now operates several facilities there is simply not sufficient to show a logical connection to the transaction at issue in this case.

The choice of law provision in Tennessee and most if not all states, will be honored when there is a “material connection” to the transactions at issue. That means that a jurisdiction and venue clause must be based where the plaintiff is, where the defendant is or where the accident happened. IF the jurisdiction and venue clause is based on the defendant’s location, the courts are looking for more than just location. They want witnesses needed to be there or a real reason why the defendant’s location to be the site of the trial and the law to be applied.

After throwing out the jurisdiction and venue clauses in the release for being an attempt to get around an issue, the court then looked at the release itself. The court first looked at limitations on releases in Tennessee.

These types of agreements, however, are subject to some important exceptions, such as waivers involving gross negligence or willful conduct or those involving a public duty. These types of provisions must also be clear and unambiguous.

The plaintiff’s argument was the release violated Tennessee’s public policy.

[T]he public policy of Tennessee is to be found in its constitution, statutes, judicial decisions and applicable rules of common law.'” “Primarily, it is for the legislature to determine the public policy of the state, and if there is a statute that addresses the subject in question, the policy reflected therein must prevail.”

To determine if a contract violates public policy the court must look at the purpose of the contract, if the contract will have a detrimental effect on the public. “‘The principle that contracts in contravention of public policy are not enforceable should be applied with caution and only in cases plainly within the reasons on which that doctrine rests.’”

The court then reviewed the Childress decision in detail and found it to still be viable law in Tennessee.

Based on the foregoing, we conclude that there is no basis to depart from this Court’s well-reasoned decision in Childress. Because the law in Tennessee states that parents may not bind their minor children to pre-injury waivers of liability, releases, or indemnity agreements, the trial court did not err in refusing to enforce the waiver of liability and indemnity provisions of the release signed by Mother on behalf of Son.

This court agreed, releases signed by parents to stop claims of a minor are invalid in Tennessee. Tennessee now has two appellate court decisions prohibiting a parent from signing away a minor’s right to sue. The Tennessee Supreme Court declined to review the decision, Blackwell v. Sky High Sports Nashville Operations, LLC, 2017 Tenn. LEXIS 305.

The court then looked at a motion filed by the plaintiff to increase the damages based on pre-majority medical expenses. These were medical bills paid by the mother prior to the injured plaintiff reaching the age of 18. Those bills under Tennessee’s law where the mother’s bills, the person who paid them, however, since she had dismissed her claims, those damages were no longer part of the suit. Now the plaintiff was trying to include them in the injured plaintiff’s claims.

The court denied that motion based on the release the mother signed, which prevented her claims and the plaintiff as a minor had no legal duty to pay those bills, only the mother could. Therefore, those damages could not be included in the lawsuit.

The release in that regard proved valuable to the defendant because the medical bills incurred right after the accident were the largest amount of claims to be paid.

So Now What?

This is a great example of a case where the local business accepted the release from above, home office, without checking to see if that release was valid. This occurs every day, with the same results, when an insured asks for a release from their insurance company or a new franchise opens up and accepts the paperwork from the franchisor as is.

Always have your release reviewed to see if it meets the needs of your business and the laws of your state.

The release was effective to stop the lawsuit for claims made by the mother of the injured minor. Those medical bills paid by the mother were probably substantial and would the largest amount of claims owed. In many cases with the reduced amount of medical bills, other damages would be significantly reduced because those damages tend to be a factor of the medical bills.

What is of note in this decision is the jurisdiction and venue clause, or choice of law and forum selection clause as defined in the decision would have been upheld if it was not so absurd. If the choice of law clause was based on the requirements that it have some relationship to the parties or the accident, it seems to have been a valid decision and upheld.

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

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Your Jurisdiction and Venue clause must be relevant to the possible location of the accident. Screw this up and you can void your release as occurred in this ski racing case.

This is not the first decision I’ve read where the United States Ski Association (USSA) had its release laughed out of court. The court found ZERO legal arguments for the jurisdiction and venue clause in the release used.

Kearney, v. Okemo Limited Liability Company, 2016 U.S. Dist. LEXIS 106011

State: Vermont, United States District Court for the District of Vermont

Plaintiff: Brian J Tierney

Defendant: Okemo Limited Liability Company, d/b/a Okemo Mountain Resort, and The United States Ski and Snowboard Association,

Plaintiff Claims: alleging negligent installation of safety netting during a downhill alpine ski race

Defendant Defenses: Release

Holding: for the plaintiff

Year: 2016

The United States Ski Association (USSA) has members sign a release online before they can participate in any USSA as a ski race. Ski areas rely on this release when holding USSA sanctioned races. The USSA release, however, is a poorly written document and time after time the ski areas, and the USSA lose a lawsuit by a plaintiff because they relied on the USSA release.

The number-one  reason why the USSA as a release is thrown out by the courts is the jurisdiction and venue clause. Jurisdiction is the law that will be applied case and venue is the actual location of where the trial will be held. The USSA release says the jurisdiction for any case is Colorado. The problem is unless the accident occurred in Colorado; no other relationship exists between Colorado and the parties to the lawsuit.

The USSA is based, located, in Utah. In this case, the defendant ski area was located in Vermont. There were zero relationships between the USSA in Utah the ski area in Vermont and the injured plaintiff who was from New York, and the state of Colorado.

Consequently, the court throughout the jurisdiction and venue clause and found as 99% of most courts would that the location of the lawsuit should be Vermont, the place where the accident happened.

Vermont, however, does not recognize releases. (See States that do not Support the Use of a Release.).

The plaintiff argued the release was invalid because a copy with his signature could not be produced. The plaintiff signed and agreed to the documentation, including the release when he became a member of the USSA. The plaintiff argued in court that he did not remember signing or agreeing to the release. However, the USSA could  show through their IT expert the only way that the plaintiff could have become a member of the USSA was by signing the release. You either had to click on and accept the release, or you could go no further in signing up to be a member of the USSA.

The plaintiff was injured while competing in amateur downhill ski race at the defendant ski area at Okemo Mountain resort. The USSA sanctioned the race. To be eligible to participate in the race a person had to be a USSA member, had to have conducted a visual inspection of course, and had to have taken at least two official training runs prior to the race.

The defendant filed a motion for summary judgment based on the release. This ruling denied the motion for summary judgment.

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

The court first commented on the jurisdiction and venue issue.

The release also contained a choice-of-law provision, which stated that it would be “construed in accordance with, and governed by the substantive laws of the State of Colorado, without reference to principles governing choice or conflict of laws.”

The court then went through the various arguments of the plaintiff and defendant concerning the motion to dismiss, first off, with the plaintiff’s argument that he never remembered signing the release could not have signed release. The court termed the online release as a clip wrap release. This means that the release could not have been rejected by the plaintiff because the website only allows you to go forward after clicking yes to the release.

Because the click-wrap technology does not permit the customer to continue to use the website, unless he or she clicks on the required box on the screen, courts have accepted proof of use at the site as evidence of the customer’s agreement.

The court stated that generally clip wrap releases are upheld. The court went through several different decisions where clip-wrap releases had been decided. The court concluded that the plaintiff had to have signed the release because the plaintiff admitted that he had been charged for his USSA membership on his credit card and received an email about his membership from the USSA. “Plaintiff admits that he received a confirmation email from USSA and that his credit card statement reflects a payment for his USSA membership.

The court then went into the choice of law clause. That means the jurisdiction and venue clause. A choice of law clause is not a clause that is controlled strictly by the contract.

Whenever there is a decision based on what law shall apply the law where the accident happened or where the court is sitting is the law that is applied to determine what law will apply. In many cases, such as this one, the choice of law decision leans toward granting the choice of law to the place where the test is being determined.

“The validity of a contractual choice-of-law clause is a threshold question that must be decided not under the law specified in the clause, but under the relevant forum’s choice-of-law rules governing the effectiveness of such clauses.” As this is a diversity action, the court looks to Vermont’s choice-of-law rules to determine which law applies.

A jurisdiction and venue clause is also not solely determined based on the four corners of the document. Meaning, just because you have a jurisdiction and venue clause in the document does not mean that is what is going to be upheld by the court. Here the court applied the choice of laws test as set forth in Vermont to determine what law should apply in governing where the suit in the law to be applied is suit to take place.

Simply put the court found there was no relationship between the choice of law clause in the release and the parties or where the accident occurred. The test for what choice of law applies a substantial relationship test. That means that the law that should be applied should be the one that has the greatest relationship to the parties and or the location of the incident giving rise to the lawsuit. In this case the court found, there was no relationship to the parties of the transaction. Plaintiff was a resident of New York the USSA was a Utah corporation, and the defendant ski area was a defendant was a Vermont location.

The arguments made by the USSA as an aid to justify Colorado’s choice of law clause were just plain weak. They argued that the majority of their races occurred in Colorado and that there was a good chance that the plaintiff would race in Colorado. The court found neither of those arguments to be persuasive.

The chosen state of Colorado has no “substantial relationship” to the parties or the transaction. Plaintiff is a resident of New York. USSA is a Utah corporation and Okemo is a Vermont entity. The incident in question did not occur in Colorado. The only facts Defendants have offered in sup-port of applying Colorado law to this case are: (1) Colorado is home to more USSA member clubs than any other state and hosts the majority of USSA’s major events, and (2) there was a possibility that Plaintiff could have competed in Colorado at some point during the relevant ski season. The court finds that such a tenuous and hypothetical connection does not vest in the state of Colorado a substantial relationship to the parties or specific transaction at issue in this case.

The court did find that Vermont had a substantial and significant interest in the transaction. The defendant was based in Vermont. The accident occurred in Vermont. The plaintiff was issued a lift ticket by the defendant ski area that required all disputes to be litigated in Vermont. The plaintiff participated in the inspection and training runs as well as the race in Vermont.

In contrast, Vermont’s relationship to the parties and transaction is significant. Okemo is a Vermont corporation, the competition was held in Vermont, Plaintiff was issued a lift ticket by Okemo requiring all disputes to be litigated in Vermont, Plaintiff participated in inspection and training runs in Vermont, and Plaintiff’s injury occurred in Vermont.

(Of note is the fact the court looked at the writing on the lift ticket as a quasi-contract. Rarely are lift tickets anything more than simple “signs” providing warnings rather than contracts or quasi contracts. See Lift tickets are not contracts and rarely work as a release in most states.)

The court then took apart the choice of law provision in the USSA release. It found no substantial relationship of the parties to the transaction in Colorado. The minimal facts offered by the USSA to support Colorado did not establish a reasonable basis for choosing Colorado.

The court also reasoned that finding Colorado as the applicable choice of law would violate a fundamental policy of Vermont law, which is releases for skiing or void under Vermont law.

First, applying Colorado law would undoubtedly produce a result contrary to a fundamental policy of Vermont. Whereas exculpatory clauses in ski contracts have been held to be enforceable under Colorado law, courts applying Vermont law consistently hold such re-leases to be void as contrary to important public policies of the state.

The court also found the Vermont had a materially greater interest in case then Colorado. Colorado’s interest in the case is minimal. Vermont had a great interest in applying Vermont law to issues, transactions and accidents that occur in Vermont. Skiing is a significant and important recreational activity in Vermont, and the Vermont Supreme Court has repeatedly stated that they have a significant interest in holding ski resorts responsible for skier safety in Vermont.

Second, Vermont has a “materially greater interest” than Colorado in the determination of this issue.4 Colorado’s interest in this case is minimal. The fact that Plaintiff may have competed there in the course of the relevant ski season and that USSA hosts many events in that state does not create a significant interest in a case concerning a Vermont ski race. Conversely, Vermont’s interest is plain. Vermont has a general interest in having its laws apply to contracts governing transactions taking place within the state. Vermont also has a significant interest in the conduct at issue here. Skiing is an important recreational activity for Vermonters and those visiting the state, and the Vermont Supreme Court has repeatedly noted its interest in holding ski resorts responsible for skier safety.

The court then held the choice of law provision in the USSA release did not control, and the Vermont law would apply to this case.

Under Vermont law releases for skiing activities are unenforceable. (See Federal court voids release in Vermont based on Vermont’s unique view of release law). The Vermont Supreme Court had determined that it was a violation of public policy under Vermont law to allow ski area to use a release to avoid liability for its own negligence. The court used a totality of the circumstances test to make the determination that the ski areas had the greater responsibility and the greater ability to keep its patrons out of harm’s way.

The Court concluded that “ultimately the determination of what constitutes the public interest must be made considering the totality of the circumstances of any given case against the backdrop of current societal expectations.” It then went on to make its public policy determination largely on the basis of two factors derived from the seminal case of Tunkl v. Regents of University of California, 383 P.2d 441 (Cal. 1963): (1) ski areas are open to the general public without regard to special training or ability, and (2) the longstanding rule that premises owners are in the best position to assure for the safety of their visitors.

(Using Tunkl to void a release seems to be an extremely odd reading of Tunkl. The Tunkl decision is a California case setting forth requirements for Assumption of the Risk.)

The court also looked at the difference between skiing in Vermont participating in a ski race. Here too though, the Vermont Supreme Court already ruled. The Vermont Supreme Court found that there was really no difference between ski racing and skiing in Vermont, and the releases would be void in both cases.

There had been Vermont decisions upholding release law based on restricted access to the race or because total control for the majority the control for the welfare of the racers was in the racer’s hands. These decisions concerned motorcycle racing.

The defendant argued that ski racing was much like motorcycle racing in Vermont. However, the court found that although membership in the motorcycle racing was restricted, it was not restricted in the ski racing case. Any person could become a member of the USSA, and any person could race, as long as they inspected the course and made two runs and. That effectively was not a bar to anyone participating in the race.

The Court saw “no salient distinctions between [its case] and making clear that, under Vermont law, ski areas and sport event organizers will not be absolved from liability by virtue of an exculpatory clause even in the context of amateur racing.

The court in evaluating the release law and ski areas in Vermont determined that the cases were based on a premise’s liability argument. Premise’s liability says that the owner of the land has a duty to inform guests of the risks on the land. This responsibility included eliminating any known risks or risk the by the landowner should discover. It did not find in the motorcycle cases that a premise’s liability relationship existed because the risk was largely in control of the racer on the motorcycle.

Consequently, the court ruled that the release was invalid under Vermont law, and dismissed the defendant’s motion for summary judgment.

So Now What?

I suspect that USSA wanted to take advantage of the Colorado Statute that allows a parent to sign away a minor’s right to sue: Colorado Revised Statutes 13-22-107. Colorado’s release law is clearer and there is no issue with a release stopping suits by ski areas. Utah has mixed issues with releases and ski areas. However, to use Colorado as the site of the lawsuit, there must be a nexus to the state of Colorado, not just one created on paper.

Not only must the language stating the jurisdiction and venue be correct; the clause must also contain the reasoning why the jurisdiction and venue should be in a location other than location where the accident happened. In this case that would mean that there was an agreement between the parties that outlined all the reasons why the lawsuit should be brought back to Utah would be the only state, based on the contractual law of Utah.

I doubt there is any way that you could really write a release based on the law of a state that had no relationship, no nexus, to the accident or the parties in the case.

Vermont was the obvious answer, and that is what the court found. They might’ve been able also argued New York law, which would’ve been better than Vermont law. However, that would require them to litigate a case wherever the people who are racing in their events are located.

To be effective the jurisdiction and venue claw must have a nexus to either the parties in the case of the place of the accident occurred. USSA could move to Colorado, and that would provide a much better argument that Colorado law could apply. The USSA could argue that since they’re facing litigation from across the United States that they need to have one law apply to their releases and lawsuits, and that law should be the law where the located.

Whenever you’re stretching the jurisdiction and venue clause, you need to make sure that you incorporate in the clause all the legal reasons for picking the venue where the clause says the accident or location will occur. You just can’t state venue, and jurisdiction will be here.

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

What do you think? Leave a comment.

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Kearney, v. Okemo Limited Liability Company, 2016 U.S. Dist. LEXIS 106011

Kearney, v. Okemo Limited Liability Company, 2016 U.S. Dist. LEXIS 106011

Read the rest of this entry »

Association for Challenge Course Technology (ACCT), a DE corporation is being sued in Oregon for “promulgating deficient safety standards.” Issue is where the trial should be held, in Oregon where the plaintiff lives and was injured or in DE or IL where ACCT is located and does business

This case is still ongoing so who knows where it will go and how it will end. However, the relevant Jurisdiction and Venue issues are pretty clear. If you sell yourself or services online and deliver product or services in a state, expecting your name to be used with the services, you are probably doing enough business to be sued in that state.

Almquist v. Synergo, LLC, 2016 U.S. Dist. LEXIS 79261

State: Oregon

Plaintiff: Cassidy Almquist

Defendant: Synergo, LLC, an Oregon limited liability company, Synergo, an Oregon corporation; Association for Challenge Course Technology, a Delaware non-profit corporation

Plaintiff Claims: (1) in promulgating standards for its certified inspectors, that allow them to certify challenge courses as safe when the inspector knows that untrained challenge course workers will operate the course, and (2) by failing to include in the inspection standards a provision directing an inspector to recommend that a course be closed until workers receive proper training

Defendant Defenses: Jurisdiction and Venue

Holding: for the Plaintiff

Year: 2016

This is not a final decision. The basis of this analysis may change or be changed at a later time by the trial court or an appellate court. This analysis is based on the facts and appellate opinion of this intermediate motion. However, the analysis and issues are relevant and important no matter the outcome.

Remember, any case where the plaintiff is rendered a paraplegic or quadriplegic by the accident is probably going to involve litigation because of the medical bills and future medical care. On top of that, worker’s compensation insurance companies are directed both by subrogation clauses and state law sometimes to recoup money paid out for injuries. The plaintiff in this case was working at the time of her injury so the likelihood of a lawsuit was probably absolute.

The decision is based on a motion to dismiss filed by the defendant Association for Challenge Course Technology (ACCT). The motion is based on the ACCT being sued in a state where they have no business presence so it is requesting a dismissal because it is the wrong jurisdiction and venue to sue ACCT under the law.

The plaintiff was working at the Bar-M-Ranch in Oregon as a camp counselor. Who she was working for was not really identified, and the Bar-M-Ranch is not identified as a defendant. Guessing, that means she was working for the Bar-M-Ranch, and they were not sued because they had worker’s compensation insurance, which protects them; actually prohibits an injured employee from suing the employer.

The plaintiff was injured when she fell from a “giant swing” and was paralyzed.

The Calvary Church Tri-Cities constructed  the adventure course at the Bar-M-Ranch in Richmond Oregon. The camp director asked the plaintiff to demonstrate the Giant Swing. A camp employee, who was not trained to operate the Giant Swing, improperly connected the plaintiff to the swing. She fell 50’ to the ground.

Synergo, a defendant was an ACCT member and professional vendor member, PVM.

Synergo is in the business of, among other things, inspecting challenge courses.  Synergo is located in Tigard, Oregon, and is a dues-paying member of ACCT. Synergo is the only accredited Professional Vendor Member (“PVM”) of ACCT in Oregon. Synergo’s founder and manager, Erik Marter, served on the Board of Directors of ACCT, and is the only certified ACCT professional inspector in Oregon. ; and (lasted visited May 20, 2016). Synergo conducts inspections of challenge courses according to ACCT standards. (Am. Compl. ¶ 28.)

Synergo was  hired by Calvary Church Tri-Cities to inspect the challenge course, described by the court as an adventure course. Approximately a month before the accident defendant Synergo had sent an employee to inspect the course and giant swing. During the inspection, Synergo had discovered the Church, and the Bar-M-Ranch employees had not been trained in how to operate the giant swing. Synergo did not act on this information.

Synergo did not direct or recommend that Calvary close the Giant Swing until the operators of the swing were trained. If recommended by Synergo, Calvary would have closed the Giant Swing.

The lawsuit was filed against Synergo and ACCT. ACCT filed a motion to dismiss based on improper jurisdiction. The District Court’s denial of that motion is analyzed below.

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

In a jurisdiction fight, the plaintiff has to prove the court where the plaintiff chose to file the case has the legal right to hear the case. The term personal jurisdiction is used because the courts look at the defendants, even though a corporation, as an individual in who they deal with the state where the case is filed.

Jurisdiction is also a constitutional issue and controlled by US Supreme Court decisions and the States Long Arm Statute. Meaning the state passes a law, the long-arm  statute that defines what is necessary to be bringing an out of state defendant into a local court within the state.  The federal law is then applied to see if the state long arm statute violates federal law and as in this case.

The entire discussion is based on the constitutional right to due process. “Due process requires that defendants ‘have certain minimum contacts’ with the forum state ‘such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.'”

Oregon Federal Courts are part of the 9th circuit. The ninth circuit employs a three-prong test to determine if the defendant has had the minimum contacts to be subject to the jurisdiction of the court at issue.

(1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws;

(2) the claim must be one which arises out of or relates to the defendant’s forum-related activities; and

(3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e., it must be reasonable.

Plaintiff bears the burden of satisfying the first two prongs. The burden then shifts to the moving defendant to present “a ‘compelling case’ that the exercise of jurisdiction would not be reasonable.”

For tort claims the court applies a purposeful direction test when looking at the evidence.

For claims sounding in tort, courts in this circuit “instead apply a ‘purposeful direction’ test and look to evidence that the defendant has directed his actions at the forum state, even if those actions took place elsewhere

To prove the purposeful direction test the plaintiff must show the defendant purposefully directed his conduct toward residents in the state at issue. In the past that has meant the defendant placed his products in the stream of commerce with the expectation they would be purchased in the state at issue. That was easier to determine when catalogs were sent out from a warehouse, and products were mailed from the business warehouse to the state.

Now with services that are delivered over the Internet or based on webpages the test is complicated.

ACCT argued it did not direct its activities to Oregon.

By Declaration, Todd Domeck, Vice Chairman of the Board of Directors with ACCT, informed the Court that ACCT is a Delaware non-profit corporation with its principal place of business in Illinois. ACCT has no office or registered agent in Oregon, and no employees who reside in Oregon. Domeck also states that “ACCT was not consulted during the construction of the ‘Giant Swing,'” nor did ACCT provide training for “any employees of the Bar-M-Ranch who were to be operators of the ‘Giant Swing.'”

Based on the ACCT affidavit, the test then looks at other actions of the ACCT.

In light of those facts, the jurisdictional analysis here turns on the extent to which ACCT, as a non-profit trade association, acted by way of its website and its certification of Synergo to create a presence in Oregon. In aid of the Court’s analysis of ACCT’s purposeful direction in Oregon, the Court relies on the uncontroverted allegations of the Amended Complaint, the Micah Henderson Declaration, and the Internet websites of ACCT and Synergo.

The court then examined the ACCT website. The analysis is based on a sliding scale” “…likelihood that personal jurisdiction can be constitutionally exercised is directly proportionate to the nature and quality of the commercial activity that an entity conducts over the Internet.”

…that a state may assert jurisdiction over a nonresident defendant “when that person (1) directs electronic activity into the State, (2) with the manifested intent of engaging in business or other interactions within the State, and (3) that activity creates, in a person within the State, a potential cause of action cognizable to the State’s courts”.

ACCT described itself, as any company would. However, that description the court found stated that ACCT intended to sell its services in Oregon.

On its website, ACCT describes itself as “the world’s leading and largest American National Standards Institute (ANSI) Accredited Standards Developer focused specifically and solely on the challenge course industry.” (last visited May 20, 2016). Through its website, ACCT represents that it “develops, refines, and publishes standards for installing, maintaining, and managing challenge courses; provides forums for education and professional development; and advocates for the challenge course and adventure industry.” ACCT’s website is an interactive commercial website, and ACCT uses it to advertise and sell its services and merchandise. Specifically, individuals and businesses may purchase memberships and ACCT’s standards book, apply and register for inspector certification courses and exams, and access challenge course related employment listings.

The court also found that 5% of ACCT membership was located in Oregon and 2.4% of its inspectors are based in Oregon, and over the past ten months 3.5% of its standards had been sold to Oregon residents.

Although the business ACCT conducts in Oregon is not overwhelming, the Court concludes that the nature and quality of ACCT’s contacts with Oregon via its website are sufficient to satisfy the purposeful direction test.

The court summed up its analysis this way.

In any event, even if ACCT’s reach into Oregon via its website was not sufficient, standing alone, to confer personal jurisdiction, the Court finds that ACCT’s reach into Oregon went beyond mere solicitation of members and sales through its website.

The court then looked at the relationship between the two defendants Synergo and ACCT.

The Court finds that ACCT directly targeted Oregon through the following actions: ACCT’s certification of Oregon-based Synergo as a PVM, advertising Oregon-based Synergo as a PVM (including recommending that consumers hire Synergo), and setting standards for the inspection of challenge courses, to which ACCT required Synergo to adhere. Specifically, ACCT established and promoted PVM designations for companies, including Synergo, that successfully complete the application and accreditation process, which can take up to 18 months to complete, and includes a site visit of one-to-three days in duration. (last visited May 20, 2016). ACCT describes the process as “a stringent review which determines an applicant’s adherence to ACCT Accreditation Policies and Procedures and its good faith commitment to ACCT Standards.”

ACCT even had a link on its website to the Synergo website. Synergo, in turn prominently displayed its membership in the ACCT on its website. The court found this relationship and promotion of Synergo established purposeful direction into Oregon. Thus the first prong of the test was met.

The second prong, the Relating to the Forum test was scrutinized next. This test looks at “the specific personal jurisdiction test requires a plaintiff to demonstrate that the claims arise out of, or are related to, defendant’s forum-related activities.” The courts analyze this prong with a “butt for test.”

This was a simple analysis in this case.

Almquist has alleged that “but for” ACCT promulgating deficient safety standards, she would not have fallen and sustained injuries in Oregon. Thus, the contacts ACCT had with Oregon–i.e., certifying Synergo and allegedly setting inadequate course inspection standards to which Synergo was required to adhere–are also the conduct that give rise to Almquist’s claims. Accordingly, the second prong of the specific personal jurisdiction test is satisfied here.

Courts and many long-arm  statures give deference to the state where the accident occurred in tort claims. Consequently, this test is superfluous if the accident occurred in the state.

The final prong is a reasonableness test. This is a simple test that balances the needs of both parties and the costs, both in terms of time and money, in having the trial in one location or another. One way of looking at this was argued by the ACCT, that other forums are just as reasonable as Oregon to conduct the trial.

The court looked at the burden of litigating in Oregon to the ACCT. This test is very difficult to overcome if the court has found that the defendant has a relationship with the forum state. “…unless the inconvenience is so great as to constitute a deprivation of due process, it will not overcome clear justifications for the exercise of jurisdiction.” Consequently, the modern conveniences that allow companies to sell to the forum state are also such that allow litigation in the forum state to be easier.

The major hurdle that the ACCT could not overcome is the accident occurred in Oregon, and the injured plaintiff lived in Oregon.

The court then looked at Oregon’s (the people of the state of Oregon) in litigating in Oregon.

To make this determination, the Court focuses on the location of the evidence and witnesses. Caruth,. The evidence and potential witnesses reside in Oregon, Washington, California, and Illinois. As such, one party must litigate in a foreign venue. While ACCT argues that its witnesses are located in “other states,” it does not contend that its burden is greater than Almquist’s were she forced to litigate elsewhere. In addition, this factor is “no longer weighed heavily given the modern advances in communication and transportation.”

The next analysis is the convenience of litigating in Oregon. The fact that the plaintiff was a paraplegic would sufficiently increase the burden and cost of litigating in a foreign state. The court also must look at whether or not an alternative forum exists that would have a fair trial. Both Delaware and Illinois would meet this requirement.

However, looking at all the tests, the stronger requirements to litigate were in Oregon and the greatest burden would be placed on the plaintiff if she were  forced to litigate out of Oregon.

Applying the seven-factor test, the Court concludes that exercising personal jurisdiction over ACCT is reasonable, and comports with fair play and substantial justice. The first, fourth, fifth, and sixth factors weigh in favor of Almquist, although the sixth factor is given little weight. The second and seventh factors weigh in favor of ACCT. The third factor is neutral. Although some factors weigh in favor of ACCT, it did not present a “compelling case” that exercising jurisdiction in this Court is unreasonable.

The ACCT motion was denied.

So Now What?

This case is far from over. Discovery is just starting and many more motions will be filed, and may be appealed before a settlement or trial. When faced with a paraplegic as a plaintiff, settlement is usually the preferred result because a jury can give unlimited an almost unlimited amount of money. On top of that the settlement can be structured to provide the best benefits to the plaintiff.

However, this case is another example of the cost of creating standards rather than best practices or something other forms of help. The idea would have also been a lot easier if ACCT had not “qualified” people to inspect courses. No one is “qualified” by anyone to inspect highways, buildings, ball parks, except by state law.

State law means an Engineer, etc., licensed by the state to inspect. This is the second case in three years where an inspector has been sued for allegedly missing something during an inspection. See Bad luck or about time; however, you look at this decision, you will change the way you work in the Outdoor Recreation Industry.

If you are inspecting, you better identify every issue and let the client know. You cannot say it’s not that important it because it will become important. After that it is up to the client to deal with your inspection. Which may the cost the client a lot. See Serious Disconnect: Why people sue.

This case was not an “if” case, but a when a case. You make standards not based upon a national organization such as ANSI or ASTM; you can expect to be sued for how you created the standards and what the standards say.

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#AdventureTourism, #AdventureTravelLaw, #AdventureTravelLawyer, #AttorneyatLaw, #Backpacking, #BicyclingLaw, #Camps, #ChallengeCourse, #ChallengeCourseLaw, #ChallengeCourseLawyer, #CyclingLaw, #FitnessLaw, #FitnessLawyer, #Hiking, #HumanPowered, #HumanPoweredRecreation, #IceClimbing, #JamesHMoss, #JimMoss, #Law, #Mountaineering, #Negligence, #OutdoorLaw, #OutdoorRecreationLaw, #OutsideLaw, #OutsideLawyer, #RecLaw, #Rec-Law, #RecLawBlog, #Rec-LawBlog, #RecLawyer, #RecreationalLawyer, #RecreationLaw, #RecreationLawBlog, #RecreationLawcom, #Recreation-Lawcom,, #RiskManagement, #RockClimbing, #RockClimbingLawyer, #RopesCourse, #RopesCourseLawyer, #SkiAreas, #Skiing, #SkiLaw, #Snowboarding, #SummerCamp, #Tourism, #TravelLaw, #YouthCamps, #ZipLineLawyer, ACCT, PVM, Association of Challenge Course Technology, Ropes Course, Challenge Course, Giant Swing, Jurisdiction and Venue, Jurisdiction, Vendor, Professional Vendor Member,


The dissent in this case argues because the release was not presented to the plaintiff until he had traveled to the resort it should be void.

Case was moved from plaintiff’s town to the ski area home town based on the venue selection clause in equipment rental release. However the dissent would void venue selection clause because it was only presented to the plaintiff after the plaintiff traveled to the skis area. The dissenting judge had federal decisions that supported him.

Karlsberg v Hunter Mountain Ski Bowl, Inc., 131 A.D.3d 1121; 2015 N.Y. App. Div. LEXIS 6806; 2015 NY Slip Op 06890; 16 N.Y.S.3d 746

State: New York, Supreme Court of New York, Appellate Division, Second Department

Plaintiff: David Karlsberg

Defendant: Hunter Mountain Ski Bowl, Inc., doing business as Hunter Mountain

Plaintiff Claims: failed to provide him with proper instruction, causing him to sustain injuries while snowboarding at the defendant’s facility

Defendant Defenses: Release changes the venue

Holding: For the Defendant, venue changed

Year: 2015

This is a simple case. The plaintiff traveled to Hunter Mountain Ski Bowl, in upper New York. Upon arrival the plaintiff signed an equipment release. He rented a snowboard and took a snowboarding lesson. How he was injured was not in the decision.

The plaintiff filed suit in Suffolk County New York (Long Island). The equipment release the plaintiff signed had a jurisdiction clause that stated any lawsuits had to “be litigated exclusively in the Supreme Court of the State of New York, County of Greene, or in the United States District Court for the Northern District of New York.”

The trial court transferred the case and the plaintiff appealed.

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

The decision, a New York Appellate court decision was short. It simply said the trial court was correct. The decision reviewed the claims of the plaintiff for the reasons why the release should be voided.

Contrary to the plaintiff’s contentions, the “Equipment Rental Form and Release of Liability” was not an unenforceable contract of adhesion, and enforcement of the forum selection clause contained therein does not contravene public policy  Contrary to the plaintiff’s additional contention, the defendant’s motion was timely, inasmuch as it was made within a reasonable time after the commencement of the action

However, no reasons were given why the claims were denied.

The dissenting opinion was longer. The dissent basically argued “the better rule is one where forum selection clauses are not to be enforced if they are shown to consumers for the first time upon their arrival at a resort.”

The dissent then went through New York Law and case law from the federal courts in New York. The federal courts have upheld claims like the plaintiff’s that the release should be void because it was presented after the plaintiff had traveled and arrived at the destination.

However there was one prior case, almost identical to this one where the release was upheld even through claims of voiding the release because the plaintiff had traveled without knowing he or she would sign a jurisdiction and venue clause were denied. As such, the decisions from the state courts were controlling and basically “overruled” the federal court decisions because the decisions involved an interpretation of state law.

So Now What?

Avoid making the courts wonder about your relationship with the plaintiff and whether you attempted to hide information from the plaintiff or mislead the plaintiff. On your website and in your brochure tell prospective clients that they have to sign a release when they arrive.

Better, please the release online so they can review the release and see what they are signing. Releases are signed every day for all sorts of activities should it should be no shock that your clients will be signing one. Consequently don’t be afraid to be honest and tell them in advance.

If, upon arrival, a guest decides they don’t want to sign your release what are you going to do? The guest will have a valid claim for you to repay all of their money for the travel they incurred. Are you prepared to refund all of the money the guest spent with you and possibly repay what the guest spent to get to your destination?

Easier to post your release online and tell your clients in advance they have to sign it then to write a check when they find out and are upset about it.

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Karlsberg v Hunter Mountain Ski Bowl, Inc., 131 A.D.3d 1121; 2015 N.Y. App. Div. LEXIS 6806; 2015 NY Slip Op 06890; 16 N.Y.S.3d 746

Karlsberg v Hunter Mountain Ski Bowl, Inc., 131 A.D.3d 1121; 2015 N.Y. App. Div. LEXIS 6806; 2015 NY Slip Op 06890; 16 N.Y.S.3d 746

David Karlsberg, appellant, v Hunter Mountain Ski Bowl, Inc., doing business as Hunter Mountain, respondent. (Index No. 38816/11)



131 A.D.3d 1121; 2015 N.Y. App. Div. LEXIS 6806; 2015 NY Slip Op 06890; 16 N.Y.S.3d 746

September 23, 2015, Decided

COUNSEL: [*1] The Berkman Law Office, LLC, Brooklyn, N.Y. (Robert J. Tolchin and Meir Katz of counsel), for appellant.

Carol A. Schrager, New York, N.Y. (Beth A. Willensky of counsel), for respondent.




In an action to recover damages for personal injuries, the plaintiff appeals, as limited by his brief, from so much of an order of the Supreme Court, Suffolk County (Pastoressa, J.), entered March 24, 2014, as, upon reargument, adhered to a prior determination in an order of the same court dated December 3, 2012, granting that branch of the defendant’s motion which was pursuant to CPLR 501 and 511 to change the venue of the action from Suffolk County to Greene County.

ORDERED that the order entered March 24, 2014, is affirmed insofar as appealed from, with costs.

On March 19, 2011, the plaintiff sought beginner snowboarding lessons at the defendant’s facility, and signed an “Equipment Rental Form and Release of Liability” that provided, among other things, that

“all disputes arising under this contract and/or the use of this equipment and/or the use of the facilities [*2] at Hunter Mountain Ski Bowl, shall be litigated exclusively in the Supreme Court of the State of New York, County of Greene, or in the United States District Court for the Northern District of New York.”

In December 2011, the plaintiff commenced this action in the Supreme Court, Suffolk County, alleging that an instructor employed by the defendant failed to provide him with proper instruction, causing him to sustain injuries while snowboarding at the defendant’s facility. In September 2012, the defendant moved, inter alia, pursuant to CPLR 501 and 511 to change the venue of the action from Suffolk County to Greene County.

Upon reargument, the Supreme Court properly adhered to its original determination [***747] granting that branch of the defendant’s motion which was pursuant to CPLR 501 and 511 to change the venue of the action from Suffolk County to Greene County. Contrary to the plaintiff’s contentions, the “Equipment Rental Form and Release of Liability” was not an unenforceable contract of adhesion, and enforcement of the forum selection clause contained therein does not [**2] contravene public policy (see Molino v Sagamore, 105 AD3d 922, 923, 963 N.Y.S.2d 355; KMK Safety Consulting, LLC v Jeffrey M. Brown Assoc., Inc., 72 AD3d 650, 651, 897 N.Y.S.2d 649; LSPA Enter., Inc. v Jani-King of N.Y., Inc., 31 AD3d 394, 395, 817 N.Y.S.2d 657). Contrary to the plaintiff’s additional contention, the defendant’s motion was timely, inasmuch as it was [*3] made within a reasonable time after the commencement of the action (see CPLR 511[a]; Medina v Gold Crest Care Ctr., Inc., 117 AD3d 633, 634, 988 N.Y.S.2d 578; Bonilla v Tishman Interiors Corp., 100 AD3d 673, 953 N.Y.S.2d 870).




DICKERSON, J., concurs in the result, on constraint of Molino v Sagamore (105 AD3d 922, 963 N.Y.S.2d 355), with the following memorandum:

I vote with the majority on constraint of this Court’s precedent, but I write separately to express my view that the better rule is one where forum selection clauses are not to be enforced if they are shown to consumers for the first time upon their arrival at a resort.

In Molino, the injured plaintiff made a reservation to stay as a guest at a resort in Warren County (see id.). Upon arrival, and while registering for the stay, the injured plaintiff signed a document, entitled “Rental Agreement,” containing a provision stating that “if there is a claim or dispute that arises out of the use of the facilities that results in legal action, all issues will be settled by the courts of the State of New York, Warren County” (id.). After the injured plaintiff allegedly tripped and fell on the resort’s property, she, and her husband suing derivatively, commenced an action against the resort in the Supreme Court, Queens County (see id.). This Court held that the Supreme [*4] Court should have granted the defendant’s motion pursuant to CPLR 501 and 511 to change the venue of the action from Queens County to Warren County, concluding that the plaintiffs failed to demonstrate that: (1) enforcement of the forum selection clause would be unreasonable, unjust, or would contravene public policy; (2) the clause was invalid because of fraud or overreaching; or (3) a trial in the selected forum of Warren County would, for all practical purposes, deprive them of their day in court (see id. at 923).

In so holding, the Molino Court cited Carnival Cruise Lines, Inc. v Shute (499 U.S. 585, 111 S. Ct. 1522, 113 L. Ed. 2d 622) for the proposition that “the fact that the Rental Agreement containing the forum selection clause was presented to the plaintiffs at registration and was not the product of negotiation does not render it unenforceable” (Molino v Sagamore, 105 AD3d at 923). In Carnival Cruise Lines, the United States Supreme Court concluded that the United States Court of Appeals for the Ninth Circuit erred in refusing to enforce a forum selection clause contained on the face of cruise tickets issued to the plaintiffs in that case. However, the United States Supreme Court noted that it did not “address the question of whether [the plaintiffs] [***748] had sufficient notice of the forum selection clause before [*5] entering the contract for passage” (Carnival Cruise Lines, Inc. v Shute, 499 US at 590) because the plaintiffs had essentially conceded that they had notice of the forum selection provision and the Ninth Circuit had evaluated the enforceability of the forum clause under the assumption, although ” doubtful,'” that the passengers could be deemed to have knowledge of the clause (id., quoting Shute v Carnival Cruise Lines, 897 F2d 377, 389 n 11 [9th Cir]).

In Sun Trust Bank v Sun Intl. Hotels Ltd. (184 F Supp 2d 1246 [SD Fla]) and Foster v Sun Intl. Hotels, Ltd. (2002 WL 34576251, 2002 US Dist LEXIS 28475 [SD Fla, No. 01-1290-CIV]), the United States District Court for the Southern District of Florida concluded that forum selection clauses set forth in reservation forms that were not shown to consumers until they arrived at a resort were unenforceable because the consumers were not given an adequate opportunity to consider the clause and reject their contracts with the resort (see Foster v Sun Intl. Hotels Ltd., 2002 WL 34576251, *1, 2002 US Dist LEXIS 28475 *3-4; Sun Trust Bank v Sun Intl. Hotels Ltd., 184 F Supp 2d at 1261-1262). Similarly, in Ward v Cross Sound Ferry (273 F3d 520 [2d Cir]), the United States Court of Appeals for the Second Circuit held that a contractual statute of limitations clause set forth in a ticket issued to a cruise passenger just minutes before she boarded a ship, and then collected at boarding, was not enforceable because the circumstances did not permit the passenger to become meaningfully informed of the contractual terms at stake (see id. at 523-526). By contrast, where forum selection clauses have been sent [*6] to consumers or travel agents prior to the [**3] consumer’s arrival at the subject resort, or where consumers had visited the subject resort on previous occasions and signed forms containing similar forum selection clauses, the United States Court of Appeals for the Eleventh Circuit has found that the clauses were reasonably communicated to the consumers and, thus, enforceable (see McArthur v Kerzner Intl. Bahamas Ltd., 607 Fed. Appx. 845, 2015 WL 1404409, *1-2, 2015 US App LEXIS 5058, *6-7 [11th Cir, No. 14-138897]; Pappas v Kerzner Intl. Bahamas Ltd., 585 Fed Appx 962, 965-966 [11th Cir]; Estate of Myhra v Royal Caribbean Cruises, Ltd., 695 F3d 1233, 1246 [11th Cir]; Krenkel v Kerzner Intl. Hotels Ltd., 579 F3d 1279, 1282 [11th Cir]).

While I believe that the federal cases discussed above set forth the better rule, the doctrine of stare decisis dictates that we follow our prior decision in Molino, which is factually indistinguishable from this case in all relevant respects (see Matter of State Farm Mut. Auto Ins. Co. v Fitzgerald, 25 NY3d 799, 2015 NY Slip Op 05626 [2015]; Eastern Consol. Props. v Adelaide Realty Corp., 95 NY2d 785, 788, 732 N.E.2d 948, 710 N.Y.S.2d 840). Accordingly, I agree with the majority that the subject forum selection clause was enforceable, notwithstanding the fact that it was shown to the plaintiff for the first time upon his arrival at the defendant’s facility. I also agree with the majority’s other conclusions, and that, upon reargument, the Supreme Court properly adhered to its prior determination granting that branch of the defendant’s motion which was pursuant to CPLR 501 and 511 to change the venue of the action from Suffolk County to Greene County.

Poorly written release and allegation of duress push whitewater rafting ligation to Pennsylvania Appellate court.

Release probably not written by an attorney, signed in one state for rafting in another state and probably one where the economics suggest an insurance company is playing plaintiff.

Mcdonald v. Whitewater Challengers, Inc., 2015 PA Super 104; 116 A.3d 99; 2015 Pa. Super. LEXIS 232

State: Pennsylvania

Plaintiff: Erin Mcdonald

Defendant: Whitewater Challengers, Inc., and Whitewater Challengers Outdoor Adventure Center, T/D/B/A Whitewater Challengers, Inc.

Plaintiff Claims: a. Failing to provide a river guide / instructor in plaintiff’s boat;

b. Failing to provide a properly inflated raft;

c. Failing to advise Plaintiff on the grade and / or class of the whitewater rapids;

d. Failing to properly instruct Plaintiff on how to safely and effectively maneuver fast and difficult rapids; and

e. Allowing an unsafe number of inexperienced rafters to operate a raft.

Defendant Defenses: Release

Holding: For Defendants

Year: 2015

The plaintiff was a teacher at a school that brought 72 kids whitewater rafting with the defendant on the Lehigh River. The school was located, and the plaintiff lived in New York. The defendant was located and the Lehigh River, where the rafting occurred, was in Pennsylvania.

While still at work two days before the trip her supervisor handed a release which she signed. The release had a venue clause which means any lawsuit must be in Pennsylvania but not a jurisdiction clause.

While rafting the plaintiff’s boat struck a rock ejecting the plaintiff from the raft which injured her.

The plaintiff and defendant filed various motions prior to trial. The plaintiff wanted New York law to apply because she had signed the release in New York and was from New York. (The plaintiff wanted the suit brought under New York law because New York does not recognize releases. See States that do not Support the Use of a Release.) The defendant wanted Pennsylvania law to apply, which generally upholds releases.

The court ruled against both parties and denied the release because the plaintiff made an allegation that she was forced to sign the release (duress) therefore, the release should be void. The trial court approved a motion to appeal these issues prior to trial and the appellate court accepted the appeal.

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

The plaintiff started her argument with three theories on the location where the release was signed was the proper jurisdiction for interpreting the law, New York.  

The plaintiff also argued that because the defendant did not have a jurisdiction clause in its release, then obviously the defendant wanted New York law to apply.

Finally, she argued that because her medical bills and treatment would be generated and done in New York that law should apply.

She maintains that because she signed the release in New York, the contract was formed in New York. As a New York resident, McDonald asserts she is entitled to the benefit of New York law. McDonald claims that if Whitewater intended for Pennsylvania law to apply, then it should have included such a clause in its release. She points out that most of her medical treatment occurred in New York and that the New York State Insurance Fund has an interest in recouping her lost wages and medical expenses.

The court started its examination of the law to be applied by first looking at whether tort law or contract law applied. Tort law is the law of injuries and has different requirements to prove jurisdictional issues than contract law, which is what a release is. The court found that contract law applied without much analysis on how it came to that decision.

The court then looked at how a conflict of law’s decision was to be made by the courts when deciding in a contract basis where the contract is silent on the issue of jurisdiction.

…the first step in a choice of law analysis under Pennsylvania law is to determine whether [an actual] conflict exists between the laws of the competing states. If no [actual] conflict exists, further analysis is unnecessary. An actual conflict exists if “there are relevant differences between the laws.

The analysis of what law applies; New York or Pennsylvania is extensive. If only one state would be harmed (the interests of the party from that state), then the issue is a false conflict. If the interests of both states would be harmed (the residents of both states would be harmed) by the decision, then the issue is a true conflict issue. “In such a situation, the court must apply the law of the state whose interests would be harmed if its law were not applied.”

A third situation would exist if the parties of neither state would be harmed. This is called a “neither jurisdiction” issue. This occurs when the law of both states is identical.

In sum, in Pennsylvania, a conflict-of-law analysis not involving a statutory or contractual choice of law clause, first requires determining whether the laws in question actually conflict. If relevant differences between the laws exist, then we next classify the actual conflict as a “true conflict,” “false conflict,” or “unprovided-for conflict.”

Instantly, a New York statute voids clauses immunizing recreational facilities from liability for negligence because they violate New York’s public policy. Pennsylvania, however, recognizes the validity of such exculpatory clauses when they govern voluntary and hazardous recreational activities.

The court determined that this is a true conflict case where both parties would be harmed, based on their desire for the jurisdiction to be applied in their state.

The next issue once a true conflict has been determined is for the court to determine who (what state) would be harmed the most by a decision. “We thus ascertain whether New York “or Pennsylvania has the greater interest in the application of its law to the question now before us.

The actual analysis came down to how the court looked at the issues.

But, comparable to the insurance policy in Walter, the instant release was executed for the purpose of protecting Whitewater, a Pennsylvania business that “had the right to expect that [the release] conformed to [Pennsylvania] law and that the laws of [Pennsylvania] would apply in interpreting the [release].” “[I]t seems only fair to permit” Whitewater to rely on Pennsylvania law when it acted within Pennsylvania. Whitewater should not be placed in jeopardy of liability exceeding that created by Pennsylvania law just because McDonald is a visitor from New York, a state offering higher protection.

The court decided that the law of Pennsylvania would apply. Because the activity where the accident occurred giving rise to the litigation occurred in Pennsylvania the court determined Pennsylvania law would control.

After carefully weighing the sovereign interests at stake, which include contacts establishing the significant relationships with each sovereign, we hold that Pennsylvania has the greater interest in the application of its law to this case.

The court then went into the analysis of the plaintiff’s claim the release should be thrown out because it was signed under duress.

[McDonald] had testified in her deposition that on May 17, 2006, the Headmaster of the School of the Holy Child handed the Release form to [McDonald], while she was between classes and walking through the school hallway and told her to sign it, since she would be one of the chaperones for the students on the rafting trip.

[McDonald] alleges she signed the Release form without reading it.

The plaintiff stated she did not read the release; however, because she had been on a previous whitewater trip.

The plaintiff next argued that she had no choice but to sign the release because it was required by her job. The court then looked at the issues the plaintiff faced in her annual performance evaluations and found that she would not suffer financially if she had not gone on the trip, therefore, she could not claim she was forced to sign the release.

The defendant argued that it did not compel or force the plaintiff to sign the release. If anyone did, her employer did. Since her employer was not a party to the contract, the release, then there could not be any duress.

To constitute duress or business compulsion there must be more than a mere threat which might possibly result in injury at some future time, such as a threat of injury to credit in the indefinite future. It must be such a threat that, in conjunction with other circumstances and business necessity, the party so coerced fears a loss of business unless he does so enter into the contract as demanded.

Because the defendant was not the party “forcing” the plaintiff to sign she could walk away from the release.

Instantly, we frame Whitewater’s question as whether one party to a contract can invoke duress when that duress was allegedly imposed by a non-party and not by the other party to the contract. More precisely, we examine whether McDonald can void the release by claiming the School of the Holy Child economically compelled her to sign the release with Whitewater. McDonald’s presumption is that economic compulsion, i.e., duress, by a non-party to a contract can be “transferred.”

Because the plaintiff was free to walk away from the rafting trip and consequently, the release, the court agreed with the defendant and found there was no duress. “It follows that the School of the Holy Child could not elicit the assent of McDonald by duress.”

Nor did the plaintiff ever claim that the defendant compelled her to sign the release, the only party that a claim of duress against whom the claim could be found. The defendant provided recreational services, which are not something that a claim of duress can be used.

Because a release is not a contract of adhesion, the plaintiff was not forced to sign it.

Thus, an exculpatory clause is not typically analyzed within the framework of whether it is a contract of adhesion. (“The signer is under no compulsion, economic or otherwise, to participate, much less to sign the exculpatory agreement, because it does not relate to essential services, but merely governs a voluntary recreational activity.”).

The court found that the plaintiff could not be compelled by anyone and was not compelled by the defendant to sign the release.

The court then looked at whether the release was viable under Pennsylvania law.

It is generally accepted that an exculpatory clause is valid where three conditions are met. First, the clause must not contravene public policy. Secondly, the contract must be between persons relating entirely to their own private affairs and thirdly, each party must be a free bargaining agent to the agreement so that the contract is not one of adhesion.

If the release is found to be valid, it must still be examined under Pennsylvania to see if it meets four more tests.

…unless the language of the parties is clear that a person is being relieved of liability for his own acts of negligence. In interpreting such clauses we listed as guiding standards that: 1) the contract language must be construed strictly, since exculpatory language is not favored by the law; 2) the contract must state the intention of the parties with the greatest particularity, beyond doubt by express stipulation, and no inference from words of general import can establish the intent of the parties; 3) the language of the contract must be construed, in cases of ambiguity, against the party seeking immunity from liability; and 4) the burden of establishing the immunity is upon the party invoking protection under the clause.

The court looked at Pennsylvania law and found releases were valid for inherently dangerous sporting activities.

Regarding the first element needed for a valid exculpatory clause, Pennsylvania courts have affirmed exculpatory releases for “skiing and other inherently dangerous sporting activities,” such as snowtubing and motorcycle racing. Other activities include automobile racing, paintballing, and whitewater rafting. Thus, Pennsylvania courts have held exculpatory clauses pertaining to inherently dangerous sporting activities do not “contravene any policy of the law.”

The court also found the release would be valid if it was between two parties for their own private affairs.

With respect to the second element, our Supreme Court held “[t]he validity of a contractual provision which exculpates a person from liability for his own acts of negligence is well settled if the contract is between persons relating entirely to their own private affairs.”

The court then examined the release and found it spells out the intention of the parties with particularity and shoes the intent of the parties to release the defendant from liability.

The court held the release was enforceable.

So Now What?

This case is long but brings up some interesting arguments to void releases and does a good job of explaining Pennsylvania law on releases.

First the argument that by leaving a specific clause out of a release is proof the person offering the release agrees to the lack of the clause is very scary. Most releases out there leave out a lot. I signed one the other day for an activity that left out both a jurisdiction and venue clause. I signed the release in Nevada where activity occurred. If injured, I would be allowed to sue the California Corporation in Nevada because by not putting the clause in the release it agreed to jurisdiction different from the venue clause.

Thankfully, this argument did not fly. However, it will be picked up in the future and used more often. You cannot tell when a judge or appellate panel will adopt it.

The duress argument is also valid. Duress cannot occur for recreational activities because like the public policy argument, the guest is free to walk away and loses nothing necessary for life. The duress argument is another one that might be brought when the person on the trip is therefore, more than their own enjoyment.

If they are an employee or volunteer of a church or other youth group, if they are required to do public service if they have an employer who wants them to participate, the argument is valid for duress; however, the wrong defendant is being sued. The duress must be brought by the person you are suing to void the release, not the person who made you sign it.

At the same time, it brings up the argument that this might be a subrogation claim brought by the plaintiff’s health insurance carrier or possibly worker’s compensation carrier. If the plaintiff was successful in arguing that the whitewater rafting, trip was part of her employment her injuries, lost wages, and other expenses would be covered by worker’s compensation. Her worker’s compensation insurance carrier then using the subrogation clause in the policy would have the right to sue any party that was the cause for the injuries.

A defense available to the plaintiff also bars any claims made by the insurer when applying the subrogation clause to sue. So a release signed by the plaintiff stops her lawsuit and also here insurer’s lawsuit.

Not having an enforceable jurisdiction clause in a release sent this litigation from the trial court to the appellate court and back again. In this case, it took nine years from the date of the accident, May 2006, and seven years from the start of the lawsuit, July 2008, for the case to be settled. The addition of “and jurisdiction” to the release would have probably ended the case before it got started.

Think about the stress of dealing with a lawsuit against you for seven years.

If you think, the analysis is painful to read, it is. The decision is 27 pages long. There is an entire semester of class on this one subject in law school called “Choice of Laws.” The analysis each time one party claims the lawsuit should be somewhere else or the law applied to the case should be other states not the state where the lawsuit is, is extensive. These cases also take forever.

A case where a person died on a river trip in Arizona was brought in Texas. Six years after the death the Texas Supreme Court sent the case to Arizona where it started all over again. Moki Mac River Expeditions, v. Drugg, 221 S.W.3d 569; 2007 Tex. LEXIS 188; 50 Tex. Sup. J. 498

Of note in the decision but not brought out in the decision was the fact the defendant does not put a guide in every boat on this section of the Lehigh River. One of the claims made by the plaintiff was “a. Failing to provide a river guide / instructor in [McDonald’s] boat;…

For more articles on Jurisdiction and Venue see:

A Recent Colorado Supreme Court Decision lowers the requirements to be brought into the state to defend a lawsuit.                                                                                           

Buy something online and you may not have any recourse if it breaks or you are hurt

Four releases signed and all of them thrown out because they lacked one simple sentence!

Jurisdiction and Venue (Forum Selection clauses) are extremely important in your releases.

Jurisdiction in Massachusetts allows a plaintiff to bring in Salomon France to the local court.

Shark Feeding Death triggers debate                                                        

The legal relationship created between manufactures and US consumers

This case is a summer camp lawsuit and the decision looks at venue and jurisdiction; however the complaint alleges medical malpractice against a camp!                         

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