Oklahoma Federal Court opinion: the OK Supreme Court would void a release signed by the parent for a minor.

Minor injured in a sky-diving accident is allowed to sue because the release, she and her parents signed are void under Oklahoma law. Parents are not allowed to sue for their claims because of the release.

Wethington v. Swainson, 2015 U.S. Dist. LEXIS 169145

State: Oklahoma, United States District Court for the Western District of Oklahoma

Plaintiff: Holly Wethington and Makenzie Wethington

Defendant: Robert Swainson, d/b/a/ Pegasus Airsport

Plaintiff Claims: (1) provided inadequate training to [*2]  Makenzie in preparation for the parachute jump, (2) selected a person to provide radio assistance who had no prior experience, (3) provided old equipment that malfunctioned during Makenzie’s jump, and (4) permitted Makenzie to use a parachute she was ill-prepared to use and which was inappropriate for her skill level

Defendant Defenses: Release

Holding: for the defendant for the claims of the parents, for the plaintiff for her claims

Year: 2015

The minor plaintiff was sixteen years old when she wanted to check another item off her bucket list. She went to the defendant’s sky-diving business along with her parents.

First, the minor plaintiff completed a Registration Form and Medical Statement which included a notice that sky diving was dangerous. The minor plaintiff also signed a release. Her parents also signed the release. The release required the minor plaintiff to write out a statement that she knew she was signing a release and understood the risks. She wrote this out and signed it. The bottom of the release also had a ratification paragraph which the Parent/Guardian was required to sign that stated they understood the risks and released the defendants. Both parents signed this.

In total, a warning in one document, a release signed by all three parents, an additional clause signed by the paragraphs and a written paragraph written and signed by the minor plaintiff is normally far in excess of what a party signs before engaging in recreational activities.

The minor plaintiff then received four houses of training. On her first jump, her parachute malfunctioned, and she hit the ground sustaining injuries.

The defendants filed for a motion for summary judgment based on the release.

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

The court started by looking at the issues surrounding release law in Oklahoma. “An exculpatory clause releases in advance the second party for any harm the second party might cause the first party after the contract is entered.” Releases are enforceable in Oklahoma but are “distasteful.”

At the same time, releases in Oklahoma should not be voided because of public policy grounds. “Notwithstanding this admonition, courts should void contract clauses on public-policy grounds “rarely, with great caution and in cases that are free from doubt.” Public policy grounds are the normal way releases signed by minors are voided.

Releases in Oklahoma have to meet three criteria to be valid.

(1) Their language must evidence a clear and unambiguous intent to exonerate the would-be defendant from liability for the sought-to-be-recovered damages;

(2) At the time the contract was executed, there must have been no vast difference in bargaining power between parties; and

(3) Enforcement of the clause would not (a) be injurious to public health, public morals or confidence in administration of the law or (b) so undermine the security of individual rights vis-a-vis personal safety or private property as to violate public policy.

The court also stated that under Oklahoma law releases cannot work to prevent “liability for intentional, willful or fraudulent acts or gross, wanton negligence.”

After reviewing the release the court found the release was valid.

First, the Release states in clear and unequivocal terms the intention of the parties to excuse Defendant from liability caused by Defendant’s negligence, equipment failure, or inadequate instruction. Plaintiffs signed and initialed several clauses containing the headings, RELEASE FROM LIABILITY, COVENANT NOT TO SUE, and ACKNOWLEDGMENT OF RISK. Mrs. Wethington and her husband signed a ratification stating they had read the Release, understood its terms, and agreed to be bound thereby.

The court then looked at whether there was inequality in the bargaining power of the plaintiff and found none.

Second, there is no evidence of unequal bargaining power. “Oklahoma courts consider two factors in determining parties’ relative bargaining power: ‘(1) the importance of the subject matter to the physical or economic wellbeing of the party agreeing to the release, and (2) the amount of free choice that party could have exercised when seeking alternate services.'” There is no evidence that skydiving was necessary or important to Plaintiffs’ wellbeing. In fact, when asked why she wanted to skydive, Makenzie answered, “It’s on my bucket list.”

The court found the plaintiffs were not bound to sky dive with the defendant; she was free to sky dive with anyone. Therefore, the plaintiff was not under any pressure or requirement to sky dive with the defendant.

The court then looked at Oklahoma law to see if parents could sign away a minor’s right to sue.

It is also true that as a matter of public policy, courts have protected minors from improvident and imprudent contractual commitments by declaring the contract of a minor is voidable at the election of the minor after she attains majority. Under Oklahoma law, a minor’s right to rescind a contract is unaffected by the approval or consent of a parent.

The court also found that for a claim to be approved for a minor for an injury resulting in a settlement, the court had to approve the settlement.

However, the court found this case was complicated by the fact the minor plaintiff’s parents had also signed the release. “In this case, however, Makenzie’s parents also knowingly signed the Release on her behalf, ratifying and affirming its exculpatory content, and agreeing to be bound thereby.”

The Oklahoma Supreme Court did not rule on the issue. Federal courts hearing cases based on the diversity of the parties dealing with state law issues must apply the law of the state where the lawsuit is based or the law that applies.

…federal court sitting in diversity must apply state law as propounded by the forum’s highest court. Absent controlling precedent, the federal court must attempt to predict how the state’s highest court would resolve the issue.

The next issue is disaffirmance of the contract. A minor must disaffirm a contract after reaching the age of majority or the contract is valid. The plaintiffs argued, and the court agreed that the filing of the lawsuit disaffirmed the release. “Plaintiffs correctly argue that commencement of this lawsuit constitutes a disaffirmance of the Release, and the contract is void ab initio.”

For more on this see Rare issue this case looked at a release signed by a minor that prevented a suit for his injuries after turning age 18. However, this decision was later overturned in Oregon Supreme Court finds release signed at ski area is void as a violation of public policy.

The court also examined the issue that the parents signed the release and found it had no bearing on the case. However, the release did stop claims by the parents.

The ratification signed by Makenzie’s parents is, likewise, unenforceable as a bar to Makenzie’s claims. The Release, however, is otherwise conspicuous and clear so as to bar the parents’ cause of action based upon injury to their child.

When a minor is injured, the minor can sue and the parents can sue. Dependent upon the state, the claims of the parents may include those of the minor or may be solely based on the parents’ loss.

The court then ruled that the minor claim was valid and not barred by the release. The parent’s claims, specifically the named plaintiff, the minor plaintiff’s mother, were barred by the release.

Defendant’s motion is granted as to Plaintiff Holly Wethington’s claims and denied as to Plaintiff Makenzie Wethington’s claim for negligence. Since the skydiving contract is rendered void ab initio by means of Makenzie’s lawsuit, her breach of contract claim cannot proceed as a matter of law.

So Now What?

The minor plaintiff can sue, and the mother cannot.

This decision is not controlling in Oklahoma. The Oklahoma Supreme Court could still rule that a parent can sign away a minor’s right to sue.

At the same time, this decision outlines release law in Oklahoma and does a great job. As far as how the Oklahoma Supreme Court will rule, the Federal District Court knows the Supreme Court in the state where they sit better than any other person, and I would vote with the Federal Court.

As in other cases in the majority of states, a parent cannot sign away a minor’s right to sue.  To see the States where a parent can sign away a minor’s right to sue and the decisions deciding that issue see States that allow a parent to sign away a minor’s right to sue.

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Decisive Supreme Court Decision on the Validity of Releases in Oklahoma

Schmidt v. United States of America, 1996 OK 29; 912 P.2d 871; 1996 Okla. LEXIS 38 (Okla 1996)

Case arose as a certified question from the US District Court from Western Oklahoma.

This is a request by the Federal District Court in Western Oklahoma for clarification on a legal point. When a Federal court has to apply state law and there are no decisions for the Federal court to rely upon, it certifies the question to the state Supreme Court for clarification. That is how this case arose.

The plaintiff went for a trail ride at Artillery Hunt Riding Stables at Fort Sill, Oklahoma. Because the stable was owned by the Army that is the reason for the suit to be brought in Federal Court and why the defendant is the USA.

While on the ride, the “ride leader” allegedly rode up behind the plaintiff and frightened her horse causing the horse to throw her. The plaintiff sued saying that the US “(1) is liable vicariously for the ride leader’s negligence and (2) is culpable for its own negligence in selecting and keeping an unfit ride leader.” Both claims are based in negligence.

The Federal Court could not find case law to rely upon to issue an opinion on the defendant’s defense of release so it sent the case the Oklahoma Supreme Court.

The Oklahoma Supreme Court did not decide the case. The court only used the facts as supplemental information in making its decision concerning releases in Oklahoma.

The Oklahoma looked at the question in two parts:

1. Whether, under Oklahoma law, a contractual exculpatory clause for personal injury is valid and enforceable?

2. Whether, under Oklahoma law, the exculpatory provisions contained in the Rental Riding Agreement are valid and enforceable and operate to bar the plaintiff’s negligence and negligent entrustment claims?

The court responded this way: “

We respond to the first question in the affirmative. We answer the second with a qualifying affirmative by noting that it applies if the certifying court finds that three preconditions to the clause’s enforcement are met: (1) the exculpatory clause’s language clearly, definitely and unambiguously displays an intent to insulate the United States from the type of liability the plaintiff seeks to impose; (2) no disparity of bargaining power existed between the two parties to the agreement containing the clause at the time it was executed; and (3) its effect would not violate public policy.

We note that exculpatory clauses cannot relieve one from liability for fraud, willful injury, gross negligence or violation of the law.

Summary of the case

This decision is a well-written look at how Oklahoma and many other states look at releases. Generally, releases are upheld in Oklahoma. However, although releases are “generally enforceable” releases are distasteful. The test in Oklahoma on whether a release is valid is:

(1) their language must evidence a clear and unambiguous intent to exonerate the would-be defendant from liability for the sought-to-be-recovered damages;

(2) at the time the contract (containing the clause) was executed there must have been no vast difference in bargaining power between the parties; and

(3) enforcement of these clauses must never

(a) be injurious to public health, public morals or confidence in administration of the law or

(b) so undermine the security of individual rights vis-a-vis personal safety or private property as to violate public policy.

The court then described what clear and unambiguous intent was:

A contractual provision which one party claims excuses it from liability for in futuro tortious acts or omissions must clearly and cogently (1) demonstrate an intent to relieve that person from fault and (2) describe the nature and extent of damages from which that party seeks to be relieved. This is so not only when one assesses a party’s direct liability for negligence, but also when assaying whether the agreement’s terms embrace acts of an agent or servant of that party. In short, both the identity of the tortfeasor to be released and the nature of the wrongful act — for which liability is sought to be imposed — must have been foreseen by, and fall fairly within the contemplation of, the parties. The clause must also identify the type and extent of damages covered — including those to occur in futuro.

The court did differentiate between an exculpatory clause (release) which limits suits and clauses, which limit damages under Oklahoma law.

Bargaining power was described by the court in looking at releases as:

Courts consider two factors when called upon to ascertain the equality of the parties’ bargaining power, vis-a-vis each other, in the setting of a promissory risk assumption: (1) the importance of the subject matter to the physical or economic well-being of the party agreeing to the release and (2) the amount of free choice that party could have exercised when seeking alternate services.

The final issue, a release that violates public policy was described as:

While courts may declare void those portions of private contracts which contradict public policy, they must do so only with great caution. Two classes of exculpating agreements may be said to violate public policy: (1) those which — if enforced — patently would tend to injure public morals, public health or confidence in the administration of the law and (2) those which would destroy the security of individuals’ rights to personal safety or private property.

The court summed up its opinion on what a release must have under Oklahoma law as:

“any agreement having as its purpose the unequivocal exoneration of one party from negligent tort liability of another must identify both the putative tortfeasor and the category of recovery from which that actor would be relieved.

However, if any single requirement of the three requirements is not met by a release, then the release must fail.

So Now What?

You never find a decision that says this is what you must do to be legal. This decision from the Oklahoma Supreme Court explains step by step what an attorney must do to write a release.

 

Plaintiff: Elizabeth M. Schmidt

 

Defendant: United States of America (Artillery Hunt Riding Stables at Fort Sill, Oklahoma)

 

Plaintiff Claims: Negligence in the original Federal Action

 

Defendant Defenses: Release

 

Holding: Sent to the Federal Court for determination based on the decision here.

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