What the term “strictly construed” actually means when used to describe how a release will be viewed by the court.Posted: July 9, 2018
The decision involves several legal issues, the one that concerns us is the issue of a release for a product. In Kansas, releases are strictly construed. In this case that meant that the language of the release did not meet the requirements of state law for a release. However, the court stretched incredibly far to come to that conclusion.
State: Kansas, United States District Court for the District of Kansas
Plaintiff: Patricia Fee
Defendant: Steve Snyder Enterprises, Inc.; Russell Young; SSE, Incorporated; Greene County Sport Parachute Center of Wellsville, Kansas, Inc.; and John Doe Corporation
Plaintiff Claims: Wrongful death and survival claims based on negligence, product liability and breach of warranty
Defendant Defenses: Statute of Limitations ran,
Holding: for the plaintiff
The lawsuit was brought over the failure of an automatic opener, which did not during a sky dive. The widow sued the manufacture of the device and the sky-diving center who sold the device to the deceased. The deceased signed a release and indemnity agreement, two separate documents when purchasing the automatic opener.
In Kansas, releases are allowed but strictly construed. Here strict construction is used, improperly, to interpret the release in an extremely narrow way to allow the lawsuit to proceed.
The deceased died when he was sky diving, and his automatic opening device failed to open. The automatic opening device was manufactured by the defendant.
The plaintiff spent eight years attempting to serve the defendant, starting in 1977 and finally serving the defendant in 1985. This lead to a discussion about when the lawsuit actually started, which takes the first half of the decision. Because the defendant had avoided service of process, because he knew about it and made attempts not to get sued, the date of the lawsuit started was the date he was served. However, due to the defendant’s actions, the statute of limitations did not run.
The widow purchased the automatic opener for the deceased, although the dates in the decision must be incorrect. The decision states the device was purchased a year after the deceased died. The device failed the first time it was used by the decedent.
The deceased signed a release for the parachute center. The defendant manufacturer raised the release as a defense to the claims of the plaintiff against the manufacture as well as those claims against the dive center.
The release was on one side of the paper and on the reverse was an assumption of risk language. The deceased also signed a separate indemnify agreement. The decedent signed both agreements.
This decision is that of the Federal District Court in Kansas.
Analysis: making sense of the law based on these facts.
The court first looked at release law in Kansas. If not against public policy, then Kansas recognizes exculpatory agreements, releases. However, like many state’s releases, the courts in Kansas use the language that releases “are not favored by the law and are strictly construed against the party relying on them.” Strictly construed does not require the specific term negligence but must clearly appear to express the intent to release from liability the defendant.
It is not necessary; however, that the agreement contained specific or express language covering in so many words the party’s negligence, if the intention to exculpate the party from liability clearly ap-pears from the contract, the surrounding circumstances and the purposes and objects of the parties.
The court in reading the release found it did not stop the plaintiff’s claims.
The court first in looking at the language found the language covered use of the product but did not cover liability for “sale” of the product.
First, a review of the agreement itself shows that, although it specifically releases the Parachute Center from liability for injuries or death arising out of the “ownership, operation, use, maintenance or control” of many devices,” the agreement fails to mention any release of liability revolving around the sale of any product to the parachuter.
The court admitted the deceased understood that parachuting was dangerous, that was not enough. By making the determination that the product was defective when sold, the court found the release would not stand because you cannot release liability for selling a defective product.
Strictly construing the agreement; however, we do not believe that this should be interpreted to exempt the Parachute Center from a failure to use due care in furnishing safe equipment, or should allow it to sell a product in a defective condition unreasonably dangerous to the parachuter. To do so would impermissibly extend the terms of the agreement to situations not plainly within its language.
The court then determined the release would also not work to stop the plaintiff’s claims for breach of either express or implied warranty. The court found attempting to release the defendant parachute center from liability was unconscionable. Under Kansas law, a release could be used to stop warranty claims, unless that was found to be unconscionable.
We, therefore, hold that plaintiff’s action is not barred by the release, covenant not to sue and indemnity clause signed by the plaintiff’s decedent. Summary judgment in favor of the defendants Parachute Center and Russell Young is therefore, inappropriate.
The indemnification agreement seemed to be ignored in reaching this determination by the court.
So Now What?
Strict construction is a term that gives leeway to a court to review the language of the release to make sure it conforms to the language required under state law. However, that term was created and applied to release’s decades ago and rarely used now except in rare situations like this. When the judge wants the defendant to pay.
Probably the term was created when courts were first asked to apply releases to a plaintiff’s claims and wanted a way to soften the blow. Now days, in most states it is quoted in the decision at the beginning and never heard of again. Eventually if the courts review enough releases, the term is not even quoted.
Few states allow a release to be used to stop product liability claims. However, several states do and several states allow assumption of risk to stop product liability claims. A well-written release that incorporates assumption of risk language is still effective in many product liability cases.
Here, however, the court reached as far as it could to find that the release was barred from stopping the claims. Part of that desire to allow the suit to proceed was probably because of the actions of the manufacturer who spend eight years avoiding service of the lawsuit.
The rest, however, was simply a stretch to allow the lawsuit to proceed.
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Patricia Fee, Plaintiff, v. Steve Snyder Enterprises, Inc.; Russell Young; SSE, Incorporated; Greene County Sport Parachute Center of Wellsville, Kansas, Inc.; and John Doe Corporation, Defendants
CIVIL ACTION No. 84-2323
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS
1986 U.S. Dist. LEXIS 28158
March 14, 1986
CORE TERMS: parachute, sport, summary judgment, decedent, personally, covenant, implied warranties, statute of limitations, service of process, mail service, notice, mail, parachuting, personal injury, personal service, parachuter, consumer, assigns, wrongful death, strict liability, territorial limits, unconscionable, consequential, predecessor, disclaimer, diversity, automatic, warranty, opening, saving
COUNSEL: [*1] John E. McKay, LAW OFFICES OF BENSON & McKAY, 911 Main Street, Suite 1430, Kansas City, Missouri 64105, (816) 842-7604; Mark R. Singer/Micheline Z. Burger ROMAIN, BURGER & SINGER, CHTD., The College View Building, 4500 College Blvd., Suite 103, Overland Park, Kansas 66221, (913)649-5224; Paul v. Herbers, James E. Cooling, Cooling, Herbers & Sears, P.C., P.O. Box 26770, Kansas City, MO 64196, (816) 474-0770; Russell C. Leffel, 7315 Frontage Road, Suite 111, Shawnee Mission, KS 66204, 913-362-9727, Neal E. Millert, Larry J. Tyrl, James, Millert, Houdek, Tyrl & Sommers, 804 Bryant Building, 1102 Grand, Kansas City, Missouri 64106, Randolph G. Austin, Speer, Austin, Holliday, & Ruddick, 261 N. Cherry, P.O. Box 1000, Olathe, Kansas 66061.
OPINION BY: O’CONNOR
MEMORANDUM AND ORDER
EARL E. O’CONNOR, CHIEF JUDGE.
This matter is before the court on defendants’ motions for summary judgment and plaintiff’s motion for costs. This is a diversity action for wrongful death and survivorship based on claims of negligence, strict liability and breach of express and implied warranties.
I. Motion for Summary Judgment by Defendant SSE, Incorporated.
Defendant SSE, Incorporated, moves for [*2] summary judgment on the ground that plaintiff’s action is barred by the two-year statute of limitations found at K.S.A. 60-513(a). For the following reasons, defendant’s motion must be denied.
[HN1] Summary judgment is appropriate when the matters considered by the court disclose that “there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Federal Rule of Civil Procedure 56(c). The court must look at the record in the light most favorable to the party opposing the motion. Prochaska v. Marcoux, 632 F.2d 848, 850 (10th Cir. 1980), cert. denied, 451 U.S. 984 (1981). Before summary judgment may be granted, the moving party must establish that it is entitled to summary judgment beyond a reasonable doubt. Ellis v. El Paso Natural Gas Co., 754 F.2d 884, 885 (10th Cir. 1985).
The uncontroverted facts relevant to this motion are as follows:
1. The plaintiff’s decedent died while skydiving on December 11, 1982, when his parachute failed to open. Decedent’s parachute was equipped with an automatic opening device, which was manufactured by the defendant SSE, Incorporated.
2. Plaintiff filed this lawsuit on August 13, [*3] 1984, consisting of wrongful death and survival claims based on negligence, product liability and breach of warranty. Plaintiff named Steve Snyder Enterprises, Inc., as a defendant, claiming that it was a Pennsylvania corporation that designed, manufactured and sold the defective device.
3. On August 14, 1984, the complaint was mailed to Steve Snyder Enterprises, Inc., at a New Jersey address.
4. Steve Snyder Enterprises, Inc., had changed its name to “SSE, Incorporated,” in November of 1977. Its corporate headquarters, however, remained at the same location.
5. SSE, Incorporated, received the complaint at the New Jersey address.
6. ln a telephone conversation with plaintiff’s counsel, the attorney for SSE, Incorporated, advised plaintiff’s counsel that neither SSE nor its predecessor corporation, Steve Snyder Enterprises, Inc., would accept service by mail.
7. On November 1, 1984, counsel for SSE, Incorporated, rated, wrote to plaintiff’s counsel, again informing him that SSE intended not to acknowledge the mail service.
8. On November 14, 1984, the complaint was again mailed to Steve Snyder Enterprises, Inc. SEE, Incorporated, received the complaint, but refused to sign or [*4] return an acknowledgement.
9. On December 7, 1984, plaintiff filed her first amended complaint, adding SSE, Incorporated, as a defendant.
10. From January 1985 to August 28, 1985, plaintiff’s process servers made thirty-three attempts to personally serve SSE, Incorporated.
11. On August 29, 1985, plaintiff successfully served Steve Snyder, the registered agent and president of SSE, Incorporated.
Defendant SSE, Incorporated, argues that summary judgment is appropriate on all of plaintiff’s claims because they are barred by the two-year statute of limitations for wrongful death actions set forth at K.S.A. 60-513(a)(5). The court notes, however, that not all of plaintiff’s claims are for wrongful death — Counts VI through VIII are survival actions based on negligence, strict liability and breach of express and implied warranties. Nevertheless, a similar two-year statute of limitations (see K.S.A. 60-13(a)(4)) applies to the negligence, strict liability and breach of warranty claims. See Grey v. Bradford-White Corp., 581 F.Supp. 725 (D. Kan. 1984). The court will therefore treat defendant’s motion as seeking summary judgment on all of plaintiff’s claims and not merely plaintiff’s [*5] wrongful death claims.
To decide whether plaintiff’s claims are barred by the two-year statute of limitations, we must first determine when plaintiff’s suit was commenced. [HN2] In a diversity action, the court must apply the state law prescribing when an action commences for statute of limitations purposes rather than Rule 3 of the Federal Rules of Civil Procedure. Walker v. Armco Steel Corp., 446 U.S. 740 (1980); Ragan v. Merchants Transfer & Warehouse Company, 337 U.S. 530 (1949). [HN3] Kansas law provides that an action is commenced at the time a petition is filed if service of process is obtained within ninety days. See K.S.A. 60-203(a)(1). If service is not obtained during the 90-day period, then the action is commenced at the time of service. Id.
Defendant argues that plaintiff’s action did not com- mence until August 29, 1985, when plaintiff personally served the agent of SSE, Incorporated, Steve Snyder. Accordingly, since plaintiff’s cause of action arose on December 11, 1982, her claims are barred by the two-year statute of limitations. We are not persuaded by defendant’s argument.
We conclude that plaintiff’s action was timely commenced under the saving provisions [*6] of K.S.A. 60-203(b). That section provides:
[HN4] If service of process or first publication purports to have been made within the time specified by subsection (a)(1) but is later adjudicated to have been invalid due to any irregularity in form or procedure or any defect in making service, the action shall nevertheless be deemed to have been commenced by the original filing of the petition if valid service is obtained or first publication is made within 90 days after that adjudication, except that the court may extend that time an additional 30 days upon a showing of good cause by the plaintiff.
Applying this statute to the facts in this case, we find that plaintiff purported to serve process by mail on August 14, 1984, only one day after the suit was filed. Service by mail is proper under a recent amendment to the Kansas Code of Civil Procedure. 1
See K.S.A. 60-314 (Supp. 1985). We find, however, that plaintiff’s service was invalid due to the defendant’s failure to complete and return the enclosed notice. Under the saving provision of section 60-203(b), we may nevertheless deem plaintiff’s action to have been commenced on the date plaintiff’s complaint was filed, [*7] so long as plaintiff makes personal service on the defendant within ninety days of this order.
1 We must look to the Kansas law prescribing the method of service. This is a diversity action in which plaintiff asserts jurisdiction over the defendant pursuant to the Kansas long-arm statute, K.S.A. 60-308. Fed. R. Civ. P. 4(f) provides that “process other than a subpoena may be served anywhere within the territorial limits of the state in which the district court is held, and when authorized by a statute of the United States or by these rules, beyond the territorial limits of that state.” There is no applicable federal statute that would allow service of process outside the state in this case. Thus, in order to obtain service beyond the territorial limits of the court, there must be authorization in “these rules.” Rule 4(e) provides for service of process on defendants who are not inhabitants of or found within the state. In pertinent part it states:
Whenever a statute or rule of court of the state in which the district is held provides (1) for service of a summons, or of a notice, or of an order in lieu of summons upon a party not an inhabitant of or found within the state, . . . service may . . . be made under the circumstances and in the manner prescribed in the [state] statute or rule.
Clearly, service by mail is a “manner” of service provided by the Kansas statute in this situation. See K.S.A. 60-314 (Supp. 1985).
[*8] Defendant also argues that because plaintiff’s mail service was directed to Steve Snyder Enterprises, Inc., rather than to SSE, Incorporated, it was totally ineffective. We find defendant’s argument meritless for two reasons. First, under the saving provision discussed above, plaintiff’s mistake in naming defendant’s predecessor corporation qualifies as a defect in the service that may be remedied by plaintiff reserving the defendant under its proper name within ninety days of this order. Second, [HN5] both the federal rules (Rule 15(c)) and Kansas law (K.S.A. 60-215(c)) allow for relation back of an amendment changing a party. Under these provisions, [HN6] a change in party relates back so long as the claim asserted arose out of the events set forth in the original complaint and
within the period provided by law for commencing the action against him, the party to be brought in by amendment (1) has received such notice of the institution of the action that he will not be prejudiced in maintaining his defense on the merits, and (2) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against him.
Federal Rule [*9] of Civil Procedure 15(c); K.S.A. 60-215(c).
In this case, an amendment changing defendant’s name from Steve Snyder Enterprises, Inc., to SSE, Incorporated, would clearly relate back. First, the claims asserted would be identical to those originally filed. Second, SSE, Incorporated, admits it had notice of this action within the statutory period. Counsel for SSE, Incorporated, informed plaintiff’s counsel in August and November of 1984 that SSE had received the mail service but chose not to acknowledge it. Third, SSE, Incorporated, knew that but for plaintiff’s confusion over the name of its predecessor corporation, the action would have been brought against it.
We therefore hold that plaintiff shall have ninety (90) days from the date of this order to personally serve the defendant SSE, Incorporated. Upon such service, plaintiff’s action will be deemed to have commenced on August 13, 1984, when the case was filed. Plaintiff’s claims will therefore be timely. If, however, plaintiff fails to serve SSE, Incorporated, within the 90-day time period, plaintiff’s action against this defendant will be deemed time-barred. Defendant’s motion for summary judgment will therefore be held in abeyance [*10] for ninety days from the date of this order to allow plaintiff to properly serve the defendant.
II. Plaintiff’s Motion for Costs.
Plaintiff moves for payment of the costs incurred in plaintiff’s previous attempts to personally serve defendant. [HN7] Costs are available pursuant to both Federal Rule of Civil Procedure 4(c)(2)(D) and K.S.A. 60-314:
Unless good cause is shown for not doing so the court shall order the payment of the costs of personal service by the person served if such person does not complete and return within 20 days after mailing, the notice and acknowledgment of receipt of summons.
Defendant in this case has shown no reason why costs should not be assessed against it. Defendant deliberately refused to acknowledge mail service and even went so far as to inform plaintiff that it was electing to assert its “right to service of process in the customary manner and not by mail.” Defendant’s Exhibit 4. Not only did defendant refuse mail service, but it also made every attempt to thwart personal service. Plaintiff was thus forced to attempt service at least thirty-three times against defendant. We therefore hold that plaintiff is entitled to recover costs in [*11] the amount of $1,628.47 as requested in her motion. Furthermore, plaintiff will be entitled to recover costs incurred in serving the defendant again, as discussed in part I above, upon plaintiff’s submission of proof of expenses.
III. Motion for Summary Judgment by Defendants Russell Young and Greene County Sport Parachute Center.
Defendant Russell Young moves for summary judgment on the ground that plaintiff’s decedent signed a release and covenant not to sue in favor of Greene County Sport Parachute Center of Wellsville, Kansas, Inc. (hereinafter the Parachute Center), and its employees and agents. The Parachute Center joins in said motion.
The material uncontroverted facts are as follows:
1. On May 8, 1982, plaintiff’s decedent signed a “Release and Covenant Not To Sue,” which read in pertinent part:
[I] do hereby fully and forever release and discharge the said Greene County Sport Parachute Center of Wellsville, Kansas, Inc. and their employees, servants, stockholders, agents, successors, assigns, and all other persons whomsoever directly or indirectly liable, from any and all other claims and demands, actions and cause of action, damages, costs, loss of services, [*12] expenses and any and all other claims of damages whatsoever, resulting from PERSONAL INJURIES, DEATH OR PROPERTY DAMAGES SUSTAINED BY ME, arising out of AIRCRAFT FLIGHTS, PARACHUTE JUMPS, or any other means of lift, ascent or descent from an aircraft of any nature, or arising out of the ownership, operation, use, maintenance or control of any vehicle, whether motor vehicle, aircraft, or otherwise, or any device, or mooring, while on the ground or in flight, and meaning and intending to include herein all such PERSONAL INJURIES, DEATH OR PROPERTY DAMAGE resulting from or in any way connected with or arising out of instructions, training, and ground or air operations incidental thereto.
This release and covenant not to sue is made and entered in consideration of the permission extended to me by Greene County Sport Parachute Center of Wellsville, Kansas, Inc. to participate in a course of parachuting instructions, parachuting training flying activities, ground or air operations incidental to parachuting and flying.
I further acknowledge that I will not rely on any oral or written representation of Greene County Sports Parachute Center of Wellsville, Kansas, Inc. or any agent thereof. [*13] I fully understand that there are dangerous risks in the sport of parachute jumping, and I assume said risks. . . .
I HAVE READ AND FULLY UNDERSTAND that Release and Covenant Not to Sue and sign the same as my own free act.
2. Plaintiff’s decedent also signed an “Indemnity Clause,” which read:
I acknowledge that Greene County Sport Parachute Center of Wellsville, Ks., Inc., is not an insurer of me. I do, for myself, my heirs, executors, administrators and assigns, hereby expressly stipulate, covenant and agree to indemnify and hold forever harmless the said Greene County Sport Parachute Center of Wellsville, Ks., Inc., and its employees, servants, stockholders, agents, successors, and assigns, and all other persons whomsoever against and from any and all actions, causes of action, claims and demands for damages, judgments, executions, costs, loss of services, expenses, compensation, including reimbursement of all legal costs and reasonable counsel fees incurred or paid by the said indemnified parties or any of them, for the investigation, prosecution or defense of any such action, cause of action or claim or demand for damages, and any and all other claims for damages, whatsoever, [*14] which may hereafter arise, or be instituted or recovered against said Greene County Sport Parachute Center of Wellsville, Ks., Inc., and its servants, employees, stockholders, agents, successors, assigns or any other person or persons whomsoever, by me or by any other person whomsoever, whether for the purpose of making or enforcing a claim for damages, on account of PERSONAL INJURIES, DEATH, OR PROPERTY DAMAGE sustained by me, or whether for the purpose of enforcing a claim for damages of any nature by any person whomsoever, on account of, or in any way resulting therefrom.
3. The decedent signed both the clause and release and certified that he had read them. His signature was witnessed by defendant Russell Young, President of the Parachute Center.
4. On the reverse side of the release, the decedent also signed and certified the following statements:
(9) I understand there are potential dangers and risks involved in this sport and acknowledge that the training I have received is intended to minimize such but is no guarantee or representation that there are none.
(10) I understand that parachuting is a potentially dangerous sport and that the proper functions of these parachutes [*15] or any parachute cannot be and is not guaranteed.
5. The decedent ordered and promised to pay for an automatic parachute opening device from the defendants Parachute Center and Russell Young. Young delivered the device to the decedent in December 1982.
6. The decedent used the device for the first time while skydiving on December 11, 1982. His parachute failed to open, he fell to the ground and was fatally injured.
7. The decedent’s widow paid the Parachute Center $254.60 for the device on January 27, 1983.
[HN8] Kansas courts have long recognized the validity of exculpatory agreements relieving a party from liability unless it would be against the settled public policy to do so. See, e.g., Belger Cartage Service, Inc. v. Holland Construction Co., 224 Kan. 320, 329, 582 P.2d 1111, 1118 (1978); Hunter v. American Rentals, 189 Kan. 615, 617, 371 P.2d 131, 133 (1962). Exculpatory contracts, however, “are not favored by the law and are strictly construed against the party relying on them.” Cason v. Geis Irrigation Co., 211 Kan. 406, 411, 507 P.2d 295, 299 (1973). Accord. Belger, 224 Kan. at 329, 582 P.2d at 1119. The terms of the agreement are not to be extended to [*16] situations not plainly within the language employed. Baker v. City of Topeka, 231 Kan. 328, 334, 644 P.2d 441, 446 (1982); Missouri Pacific Railroad Co. v. City of Topeka, 213 Kan. 658, 664, 518 P.2d 372, 377 (1973). It is not necessary, however, that the agreement contain specific or express language covering in so many words the party’s negligence, if the intention to exculpate the party from liability clearly appears from the contract, the surrounding circumstances and the purposes and objects of the parties. Bartlett v. Davis Corp., 219 Kan. 148, 159, 547 P.2d 800, 806 (1976).
After reviewing the language of the contract and the totality of the circumstances to determine the intent of these parties, we conclude that the release and indemnity clause do not preclude plaintiff’s action. First, a review of the agreement itself shows that, although it specifically releases the Parachute Center from liability for injuries or death arising out of the “ownership, operation, use, maintenance or control” of many device,” the agreement fails to mention any release of liability revolving around the sale of any product to the parachuter. Granted, there is a paragraph in [*17] which the parachuter states that he understands that parachuting is a potentially dangerous sport and that the proper function of the parachute cannot be guaranteed. Strictly construing the agreement, however, we do not believe that this should be interpreted to exempt the Parachute Center from a failure to use due care in furnishing safe equipment, or should allow it to sell a product in a defective condition unreasonably dangerous to the parachuter. To do so would impermissibly extend the terms of the agreement to situations not plainly within its language.
Other courts have held that similar releases exempt parachute centers and trainers only from injuries that ordinarily occur without any fault of the defendant. See Diedrich v. Wright, 550 F.Supp. 805 (N.D. Ill. 1982); Gross v. Sweet, 49 N.Y.2d 102, 424 N.Y.S.2d 65, 400 N.E.2d 306 (Ct.App. 1979). We agree with these courts that the language alerting the parachuter to the dangers in parachute jumping is used to drive home to the individual that he must enter into this sport with an apprehension of the risks inherent in the nature of the sport. See 550 F.Supp. at 808; 49 N.Y.2d at
, 424 N.Y.S.2d at 369, 400 [*18] N.E.2d at It does not, however, follow that he must accept enhanced exposure to injury or death based on the carelessness of the defendants in selling him a defective product or failing to warn him about its use.
Furthermore, we hold that the release was ineffective under Kansas law to limit liability for a breach of either an express or implied warranty. [HN9] With respect to disclaimer of express warranties, K.S.A. 84-2-719(3) provides:
Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. Limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation of damages where the loss is commercial is not.
In this case, the automatic opening device qualifies as a consumer good under K.S.A. 84-9-109. Under section 84-2-719(3), the defendants’ attempt to exclude consequential damages for personal injury was unconscionable and therefore unenforceable.
Furthermore, with respect to disclaimer of implied warranties of merchantability, [HN10] the Kansas Consumer Protection Act flatly prohibits in consumer cases the use of any limitation on remedies or liability for implied [*19] warranties, and declares that any such disclaimers are void. K.S.A. 50-639(a) and (e). See also id. at 84-2-719 (Kansas Comment).
We therefore hold that plaintiff’s action is not barred by the release, covenant not to sue and indemnity clause signed by plaintiff’s decedent. Summary judgment in favor of the defendants Parachute Center and Russell Young is therefore inappropriate.
IT IS THEREFORE ORDERED that defendants’ motion for summary judgment by Russell Young and Greene County Sport Parachute Center of Wellsville, Kansas, Inc., is denied.
IT IS FURTHER ORDERED that defendant’s motion for summary judgment by SSE, Incorporated, shall be held in abeyance until plaintiff obtains personal service upon SSE, Incorporated. Plaintiff shall have ninety (90) days from the date of this order to personally serve SSE, Incorporated. If plaintiff fails to so serve the defendant, defendant’s motion for summary judgment will be granted.
IT IS FURTHER ORDERED that plaintiff’s motion for costs to personally serve the defendant SSE, Incorporated, in the amount of $1,628.47, is granted.
Dated this 14th May of March, 1986, at Kansas City, Kansas.
Daniel M. Boucher v. Gordon E. Riner, et al.
No. 1470, September Term, 1985
Court of Special Appeals of Maryland
68 Md. App. 539; 514 A.2d 485; 1986 Md. App. LEXIS 391
September 8, 1986
Prior History: [***1] Appeal from the Circuit Court for Caroline County, George B. Rasin, Jr., Judge.
Disposition: Judgment Affirmed; Costs to be Paid by the Appellant.
Counsel: Argued by David R. Thompson (Kurt D. Karsten and Franch, Earnest & Cowdrey, P.A. on the brief), Easton for appellant.
Argued by W. Michael Jacobs (Charles E. Iliff, Jr. and Semmes, Bowen & Semmes on the brief), Baltimore for appellees.
Judges: Weant, Karwacki and Wenner, JJ.
Opinion By: Karwacki
[*540] [**486] Daniel M. Boucher, the appellant, wishing to learn how to parachute, joined the Naval Academy Parachuting Club (the Club) in September 1982. The Club is a voluntary extracurricular activity for students at the Naval Academy. The Academy, where Boucher was a midshipman, provided equipment, paid various fees, and made arrangements for the use of a drop zone for the club members. Although the Club was organized and operated by upperclass midshipmen, it had a faculty advisor, and the Club members were accompanied on field trips by naval officers.
The Club had an agreement with Parachutes Are Fun, Inc. (Parachutes), for the use of Parachutes’ drop zone as a training ground for Club members. That agreement provided that the [***2] Club would provide its own equipment and be able to use the drop zone at a reduced rate. Parachutes agreed to conform to all regulations as specified by the Academy.
Prior to Boucher’s first parachute jump, he received instructions in sport parachuting at the Academy from [*541] Midshipmen Byrne and Lastar, who were among the upper-classmen who ran the Club. The two were qualified by the U.S. Parachute Association (USPA), a civilian organization engaged in the promotion and self-regulation of the sport. Boucher’s training consisted of instruction in the hazards normally associated with parachuting, including the hazard posed by jumping in the vicinity of uninsulated electric power lines. Attention was given to the methods which should be employed by the parachutist to avoid or minimize contact with obstacles on the ground by controlling the direction of descent.
The appellees, in addition to Parachutes, are: the Pelicanland Corporation (Pelicanland), the owner of the airport where the drop area was located; Gordon E. Riner, the co-owner and vice-president of Parachutes, who is a certified jumpmaster, instructor, and parachutist; and Kenneth Dunker, a certified jumpmaster, [***3] instructor, and parachutist who worked at Parachutes.
On September 18, 1982, Boucher along with other midshipmen went to Pelicanland to make his first jump. Prior to Boucher’s boarding the airplane that day, he signed an exculpatory agreement with Parachutes, the relevant portion of which stated:
2 A. EXEMPTION FROM LIABILITY
The Participant exempts and releases the Corporation, its owners, officers, agents, servants, employees, and lessors and the County of Sussex, its officers, agents, servants and employees from any and all liability, claims, demands or [**487] actions or causes of action whatsoever arising out of any damage, loss or injury to the Participant or the Participant’s property while upon the premises or aircraft of the Corporation or while participating in any of the activities contemplated by this Agreement, whether such loss, damage, or injury results from the negligence of the Corporation, its officers, agents, servants, employees or lessors or from some other cause.
[*542] At about 5:30 p.m., a decision was made that wind conditions were such that the jump could be made. Boucher went up in the plane with two other midshipmen and with Riner, [***4] who was there to act as coach and jumpmaster. Dunker was on the ground, near the target area, and was manning the public address system to “talk down” the jumpers. Boucher was the last of the three to jump. After Boucher’s parachute opened, Dunker began calling out his instructions, telling Boucher to change from a “running” position where his back was to the wind, to a “holding” position, facing the wind. As Boucher neared the ground, Dunker instructed him to execute a 360o turn. At this point, Dunker realized that there was a danger that Boucher would fly right into nearby power lines. He gave no indication of that danger to Boucher, who continued his descent with his back to the lines. Seconds later, Boucher collided with the lines, sending 12,500 volts of electricity through his body.
Boucher filed a two count declaration against the appellees alleging (1) negligence on the part of the appellees as owners or occupiers of the drop zone, because of the location of the electric lines in relation to the drop zone, and (2) gross negligence on the part of the appellees in the performance of their duties. The appellees jointly moved for summary judgments. On July 24, 1985, [***5] following a hearing, the Circuit Court for Caroline County (Rasin, J.), in a well reasoned memorandum opinion, granted the appellees’ motion. Boucher, in his appeal from those judgments, presents the broad question of “whether the trial court improperly granted summary judgment to the defendants?”
Specifically, he raises the following issues:
I. Whether the evidence presented a genuine issue of fact as to the defendants’ gross negligence?
II. Whether the exculpatory agreement signed by the plaintiff shortly before the accident precluded all recovery against the defendants based on negligence?
[*543] III. Whether there exists a genuine issue of fact as to the defendant Dunker’s status as an independent contractor?
Preliminarily, since the hearing court resolved this controversy in favor of the appellees by summary judgment, we will review the evidence, including all permissible inferences therefrom, in the light most favorable to the appellant. Natural Design, Inc. v. Rouse Co., 302 Md. 47, 62, 485 A.2d 663 (1984); Washington Homes v. Inter. Land Dev., 281 Md. 712, 716-18, 382 A.2d 555 (1978).
Summary judgment should be granted only upon a showing that there [***6] is no genuine issue as to any material fact. Fireman’s Fund Ins. Co. v. Rairigh, 59 Md.App. 305, 313, 475 A.2d 509, cert. denied, 301 Md. 176, 482 A.2d 502 (1984). If there is a conflict between the inferences which may be drawn from the evidence before the court, summary judgment is not proper. Coffey v. Derby Steel Co., 291 Md. 241, 246-47, 434 A.2d 564 (1981). Our review of all of the evidence in the light most favorable to the appellant convinces us that the hearing court was correct in finding, that there was no genuine dispute as to any material fact and that the appellees were entitled to judgments as a matter of law.
Boucher contends that the appellees were guilty of gross negligence and that even if the exculpatory clause is held to be valid it does not shield the appellees from liability for gross negligence. As to the latter part of Boucher’s assertion—that the [**488] appellees are not shielded from liability for gross negligence—he is correct. A waiver of a right to sue, such as the one executed between Boucher and Parachutes, is ineffective to shift the risk of a party’s own willful, wanton, reckless, or gross conduct. Winterstein v. [***7] Wilcom, 16 Md.App. 130, 134-36, 293 A.2d 821, cert. denied, 266 Md. 744 (1972). Dean Prosser explains such a result on the alternative bases of common experience as to what is intended by the contracting parties or of public [*544] policy to discourage aggravated wrongs. Prosser and Keeton, The Law of Torts § 68 (5th ed. 1984).
Returning to the first part of Boucher’s contention—that the appellees were guilty of gross negligence—we find ourselves in agreement with the hearing court that Boucher fails in his reliance on essentially three facts to raise an inference of gross negligence. Boucher alleges that the appellee Dunker was on the ground giving instructions to Boucher as he was descending; that Boucher was unaware of the electric lines prior to colliding with them because, as Dunker had instructed, his back was to the lines; and that Dunker did not warn Boucher of the presence of the power lines. Boucher argues that an inference of gross negligence can be drawn from the above circumstances because Dunker was “controlling” Boucher’s movements and thus guided Boucher into the electric lines.
Gross negligence has been examined in a number of Maryland cases [***8] dealing with a variety of issues. These cases have addressed issues which include the circumstances under which gross negligence can support an award of exemplary damages, 1 civil liability for injuries to trespassers, 2 and criminal liability for manslaughter by automobile. 3 Our appellate courts have also dealt with the issue of gross negligence in the context of the type of conduct that would support an inference sufficient to overcome the bar of an [*545] automobile guest statute, 4 contributory negligence, 5 and, as in this case, a pre-injury release. 6
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1. Smith v. Gray Concrete Pipe Co., 267 Md. 149, 297 A.2d 721 (1972); Bannon v. B. & O. R.R. Co., 24 Md. 108 (1866).
2. Murphy v. Baltimore Gas & Elec., 290 Md. 186, 428 A.2d 459 (1981); Mondshour v. Moore, 261 A.2d 482, 256 Md. 617 (1970); Mech v. Hearst Corp., 64 Md.App. 422, 496 A.2d 1099 (1985), cert. denied, 305 Md. 175 501 A.2d 1323 (1986); Medina v. Meilhammer, 62 Md.App. 239, 489 A.2d 35, cert. denied, 303 Md. 683, 496 A.2d 683 (1985).
3. Johnson v. State, 213 Md. 527, 132 A.2d 853 (1957). [***9]
4. Romanesk v. Rose, 248 Md. 420, 237 A.2d 12 (1968).
5. Liscombe v. Potomac Edison Co., 303 Md. 619, 495 A.2d 838 (1985).
6. Winterstein v. Wilcom, 16 Md.App. 130, 293 A.2d 831, cert. denied, 266 Md. 744 (1972).
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In Smith v. Gray Concrete Pipe Co., 267 Md. 149, 297 A.2d 721 (1972), the Court of Appeals addressed the issue of gross negligence in the context of punitive damages. In that case, a boy was killed after he was struck by a truck owned by the defendant concrete company and driven by an inexperienced 18 year-old. In an action seeking compensatory and exemplary damages, the executor of the decedent’s estate sued Gray Concrete for negligent entrustment of the vehicle and the driver for negligent operation of the truck. The complaint stated that the corporate defendant had entrusted the truck to the driver knowing that the truck’s hood was improperly secured and that it could pop open at any time, that the driver was only 18 when the law required its drivers to be over 21 years of age, that the driver had no chauffeur’s license, and that the driver was [***10] untrained, unqualified, and incompetent to drive the truck on the highway. Id. at 169, 297 A.2d 721. The count against the driver alleged that he did not check the condition of the truck prior to operating it on the highway, that he did not respond properly when the hood flew up and blocked his vision—he stopped his truck in the center lane of the highway rather than pulling it off to the side—and that he knew or should have [**489] known that the truck was in violation of many requirements of the law. Id. at 170-71, 297 A.2d 721.
The Court concluded that punitive damages were recoverable in actions arising out of motor vehicle torts where there was a “’wanton or reckless disregard for human life’ in the operation of a motor vehicle, with all the known dangers and risks attendant to such conduct.” Id. at 168, 297 A.2d 721. The Court stated that the standard contemplated conduct which was of an “extraordinary or outrageous [*546] character,” but which stopped short of “wilful or intentional injury.” Id.
In Smith, the Court held that punitive damages were not recoverable against the driver of the truck because his conduct, “although constituting [***11] sufficient negligence to support a claim for compensatory damages, does not mount up to ‘a wanton or reckless disregard for human life.’” Id. at 171, 297 A.2d 721. In other words, although the driver may have exercised extremely poor judgment in his operation of the truck, his conduct was not of an extraordinary or outrageous character so as to constitute gross negligence.
On the other hand, the corporate defendant was found to be subject to possible exemplary damages. The conduct of Gray Concrete “did not occur under the pressures of a highway crisis, where what might superficially appear to be caused by ‘extraordinary or outrageous conduct’ could be merely the result of poor judgment exercised under such circumstances.” Id. at 172, 297 A.2d 721. The Court noted that Gray’s conduct reflected a premeditated decision by an employer in possession of facts which should have indicated almost certain harm to others. Id.
In another instructive case, Liscombe v. Potomac Edison Co., 303 Md. 619, 495 A.2d 838 (1985), the Court of Appeals had to determine whether there had been a showing of legally sufficient evidence of gross negligence to defeat the defendants’ motions [***12] for summary judgment. Liscombe involved the driver of a dump truck who was injured when the raised bed of his truck came into contact with high voltage lines that passed over the site. The driver alleged that the gross negligence of both the power company and the occupier of the premises led to his being injured. Id. The Court quoted from Bannon v. B. & O. R.R. Co., 24 Md. 108, 124 (1866), where it was said: “Gross negligence is a technical term, it is the omission of that care ‘which even inattentive and thoughtless men never fail to take of their own property,’ it is a violation of good faith.” Id., 303 Md. at 634-35, 495 A.2d 838. The Court then noted its decision in Romanesk v. Rose, 248 Md. 420, 237 A.2d 12 (1968) [*547] (applying Virginia law), in which it quoted with approval the definition of gross negligence from 4 Blashfield, Cyclopedia of Automobile Law and Practice § 2771 (1946 ed.) as:
an intentional failure to perform a manifest duty in reckless disregard of the consequences as affecting the life or property of another, and also implies a thoughtless disregard of the consequences without the exertion of any effort to avoid them. [***13] Stated conversely, a wrongdoer is guilty of gross negligence or acts wantonly and willfully only when he inflicts injury intentionally or is so utterly indifferent to the rights of others that he acts as if such rights did not exist.
Id. at 423, 237 A.2d 12.
In concluding that the evidence of gross negligence before the hearing court was insufficient, the Court assumed without deciding that the “lesser standard” of Smith v. Gray Concrete Pipe Co., supra, was the appropriate test for determining whether legally sufficient evidence of gross negligence by either defendant had been shown. The Liscombe Court noted the defendants’ efforts to minimize exposure to the danger, that there was no evidence of indifference by the defendants to the safety of others, and that there was no indication to either that almost certain harm to others would result from the defendants’ action or their failure to act. The Court stated that, [**490] “[t]here was, in short, no showing of facts establishing extraordinary or outrageous conduct mounting up to a wanton or reckless disregard for human life on the part of either defendant.” Id.
We rely on the guidance of Liscombe [***14] and Smith in deciding whether the conduct of the appellee Dunker in this case amounted to gross negligence. In Smith, the Court of Appeals noted that “the conduct alleged here reflects a premeditated decision, deliberately arrived at, by an indifferent employer in possession of facts which should have indicated almost certain harm to others.” 267 Md. at 172, 297 A.2d 721. In the case sub judice, viewing all of the evidence in the light most favorable to the appellant, we [*548] cannot say that Dunker’s conduct amounted to a wanton or reckless disregard for Boucher’s life. The undisputed material facts of this case show that Dunker was attentive to Boucher’s descent, that he was stationed in the proper location, and that he was calling out instructions to Boucher as was expected of him. There was no showing of indifference on the part of Dunker. Rather, the conduct alleged here reflects, at worst, poor judgment on the part of Dunker that, while perhaps amounting to ordinary negligence, does not rise to the level of gross negligence. We see no evidence of a premeditated decision, deliberately arrived at, by an indifferent jumpmaster that should have indicated almost [***15] certain harm to others.
The appellant next argues that the exculpatory agreement which he signed shortly before his jump is unenforceable. 7 We disagree.
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Whether this issue is even preserved for our review is questionable since it was not explicitly raised below. On the assumption that it was implicitly preserved for our review, however, we will address the issue.
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The Maryland law regarding exculpatory clauses can be stated quite succinctly. In the absence of legislation to the contrary, there is ordinarily no public policy which prevents the parties from contracting as they see fit. Winterstein v. Wilcom, 16 Md.App. at 135, 293 A.2d 821. “It is quite possible for the parties expressly to agree in advance that the defendant is under no obligation of care for the benefit of the plaintiff, and shall not be liable for the consequences of conduct which would otherwise be negligent.” Id., quoting Prosser, The Law of Torts § 67 (3d ed. 1964). There are, of course, exceptions to the general [***16] rule, and the appellant would have us here find either of two exceptions applicable. The first is that such an agreement will be invalid if the relationship of the parties is such that one [*549] party is at an obvious disadvantage in bargaining at the time the contract is entered so that the effect of the contract is to put him at the mercy of the other’s negligence. Winterstein, 16 Md.App. at 135-36, 293 A.2d 821. The second exception invalidates exculpatory agreements if they are part of a transaction affected with a public interest. Id. at 136-37, 293 A.2d 821. We will examine the exculpatory agreement sub judice, in light of the evidence before the hearing court to determine the applicability of either exception.
Boucher joined the Club of his own volition sometime prior to September 18, 1982. His participation in the Club was not required by the Academy. Further, Boucher was not compelled by Parachutes to agree to the waiver of his right to sue. Had Boucher so wished, he could have chosen the option provided by Parachutes under Paragraph 2B 8 of the Agreement to pay an additional fee of $ 300 to nullify the [**491] waiver of paragraph 2A. Boucher [***17] chose not to pay the additional fee thereby waiving his right to sue in the event of an accident involving the negligence of the defendants.
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8. 2B ALTERNATIVE PROVISION:
In consideration of the deletion of the provisions, 2A, 3, 4 and 6 herein regarding EXEMPTION FROM LIABILITY COVENANT NOT TO SUE, INDEMNITY AGAINST THIRD PARTY CLAIMS, and CONTINUATION OF OBLIGATION the Participant has paid the additional sum of $ 300.00 upon execution of this agreement, receipt of which is hereby acknowledged by the Corporation.
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The case of Winterstein v. Wilcom, supra, involved an exculpatory contract with language similar to the instant Agreement. In Winterstein, the appellant had signed an exculpatory agreement in connection with his use of a drag strip operated by the defendant. The plaintiff was injured when his car struck an automobile cylinder head which had not been cleared from the track prior to the plaintiff’s use of the drag strip. Winterstein, 16 Md.App. at 133, 293 A.2d 821 . This Court held that [***18] the exculpatory agreement [*550] was not void as against public policy. We noted there that there was “not the slightest disadvantage in bargaining power between the parties.” Id. at 138, 293 A.2d 821.
We stated that the plaintiff “was under no compulsion, economic or otherwise, to race his car. He obviously participated . . . simply because he wanted to do so . . . . This put him in no bargaining disadvantage.” Id. We make a similar determination in the instant case. Boucher was under no compulsion to make a parachute jump, and he did so merely because he wanted to do so. He was not at a bargaining disadvantage.
This Court in Winterstein identified six factors to be considered in determining whether a transaction is so affected by public interest as to invalidate exculpatory provisions. Quoting from a decision by the Supreme Court of California, sitting en banc, we stated:
[T]he attempted but invalid exemption involves a transaction which exhibits some or all of the following characteristics. It concerns a business of a type generally thought suitable for public regulation. The party seeking exculpation is engaged in performing a service of [***19] great importance to the public, which is often a matter of practical necessity for some members of the public. The party holds himself out as willing to perform this service for any member of the public who seeks it, or at least for any member coming within certain established standards. As a result of the essential nature of the service, in the economic setting of the transaction, the party invoking exculpation possesses a decisive advantage of bargaining strength against any member of the public who seeks his services. In exercising a superior bargaining power the party confronts the public with a standardized adhesion contract of exculpation, and makes no provision whereby a purchaser may pay additional reasonable fees and obtain protection against negligence. Finally, as a result of the transaction, the person or property of the purchaser [*551] is placed under the control of the seller, subject to the risk of carelessness by the seller or his agents.
Winterstein, 16 Md.App. at 137, 293 A.2d 821.
Clearly, the transaction in which the appellant engaged on September 18, 1982, exhibited none of these characteristics. Parachutes is not performing a service of [***20] great importance or a matter of practical necessity for any member of the public. The Legislature has not thought sport parachuting suitable for public regulation. As the service is not of an essential nature, Parachutes had no decisive advantage of bargaining strength against any member of the public seeking to participate. Boucher was not “under the control” of Parachutes or its employees in such a way that he was subject to the risk of carelessness by Parachutes—Boucher had received training in obstacle avoidance. Finally, Boucher was under no obligation to make the jump. Cf. Winterstein, 16 Md.App. at 138, 293 A.2d 821. We therefore hold that the exculpatory clause signed by Boucher was not void as against public policy.
Lastly, the appellant argues that summary judgment should not have been granted because “[t]here exists a genuine issue of [**492] fact as to whether defendant Dunker’s status at Parachutes Are Fun, Inc. was that of servant or independent contractor.” The short answer is that the appellant has not preserved this issue for our review. Rule 1085. In the summary judgment proceedings before the hearing court, the appellant did not attempt [***21] to contradict any of the affidavits, admissions, deposition excerpts, or any evidence presented by the appellees in support of their summary judgment motion.
Furthermore, the appellant did not argue at the hearing on the motion that Dunker was an independent contractor. By failing to make this argument before the hearing judge, the appellant did not show that court, with some precision, a genuine and material dispute. [*552] Sherman v. Am. Bankers Life Assur., 264 Md. 239, 242, 285 A.2d 652 (1972).
The appellant himself conceded in his brief to this Court that the only time that the status of the appellee Dunker was raised by the appellant, up to and including the summary judgment hearing, was in the complaint he filed in the Circuit Court. In paragraph six of the complaint, the appellant alleged:
Defendant Kenneth Dunker, on September 18, 1982, acted as an agent of both Parachutes Are Fun, Inc., and Pelicanland Corporation. He also acted independently in his capacity as a licensed parachute jump master. (Emphasis supplied).
To us, the above quoted paragraph appears to be an acknowledgement that the appellant recognized Dunker as an agent of Parachutes [***22] and of Pelicanland. Given that the exculpatory clause released from liability “the Corporation, its owners, officers, agents, servants, employees, and lessors . ..” (emphasis added), the appellant’s argument, without more, does not appear to have any merit. Surely the phrase “[h]e also acted independently,” read in the context of the rest of paragraph six of the appellant’s complaint, cannot be taken to mean that the appellant asserts that Dunker was an independent contractor. But therein lies the danger behind an appellate court attempting to review an issue that was not passed upon by the court below. In order to prevent such a situation, this Court ordinarily will not decide a question that has not been raised and decided by the lower court. Rule 1085; Washington Homes v. Baggett, 23 Md.App. 167, 326 A.2d 206 (1974), cert. denied, 273 Md. 723 (1975). The requirements of Rule 1085 are matters of basic fairness to the hearing court, and to opposing counsel, as well as being fundamental to the proper administration of justice. Medley v. State, 52 Md.App. 225, 448 A.2d 363 , [***23] cert. denied, 294 Md. 544 (1982).
JUDGMENT AFFIRMED; COSTS TO BE PAID BY THE APPELLANT.
Several news reports have described lawsuits between skydivers who collide. In one case, one skydiver had logged 1800 jumps when he was hit in midair and injured by another skydiver. The injuries ended his skydiving and work career. A judge ruled the skydiver (and friend) who hit the Plaintiff (the injured skydiver) was negligent and awarded the Plaintiff $748,000. See Skydiver Wins Lawsuit Against Teammate. Yet skydivers hit each other every once in a while. See Skydivers injured in midair collision and YouTube has several videos of skydivers colliding.
The accident occurred when an eight-man team including the Plaintiff and Defendant, ended a formation and broke apart to open their chutes. The Plaintiff and Defendant where both members of the team and had been practicing these maneuvers. The Defendant’s elbow hit the plaintiff in the head, knocking the Plaintiff unconscious and tangling the chutes. The Defendant was able to free himself from the tangled chutes and landed safely. The Plaintiff was not and fell suffering broken bones and brain injuries.
The lawsuit seems to be full of folly. (A politically correct term in this case.) Immediately what comes to mind is that someone with 1800 jumps knows, understands and assumes the risk of an injury. The judge did not see it this way. For this discussion, however, a different point needs to be discussed. Does your release protect your customers from this type of lawsuit?
Your customers can be involved in lawsuits in three ways:
- As the Plaintiff – the person initiating the lawsuit.
- As a witness to the incident which caused the lawsuit.
- Rarely do we think of our customers as a Defendant in the lawsuit. However as rare as we may think it is, it is more common then you would imagine. (Co-participant liability)
Numerous articles have discussed the first case, i.e. as a Plaintiff, previously in this newsletter and it will continue to be our focus, however, the 2nd and 3rd ways your clients can be sued are also important. That your clients may be brought into a lawsuit as either a witness or a defendant is also quite important to you and can have a tremendous impact on your business. Some examples of how your clients can be involved as witnesses or defendants follow.
Having your customers called as witnesses can create significant public relations problems: You have six customers in a boat. One is injured and sues another customer. You have four other customers who are subpoenaed as witnesses. I can foretell that you now have six angry former customers. There is not much you can do which will appease everyone involved, except to end the lawsuit quickly; assuring the other witnesses they are not going to be brought into the suit as parties. (“Parties” is the term that defines Plaintiffs and Defendants).
In the 3rd scenario, your customer could be sued in part because you can’t and the injured person is looking for money: The future plaintiff walks into an attorney’s office and describes his injuries and the accident to an attorney. The attorney, after discovering a release, (and realizing he cannot sue the outfitter) decides to sue the person who caused the injury, your customer. Your customer fell off the raft, knocking the injured person into the water; or started the avalanche while backcountry skiing; or the youth who while playing falls on a tent injuring the occupants inside.
For whatever reason, your customer is now in a precarious situation. They may or may not be liable for the injuries. In the latter instance, they are upset over lost time and money. If they are liable for the injuries, they may be confused as to why someone would sue them for an accident while recreating. Either way, they may be mad at you for not helping them out of a bad situation.
Worse, the defendant/customer may not have insurance to cover the cost of the defense or any judgement. Normally homeowner’s insurance will cover this type of claim, however not all homeowner’s policies may cover this and not everyone has homeowner’s (or condor or renter’s) insurance.
Other than moral support, you cannot provide much help – except from your own pocket. Your insurance policy is only available if you or your employees are the named defendants. No matter what you may want to do, you are paying your own bills for attending the courtroom drama, (which is nothing like TV, in real life, the main problem is always keeping the judge and jury awake!).
However, your insurance company should be paying your attorney to be their. There are probably going to be several issues that could lead to problems if your attorney is not on top of the case.
Bad press is also going to accompany any lawsuit between your clients. The press will jump on this and wonder why you are not involved. The defendant client will bring in the press to ask the question of why you have not been named as a defendant as well. Either way, from the sideline you appear uncaring or apathetic while your clients beat each other up in court.
But this can be prevented. When your release is being written, make sure the “people” covered by the release includes everyone. Not just the employees, but Directors, Officers and Agents of the corporation, employees, managers and owners of the business, and “OTHER PARTICIPANTS.” This is a very simple solution to what can be a disastrous affair.
You are running a Mountaineering course and one climber slips, fails to self-arrest and slams into another climber. Besides sixteen puncture wounds from the crampon points, the injured participant has a broken ankle and no insurance. There is a question as to who failed to keep the tension between the falling client and the guide who was first on the rope. Did the guide slow down, did the student speed up or did they both fail to be observant.
You and the client who fell are sued.
In the normal scenarios the insurance company lawyer files a motion. Based on the release, the company is dismissed leaving a very angry student to stand alone for the damages.
In scenario #2, you are not dismissed from the suit. Your defense is to try to blame the client who fell. You now have a very mad student and a bad reputation in the industry.
Scenario #3: The falling client with no money forms an alliance with the injured client to testify against you and leave you holding an empty money bag.
Scenario #4: Your release defends both you and the falling student thus protecting that student from liability. You have a good witness on your side rather than one running to offer their cooperation to the opposition and between the release, assumption of risk, and the guide and client as witnesses you have a good defense.
The simple inclusion of language protecting everyone in the lawsuit can keep your and your clients coming back for more accidents in the wilderness.
Here, the release covering everyone shows the witnesses they are not going to be drug into the suit. Also, the release helps your clients understand the suit should end quickly. However your clients feel, whether the injured party needs money or is wrong, NO ONE wants to be involved in litigation.