Lukken v. Fleischer, 962 N.W.2d 71 (Iowa 2021)

962 N.W.2d 71

Thomas LUKKEN, Appellant,
v.
Korby L. FLEISCHER, individually and d/b/a Mt. Crescent Ski Area ; Samantha Fleischer, individually and d/b/a Mt. Crescent Ski Area; Mt. Crescent Ski Area, an unknown business entity; Safehold Special Risk, Inc., an Illinois corporation; Challenge Quest, LLC, an Oklahoma Corporation d/b/a Challenge Quest, LLC ; and Kirk Gregory Engineering, P.C., a Texas Corporation; KG Structural Solutions, LLC, a Texas Corporation; and Atlas Engineering, LLC, a Nebraska Corporation, Appellees.

No. 20-0343

Supreme Court of Iowa.

Submitted March 24, 2021
Filed June 30, 2021

Matthew A. Lathrop (argued) of Law Office of Mathew A. Lathrop, Omaha, Nebraska, and Robert M. Livingston of Stuart Tinley Law Firm, LLP, Council Bluffs, for appellant.

Thomas Henderson (argued) and Peter J. Chalik of Whitfield & Eddy, P.L.C., Des Moines, for Mt. Crescent appellees.

Joshua S. Weiner (argued) and Robert M. Slovek of Kutak Rock LLP, Omaha, Nebraska, for appellee Challenge Quest, LLC.

McDermott, J., delivered the opinion of the court, in which Christensen, C.J., and Waterman, Mansfield, McDonald, and Oxley, JJ., joined. Appel, J., filed an opinion concurring specially.

McDERMOTT, Justice.

Thomas Lukken stepped off an elevated platform and sped down a zip line at the Mt. Crescent Ski Area. An employee at the end of the zip line had failed to reset the zip line’s braking system after the previous rider exited. By the time the employee realized his mistake, it was too late. Lukken slammed into a wooden pole at the base of the zip line and fractured his neck. He sued the zip line’s original designer and its owner. The district court dismissed the claims against the zip line’s designer primarily based on the fact that the braking system that failed to stop Lukken had been completely replaced by a different supplier before the incident. And the district court dismissed the claims against the zip line’s owner based on a liability waiver that Lukken signed before riding. Lukken appeals.

I.

Double Diamond, Inc. d/b/a Mt. Crescent Ski Area (Mt. Crescent) operates a skiing and sledding business in winter months and offers other outdoor recreational activities, including zip lining, in warmer months. The zip line begins on a twenty-four-foot-high platform atop the ski hill. Harnessed riders travel down the zip line reaching speeds of up to forty miles per hour before landing on a lower thirty-three-foot-high landing platform at the bottom of the hill. The zip line extends 1576 feet from start to finish.

In April 2014, Mt. Crescent contracted with Challenge Quest, LLC, to build and install the zip line. Challenge Quest designed the zip line to have enough slack so that riders would nearly run out of momentum before reaching the landing platform. To bring riders nearing the landing platform to a complete stop, a small device with wheels that rode on top of the zip line and connected the rider’s harness to the zip line (referred to as a “trolley”) made contact with a padded brake block. The brake block connected to a rope-pulley system. An operator on the landing platform held onto a rope connected to the pulley and applied manual resistance to bring riders to a complete stop. This rope-braking feature slowed riders as the rope ran through the operator’s hands, with operators tightening or releasing their hold as needed to apply the appropriate amount of friction. Because slack in the zip line could cause riders to slide back away from the landing platform once a rider’s forward momentum stopped, the brake block also featured a capture arm that prevented riders from backsliding. The operator used the same rope-pulley system to pull stopped riders all the way onto the landing platform. After an operator unhooked a completed rider on the landing platform, the operator would use the same rope-pulley system to manually move the brake block back out for the next rider.

Challenge Quest completed construction of the zip line in August 2014. It then provided, as contemplated by the parties’ contract, a four day “site specific high technical training for full time staff,” including training on the braking system, after which it turned full control of the zip line over to Mt. Crescent. After the zip line opened to the public, Mt. Crescent’s operators in several instances failed to sufficiently slow riders using grip friction on the rope to control the brake block. Riders arrived at the landing platform at speeds in excess of six miles per hour, the maximum recommended by a trade association called the Association for Challenge Course Technology (ACCT), which develops safety standards for zip line courses. In some cases, these riders collided with the Mt. Crescent employees engaged in stopping them. A handful of injuries resulted, the most serious apparently being an injured ankle.

Mt. Crescent decided to consult with a different contractor about a different braking system than the original one Challenge Quest had installed. This new contractor, Sky Line, inspected Mt. Crescent’s zip line and recommended a “zipSTOP” braking system. Mt. Crescent had initially considered a zipSTOP braking system as part of the zip line that Challenge Quest designed but decided against it. Mt. Crescent agreed with Sky Line’s recommendation and hired Sky Line to install the zipSTOP system on its existing zip line. Sky Line completed the installation in July 2016. Mt. Crescent informed Challenge Quest of none of this.

Like the original braking system, the zipSTOP braking system also uses a brake block to bring riders to a complete stop. But instead of rope pulleys controlling the brake block using an operator’s hand resistance, the brake block uses a magnetic-resistance wheel to bring riders to a complete stop. The brake block automatically moves back to the correct position on the zip line in preparation for the next rider, but an operator must manually redeploy it before it will move.

Lukken rode Mt. Crescent’s zip line in October 2016 with the zipSTOP braking system in place. The Mt. Crescent employee on the landing platform forgot to redeploy the brake block after the rider ahead of Lukken finished. Lukken was already whizzing down the zip line toward the landing platform by the time the operator realized his mistake. The operator’s tardy redeployment of the zipSTOP braking system didn’t permit enough time for it to stop Lukken, and he crashed into a wooden pole at the base of the zip line and suffered a neck fracture.

Before riding on the zip line, Lukken signed a release and waiver-of-liability agreement in favor of Mt. Crescent. It stated in relevant part:

I am aware and fully understand that these activities are very dangerous. They involve the risk of damage, serious injury and death, both to myself and to others.

I understand that there are many potential causes for property damage, serious injury and death at Mt Crescent Ski Area including the negligence of Mt Crescent Ski Area, its owners, agents, employees, volunteer staff, rescue personnel, and equipment as well as my own negligence and the negligence of others.

In consideration of being permitted to participate in the activities offered at Mt Crescent Ski Area I hereby agree to release, waive, discharge, and covenant not to sue Mt Crescent Ski Area, its owners, agents, employees, volunteer staff, or rescue personnel as well as any equipment manufacturers and distributors involved with the Mt Crescent Ski Area facilities from any and all liability from any and all loss or damage I may have and any claims or demands I may have on account of injury to my person and property or the person and property of others, including death, arising out of or related to the activities offered at Mt Crescent Ski Area whether caused by the negligence of Mt Crescent Ski Area, its owners, agents, employees, volunteer staff, rescue personnel, equipment manufacturers, or distributors or otherwise.

….

In consideration of being permitted to participate in the activities offered at Mt Crescent Ski Area, I agree that this Release and Waiver of Liability, Assumption of Risk and Indemnity Agreement extends to any and all acts of negligence by Mt Crescent Ski Area, its owners, agents, employees, volunteer staff, rescue personnel, and equipment manufacturers, and distributors, including negligent rescue operations and is intended to be as broad and inclusive as permitted by Iowa law and that if any portion is held invalid, it is agreed that the balance shall continue in full legal force and effect.

He filed suit against Mt. Crescent (and related individuals and entities alleged to own it) and Challenge Quest (and related entities alleged to have participated in the zip line’s design and construction), pleading causes of action for negligence and strict liability, and requesting punitive damages.

The district court granted summary judgment in favor of Challenge Quest, holding that it breached no duty to Lukken and that it didn’t cause Lukken’s injuries. The district court reasoned that Challenge Quest owed no duty to Lukken because it had completed its work under its contract and transferred control of the zip line to Mt. Crescent by the time of the incident, and, further, that its actions were not the “cause” of Lukken’s injuries because it didn’t install the allegedly defective braking system in place when Lukken was injured.

The district court also granted summary judgment in favor of Mt. Crescent, holding the waiver dispositive of the claims. The district court reasoned that Iowa courts consistently uphold exculpatory agreements and that the waiver at issue contained language sufficiently “clear and unequivocal” to demonstrate that Lukken understood he was waiving future claims of negligence. The court held that the express language of waiving “any and all negligence” waived all of Lukken’s negligence claims, including his claim for gross negligence. The district court declined to hold the waiver unenforceable based on public-policy grounds and held that the waiver wasn’t preempted by statute.

Lukken appeals each of the district court’s summary judgment rulings.

II.

We turn first to Lukken’s claims against Challenge Quest. Lukken pleaded claims against Challenge Quest under theories of both negligence and strict liability. Yet his summary judgment and appellate briefing contain no separate legal arguments distinguishing the two theories. He cites no products liability law despite the fact that his petition alleges claims for strict liability based on design defects in the zip line. He instead focuses solely on traditional negligence principles. We will thus analyze Challenge Quest’s liability through the lens of a negligence claim.

To maintain a claim for negligence, Lukken must prove that Challenge Quest owed a duty to protect him from the harm he suffered. See
Thompson v. Kaczinski , 774 N.W.2d 829, 834 (Iowa 2009). Lukken contends that Challenge Quest owed a bevy of duties to Mt. Crescent, including a duty (1) to design and construct a zip line that complied with industry standards, (2) to provide Mt. Crescent appropriate instruction on how to operate the zip line, (3) to address Mt. Crescent’s safety concerns about the zip line, (4) to ensure that Mt. Crescent had procedures in place to train new employees, and (5) to address safety issues with Mt. Crescent arising in future safety inspections. Lukken argues that Challenge Quest owes each of these duties to Mt. Crescent and, based on the risk of physical harm to Mt. Crescent’s zip line riders, these duties extend to Lukken as well.

Whether a defendant owes a duty of care under particular circumstances is a question of law for the court. Hoyt v. Gutterz Bowl & Lounge L.L.C. , 829 N.W.2d 772, 775 (Iowa 2013). The district court in granting summary judgment held that Challenge Quest owed Lukken no duty of care for the injury he sustained. We review the district court’s holding for correction of legal error. Lewis v. Howard L. Allen Invs., Inc. , 956 N.W.2d 489, 490 (Iowa 2021).

The central issue here is the scope of Challenge Quest’s duty in regard to the braking system after the braking system had been replaced without Challenge Quest’s involvement. We have reiterated that, under the Restatement (Third) of Torts, control remains an important consideration in whether a duty exists and liability normally follows control. See
McCormick v. Nikkel & Assocs., Inc. , 819 N.W.2d 368, 371–73 (Iowa 2012). In McCormick v. Nikkel & Associates, Inc. , we held as a matter of law that a subcontractor owed no duty to assure the safety of a jobsite once it locked up the switchgear and transferred control back to the contractor. Id. at 373–75. So too here, once Mt. Crescent decided to replace the braking system, any machine- or human-related flaws in that system ceased to be Challenge Quest’s responsibility. Challenge Quest’s braking system didn’t fail; it no longer existed. Challenge Quest likewise had no connection to the actions of Mt. Crescent’s employee who failed to reset the brake in time to stop Lukken. The employee didn’t work for Mt. Crescent when Challenge Quest conducted its four-day technical training for Mt. Crescent employees prior to Mt. Crescent opening the course to the public. Challenge Quest had no role in the employee’s hiring, supervision, or instruction.

And Challenge Quest neither designed nor constructed the braking system that the employee failed to reset when Lukken rode the zip line. By that time, Sky Line’s zipSTOP braking system had replaced Challenge Quest’s original system. Challenge Quest owed no duty of care to prevent Mt. Crescent from changing the braking system. Because Challenge Quest owed no duty of care associated with the zip line’s braking system after its own braking system had been uninstalled, no cause of action for negligence exists as a matter of law, and the district court thus properly granted summary judgment in Challenge Quest’s favor.

Lukken argues more specifically that Challenge Quest should have incorporated an emergency brake as part of its original braking system. But this argument fails, too, based on the replacement of the braking system and Challenge Quest’s lack of any control at that point. When Mt. Crescent decided to install a different braking system, it became the responsibility of Mt. Crescent and Sky Line to assure the safety of that system. Challenge Quest’s original braking system (without an emergency brake) apparently resulted in some minor mishaps until it was replaced in July 2016. Sky Line’s replacement braking system (without an emergency brake) had the potential to result in a more serious accident in the event of an operator’s error. It would be unfair to make Challenge Quest legally responsible for this replacement system. See
Huck v. Wyeth, Inc. , 850 N.W.2d 353, 381 (Iowa 2014) (reaffirming the “long-standing” rule that requires the plaintiff “to prove the defendant manufactured or supplied the product that caused her injury, and [declining] to extend the duty of product manufacturers to those injured by use of a competitor’s product”). In this case, to the extent any product failed, it wasn’t Challenge Quest’s product. Cf. Weyerhaeuser Co. v. Thermogas Co. , 620 N.W.2d 819, 825 (Iowa 2000) (en banc) (“[T]o establish assembler liability, the plaintiff must show that the assembler actually sold or otherwise placed the defective product on the market. Baughman [ v.
Gen. Motors Corp. , 780 F.2d 1131, 1132–33 (4th Cir. 1986)] (refusing to hold truck manufacturer liable for defective wheel rim that was placed on vehicle after sale and that manufacturer did not supply); Exxon [ Shipping Co. v. Pac. Res., Inc. , 789 F. Supp. 1521, 1522–23, 1527 (D. Haw. 1991)] (refusing to hold designer of mooring terminal liable for defective replacement chain).”) That Lukken claims the new, different product was similarly defective does not provide him a basis to pursue Challenge Quest for a defect in a product that Lukken never used and that didn’t injure him. See Restatement (Third) of Torts: Prod. Liab. § 15 cmt. b , illus. 2, at 232 (Am. L. Inst. 1998).

Lukken also contends that Challenge Quest’s zip line design defects caused riders to reach speeds in excess of ACCT’s standards, which left the braking system unable to safely stop him. But the record demonstrates that Sky Line independently examined the existing zip line, recommended the zipSTOP braking system, and (at Mt. Crescent’s direction) installed it. As the district court correctly found, the actions of Sky Line and Mt. Crescent cut off Challenge Quest’s liability. See
McCormick , 819 N.W.2d at 374 (noting that the party in control “is best positioned to take precautions to identify risks and take measures to improve safety”). In this case, when Mt. Crescent scrapped Challenged Quest’s original braking system and installed Sky Line’s zipSTOP braking system, Challenge Quest was relieved of any liability associated with insufficient stopping capacity or other defects in its original braking system.

Lukken further claims that Challenge Quest breached a duty to provide Mt. Crescent information, training, and policies to ensure Mt. Crescent’s safe ongoing operation of the zip line. Lukken asserts that had Challenge Quest instructed Mt. Crescent on safety procedures that included, for instance, operational redundancies or checklists, Mt. Crescent might have ensured the braking system was properly deployed and cross-checked before Lukken ever started down the zip line. But this claimed duty on Challenge Quest fails for reasons inherent in the different braking systems that were installed. The original braking system required an employee’s active, manual stopping efforts to ensure riders stopped at the landing platform. Yet the zipSTOP system stops riders through an automated brake that requires no similar manual exertion. Challenge Quest had no reason to provide the type of instruction or policies that would have caused Mt. Crescent’s employees to remember to redeploy an automated braking system that, at the time, didn’t exist on this zip line. Challenge Quest trained Mt. Crescent’s employees on how to stop a rider using the original manual stopping method; we see no basis to impose on Challenge Quest some requirement to provide instruction or procedures on operating a distinct braking system that hadn’t been installed. On these facts, Challenge Quest had no duty to provide training or policies on the safe operation of a braking system that relied on a completely different stopping mechanism and that required completely different actions by Mt. Crescent’s employees.

We thus affirm the district court’s grant of summary judgment in favor of Challenge Quest.

III.

We turn to the dismissal of Lukken’s negligence claim against Mt. Crescent.

The district court found that the waiver Lukken signed before riding the zip line was “broad in its inclusiveness and contained clear and unequivocal language sufficient to notify Plaintiff that by signing the document, he would be waiving all future claims for negligence against Defendants.” Lukken argues that even if the waiver’s language could be considered “clear and unequivocal,” Mt. Crescent’s negligence went beyond ordinary negligence and into the realm of gross negligence. He argues that the gross negligence alleged in this case involves conduct more culpable than the inadvertence or inattention of ordinary negligence and that, as a matter of public policy, Iowa courts should not enforce clauses that exculpate parties from grossly negligent conduct.

Exculpatory clauses, sometimes referred to as “hold harmless” clauses, relieve parties from responsibility for the consequences of their actions. “[W]e have repeatedly held that contracts exempting a party from its own negligence are enforceable, and are not contrary to public policy.” Huber v. Hovey , 501 N.W.2d 53, 55 (Iowa 1993). An enforceable waiver must contain “clear and unequivocal language” notifying a casual reader that by signing, she agrees to waive all claims for future acts or omissions of negligence. Sweeney v. City of Bettendorf , 762 N.W.2d 873, 878–79 (Iowa 2009). An intention to absolve a party from all claims of negligence must be clearly and unequivocally expressed in the waiver. Id. at 878–79 ; see also
Baker v. Stewarts’ Inc. , 433 N.W.2d 706, 709 (Iowa 1988) (stating that an intent “to absolve the establishment from liability based upon the acts or omissions of its professional staff … must be clearly and unequivocally expressed”).

Exculpatory clauses reside at the intersection of tort law and contract law. Under tort law, courts generally permit a party to whom a duty of care is owed to pursue damages against another for acts that breach that duty if those acts were the factual cause of the harm and within the other party’s scope of liability. See
Thompson , 774 N.W.2d at 837. But under contract law, “parties of full age and competent understanding must have the greatest freedom of contracting, and contracts, when entered into freely and voluntarily, must be upheld and enforced by the courts.” 5 Richard A. Lord, Williston on Contracts § 12:3, at 862–870 (4th ed. 2009). Not enforcing exculpatory clauses advances the interests of tort law (deterring unsafe conduct and compensating accident victims) but abridges parties’ power to contract; enforcing exculpatory clauses advances the parties’ power to contract but abridges tort remedies.

Courts attempt to strike a balance by not enforcing exculpatory contracts that contravene public policy. See
Wunschel L. Firm, P.C. v. Clabaugh , 291 N.W.2d 331, 335 (Iowa 1980). Admittedly, courts have struggled to articulate a predictable framework for parties to anticipate which agreements will contravene public policy in a future given case and which will not. We have stated in general terms that courts should not enforce a contract that “tends to be injurious to the public or contrary to the public good.” Walker v. Am. Fam. Mut. Ins. , 340 N.W.2d 599, 601 (Iowa 1983). Yet declaring contracts unenforceable as violating public policy “is a delicate power which ‘should be exercised only in cases free from doubt.’ ” Wunschel L. Firm, P.C. , 291 N.W.2d at 335 (quoting Richmond v. Dubuque & Sioux City R.R. , 26 Iowa 191, 202 (1868) ). We will not “curtail the liberty to contract by enabling parties to escape their valid contractual obligation on the ground of public policy unless the preservation of the general public welfare imperatively so demands.” Walker , 340 N.W.2d at 601 (quoting Tschirgi v. Merchs. Nat’l Bank of Cedar Rapids , 253 Iowa 682, 690, 113 N.W.2d 226, 231 (1962) ); see also
Robinson v. Allied Prop. & Cas. Ins. , 816 N.W.2d 398, 408 (Iowa 2012) (” ‘[T]here is a certain danger in too freely invalidating private contracts on the basis of public policy.’ … To do so ‘is to mount “a very unruly horse, and when you once get astride it, you never know where it will carry you.” ‘ ” (alteration in original) (first quoting Skyline Harvestore Sys., Inc. v. Centennial Ins. , 331 N.W.2d 106, 109 (Iowa 1983) ) (second quoting Grinnell Mut. Reins. v. Jungling , 654 N.W.2d 530, 540 (Iowa 2002) )). And yet, in Galloway v. State , we held that “public policy precludes enforcement of a parent’s preinjury waiver of her child’s cause of action for [negligently inflicted] injuries” on an educational field trip. 790 N.W.2d 252, 253, 256, 258 (Iowa 2010). But see
Kelly v. United States , 809 F. Supp. 2d 429, 437 (E.D.N.C. 2011) (anticipating that the North Carolina Supreme Court would enforce the parent’s liability waiver for fifteen-year-old’s high school enrichment program and describing Galloway as an “outlier”).

Lukken argues that we should not enforce an exculpatory clause against him that purports to release claims of “any and all acts of negligence” as contrary to public policy to the extent it includes claims of gross negligence. While we have never provided an all-encompassing framework for analyzing public-policy exceptions, in Baker v. Stewarts’ Inc. , we recited several factors that might be considered to determine whether a contract implicated a public interest. See 433 N.W.2d at 708. The district court in this case found that one of these factors—whether “the party seeking exculpation performs a service of great importance to the public which is of practical necessity for at least some members of the public,” id. —cut sharply against a finding that zip lining implicated a sufficient public interest to warrant interference with the parties’ contract. The district court noted that the Iowa Court of Appeals in an unpublished opinion determined that snow sledding was a “purely recreational activity” and thus not a service of great importance or necessity to the public to justify applying the public-policy exception. Lathrop v. Century, Inc. , No. 01-1058, 2002 WL 31425215, at *3 (Iowa Ct. App. Oct. 30, 2002).

But this focus somewhat misconstrues Lukken’s argument. Lukken’s focus isn’t on whether Mt. Crescent may enforce an exculpatory clause for voluntary recreational activities (under Iowa law, it may), but whether Mt. Crescent may enforce an exculpatory clause that negates claims for more culpable conduct. Lukken argues that the district court’s ruling overlooks the differences between “ordinary” negligence and “gross” negligence, and thus overlooks the public-policy implications associated with the differences in the culpability of the conduct that he alleges.

In his summary judgment and appeal briefing, Lukken contends that gross negligence includes “wanton” conduct based on its description in Iowa Code section 85.20. That statute describes gross negligence as conduct “amounting to such lack of care as to amount to wanton neglect.” Iowa Code § 85.20(2) (2018); see also
Thompson v. Bohlken , 312 N.W.2d 501, 504 (Iowa 1981) (en banc). Lukken recites cases that define gross negligence similar to wanton conduct (and wanton conduct’s close sibling, reckless conduct) as a basis for refusing to enforce contracts that include exculpatory clauses for gross negligence. Yet Lukken’s argument—that his gross negligence claim includes wanton or reckless conduct—glosses over a distinction in our cases between our common law conception of gross negligence and different statutory renderings of gross negligence.

“Gross negligence” is not a distinct cause of action under our common law, but instead is a measure of conduct in a cause of action for negligence. Unertl v. Bezanson , 414 N.W.2d 321, 326–27 (Iowa 1987) (en banc). “In this state, as is well known, the actionable character of negligence is not dependent upon its ‘degree,’ and the ancient differentiation into ‘gross,’ ‘ordinary,’ and ‘slight’ has come to mean little more than a matter of comparative emphasis in the discussion of testimony.” Denny v. Chi., R.I. & P. Ry. , 150 Iowa 460, 464–65, 130 N.W. 363, 364 (1911). Under our common law “there are no degrees of care or of negligence in Iowa,” Tisserat v. Peters , 251 Iowa 250, 252, 99 N.W.2d 924, 925–26 (1959), and we thus do not recognize a tort cause of action based on “gross” negligence as distinct from “ordinary” negligence. Hendricks v. Broderick , 284 N.W.2d 209, 214 (Iowa 1979).

Yet analysis of “gross negligence” appears frequently in our cases interpreting statutes that employ the term. See, e.g. , Thompson , 312 N.W.2d at 504 (interpreting the meaning of “gross negligence” in section 85.20 ); Sechler v. State , 340 N.W.2d 759, 761 (Iowa 1983) (en banc) (interpreting the meaning of “gross negligence” in section 306.41). In Thompson v. Bohlken , for instance, we analyzed the term “gross negligence” in section 85.20, which the statute describes as conduct “amounting to such lack of care as to amount to wanton neglect.” 312 N.W.2d at 504 (quoting Iowa Code § 85.20 (1977)). We determined that the term “gross negligence” under this statute included elements requiring proof of the defendant’s knowledge of the danger, the defendant’s knowledge that injury is probable (not merely possible) to result from the danger, and the defendant’s conscious failure to avoid the danger. Id. at 505. These elements generally track the definition of recklessness in the Restatement (Second) of Torts. See
Leonard ex rel. Meyer v. Behrens , 601 N.W.2d 76, 80 (Iowa 1999) (per curiam) (relying on the definition of “recklessness” in the Restatement (Second) of Torts § 500, at 587 (Am. L. Inst. 1965) ).

But we have warned that conceptions of “gross negligence” deriving from statutory uses of that term are not to be applied beyond those statutes. In Sechler v. State , a case tried before Iowa’s adoption of comparative negligence, we defined gross negligence for purposes of Iowa Code section 306.41 (1983) as not to include wanton neglect. 340 N.W.2d at 761. We later stated that, “[f]ar from creating a new basis of liability, the ‘gross negligence’ discussed in Thompson was a restriction, not an expansion, of the scope of negligence suits.” Unertl , 414 N.W.2d at 327. The notion of gross negligence as including “wanton” conduct under section 85.20 thus is “a concept limited by its terms to workers’ compensation cases.” Id. at 326–27.

As a result, Lukken’s argument that common law gross negligence incorporates wanton or reckless conduct based on the description in section 85.20 doesn’t square with our cases. The district court, reciting our cases stating that gross negligence is simply another degree of ordinary negligence, determined that the exculpatory clause releasing “any and all negligence” likewise released Lukken’s gross negligence claims, and thus dismissed Lukken’s claims against Mt. Crescent.

Lukken’s confusion about how reckless or wanton conduct falls within the scope of gross negligence doesn’t end the analysis in this case, however, because Lukken in his petition alleged that Mt. Crescent engaged in not only negligent conduct but also willful, wanton, and reckless conduct. We have long recognized separate grounds for tort liability based on these more culpable types of conduct. See, e.g. , Leonard ex rel. Meyer , 601 N.W.2d at 80 (recognizing a cause of action in tort for reckless disregard for safety); see also
Hendricks , 284 N.W.2d at 214 (analyzing alleged reckless conduct separate from negligence).

Both the Restatements of Contracts and Torts disfavor exculpatory clauses that attempt to limit liability for harm caused recklessly or intentionally. Restatement (Second) of Contracts § 195(1), at 65 (Am. L. Inst. 1981) (“A term exempting a party from tort liability for harm caused intentionally or recklessly is unenforceable on grounds of public policy.”); Restatement (Third) of Torts: Apportionment of Liab. § 2 cmt. d , at 20 (Am. L. Inst. 2000) (stating that generally “contracts absolving a party from intentional or reckless conduct are disfavored”).

The Restatement (Second) of Torts notes that “[i]n the construction of statutes which specifically refer to gross negligence, that phrase is sometimes construed as equivalent to reckless disregard” of the interest of others. Restatement (Second) of Torts § 282 cmt. e , special n. 5, at 11. And so it has been in Iowa. Wanton conduct “involves the combination of attitudes: a realization of imminent danger, coupled with a reckless disregard or lack of concern for the probable consequences of the act.” Thompson , 312 N.W.2d at 505. While willfulness is “characterized by intent to injure,” wantonness is characterized by “indifference as to whether the act will injure another.” Id. (citing 57 Am. Jur. 2d Negligence § 102, at 452–53 (1971) ).

Many courts have considered in the same classification the concepts of wantonness, recklessness, and willfulness in declaring liability waivers unenforceable to the extent they seek to release such conduct. See, e.g. , Wolfgang v. Mid-Am. Motorsports, Inc. , 898 F. Supp. 783, 788 (D. Kan. 1995) (recognizing that under Kansas common law “any attempt to limit liability for gross negligence or willful and wanton conduct is unenforceable”); Moore v. Waller , 930 A.2d 176, 179 (D.C. 2007) (recognizing that courts generally don’t enforce exculpatory clauses limiting a party’s liability for “gross negligence, recklessness or intentional torts” (quoting Carleton v. Winter , 901 A.2d 174, 181 (D.C. 2006) )); Jones v. Dressel , 623 P.2d 370, 376 (Colo. 1981) (en banc) (holding that “in no event will such an [exculpatory] agreement provide a shield against a claim for willful and wanton negligence”); Brady v. Glosson , 87 Ga.App. 476, 74 S.E.2d 253, 255–56 (1953) (holding an exculpatory clause unenforceable to relieve liability for willful or wanton conduct); Wolf v. Ford , 335 Md. 525, 644 A.2d 522, 525 (1994) (stating that “a party will not be permitted to excuse its liability for … the more extreme forms of negligence, i.e., reckless, wanton, or gross”); Anderson v. McOskar Enters., Inc. , 712 N.W.2d 796, 801 (Minn. Ct. App. 2006) (stating that “any ‘term’ in a contract which attempts to exempt a party from liability for gross negligence or wanton conduct is unenforceable” (quoting Wolfgang , 898 F. Supp. at 788 )); New Light Co. v. Wells Fargo Alarm Servs. , 247 Neb. 57, 525 N.W.2d 25, 30 (1994) (holding that public policy prevents parties from limiting damages for “gross negligence or willful and wanton misconduct”). We conclude that, consistent with the great weight of authority, exculpatory clauses purporting to negate liability for acts that are wantonly or recklessly committed generally violate public policy.

We therefore hold that the contractual waiver limiting Mt. Crescent’s liability is unenforceable to the extent it purports to eliminate liability for the willful, wanton, or reckless conduct that Lukken has alleged. To the extent Lukken’s claims against Mt. Crescent involve culpability that constitutes only negligent conduct (regardless of any degree of negligence), his claims fail as a matter of law based on the liability waiver. Yet Lukken maintains the opportunity, notwithstanding the liability waiver, to pursue against Mt. Crescent his claims of willful, wanton, or reckless conduct.

We reverse the district court’s summary judgment ruling as to Mt. Crescent and, in light of this determination, need not address the plaintiff’s other arguments concerning the claims against Mt. Crescent in this appeal. We remand for further proceedings consistent with this opinion.

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

All justices concur except Appel, J., who concurs specially.

APPEL, Justice (concurring specially).

I cannot join the majority’s overbroad duty analysis suggesting that because of lack of control, duty invariably evaporates. If the zip line was negligently constructed by Challenge Quest and a patron was injured as a result of the negligent design, a potential claim by the injured patron would not be defeated by a lack of duty. As noted by comment g of the Restatement (Third), section 49, a contractor no longer in possession “is subject to a duty of reasonable care as provided in § 7 for any risk created by the contractor in the course of its work.” 2 Restatement (Third) of Torts: Liab. for Physical and Emotional Harm § 49 cmt. g , at 235 (Am. L. Inst. 2012). See generally
McCormick v. Nikkel & Assocs., Inc. , 819 N.W.2d 368, 377–83 (Iowa 2012) (Hecht, J., concurring in part and dissenting in part) (describing the duty of care for contractors after relinquishing possession of land). The analysis after a contractor is no longer in control of the premises concerns the fact-based questions of whether the risk was within the scope of liability and causation, not the legal question of duty. See generally
Morris v. Legends Fieldhouse Bar and Grill, LLC, 958 N.W.2d 817, 828–42 (Iowa 2021) (Appel, J., dissenting) (describing the proper analysis in most negligence cases rests with the fact questions of breach of duty and causation).

Generally, of course, these fact questions are not amenable to summary judgment. See
Thompson v. Kaczinski , 774 N.W.2d 829, 832 (Iowa 2009). But here, causation is not present with respect to the design of the braking system itself as the allegedly defective Challenge Quest system was entirely replaced by another independent vendor. To the extent there was an equipment defect in the braking system (i.e. not having an emergency brake), it was the defect in the new braking system, and not the original braking system, that caused the accident. And, the plaintiff showed no linkage between the unfortunate accident and the nebulous and allegedly insufficient training and safety policies, or the accident and the newly installed braking system (with a fundamentally different design from the original Challenge Quest system). So I concur in the district court’s conclusion that any claim against Challenge Quest fails. But this is an oddball case tightly controlled by its facts that should not be decided based on the legal principles of duty.

I concur in the majority’s holding with respect to the waiver of claims sounding in gross negligence.


Release upheld to stop claims for injuries sustained on a high rope’s course.

Plaintiff’s arguments failed because Colorado is supportive of releases.

Sheldon v. Retreat, 2020 U.S. Dist. LEXIS 69461 (D. Colo. 2020)

State: Colorado, US District Court for the District of Colorado

Plaintiff: Jodi Sheldon

Defendant: Golden Bell Retreat d/b/a The Colorado District Church of the Nazarene, d/b/a Golden Bell Ranch and Golden Bell Camp and Conference Center, Cross Bearing Adventures, LLC, Kent Fielden Mcilhany, an individual, and John Doe Corporations 1-10, Defendants

Plaintiff Claims: Colorado’s Premises Liability Act (“PLA”), §13-21-115, C.R.S. negligence against Cross Bearing Adventures (“CBA”), the company which constructed and inspected the course and trained Golden Bell employees on the safety and facilitation of various aspects of the course, and its owner, Kent McIlhany

Defendant Defenses: Release

Holding: For the Defendant

Year: 2020

Summary

The plaintiff signed a release to go to a Church retreat prior to attending the retreat. At the retreat, she was injured on a ropes or challenge course. She sued the retreat, the church and the builder of the course and lost because of the release she had signed.

Facts

The facts in this case are sparse.

On June 29, 2018, plaintiff Jodi Sheldon was seriously injured while participating in a high ropes course at the Golden Bell Ranch (“Golden Bell”).

Ms. Sheldon sued Golden Bell under Colorado’s Premises Liability Act (“PLA”), §13-21-115, C.R.S. She also brought a claim of negligence against Cross Bearing Adventures (“CBA”), the company which constructed and inspected the course and trained Golden Bell employees on the safety and facilitation of various aspects of the course, and its owner, Kent McIlhany

The defendants claim the plaintiff’s claims are barred by the release she signed.

Ms. Sheldon received the Waiver from her aunt3 after having been given a list of activities offered at Golden Bell and indicating her interest in participating in the high ropes course.

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

The court started its analysis of the case by reviewing case law on releases.

Exculpatory agreements “stand at the crossroads of two competing principles: freedom of contract and responsibility for damages caused by one’s own negligent acts,” Thus, although such agreements are generally disfavored, and cannot “shield against a claim for willful and wanton conduct, regardless of the circumstances or intent of the parties,” “Colorado common law does not categorically prohibit the enforcement of contracts seeking to release claims of negligence,”

The court then reviewed the four factors that affect the validity of a release under Colorado law.

Colorado courts have identified four factors which inform the decision whether to enforce an exculpatory agreement: “(1) the existence of a duty to the public; (2) the nature of the service performed; (3) whether the contract was fairly entered into; and (4) whether the intention of the parties is expressed in clear and unambiguous language.”

If a release meets any of the four factors, then under Colorado law, the release is unenforceable. The first two factors can be ignored because the activities were recreational in nature. Colorado courts have long held that there is no public policy or necessity in recreational cases.

The same applies to the third test, because the services offered were recreational in nature, the third test does not apply.

Nor is there any argument or evidence to establish that the third factor – whether the contract was fairly entered into – is applicable here. Indeed, because recreational activities are not considered either essential services or practically necessary, “a person is not ‘at the mercy’ of a business’s negligence when entering an exculpatory agreement involving recreational activities.”

Consequently, under Colorado law only the fourth test can be used to show a release should be void in a recreational case. This test is a simple legal test, is the release written properly and does it convey to the possible plaintiff the intention of the document.

Thus, whether the Waiver is enforceable turns exclusively on the fourth factor, “whether the intention of the parties is expressed in clear and unambiguous language.” In analyzing this factor, the court focuses on whether the parties’ intent to “extinguish liability . . . was clearly and unambiguously expressed.”

The plaintiff argued the language of the release did not cover the risks of a high rope’s course. However, the court found the language did cover the risks; the language was broad enough in scope to cover the risks and injury the plaintiff incurred.

Ms. Sheldon insists the Waiver is ambiguous as to whether the high ropes course was within the scope of the activities covered. I am not persuaded. Here, the Waiver defined the term “Activities” as “recreational activities . . . including activities that may be hazardous or otherwise involve a risk of physical injury or death to participants.” (Emphasis added.) The use of the term “including” plainly signifies that some – but not all – of the Activities covered by the Waiver will be hazardous or involve a risk of physical injury. Thus, even accepting Ms. Sheldon’s suggestion that a high ropes course is not a hazardous activity, her argument fails.

Colorado is extremely lenient on the language allows to prevent a claim.

Nor does the Waiver’s failure to refer specifically to the high ropes course render it ambiguous with respect to the type of activities covered. Colorado law does not require “an exculpatory agreement describe in detail each specific risk that the signor might encounter.”

The language was interpreted to be broad enough to protect the builder of the course, also.

Relatedly, the Waiver also clearly bars Ms. Sheldon’s claims against CBA. “A person not a party to an express contract may bring an action on such contract if the parties to the agreement intended to benefit the non-party, provided that the benefit claimed is a direct and not merely an incidental benefit of the contract.”

The plaintiff also argued the waiver lacked consideration because of the lapse in time between when she signed the release and when her injury occurred. The court did not agree.

The Waiver does not fail for lack of consideration. Contrary to Ms. Sheldon’s arguments, the mere lapse of time between her payment to participate in the activity and the date the waiver was delivered to Golden Bell is not fatal to its enforcement. Instead, the pertinent question is whether the release of liability was a contract modification or rather is part of the same transaction and thus enforceable without additional consideration.

Consideration is a benefit flowing from one party to the other. Every contract must have consideration. In 99% of the contracts, consideration is defined as money, an amount. The other side of the contract in consideration for money exchanges or provides services or products. In this case the exchange was a fee, money, paid by the plaintiff in exchange for a service, the ropes course, for the fee paid by the defendant.

The Plaintiff then argued the release should be void because of mutual mistake. That argument failed because the plaintiff could not show where there was any issue that was not clearly covered in the release. If a release is written with clarity and signed, their argument of mutual mistake is nearly impossible to prove.

The doctrine of mutual mistake permits a party to rescind a contract “if all parties labored under the same erroneous conception of the contract’s terms and conditions.”

The mutual mistake argument was then expanded by the plaintiff to say because the state had no licensed the high ropes course, then the release should be void by mutual mistake.

Mutual mistake in a contract means both parties to the contract made the same mistake in the contract unenforceable or such that neither party wants to enforce the contract. Normally in a mutual mistake claim, the court re-writes the contract to meet the terms needed to eliminate the mutual mistake.

The state of Colorado does not license ropes course.

For one thing, it is not clear that Ms. Sheldon’s asserted mistake – that Golden Bell’s high ropes course had been licensed by the state of Colorado – was sufficiently similar to Golden Bell’s mistake – that it did not require such a license – to warrant application of the doctrine at all. Assuming arguendo that it does, however, the doctrine of mutual mistake permits reformation of the contract “where both parties’ understanding of their agreement is contrary to the terms of a written instrument due to a drafting error[.]”(“A mutual mistake claim requires a showing that both parties were laboring under the same erroneous conception of the contract’s terms and conditions.”) (doctrine of mutual mistake applies only to mistakes going to a “basic assumption” underlying the contract)

The plaintiff claimed the mutual mistake was the ropes course was not licensed. There was a mistake that because the course was unlicensed, the contract was not correct, there was a mistake.

There could not be a mutual mistake because no term in the contract, the release, required that one party have the rope’s course licensed. Meaning, a mutual mistake is not a legal theory that brings in outside issues into the analysis of the contract. A mutual mistake is something that was not understood within the contract.

The plaintiff then argued there was a unilateral mistake that should void the release.

[A] unilateral mistake by one party to a contract can permit reformation if the evidence demonstrates that, at the time the contract was formed, the non-mistaken party was aware of the mistaken party’s mistake.” Thus, one party’s unilateral mistake may permit reformation where “the other engaged in fraud or inequitable conduct.

However, there was nothing in the contract, the release or the evidence that could be identified as one party engaging in fraud or inequitable conduct.

None of these circumstances pertains here. It cannot be unconscionable to enforce an exculpatory contract which, like this one, is enforceable under Colorado law. Moreover, there is no hint in the record that Golden Bell knew or had reason to know that Ms. Sheldon did not know its high ropes course was not licensed by the state. Nor is there evidence to suggest Golden Bell was required to make its licensing status known to participants or that it purposefully hid its licensing status from Ms. Sheldon.

The release was upheld to prevent the claims brought against all three defendants.

So Now What?

Release law is written by poor releases. My releases never go to court because they are written to cover the issues like this. The Socratic method used in law school to learn still applies when practicing law, you learn from failure not success.

Here the release squeaked through, because of the breath of the case law in Colorado supporting releases. In other states, this release would fail.

Have your release written by an attorney who understands release law and understands what you do so you do not become a learning opportunity for the rest of your industry.

The remaining arguments made by the plaintiff were without any merit, and I write about them just as additional caution and to understand what those arguments really mean.

What do you think? Leave a comment.

Who am I

Jim Moss

I’m an attorney specializing in the legal issues of the Outdoor Recreation Industry

I represent Manufactures, Outfitters, Guides, Reps, College & University’s, Camps, Youth Programs, Adventure Programs and Businesses

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Sheldon v. Retreat, 2020 U.S. Dist. LEXIS 69461 (D. Colo. 2020)

Sheldon v. Retreat, 2020 U.S. Dist. LEXIS 69461 (D. Colo. 2020)

JODI SHELDON, Plaintiff,
v.
GOLDEN BELL RETREAT d/b/a THE COLORADO DISTRICT CHURCH OF THE NAZARENE,
d/b/a GOLDEN BELL RANCH and GOLDEN BELL CAMP and CONFERENCE CENTER,
CROSS BEARING ADVENTURES, LLC, KENT FIELDEN MCILHANY, an individual,
and JOHN DOE CORPORATIONS 1-10, Defendants.

Civil Action No. 19-cv-01371-REB-NYW

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

April 20, 2020

Judge Robert E. Blackburn

ORDER GRANTING SUMMARY JUDGMENT

Blackburn, J.

The matters before me are (1) the Motion for Summary Judgment on Plaintiff’s Personal Injury Claims Against Golden Bell Retreat d/b/a The Colorado District Church of the Nazarene d/b/a Golden Bell Ranch and Golden Bell Camp and Conference Center [#42],1 filed January 21, 2020; and (2) Defendants Cross Bearing Adventures, LLC’s and Kent Fielden McIlhany’s Motion for Summary Judgment [#55], filed March 9, 2020. I grant both motions and dismiss plaintiff’s remaining claims with prejudice as against the named defendants and without prejudice as against the Doe defendants.

I. JURISDICTION

I have jurisdiction over this matter under 28 U.S.C. §1332 (diversity of citizenship).

II. STANDARD OF REVIEW

Summary judgment is proper when there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. FED. R. CIV. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). A dispute is “genuine” if the issue could be resolved in favor of either party. Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S. Ct. 1348, 1356, 89 L.Ed.2d 538 (1986); Farthing v. City of Shawnee, 39 F.3d 1131, 1135 (10th Cir. 1994). A fact is “material” if it might reasonably affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986); Farthing, 39 F.3d at 1134.

A party who does not have the burden of proof at trial must show the absence of a genuine factual dispute. Concrete Works, Inc. v. City & County of Denver, 36 F.3d 1513, 1517 (10th Cir. 1994), cert. denied, 115 S.Ct. 1315 (1995). Once the motion has been properly supported, the burden shifts to the nonmovant to show, by tendering depositions, affidavits, and other competent evidence, that summary judgment is not proper. Concrete Works, 36 F.3d at 1518. All the evidence must be viewed in the light most favorable to the party opposing the motion. Simms v. Oklahoma ex rel. Department of Mental Health and Substance Abuse Services, 165 F.3d 1321, 1326 (10th Cir.), cert. denied, 120 S.Ct. 53 (1999).

III. ANALYSIS

On June 29, 2018, plaintiff Jodi Sheldon was seriously injured while participating in a high ropes course at the Golden Bell Ranch (“Golden Bell”). Ms. Sheldon sued Golden Bell under Colorado’s Premises Liability Act (“PLA”), §13-21-115, C.R.S. She also brought a claim of negligence against Cross Bearing Adventures (“CBA”), the company which constructed and inspected the course and trained Golden Bell employees on the safety and facilitation of various aspects of the course, and its owner, Kent McIlhany.2

All three defendants claim Ms. Sheldon’s claims are barred by a Waiver, Release and Indemnification Agreement (the “Waiver”) which she signed on May 18, 2018, prior to participating in the high ropes course. The Waiver provided, in relevant part,

I wish to participate in recreational activities to be made available to participants at Golden Bell Camp including activities that may be hazardous or otherwise involve a risk of physical injury or death to the participants (the”Activities”).

I expressly assume any and all risks of injury or death arising from or relating to the Activities including horseback riding, agricultural recreation and waive and release any and all actions, claims, suits or demands of any kind or nature whatsoever against Golden Bell Camp, its corporate affiliates, contractors, vendors, officer, agents, sponsors, volunteers or representatives of any kind (collectively “Releases”) arising from or relating in any way to my voluntary participation in these activities. I understand that this Waiver, Release and Indemnification agreement means, among other things, that if I am injured or die as a result of my participation in these activities, I and/or my family or heirs cannot under any circumstances sue Releases or any of them for damages relating to or caused by my injuries or death.

. . .

I agree to indemnify Releases or any of them and their subrogees, if any, in the event of any loss, damage or claim arising from or relating in any way to my participation in any of the Activities.

. . . .

I have read this Waiver, Release and Indemnification Agreement, have asked and received answers to any questions I had concerning its meaning and execute it freely, without duress, and in full complete understanding of its legal effect, and of the fact that it may affect my legal rights.

(CBA Motion App., Exh. C, Attachment 2.) Ms. Sheldon received the Waiver from her aunt3 after having been given a list of activities offered at Golden Bell and indicating her interest in participating in the high ropes course. (Id., Exh. C, Attachment 1 at 25-26.)

To begin, Ms. Sheldon does not oppose Mr. McIlhany’s motion to dismiss her claims against him personally. The uncontested evidence supports Mr. McIlhany’s assertion that all actions taken by him of which Ms. Sheldon complains were done in his capacity as a member, manager, and operator of CBA and that he never performed any services for Golden Bell in his individual capacity. Ms. Sheldon’s claims against Mr. McIlhany therefore will be dismissed with prejudice.

As for Ms. Sheldon’s claims against Golden Bell and CBA, they are precluded by the Waiver.4 Because this case implicates the court’s diversity jurisdiction, I apply Colorado law. Wade v. EMASCO Insurance Co., 483 F.3d 657, 665-66 (10th Cir. 2007). Exculpatory agreements “stand at the crossroads of two competing principles: freedom of contract and responsibility for damages caused by one’s own negligent acts,” Heil Valley Ranch, Inc. v. Simkin, 784 P.2d 781, 784 (Colo. 1989). Thus, although such agreements are generally disfavored, see B & B Livery, Inc. v. Riehl, 960 P.2d 134, 136 (Colo. 1998), and cannot “shield against a claim for willful and wanton conduct, regardless of the circumstances or intent of the parties,” Boles v. Sun Ergoline, Inc., 223 P.3d 724, 726 (Colo. 2010), “Colorado common law does not categorically prohibit the enforcement of contracts seeking to release claims of negligence,” Espinoza v. Arkansas Valley Adventures, LLC, 809 F.3d 1150, 1152 (10th Cir. 2016).

Colorado courts have identified four factors which inform the decision whether to enforce an exculpatory agreement: “(1) the existence of a duty to the public; (2) the nature of the service performed; (3) whether the contract was fairly entered into; and (4) whether the intention of the parties is expressed in clear and unambiguous language.” Brigance v. Vail Summit Resorts, Inc., 883 F.3d 1243, 1250 (10t Cir. 2018) (quoting Jones v. Dressel, 623 P.2d 370, 376 (Colo. 1981)) (internal quotation marks omitted).

The first two Jones factors focus on public policy questions – asking whether the party seeking exculpation is engaged in performing a service of great importance to the public, which is often a matter of practical necessity. Meanwhile, the latter two factors focus on more party – and contract-specific questions – asking whether the release was fairly obtained and clearly and unambiguously expressed.

Patterson v. Powder Monarch, LLC, 926 F.3d 633, 639 (10th Cir. 2019) (internal citations and quotation marks omitted). “[I]f an exculpatory agreement satisfies any of the four factors, it must be deemed unenforceable.” Brigance, 883 F.3d at 1250. The determination of this question is a matter of law for the court. Jones, 623 P.2d at 376. See also Johnson v. Gold’s Gym Rockies, LLC, 2019 WL 1112374 at *3 (D. Colo. March 11, 2019).

The first two factors are generally inapplicable to businesses engaged in recreational activities, Patterson, 926 F.3d at 639; Chadwick v. Colt Ross Outfitters, Inc., 100 P.3d 465, 467 (Colo. 2004), and the parties do not argue otherwise. See also Brigance, 883 F.3d at 1250-51, 1252-53 (citing cases). Nor is there any argument or evidence to establish that the third factor – whether the contract was fairly entered into – is applicable here. Indeed, because recreational activities are not considered either essential services or practically necessary, “a person is not ‘at the mercy’ of a business’s negligence when entering an exculpatory agreement involving recreational activities.” Brigance, 883 F.3d at 1253 (quoting Hamill v. Cheley Colorado Camps, Inc., 262 P.3d 945, 949-50 (Colo. App. 2011)).

Thus, whether the Waiver is enforceable turns exclusively on the fourth factor, “whether the intention of the parties is expressed in clear and unambiguous language.” Jones, 623 P.2d at 376. In analyzing this factor, the court focuses on whether the parties’ intent to “extinguish liability . . . was clearly and unambiguously expressed.” Heil Valley Ranch, 784 P.2d at 785.

To determine whether the intent of the parties is clearly and unambiguously expressed, [Colorado courts] have previously examined the actual language of the agreement for legal jargon, length and complication, and any likelihood of confusion or failure of a party to recognize the full extent of the release provisions. [They] have even taken into account an injured party’s subsequent acknowledgment that he understood the meaning of the provision.

Chadwick, 100 P.3d at 467 (internal citations omitted).

Ms. Sheldon insists the Waiver is ambiguous as to whether the high ropes course was within the scope of the activities covered. I am not persuaded. Here, the Waiver defined the term “Activities” as “recreational activities . . . including activities that may be hazardous or otherwise involve a risk of physical injury or death to participants.” (Emphasis added.) The use of the term “including” plainly signifies that some – but not all – of the Activities covered by the Waiver will be hazardous or involve a risk of physical injury. Thus, even accepting Ms. Sheldon’s suggestion that a high ropes course is not a hazardous activity,5 her argument fails.

Nor does the Waiver’s failure to refer specifically to the high ropes course render it ambiguous with respect to the type of activities covered.6 Colorado law does not require “an exculpatory agreement describe in detail each specific risk that the signor might encounter.” Squires v. Breckenridge Outdoor Education Center, 715 F.3d 867, 873 (10th Cir. 2013). Read in context, and considering not only its structure and language but also its purpose, the Waiver clearly and unambiguously applies to activities such as the high ropes course. See Patterson, 926 F.3d at 642. In this regard, Ms. Sheldon testified that prior to signing up for the high ropes course, she reviewed a list of activities offered by Golden Bell which, in addition to the high ropes course, also included “horseback riding,” an activity specifically referenced in and covered by the Waiver. (CBA Motion App., Exh. C, Attachment 1 at 25.) Moreover, nothing in the record suggests Ms. Sheldon would have been asked to sign a Waiver had she not requested to participate in the high ropes course. Given those circumstances, it “strains logic,” Squires, 715 F.3d at 874, to suggest Ms. Sheldon was confused or misled as to the fact that she was being asked to waive potential claims of negligence associated with the high ropes course. See also Hamill, 262 P.3d at 952 (exculpatory waiver enforceable against parent who signed on behalf of minor child where parent knew activities that were offered at camp; “An agreement with such plain and unambiguous terms will not fail because one of the parties, in hindsight, now claims to have misunderstood the scope of that agreement . . . based on ambiguities not readily apparent within the four corners of the agreement.”).7

Relatedly, the Waiver also clearly bars Ms. Sheldon’s claims against CBA. “A person not a party to an express contract may bring an action on such contract if the parties to the agreement intended to benefit the non-party, provided that the benefit claimed is a direct and not merely an incidental benefit of the contract.” E.B. Roberts Const. Co. v. Concrete Contractors, Inc., 704 P.2d 859, 865 (Colo. 1985). The Waiver specifically protects Golden Bell’s “contractors” and “vendors” from claims “arising from or relating in any way to [Ms. Sheldon’s] voluntary participation in these activities.” (CBA Motion App., Exh. C, Attachment 2.) Clearly, the Waiver was intended to cover parties like CBA in precisely the situation presented by this lawsuit. Moreover, the benefit thus conferred is directly related to its purpose – to absolve such parties from liability for claims of negligence.

Ms. Sheldon’s suggestion that the Wavier is ambiguous as to whether contractors and vendors are covered for all purposes or only when they are on site is meritless. The Waiver plainly is intended to have the broadest possible scope, applying to claims “arising from or relating in any way” to Ms. Sheldon’s participation in the covered activities. Clearly, the parties intended to absolve contractors from claims they were negligent in any way in relation to the subject activities, regardless whether that negligence happened on site at the time of the event. I thus find and conclude that the Waiver clearly and unambiguously bars Ms. Sheldon’s claims against CBA as well.

Ms. Sheldon’s remaining arguments attempting to avoid the effect of the Waiver are likewise unavailing. The Waiver does not fail for lack of consideration. Contrary to Ms. Sheldon’s arguments, the mere lapse of time between her payment to participate in the activity and the date the waiver was delivered to Golden Bell is not fatal to its enforcement. Instead, the pertinent question is whether the release of liability was a contract modification or rather is part of the same transaction and thus enforceable without additional consideration. See Patterson, 926 F.3d at 638 (“[E]ven aside from the question of timing, we are persuaded based on the nature and circumstances of the transaction that the payment and exculpatory agreement here . . . are better viewed as part of the same transaction, rather than as a subsequent contract modification.”) (citing Mincin, 308 F.3d at 1109).8

I am similarly unpersuaded by Ms. Sheldon’s suggestion that the Waiver fails due to either unilateral or mutual mistake. The doctrine of mutual mistake permits a party to rescind a contract “if all parties labored under the same erroneous conception of the contract’s terms and conditions.” In re Estate of Ramstetter, 411 P.3d 1043, 1051 (Colo. App. 2016) (citation and internal quotation marks omitted). Ms. Sheldon has failed to prove by clear and convincing evidence that such is the case here. Cabs, Inc. v. Hartford Insurance Group, 151 Fed. Appx. 604, 610 (10th Cir. Aug. 31, 2005); Maryland Casualty Co. v. Buckeye Gas Products Co., 797 P.2d 11, 13 (Colo. 1990).

For one thing, it is not clear that Ms. Sheldon’s asserted mistake – that Golden Bell’s high ropes course had been licensed by the state of Colorado – was sufficiently similar to Golden Bell’s mistake – that it did not require such a license – to warrant application of the doctrine at all.9 Assuming arguendo that it does, however, the doctrine of mutual mistake permits reformation of the contract “where both parties’ understanding of their agreement is contrary to the terms of a written instrument due to a drafting error[.]” Tatonka Capital Corp. v. Connelly, 390 F.Supp.3d 1289, 1294 (D. Colo. 2019), as modified on reconsideration, 2019 WL 5535226 (D. Colo. Oct. 25, 2019), appeal filed, 2019 WL 5535226 (10th Cir. Nov. 25, 2019) (No. 19-1450). See also Casey v. Colorado Higher Education Insurance Benefits Alliance Trust, 310 P.3d 196, 207 (Colo. App. 2012) (“A mutual mistake claim requires a showing that both parties were laboring under the same erroneous conception of the contract’s terms and conditions.”) See also Ranch O, LLC v. Colorado Cattlemen’s Agricultural Land Trust, 361 P.3d 1063, 1066-67 (Colo. App. 2015) (doctrine of mutual mistake applies only to mistakes going to a “basic assumption” underlying the contract).10

No term of the contract here addressed whether Golden Bell had, or was required to have, a state-issued license. Thus, any mistake as to that fact “did not create any ambiguity regarding the terms or substance of the [Waiver].” Shoels v. Klebold, 375 F.3d 1054, 1067 (10th Cir. 2004), cert. denied, 125 S.Ct. 1302 (2005). The Colorado Supreme Court long ago warned that courts “should not sanction, under the guise of reformation, the insertion in [contracts] of a new term or provision which was never even in the minds of the parties, let alone assented to by them.” Segelke v. Kilmer, 360 P.2d 423, 427 (Colo. 1961). “To order reformation under these circumstances is to rewrite, not to reform, the instruments.” Id. Just so here. I thus find the Waiver is not infirm based on mutual mistake.

I likewise reject Ms. Sheldon’s suggestion that she may avoid the waiver’s effect under the doctrine of unilateral mistake. “[A] unilateral mistake by one party to a contract can permit reformation if the evidence demonstrates that, at the time the contract was formed, the non-mistaken party was aware of the mistaken party’s mistake.” Tatonka Capital Corp., 390 F.Supp.3d at 1299. Thus, one party’s unilateral mistake may permit reformation where “the other engaged in fraud or inequitable conduct.” Poly Trucking, Inc. v. Concentra Health Service., Inc., 93 P.3d 561, 563 (Colo. App. 2004). See also RESTATEMENT (SECOND) OF CONTRACTS § 153 (contract may be avoided based on unilateral mistake where “(a) the effect of the mistake is such that enforcement of the contract would be unconscionable, or (b) the other party had reason to know of the mistake or his fault caused the mistake”); Shoels, 375 F.3d at 1068 (quoting Powder Horn Constructors, Inc. v. City of Florence, 754 P.2d 356, 364 (Colo.1988) (“[E]quity will not allow a party to knowingly take advantage of a mistake of another.”)).

None of these circumstances pertains here. It cannot be unconscionable to enforce an exculpatory contract which, like this one, is enforceable under Colorado law. Moreover, there is no hint in the record that Golden Bell knew or had reason to know that Ms. Sheldon did not know its high ropes course was not licensed by the state. Nor is there evidence to suggest Golden Bell was required to make its licensing status known to participants or that it purposefully hid its licensing status from Ms. Sheldon. At best, the evidence suggests Golden Bell’s website made it appear the camp’s activities were open to the general public, which if true would have rendered them subject to inspection and licensing by the state.11 Yet there is neither argument nor evidence that Ms. Sheldon even consulted, much less relied on, Golden Bell’s website in deciding to participate in the high ropes course or sign the Waiver.12 I thus find and conclude that the Waiver is not voidable based on unilateral mistake either.

IV. CONCLUSION

For these reasons, the named defendants are entitled to summary judgment, and Ms. Sheldon’s remaining claims against them will be dismissed with prejudice. Although the caption of this case named a number of unknown John Doe defendant corporations who may have had “ownership and control of the subject obstacle activity (Complaint ¶ 10 at 3 [#1], filed May 13, 2019), with discovery now closed, Ms. Sheldon has not identified any such entities. These defendants therefore also should be dismissed, albeit without prejudice.13
See Culp v. Williams, 2011 WL 1597686 at *3 (D. Colo. April 27, 2011) (because Doe designation is not permitted where “plaintiff’s ignorance of the defendant’s true identity is the result of willful ignorance or lack of reasonable inquiry,” Doe defendants dismissed where case had been pending for more than a year and plaintiff failed to show “good reason as to why [it] ha[d] been unable to obtain the true identity of these unnamed Defendants”).

V. ORDERS

THEREFORE, IT IS ORDERED as follows:

1. That the Motion for Summary Judgment on Plaintiff’s Personal Injury Claims Against Golden Bell Retreat d/b/a The Colorado District Church of the Nazarene d/b/a Golden Bell Ranch and Golden Bell Camp and Conference Center [#42], filed January 21, 2020, is granted;

2. That Defendants Cross Bearing Adventures, LLC’s and Kent Fielden McIlhany’s Motion for Summary Judgment [#55], filed March 9, 2020, is granted;

3. That plaintiff’s remaining claims against defendants are dismissed as follows:

a. That the remaining claims of plaintiff against defendants, Golden Bell Retreat d/b/a The Colorado District Church of the Nazarene d/b/a Golden Bell Ranch and Golden Bell Camp and Conference Center; Cross Bearing Adventures, LLC; Kent Fielden McIlhany, an individual, are dismissed with prejudice; and

b. That the remaining claims of plaintiff against defendants, John Doe Corporations 1 through 10 are dismissed without prejudice;

4. That judgment shall enter as follows:

a. That judgment with prejudice shall enter on behalf of defendants, Golden Bell Retreat d/b/a The Colorado District Church of the Nazarene d/b/a Golden Bell Ranch and Golden Bell Camp and Conference Center; Cross Bearing Adventures, LLC; and Kent Fielden McIlhany, an individual, and against plaintiff, Jodi Sheldon, as to all remaining claims for relief and causes of action asserted herein;

b. That judgment without prejudice shall enter on behalf of defendants, John Doe Corporations 1 through 10, and against plaintiff, Jodi Sheldon, as to all remaining claims for relief and causes of action asserted herein;

5. That judgment shall enter further in accordance with my Order Adopting Recommendation of United States Magistrate Judge [#35], filed January 8, 2020;

6. That the combined Final Pretrial Conference and Trial Preparation Conference scheduled for June 11, 2020, at 10:00 a.m., is vacated;

7. That the trial scheduled to commence on June 29, 2020, is vacated;

8. That defendants are awarded their costs, to be taxed by the clerk in the time and manner required by Fed. R. Civ. P. 54(d)(1) and D.C.COLO.LCivR 54.1; and

9. That this case is closed.

Dated April 20, 2020, at Denver, Colorado.

BY THE COURT:

/s/_________
Robert E. Blackburn
United States District Judge

——–

Footnotes:

1. “[#42]” is an example of the convention I use to identify the docket number assigned to a specific paper by the court’s case management and electronic case filing system (CM/ECF). I use this convention throughout this order.

2. Ms. Sheldon’s claims of negligence and fraudulent concealment against Golden Bell were dismissed previously as preempted by the PLA. (See Order Adopting Recommendation of the United States Magistrate Judge [#35], filed January 8, 2020.)

3. Ms. Sheldon, who is a resident of Illinois, attended Golden Bell as part of a large family reunion.

4. I reject Ms. Sheldon’s suggestion that I should defer ruling on this motion until after Golden Bell’s Rule 30(b)(6) deposition is completed. Pursuant to Rule 56(d), to warrant such action, Ms. Sheldon must “show[] by affidavit or declaration that, for specified reasons, [she] cannot present facts essential to justify [her] opposition.” FED. R. CIV. P. 56(d). No such affidavit or declaration has been submitted in support of Ms. Sheldon’s request. The request also violates D.C.COLO.LCivR 7.1(d), which provides that “[a] motion shall not be included in a response or reply to the original motion. A motion shall be filed as a separate document.” I therefore deny this request and consider the summary judgment motions as submitted.

5. Frankly, however, this argument strains credulity. I would be hard pressed to find that it is not inherently risky to be suspended many feet above the ground, regardless of safety measures taken to mitigate the risk. Moreover, Ms. Sheldon’s subjective belief that the ropes course was not inherently dangerous is irrelevant. See Brooks v. Timberline Tours, Inc., 127 F.3d 1273, 1275 n.1 (10t Cir. 1997) (“Plaintiffs’ subjective intent is inadmissible to overcome the parties overt manifestation of intent in the releases because the language in these agreements is clear and unambiguous.”) (citation and internal quotation marks omitted).

6. Ms. Sheldon’s reliance on the district court’s decision in Schlumbrecht-Muniz v. Steamboat Ski & Resort Corp., 132 F.Supp.3d 1310 (D. Colo. 2015), is misplaced. There, although the agreement at issue clearly and unambiguously released the defendant from claims related to the plaintiff’s participation in “the Event” (a ski race), it was not clear that it covered injuries the plaintiff sustained after she finished competing in that event. See id. at 1315. There is no such ambiguity here. Ms. Sheldon was injured while participating in the “activities” which were the subject of the Waiver.

7. I further reject Ms. Sheldon’s argument that her claim of gross negligence against Golden Bell cannot be waived. Assuming such is the case as a matter of law, as a matter of fact, Ms. Sheldon failed to plead such a claim.

8. In reaching its determination, the Mincin court relied on two state court decisions which reached similar conclusions. See Mincin, 308 F.3d at 1109 (citing Beehner v. Cragun Corp., 636 N.W.2d 821, 829 (Minn. Ct. App.2001) (“This court has held that an exculpatory agreement signed after a fee to participate in a recreational activity has been paid is part of the same transaction and is therefore enforceable without additional consideration other than permission to participate in the activity.”), and Hewitt v. Miller, 521 P.2d 244, 248 n.3 (Wash. App. 1974) (concluding that release signed by scuba diving student after payment of fee was an integrated part of the whole transaction and was thus supported by original consideration)).

9. At the time Ms. Sheldon participated in the high ropes course, the course was not licensed by the Colorado Division of Oil and Public Safety (“OPS”) because Golden Bell believed itself subject to a “private event” exception, as its activities were available only to persons staying at the camp or its associated RV park and not open to the general public. However, because Golden Bell charged a separate fee for participation in activities at the camp to groups making use of the RV park, OPS found Golden Bell was not entitled to the benefit of this exclusion. Golden Bell resolved the violation by changing the way in which it offers its activities to guests of the RV park. OPS waived the fine assessed and considered the matter resolved as of August 23, 2019. (See Pl. Resp. App. [#52], Exh. J, Golden Bell Motion App., Exhs. A & B.)

10. Even where the doctrine of mutual mistake is otherwise applicable, however, a party is not entitled to reformation where she was “‘aware, at the time the contract is made, that [she] ha[d] only limited knowledge with respect to the facts to which the mistake relates but treat[ed] [her] limited knowledge as sufficient.'” In re Estate of Ramstetter, 411 P.3d 1043, 1051 (Colo. App. 2016) (quoting RESTATEMENT (SECOND) OF CONTRACTS § 154(b)). Such is arguably the case here as well.

11.
See supra, note 6.

12. These same reasons preclude Ms. Sheldon’s belated assertion that Golden Bell engaged in fraud which would invalidate the Waiver. Otherwise, this argument is so woefully undeveloped and unsupported by citation to any legal authority that I decline to consider it. See Bird v. Regents of New Mexico State University, 619 Fed. Appx. 733, 766 (10th Cir. Aug. 6, 2015) (arguments which re “conclusory, unsupported, and undeveloped” “are insufficient to overcome summary judgment “); Center for Biological Diversity v. Pizarchik, 858 F.Supp.2d 1221, 1230 n.11 (D. Colo. 2012) (court does not consider “cursory, unsupported, or otherwise inadequately briefed arguments”). To the extent Ms. Sheldon believed she required further discovery to make this argument, she has forfeited any such argument. See supra, note 4.

13. Without knowledge as to how any such corporations may be related to or associated with Golden Bell, it is impossible to say whether they would be covered by the Waiver and thus entitled to dismissal with prejudice. Cf. Roper v. Grayson, 81 F.3d 124, 126 (10th Cir. 1996); Bustamante v. Board of County Commissioners of San Miguel County, 2009 WL 10706928 at *5 n.7 (D.N.M. Oct. 2, 2009).

——–


Minnesota Appellate court upholds a release signed by a mother for a child’s injuries

Court also upheld the settlement agreement signed by the parents was valid to prohibit a claim by the minor after turning age 18

Justice v. Marvel, LLC, 965 N.W.2d 335 (Minn. App. 2021)

State:
Minnesota, Court of Appeals of Minnesota

Plaintiff: Carter Justice

Defendant: Marvel, LLC d/b/a Pump It Up Parties

Plaintiff Claims: negligently failed to cover the landing surface of the fall zone surrounding the inflatable

Defendant Defenses: Settlement and Release

Holding: For the Defendant

Year: 2021

Summary

The plaintiff was injured as a minor at an indoor recreation facility. The parents settled with the facility at the time of the injury. When the minor reached the age of majority in Minnesota he sued the facility. The Appellate court upheld the release signed by the parent to stop the minors claims and the settlement agreement.

Facts

In February 2007, Justice attended a friend’s birthday party at an indoor amusement facility in the city of Plymouth. The facility, known as Pump It Up, was owned and operated by Marvel, L.L.C. Upon entering the facility, Justice’s mother, Michelle Sutton, was asked to sign, and did sign, a form agreement….

During the party, while playing on an inflatable obstacle course, Justice fell approximately six feet and hit his head on the carpeted floor. He was taken to a hospital, where he received treatment.

In September 2007, Sutton and her husband, Steve Sutton, who is Justice’s step-father, entered into a written agreement with Marvel. The one-page agreement states that the Suttons had incurred unreimbursed medical expenses as a result of Justice’s head injury and that Marvel agreed to pay $1,500 of those expenses. The agreement provided that, if no new medical complications arose within six months, the Suttons would “execute a full and complete release and discharge of any and all claims” against Marvel. The Suttons did not thereafter execute such a release.

In June 2018, after Justice had turned 18 years old, he commenced this action against Marvel.

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

This is the first case I’ve found in the recreation community where a minor sued upon reaching the age of majority for an injury the minor received years before. Injured minors are the lawsuits that seem to hang on forever. In some cases, you want the parents to present a claim so you can deal with it and not possible wait tent to fifteen years for the minor to turn 18 (or 19 or 21 dependent on the state See The age that minors become adults.) to sue on their own.

The defendant had two defenses. 1. The release that the mother had signed for her son at the time of the injury (pre-injury release). 2. The release the mother and father had signed at the time of the injury to settle the claim (post injury release).

The court looked at the basic issues surrounding a parents’ right to raise a child and whether this right includes the right to sign away a minor’s right to sue.

His first argument for voiding the release is also unique. After his mother signed the release, Minnesota passed a statute to regulate amusement parks like this and in the process lost the right to have a parent sign away a minor’s right to sue.

Nonetheless, the existence of a parent’s fundamental right “to make decisions concerning the care, custody, and control of his or her children,” implies that a parent has authority to act on behalf of a minor child when interacting with third parties. The United States Supreme Court has recognized as much: “Most children, even in adolescence, simply are not able to make sound judgments concerning many decisions, including their need for medical care or treatment. Parents can and must make those judgments. This principle is based on “a presumption that parents possess what a child lacks in maturity, experience, and capacity for judgment required for making life’s difficult decisions.” Furthermore, the law recognizes that “natural bonds of affection lead parents to act in the best interests of their children. The Supreme Court stated in Parham that a parent’s authority to make health-care decisions on behalf of a minor child is limited only in atypical situations, such as if the parent has neglected or abused the child.

(This has been adopted by all states, yet most State Supreme Courts do not believe that a parent has the right to sign away a child’s right to sue. They can provide medical care to the child that might kill them, but they can’t allow them to be injured.)

The court then reviewed all the ways that the state of Minnesota has by statute given parents the right to control the child upbringing. The court then made this statement supporting the right of a parent to sign away the right to sue.

In light of these statutes, and in the absence of any law that either forbids parents from entering into contracts on behalf of their minor children or limits their ability to do so, it is clear that a parent generally has authority, on behalf of a minor child, to enter into an agreement that includes an exculpatory clause.

The next issue was a statute posted after the release was signed would void the release.

Three years after the plaintiff’s mother signed the release, Minnesota enacted Minn. Stat. 184B.20 Inflatable Amusement Equipment. The statute had a specific provision which voided releases signed by a parent for a minor.

Subd. 5. Insurance required; waiver of liability limited.

(b) A waiver of liability signed by or on behalf of a minor for injuries arising out of the negligence of the owner or the owner’s employee or designee is void.

The plaintiff argued that this statute should be used to void a release. However, a basic tenet of the law is “No law shall be construed to be retroactive unless clearly and manifestly so intended by the legislature.” Even if the legislature intends for a law to retroactive it is very rarely upheld as valid. No business could continue if at any time in the future the law could change making the action or business illegal.

The plaintiff then argued the release was void because it was “overly broad and contrary to public policy.” Minnesota law follows the law in most other states on interpreting an overly broad release and public policy issues.

“A clause exonerating a party from liability will be strictly construed against the benefited party.” “If the clause is either ambiguous in scope or purports to release the benefited party from liability for intentional, willful or wanton acts, it will not be enforced.” Id. In addition, an exculpatory clause is unenforceable if it “contravenes public policy.”

Minnesota has a two prongs test to determine if a contract violates public policy.

The test focuses on two factors: “(1) whether there was a disparity of bargaining power between the parties (in terms of a compulsion to sign a contract containing an unacceptable provision and the lack of ability to negotiate elimination of the unacceptable provision)” and “(2) the types of services being offered or provided (taking into consideration whether it is a public or essential service).”

The plaintiff argued the release was a violation of public policy because his mother could not negotiate the release and as such he would not have been permitted to attend the birthday party if she had not signed the release. This argument might work for a real necessity, however in recreation cases it fails because the services can always be obtained elsewhere.

Justice contends that there was a disparity in bargaining power because there was no opportunity for his mother to negotiate the terms of the exculpatory clause and because he would not have been permitted to attend the birthday party if his mother had not signed the form agreement. Justice’s contention is not legally viable. “Even though a contract is on a printed form and offered on a ‘take it or leave it’ basis, those facts alone do not cause it to be an adhesion contract.” More is required. The agreement must relate to a “necessary service,” and there also “must be a showing … that the services could not be obtained elsewhere.”

But the supreme court has recognized that “contracts relating to recreational activities do not fall within any of the categories where the public interest is involved,” on the ground that they are not “services of great importance to the public, which were a practical necessity for some members of the public.”

The release was found to not violate public policy because:

…exculpatory clause is not contrary to public policy because there was no bargaining-power disparity and because Marvel did not provide “an essential or public service.”

The next argument was the scope of the release was too broad because the language tries to stop claims for “intentional, willful or wanton acts.” However, the release itself only referred to claims for negligence. However, this was not enough of a restriction under Minnesota law the court concluded.

Marvel’s exculpatory clause does not make any reference to claims of “ordinary negligence” or simply “negligence.” Rather, it expansively refers to “any and all claims,” which means that it purports to release Marvel from claims arising from its intentional, willful or wanton acts. Thus, Marvel’s exculpatory clause is overly broad.

The court concluded the language of the release was overly broad when it did language in the release purported to release the defendant from more than simple negligence claims. The court then examined whether this issue was enough to void the release.

The court in a prior decision, repeated here found that although the language of the release may purport to cover greater than ordinary negligence, a release under Minnesota law could only release from ordinary negligence. So, no matter what the release said or was interpreted to say, it could not protect from simple negligence claims.

We reasoned that “any term in a contract which attempts to exempt a party from liability for gross negligence or wanton conduct is unenforceable, not the entire contract. ” (emphasis added) (quotation and alteration omitted). In light of Anderson, Marvel’s exculpatory clause is enforceable to the extent that Justice asserts a claim of ordinary negligence, but it is unenforceable to the extent that Justice asserts a claim of greater-than-ordinary negligence.

Overly broad language, concerning the extent of the protection provided by the release, did not void the release.

Finally, the court reviewed the plaintiff’s argument that the post injury release signed by the plaintiff’s parents to settle their claims at the time of the injury was not valid. The plaintiff argued legal technical claims about the signing and validity of the release, which the court rejected.

The district court did not err by granting Marvel’s motion for summary judgment on the ground that Justice’s sole claim of ordinary negligence is barred by the exculpatory clause that his mother signed on his behalf. In light of that conclusion, Justice’s argument that the district court erred by denying his motion to amend the complaint to add a request for punitive damages is moot.

So Now What?

One of the confusing points of this case is why did the amusement industry allow Minn. Stat. 184B.20 Inflatable Amusement Equipment to be passed. It provided no protection for the industry or operators, placed a mandatory insurance requirement and worst voided the use of a release for a minor in one of the few states where a minor can have a parent sign away their rights.

The two other issues, the signing of a release by a parent to stop the claims of a child, which is not moot for inflatable amusement devices, and the concept of a minor suing after his parents have settled a claim, after reaching the age of majority are rare and decided by the court in a manner that upholds the validity of a contract.

If settlement and post injury release signed by the parents had been thrown out, this would create a nightmare of litigation. No one would settle any claim of a minor until the minor reached the age of majority since any settlement might be void. No matter how badly a parent might want to pay medical bills or move on, no insurance company would offer a payment knowing they could be sued later.

What do you think? Leave a comment.

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Jim Moss

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Minn. Stat. 184B.20 Inflatable Amusement Equipment (Minnesota Statutes (2022 Edition))

Minn. Stat. 184B.20 Inflatable Amusement Equipment (Minnesota Statutes (2022 Edition))

§ 184B.20. INFLATABLE AMUSEMENT EQUIPMENT

Subdivision 1. Definitions.

(a) For purposes of this section, the terms defined in this subdivision have the meanings given.

(b) “Commercial use” means regular use of an inflatable for profit by an owner at a permanently located facility:

(1) to which the general public is invited; or

(2) which the owner makes available at that facility for private parties or other events.

“Commercial use” does not include use of an inflatable (i) at a carnival, festival, fair, private party, or similar venue at a location other than the permanently located facility, or (ii) at a facility where the use of the inflatable is incidental to the primary use of the facility.

(c) “Inflatable” means an amusement device, used to bounce or otherwise play on, that incorporates a structural and mechanical system and employs a high-strength fabric or film that achieves its strength, shape, and stability by tensioning from internal air pressure.

(d) “Owner” means a person who owns, leases as lessee, or controls the operation of an inflatable for commercial use.

(e) “Person” has the meaning given in section 302A.011, subdivision 22.

(f) “Supervisor” means an individual stationed within close proximity to an inflatable during its use, for the purpose of supervising its safe use.

(g) “Trained” means that an individual has received instruction in how to supervise the safe use of inflatables in accordance with industry and ASTM standards.

Subd. 2. Prohibition.

No owner shall provide an inflatable for commercial use in this state by others unless the owner complies with this section.

Subd. 3. Protection against injuries from falls.

An inflatable that is in commercial use must be placed in a manner that complies with ASTM Standard F 2374.07, adopted by the American Society for Testing and Materials, including any future updates to that standard.

Subd. 4. Supervision by trained person required.

No owner of an inflatable shall allow commercial use of the inflatable unless a trained supervisor is present in close proximity to the inflatable and is actively supervising its use. The ratio of supervisors to inflatables must comply with ASTM Standard F 2374.07, as referenced under subdivision 3.

Subd. 5. Insurance required; waiver of liability limited.

(a) An owner of an inflatable that is subject to subdivision 2 shall maintain liability insurance covering liability for a death or injury resulting from commercial use of the inflatable with limits of no less than $1,000,000 per occurrence and $2,000,000 aggregate per year. The insurance shall also include medical payments coverage of no less than $5,000 per occurrence, which may be limited to injuries incurred while using an inflatable, including getting on or off of the inflatable. The insurance must be issued by an insurance company authorized to issue the coverage in this state by the commissioner of commerce, and must be kept in force during the entire period of registration. In the event of a policy cancellation, the insurer will send written notice to the commissioner of labor and industry at the same time that a cancellation request is received from or a notice is sent to the insured.

(b) A waiver of liability signed by or on behalf of a minor for injuries arising out of the negligence of the owner or the owner’s employee or designee is void.

Subd. 6. Registration required.

An owner of an inflatable that is subject to subdivision 2 must obtain and maintain a current registration with the commissioner of labor and industry. The registration information must include the name, address, telephone number, and e-mail address of the owner, the street address of each facility at which the owner regularly provides inflatables for commercial use in this state by others, and a current insurance certificate of coverage proving full compliance with subdivision 5. The commissioner shall issue and renew a certificate of registration only to owners who comply with this section. The commissioner shall charge a registration fee of $100 for a two-year registration designed to cover the cost of registration and enforcement. Fee receipts must be deposited in the state treasury and credited to the construction code fund. The registration certificate shall be issued and renewed for a two-year period. The registrant shall promptly notify the commissioner in writing of any changes in the registration information required in this subdivision.

Subd. 7. Enforcement.

The commissioner of labor and industry shall enforce this section and may use for that purpose section 326B.082 and any powers otherwise available to the commissioner for enforcement purposes, including suspension or revocation of the person’s registration and assessment of fines.

Source:

2010 c 347 art 3s 2


Justice v. Marvel, LLC, 965 N.W.2d 335 (Minn. App. 2021)

Justice v. Marvel, LLC, 965 N.W.2d 335 (Minn. App. 2021)

965 N.W.2d 335

Carter JUSTICE, Appellant,
v.
MARVEL, LLC d/b/a Pump It Up Parties, Respondent.

A20-1318

Court of Appeals of Minnesota.

Filed July 19, 2021
Granted in part October 19, 2021

Mahesha P. Subbaraman, Subbaraman, P.L.L.C., Minneapolis, Minnesota; and Patrick W. Michenfelder, Throndset Michenfelder, L.L.C., St. Michael, Minnesota (for appellant)

Joseph A. Nilan, Daniel A. Ellerbrock, Jacob T. Merkel, Gregerson, Rosow, Johnson & Nilan, Ltd., Minneapolis, Minnesota (for respondent)

Matthew J. Barber, Schwebel, Goetz & Sieben, P.A., Minneapolis, Minnesota (for amicus curiae Minnesota Association for Justice)

Considered and decided by Worke, Presiding Judge; Johnson, Judge; and Gaïtas, Judge.

OPINION

JOHNSON, Judge

When he was seven years old, Carter Justice attended a birthday party at a business that provided inflatable amusement equipment on which children were allowed to jump, climb, and play. Before entering the party, Justice’s mother signed a form agreement that included an exculpatory clause that released the business from any and all claims she and Justice might have based on his use of the inflatable amusement equipment. During the party, Justice fell off an inflatable obstacle course and hit his head on the floor, which caused him a head injury.

When Justice was 18 years old, he sued the business that hosted the birthday party. The district court denied Justice’s motion to amend the complaint to seek punitive damages. The district court later granted the defendant’s motion for summary judgment on the ground that the exculpatory clause signed by Justice’s mother is valid and enforceable. We conclude that the district court did not err by granting the motion for summary judgment. Therefore, we affirm.

FACTS

In February 2007, Justice attended a friend’s birthday party at an indoor amusement facility in the city of Plymouth. The facility, known as Pump It Up, was owned and operated by Marvel, L.L.C. Upon entering the facility, Justice’s mother, Michelle Sutton, was asked to sign, and did sign, a form agreement that stated as follows:

In consideration of being allowed to enter into the play area and/or participate in any party and/or program at Pump It Up of Plymouth, MN, the undersigned, on his or her own behalf, and/or on behalf of the participant(s) identified below, acknowledges, appreciates and agrees to the following conditions:

I represent that I am the parent or legal guardian of the Participant(s) named below …

….

I, for myself and the participant(s) nanied below, hereby releaseMARVEL, LLC, dba Pump It Up of Plymouthfrom and against any and all claims, injuries, liabilities or damages arising out of or related to our participation inthe use of the play area and/or inflatable equipment. (Emphasis added.)

During the party, while playing on an inflatable obstacle course, Justice fell approximately six feet and hit his head on the carpeted floor. He was taken to a hospital, where he received treatment.

In September 2007, Sutton and her husband, Steve Sutton, who is Justice’s step-father, entered into a written agreement with Marvel. The one-page agreement states that the Suttons had incurred unreimbursed medical expenses as a result of Justice’s head injury and that Marvel agreed to pay $1,500 of those expenses. The agreement provided that, if no new medical complications arose within six months, the Suttons would “execute a full and complete release and discharge of any and all claims” against Marvel. The Suttons did not thereafter execute such a release.

In June 2018, after Justice had turned 18 years old, he commenced this action against Marvel. He alleged that Marvel had “negligently failed to cover the landing surface of the fall zone surrounding the inflatable.” In March 2020, Justice moved to amend the complaint to add a request for punitive damages. In April 2020, the district court denied the motion to amend.

In May 2020, Marvel moved for summary judgment on the ground that Justice’s claim is barred by the exculpatory clause that his mother signed and, in addition, by the post-injury agreement that both of the Suttons signed. In August 2020, the district court granted the motion for summary judgment, reasoning that Justice’s claim is barred by the pre-injury exculpatory clause. Justice appeals.

ISSUE

Did the district court err by granting Marvel’s motion for summary judgment based on the exculpatory clause that Justice’s mother signed on his behalf when he was a minor child?

ANALYSIS

On appeal, Justice makes two arguments. First, he argues that the district court erred by granting Marvel’s motion for summary judgment. Second, he argues that the district court erred by denying his motion to amend the complaint to add a request for punitive damages. We begin by addressing his first argument, which is dispositive of the appeal.

A district court “shall grant summary judgment if the movant shows that there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law.” Minn. R. Civ. P. 56.01. A genuine issue of material fact exists if a rational trier of fact, considering the record as a whole, could find for the nomnoving party. Frieler v. Carlson Mktg. Grp., Inc., 751 N.W.2d 558, 564 (Minn. 2008). This court applies a de novo standard of review to the district court’s legal conclusions on summary judgment and views the evidence in the light most favorable to the party against whom summary judgment was granted. Commerce Bank v.
West Bend Mut. Ins. Co., 870 N.W.2d 770, 773 (Minn. 2015).

Justice argues that the district court erred on the ground that the exculpatory clause is invalid and unenforceable for five reasons. First, he argues that a pre-injury exculpatory clause releasing claims arising from the use of inflatable amusement equipment is void as a matter of law pursuant to a statute that was enacted after Justice’s mother signed Marvel’s exculpatory clause. Second, he argues that a parent does not have authority to agree to a pre-injury exculpatory clause on behalf of a minor child and that any such agreement is not binding on the child after he becomes an adult. Third, he argues that Marvel’s exculpatory clause is invalid and unenforceable because it is overly broad or arguably overbroad and in violation of public policy. Fourth, he argues that the post-injury agreement abrogated or modified the pre-injury exculpatory clause. And fifth, he argues that there is a genuine issue of material fact as to whether Marvel engaged in greater-than-ordinary negligence. We will consider each of Justice’s arguments but in a different order.

A. Parental Authority

Justice argues that a parent does not have authority to agree to a pre-injury exculpatory clause on behalf of a minor child and that any such agreement is not binding on the child after he becomes an adult.1 Neither party has cited any Minnesota caselaw that is directly on point, and we are unaware of any such caselaw.2

The district court ruled in favor of Marvel on this issue by stating that “a parent may sign a waiver on behalf of a child under the laws of Minnesota.” In support of this statement, the district court quoted the following sentence in SooHoo v. Johnson, 731 N.W.2d 815 (Minn. 2007) : “A parent’s right to make decisions concerning the care, custody, and control of his or her children is a protected fundamental right.” Id. at 820 (citing Troxel v. Granville, 530 U.S. 57, 65, 120 S. Ct. 2054, 2060, 147 L.Ed.2d 49 (2000) ). The supreme court’s statement in SooHoo was made in the context of analyzing an argument that a custodial parent of a minor child has a constitutional right to substantive due process with respect to governmental interference with the parent-child relationship. Id. There was no issue in that case concerning a parent’s authority to enter into a contract on behalf of a minor child. See
id. at 819-26.

Nonetheless, the existence of a parent’s fundamental right “to make decisions concerning the care, custody, and control of his or her children,” id. at 820, implies that a parent has authority to act on behalf of a minor child when interacting with third parties. The United States Supreme Court has recognized as much: “Most children, even in adolescence, simply are not able to make sound judgments concerning many decisions, including their need for medical care or treatment. Parents can and must make those judgments.” Parham v. J.R., 442 U.S. 584, 603, 99 S. Ct. 2493, 2505, 61 L.Ed.2d 101 (1979). This principle is based on “a presumption that parents possess what a child lacks in maturity, experience, and capacity for judgment required for making life’s difficult decisions.” Id. at 602, 99 S. Ct. at 2504. Furthermore, the law recognizes that “natural bonds of affection lead parents to act in the best interests of their children.” Id. (citing 1 William Blackstone, Commentaries of the Law of England 447 (Legal Classics Library 1983) (1769); 2 James Kent, Commentaries on American Law 190 (1827)). The Supreme Court stated in Parham that a parent’s authority to make health-care decisions on behalf of a minor child is limited only in atypical situations, such as if the parent has neglected or abused the child. Id. at 604, 99 S. Ct. at 2505.

Several Minnesota statutes recognize by implication that a parent generally is authorized to enter into agreements with third parties on behalf of a minor child. For example, in matters related to education, the legislature has recognized that parents have authority to make binding decisions on behalf of their minor children. See, e.g., Minn.Stat. §§ 120A.22, subds. 4-5, 8, 120A.3 8, 120B.07 (2020). Similarly, in the context of medical care, the legislature has provided for only a limited number of situations in which a parent’s consent to the medical treatment of a minor child is unnecessary, thereby implying that, in all other situations, a parent’s agreement or consent is necessary. For example, a minor child “may give effective consent to personal medical, dental, mental and other health services” only if the minor child is “living separate and apart from parents or legal guardian … and is managing personal financial affairs.” Minn. Stat. § 144.341 (2020). In addition, a health-care provider may give emergency treatment to a minor child without parental consent only if “the risk to the minor’s life or health is of such a nature that treatment should be given without delay and the requirement of consent would result in delay or denial of treatment.” Minn. Stat. § 144.344 (2020). Each of these statutes presupposes that a parent generally has authority to make decisions on behalf of a minor child.

The legislature’s recognition of a parent’s authority to enter into an agreement on behalf of a minor child also is reflected in two recent statutes that are especially pertinent to this case. In 2010, the legislature passed, and the governor signed, a bill to regulate inflatable amusement equipment in various ways. 2010 Minn. Laws ch. 347, art. 3, § 2, at 46 (codified at Minn. Stat. § 184B.20 (2020) ). One provision of the statute (which is discussed further below in part B) broadly prohibits exculpatory clauses with the following language: “A waiver of liability signed by or on behalf of a minor for injuries arising out of the negligence of the owner or the owner’s employee or designee is void.” Minn. Stat. § 184B.20, subd. 5(b) (emphasis added). The italicized language in section 184B.20 would be unnecessary unless another person—such as a parent—has authority to sign a waiver of liability on behalf of a minor child. Also, in 2013, the legislature and the governor enacted a law to, among other things, prohibit exculpatory clauses that purport to release claims of greater-than-ordinary negligence in the context of consumer services, including recreational activities. 2013 Minn. Laws ch. 118 (codified at Minn. Stat. § 604.055 (2020) ). The statute applies to agreements entered into by “a minor or another who is authorized to sign or accept the agreement on behalf of the minor. ” Minn. Stat. § 184B.20, subd. 2 (emphasis added). Again, the italicized language impliedly recognizes that, in the absence of the statute, another person—such as a parent—may be authorized to sign agreements of that type, which is the same general type of agreement as the exculpatory clause in this case.

In light of these statutes, and in the absence of any law that either forbids parents from entering into contracts on behalf of their minor children or limits their ability to do so, it is clear that a parent generally has authority, on behalf of a minor child, to enter into an agreement that includes an exculpatory clause.

Justice contends that a parent should not be permitted to bind his or her minor child to an exculpatory clause after the child becomes an adult because a minor child who independently enters into a contract may avoid the contract after reaching adulthood. See
Kelly v. Furlong, 194 Minn. 465, 261 N.W. 460, 466 (1935) ; Goodnow v. Empire Lumber Co., 31 Minn. 468, 18 N.W. 283, 284-85 (1884) ; Dixon v. Merritt, 21 Minn. 196, 200 (1875). This rule of law exists “for the protection of minors, and so that they shall not be prejudiced by acts done or obligations incurred at a time when they are not capable of determining what is for their interest to do.” Goodnow, 18 N.W. at 284. For that reason, “the law gives them an opportunity, after they have become capable of judging for themselves, to determine whether such acts or obligations are beneficial or prejudicial to them, and whether they will abide by or avoid them.” Id. at 284-85. But that rationale simply does not apply if an adult parent signed an exculpatory clause on behalf of a minor child. An adult parent is presumed to be competent to make decisions on behalf of a minor child and to act in the child’s best interest. See
Parham, 442 U.S. at 602, 99 S. Ct. at 2504. Such a parent may balance the relevant considerations and either elect to sign an exculpatory clause on behalf of a minor child and thereby obtain the benefits of doing so or elect to not sign it and thereby forego any such benefits.

Justice also contends that a parent should not be permitted to sign an exculpatory clause on behalf of a minor child before any injury occurs because a parent is not permitted to settle a pending lawsuit on behalf of a minor child after a child has been injured, unless a district court approves. Justice refers to a statute that authorizes a parent to “maintain an action for the injury of a minor son or daughter” and also provides, “No settlement or compromise of the action is valid unless it is approved by a judge of the court in which the action is pending.” Minn. Stat. § 540.08 (2020). Justice’s contention fails to recognize the differences between the two situations. Section 540.08 guards against the risk that a parent might enter into an improvident settlement that is not in the minor child’s best interests or the risk that a parent might be motivated by an intent to use settlement proceeds for improper purposes. Such risks are especially ripe after a child has been injured and a civil action has been commenced and settled. But such risks are not present and are unlikely to arise in the more common situation in which a parent is presented with an exculpatory clause and no injury has yet occurred. In that situation, there is no immediate prospect of a settlement that is contrary to a minor child’s best interests.

Justice contends further that this court held in O’Brien Entertainment Agency, Inc. v. Wolfgramm, 407 N.W.2d 463 (Minn. App. 1987), review denied (Minn. Aug. 12, 1987), that a parent’s agreement on behalf of his minor children was unenforceable. We disagree with Justice’s interpretation of our opinion in O’Brien
. The opinion states that a father of six children signed a contract, but the opinion does not clearly state that the father signed the contract on behalf of his children. Id. at 465-66. Absent from the court’s reasoning is any statement that the father purported to enter into the contract on behalf of his children. See
id. at 466-67. We concluded that the statute of frauds barred the breach-of-contract claim against the children because none of the children signed the contract. Id. at 466. Thus, our opinion did not address the question whether a parent may enter into a contract on behalf of a minor child.

In sum, various provisions of Minnesota law recognize that a parent may enter into an agreement on behalf of a minor child. Recent statutory enactments clearly indicate that the legislature has assumed that a parent is authorized to sign an exculpatory clause—including an exculpatory clause concerning the use of inflatable amusement equipment—on behalf of a minor child. Justice has not cited any Minnesota authority for the proposition that a parent may not enter into an agreement on behalf of a minor child.

Thus, the district court did not err by reasoning that Justice’s mother was authorized to sign Marvel’s exculpatory clause on Justice’s behalf.

B. Section 184B.20

Justice also argues that section 184B.20 of the Minnesota Statutes, which was enacted in 2010, voids the exculpatory clause that his mother signed in 2007 because the statute voids all waivers of claims based on injuries caused by the use of inflatable amusement equipment.

As noted above, section 184B.20 provides, “A waiver of liability signed by or on behalf of a minor for injuries arising out of the negligence of the owner or the owner’s employee or designee is void.” Minn. Stat. § 184B.20, subd. 5(b). The session law that led to the codification of this statute states that the law “is effective August 1, 2010.” 2010 Minn. Laws ch. 347, art. 3, § 2, at 46. The district court rejected Justice’s argument that section 184B.20 voids Marvel’s exculpatory clause on the grounds that Justice’s mother signed the exculpatory clause before the statute’s effective date and that the legislature did not intend for the statute to apply retroactively.

” ‘No law shall be construed to be retroactive unless clearly and manifestly so intended by the legislature.’ ” In re Individual 35W Bridge Litigation, 806 N.W.2d 811, 819 (Minn. 2011) (A09-1776) (hereinafter 35W Bridge (A09-1776)
) (quoting Minn. Stat. § 645.21 (2010) ). One way in which the legislature may indicate its intent for a law to operate retroactively is to use the term “retroactive.” Duluth Firemen’s Relief Ass’n v. City of Duluth, 361 N.W.2d 381, 385 (Minn. 1985).

Justice does not argue that the legislature intended the statute to apply retroactively. Instead, he contends that the statute’s application in this case would be a prospective application, not a retroactive application. But the supreme court has stated, “A statute operates retroactively if it affects rights, obligations, acts, transactions and conditions which are performed or exist prior to the adoption of the statute.” 35W Bridge (A09-1776), 806 N.W.2d at 819-20 (quotation omitted). If section 184B.20 were applied to this case, it would affect the parties’ respective rights and obligations concerning events—the signing of Marvel’s exculpatory clause and Justice’s head injury—that occurred more than three years before the effective date of the statute. Such an application would result in a retroactive application of the statute because it would affect rights and obligations that were pre-existing when the statute became effective. See id.

Justice attempts to avoid a retroactive characterization by relying on Tapia v. Leslie, 950 N.W.2d 59 (Minn. 2020), in which the supreme court concluded that a 2014 statutory amendment governed a 2017 application for a permit to carry a pistol. Id. at 63. In Tapia, the relevant statute was amended three years before the application for a permit, which was the operative event. Id. In this case, the statute was enacted three years after Justice’s mother agreed to the exculpatory agreement. Thus, Tapia is distinguishable from this case.

Justice also contends that the application of section 184B.20 in this case would not impair any vested rights belonging to Marvel. The existence of vested rights may, in certain circumstances, defeat the intended retroactive application of a statute if retroactive application would be unconstitutional. See
In re Individual 35W Bridge Litigation, 806 N.W.2d 820, 829-33 (Minn. 2011) (A10-0087); Peterson v. City of Minneapolis, 285 Minn. 282, 173 N.W.2d 353, 357-58 (1969) ; Yaeger v. Delano Granite Works, 250 Minn. 303, 84 N.W.2d 363, 366-67 (1957) ; Holen v. Minneapolis-St. Paul Metro. Airports Comm’n, 250 Minn. 130, 84 N.W.2d 282, 287 (1957) ; K.E. v. Hoffman, 452 N.W.2d 509, 512-13 (Minn. App. 1990), review denied (Minn. May 7, 1990). This understanding of vested rights is apparent in Larson v. Independent School District No. 314, 305 Minn. 358, 233 N.W.2d 744 (1975), the case on which Justice primarily relies in his principal brief. In Larson, the supreme court concluded that the retroactive application of a rule of civil procedure, as intended, did not “deprive[ ] defendants of vested rights of property and privacy in violation of the due process clause of the Fourteenth Amendment to the Federal Constitution.Id. at 748 (emphasis added). Outside the context of land use and zoning, the vested-rights doctrine simply does not affect the determination of whether a statute is intended to have retroactive application. Cf . Interstate Power Co. v. Nobles County Bd. of Commissioners, 617 N.W.2d 566, 575-78 (Minn. 2000) (citing cases). Because we have determined that the legislature did not intend for section 184B.20 to apply retroactively, the vested-rights doctrine is not relevant.

Thus, the district court did not err by reasoning that section 184B.20 does not apply retroactively to Justice’s mother’s agreement to Marvel’s exculpatory clause.

C. Marvel’s Exculpatory Clause

Justice also argues that Marvel’s exculpatory clause is unenforceable on the grounds that it is overly broad and contrary to public policy.

“A clause exonerating a party from liability will be strictly construed against the benefited party.” Schlobohm v. Spa Petite, Inc., 326 N.W.2d 920, 923 (Minn. 1982). “If the clause is either ambiguous in scope or purports to release the benefited party from liability for intentional, willful or wanton acts, it will not be enforced.” Id. In addition, an exculpatory clause is unenforceable if it “contravenes public policy.” Yang v. Voyagaire Houseboats, Inc., 701 N.W.2d 783, 789 (Minn. 2005) (citing Schlobohm, 326 N.W.2d at 923 ).

1. Public Policy

Justice contends that Marvel’s exculpatory clause is unenforceable on the ground that it is contrary to public policy.

The supreme court has prescribed a “two-prong test” to determine whether an exculpatory clause is contrary to public policy. Schlobohm, 326 N.W.2d at 923. The test focuses on two factors: “(1) whether there was a disparity of bargaining power between the parties (in terms of a compulsion to sign a contract containing an unacceptable provision and the lack of ability to negotiate elimination of the unacceptable provision)” and “(2) the types of services being offered or provided (taking into consideration whether it is a public or essential service).” Id. In this case, the district court determined that Marvel’ s exculpatory clause is not contrary to public policy because there was no bargaining-power disparity and because Marvel did not provide “an essential or public service.”

Justice contends that there was a disparity in bargaining power because there was no opportunity for his mother to negotiate the terms of the exculpatory clause and because he would not have been permitted to attend the birthday party if his mother had not signed the form agreement. Justice’s contention is not legally viable. “Even though a contract is on a printed form and offered on a ‘take it or leave it’ basis, those facts alone do not cause it to be an adhesion contract.” Id. at 924. More is required. The agreement must relate to a “necessary service,” and there also “must be a showing … that the services could not be obtained elsewhere.” Id. at 924-25. Consequently, there is no disparity in bargaining power, for purposes of the Schlobohm public-policy analysis, if a consumer has the choice to simply forego the activity. See
Beehner v. Cragun Corp., 636 N.W.2d 821, 827-28 (Minn. App. 2001), review denied (Minn. Feb. 28, 2002); Malecha v. St. Croix Valley Skydiving Club, Inc., 392 N.W.2d 727, 730 (Minn. App. 1986), review denied (Minn. Oct. 29, 1986). There is no evidence in the summary-judgment record that the services Marvel provided were unavailable else where, and we may presume that Justice was not compelled to participate in the birthday party because the provision of inflatable amusement equipment is not a necessary service. Thus, as in Schlobohm and Malecha, there was no disparity in bargaining power, as required for a conclusion that an exculpatory clause is contrary to public policy.

Justice also contends that the type of services offered by Marvel causes its exculpatory clause to be incompatible with public policy. He likens Marvel’s services to the “[t]ypes of services thought to be subject to public regulation,” such as “common carriers, hospitals and doctors, public utilities, innkeepers, public warehousemen, employers and services involving extra-hazardous activities.” Schlobohm, 326 N.W.2d at 925. But the supreme court has recognized that “contracts relating to recreational activities do not fall within any of the categories where the public interest is involved,” on the ground that they are not “services of great importance to the public, which were a practical necessity for some members of the public.” Id. at 926. Subsequent opinions have relied on this principle in concluding that the use of an exculpatory clause in connection with a recreational activity is not contrary to public policy. See
Anderson v. McOskar Enterprises, Inc., 712 N.W.2d 796, 802 (Minn. App. 2006) (health club); Beehner, 636 N.W.2d at 829 (horseback riding); Malecha, 392 N.W.2d at 730 (skydiving). A business that provides inflatable amusement equipment is well within the category of recreational activities for which exculpatory clauses are not prohibited.

Justice counters that providing inflatable amusement equipment is the type of service that is “generally thought suitable for public regulation,” Schlobohm, 326 N.W.2d at 925, because it now is, in fact, regulated by statute, as of 2010. See Minn. Stat. § 184B.20; 2010 Minn. Laws ch. 347, art. 3, § 2, at 46. Furthermore, he contends that Marvel’s exculpatory clause is contrary to public policy because the legislature has declared that all exculpatory clauses concerning inflatable amusement equipment are void. To rely on section 184B.20 for purposes of the Schlobohm public-policy analysis would be, in effect, to apply the statute retroactively. We have already concluded that section 184B.20 does not apply retroactively to an exculpatory clause that was signed before the statute’s effective date. See supra part B. Accordingly, Justice cannot rely on section 184B.20 to establish that Marvel’s exculpatory clause is contrary to public policy in the sense described in Schlobohm.

Thus, the district court did not err by reasoning that Marvel’s exculpatory clause does not violate public policy.

2. Scope of Release

Justice contends that Marvel’s exculpatory clause is unenforceable on the ground that it purports to release Marvel from claims arising from Marvel’s intentional, willful or wanton acts. Justice alternatively contends that Marvel’s exculpatory clause is unenforceable on the ground that it is ambiguous with respect to whether it releases Marvel from claims arising from Marvel’s intentional, willful or wanton acts.

Exculpatory clauses are permissible but not favored and, thus, are “strictly construed against the benefited party.” Schlobohm, 326 N.W.2d at 923. An exculpatory clause is unenforceable if it is “either ambiguous in scope or purports to release the benefited party from liability for intentional, willful or wanton acts.” Id.

By signing Marvel’s exculpatory clause, Justice’s mother agreed, on her own behalf and on behalf of Justice, to “release … MARVEL, LLC, … from and against any and all claims, injuries, liabilities or damages.” (Emphasis added.) The plain language of this clause purports to release claims of both ordinary negligence and greater-than-ordinary negligence, including claims based on intentional, willful or wanton acts. Marvel contends that its exculpatory clause is similar to exculpatory clauses in other cases in which the appellate courts concluded that the clauses were limited to ordinary negligence. In each of those cases, however, the exculpatory clause expressly referred to claims of “negligence,” which provided the appellate courts with a basis for concluding that the clauses were limited to claims of ordinary negligence. See
Schlobohm, 326 N.W.2d at 922-23 ; Anderson, 712 N.W.2d at 799, 801 ; Malecha, 392 N.W.2d at 728-30 ; see also Beehner, 636 N.W.2d at 825-27. But Marvel’s exculpatory clause does not make any reference to claims of “ordinary negligence” or simply “negligence.” Rather, it expansively refers to “any and all claims,” which means that it purports to release Marvel from claims arising from its intentional, willful or wanton acts. Thus, Marvel’s exculpatory clause is overly broad.

3. Effect of Overbreadth

Having determined that Marvel’s exculpatory clause is overly broad, we must consider the consequences of that determination. The question arises whether Marvel’s exculpatory clause is completely unenforceable, even with respect to claims of ordinary negligence, or unenforceable only to the extent that Justice asserts a claim of greater-than-ordinary negligence. Justice contends that an overly broad exculpatory clause is “invalid,” without discussing more specifically the nature or extent of its invalidity. Marvel argues only that the exculpatory clause is valid, without making any alternative argument about whether or how this court should apply the exculpatory clause if it is invalid.

This court considered this precise issue in Anderson, in which we characterized a health club’s exculpatory clause as “arguably ambiguous.” 712 N.W.2d at 801. The plaintiff had asserted only a claim of ordinary negligence. Id. We stated that it “would subvert the parties’ manifested intent” to conclude that the plaintiffs ordinary-negligence claim was not barred by a release that clearly released such a claim. Id. We reasoned that “any term in a contract which attempts to exempt a party from liability for gross negligence or wanton conduct is unenforceable, not the entire contract.Id. (emphasis added) (quotation and alteration omitted). In light of Anderson, Marvel’s exculpatory clause is enforceable to the extent that Justice asserts a claim of ordinary negligence, but it is unenforceable to the extent that Justice asserts a claim of greater-than-ordinary negligence. See id. ; see also
ADT Security Services, Inc. v. Swenson, 276 F.R.D. 278, 300-01 (D. Minn. 2011) (concluding that overly broad nature of exculpatory clause “limit[s] its applicability to claims which do not implicate willful and wanton negligence or intentional behavior”).

Thus, the district court did not err by enforcing Marvel’s exculpatory clause and concluding that it released Justice’s claim of ordinary negligence, even though the clause is overly broad.

D. Greater-than-Ordinary Negligence

Justice argues that he has introduced evidence that is sufficient to create a genuine issue of material fact as to whether Marvel engaged in greater-than-ordinary negligence. In response, Marvel argues that Justice did not preserve this argument because he did not present it to the district court.

Marvel is correct. Justice did not argue to the district court that Marvel’s summary-judgment motion should be denied on the ground that there is a genuine issue of material fact as to whether Marvel engaged in greater-than-ordinary negligence. The district court expressly stated in its order that “Plaintiffs claims are based solely on negligence, and there is no claim by Plaintiff nor evidence in the record to suggest that Defendant or its employees acted willfully, intentionally or wantonly.” Justice is making a claim of greater-than-ordinary negligence for the first time on appeal. In that situation, an appellate court generally will not consider an argument that was forfeited because it was not presented to the district court. Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) ; Doe 175 v. Columbia Heights Sch. Dist., 842 N.W.2d 38, 42-43 (Minn. App. 2014).

Justice contends that he adequately preserved a claim of greater-than-ordinary negligence by pleading his claim broadly. He also contends that he raised an issue of greater-than-ordinary negligence in his motion to amend the complaint to add a request for punitive damages. Regardless of how Justice pleaded his claim or claims in his complaint, and regardless of the arguments he made with respect to a different motion, he had an obligation to oppose Marvel’s summary-judgment motion by submitting and citing admissible evidence in support of all of his claims and by presenting all of his legal arguments for denying the motion. See
DLH, Inc. v. Russ, 566 N.W.2d 60, 69-71 (Minn. 1997) ; Hunt v. IBM Mid Am. Emps. Fed. Credit Union, 384 N.W.2d 853, 855-56 (Minn. 1986) ; Molde v. CitiMortgage, Inc., 781 N.W.2d 36, 44 (Minn. App. 2010) ; Fontaine v. Steen, 759 N.W.2d 672, 676 (Minn. App. 2009). But Justice did not mention a claim of. greater-than-ordinary negligence in his memorandum of law in opposition to Marvel’s motion.

Thus, we will not consider Justice’s argument that the district court should have denied Marvel’s summary-judgment motion with respect to a claim of greater-than-ordinary negligence. See
Thiele, 425 N.W.2d at 582 ; Doe 175 , 842 N.W.2d at 42-43.

E. Post-Injury Agreement

Justice argues that the district court erred by reasoning that the agreement signed by his mother and step-father in September 2007, after Justice was injured, does not abrogate or modify the exculpatory clause.

The September 2007 agreement provides, in relevant part,

As of the date of this Agreement, Carter Justice seems to have recovered completely from the Accident and has been removed from any restrictions by his attending physician(s). Parents agree that if there are no new medical complications arising as a result of the Accident within six months following the date of this Agreement they will execute a full and complete release and discharge of any and all claims against [Marvel] stemming from the Accident.

Justice argued to the district court that this post-injury agreement abrogated the exculpatory clause on the ground that the parties “agreed to substitute a new contract” for the exculpatory clause. The district court rejected the argument, reasoning that the post-injury agreement does not abrogate or modify the exculpatory clause because it does not refer to the exculpatory clause and because it states that it is not “an admission of any fault or legal liability.”

On appeal, Justice contends that the post-injury agreement abrogates the exculpatory clause because the post-injury agreement is specifically related to Justice’s head injury, Justice’s mother and step-father agreed to release claims arising from Justice’s head injury only if certain conditions were present, and the conditions stated in the post-injury agreement were not present. In response, Marvel contends that the post-injury agreement did not modify the exculpatory clause because the agreement does not refer to the waiver and because it was entered into by Justice’s mother and step-father on their own behalf but not on behalf of Justice.

Justice’s argument requires us to interpret the post-injury agreement, which is a contract. “The primary goal of contract interpretation is to determine and enforce the intent of the parties.” Travertine Corp. v. Lexington-Silverwood, 683 N.W.2d 267, 271 (Minn. 2004). “Where there is a written instrument, the intent of the parties is determined from the plain language of the instrument itself.” Id. If a contract is clear and unambiguous, courts should apply the plain language of the contract and “not rewrite, modify, or limit its effect by a strained construction.” Id. This court applies a de novo standard of review to a district court’s interpretation of a contract. Id.

The district court correctly interpreted the post-injury agreement. It is an agreement between Marvel and Justice’s mother and step-father but not between Marvel and Justice, the two parties to this case. It does not refer to the pre-injury exculpatory clause in any way. It provided for the possibility of “a full and complete release and discharge of any and all claims against [Marvel] stemming from” Justice’s injury. If such a release had been signed, it would have provided Marvel with an additional defense to Justice’s claim. But Justice’s mother and step-father never signed the release that was contemplated by the post-injury agreement. The absence of a second release does not in any way alter the release contained in the exculpatory clause that was signed by Justice’s mother on the day of Justice’s injury.

Thus, the district court did not err by reasoning that the post-injury agreement does not abrogate or modify the exculpatory clause.

DECISION

The district court did not err by granting Marvel’s motion for summary judgment on the ground that Justice’s sole claim of ordinary negligence is barred by the exculpatory clause that his mother signed on his behalf. In light of that conclusion, Justice’s argument that the district court erred by denying his motion to amend the complaint to add a request for punitive damages is moot.

Affirmed.

——–

Notes:

1 Marvel contends that Justice did not preserve this argument by presenting it to the district court. Marvel’s contention is colorable because Justice presented the issue to the district court in a somewhat indirect manner. But the district court determined that the issue was presented, stating that it “was addressed in the [parties’] memoranda and is therefore worth clarifying.” Accordingly, the argument is sufficiently preserved for appellate review.

2 The Minnesota Association for Justice has filed an amicus brief supporting Justice’s position. The association notes that a person may void a contract that he or she entered into as a minor, contends that compensation of children who are tort victims is an important objective, and asserts that courts in 17 other states do not enforce parental waivers of minors’ claims. Our research indicates that courts in other states have resolved the issue in various ways. Courts in some states have enforced exculpatory clauses signed by a parent on behalf of a minor child. See, e.g.,
Sharon v. City of Newton, 437 Mass. 99, 769 N.E.2d 738, 745-47 (2002) ; BJ’s Wholesale Club, Inc. v. Rosen, 435 Md. 714, 80 A.3d 345, 353-55 (2013) ; Zivich v. Mentor Soccer Club, Inc., 82 Ohio St.3d 367, 696 N.E.2d 201, 206-07 (1998). Courts in other states have not enforced such exculpatory clauses. See, e.g., Woodman ex rel. Woodman v. Kera, LLC, 486 Mich. 228, 785 N.W.2d 1, 8 (2010) ; Hawkins ex rel. Hawkins v. Peart, 37 P.3d 1062, 1066 (Utah 2001) ; Scott v. Pacific W. Mountain Resort, 119 Wash.2d 484, 834 P.2d 6, 10-12 (1992).

——–


New way to beat a release, lie and say you signed it not your son.

However, fraud in signing a contract is usually not enough to get the agreement thrown out. This should be appealed.

Bonnen v. Pocono Whitewater, Ltd. (M.D. Pa. 2021)

State: Pennsylvania, United States District Court, M.D. Pennsylvania

Plaintiff: Caroline Bonnen, et al

Defendant: Pocono Whitewater, Ltd

Plaintiff Claims: negligent, grossly negligent, and reckless

Defendant Defenses: Release which contained a forum selection clause

Holding: For the Plaintiff

Year: 2020

Summary

The facts are sparse in the opinion and semi speculative here. A mother allegedly signed her son up for a Whitewater raft trip. The son died on the trip after falling out of the unguided raft. The rafting company tried to dismiss the claims due to the jurisdiction and venue clause in the release but was denied because the mother signed the release, not the son.

This reads like the release was signed online, but I could not find an online release for the defendant. With a search, I did find a PDF of a release for the defendant which did have jurisdiction language matching the defendants.

Facts

This is a motion to dismiss because the lawsuit was filed in a county that was not the county identified in the release. Consequently, since it is a simple motion to dismiss the order is light on facts.

On September 1, 2019, Christopher Santana was one of nine occupants in an eight-person raft, none of whom were guides, who were Whitewater rafting on the Lehigh River in Jim Thorpe, Carbon County, Pennsylvania. After the raft hit a rock, Santana was thrown from the raft into turbulent and rocky waters. His foot became lodged between rocks causing him to become submerged underwater, which resulted in his death by drowning. The plaintiff, Caroline Bonnen, individually and as Administratrix of the Estate of Christopher Santana, brings this wrongful death and survival action against the defendant, Pocono Whitewater, Ltd.

In her opposition papers, the plaintiff contends that the release of liability, which includes the forum selection clause contained therein, is invalid because the decedent did not execute the release. The plaintiff maintains that it was she who signed the decedent’s name, without authority to contract on behalf of the decedent.

So, you now have as many questions as you do answers.

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

I’m not sure how an attorney can plead a lie as a defense to a claim to dismiss, but that is probably just me.

The lawsuit was filed in Federal District Court for the Middle District of Pennsylvania. The deceased or his mother had signed a release which stated any lawsuit had to be filed in Carbon County state court.

The defendant raft company filed a motion to dismiss in the court stating the lawsuit had been filed in the wrong place, based on the contract.

Normally, these are granted and the court requires the plaintiff to file within so many days or months. The only real issue always is if the statute of limitations has passed by the time the motion is filed, does the plaintiff have a case.

Here though, the mother of the deceased, the plaintiff, said the release was not valid because it was not signed by the deceased. She signed it.

The court bought this argument, which really it had no choice because there were not facts that countered the argument.

Here, the plaintiff disputes the validity of the release containing a forum selection clause because it was allegedly signed in the decedent’s name by his mother, the plaintiff, without authorization or consent by the decedent. Based on the factual allegations by the parties, we are unable to conclude that the decedent unambiguously manifested his assent to the forum selection clause, and thus we are unable to find that the forum selection clause is valid.

The case even gets wilder with the next statement by the court.

Moreover, Pennsylvania law holds that such a release agreement cannot bind non-signatories. Therefore, construing all well-pleaded facts as true, as we must, we are constrained to deny the motion to dismiss.

Sure, a contract cannot be used to hold a non-signatory to an agreement. I cannot sign a contract signing you up for the beer of the month club. However, in most cases, when there is fraud involved things change. Here the mother fraudulent signed the contract on behalf of her son.

Should she be allowed to profit from her fraud?

Yes, she lost a son, but this; I think, is not right.

So Now What?

  1. The release needed better language that stated that the person signing the document was the person identified in the document.
  2. The contract or release should have also stated that the release binds the entire family of the signor to the terms of the release.

I did a Google Search and found a PDF of a release for the defendant dated around the time of the accident. If that is the release that was used, it might not work anyhow. It was a half-page form that would have a difficult time holding up to Pennsylvania law. However, it also was a PDF so it would require an actual signature.

So here again, the plaintiff could use a release that was lacking a few issues to keep the lawsuit going. I suspect this is not the last argument over this release we will read. At least, I hope not.

The website states there will be professional raft guides, the allegations claim no guides were in the boat.

What do you think? Leave a comment.

Who am I

Jim Moss

I’m an attorney specializing in the legal issues of the Outdoor Recreation Industry

I represent Manufactures, Outfitters, Guides, Reps, College & University’s, Camps, Youth Programs, Adventure Programs and Businesses

CV

Copyright 2022 Recreation Law (720) 334 8529

If you like this let your friends know or post it on FB, Twitter or LinkedIn

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Bonnen v. Pocono Whitewater, Ltd. (M.D. Pa. 2021)

CAROLINE BONNEN, et al., Plaintiffs,
v.
POCONO WHITEWATER, LTD., Defendant.

Civil Action No. 3:20-cv-01532

United States District Court, M.D. Pennsylvania

September 17, 2021

MEMORANDUM

JOSEPH F. SAPORITO, JR., U.S. Magistrate Judge.

 This diversity action is before the court on the defendant’s motion to dismiss the amended complaint under Fed.R.Civ.P. 12(b)(6) based on enforcement of a forum selection provision. (Doc. 15). The action arises out of an incident where the plaintiffs decedent died as a result of being thrown from a raft while Whitewater rafting on the Lehigh River in Carbon County, Pennsylvania. For the reasons set forth herein, we will deny the motion.

 I. Statement of Facts

 On September 1, 2019, Christopher Santana was one of nine occupants in an eight-person raft, none of whom were guides, who were Whitewater rafting on the Lehigh River in Jim Thorpe, Carbon County, Pennsylvania. After the raft hit a rock, Santana was thrown from the raft into turbulent and rocky waters. His foot became lodged between rocks causing him to become submerged underwater, which resulted in his death by drowning. The plaintiff, Caroline Bonnen, individually and as Administratrix of the Estate of Christopher Santana, brings this wrongful death and survival action against the defendant, Pocono Whitewater, Ltd.

 The defendant has filed a motion to dismiss (Doc. 15), seeking dismissal on the ground that a forum selection provision contained in a release of liability purportedly signed by the decedent sets the Court of Common Pleas of Carbon County as the appropriate and agreed-upon venue for any dispute “aris[ing] out of th[e] agreement or otherwise between the parties.” (Doc. 14-5).

 A review of the amended complaint reflects that the plaintiff did not plead whether the release of liability has any relevance to the incident. Rather, the plaintiff has pled that the defendant was negligent, grossly negligent, and reckless in its conduct in a variety of several itemized instances. (Doc. 9 ¶ 31). In her opposition papers, the plaintiff contends that the release of liability, which includes the forum selection clause contained therein, is invalid because the decedent did not execute the release. (Doc. 20 passim; Doc. 21, at 3-5). The plaintiff maintains that it was she who signed the decedent’s name, without authority to contract on behalf of the decedent. (Id.).

 The motion has been fully briefed by the parties and is ripe for disposition. (Doc. 16; Doc. 21).

 II. Legal Standard

 Rule 12 (b)(6) of the Federal Rules of Civil Procedure authorizes a defendant to move to dismiss for “failure to state a claim upon which relief is granted.” Fed.R.Civ.P. 12(b)(6). “Under Rule 12(b)(6), a motion to dismiss may be granted only if, accepting all well-pleaded allegations in the complaint as true and viewing them in the light most favorable to the plaintiff, a court finds the plaintiffs claims lack facial plausibility.” Warren Gen. Hosp. v. Amgen, Inc., 643 F.3d 77, 84 (3d Cir. 2011) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-56 (2007)). In deciding the motion, the court may consider the facts alleged on the face of the complaint, as well as “documents incorporated into the complaint by reference, and matters of which a court may take judicial notice.” Tellab, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007). Although the Court must accept the fact allegations in the complaint as true, it is not compelled to accept “unsupported conclusions and unwarranted inferences, or a legal conclusion couched as a factual allegations.” Morrow v. Balaski, 719 F.3d 160, 165 (3d Cir. 2013) (quoting Baraka v. McGreevy, 481 F.3d 187, 195 (3d Cir. 2007). Nor is it required to credit factual allegations contradicted by indisputably authentic documents on which the complaint relies or matters of public record of which we may take judicial notice. In re Washington Mut. Inc., 741 Fed.Appx. 88, 91 n.3 (3d Cir. 2018); Sourovelis v. City of Philadelphia, 246 F.Supp.3d 1058, 1075 (E.D. Pa. 2017); Banks v. Cty. of Allegheny, 568 F.Supp.2d 579, 588-89 (W.D. Pa. 2008).

 III. Discussion

 Turning to the motion to dismiss based on enforcement of a forum selection provision under Fed.R.Civ.P. 12(b)(6), when the parties’ agreement contains a valid forum selection clause designating a particular forum for settling disputes arising out of their contract, a Rule 12(b)(6) dismissal is a permissible means of enforcing that forum selection clause. Salovaara v. Jackson Nat’l Life Ins. Co., 246 F.3d 289, 298 (3d Cir. 2001). Podesta v. Hanzel, 684 Fed.Appx. 213, 216 (3d Cir. 2017); see also Eureka Res., LLC v. Hoden Roots LLC, ___F.Supp.3d.___, 2021 WL 3545068, at * 1 & n.5 (M.D. Pa. Aug. 11, 2021).

 Here, the plaintiff disputes the validity of the release containing a forum selection clause because it was allegedly signed in the decedent’s name by his mother, the plaintiff, without authorization or consent by the decedent. Based on the factual allegations by the parties, we are unable to conclude that the decedent unambiguously manifested his assent to the forum selection clause, and thus we are unable to find that the forum selection clause is valid. See Oak Street Printery LLC v. Fujifilm N. Am. Corp., 895 F.Supp.2d 613, 619 (M.D. Pa. 2012). Because the validity of the form selection clause remains in doubt, the defendant’s preferred forum-the Carbon County state courts-is not controlling. See Id. Moreover, Pennsylvania law holds that such a release agreement cannot bind non-signatories. See Valentino v. Philadelphia Triathlon, LLC, 150 A.3d 483, 497 (Pa. Super. Ct. 2016) (noting that a statutory “wrongful death claimant possesses an independent, non-derivative right of action” that cannot be subjected to a forum selection clause, signed by the decedent, without the claimant’s consent); cf. Buttermore v. Aliquippa Hospital, 561 A.2d 733, 736 (Pa. l989)(holding that a wife’s consortium claim was an independent cause of action, and thus not barred by a settlement agreement to which she was not a signatory). Therefore, construing all well-pleaded facts as true, as we must, we are constrained to deny the motion to dismiss.

 An appropriate order follows.


A Parent cannot sign away a minor’s right to sue in New Jersey, however, a parent can agree to arbitrate the minor’s claims.

Another trampoline park case where the plaintiffs are required to arbitrate their claim even though the release which included the arbitration clause was not enforceable in New Jersey.

Johnson v. Sky Zone Indoor Trampoline Park in Springfield (N.J. Super. App. Div. 2021)

State: New Jersey

Plaintiff: David Johnson, an infant by his guardian ad litem, Shalonda Johnson, and Shalonda Johnson, individually

Defendant: Sky Zone Indoor Trampoline Park in Springfield, Sky Zone, LLC, Sky Zone Franchise Group, LLC, and Go Ahead and Jump 4, LLC

Plaintiff Claims: negligence

Defendant Defenses: release required arbitration of the claims

Holding: For the defendants, claims must be arbitrated

Year: 2021

Summary

The New Jersey Supreme Court held Hojnowski v. Vans Skate Park, 187 N.J. 323 (2006), that a parent could not sign away a minor’s right to sue. See However, in Hojnowski the court stated a parent could agree to arbitrate a minor’s claims. This decision of the injuries received at a trampoline park held the same decision. When signing the release, the mother agreed to arbitration of any claims.

Facts

On July 14, 2018, ten-year-old David and his mother visited the Park. Before they were permitted entry, however, a Park employee apprised Johnson she was required to sign a “Participation Agreement, Release and Assumption of Risk” (the Agreement) on an electronic tablet. On August 15, 2018, plaintiffs again visited the Park and, while jumping on a trampoline, David seriously injured his leg. The appellate record did not include evidence of whether Johnson executed a second waiver.

The Agreement is presented to the patrons at a kiosk in the form of an electronic document. The patrons are expected to read it and acknowledge their consent to be bound by the terms contained therein by placing an electronic “checkmark” and entering certain personally identifying information. Defendants argue David’s mother placed an electronic checkmark where indicated, and thus acknowledged she understood and agreed “to arbitrate any dispute as set forth in this section” and waived “[her] right, and the right(s) of [her] minor child(ren) . . . to maintain a lawsuit against [defendants] . . . for any and all claims covered by this Agreement.”

The mother filed a lawsuit for herself and her son. The defendant argued the arbitration clause in the release should apply. That would remove the litigation from the state court system and have a neutral arbitrator decide the case. Normally arbitrators do not hand out damages to the extend a jury would. The court agreed, leading to this appeal.

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

The argument was quite simple. The plaintiff argued that since the New Jersey Supreme Court had decided that a parent could not sign away a minor’s right to sue, that the release, including the arbitration clause should be thrown out.

The plaintiff first argued there was no real notice because the plaintiff had checked a box on the electronic form and that was not enough notice required to alert the plaintiff that she was going to have to arbitrate any claim. The defense countered that the plaintiff has completed the form giving the defendant a lot of contact information.

In response, defense counsel argued Johnson did a great deal more than merely place a checkmark on a section of an electronic document. “We don’t just have the electronic signatures. We have her name, her address, her phone number, her date of birth . . . it’s not merely that you have [Janay’s] certification.

The plaintiff then argued the arbitration clause was ambiguous and unenforceable as a matter of law.

As a matter of public policy, our Supreme Court has upheld arbitration as a “favored means of dispute resolution.” Hojnowski, 187 N.J. at 342. The Court has consistently endorsed a “strong preference to enforce arbitration agreements, both at the state and federal level.” In determining whether a valid agreement to arbitrate exists, we will apply “state contract-law principles.” Hojnowski, 187 N.J. at 342. Guided by these principles, “[a]n arbitration agreement is valid only if the parties intended to arbitrate because parties are not required ‘to arbitrate when they have not agreed to do so.

The statement that the arbitration clause is only valid if the parties intended to arbitrate is good for arbitration clauses and contracts. The court also found the language requiring arbitration was not ambiguous or unenforceable.

Mutuality of assent is the hallmark of an enforceable contract. Thus, the initial inquiry is whether the parties actually and knowingly agreed to arbitrate their dispute. To reflect mutual assent to arbitrate, the terms of an arbitration provision must be “sufficiently clear to place a consumer on notice that he or she is waiving a constitutional or statutory right . . . .” “No particular form of words is necessary to accomplish a clear and unambiguous waiver of rights.” If, “at least in some general and sufficiently broad way,” the language of the clause conveys arbitration is a waiver of the right to bring suit in a judicial forum, the clause will be enforced.

The court went further to state:

The language in the arbitration clause states plaintiffs were “agreeing to arbitrate any dispute as set forth in this section” and were “waiving [their] right . . . to maintain a lawsuit.” It sets forth, “[b]y agreeing to arbitrate, [plaintiffs] understand that [they] will NOT have the right to have [their] claim[s] determined by a jury.” This language clearly and unambiguously puts plaintiffs on notice that they are waiving the right to a jury trial and the right to pursue their claims in a court of law. This part of the Agreement is therefore enforceable.

The plaintiff then argued that forcing her to sign an exculpatory contract of adhesion right before a birthday party was a violation of the doctrines of procedural and substantive unconscionability.

We next address plaintiffs’ arguments attacking the enforcement of the arbitration clause based on the doctrines of procedural and substantive unconscionability. In essence, plaintiffs argue requiring Johnson to read and sign an ambiguous contract of adhesion immediately before a birthday party left her with no other choice but to assent.

In New Jersey there is a four-part test to determine if an agreement is a contract of adhesion.

[I]n determining whether to enforce the terms of a contract of adhesion, [a court] look[s] not only to the take-it-or-leave-it nature or the standardized form of the document but also to [(1)] the subject matter of the contract, [(2)] the parties’ relative bargaining positions, [(3)] the degree of economic compulsion motivating the “adhering” party, and [(4)] the public interests affected by the contract.

The court’s response was they could not find anything in the agreement that rose to the level that the contract was a contract of adhesion under New Jersey law.

Although the case is not over, any damages will probably significantly reduce by requiring arbitration.

So Now What?

This is the second decision that is almost identical to this one. Can a release in New Jersey at a trampoline park require the parent to arbitrate the minor’s claim. See New Jersey does not allow a parent to sign away a minor’s right to sue so a binding arbitration agreement is a good idea, if it is written correctly. This decision does not mention the decision is Weed v. Sky NJ, LLC., 2018 N.J. Super. Unpub. LEXIS 410, 2018 WL 1004206 which is almost identical in the facts.

There are two ways to limit damages in a state that does not allow a parent to sign a release giving up a minor’s right to sue. Assumption of the risk agreements and the defense of assumption of the risk. Did the parent AND the minor knowingly and voluntarily enter into the risk that caused the injury. This is only valid if you can prove the minor knew or you provided the minor with the education or knowledge to knowingly and voluntarily assume the risk. Voluntary is the easy part proving the minor knew of the risk is difficult.

Arbitration then is the next defense in this ladder to reduce damages. Most states do not allow an arbitrator to award more than the basic damages. Punitive damages cannot be awarded by arbitrators. Also, arbitrators are not over come by emotion or other factors that would influence them into awarding large damages.

Before putting an arbitration clause in your agreement, you need to determine two things.

  1. Is arbitration better than the court system in your state. If your state supports the use of a release, a release gets you out of a case without any damages. Even though arbitration will generally not give the plaintiff large awards, they usually award something.
  2. Are there benefits to arbitration in your state that outweigh other means of resolving the dispute.

In those states that do not support a parent signing away a minor’s right to sue, arbitration is probably a good result. See States that allow a parent to sign away a minor’s right to sue.

What do you think? Leave a comment.

Who am I

Jim Moss

I’m an attorney specializing in the legal issues of the Outdoor Recreation Industry

I represent Manufactures, Outfitters, Guides, Reps, College & University’s, Camps, Youth Programs, Adventure Programs and Businesses

CV

Copyright 2022 Recreation Law (720) 334 8529

If you like this let your friends know or post it on FB, Twitter or LinkedIn

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

Author: Outdoor Recreation Insurance, Risk Management and Law

To Purchase Go Here:

Facebook Page: Outdoor Recreation & Adventure Travel Law

Email: Jim@Rec-Law.US

By Recreation Law    Rec-law@recreation-law.com

James H. Moss

#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, #Recreation-Law.com, #RiskManagement, #RockClimbing, #RockClimbingLawyer, #RopesCourse, #RopesCourseLawyer, #SkiAreas, #Skiing, #SkiLaw, #Snowboarding, #SummerCamp, #Tourism, #TravelLaw, #YouthCamps, #ZipLineLawyer, #RecreationLaw, #OutdoorLaw, #OutdoorRecreationLaw, #SkiLaw,


Johnson v. Sky Zone Indoor Trampoline Park in Springfield (N.J. Super. App. Div. 2021)

Johnson v. Sky Zone Indoor Trampoline Park in Springfield (N.J. Super. App. Div. 2021)

DAVID JOHNSON, an infant by his guardian ad litem, SHALONDA JOHNSON, and SHALONDA JOHNSON, individually, Plaintiffs-Appellants,
v.
SKY ZONE INDOOR TRAMPOLINE PARK IN SPRINGFIELD, SKY ZONE, LLC, SKY ZONE FRANCHISE GROUP, LLC, and GO AHEAD AND JUMP 4, LLC, Defendants-Respondents.

No. A-2489-20

Superior Court of New Jersey, Appellate Division

December 6, 2021

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued November 10, 2021

On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-5446-20.

Edward M. Colligan argued the cause for appellants (Colligan & Colligan attorneys; Edward M. Colligan, on the brief).

Kelly A. Waters argued the cause for respondents (Wood Smith Henning & Berman, attorneys; Kelly A. Waters, of counsel and on the brief; Jill A. Mucerino and Sean P. Shoolbraid, on the brief).

Before Judges Fuentes, Gilson, and Gooden Brown.

PER CURIAM

David Johnson, a child under the age of eighteen, was injured while visiting a trampoline park owned and operated by Sky Zone, LLC, Sky Zone Franchise Group, LLC and Go Ahead and Jump 4, LLC (collectively, Park or defendants). Shalonda Johnson, individually and as guardian ad litem of her minor son (collectively, plaintiffs), [1] filed a civil action against defendants in the Superior Court, Law Division, in Union County, seeking compensatory damages. In lieu of filing a responsive pleading, defendants moved before the Law Division to enforce an arbitration clause contained in an electronic document Johnson signed as a condition of being permitted to enter the Park. After considering the arguments of counsel and the exhibits submitted, the Law Division judge assigned to the case granted defendants’ motion to enforce the arbitration clause and dismissed the case with prejudice in an order entered on March 24, 2021.

In this appeal, plaintiffs argue the arbitration clause contained in this electronic general liability release contract is unenforceable. After reviewing the record presented to the Law Division judge, we affirm the part of the order enforcing the arbitration clause, vacate the dismissal of plaintiffs’ complaint with prejudice, and remand for the court to stay judicial proceedings related to this case pending the outcome of the arbitration.[2]

I.

A.

On July 14, 2018, ten-year-old David and his mother visited the Park. Before they were permitted entry, however, a Park employee apprised Johnson she was required to sign a “Participation Agreement, Release and Assumption of Risk” (the Agreement) on an electronic tablet. On August 15, 2018, plaintiffs again visited the Park and, while jumping on a trampoline, David seriously injured his leg.[3] The appellate record did not include evidence of whether Johnson executed a second waiver.

The Agreement contains a general release provision “intended to release and provide other benefits, legal protections and consideration” to defendants. For example, it contains an “acknowledgement of potential injuries” provision, which places patrons on notice that “participating in trampoline and other activities is inherently and obviously dangerous.” The Agreement also includes a “voluntary assumption of risk acknowledgment” provision, which informs patrons that they “are participating voluntarily at [their] own risk” and could suffer “significant bodily injuries” or “die or become paralyzed, partially or fully, through their use of the Sky Zone facility and participation in Sky Zone activities.”

Finally, the Agreement contains a “release of liability” section, which requires patrons to “forever, irrevocably and unconditionally release, waive, relinquish, discharge from liability and covenant not to sue [Sky Zone]” for

any and all claims . . . of whatever kind or nature, in law, equity or otherwise, . . . related to or arising, directly or indirectly, from [their] access to and/or use of the Sky Zone [f]acility, . . . including, without limitation, any claim for negligence, failure to warn or other omission, . . . personal injury, . . . [or] bodily harm . . . .

The enforceability of these exculpatory provisions are not part of this appeal. We express no opinion as to whether these exculpatory provisions are enforceable under our State’s common law, as expressed by our Supreme Court in Stelluti v. Casapenn Enters., LLC, 203 N.J. 286 (2010), and Hojnowski v. Vans Skate Park, 187 N.J. 323 (2006).

The dispositive issue in this appeal concerns the enforceability of the section in the Agreement entitled, in part, “arbitration of disputes.” The Agreement is presented to the patrons at a kiosk in the form of an electronic document. The patrons are expected to read it and acknowledge their consent to be bound by the terms contained therein by placing an electronic “checkmark” and entering certain personally identifying information. Defendants argue David’s mother placed an electronic checkmark where indicated, and thus acknowledged she understood and agreed “to arbitrate any dispute as set forth in this section” and waived “[her] right, and the right(s) of [her] minor child(ren) . . . to maintain a lawsuit against [defendants] . . . for any and all claims covered by this Agreement.” This section also provides the following recitation of the rights plaintiffs agreed to waive as a precondition to enter the Park and participate in the activities available therein:

By agreeing to arbitrate, I understand that I will NOT have the right to have my claim determined by a jury, and the minor child(ren) above will NOT have the right to have claim(s) determined by a jury. Reciprocally, [the Sky Zone defendants] waive their right to maintain a lawsuit against [plaintiff] . . . for any and all claims covered by this [a]greement, and they will not have the right to have their claim(s) determined by a jury. ANY DISPUTE, CLAIM OR CONTROVERSY ARISING OUT OF OR RELATING TO MY OR THE CHILD’S ACCESS TO AND/OR USE OF THE SKY ZONE PREMISES AND/OR ITS EQUIPMENT, INCLUDING THE DETERMINATION OF THE SCOPE OR APPLICABILITY OF THIS AGREEMENT TO ARBITRATE, SHALL BE BROUGHT WITHIN ONE YEAR OF ITS ACCRUAL (i.e., the date of the alleged injury) FOR AN ADULT AND WITHIN THE APPLICABLE STATUTE OF LIMITATIONS FOR A MINOR AND BE DETERMINED BY ARBITRATION IN THE COUNTY OF THE SKY ZONE FACILITY . . . BEFORE ONE ARBITRATOR. THE ARBITRATION SHALL BE ADMINISTERED BY [JUDICIAL ARBITRATION AND MEDIATION SERVICES (JAMS)] PURSUANT TO ITS RULE 16.1 EXPEDITED ARBITRATION RULES AND PROCEDURES. JUDGMENT ON THE AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. THIS CLAUSE SHALL NOT PRECLUDE PARTIES FROM SEEKING PROVISIONAL REMEDIES IN AID OF ARBITRATION FROM A COURT OF APPROPRIATE JURISDICTION. This [a]greement shall be governed by, construed and interpreted in accordance with the laws of the State of New Jersey, without regard to choice of law principles. Notwithstanding the provision with respect to the applicable substantive law, any arbitration conducted pursuant to the terms of this [a]greement shall be governed by the Federal Arbitration Act (9 U.S.C., Sec. 1-16). I understand and acknowledge that the JAMS Arbitration Rules to which I agree are available online for my review at jamsadr.com, and include JAMS Comprehensive Arbitration Rules & Procedures; Rule 16.1 Expedited Procedures; and, Policy On Consumer Minimum Standards Of Procedural Fairness.

[(Emphasis in original).]

The Agreement also contained a merger and a severability clause, in which Johnson acknowledged: “I have had sufficient opportunity to read this entire document. I have read and understood and voluntarily agree to be bound by its terms.” The clause further provided:

This [a]greement constitutes and contains the entire agreement between [Sky Zone] and [plaintiffs] relating to the . . . use of the Sky Zone Facility. There are no other agreements, oral, written, or implied, with respect to such matters. . . . If any term or provision of this [agreement] shall be held illegal, unenforceable, or in conflict with any law governing this [agreement] the validity of the remaining portions shall not be affected thereby. B.

Plaintiffs filed their personal injury complaint against defendants on August 13, 2020. The Law Division entered default against defendants on December 28, 2020, for failure to file a timely responsive pleading. On January 8, 2021, defendants’ counsel notified plaintiffs’ counsel he intended to file a motion to dismiss the complaint in lieu of an answer pursuant to Rule 4:6-2(e), based on plaintiffs’ failure to state a claim upon which relief may be granted. The attorneys thereafter entered into a Consent Agreement, stating in relevant part:

This matter having come before the [c]ourt upon the Consent of the parties, whereby the parties consent, stipulate, and agree that the default entered against Defendants, SKY ZONE FRANCHISE GROUP, LLC and GO AHEAD AND JUMP 4, LLC, be vacated and the time for Defendant to Answer or Otherwise Plead be extended until January 30, 2021 . . . .

[(Strikethrough in original).]

Plaintiff’s counsel unilaterally struck “or Otherwise Plead” from the Consent Order. On February 2, 2021, the Law Division accepted the Consent Agreement and vacated the default. Defendants moved to dismiss the complaint and compel arbitration on January 30, 2021. Defendants’ motion came for oral argument before the Law Division on March 24, 2021. Plaintiffs’ counsel argued the arbitration clause presented to Johnson was unenforceable based on both the obscure, technical language used in the document, and by presenting it as part of an electronic document in a kiosk located outside the Park’s entrance. Plaintiff’s counsel also emphasized the circumstances under which Johnson allegedly waived her son’s constitutional right to a jury trial: “[M]y client went in July [2018] to be a guest at a birthday party. The . . . defense . . . alleges that she signed this Agreement at that time and at that time, they’re saying that she signed an agreement that was good forever.”

In response, defense counsel argued Johnson did a great deal more than merely place a checkmark on a section of an electronic document. “We don’t just have the electronic signatures. We have her name, her address, her phone number, her date of birth . . . it’s not merely that you have [Janay’s] certification. You have identifiers that Skyzone would not have gotten without the plaintiff.” The reference made by defense counsel to “Janay’s certification” relates to Michael Janay, the Managing Member of defendant Go Ahead and Jump 4, LLC., who averred:

As a matter of business practice, all patrons who enter the Park for the first time are required to electronically sign a Participant Agreement, Release and Assumption of Risk . . . at a kiosk, or online, as a pre-condition to entry. Patrons are not permitted entry into the Park unless a Participation Agreement has been executed on their behalf and there are signs throughout the Park indicating the same. . . . [A]ll patrons who enter the Park are required to provide a valid email address when electronically signing the Participation Agreement.

. . . [O]nce the Participation Agreement is electronically signed, a copy of the executed Participation Agreement is sent to the email address provided by the patron.

. . . .

Based on the information provided, a copy of this Participation Agreement was sent to Shalonda Johnson’s email following Shalonda Johnson’s execution of the Participation Agreement at the Park on July 14, 2018. As indicated, Shalonda Johnson listed her son David Johnson[, ] who is the Minor[-]Plaintiff, and another minor Kevin Johnson. On that basis, Shalonda Johnson, David Johnson, and Kevin Johnson were permitted entry into the Park on July 14, 2018.

After considering the arguments of counsel, the motion judge granted defendants’ motion on March 24, 2021. The judge explained the basis of his decision in a Statement of Reasons attached to the order.

II.

Against this factual backdrop, plaintiffs argue the arbitration agreement is ambiguous and unenforceable as a matter of law. We reject these arguments and affirm the part of the Law Division’s Order upholding the enforceability of the arbitration clause. Because the Law Division’s decision to enforce this arbitration provision is purely a question of law, our standard of review is de novo. Flanzman v. Jenny Craig, Inc., 244 N.J. 119, 131 (2020); see also Kernahan v. Home Warranty Adm’r of Fla., Inc., 236 N.J. 301, 316 (2019) (“Whether a contractual arbitration provision is enforceable is a question of law, and we need not defer to the interpretative analysis of the trial . . . court[] unless we find it persuasive.”).

As a matter of public policy, our Supreme Court has upheld arbitration as a “favored means of dispute resolution.” Hojnowski, 187 N.J. at 342. The Court has consistently endorsed a “strong preference to enforce arbitration agreements, both at the state and federal level.” Hirsch v. Amper Fin. Servs., LLC, 215 N.J. 174, 186 (2013). In determining whether a valid agreement to arbitrate exists, we will apply “state contract-law principles.” Hojnowski, 187 N.J. at 342. Guided by these principles, “[a]n arbitration agreement is valid only if the parties intended to arbitrate because parties are not required ‘to arbitrate when they have not agreed to do so.'” Kernahan, 236 N.J. at 317 (quoting Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468, 478 (1989)).

Mutuality of assent is the hallmark of an enforceable contract. Thus, the initial inquiry is whether the parties actually and knowingly agreed to arbitrate their dispute. To reflect mutual assent to arbitrate, the terms of an arbitration provision must be “sufficiently clear to place a consumer on notice that he or she is waiving a constitutional or statutory right . . . .” Atalese v. U.S. Legal Servs. Grp., L.P., 219 N.J. 430, 443 (2014). “No particular form of words is necessary to accomplish a clear and unambiguous waiver of rights.” Id. at 444. If, “at least in some general and sufficiently broad way,” the language of the clause conveys arbitration is a waiver of the right to bring suit in a judicial forum, the clause will be enforced. Id. at 447. “The key . . . is clarity.” Barr v. Bishop Rosen & Co., 442 N.J.Super. 599, 607 (App. Div. 2015).

Here, plaintiffs claim the arbitration clause is ambiguous and therefore unenforceable because it contains “void, inaccurate, misleading and ambiguous language . . . .” and “confusing lower[-]case passages and all upper[-]case bold passages.” Plaintiffs argue Hojnowski, 187 N.J. at 327, “prohibits a parent of a minor child from releasing the child’s potential tort claims arising out of the use of a commercial recreational facility.” According to plaintiffs, JAMS, the named forum in the arbitration provision, is “not permitted to conduct arbitration in New Jersey” and thus the agreement should fail. We disagree.

The language in the arbitration clause states plaintiffs were “agreeing to arbitrate any dispute as set forth in this section” and were “waiving [their] right . . . to maintain a lawsuit.” It sets forth, “[b]y agreeing to arbitrate, [plaintiffs] understand that [they] will NOT have the right to have [their] claim[s] determined by a jury.” This language clearly and unambiguously puts plaintiffs on notice that they are waiving the right to a jury trial and the right to pursue their claims in a court of law. This part of the Agreement is therefore enforceable. See Flanzman, 244 N.J. at 137-38 (citing Atalese, 219 N.J. at 444-45).

Plaintiffs’ reliance on Hojnowski is misplaced. Writing for a unanimous Court, then Justice Zazzali[4] made clear “permitting arbitration of a minor’s claims is consistent with New Jersey case law discussing the enforceability of arbitration agreements that affect the rights of children.” 187 N.J. at 343. Here, plaintiff’s mother signed the Agreement that included an arbitration clause.

The unavailability of JAMS does not render the arbitration clause unenforceable. Although the parties agree JAMS is not available to arbitrate this case, the Agreement contains a severability clause that states: “If any term or provision of this [agreement] shall be held illegal, unenforceable, or in conflict with any law governing this [agreement] the validity of the remaining portions shall not be affected thereby.” Severability clauses “are indicative of the parties’ intent that the agreement as a whole survives the excision of an unenforceable provision.” Arafa v. Health Express Corp., 243 N.J. 147, 169 n.2 (2020). As the Supreme Court explained in Flanzman:

No New Jersey statutory provision or prior decision has elevated the selection of an “arbitral institution” or the designation of a “general process for selecting an arbitration mechanism or setting” to the status of essential contract terms, without which an arbitration agreement must fail.

To the contrary, the [New Jersey Arbitration Act (NJAA)] makes clear that its default provision for the selection of an arbitrator may operate in the absence of contractual terms prescribing such procedures. See N.J.S.A. 2A:23B-11(a). The NJAA reflects the Legislature’s intent that the parties’ omission of an arbitrator or arbitral organization, or their failure to set forth the method by which they will choose an arbitrator in the event of a dispute, will not preclude the enforcement of their agreement. Ibid.

[244 N.J. at 139.]

The arbitration clause at issue here must be interpreted in accordance with New Jersey law and the Federal Arbitration Act (FAA). The FAA and the NJAA provide for a court-appointed arbitrator if the designated arbitrator is unavailable. Id. at 141. The arbitration clause enables the parties to seek from a court “provisional remedies in aid of arbitration.” The language in the Agreement does not show the parties intended to forego arbitration if JAMS is unavailable. The designation of JAMS was not integral to the enforcement of the arbitration clause. Thus, the unavailability of JAMS does not invalidate the arbitration clause.

We next address plaintiffs’ arguments attacking the enforcement of the arbitration clause based on the doctrines of procedural and substantive unconscionability. In essence, plaintiffs argue requiring Johnson to read and sign an ambiguous contract of adhesion immediately before a birthday party left her with no other choice but to assent. Our Supreme Court has described the factors that constitute the doctrines of procedural and substantive unconscionability:

The defense of unconscionability, specifically, calls for a fact-sensitive analysis in each case, even when a contract of adhesion is involved. [The] Court has recognized that contracts of adhesion necessarily involve indicia of procedural unconscionability. [The Court has] identified, therefore, four factors as deserving of attention when a court is asked to declare a contract of adhesion unenforceable.

[I]n determining whether to enforce the terms of a contract of adhesion, [a court] look[s] not only to the take-it-or-leave-it nature or the standardized form of the document but also to [(1)] the subject matter of the contract, [(2)] the parties’ relative bargaining positions, [(3)] the degree of economic compulsion motivating the “adhering” party, and [(4)] the public interests affected by the contract. [Delta Funding Corp. v. Harris, 189 N.J. 28, 39-40 (2006) (internal citations omitted) (quoting Rudbart v. N. Jersey Dist. Water Supply Comm’n, 127 N.J. 344, 356 (1992)).]

Here, plaintiffs merely recycle their arguments relying on the Agreement’s alleged ambiguity without applying or analyzing the factors established by the Court in Delta Funding. We discern no basis, in fact or in law, to conclude this arbitration provision is substantively unconscionable. Finally, plaintiffs’ allegations that defendants acted intentionally and recklessly have no basis in fact and are not worthy of further comment by this court. Plaintiffs’ remaining argument lack sufficient merit to warrant discussion in a written decision. R. 2:11-3(e)(1)(E).

The order of the Law Division upholding the enforceability of defendants’ arbitration clause is affirmed. However, we vacate the part of the order that dismisses plaintiffs’ complaint with prejudice and remand the matter to the Law Division to stay any judicial proceedings related to this case pending the outcome of the arbitration. GMAC, 205 N.J. at 584 n.7; N.J.S.A. 2A:23B-7(g).

Affirmed in part, reversed in part, and remanded consistent with this opinion. We do not retain jurisdiction. ———

Notes:

[1] In the interest of clarity, we will occasionally also refer to plaintiffs by their names; we will refer to the child by his first name and his mother by her last name. No disrespect is intended.

[2] Although an order entered by the Law Division compelling or denying arbitration is appealable to this court as of right, pursuant to Rule 2:2-3(a)(3), the trial court must stay any judicial proceeding pending the outcome of the arbitration. The court may also limit the stay to arbitrable claims if other claims are severable. GMAC v. Pittella, 205 N.J. 572, 584 n.7 (2011) (citing N.J.S.A. 2A:23B-7(g)).

[3] In a certification submitted to the motion judge, Johnson averred the injury damaged “the growth plate in my son’s leg . . . and his leg did not continue to grow properly. He has undergone surgery to shorten the opposite leg and may need additional treatment in the future.”

[4] In October 2006, Governor Jon Corzine appointed Justice Zazzali to succeed Deborah T. Poritz as Chief Justice. Chief Justice Zazzali served in this capacity until June 17, 2007, when he reached the mandatory retirement age for all members of the New Jersey Judiciary.

———


One paragraph would have eliminated this lawsuit.

Badly written release and a bad attempt to tie two documents together almost cost outfitter

Hamric v. Wilderness Expeditions, Inc

State: Colorado, United States Court of Appeals, Tenth Circuit

Plaintiff: Alicia Hamric, individually, as representative of the Estate of Robert Gerald Hamric, and as next friend of Ava Hamric, a minor

Defendant: Wilderness Expeditions, Inc.

Plaintiff Claims: Negligence

Defendant Defenses: Release

Holding: For the defendant

Year: 2021

Summary

Badly written release and medical form with release language in them give the plaintiff the opportunity to win a lawsuit. However, a lawsuit where Colorado law is applied is going to support the release.

Facts

Members of the Keller Church of Christ in Keller, Texas, scheduled an outdoor excursion to Colorado, contracting with WEI for adventure planning and guide services. WEI is incorporated in Colorado and has its headquarters in Salida, Colorado. Jamie Garner served as the coordinator for the church group and the point-of-contact between the church members and WEI. The experience WEI provided included guides taking participants rappelling. WEI required all participants, before going on the outdoor excursion, to complete and initial a “Registration Form” and complete and sign a “Medical Form.”

WEI made the forms available to Mr. Garner for downloading and completion by the individual church members several months prior to the booked trip. Mr. Hamric initialed both blanks on the Registration Form and signed the Medical Form, dating it April 5, 2017. Andrew Sadousky, FNP-C, completed and signed the “Physician’s Evaluation” section of the Medical Form, certifying that Mr. Hamric was medically capable of participating in the outdoor activities listed on the form, including rappelling. Mr. Hamric’s signed forms were delivered to WEI upon the church group’s arrival in Colorado in July 2017.

After spending a night on WEI property, WEI guides took the church group, including Mr. Hamric, to a rappelling site known as “Quarry High.” Because the rappelling course had a section that WEI guides considered “scary,” the guides did not describe a particular overhang at the Quarry High site during the orientation session or before taking the church group on the rappelling course. Id. at 203.

Several members of the church group successfully descended Quarry High before Mr. Hamric attempted the rappel. As Mr. Hamric worked his way down the overhang portion of the course, he became inverted and was unable to right himself. Efforts to rescue Mr. Hamric proved unsuccessful, and he died of positional asphyxiation.

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

The Tenth Circuit Court of Appeals is an appellate court that sits in Denver. The Tenth Circuit hears cases from Colorado, Kansas, New Mexico, Oklahoma, Utah and Wyoming. The court, consequently, hears a few appeals of recreation cases.

This appealed covered four different legal issues. Three of the issues were procedural and won’t be reviewed. The fourth was the dismissal of the case by the lower-court magistrate on a motion for summary judgement because of the release.

The plaintiff argued the release should be read using Texas law because the release was read and signed in Texas.

There was no Jurisdiction and Venue Clause in the Release!

The defendant had the deceased sign two forms. One was a release, and the second was a medical form. Having a medical information formed signed is a quick give away that the defendant does not understand the legal issues involved. The defendant wrote both forms, so they conflicted with each other in some cases and attempted to tie the forms together. Neither really worked.

The plaintiff argued the forms were one because they conflicts would have made both forms basically invalid.

Further, language on the Medical Form is conflicting and ambiguous as to whether the two forms comprise a single agreement: Individuals who have not completed these forms will not be allowed to participate. I have carefully read all the sections of this agreement, understand its contents, and have initialed all sections of page 1 of this document. I have examined all the information given by myself, or my child. By the signature below, I certify that it is true and correct. Should this form and/or any wording be altered, it will not be accepted and the participant will not be allowed to participate.

Both the italicized language and the use of “forms” in the plural to describe the agreement support the conclusion that the Registration Form and the Medical Form are a single agreement. But the underlined language, using “form” in the singular, suggests the forms might constitute separate agreements. Otherwise, the singular use of “form” would suggest the unlikely result that a participant could not alter the wording of the Medical Form but could alter the wording of the Registration Form.

The plaintiff’s argument in many jurisdictions might have prevailed. However, the 10th circuit covers the outdoor recreation center of the universe, and state laws protect outdoor recreation, and outdoor recreation is a major source of income for these states. Consequently, any issues are going to lean towards protecting recreation.

After a lengthy review, the court found the forms were two different documents and ignored the medical form and the release like language in it.

We conclude, however, that this dispute of fact is not material to resolution of the primarily legal question regarding whether Mr. Hamric entered into a valid liability release with WEI.

The next issue is what law should apply to determine the validity of the release. Choice of laws is a complete course you can take in law school. I still have my Choice of Laws’ textbook after all these years because it is a complicated subject that hinges on minutia in some cases to determine what court will hear a case and what law will be applied.

The case was filed in the Federal Court covering Colorado. Since the defendant was not a Texas business or doing business in Texas, the lawsuit needed to be in the defendant’s state. Federal Court was chosen because disputes between citizens of two states should be held in a neutral court, which are the federal courts. A Texan might not feel they are getting a fair deal if they have to sue in a Colorado state court. That is called the venue. What court sitting where, will hear the case.

So, the decision on what court to sue in was somewhat limited. However, that is not the end. Once the court is picked the next argument is what law will be applied to the situation. The plaintiff argued Texas Law. Texas has stringent requirements on releases. The defendant argued Colorado law, which has much fewer requirements for releases.

Ms. Hamric further contends that under contract principles in the Restatement (Second) of Conflicts of Laws, Texas law applies because Mr. Hamric was a Texas resident who completed the Registration Form and the Medical Form while in Texas.

Here is the court’s analysis on what states laws should apply.

A more specific section of the Restatement addressing contracts lacking a choice-of-law provision provides additional guidance: (1) The rights and duties of the parties with respect to an issue in contract are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the transaction and the parties under the principles stated in § 6. (2) In the absence of an effective choice of law by the parties . . ., the contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include: (a) the place of contracting, (b) the place of negotiation of the contract, (c) the place of performance, (d) the location of the subject matter of the contract, and (e) the domicile, residence, nationality, place of incorporation and place of business of the parties. These contacts are to be evaluated according to their relative importance with respect to the particular issue.

It is not a slam dunk for Colorado law. In this case, the plaintiff made a very good argument that Texas law should apply. The deceased was a Texas resident recruited in Texas by the defendant. The release had been given to the deceased in Texas, and he signed it in Texas. If the analysis ended there, Texas law would have applied.

There was more to the investigation the court is required to do.

We conclude that, under the Restatement, a Colorado court would apply Colorado law to determine the validity and enforceability of the liability release relied upon by WEI. First looking at § 6 of the Restatement, the liability release was drafted by a Colorado corporation to cover services provided exclusively in Colorado.

This argument switched the discussion from applying Texas law to Colorado law.

Applying out-of-state law to interpret the liability release would hinder commerce, as it would require WEI and other outdoor-recreation companies to know the law of the state in which a given participant lives. Such a rule would place a significant burden on outdoor-recreation companies who depend on out-of-state tourists for revenue because it would require a company like WEI to match the various requirements of the other forty-nine states. This approach would not give WEI the benefit of having logically molded its liability release to comply with Colorado law, the law of the state where WEI does business. Furthermore, Ms. Hamric’s primary argument for applying Texas law is that Mr. Hamric signed the forms in Texas. But a rule applying out-of-state law on that basis is likely to deter WEI from furnishing the liability release until a participant enters Colorado. And, while not providing participants the forms until arrival in Colorado might lessen WEI’s liability exposure under out-of-state law, such a practice would not benefit participants because it would pressure participants into a last-minute decision regarding whether to sign the liability release after having already traveled to Colorado for the outdoor excursion.

It is significant to note that the court looked at the issue of waiting until customers arrive in the state of Colorado to have them sign the release. The court intimated that doing so would put pressure on them to sign after already traveling to Colorado. Legally, that could be argued as duress, which voids a release or contract.

It is important to remember this point. If you are marketing out of state and book travel from out of state, you need to get your release in the hands of your out of state clients when they book the travel.

In a rare statement, the court also commented on the outdoor recreation industry in Colorado and the need for releases.

Colorado also has a strong interest in this matter. Colorado has a booming outdoor-recreation industry, in the form of skiing, hiking, climbing, camping, horseback riding, and rafting excursions. Colorado relies on tax receipts from the outdoor-recreation industry. And while many out-of-state individuals partake in these activities within Colorado, they often purchase their tickets or book excursion reservations before entering Colorado. If we applied Texas law because it is the state where Mr. Hamric signed the liability release, we would essentially allow the other forty-nine states to regulate a key industry within Colorado.

So Now What?

This was a badly written set of documents. Probably the attempt was made to cover as many legal issues as possible as many was as possible. Writing to documents that both contained release language. However, as written here and in Too many contracts can void each other out; two releases signed at different times can render both release’s void.
Write too many documents with release language in them and you can void all the releases.

The second major disaster is not having a venue and jurisdiction clause. The only real attempt to win the plaintiff had, was the release did not have a venue and jurisdiction clause. Never sign any contract without one, or if signing a contract written by someone else, find out where you have to sue and what law is applied to the contract. It makes a major difference.

Sad, so much time, energy and money were wasted on poorly written contracts (Yes, a release is a contract).

Sadder yet the plaintiff died.

What do you think? Leave a comment.

Who am I

Jim Moss

I’m an attorney specializing in the legal issues of the Outdoor Recreation Industry

I represent Manufactures, Outfitters, Guides, Reps, College & University’s, Camps, Youth Programs, Adventure Programs and Businesses

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Hamric v. Wilderness Expeditions, Inc.,

ALICIA HAMRIC, individually, as representative of the Estate of Robert Gerald Hamric, and as next friend of Ava Hamric, a minor, Plaintiff – Appellant,

v.

WILDERNESS EXPEDITIONS, INC., Defendant-Appellee.

No. 20-1250

United States Court of Appeals, Tenth Circuit

July 26, 2021

Appeal from the United States District Court for the District of Colorado (D.C. No. 1:19-CV-01442-NYW)

William J. Dunleavy, Law Offices of William J. Dunleavy, Allen, Texas (Stephen A. Justino, Boesen Law, Denver, Colorado, on the briefs), for Plaintiff – Appellant.

Malcolm S. Mead (Peter C. Middleton and Jacob R. Woods with him on the brief), Hall & Evans, Denver, Colorado, for Defendant – Appellee.

Before TYMKOVICH, Chief Judge, HOLMES, and McHUGH, Circuit Judges.

McHUGH, CIRCUIT JUDGE

Gerald Hamric, a Texas resident, joined a church group on an outdoor recreation trip to Colorado. The church group employed the services of Wilderness Expeditions, Inc. (“WEI”) to arrange outdoor activities. Before the outdoor adventure commenced, WEI required each participant, including Mr. Hamric, to complete a “Registration Form” and a “Medical Form.” On the first day, WEI led the church group on a rappelling course. In attempting to complete a section of the course that required participants to rappel down an overhang, Mr. Hamric became inverted. Attempts to rescue Mr. Hamric proved unsuccessful, and he died.

Alicia Hamric, Mr. Hamric’s wife, sued WEI for negligence. WEI moved for summary judgment, asserting the Registration Form and the Medical Form contained a release of its liability for negligence. Ms. Hamric resisted WEI’s motion for summary judgment in four ways. First, Ms. Hamric moved for additional time to conduct discovery under Federal Rule of Civil Procedure 56(d). Second, Ms. Hamric moved for leave to amend her complaint to seek exemplary damages based on willful and wanton conduct. Third, Ms. Hamric filed a motion for leave to disclose an expert out of time. Fourth, Ms. Hamric argued Texas law controlled the validity of the purported liability release in the Registration Form and the Medical Form, and additionally that the release was not conspicuous as required by Texas law.

In a single order, a magistrate judge addressed each of the pending motions. The magistrate judge first declined to grant leave to amend the complaint due to Ms. Hamric’s failure to (1) sustain her burden under Federal Rule of Civil Procedure 16(b) because the deadline for amendments had passed; and (2) make out a prima facie case of willful and wanton conduct as required by Colorado law to plead a claim seeking exemplary damages. Next, the magistrate judge concluded WEI was entitled to summary judgment, holding the liability release was valid under both Colorado law and Texas law. Finally, the magistrate judge denied as moot Ms. Hamric’s motions for additional discovery and to disclose an expert out of time.

We affirm the magistrate judge’s rulings. As to Ms. Hamric’s motion for leave to amend, a party seeking to amend a pleading after the deadline in a scheduling order for amendment must satisfy the standard set out by Federal Rule of Civil Procedure 16(b). But Ms. Hamric concedes she has never sought to satisfy the Rule 16(b) standard. Turning to the discovery motions, where this case hinges on the validity of the liability release and all facts necessary to this primarily legal issue appear in the record, we reject Ms. Hamric’s contentions that further discovery or leave to belatedly disclose an expert were warranted. Finally, while the magistrate judge’s summary judgment analysis was not free of error, we apply de novo review to that ruling. And, under de novo review, we conclude (1) relying on contract law to resolve the choice-of-law issue, as argued for by the parties, Colorado law, rather than Texas law, controls whether the Registration Form and the Medical Form contain a valid liability release; and (2) the forms contain a valid release for negligence by WEI, barring Ms. Hamric’s action.

I. BACKGROUND

A. The Rappelling Excursion, Mr. Hamric’s Death, and the Liability Release

Members of the Keller Church of Christ in Keller, Texas, scheduled an outdoor excursion to Colorado, contracting with WEI for adventure planning and guide services. WEI is incorporated in Colorado and has its headquarters in Salida, Colorado. Jamie Garner served as the coordinator for the church group and the point-of-contact between the church members and WEI. The experience WEI provided included guides taking participants rappelling. WEI required all participants, before going on the outdoor excursion, to complete and initial a “Registration Form” and complete and sign a “Medical Form.”[ 1]

The Registration Form has three sections. The first section requires the participant to provide personally identifiable information and contact information. The second section is entitled “Release of Liability & User Indemnity Agreement for Wilderness Expeditions, Inc.” App. Vol. I at 57, 83.[ 2] The text under this bold and underlined header reads, in full: I hereby acknowledge that I, or my child, have voluntarily agreed to participate in the activities outfitted by Wilderness Expeditions, Inc. I understand that the activities and all other hazards and exposures connected with the activities conducted in the outdoors do involve risk and I am cognizant of the risks and dangers inherent with the activities. I (or my child) and (is) fully capable of participating in the activities contracted for and willingly assume the risk of injury as my responsibility whether it is obvious or not. I understand and agree that any bodily injury, death, or loss of personal property and expenses thereof as a result of any, or my child’s, negligence in any scheduled or unscheduled activities associated with Wilderness Expeditions, Inc. are my responsibilities. I understand that accidents or illness can occur in remote places without medical facilities, physicians, or surgeons, and be exposed to temperature extremes or inclement weather. I further agree and understand that any route or activity chosen may not be of minimum risk, but may have been chosen for its interest and challenge. I agree to defend, indemnify, and hold harmless Wilderness Expeditions. Inc., the USDA Forest Service, Colorado Parks and Recreation Department, and any and all state or government agencies whose property the activities may be conducted on, and all of their officers, members, affiliated organizations, agents, or employees for any injury or death caused by or resulting from my or my child’s participation in the activities, scheduled and unscheduled, whether or not such injury or death was caused by my, or their, negligence or from any other cause. By signing my initials below, I certify this is a release of liability.

Id.[ 3] Immediately after this paragraph, the form reads, “Adult participant or parent/guardian initial here:(Initials).” Id. The third and final section of the form is entitled: “Adult Agreement or Parent’s/Guardian Agreement for Wilderness Expeditions, Inc.” Id. The text of this provision states: I understand the nature of the activities may involve the physical demands of hiking over rough terrain, backpacking personal and crew gear, and voluntarily climbing mountains to 14, 433 feet in elevation. Having the assurance of my, or my child’s, good health through a current physical examination by a medical doctor, I hereby give consent for me, or my child, to participate in the activities outfitted by Wilderness Expeditions, Inc. I have included in this form all necessary medical information about myself, or my child, that should be known by the leadership of the program. I assure my, or my child’s, cooperation and assume responsibility for my, or my child’s, actions. I understand that I am responsible for any medical expenses incurred in the event of needed medical attention for myself, or my child. I further agree that I will be financially responsible to repair or replace all items lost or abused by myself or my child. In the event of an emergency, I authorize my consent to any X-ray examination, medica1, dental, or surgical diagnosis, treatment, and/or hospital care advised and supervised by a physician, surgeon, or dentist licensed to practice. I understand that the designated next of kin will be contacted as soon as possible. By signing my initials below, I certify this is a release of liability.

Id. And, as with the second section, the form then provides a line for the participant or the parent or guardian of the participant to initial.

The Medical Form has four sections. The first section seeks information about the participant. The second section is entitled “Medical History.” Initially, this section asks the participant if he suffers from a list of medical conditions, including allergies, asthma, and heart trouble. If the participant does suffer from any medical conditions, the form requests that the participant explain the affirmative answer. Thereafter, the section includes the following language: Note: The staff will not administer any medications, including aspirin, Tums, Tylenol, etc. If you need any over the counter medications, you must provide them. Be sure to tell your staff members what medications you are taking. List any medications that you will have with you: Note about food: Trail food is by necessity a high carbohydrate, high caloric diet. It is high in wheat, milk products, sugar, com syrup, and artificial coloring/flavoring. If these food products cause a problem to your diet, you will be responsible for providing any appropriate substitutions and advise the staff upon arrival. * Doctor’s signature is required to participate. No other form can be substituted. By signing below a physician is verifying the medical history given above and approving this individual to participate.

Id. at 58, 84. The form then includes a section titled “Physician’s Evaluation.” Id. This section seeks certification of the participant’s medical capability to partake in the outdoor activities and asks the physician for contact information. It reads: The applicant will be taking part in strenuous outdoor activities that may include: backpacking, rappelling, hiking at 8-12, 000 feet elevation, and an all day summit climb up to 14, 433 feet elevation. This will include high altitude, extreme weather, cold water, exposure, fatigue, and remote conditions where medical care cannot be assured. The applicant is approved for participation. Physician Signature: ___ Date: ___ Physician Name: ___ Phone Number: ___ Office Address: ___ City: ___ State: ___ Zip: ___

Id. The final section of the form is entitled “Participant or Parent/Guardian Signature – All sections of these forms must be initialed or signed.” Id. The text of the section reads: Individuals who have not completed these forms will not be allowed to participate. I have carefully read all the sections of this agreement, understand its contents, and have initialed all sections of page 1 of this document[.] I have examined all the information given by myself, or my child. By the signature below, I certify that it is true and correct. Should this form and/or any wording be altered, it will not be accepted and the participant will not be allowed to participate.

Id.

WEI made the forms available to Mr. Garner for downloading and completion by the individual church members several months prior to the booked trip. Mr. Hamric initialed both blanks on the Registration Form and signed the Medical Form, dating it April 5, 2017. Andrew Sadousky, FNP-C, completed and signed the “Physician’s Evaluation” section of the Medical Form, certifying that Mr. Hamric was medically capable of participating in the outdoor activities listed on the form, including rappelling. Mr. Hamric’s signed forms were delivered to WEI upon the church group’s arrival in Colorado in July 2017.

After spending a night on WEI property, WEI guides took the church group, including Mr. Hamric, to a rappelling site known as “Quarry High.” Because the rappelling course had a section that WEI guides considered “scary,” the guides did not describe a particular overhang at the Quarry High site during the orientation session or before taking the church group on the rappelling course. Id. at 203.

Several members of the church group successfully descended Quarry High before Mr. Hamric attempted the rappel. As Mr. Hamric worked his way down the overhang portion of the course, he became inverted and was unable to right himself. Efforts to rescue Mr. Hamric proved unsuccessful, and he died of positional asphyxiation.

B. Procedural History

In the District of Colorado, Ms. Hamric commenced a negligence action against WEI, sounding in diversity jurisdiction. As a matter of right, Ms. Hamric amended her complaint shortly thereafter. See Fed. R. Civ. P. 15(a)(1)(A) (permitting plaintiff to file amended complaint “as a matter of course” within twenty-one days of serving original complaint). The parties, pursuant to 28 U.S.C. § 636(c), consented to a magistrate judge presiding over the case. WEI answered Ms. Hamric’s First Amended Complaint, in part raising the following affirmative defense: “Decedent Gerald Hamric executed a valid and enforceable liability release. Decedent Gerald Hamric also executed a medical evaluation form which Defendant relied upon. The execution of these document [sic] bars or reduces [Ms. Hamric’s] potential recovery.” Id. at 31-32.

The magistrate judge entered a Scheduling Order adopting several deadlines: (1) August 31, 2019, for amendments to the pleadings; (2) January 31, 2020, for Ms. Hamric to designate her expert witnesses; and (3) April 10, 2020, for the close of all discovery. The Scheduling Order also noted WEI’s defense based on the purported liability release, stating “[t]he parties anticipate that mediation . . . may be useful to settle or resolve the case after meaningful discovery and summary judgment briefing on the issue of the validity and enforceability of the liability release.” Id. at 38 (emphasis added). Finally, the Scheduling Order concluded with language reminding the parties that the deadlines adopted by the order “may be altered or amended only upon a showing of good cause.” Id. at 42 (italicized emphasis added).

In November 2019, after the deadline for amendments to the pleadings but before the discovery deadlines, WEI moved for summary judgment based on its affirmative defense that both the Registration Form and Medical Form contained a liability release that barred Ms. Hamric’s negligence claim. In support of its motion, WEI contended Colorado law controlled the interpretation and validity of the liability release. Ms. Hamric opposed summary judgment, arguing that because Mr. Hamric completed the forms in Texas, a Colorado court would apply Texas law and that, under Texas law, the liability release was not adequately conspicuous to be valid.

Ms. Hamric also sought to avoid disposition of WEI’s motion for summary judgment and dismissal of her action by filing three motions of her own. First, Ms. Hamric moved under Federal Rule of Civil Procedure 56(d) for additional time to conduct discovery, contending further discovery would, among other things, reveal details about Mr. Hamric’s completion of the forms and whether Colorado or Texas law should control the interpretation and validity of the purported liability release. Second, in February 2020, Ms. Hamric moved pursuant to Federal Rule of Civil Procedure 15(a), for leave to file a second amended complaint to seek exemplary damages under § 13-21-102 of the Colorado Revised Statutes based on new allegations of WEI’s willful and wanton conduct.[ 4] Ms. Hamric’s motion to amend, however, did not cite Federal Rule Civil Procedure 16(b) or seek leave to amend the August 31, 2019, Scheduling Order deadline for amendments to the pleadings. Third, in March 2020, Ms. Hamric moved for leave to disclose out of time a “‘Rappelling/Recreational Activities Safety’ expert.” App. Vol. II at 37. Ms. Hamric contended the expert’s opinions about the training, knowledge, and rescue efforts of the WEI guides supported her contention in her proposed second amended complaint that WEI acted in a willful and wanton manner.

The magistrate judge disposed of the four pending motions in a single order. Starting with Ms. Hamric’s motion for leave to amend her complaint, the magistrate judge concluded Ms. Hamric (1) “failed to meet her burden under Rule 16(b) of establishing good cause to generally amend the operative pleading” and (2) had not made out a prima facie case of wanton and willful conduct. Id. at 94. The magistrate judge then turned to WEI’s motion for summary judgment. The magistrate judge concluded WEI’s affirmative defense raised an issue sounding in contract law such that principles of contract law controlled the choice-of-law analysis. Applying contract principles, the magistrate judge determined that although Texas law imposed a slightly more rigorous standard for enforcing a liability release, the difference between Texas law and Colorado law was not outcome-determinative and the court could, therefore, apply Colorado law. The magistrate judge read Colorado law as holding that a liability release is valid and enforceable “so long as the intent of the parties was to extinguish liability and this intent was clearly and unambiguously expressed.” Id. at 106 (citing Heil Valley Ranch v. Simkin, 784 P.2d 781, 785 (Colo. 1989)). Applying this standard, the magistrate judge held the liability release used clear and simple terms such that, even though Mr. Hamric was inexperienced at rappelling, the release was valid and foreclosed Ms. Hamric’s negligence claim. Therefore, the magistrate judge granted WEI’s motion for summary judgment. And, having denied Ms. Hamric’s motion for leave to amend and granted WEI’s motion for summary judgment, the magistrate judge denied both of Ms. Hamric’s discovery motions as moot.

Ms. Hamric moved for reconsideration, which the magistrate judge denied. Ms. Hamric timely appealed.

II. DISCUSSION

On appeal, Ms. Hamric contests the denial of her motion for leave to amend and the grant of summary judgment to WEI. Ms. Hamric also tacitly challenges the magistrate judge’s denial of her discovery motions. We commence our analysis with Ms. Hamric’s motion for leave to amend, holding the magistrate judge did not abuse her discretion in denying the motion where the motion was filed after the Scheduling Order’s deadline for amendments to pleadings and Ms. Hamric did not attempt to satisfy Federal Rule of Civil Procedure 16(b)’s standard for amending a deadline in a scheduling order. Next, we discuss Ms. Hamric’s two discovery motions, concluding the magistrate judge did not abuse her discretion by denying the motions because (1) WEI’s motion for summary judgment presented a largely legal issue on which all facts necessary for resolution already appeared in the record; and (2) consideration of the proposed expert’s opinions potentially capable of supporting allegations of willful and wanton conduct was mooted upon Ms. Hamric failing to satisfy Rule 16(b)’s standard for amending her complaint to allege such conduct. Finally, we analyze WEI’s motion for summary judgment. Although the magistrate judge’s decision was not free of error, the errors are not outcome determinative on appeal given our de novo standard of review. Exercising de novo review, we conclude Colorado law governs the validity of the liability release. And considering the entirety of both the Registration Form and the Medical Form, we conclude the liability release satisfies the factors in Colorado law for enforceability. Therefore, we affirm the magistrate judge’s grant of summary judgment.

A. Ms. Hamric’s Motion for Leave to Amend

1. Standard of Review

“We review for abuse of discretion a district court’s denial of a motion to amend a complaint after the scheduling order’s deadline for amendments has passed.” Birch v. Polaris Indus., Inc., 812 F.3d 1238, 1247 (10th Cir. 2015). “An abuse of discretion occurs where the district court clearly erred or ventured beyond the limits of permissible choice under the circumstances.” Id. (quotation marks omitted). “A district court also abuses its discretion when it issues an arbitrary, capricious, whimsical or manifestly unreasonable judgment.” Id. (internal quotation marks omitted).

2. Analysis

“A party seeking leave to amend after a scheduling order deadline must satisfy both the [Federal Rule of Civil Procedure] 16(b) and Rule 15(a) standards.” Tesone v. Empire Mktg. Strategies, 942 F.3d 979, 989 (10th Cir. 2019). Under the former of those two rules, “[a] schedule may be modified only for good cause and with the judge’s consent.” Fed.R.Civ.P. 16(b)(4). To satisfy this standard a movant must show that “the scheduling deadlines cannot be met despite the movant’s diligent efforts.” Gorsuch, Ltd., B.C. v. Wells Fargo Nat’l Bank Ass’n, 771 F.3d 1230, 1240 (10th Cir. 2014) (internal quotation marks omitted). We have observed the “good cause” standard for amending deadlines in a scheduling order is “arguably [a] more stringent standard than the standards for amending a pleading under Rule 15.” Bylin v. Billings, 568 F.3d 1224, 1231 (10th Cir. 2009).

In moving for leave to file a second amended complaint, Ms. Hamric discussed Federal Rule of Civil Procedure 15 and how Colorado law did not permit a plaintiff to seek exemplary damages until after commencement of discovery. But Ms. Hamric did not advance an argument for amending the Scheduling Order as required by Rule 16(b). Nor does Ms. Hamric cite Rule 16(b) in her briefs on appeal, much less explain how she satisfied, in her papers before the magistrate judge, the Rule 16(b) standard. In fact, Ms. Hamric conceded at oral argument that, before the magistrate judge, she sought only to amend her complaint and “did not seek to amend the scheduling order.” Oral Argument at 7:42-7:46; see also id. at 7:31-9:10. Ms. Hamric also conceded at oral argument that she had not advanced an argument on appeal regarding satisfying Rule 16(b).

This omission by Ms. Hamric is fatal to her argument. Specifically, when a party seeking to amend her complaint fails, after the deadline for amendment in a scheduling order, to present a good cause argument under Rule 16(b), a lower court does not abuse its discretion by denying leave to amend. Husky Ventures, Inc. v. B55 Invs. Ltd., 911 F.3d 1000, 1019-20 (10th Cir. 2018). Even if a party who belatedly moves for leave to amend a pleading satisfies Rule 15(a)’s standard, the party must also obtain leave to amend the scheduling order. But Rule 16(b) imposes a higher standard for amending a deadline in a scheduling order than Rule 15(a) imposes for obtaining leave to amend a complaint. Thus, as Husky Ventures suggests, a party’s ability to satisfy the Rule 15(a) standard does not necessitate the conclusion that the party could also satisfy the Rule 16(b) standard. Id. at 1020; see also Bylin, 568 F.3d at 1231 (observing that Rule 16(b) imposes “an arguably more stringent standard than the standards for amending a pleading under Rule 15”). Accordingly, where Ms. Hamric did not attempt to satisfy the Rule 16(b) standard for amending the Scheduling Order, we affirm the district court’s denial of Ms. Hamric’s motion for leave to amend.

B. Ms. Hamric’s Discovery Motions

After WEI moved for summary judgment, Ms. Hamric filed a pair of discovery-related motions-a motion for additional discovery before disposition of WEI’s motion for summary judgment and a motion to disclose an expert out of time. The magistrate judge denied both motions as moot. After stating the applicable standard of review, we consider each motion, affirming the magistrate judge’s rulings.

1. Standard of Review

We review the denial of a Federal Rule of Civil Procedure 56(d) motion for additional discovery for an abuse of discretion. Ellis v. J.R.’s Country Stores, Inc., 779 F.3d 1184, 1192 (10th Cir. 2015). Likewise, we review the denial of a motion to revisit a scheduling order and allow the disclosure of an expert out of time for an abuse of discretion. Rimbert v. Eli Lilly & Co., 647 F.3d 1247, 1253-54 (10th Cir. 2011). “We will find an abuse of discretion when the district court bases its ruling on an erroneous conclusion of law or relies on clearly erroneous fact findings.” Ellis, 779 F.3d at 1192 (internal quotation marks omitted). “A finding of fact is clearly erroneous if it is without factual support in the record or if, after reviewing all of the evidence, we are left with the definite and firm conviction that a mistake has been made.” Id. (quotation marks omitted).

2. Analysis

a. Motion for additional discovery

Before the April 10, 2020, deadline for discovery, WEI filed its motion for summary judgment based on the liability release. Ms. Hamric moved under Federal Rule of Civil Procedure 56(d) to delay resolution of WEI’s motion for summary judgment, asserting additional discovery would allow her to learn further information about the liability release. The magistrate judge denied the motion as moot, concluding further discovery was not needed to assess the validity of the liability release.

Under Rule 56(d), a party opposing a motion for summary judgment may seek additional time for discovery. To do so, a party must “submit an affidavit (1) identifying the probable facts that are unavailable, (2) stating why these facts cannot be presented without additional time, (3) identifying past steps to obtain evidence of these facts, and (4) stating how additional time would allow for rebuttal of the adversary’s argument for summary judgment.” Cerveny v. Aventis, Inc., 855 F.3d 1091, 1110 (10th Cir. 2017). “[S]ummary judgment [should] be refused where the nonmoving party has not had the opportunity to discover information that is essential to his opposition.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 n.5 (1986). “Requests for further discovery should ordinarily be treated liberally.” Cerveny, 855 F.3d at 1110. “But relief under Rule 56(d) is not automatic.” Id. And Rule 56’s provision allowing a non-moving party to seek additional discovery before disposition on a motion for summary judgment “is not a license for a fishing expedition.” Lewis v. City of Ft. Collins, 903 F.2d 752, 759 (10th Cir. 1990); see also Ellis, 779 F.3d at 1207-08 (affirming denial of Rule 56(d) motion where party “required no further discovery to respond to the . . . summary-judgment motion” and additional discovery sought was speculative).

Through the affidavit supporting her Rule 56(d) motion, Ms. Hamric sought four areas of additional discovery. First, she sought discovery on “the drafting of the purported liability release forms” and the meaning of language on the forms. App. Vol. I at 94. Regardless of whether Colorado or Texas law applies, the four corners of the Registration Form and Medical Form, not WEI’s thought process when drafting the forms, controls the validity of the liability release. See B & B Livery, Inc. v. Riehl, 960 P.2d 134, 138 (Colo. 1998) (requiring that intent of parties to extinguish liability be “clearly and unambiguously expressed” (quoting Heil Valley Ranch, 784 P.2d at 785)); Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 508 (Tex. 1993) (“[A] party seeking indemnity from the consequences of that party’s own negligence must express that intent in specific terms within the four corners of the contract.”). Therefore, the drafting process employed by WEI and its understanding of the language of the forms is not relevant to whether the forms included sufficiently specific language to foreclose a claim for negligence.

Second, Ms. Hamric sought to discover information about WEI’s process for distributing the forms and how the church group members, including Mr. Hamric, completed and submitted the forms. Ms. Hamric also requested time to discover matters related to the choice-of-law issue, including the “place of contracting,” “the place of performance,” and “the domicile, residence nationality, place of incorporation and place of business of the parties.” App. Vol. I at 95. Information on these matters, however, was known to Ms. Hamric prior to the magistrate judge’s summary judgment ruling. For instance, the record shows Mr. Hamric received and completed the forms in Texas a few months before the WEI-led excursion and that the church group provided WEI the completed forms upon its arrival at WEI’s location in Colorado. Accordingly, there was no need to delay summary judgment proceedings to discover matters already known to the parties. See Ellis, 779 F.3d at 1207-08.

Third, Ms. Hamric, as part of a challenge to the authenticity of the forms, initially sought to discover information regarding anomalies and alterations on the forms attached to WEI’s motion for summary judgment, as well as evidence of fraud by WEI. Subsequent to Ms. Hamric filing her motion for additional discovery, WEI provided her the original forms signed by Mr. Hamric, and she withdrew her challenge to the authenticity of the forms. Accordingly, by the time the district court ruled on WEI’s motion for summary judgment and Ms. Hamric’s motion for additional discovery, the requests for discovery regarding the authenticity of the forms was moot.

Fourth, Ms. Hamric sought time to discover “evidence of willful and wanton conduct by Defendant WEI and/or by its agents, servants and/or employees.” Id. Discovery on this matter, however, became moot with the magistrate judge’s denial of Ms. Hamric’s motion for leave to amend her complaint to seek exemplary damages and add allegations of willful and wanton conduct, a ruling we affirm. See supra at 12-14, Section II(A).

Having considered each additional discovery request advanced by Ms. Hamric, we conclude the magistrate judge did not abuse her discretion by ruling on WEI’s motion for summary judgment without permitting Ms. Hamric additional time for discovery. Accordingly, we affirm the magistrate judge’s denial of Ms. Hamric’s Rule 56(d) motion.

b. Motion for leave to disclose expert out of time

Ms. Hamric moved for leave to disclose a “‘Rappelling/Recreational Activities Safety’ expert” out of time. App. Vol. II at 37. Attached to the motion was a Federal Rule of Civil Procedure 26(a)(2) expert disclosure, offering opinions about the alleged negligent and/or willful and wanton conduct of WEI and its employees. The magistrate judge denied this motion as moot. Considering the magistrate judge’s other rulings and our holdings on appeal, we conclude the magistrate judge did not abuse her discretion. Any opinion offered by the expert as to willful and wanton conduct lost relevance with the denial of Ms. Hamric’s motion for leave to amend her complaint to add allegations of willful and wanton conduct and to seek exemplary damages-a ruling we affirmed supra at 12-14, Section II(A). And the expert’s opinion about WEI acting in a negligent manner lost relevance upon the magistrate judge concluding the liability release was valid and barred Ms. Hamric from proceeding on her negligence claim-a ruling we affirm infra at 19-37, Section II(C). Accordingly, we affirm the magistrate judge’s denial of Ms. Hamric’s motion for leave to disclose an expert out of time.

C. WEI’s Motion for Summary Judgment

After stating our standard of review, we discuss Ms. Hamric’s contentions that the magistrate judge (1) applied the wrong standard when considering WEI’s affirmative defense based on the liability release and (2) resolved issues of disputed fact in favor of WEI. Although we conclude the magistrate judge’s ruling is not free of error, the errors do not bind us because we need not repeat them when conducting our de novo review of the grant of summary judgment. Thus, we proceed to consider the validity of the liability release. In conducting our analysis, we hold that, where the parties contend contract principles provide the framework for our choice-of-law analysis, Colorado law governs the validity of the release.[ 5] And we conclude that, under Colorado law, the liability release is valid and enforceable so as to foreclose Ms. Hamric’s negligence claim. Therefore, we affirm the magistrate judge’s grant of summary judgment.

1. Standard of Review

We review the district court’s rulings on summary judgment de novo. Universal Underwriters Ins. Co. v. Winton, 818 F.3d 1103, 1105 (10th Cir. 2016). Summary judgment is appropriate if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); accord Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Anderson, 477 U.S. at 250. “In reviewing a grant of summary judgment, we need not defer to factual findings rendered by the district court.” Lincoln v. BNSF Ry. Co., 900 F.3d 1166, 1180 (10th Cir. 2018) (internal quotation marks omitted). For purposes of summary judgment, “[t]he nonmoving party is entitled to all reasonable inferences from the record.” Water Pik, Inc. v. Med-Sys., Inc., 726 F.3d 1136, 1143 (10th Cir. 2013). Finally, “we can affirm on any ground supported by the record, so long as the appellant has had a fair opportunity to address that ground.” Alpine Bank v. Hubbell, 555 F.3d 1097, 1108 (10th Cir. 2009) (internal quotation marks omitted).

2. Alleged Errors by the Magistrate Judge

Ms. Hamric argues the magistrate judge (1) applied the incorrect standard when considering WEI’s affirmative defense and (2) resolved disputed issues of material fact in favor of WEI. We consider each contention in turn.

a. Standard applicable to affirmative defenses

Ms. Hamric contends the magistrate judge announced an incorrect standard of review and impermissibly shifted evidentiary burdens onto her, as the non-moving party. The disputed language in the magistrate judge’s opinion states: When, as here, a defendant moves for summary judgment to test an affirmative defense, it is the defendant’s burden to demonstrate the absence of any disputed fact as to the affirmative defense asserted. See Helm v. Kansas, 656 F.3d 1277, 1284 (10th Cir. 2011). Once the defendant meets its initial burden, the burden shifts to the nonmovant to put forth sufficient evidence to demonstrate the essential elements of her claim(s), see Anderson, 477 U.S. at 248; Simms v. Okla. ex rel. Dep’t of Mental Health & Substance Abuse Servs., 165 F.3d 1321, 1326 (10th Cir. 1999), and to “demonstrate with specificity the existence of a disputed fact” as to the defendant’s affirmative defense, see Hutchinson v. Pfeil, 105 F.3d 562, 564 (10th Cir. 1997).

App. Vol. II at 100 (emphasis added). Ms. Hamric takes issue with the emphasized phrase.

Nothing on the pages the magistrate judge cited from Anderson and Simms requires a plaintiff responding to a motion for summary judgment based on an affirmative defense to identify evidence supporting each element of her claim. See Anderson, 477 U.S. at 248 (requiring nonmoving party in face of “properly supported motion for summary judgment” to “‘set forth specific facts showing that there is a genuine issue for trial'” (quoting First Nat’l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 288 (1968))); Simms, 165 F.3d at 1326, 1328 (discussing summary judgment standard in context of employment discrimination claim and burden-shifting framework from McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973)). In fact, the standard announced by the magistrate judge would unnecessarily require a plaintiff, in response to a motion for summary judgment based on an affirmative defense, to identify evidence supporting elements of her claim never drawn into question by the defendant. Placing such a burden on a plaintiff is all the more problematic where, as here, the parties contemplated a bifurcated summary judgment process initially focused on the validity of the liability release, and WEI filed its motion for summary judgment before the close of discovery.

We have previously stated that a district court errs by requiring a party opposing summary judgment based on an affirmative defense to “establish at least an inference of the existence of each element essential to the case.” Johnson v. Riddle, 443 F.3d 723, 724 n.1 (10th Cir. 2006) (quotation marks omitted). We reaffirm that conclusion today. To defeat a motion for summary judgment, a plaintiff, upon the defendant raising and supporting an affirmative defense, need only identify a disputed material fact relative to the affirmative defense. Id.; Hutchinson, 105 F.3d at 564; see also Leone v. Owsley, 810 F.3d 1149, 1153-54 (10th Cir. 2015) (discussing defendant’s burden for obtaining summary judgment based on an affirmative defense). Only if the defendant also challenges an element of the plaintiff’s claim does the plaintiff bear the burden of coming forward with some evidence in support of that element. See Tesone, 942 F.3d at 994 (“The party moving for summary judgment bears the initial burden of showing an absence of any issues of material fact. Where . . . the burden of persuasion at trial would be on the nonmoving party, the movant may carry its initial burden by providing ‘affirmative evidence that negates an essential element of the nonmoving party’s claim’ or by ‘demonstrating to the Court that the nonmoving party’s evidence is insufficient to establish an essential element of the nonmoving party’s claim.’ If the movant makes this showing, the burden then shifts to the nonmovant to ‘set forth specific facts showing that there is a genuine issue for trial.'” (first quoting Celotex Corp., 477 U.S. at 330, then quoting Anderson, 477 U.S. at 250)); Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670-71 (10th Cir. 1998) (if summary judgment movant carries its initial burden of showing a lack of evidence in support of an essential element of plaintiff’s claim, “the burden shifts to the nonmovant to go beyond the pleadings and set forth specific facts” supporting the essential element (internal quotation marks omitted)).

The magistrate judge’s erroneous statement regarding Ms. Hamric’s burden, however, does not foreclose our ability to further review the grant of summary judgment. Rather, in accord with the applicable de novo standard of review, we review WEI’s motion for summary judgment under the standard that “should have been applied by the [magistrate judge].”[ 6] Nance v. Sun Life Assurance Co. of Can., 294 F.3d 1263, 1266 (10th Cir. 2002) (quotation marks omitted).

b. Resolution of disputed issues of material fact

Ms. Hamric contends the magistrate judge impermissibly resolved two issues of disputed fact in WEI’s favor. We discuss each asserted factual issue in turn, concluding factual disputes existed and the magistrate judge incorrectly resolved one of the disputes against Ms. Hamric. However, even if this factual dispute were material, we may proceed to analyze the validity of the liability release after resolving the dispute in Ms. Hamric’s favor. See Lincoln, 900 F.3d at 1180 (“In reviewing a grant of summary judgment, we need not defer to factual findings rendered by the district court.” (internal quotation marks omitted)).

i. Language of Registration Form and Medical Form

In moving for summary judgment, WEI’s brief contained edited versions of the Registration Form and Medical Form that focused the reader’s attention on the language most pertinent to Mr. Hamric’s participation in the outdoor excursion and the release of liability. For instance, the version of the forms in WEI’s brief left out phrases such as “(or my child)” and the accompanying properly-tensed-and-conjugated verb that would apply if the forms were completed by a parent or guardian of the participant, rather than by the participant himself. Compare App. Vol. I at 46, with id. at 57, 83.

Although WEI and Ms. Hamric attached full versions of the forms to their papers on the motion for summary judgment, the magistrate judge’s quotation of the language in the forms mirrored that which appeared in WEI’s brief. Ms. Hamric contends the magistrate judge, in not quoting the full forms, resolved a dispute of fact regarding the language of the forms in WEI’s favor. It is not uncommon for a court to focus on the pertinent language of a contract or liability release when putting forth its analysis. In this case, Ms. Hamric claims the forms should be reviewed on the whole. Although there is no indication the magistrate judge did not review the forms in their entirety, despite her use of incomplete quotations, we attach full versions of the Registration Form and Medical Form completed by Mr. Hamric as an appendix to this opinion. And we consider all the language on the forms when assessing whether the forms contain a valid liability release.

ii. Registration Form and Medical Form as single form

The magistrate judge viewed the Registration Form and the Medical Form as a single, “two-page agreement.” App. Vol. II at 103; see also id. at 101 (“Adult customers are required to execute a two-page agreement with WEI before they are permitted to participate in WEI-sponsored activities. The first page of the agreement is a ‘Registration Form’, followed by a ‘Medical Form’ on page two.”). Ms. Hamric contends the two forms are separate agreements, not a single agreement. While a jury could have concluded that the Registration Form and Medical Form were separate agreements, this dispute of fact is not material given applicable law regarding the construction of agreements that are related and simultaneously executed.

It is clear from the record that a participant needed to complete both forms before partaking in the WEI-lead excursion. Further, while the Medical Form required a signature and a date, the Registration Form required only that a participant place his initials on certain lines, suggesting the forms were part of a single agreement. However, the forms do not contain page numbers to indicate they are part of a single agreement. Further, language on the Medical Form is conflicting and ambiguous as to whether the two forms comprise a single agreement: Individuals who have not completed these forms will not be allowed to participate. I have carefully read all the sections of this agreement, understand its contents, and have initialed all sections of page 1 of this document. I have examined all the information given by myself, or my child. By the signature below, I certify that it is true and correct. Should this form and/or any wording be altered, it will not be accepted and the participant will not be allowed to participate.

App., Vol. I at 58, 84 (emphases added). Both the italicized language and the use of “forms” in the plural to describe the agreement support the conclusion that the Registration Form and the Medical Form are a single agreement. But the underlined language, using “form” in the singular, suggests the forms might constitute separate agreements. Otherwise the singular use of “form” would suggest the unlikely result that a participant could not alter the wording of the Medical Form but could alter the wording of the Registration Form.[ 7] Accord Navajo Nation v. Dalley, 896 F.3d 1196, 1213 (10th Cir. 2018) (describing the cannon of expressio unius est exclusio alterius as providing “that the ‘expression of one item of an associated group or series excludes another left unmentioned'” and that “the enumeration of certain things in a statute suggests that the legislature had no intent of including things not listed or embraced.” (quoting NLRB v. SW Gen., Inc., 137 S.Ct. 929, 940 (2017))). Thus, a reasonable jury could have found the Registration Form and the Medical Form were separate agreements.

We conclude, however, that this dispute of fact is not material to resolution of the primarily legal question regarding whether Mr. Hamric entered into a valid liability release with WEI. Under Colorado law, it is well established that a court may, and often must, construe two related agreements pertaining to the same subject matter as a single agreement. See Bledsoe v. Hill, 747 P.2d 10, 12 (Colo.App. 1987) (“If a simultaneously executed agreement between the same parties, relating to the same subject matter, is contained in more than one instrument, the documents must be construed together to determine intent as though the entire agreement were contained in a single document. Although it is desirable for the documents to refer to each other, there is no requirement that they do so.” (citing In re Application for Water Rights v. N. Colo. Water Conservancy Dist., 677 P.2d 320 (Colo. 1984); Harty v. Hoerner, 463 P.2d 313 (Colo. 1969); Westminster v. Skyline Vista Dev. Co., 431 P.2d 26 (Colo. 1967))).[ 8] Thus, although a jury could conclude the Registration Form and Medical Form technically constitute separate agreements, we consider the agreements together when determining if Mr. Hamric released WEI for its negligent acts.

3. Choice-of-Law Analysis

At the heart of WEI’s motion for summary judgment was whether Colorado or Texas law controls and whether the release is valid under the appropriate law. On appeal, Ms. Hamric contends “contract principles” control the choice-of-law analysis because WEI’s affirmative defense “was a contract issue on a purported agreement to release liability.” Opening Br. at 26-27. Ms. Hamric further contends that under contract principles in the Restatement (Second) of Conflicts of Laws, Texas law applies because Mr. Hamric was a Texas resident who completed the Registration Form and the Medical Form while in Texas. WEI agrees that if contract principles govern the choice-of-law issue, the Restatement (Second) on Conflict of Laws provides the appropriate factors for this court to consider. But WEI contends (1) the liability release is valid under both Colorado and Texas law and (2) the relevant factors in §§ 6 and 188 of the Restatement favor application of Colorado law if this court is inclined to resolve the conflict-of-law issue.

Outdoor recreation and tourism is a growing industry in Colorado, as well as several other states within our circuit. And many outdoor tourism outfitters, like WEI, require participants to complete forms containing liability releases. See Redden v. Clear Creek Skiing Corp., ___ P.3d ___, 2020 WL 7776149, at *2 (Colo.App. Dec. 31, 2020); Hamill v. Cheley Colo. Camps, Inc., 262 P.3d 945, 947-48 (Colo.App. 2011); see also Dimick v. Hopkinson, 422 P.3d 512, 515-16 (Wyo. 2018); Penunuri v. Sundance Partners, Ltd., 301 P.3d 984, 986 (Utah 2013); Beckwith v. Weber, 277 P.3d 713, 716-17 (Wyo. 2012). With the prevalence and recurrence of questions regarding the validity of liability releases in mind, and viewing the choice-of-law issue as sounding in contract law as urged by the parties, we consider whether the law of the state where the outdoor recreation company is based and the outdoor excursion occurs controls or whether the law of the state of residence of the participant controls.

a. Framework for choice-of-law analysis

“In a diversity action we apply the conflict-of-laws rules of the forum state.” Kipling v. State Farm Mut. Auto. Ins. Co., 774 F.3d 1306, 1310 (10th Cir. 2014). “This is true even when choice of law determinations involve the interpretation of contract provisions.” Shearson Lehman Brothers, Inc. v. M & L Invs., 10 F.3d 1510, 1514 (10th Cir. 1993). Accordingly, this court must look to Colorado choice-of-law rules to determine if Colorado or Texas law applies.

“Colorado follows the Restatement (Second) of Conflict of Laws (1971) . . . for both contract and tort actions,” Kipling, 774 F.3d at 1310 (citing Wood Brothers Homes, Inc. v. Walker Adjustment Bureau, 601 P.2d 1369, 1372 (Colo. 1979); First Nat’l Bank v. Rostek, 514 P.2d 314, 319-20 (Colo. 1973)). Absent a forum-state “statutory directive,” the Restatement advises a court to consider seven factors: (a) the needs of the interstate and international systems, (b) the relevant policies of the forum, (c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue (d) the protection of justified expectations, (e) the basic policies underlying the particular field of law, (f) certainty, predictability and uniformity of result, and (g) ease in the determination and application of the law to be applied.

Restatement (Second) of Conflict of Laws: Choice-of-Law Principles § 6 (Am. L. Inst. 1971). The commentary to § 6 identifies the first factor as “[p]robably the most important function of choice-of-law rules” because choice-of-law rules are designed “to further harmonious relations between states and to facilitate commercial intercourse between them.” Id. § 6 cmt. d. Meanwhile, the second factor takes into account any special interests, beyond serving as the forum for the action, that the forum state has in the litigation. Id. § 6 cmt. e. As to the fourth factor-“the protection of justified expectations, “- the comments to § 6 note: This is an important value in all fields of the law, including choice of law. Generally speaking, it would be unfair and improper to hold a person liable under the local law of one state when he had justifiably molded his conduct to conform to the requirements of another state.

Id. § 6 cmt. g.

A more specific section of the Restatement addressing contracts lacking a choice-of-law provision provides additional guidance: (1) The rights and duties of the parties with respect to an issue in contract are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the transaction and the parties under the principles stated in § 6. (2) In the absence of an effective choice of law by the parties . . ., the contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include: (a) the place of contracting, (b) the place of negotiation of the contract, (c) the place of performance, (d) the location of the subject matter of the contract, and (e) the domicile, residence, nationality, place of incorporation and place of business of the parties. These contacts are to be evaluated according to their relative importance with respect to the particular issue.

Restatement (Second) of Conflict of Laws: Law Governing in Absence of Effective Choice by the Parties § 188.

b. Colorado law controls

We conclude that, under the Restatement, a Colorado court would apply Colorado law to determine the validity and enforceability of the liability release relied upon by WEI. First looking at § 6 of the Restatement, the liability release was drafted by a Colorado corporation to cover services provided exclusively in Colorado. Applying out-of-state law to interpret the liability release would hinder commerce, as it would require WEI and other outdoor-recreation companies to know the law of the state in which a given participant lives. Such a rule would place a significant burden on outdoor-recreation companies who depend on out-of-state tourists for revenue because it would require a company like WEI to match the various requirements of the other forty-nine states. This approach would not give WEI the benefit of having logically molded its liability release to comply with Colorado law, the law of the state where WEI does business. Furthermore, Ms. Hamric’s primary argument for applying Texas law is that Mr. Hamric signed the forms in Texas. But a rule applying out-of-state law on that basis is likely to deter WEI from furnishing the liability release until a participant enters Colorado. And, while not providing participants the forms until arrival in Colorado might lessen WEI’s liability exposure under out-of-state law, such a practice would not benefit participants because it would pressure participants into a last-minute decision regarding whether to sign the liability release after having already traveled to Colorado for the outdoor excursion.

Colorado also has a strong interest in this matter. Colorado has a booming outdoor-recreation industry, in the form of skiing, hiking, climbing, camping, horseback riding, and rafting excursions. Colorado relies on tax receipts from the outdoor-recreation industry. And while many out-of-state individuals partake in these activities within Colorado, they often purchase their tickets or book excursion reservations before entering Colorado. If we applied Texas law because it is the state where Mr. Hamric signed the liability release, we would essentially allow the other forty-nine states to regulate a key industry within Colorado. Such an approach is impractical and illogical.

Further, the considerations and contacts listed in § 188 of the Restatement favor application of Colorado law. As to the first contact, in accord with the commentary, a contract is formed in “the place where occurred the last act necessary to give the contract binding effect.” Id. § 188 cmt. e. Here, that act occurred when the church group provided the forms to WEI in Colorado; for, before the forms were provided to WEI, Mr. Hamric had not conveyed his acceptance to WEI and WEI did not know whether Mr. Hamric would complete the forms and agree to the liability release. See Scoular Co. v. Denney, 151 P.3d 615, 619 (Colo.App. 2006) (discussing means of accepting an offer and stating “general rule that communication is required of the acceptance of the offer for a bilateral contract”). The second contact consideration is not applicable because the terms of the Medical Form precluded alteration, and there is no suggestion in the record Mr. Hamric attempted to negotiate the terms of the liability release before signing the forms. The third and fourth factors heavily favor application of Colorado law because WEI provides outdoor excursion services in Colorado, not Texas, and Mr. Hamric knew such when he signed the forms. Finally, the fifth factor is neutral because Mr. Hamric was a resident of Texas and WEI has its place of business in Colorado. With three factors favoring Colorado law, one factor inapplicable, and one factor neutral, the overall weight of the § 188 factors favors application of Colorado law.

Concluding that both § 6 and § 188 of the Restatement strongly support application of Colorado law, we hold that a Colorado court would choose to apply Colorado law, not Texas law, when determining whether the Registration Form and Medical Form contain a valid liability release. We, therefore, proceed to that analysis.

4. The Liability Release Is Valid under Colorado Law

Under Colorado law, “[a]greements attempting to exculpate a party from that party’s own negligence have long been disfavored.” Heil Valley Ranch, 784 P.2d at 783.But, such “[e]xculpatory agreements are not necessarily void,” as courts recognize that “[t]hey stand at the crossroads of two competing principles: freedom of contract and responsibility for damages caused by one’s own negligent acts.” Id. at 784.In assessing the validity of a release, “a court must consider: (1) the existence of a duty to the public; (2) the nature of the service performed; (3) whether the contract was fairly entered into; and (4) whether the intention of the parties is expressed in clear and unambiguous language.” Jones v. Dressel, 623 P.2d 370, 376 (Colo. 1981); see also Chadwick v. Colt Ross Outfitters, Inc., 100 P.3d 465, 467 (Colo. 2004) (a release agreement “must be closely scrutinized to ensure that the intent of the parties is expressed in clear and unambiguous language and that the circumstances and the nature of the service involved indicate that the contract was fairly entered into”).

Ms. Hamric challenges only WEI’s ability to show “whether the intention of the parties is expressed in clear and unambiguous language.”[ 9] “To determine whether the intent of the parties is clearly and unambiguously expressed, [the Colorado Supreme Court has] examined the actual language of the agreement for legal jargon, length and complication, and any likelihood of confusion or failure of a party to recognize the full extent of the release provisions.” Chadwick, 100 P.3d at 467. In general accord with this statement, federal district courts in Colorado have discerned five factors from Colorado Supreme Court decisions to determine if a release is unambiguous: (1) “whether the agreement is written in simple and clear terms that are free from legal jargon”; (2) “whether the agreement is inordinately long or complicated”; (3) “whether the release specifically addresses the risk that caused the plaintiff’s injury”; (4) “whether the contract contains any emphasis to highlight the importance of the information it contains”; and (5) “whether the plaintiff was experienced in the activity making risk of that particular injury reasonably foreseeable.” Salazar v. On the Trail Rentals, Inc., Civil Action No. 11-cv-00320-CMA-KMT, 2012 WL 934240, at *4 (D. Colo. Mar. 20, 2012) (deriving factors from Heil Valley Ranch, 784 P.2d at 785; Chadwick, 100 P.3d at 467); see also Eburn v. Capitol Peak Outfitters, Inc., 882 F.Supp.2d 1248, 1253 (D. Colo. 2012) (citing factors set forth in Salazar). Each and every factor, however, need not be satisfied for a court to uphold the validity of a liability release, as the Colorado Supreme Court has upheld the validity of a release where the signor was a novice at the outdoor activity in question. See B & B Livery, Inc., 960 P.2d at 138 (upholding liability release without finding every factor favored validity); id. at 139-40 (Hobbs, J., dissenting) (discussing signor’s inexperience riding horses).

The first four factors taken from Heil Valley Ranch and Chadwick support the validity of the liability release in the Registration Form and Medical Form. The forms span a mere two pages, with language pertinent to the liability release in only four sections of the forms. And those four sections are generally free of legal jargon. For instance, in detailing the scope of the release, the Registration Form required the participant/signor to “hold harmless Wilderness Expeditions, Inc. . . . for any injury or death caused by or resulting from my or my child’s participation in the activities.”[ 10] App. Vol. I at 57, 83. And this language comes after the form describes several of the risks associated with the activities, including “that accidents or illness can occur in remote places without medical facilities” and that “any route or activity chosen [by WEI] may not be of minimum risk, but may have been chosen for its interest and challenge.” Id. The Registration Form also twice places bolded emphasis on the fact that a participant was releasing WEI from liability: “By signing my initials below, I certify this is a release of liability.”Id. Finally, although not explicitly a factor identified by Colorado courts, we observe WEI provided the church group with the forms, and Mr. Hamric completed the forms, months before the booked excursion. Thus, if Mr. Hamric personally had difficulty understanding any of the language on the forms, he had ample time to contact WEI for an explanation or consult legal counsel.

The sole factor clearly cutting against enforcement of the liability release is Mr. Hamric’s lack of rappelling experience. However, as noted above, the Colorado Supreme Court has not found this consideration to be dispositive against the enforcement of a liability waiver. See B & B Livery, Inc., 960 P.2d at 138-39. And, where the liability release between Mr. Hamric and WEI is otherwise clear, specific, and uncomplicated, Mr. Hamric’s lack of experience rappelling is insufficient to defeat the release as a whole.

Accordingly, applying Colorado law, we hold the liability release is valid and its enforcement bars Ms. Hamric’s negligence claim. Therefore, we affirm the magistrate judge’s grant of summary judgment in favor of WEI.

III. CONCLUSION

We affirm the denial of Ms. Hamric’s motion for leave to amend her complaint because the magistrate judge did not abuse her discretion where Ms. Hamric did not attempt to satisfy the Federal Rule of Civil Procedure 16(b) standard for amending the Scheduling Order. We also affirm the denial of Ms. Hamric’s discovery motions, holding the magistrate judge did not abuse her discretion where the items Ms. Hamric sought to discover were either already in the record, were not necessary to determine the validity of the liability release, or went to Ms. Hamric’s effort to obtain exemplary damages, which she could not pursue given the denial of her motion for leave to amend her complaint. Finally, applying de novo review to the choice-of-law issue and the issue regarding the validity of the liability release, we conclude Colorado law applies and the release is valid and enforceable under that law. Therefore, we affirm the magistrate judge’s grant of summary judgment to WEI.

———

Notes:

[ 1]Here, we summarize the Registration Form and the Medical Form. Copies of the full forms, taken from the Appendix submitted by Ms. Hamric, are attached to this opinion. We rely on the full forms, and all of the language thereon, when conducting our analysis. Further, as discussed infra at 25-27, Section II(C)(2)(b)(ii), while the Registration Form and Medical Form could be viewed as separate forms, Colorado law requires us to consider both forms together when conducting our analysis.

[ 2]Throughout our opinion, we cite simultaneously to the Registration Form or Medical Form attached to WEI’s motion for summary judgment, App. Vol. I at 57- 58, and the Registration Form or Medical Form attached to Ms. Hamric’s response to WEI’s motion for summary judgment, id. at 83-84. Although the language of the two sets of forms are identical, the clarity of the text varies somewhat, seemingly based on the proficiency of the respective copy machines used by the parties.

[ 3]In quoting the forms, we seek to replicate the font size, spacing, and bolding of the text of the Registration Form and Medical Form completed by Mr. Hamric.

[ 4] Under Colorado law: A claim for exemplary damages in an action governed by [§ 13-21-102 of the Colorado Revised Statutes] may not be included in any initial claim for relief. A claim for exemplary damages in an action governed by this section may be allowed by amendment to the pleadings only after the exchange of initial disclosures . . . and the plaintiff establishes prima facie proof of a triable issue.

Colo. Rev. Stat. § 13-21-102(1.5)(a).

[ 5]Although Ms. Hamric’s action sounds in tort law, on appeal, the parties do not contend that tort principles provide the framework for the choice-of-law analysis regarding the liability release. Thus, we reach no conclusion as to whether Colorado law or Texas law would govern if tort principles played a role in the choice-of-law analysis.

[ 6]While the magistrate judge incorrectly stated the standard governing WEI’s motion for summary judgment, it is not apparent the magistrate judge’s analysis and conclusion that WEI was entitled to summary judgment hinged on Ms. Hamric’s failure to identify evidence supporting each element of her negligence claim. Rather, the magistrate judge correctly granted WEI summary judgment based on the liability release and WEI’s affirmative defense.

[ 7]WEI has advanced inconsistent positions on whether the Registration Form and Medical Form comprised a single agreement. Although on appeal WEI argues the forms constitute a single agreement releasing liability, WEI’s Answer to Ms. Hamric’s Complaint treats the two forms as separate agreements, stating that “[d]ecedent Gerald Hamric executed a valid and enforceable liability release. Decedent Gerald Hamric also executed a medical evaluation.” App. Vol. I at 32 (emphasis added).

[ 8]Although we conclude that Colorado law, not Texas law, controls the validity of the liability release, infra at 28-33, Section II(C)(3), Texas law likewise permits a court to read separate but related documents together when determining the intent of the parties, see Fort Worth Indep. Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831, 840 (Tex. 2000) (“The City’s argument ignores well-established law that instruments pertaining to the same transaction may be read together to ascertain the parties’ intent, even if the parties executed the instruments at different times and the instruments do not expressly refer to each other, and that a court may determine, as a matter of law, that multiple documents comprise a written contract. In appropriate instances, courts may construe all the documents as if they were part of a single, unified instrument.” (footnotes omitted)).

[ 9]Ms. Hamric also argues that the question of whether Mr. Hamric and WEI entered into a liability release was a question of fact for a jury. But Ms. Hamric withdrew her fact-based challenge to the authenticity of the forms. Further, under Colorado law, “[t]he determination of the sufficiency and validity of an exculpatory agreement is a question of law for the court to determine.” Jones v. Dressel, 623 P.2d 370, 376 (Colo. 1981). And, where a liability release has force only if it is “clear and unambiguous,” id., the question of the existence of a liability release and its validity are one in the same because if the language relied on by a defendant does not form a valid release, then no liability release exists.

[ 10] The omitted language marked by the ellipses also required a signor/participant to hold federal and state agencies harmless for injuries or death that might occur as a result of WEI-led activities on federal or state land. Like the rest of the release, this language is plain and clear such that any reasonably educated individual would understand the nature of the release as to these third parties.


One paragraph would have eliminated this lawsuit.

Badly written release and a bad attempt to tie two documents together almost cost the defendant outfitter.

Hamric v. Wilderness Expeditions, Inc

State: Colorado, United States Court of Appeals, Tenth Circuit

Plaintiff: Alicia Hamric, individually, as representative of the Estate of Robert Gerald Hamric, and as next friend of Ava Hamric, a minor

Defendant: Wilderness Expeditions, Inc.

Plaintiff Claims: Negligence

Defendant Defenses: Release

Holding: For the defendant

Year: 2021

Summary

Deceased died while repelling with the defendant and surviving spouse sued Colorado company in Colorado but attempted to use Texas law, where the release was signed, as a way to void the release.

Facts

Members of the Keller Church of Christ in Keller, Texas, scheduled an outdoor excursion to Colorado, contracting with WEI for adventure planning and guide services. WEI is incorporated in Colorado and has its headquarters in Salida, Colorado. Jamie Garner served as the coordinator for the church group and the point-of-contact between the church members and WEI. The experience WEI provided included guides taking participants rappelling. WEI required all participants, before going on the outdoor excursion, to complete and initial a “Registration Form” and complete and sign a “Medical Form.”

WEI made the forms available to Mr. Garner for downloading and completion by the individual church members several months prior to the booked trip. Mr. Hamric initialed both blanks on the Registration Form and signed the Medical Form, dating it April 5, 2017. Andrew Sadousky, FNP-C, completed and signed the “Physician’s Evaluation” section of the Medical Form, certifying that Mr. Hamric was medically capable of participating in the outdoor activities listed on the form, including rappelling. Mr. Hamric’s signed forms were delivered to WEI upon the church group’s arrival in Colorado in July 2017.

After spending a night on WEI property, WEI guides took the church group, including Mr. Hamric, to a rappelling site known as “Quarry High.” Because the rappelling course had a section that WEI guides considered “scary,” the guides did not describe a particular overhang at the Quarry High site during the orientation session or before taking the church group on the rappelling course. [emphasize added]

Several members of the church group successfully descended Quarry High before Mr. Hamric attempted the rappel. As Mr. Hamric worked his way down the overhang portion of the course, he became inverted and was unable to right himself. Efforts to rescue Mr. Hamric proved unsuccessful, and he died of positional asphyxiation.

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

The Tenth Circuit Court of Appeals is an appellate court that sits in Denver. The Tenth Circuit hears cases from Colorado, Kansas, New Mexico, Oklahoma, Utah and Wyoming federal district courts. The court, consequently, hears a few appeals of recreation cases because of Colorado, Utah, New Mexico and Wyoming recreation activities.

This appealed covered four different legal issues. Three of the issues were procedural and won’t be reviewed here. The fourth was the dismissal of the case by the lower-court magistrate on a motion for summary judgement because of the release.

The plaintiff argued the release should be read using Texas law because the release was read and signed in Texas.

There was no Jurisdiction and Venue Clause in the Release!

The defendant had the deceased sign two forms. One was a release, and the second was a medical form. Neither form had a venue or jurisdiction clause. Having a medical information formed signed is a quick give away that the defendant does not understand the legal issues involved. The defendant wrote both forms, so they conflicted with each other in some cases and attempted to tie the forms together. Neither really worked.

The plaintiff argued the forms were one because they conflicts would have made both forms basically invalid.

Further, language on the Medical Form is conflicting and ambiguous as to whether the two forms comprise a single agreement: Individuals who have not completed these forms will not be allowed to participate. I have carefully read all the sections of this agreement, understand its contents, and have initialed all sections of page 1 of this document. I have examined all the information given by myself, or my child. By the signature below, I certify that it is true and correct. Should this form and/or any wording be altered, it will not be accepted and the participant will not be allowed to participate.

Both the italicized language and the use of “forms” in the plural to describe the agreement support the conclusion that the Registration Form and the Medical Form are a single agreement. But the underlined language, using “form” in the singular, suggests the forms might constitute separate agreements. Otherwise, the singular use of “form” would suggest the unlikely result that a participant could not alter the wording of the Medical Form but could alter the wording of the Registration Form.

However, after a lengthy review, the court found the forms were two different documents and ignored the medical form and the release like language in it.

We conclude, however, that this dispute of fact is not material to resolution of the primarily legal question regarding whether Mr. Hamric entered into a valid liability release with WEI.

The next issue is what law should apply to determine the validity of the release. Choice of laws is a compete course you can take in law school. I still have my Choice of Laws’ textbook after all these years because it is a complicated subject that hinges on minutia in some cases to determine what court will hear a case and what law will be applied.

The case was filed in the Federal Court covering Colorado. Since the defendant was not a Texas business or doing business in Texas, the lawsuit needed to be in the defendant’s state. Federal Court was chosen because disputes between citizens of two states should be held in a neutral court, which is the federal courts. A Texan might not feel they are getting a fair deal if they have to sue in a Colorado state court. That is called the venue. What court sitting where will hear the case.

If the defendant had operated in Texas, been served in Texas or had a history of actively looking for clients in Texas this would have been a Texas lawsuit, probably with a different outcome.

So, the decision on what court to sue was somewhat limited. However, that is not the end. Once the court is picked, venue, the next argument is what law will be applied to the situation. The Plaintiff argued Texas Law. Texas has stringent requirements on releases. If Texas law was applied to the release, there was a chance the release would be void under Texas law. The defendant argued Colorado law, which has much fewer requirements for releases.

Ms. Hamric further contends that under contract principles in the Restatement (Second) of Conflicts of Laws, Texas law applies because Mr. Hamric was a Texas resident who completed the Registration Form and the Medical Form while in Texas.

Here is the court’s analysis on what states laws should apply.

A more specific section of the Restatement addressing contracts lacking a choice-of-law provision provides additional guidance: (1) The rights and duties of the parties with respect to an issue in contract are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the transaction and the parties under the principles stated in § 6. (2) In the absence of an effective choice of law by the parties . . ., the contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include: (a) the place of contracting, (b) the place of negotiation of the contract, (c) the place of performance, (d) the location of the subject matter of the contract, and (e) the domicile, residence, nationality, place of incorporation and place of business of the parties. These contacts are to be evaluated according to their relative importance with respect to the particular issue.

It is not a slam dunk for Colorado law. In this case, the plaintiff made a very good argument that Texas law should apply. The deceased was a Texas resident recruited in Texas by the defendant. The release had been given to the deceased in Texas, and he signed it in Texas. If the analysis ended there Texas law would have applied.

However, there was more to the investigation the court is required to do.

We conclude that, under the Restatement, a Colorado court would apply Colorado law to determine the validity and enforceability of the liability release relied upon by WEI. First looking at § 6 of the Restatement, the liability release was drafted by a Colorado corporation to cover services provided exclusively in Colorado.

Honestly, the trial court and appellate court bent over backwards to help this defendant.

This argument switched the discussion from applying Texas law to Colorado law.

Applying out-of-state law to interpret the liability release would hinder commerce, as it would require WEI and other outdoor-recreation companies to know the law of the state in which a given participant lives. Such a rule would place a significant burden on outdoor-recreation companies who depend on out-of-state tourists for revenue because it would require a company like WEI to match the various requirements of the other forty-nine states. This approach would not give WEI the benefit of having logically molded its liability release to comply with Colorado law, the law of the state where WEI does business. Furthermore, Ms. Hamric’s primary argument for applying Texas law is that Mr. Hamric signed the forms in Texas. But a rule applying out-of-state law on that basis is likely to deter WEI from furnishing the liability release until a participant enters Colorado. And, while not providing participants the forms until arrival in Colorado might lessen WEI’s liability exposure under out-of-state law; such a practice would not benefit participants because it would pressure participants into a last-minute decision regarding whether to sign the liability release after having already traveled to Colorado for the outdoor excursion.

It is significant to note that the court looked at the issue of waiting until customers arrive in the state of Colorado to have them sign the release. The court intimated that doing so would put pressure on them to sign after already traveling to Colorado. Legally, that could be argued as duress, which voids a release or contract.

It is these small statements in decisions that must be watched and remembered so that in the future they are not used to void a release. You must have your clients sign a release as soon as possible and waiting until they travel to Colorado maybe to late to have the release survive in court.

In a rare statement, the court also commented on the outdoor recreation industry in Colorado and the need for releases.

Colorado also has a strong interest in this matter. Colorado has a booming outdoor-recreation industry, in the form of skiing, hiking, climbing, camping, horseback riding, and rafting excursions. Colorado relies on tax receipts from the outdoor-recreation industry. And while many out-of-state individuals partake in these activities within Colorado, they often purchase their tickets or book excursion reservations before entering Colorado. If we applied Texas law because it is the state where Mr. Hamric signed the liability release, we would essentially allow the other forty-nine states to regulate a key industry within Colorado.

The final analysis the court discussed on the issue was the legal issue of binding effect. When a contract does define what is required to create the contract, such as the signature of both parties to the contract, then the last act that gives life or that is necessary to form the contract is considered the point when the contract was valid. Where that last act occurs is the place where the contract should be litigated and the law that should be applied to the contract. Here the last act occurred when the deceased was in Colorado and the church group he was with, handed over the signed releases.

Further, the considerations and contacts listed in § 188 of the Restatement favor application of Colorado law. As to the first contact, in accord with the commentary, a contract is formed in “the place where occurred the last act necessary to give the contract binding effect.” Here, that act occurred when the church group provided the forms to WEI in Colorado; for, before the forms were provided to WEI, Mr. Hamric had not conveyed his acceptance to WEI, and WEI did not know whether Mr. Hamric would complete the forms and agree to the liability release.

The plaintiff then argued the release did not meet the requirements of Colorado or Texas law. The plaintiff argued the contract was ambiguous. Colorado has five factors that must be considered to determine if a contract is ambiguous.

In general accord with this statement, federal district courts in Colorado have discerned five factors from Colorado Supreme Court decisions to determine if a release is unambiguous: (1) “whether the agreement is written in simple and clear terms that are free from legal jargon”; (2) “whether the agreement is inordinately long or complicated”; (3) “whether the release specifically addresses the risk that caused the plaintiff’s injury”; (4) “whether the contract contains any emphasis to highlight the importance of the information it contains”; and (5) “whether the plaintiff was experienced in the activity making risk of that particular injury reasonably foreseeable.”

The court reviewed the release and found it was not ambiguous. Only one factor the last one, whether the plaintiff has experience in the activity, was possible and the Colorado Supreme Court had weakened that requirement.

The sole factor clearly cutting against enforcement of the liability release is Mr. Hamric’s lack of rappelling experience. However, as noted above, the Colorado Supreme Court has not found this consideration to be dispositive against the enforcement of a liability waiver.

So, the court first determined that the release should be reviewed under Colorado law and then determined that under Colorado law, the release was valid and stopped the claims of the plaintiffs.

Finally, I have to comment about one incredibly stupid move on the part of the defendant. As quoted in the facts and by the court.

Because the rappelling course had a section that WEI guides considered “scary,” the guides did not describe a particular overhang at the Quarry High site during the orientation session or before taking the church group on the rappelling course.

Besides eliminating the defense of assumption of the risk by doing this, you have created a situation where you have increased the chance of a participant getting injured or as in this case died. You cannot assume a risk which you don’t know about.

First, what are you doing taking beginners rappelling over an overhang. This is not a beginner move.

Second, you have a scary section you CANNOT hide it from people, especially if they cannot see it or understand it. You MUST inform your participants of the risk.

Third, the defendant did not tell the deceased how to correct the problem if they found themselves in a compromised position. That is the main goal of any safety talk, to tell your participants how to keep themselves safe and how to rescue or be rescue.

Fourth, you need to hire new guides because it is clear your current guides do not understand the gravity of the situation, let alone the legal liability, of doing this to someone.

So Now What?

However, for one simple paragraph, or actually, one sentence, this lawsuit would have never gotten off the ground. The issue is a jurisdiction and venue clause. If the release would have stated any lawsuit must be in Colorado and Colorado law must apply, this lawsuit would not have had a chance.

Of special note in writing a release in Colorado and a few other states, if you do not outline or identify the possible risks to the participant signing the release, the release may be ambiguous. This issue is facing more scrutiny by the plaintiffs, and you are seeing more courts have to deal with the issue. On top of that, failing to identify the possible risks, eliminates the defense of assumption of the risk, which might be needed.

The other issue that the court waded through that could have done the defendant in was the competing language in the two contracts. First why collect information you cannot use, such as medical information? Only a physician and the participant have the ability to make the decision, as to whether or not they can medically undertake an activity. If you, the activity, business or program, decide a person can’t participate because of a medical issue, you are practicing medicine without a license which is a crime.

That does not mean you cannot collect information that you might need if a participant is injured.

Worse the above in this case, was both documents attempted to include release language and neither agreement had language stated which one was controlling. If you have your participants sign multiple documents you need to make sure that the release is not voided by another contract. You need to make sure one contract is primary, and the other contact has nothing in it that cancels, modifies or revokes the release.

What do you think? Leave a comment.

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Hamric v. Wilderness Expeditions, Inc.,

Hamric v. Wilderness Expeditions, Inc.

ALICIA HAMRIC, individually, as representative of the Estate of Robert Gerald Hamric, and as next friend of Ava Hamric, a minor, Plaintiff – Appellant,

v.

WILDERNESS EXPEDITIONS, INC., Defendant-Appellee.

No. 20-1250

United States Court of Appeals, Tenth Circuit

July 26, 2021

Appeal from the United States District Court for the District of Colorado (D.C. No. 1:19-CV-01442-NYW)

William J. Dunleavy, Law Offices of William J. Dunleavy, Allen, Texas (Stephen A. Justino, Boesen Law, Denver, Colorado, on the briefs), for Plaintiff – Appellant.

Malcolm S. Mead (Peter C. Middleton and Jacob R. Woods with him on the brief), Hall & Evans, Denver, Colorado, for Defendant – Appellee.

Before TYMKOVICH, Chief Judge, HOLMES, and McHUGH, Circuit Judges.

McHUGH, CIRCUIT JUDGE

Gerald Hamric, a Texas resident, joined a church group on an outdoor recreation trip to Colorado. The church group employed the services of Wilderness Expeditions, Inc. (“WEI”) to arrange outdoor activities. Before the outdoor adventure commenced, WEI required each participant, including Mr. Hamric, to complete a “Registration Form” and a “Medical Form.” On the first day, WEI led the church group on a rappelling course. In attempting to complete a section of the course that required participants to rappel down an overhang, Mr. Hamric became inverted. Attempts to rescue Mr. Hamric proved unsuccessful, and he died.

Alicia Hamric, Mr. Hamric’s wife, sued WEI for negligence. WEI moved for summary judgment, asserting the Registration Form and the Medical Form contained a release of its liability for negligence. Ms. Hamric resisted WEI’s motion for summary judgment in four ways. First, Ms. Hamric moved for additional time to conduct discovery under Federal Rule of Civil Procedure 56(d). Second, Ms. Hamric moved for leave to amend her complaint to seek exemplary damages based on willful and wanton conduct. Third, Ms. Hamric filed a motion for leave to disclose an expert out of time. Fourth, Ms. Hamric argued Texas law controlled the validity of the purported liability release in the Registration Form and the Medical Form, and additionally that the release was not conspicuous as required by Texas law.

In a single order, a magistrate judge addressed each of the pending motions. The magistrate judge first declined to grant leave to amend the complaint due to Ms. Hamric’s failure to (1) sustain her burden under Federal Rule of Civil Procedure 16(b) because the deadline for amendments had passed; and (2) make out a prima facie case of willful and wanton conduct as required by Colorado law to plead a claim seeking exemplary damages. Next, the magistrate judge concluded WEI was entitled to summary judgment, holding the liability release was valid under both Colorado law and Texas law. Finally, the magistrate judge denied as moot Ms. Hamric’s motions for additional discovery and to disclose an expert out of time.

We affirm the magistrate judge’s rulings. As to Ms. Hamric’s motion for leave to amend, a party seeking to amend a pleading after the deadline in a scheduling order for amendment must satisfy the standard set out by Federal Rule of Civil Procedure 16(b). But Ms. Hamric concedes she has never sought to satisfy the Rule 16(b) standard. Turning to the discovery motions, where this case hinges on the validity of the liability release and all facts necessary to this primarily legal issue appear in the record, we reject Ms. Hamric’s contentions that further discovery or leave to belatedly disclose an expert were warranted. Finally, while the magistrate judge’s summary judgment analysis was not free of error, we apply de novo review to that ruling. And, under de novo review, we conclude (1) relying on contract law to resolve the choice-of-law issue, as argued for by the parties, Colorado law, rather than Texas law, controls whether the Registration Form and the Medical Form contain a valid liability release; and (2) the forms contain a valid release for negligence by WEI, barring Ms. Hamric’s action.

I. BACKGROUND

A. The Rappelling Excursion, Mr. Hamric’s Death, and the Liability Release

Members of the Keller Church of Christ in Keller, Texas, scheduled an outdoor excursion to Colorado, contracting with WEI for adventure planning and guide services. WEI is incorporated in Colorado and has its headquarters in Salida, Colorado. Jamie Garner served as the coordinator for the church group and the point-of-contact between the church members and WEI. The experience WEI provided included guides taking participants rappelling. WEI required all participants, before going on the outdoor excursion, to complete and initial a “Registration Form” and complete and sign a “Medical Form.”[ 1]

The Registration Form has three sections. The first section requires the participant to provide personally identifiable information and contact information. The second section is entitled “Release of Liability & User Indemnity Agreement for Wilderness Expeditions, Inc.” App. Vol. I at 57, 83.[ 2] The text under this bold and underlined header reads, in full: I hereby acknowledge that I, or my child, have voluntarily agreed to participate in the activities outfitted by Wilderness Expeditions, Inc. I understand that the activities and all other hazards and exposures connected with the activities conducted in the outdoors do involve risk and I am cognizant of the risks and dangers inherent with the activities. I (or my child) and (is) fully capable of participating in the activities contracted for and willingly assume the risk of injury as my responsibility whether it is obvious or not. I understand and agree that any bodily injury, death, or loss of personal property and expenses thereof as a result of any, or my child’s, negligence in any scheduled or unscheduled activities associated with Wilderness Expeditions, Inc. are my responsibilities. I understand that accidents or illness can occur in remote places without medical facilities, physicians, or surgeons, and be exposed to temperature extremes or inclement weather. I further agree and understand that any route or activity chosen may not be of minimum risk, but may have been chosen for its interest and challenge. I agree to defend, indemnify, and hold harmless Wilderness Expeditions. Inc., the USDA Forest Service, Colorado Parks and Recreation Department, and any and all state or government agencies whose property the activities may be conducted on, and all of their officers, members, affiliated organizations, agents, or employees for any injury or death caused by or resulting from my or my child’s participation in the activities, scheduled and unscheduled, whether or not such injury or death was caused by my, or their, negligence or from any other cause. By signing my initials below, I certify this is a release of liability.

Id.[ 3] Immediately after this paragraph, the form reads, “Adult participant or parent/guardian initial here:(Initials).” Id. The third and final section of the form is entitled: “Adult Agreement or Parent’s/Guardian Agreement for Wilderness Expeditions, Inc.” Id. The text of this provision states: I understand the nature of the activities may involve the physical demands of hiking over rough terrain, backpacking personal and crew gear, and voluntarily climbing mountains to 14, 433 feet in elevation. Having the assurance of my, or my child’s, good health through a current physical examination by a medical doctor, I hereby give consent for me, or my child, to participate in the activities outfitted by Wilderness Expeditions, Inc. I have included in this form all necessary medical information about myself, or my child, that should be known by the leadership of the program. I assure my, or my child’s, cooperation and assume responsibility for my, or my child’s, actions. I understand that I am responsible for any medical expenses incurred in the event of needed medical attention for myself, or my child. I further agree that I will be financially responsible to repair or replace all items lost or abused by myself or my child. In the event of an emergency, I authorize my consent to any X-ray examination, medica1, dental, or surgical diagnosis, treatment, and/or hospital care advised and supervised by a physician, surgeon, or dentist licensed to practice. I understand that the designated next of kin will be contacted as soon as possible. By signing my initials below, I certify this is a release of liability.

Id. And, as with the second section, the form then provides a line for the participant or the parent or guardian of the participant to initial.

The Medical Form has four sections. The first section seeks information about the participant. The second section is entitled “Medical History.” Initially, this section asks the participant if he suffers from a list of medical conditions, including allergies, asthma, and heart trouble. If the participant does suffer from any medical conditions, the form requests that the participant explain the affirmative answer. Thereafter, the section includes the following language: Note: The staff will not administer any medications, including aspirin, Tums, Tylenol, etc. If you need any over the counter medications, you must provide them. Be sure to tell your staff members what medications you are taking. List any medications that you will have with you: Note about food: Trail food is by necessity a high carbohydrate, high caloric diet. It is high in wheat, milk products, sugar, com syrup, and artificial coloring/flavoring. If these food products cause a problem to your diet, you will be responsible for providing any appropriate substitutions and advise the staff upon arrival. * Doctor’s signature is required to participate. No other form can be substituted. By signing below a physician is verifying the medical history given above and approving this individual to participate.

Id. at 58, 84. The form then includes a section titled “Physician’s Evaluation.” Id. This section seeks certification of the participant’s medical capability to partake in the outdoor activities and asks the physician for contact information. It reads: The applicant will be taking part in strenuous outdoor activities that may include: backpacking, rappelling, hiking at 8-12, 000 feet elevation, and an all day summit climb up to 14, 433 feet elevation. This will include high altitude, extreme weather, cold water, exposure, fatigue, and remote conditions where medical care cannot be assured. The applicant is approved for participation. Physician Signature: ___ Date: ___ Physician Name: ___ Phone Number: ___ Office Address: ___ City: ___ State: ___ Zip: ___

Id. The final section of the form is entitled “Participant or Parent/Guardian Signature – All sections of these forms must be initialed or signed.” Id. The text of the section reads: Individuals who have not completed these forms will not be allowed to participate. I have carefully read all the sections of this agreement, understand its contents, and have initialed all sections of page 1 of this document[.] I have examined all the information given by myself, or my child. By the signature below, I certify that it is true and correct. Should this form and/or any wording be altered, it will not be accepted and the participant will not be allowed to participate.

Id.

WEI made the forms available to Mr. Garner for downloading and completion by the individual church members several months prior to the booked trip. Mr. Hamric initialed both blanks on the Registration Form and signed the Medical Form, dating it April 5, 2017. Andrew Sadousky, FNP-C, completed and signed the “Physician’s Evaluation” section of the Medical Form, certifying that Mr. Hamric was medically capable of participating in the outdoor activities listed on the form, including rappelling. Mr. Hamric’s signed forms were delivered to WEI upon the church group’s arrival in Colorado in July 2017.

After spending a night on WEI property, WEI guides took the church group, including Mr. Hamric, to a rappelling site known as “Quarry High.” Because the rappelling course had a section that WEI guides considered “scary,” the guides did not describe a particular overhang at the Quarry High site during the orientation session or before taking the church group on the rappelling course. Id. at 203.

Several members of the church group successfully descended Quarry High before Mr. Hamric attempted the rappel. As Mr. Hamric worked his way down the overhang portion of the course, he became inverted and was unable to right himself. Efforts to rescue Mr. Hamric proved unsuccessful, and he died of positional asphyxiation.

B. Procedural History

In the District of Colorado, Ms. Hamric commenced a negligence action against WEI, sounding in diversity jurisdiction. As a matter of right, Ms. Hamric amended her complaint shortly thereafter. See Fed. R. Civ. P. 15(a)(1)(A) (permitting plaintiff to file amended complaint “as a matter of course” within twenty-one days of serving original complaint). The parties, pursuant to 28 U.S.C. § 636(c), consented to a magistrate judge presiding over the case. WEI answered Ms. Hamric’s First Amended Complaint, in part raising the following affirmative defense: “Decedent Gerald Hamric executed a valid and enforceable liability release. Decedent Gerald Hamric also executed a medical evaluation form which Defendant relied upon. The execution of these document [sic] bars or reduces [Ms. Hamric’s] potential recovery.” Id. at 31-32.

The magistrate judge entered a Scheduling Order adopting several deadlines: (1) August 31, 2019, for amendments to the pleadings; (2) January 31, 2020, for Ms. Hamric to designate her expert witnesses; and (3) April 10, 2020, for the close of all discovery. The Scheduling Order also noted WEI’s defense based on the purported liability release, stating “[t]he parties anticipate that mediation . . . may be useful to settle or resolve the case after meaningful discovery and summary judgment briefing on the issue of the validity and enforceability of the liability release.” Id. at 38 (emphasis added). Finally, the Scheduling Order concluded with language reminding the parties that the deadlines adopted by the order “may be altered or amended only upon a showing of good cause.” Id. at 42 (italicized emphasis added).

In November 2019, after the deadline for amendments to the pleadings but before the discovery deadlines, WEI moved for summary judgment based on its affirmative defense that both the Registration Form and Medical Form contained a liability release that barred Ms. Hamric’s negligence claim. In support of its motion, WEI contended Colorado law controlled the interpretation and validity of the liability release. Ms. Hamric opposed summary judgment, arguing that because Mr. Hamric completed the forms in Texas, a Colorado court would apply Texas law and that, under Texas law, the liability release was not adequately conspicuous to be valid.

Ms. Hamric also sought to avoid disposition of WEI’s motion for summary judgment and dismissal of her action by filing three motions of her own. First, Ms. Hamric moved under Federal Rule of Civil Procedure 56(d) for additional time to conduct discovery, contending further discovery would, among other things, reveal details about Mr. Hamric’s completion of the forms and whether Colorado or Texas law should control the interpretation and validity of the purported liability release. Second, in February 2020, Ms. Hamric moved pursuant to Federal Rule of Civil Procedure 15(a), for leave to file a second amended complaint to seek exemplary damages under § 13-21-102 of the Colorado Revised Statutes based on new allegations of WEI’s willful and wanton conduct.[ 4] Ms. Hamric’s motion to amend, however, did not cite Federal Rule Civil Procedure 16(b) or seek leave to amend the August 31, 2019, Scheduling Order deadline for amendments to the pleadings. Third, in March 2020, Ms. Hamric moved for leave to disclose out of time a “‘Rappelling/Recreational Activities Safety’ expert.” App. Vol. II at 37. Ms. Hamric contended the expert’s opinions about the training, knowledge, and rescue efforts of the WEI guides supported her contention in her proposed second amended complaint that WEI acted in a willful and wanton manner.

The magistrate judge disposed of the four pending motions in a single order. Starting with Ms. Hamric’s motion for leave to amend her complaint, the magistrate judge concluded Ms. Hamric (1) “failed to meet her burden under Rule 16(b) of establishing good cause to generally amend the operative pleading” and (2) had not made out a prima facie case of wanton and willful conduct. Id. at 94. The magistrate judge then turned to WEI’s motion for summary judgment. The magistrate judge concluded WEI’s affirmative defense raised an issue sounding in contract law such that principles of contract law controlled the choice-of-law analysis. Applying contract principles, the magistrate judge determined that although Texas law imposed a slightly more rigorous standard for enforcing a liability release, the difference between Texas law and Colorado law was not outcome-determinative and the court could, therefore, apply Colorado law. The magistrate judge read Colorado law as holding that a liability release is valid and enforceable “so long as the intent of the parties was to extinguish liability and this intent was clearly and unambiguously expressed.” Id. at 106 (citing Heil Valley Ranch v. Simkin, 784 P.2d 781, 785 (Colo. 1989)). Applying this standard, the magistrate judge held the liability release used clear and simple terms such that, even though Mr. Hamric was inexperienced at rappelling, the release was valid and foreclosed Ms. Hamric’s negligence claim. Therefore, the magistrate judge granted WEI’s motion for summary judgment. And, having denied Ms. Hamric’s motion for leave to amend and granted WEI’s motion for summary judgment, the magistrate judge denied both of Ms. Hamric’s discovery motions as moot.

Ms. Hamric moved for reconsideration, which the magistrate judge denied. Ms. Hamric timely appealed.

II. DISCUSSION

On appeal, Ms. Hamric contests the denial of her motion for leave to amend and the grant of summary judgment to WEI. Ms. Hamric also tacitly challenges the magistrate judge’s denial of her discovery motions. We commence our analysis with Ms. Hamric’s motion for leave to amend, holding the magistrate judge did not abuse her discretion in denying the motion where the motion was filed after the Scheduling Order’s deadline for amendments to pleadings and Ms. Hamric did not attempt to satisfy Federal Rule of Civil Procedure 16(b)’s standard for amending a deadline in a scheduling order. Next, we discuss Ms. Hamric’s two discovery motions, concluding the magistrate judge did not abuse her discretion by denying the motions because (1) WEI’s motion for summary judgment presented a largely legal issue on which all facts necessary for resolution already appeared in the record; and (2) consideration of the proposed expert’s opinions potentially capable of supporting allegations of willful and wanton conduct was mooted upon Ms. Hamric failing to satisfy Rule 16(b)’s standard for amending her complaint to allege such conduct. Finally, we analyze WEI’s motion for summary judgment. Although the magistrate judge’s decision was not free of error, the errors are not outcome determinative on appeal given our de novo standard of review. Exercising de novo review, we conclude Colorado law governs the validity of the liability release. And considering the entirety of both the Registration Form and the Medical Form, we conclude the liability release satisfies the factors in Colorado law for enforceability. Therefore, we affirm the magistrate judge’s grant of summary judgment.

A. Ms. Hamric’s Motion for Leave to Amend

1. Standard of Review

“We review for abuse of discretion a district court’s denial of a motion to amend a complaint after the scheduling order’s deadline for amendments has passed.” Birch v. Polaris Indus., Inc., 812 F.3d 1238, 1247 (10th Cir. 2015). “An abuse of discretion occurs where the district court clearly erred or ventured beyond the limits of permissible choice under the circumstances.” Id. (quotation marks omitted). “A district court also abuses its discretion when it issues an arbitrary, capricious, whimsical or manifestly unreasonable judgment.” Id. (internal quotation marks omitted).

2. Analysis

“A party seeking leave to amend after a scheduling order deadline must satisfy both the [Federal Rule of Civil Procedure] 16(b) and Rule 15(a) standards.” Tesone v. Empire Mktg. Strategies, 942 F.3d 979, 989 (10th Cir. 2019). Under the former of those two rules, “[a] schedule may be modified only for good cause and with the judge’s consent.” Fed.R.Civ.P. 16(b)(4). To satisfy this standard a movant must show that “the scheduling deadlines cannot be met despite the movant’s diligent efforts.” Gorsuch, Ltd., B.C. v. Wells Fargo Nat’l Bank Ass’n, 771 F.3d 1230, 1240 (10th Cir. 2014) (internal quotation marks omitted). We have observed the “good cause” standard for amending deadlines in a scheduling order is “arguably [a] more stringent standard than the standards for amending a pleading under Rule 15.” Bylin v. Billings, 568 F.3d 1224, 1231 (10th Cir. 2009).

In moving for leave to file a second amended complaint, Ms. Hamric discussed Federal Rule of Civil Procedure 15 and how Colorado law did not permit a plaintiff to seek exemplary damages until after commencement of discovery. But Ms. Hamric did not advance an argument for amending the Scheduling Order as required by Rule 16(b). Nor does Ms. Hamric cite Rule 16(b) in her briefs on appeal, much less explain how she satisfied, in her papers before the magistrate judge, the Rule 16(b) standard. In fact, Ms. Hamric conceded at oral argument that, before the magistrate judge, she sought only to amend her complaint and “did not seek to amend the scheduling order.” Oral Argument at 7:42-7:46; see also id. at 7:31-9:10. Ms. Hamric also conceded at oral argument that she had not advanced an argument on appeal regarding satisfying Rule 16(b).

This omission by Ms. Hamric is fatal to her argument. Specifically, when a party seeking to amend her complaint fails, after the deadline for amendment in a scheduling order, to present a good cause argument under Rule 16(b), a lower court does not abuse its discretion by denying leave to amend. Husky Ventures, Inc. v. B55 Invs. Ltd., 911 F.3d 1000, 1019-20 (10th Cir. 2018). Even if a party who belatedly moves for leave to amend a pleading satisfies Rule 15(a)’s standard, the party must also obtain leave to amend the scheduling order. But Rule 16(b) imposes a higher standard for amending a deadline in a scheduling order than Rule 15(a) imposes for obtaining leave to amend a complaint. Thus, as Husky Ventures suggests, a party’s ability to satisfy the Rule 15(a) standard does not necessitate the conclusion that the party could also satisfy the Rule 16(b) standard. Id. at 1020; see also Bylin, 568 F.3d at 1231 (observing that Rule 16(b) imposes “an arguably more stringent standard than the standards for amending a pleading under Rule 15”). Accordingly, where Ms. Hamric did not attempt to satisfy the Rule 16(b) standard for amending the Scheduling Order, we affirm the district court’s denial of Ms. Hamric’s motion for leave to amend.

B. Ms. Hamric’s Discovery Motions

After WEI moved for summary judgment, Ms. Hamric filed a pair of discovery-related motions-a motion for additional discovery before disposition of WEI’s motion for summary judgment and a motion to disclose an expert out of time. The magistrate judge denied both motions as moot. After stating the applicable standard of review, we consider each motion, affirming the magistrate judge’s rulings.

1. Standard of Review

We review the denial of a Federal Rule of Civil Procedure 56(d) motion for additional discovery for an abuse of discretion. Ellis v. J.R.’s Country Stores, Inc., 779 F.3d 1184, 1192 (10th Cir. 2015). Likewise, we review the denial of a motion to revisit a scheduling order and allow the disclosure of an expert out of time for an abuse of discretion. Rimbert v. Eli Lilly & Co., 647 F.3d 1247, 1253-54 (10th Cir. 2011). “We will find an abuse of discretion when the district court bases its ruling on an erroneous conclusion of law or relies on clearly erroneous fact findings.” Ellis, 779 F.3d at 1192 (internal quotation marks omitted). “A finding of fact is clearly erroneous if it is without factual support in the record or if, after reviewing all of the evidence, we are left with the definite and firm conviction that a mistake has been made.” Id. (quotation marks omitted).

2. Analysis

a. Motion for additional discovery

Before the April 10, 2020, deadline for discovery, WEI filed its motion for summary judgment based on the liability release. Ms. Hamric moved under Federal Rule of Civil Procedure 56(d) to delay resolution of WEI’s motion for summary judgment, asserting additional discovery would allow her to learn further information about the liability release. The magistrate judge denied the motion as moot, concluding further discovery was not needed to assess the validity of the liability release.

Under Rule 56(d), a party opposing a motion for summary judgment may seek additional time for discovery. To do so, a party must “submit an affidavit (1) identifying the probable facts that are unavailable, (2) stating why these facts cannot be presented without additional time, (3) identifying past steps to obtain evidence of these facts, and (4) stating how additional time would allow for rebuttal of the adversary’s argument for summary judgment.” Cerveny v. Aventis, Inc., 855 F.3d 1091, 1110 (10th Cir. 2017). “[S]ummary judgment [should] be refused where the nonmoving party has not had the opportunity to discover information that is essential to his opposition.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 n.5 (1986). “Requests for further discovery should ordinarily be treated liberally.” Cerveny, 855 F.3d at 1110. “But relief under Rule 56(d) is not automatic.” Id. And Rule 56’s provision allowing a non-moving party to seek additional discovery before disposition on a motion for summary judgment “is not a license for a fishing expedition.” Lewis v. City of Ft. Collins, 903 F.2d 752, 759 (10th Cir. 1990); see also Ellis, 779 F.3d at 1207-08 (affirming denial of Rule 56(d) motion where party “required no further discovery to respond to the . . . summary-judgment motion” and additional discovery sought was speculative).

Through the affidavit supporting her Rule 56(d) motion, Ms. Hamric sought four areas of additional discovery. First, she sought discovery on “the drafting of the purported liability release forms” and the meaning of language on the forms. App. Vol. I at 94. Regardless of whether Colorado or Texas law applies, the four corners of the Registration Form and Medical Form, not WEI’s thought process when drafting the forms, controls the validity of the liability release. See B & B Livery, Inc. v. Riehl, 960 P.2d 134, 138 (Colo. 1998) (requiring that intent of parties to extinguish liability be “clearly and unambiguously expressed” (quoting Heil Valley Ranch, 784 P.2d at 785)); Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 508 (Tex. 1993) (“[A] party seeking indemnity from the consequences of that party’s own negligence must express that intent in specific terms within the four corners of the contract.”). Therefore, the drafting process employed by WEI and its understanding of the language of the forms is not relevant to whether the forms included sufficiently specific language to foreclose a claim for negligence.

Second, Ms. Hamric sought to discover information about WEI’s process for distributing the forms and how the church group members, including Mr. Hamric, completed and submitted the forms. Ms. Hamric also requested time to discover matters related to the choice-of-law issue, including the “place of contracting,” “the place of performance,” and “the domicile, residence nationality, place of incorporation and place of business of the parties.” App. Vol. I at 95. Information on these matters, however, was known to Ms. Hamric prior to the magistrate judge’s summary judgment ruling. For instance, the record shows Mr. Hamric received and completed the forms in Texas a few months before the WEI-led excursion and that the church group provided WEI the completed forms upon its arrival at WEI’s location in Colorado. Accordingly, there was no need to delay summary judgment proceedings to discover matters already known to the parties. See Ellis, 779 F.3d at 1207-08.

Third, Ms. Hamric, as part of a challenge to the authenticity of the forms, initially sought to discover information regarding anomalies and alterations on the forms attached to WEI’s motion for summary judgment, as well as evidence of fraud by WEI. Subsequent to Ms. Hamric filing her motion for additional discovery, WEI provided her the original forms signed by Mr. Hamric, and she withdrew her challenge to the authenticity of the forms. Accordingly, by the time the district court ruled on WEI’s motion for summary judgment and Ms. Hamric’s motion for additional discovery, the requests for discovery regarding the authenticity of the forms was moot.

Fourth, Ms. Hamric sought time to discover “evidence of willful and wanton conduct by Defendant WEI and/or by its agents, servants and/or employees.” Id. Discovery on this matter, however, became moot with the magistrate judge’s denial of Ms. Hamric’s motion for leave to amend her complaint to seek exemplary damages and add allegations of willful and wanton conduct, a ruling we affirm. See supra at 12-14, Section II(A).

Having considered each additional discovery request advanced by Ms. Hamric, we conclude the magistrate judge did not abuse her discretion by ruling on WEI’s motion for summary judgment without permitting Ms. Hamric additional time for discovery. Accordingly, we affirm the magistrate judge’s denial of Ms. Hamric’s Rule 56(d) motion.

b. Motion for leave to disclose expert out of time

Ms. Hamric moved for leave to disclose a “‘Rappelling/Recreational Activities Safety’ expert” out of time. App. Vol. II at 37. Attached to the motion was a Federal Rule of Civil Procedure 26(a)(2) expert disclosure, offering opinions about the alleged negligent and/or willful and wanton conduct of WEI and its employees. The magistrate judge denied this motion as moot. Considering the magistrate judge’s other rulings and our holdings on appeal, we conclude the magistrate judge did not abuse her discretion. Any opinion offered by the expert as to willful and wanton conduct lost relevance with the denial of Ms. Hamric’s motion for leave to amend her complaint to add allegations of willful and wanton conduct and to seek exemplary damages-a ruling we affirmed supra at 12-14, Section II(A). And the expert’s opinion about WEI acting in a negligent manner lost relevance upon the magistrate judge concluding the liability release was valid and barred Ms. Hamric from proceeding on her negligence claim-a ruling we affirm infra at 19-37, Section II(C). Accordingly, we affirm the magistrate judge’s denial of Ms. Hamric’s motion for leave to disclose an expert out of time.

C. WEI’s Motion for Summary Judgment

After stating our standard of review, we discuss Ms. Hamric’s contentions that the magistrate judge (1) applied the wrong standard when considering WEI’s affirmative defense based on the liability release and (2) resolved issues of disputed fact in favor of WEI. Although we conclude the magistrate judge’s ruling is not free of error, the errors do not bind us because we need not repeat them when conducting our de novo review of the grant of summary judgment. Thus, we proceed to consider the validity of the liability release. In conducting our analysis, we hold that, where the parties contend contract principles provide the framework for our choice-of-law analysis, Colorado law governs the validity of the release.[ 5] And we conclude that, under Colorado law, the liability release is valid and enforceable so as to foreclose Ms. Hamric’s negligence claim. Therefore, we affirm the magistrate judge’s grant of summary judgment.

1. Standard of Review

We review the district court’s rulings on summary judgment de novo. Universal Underwriters Ins. Co. v. Winton, 818 F.3d 1103, 1105 (10th Cir. 2016). Summary judgment is appropriate if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); accord Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Anderson, 477 U.S. at 250. “In reviewing a grant of summary judgment, we need not defer to factual findings rendered by the district court.” Lincoln v. BNSF Ry. Co., 900 F.3d 1166, 1180 (10th Cir. 2018) (internal quotation marks omitted). For purposes of summary judgment, “[t]he nonmoving party is entitled to all reasonable inferences from the record.” Water Pik, Inc. v. Med-Sys., Inc., 726 F.3d 1136, 1143 (10th Cir. 2013). Finally, “we can affirm on any ground supported by the record, so long as the appellant has had a fair opportunity to address that ground.” Alpine Bank v. Hubbell, 555 F.3d 1097, 1108 (10th Cir. 2009) (internal quotation marks omitted).

2. Alleged Errors by the Magistrate Judge

Ms. Hamric argues the magistrate judge (1) applied the incorrect standard when considering WEI’s affirmative defense and (2) resolved disputed issues of material fact in favor of WEI. We consider each contention in turn.

a. Standard applicable to affirmative defenses

Ms. Hamric contends the magistrate judge announced an incorrect standard of review and impermissibly shifted evidentiary burdens onto her, as the non-moving party. The disputed language in the magistrate judge’s opinion states: When, as here, a defendant moves for summary judgment to test an affirmative defense, it is the defendant’s burden to demonstrate the absence of any disputed fact as to the affirmative defense asserted. See Helm v. Kansas, 656 F.3d 1277, 1284 (10th Cir. 2011). Once the defendant meets its initial burden, the burden shifts to the nonmovant to put forth sufficient evidence to demonstrate the essential elements of her claim(s), see Anderson, 477 U.S. at 248; Simms v. Okla. ex rel. Dep’t of Mental Health & Substance Abuse Servs., 165 F.3d 1321, 1326 (10th Cir. 1999), and to “demonstrate with specificity the existence of a disputed fact” as to the defendant’s affirmative defense, see Hutchinson v. Pfeil, 105 F.3d 562, 564 (10th Cir. 1997).

App. Vol. II at 100 (emphasis added). Ms. Hamric takes issue with the emphasized phrase.

Nothing on the pages the magistrate judge cited from Anderson and Simms requires a plaintiff responding to a motion for summary judgment based on an affirmative defense to identify evidence supporting each element of her claim. See Anderson, 477 U.S. at 248 (requiring nonmoving party in face of “properly supported motion for summary judgment” to “‘set forth specific facts showing that there is a genuine issue for trial'” (quoting First Nat’l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 288 (1968))); Simms, 165 F.3d at 1326, 1328 (discussing summary judgment standard in context of employment discrimination claim and burden-shifting framework from McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973)). In fact, the standard announced by the magistrate judge would unnecessarily require a plaintiff, in response to a motion for summary judgment based on an affirmative defense, to identify evidence supporting elements of her claim never drawn into question by the defendant. Placing such a burden on a plaintiff is all the more problematic where, as here, the parties contemplated a bifurcated summary judgment process initially focused on the validity of the liability release, and WEI filed its motion for summary judgment before the close of discovery.

We have previously stated that a district court errs by requiring a party opposing summary judgment based on an affirmative defense to “establish at least an inference of the existence of each element essential to the case.” Johnson v. Riddle, 443 F.3d 723, 724 n.1 (10th Cir. 2006) (quotation marks omitted). We reaffirm that conclusion today. To defeat a motion for summary judgment, a plaintiff, upon the defendant raising and supporting an affirmative defense, need only identify a disputed material fact relative to the affirmative defense. Id.; Hutchinson, 105 F.3d at 564; see also Leone v. Owsley, 810 F.3d 1149, 1153-54 (10th Cir. 2015) (discussing defendant’s burden for obtaining summary judgment based on an affirmative defense). Only if the defendant also challenges an element of the plaintiff’s claim does the plaintiff bear the burden of coming forward with some evidence in support of that element. See Tesone, 942 F.3d at 994 (“The party moving for summary judgment bears the initial burden of showing an absence of any issues of material fact. Where . . . the burden of persuasion at trial would be on the nonmoving party, the movant may carry its initial burden by providing ‘affirmative evidence that negates an essential element of the nonmoving party’s claim’ or by ‘demonstrating to the Court that the nonmoving party’s evidence is insufficient to establish an essential element of the nonmoving party’s claim.’ If the movant makes this showing, the burden then shifts to the nonmovant to ‘set forth specific facts showing that there is a genuine issue for trial.'” (first quoting Celotex Corp., 477 U.S. at 330, then quoting Anderson, 477 U.S. at 250)); Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670-71 (10th Cir. 1998) (if summary judgment movant carries its initial burden of showing a lack of evidence in support of an essential element of plaintiff’s claim, “the burden shifts to the nonmovant to go beyond the pleadings and set forth specific facts” supporting the essential element (internal quotation marks omitted)).

The magistrate judge’s erroneous statement regarding Ms. Hamric’s burden, however, does not foreclose our ability to further review the grant of summary judgment. Rather, in accord with the applicable de novo standard of review, we review WEI’s motion for summary judgment under the standard that “should have been applied by the [magistrate judge].”[ 6] Nance v. Sun Life Assurance Co. of Can., 294 F.3d 1263, 1266 (10th Cir. 2002) (quotation marks omitted).

b. Resolution of disputed issues of material fact

Ms. Hamric contends the magistrate judge impermissibly resolved two issues of disputed fact in WEI’s favor. We discuss each asserted factual issue in turn, concluding factual disputes existed and the magistrate judge incorrectly resolved one of the disputes against Ms. Hamric. However, even if this factual dispute were material, we may proceed to analyze the validity of the liability release after resolving the dispute in Ms. Hamric’s favor. See Lincoln, 900 F.3d at 1180 (“In reviewing a grant of summary judgment, we need not defer to factual findings rendered by the district court.” (internal quotation marks omitted)).

i. Language of Registration Form and Medical Form

In moving for summary judgment, WEI’s brief contained edited versions of the Registration Form and Medical Form that focused the reader’s attention on the language most pertinent to Mr. Hamric’s participation in the outdoor excursion and the release of liability. For instance, the version of the forms in WEI’s brief left out phrases such as “(or my child)” and the accompanying properly-tensed-and-conjugated verb that would apply if the forms were completed by a parent or guardian of the participant, rather than by the participant himself. Compare App. Vol. I at 46, with id. at 57, 83.

Although WEI and Ms. Hamric attached full versions of the forms to their papers on the motion for summary judgment, the magistrate judge’s quotation of the language in the forms mirrored that which appeared in WEI’s brief. Ms. Hamric contends the magistrate judge, in not quoting the full forms, resolved a dispute of fact regarding the language of the forms in WEI’s favor. It is not uncommon for a court to focus on the pertinent language of a contract or liability release when putting forth its analysis. In this case, Ms. Hamric claims the forms should be reviewed on the whole. Although there is no indication the magistrate judge did not review the forms in their entirety, despite her use of incomplete quotations, we attach full versions of the Registration Form and Medical Form completed by Mr. Hamric as an appendix to this opinion. And we consider all the language on the forms when assessing whether the forms contain a valid liability release.

ii. Registration Form and Medical Form as single form

The magistrate judge viewed the Registration Form and the Medical Form as a single, “two-page agreement.” App. Vol. II at 103; see also id. at 101 (“Adult customers are required to execute a two-page agreement with WEI before they are permitted to participate in WEI-sponsored activities. The first page of the agreement is a ‘Registration Form’, followed by a ‘Medical Form’ on page two.”). Ms. Hamric contends the two forms are separate agreements, not a single agreement. While a jury could have concluded that the Registration Form and Medical Form were separate agreements, this dispute of fact is not material given applicable law regarding the construction of agreements that are related and simultaneously executed.

It is clear from the record that a participant needed to complete both forms before partaking in the WEI-lead excursion. Further, while the Medical Form required a signature and a date, the Registration Form required only that a participant place his initials on certain lines, suggesting the forms were part of a single agreement. However, the forms do not contain page numbers to indicate they are part of a single agreement. Further, language on the Medical Form is conflicting and ambiguous as to whether the two forms comprise a single agreement: Individuals who have not completed these forms will not be allowed to participate. I have carefully read all the sections of this agreement, understand its contents, and have initialed all sections of page 1 of this document. I have examined all the information given by myself, or my child. By the signature below, I certify that it is true and correct. Should this form and/or any wording be altered, it will not be accepted and the participant will not be allowed to participate.

App., Vol. I at 58, 84 (emphases added). Both the italicized language and the use of “forms” in the plural to describe the agreement support the conclusion that the Registration Form and the Medical Form are a single agreement. But the underlined language, using “form” in the singular, suggests the forms might constitute separate agreements. Otherwise the singular use of “form” would suggest the unlikely result that a participant could not alter the wording of the Medical Form but could alter the wording of the Registration Form.[ 7] Accord Navajo Nation v. Dalley, 896 F.3d 1196, 1213 (10th Cir. 2018) (describing the cannon of expressio unius est exclusio alterius as providing “that the ‘expression of one item of an associated group or series excludes another left unmentioned'” and that “the enumeration of certain things in a statute suggests that the legislature had no intent of including things not listed or embraced.” (quoting NLRB v. SW Gen., Inc., 137 S.Ct. 929, 940 (2017))). Thus, a reasonable jury could have found the Registration Form and the Medical Form were separate agreements.

We conclude, however, that this dispute of fact is not material to resolution of the primarily legal question regarding whether Mr. Hamric entered into a valid liability release with WEI. Under Colorado law, it is well established that a court may, and often must, construe two related agreements pertaining to the same subject matter as a single agreement. See Bledsoe v. Hill, 747 P.2d 10, 12 (Colo.App. 1987) (“If a simultaneously executed agreement between the same parties, relating to the same subject matter, is contained in more than one instrument, the documents must be construed together to determine intent as though the entire agreement were contained in a single document. Although it is desirable for the documents to refer to each other, there is no requirement that they do so.” (citing In re Application for Water Rights v. N. Colo. Water Conservancy Dist., 677 P.2d 320 (Colo. 1984); Harty v. Hoerner, 463 P.2d 313 (Colo. 1969); Westminster v. Skyline Vista Dev. Co., 431 P.2d 26 (Colo. 1967))).[ 8] Thus, although a jury could conclude the Registration Form and Medical Form technically constitute separate agreements, we consider the agreements together when determining if Mr. Hamric released WEI for its negligent acts.

3. Choice-of-Law Analysis

At the heart of WEI’s motion for summary judgment was whether Colorado or Texas law controls and whether the release is valid under the appropriate law. On appeal, Ms. Hamric contends “contract principles” control the choice-of-law analysis because WEI’s affirmative defense “was a contract issue on a purported agreement to release liability.” Opening Br. at 26-27. Ms. Hamric further contends that under contract principles in the Restatement (Second) of Conflicts of Laws, Texas law applies because Mr. Hamric was a Texas resident who completed the Registration Form and the Medical Form while in Texas. WEI agrees that if contract principles govern the choice-of-law issue, the Restatement (Second) on Conflict of Laws provides the appropriate factors for this court to consider. But WEI contends (1) the liability release is valid under both Colorado and Texas law and (2) the relevant factors in §§ 6 and 188 of the Restatement favor application of Colorado law if this court is inclined to resolve the conflict-of-law issue.

Outdoor recreation and tourism is a growing industry in Colorado, as well as several other states within our circuit. And many outdoor tourism outfitters, like WEI, require participants to complete forms containing liability releases. See Redden v. Clear Creek Skiing Corp., ___ P.3d ___, 2020 WL 7776149, at *2 (Colo.App. Dec. 31, 2020); Hamill v. Cheley Colo. Camps, Inc., 262 P.3d 945, 947-48 (Colo.App. 2011); see also Dimick v. Hopkinson, 422 P.3d 512, 515-16 (Wyo. 2018); Penunuri v. Sundance Partners, Ltd., 301 P.3d 984, 986 (Utah 2013); Beckwith v. Weber, 277 P.3d 713, 716-17 (Wyo. 2012). With the prevalence and recurrence of questions regarding the validity of liability releases in mind, and viewing the choice-of-law issue as sounding in contract law as urged by the parties, we consider whether the law of the state where the outdoor recreation company is based and the outdoor excursion occurs controls or whether the law of the state of residence of the participant controls.

a. Framework for choice-of-law analysis

“In a diversity action we apply the conflict-of-laws rules of the forum state.” Kipling v. State Farm Mut. Auto. Ins. Co., 774 F.3d 1306, 1310 (10th Cir. 2014). “This is true even when choice of law determinations involve the interpretation of contract provisions.” Shearson Lehman Brothers, Inc. v. M & L Invs., 10 F.3d 1510, 1514 (10th Cir. 1993). Accordingly, this court must look to Colorado choice-of-law rules to determine if Colorado or Texas law applies.

“Colorado follows the Restatement (Second) of Conflict of Laws (1971) . . . for both contract and tort actions,” Kipling, 774 F.3d at 1310 (citing Wood Brothers Homes, Inc. v. Walker Adjustment Bureau, 601 P.2d 1369, 1372 (Colo. 1979); First Nat’l Bank v. Rostek, 514 P.2d 314, 319-20 (Colo. 1973)). Absent a forum-state “statutory directive,” the Restatement advises a court to consider seven factors: (a) the needs of the interstate and international systems, (b) the relevant policies of the forum, (c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue (d) the protection of justified expectations, (e) the basic policies underlying the particular field of law, (f) certainty, predictability and uniformity of result, and (g) ease in the determination and application of the law to be applied.

Restatement (Second) of Conflict of Laws: Choice-of-Law Principles § 6 (Am. L. Inst. 1971). The commentary to § 6 identifies the first factor as “[p]robably the most important function of choice-of-law rules” because choice-of-law rules are designed “to further harmonious relations between states and to facilitate commercial intercourse between them.” Id. § 6 cmt. d. Meanwhile, the second factor takes into account any special interests, beyond serving as the forum for the action, that the forum state has in the litigation. Id. § 6 cmt. e. As to the fourth factor-“the protection of justified expectations, “- the comments to § 6 note: This is an important value in all fields of the law, including choice of law. Generally speaking, it would be unfair and improper to hold a person liable under the local law of one state when he had justifiably molded his conduct to conform to the requirements of another state.

Id. § 6 cmt. g.

A more specific section of the Restatement addressing contracts lacking a choice-of-law provision provides additional guidance: (1) The rights and duties of the parties with respect to an issue in contract are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the transaction and the parties under the principles stated in § 6. (2) In the absence of an effective choice of law by the parties . . ., the contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include: (a) the place of contracting, (b) the place of negotiation of the contract, (c) the place of performance, (d) the location of the subject matter of the contract, and (e) the domicile, residence, nationality, place of incorporation and place of business of the parties. These contacts are to be evaluated according to their relative importance with respect to the particular issue.

Restatement (Second) of Conflict of Laws: Law Governing in Absence of Effective Choice by the Parties § 188.

b. Colorado law controls

We conclude that, under the Restatement, a Colorado court would apply Colorado law to determine the validity and enforceability of the liability release relied upon by WEI. First looking at § 6 of the Restatement, the liability release was drafted by a Colorado corporation to cover services provided exclusively in Colorado. Applying out-of-state law to interpret the liability release would hinder commerce, as it would require WEI and other outdoor-recreation companies to know the law of the state in which a given participant lives. Such a rule would place a significant burden on outdoor-recreation companies who depend on out-of-state tourists for revenue because it would require a company like WEI to match the various requirements of the other forty-nine states. This approach would not give WEI the benefit of having logically molded its liability release to comply with Colorado law, the law of the state where WEI does business. Furthermore, Ms. Hamric’s primary argument for applying Texas law is that Mr. Hamric signed the forms in Texas. But a rule applying out-of-state law on that basis is likely to deter WEI from furnishing the liability release until a participant enters Colorado. And, while not providing participants the forms until arrival in Colorado might lessen WEI’s liability exposure under out-of-state law, such a practice would not benefit participants because it would pressure participants into a last-minute decision regarding whether to sign the liability release after having already traveled to Colorado for the outdoor excursion.

Colorado also has a strong interest in this matter. Colorado has a booming outdoor-recreation industry, in the form of skiing, hiking, climbing, camping, horseback riding, and rafting excursions. Colorado relies on tax receipts from the outdoor-recreation industry. And while many out-of-state individuals partake in these activities within Colorado, they often purchase their tickets or book excursion reservations before entering Colorado. If we applied Texas law because it is the state where Mr. Hamric signed the liability release, we would essentially allow the other forty-nine states to regulate a key industry within Colorado. Such an approach is impractical and illogical.

Further, the considerations and contacts listed in § 188 of the Restatement favor application of Colorado law. As to the first contact, in accord with the commentary, a contract is formed in “the place where occurred the last act necessary to give the contract binding effect.” Id. § 188 cmt. e. Here, that act occurred when the church group provided the forms to WEI in Colorado; for, before the forms were provided to WEI, Mr. Hamric had not conveyed his acceptance to WEI and WEI did not know whether Mr. Hamric would complete the forms and agree to the liability release. See Scoular Co. v. Denney, 151 P.3d 615, 619 (Colo.App. 2006) (discussing means of accepting an offer and stating “general rule that communication is required of the acceptance of the offer for a bilateral contract”). The second contact consideration is not applicable because the terms of the Medical Form precluded alteration, and there is no suggestion in the record Mr. Hamric attempted to negotiate the terms of the liability release before signing the forms. The third and fourth factors heavily favor application of Colorado law because WEI provides outdoor excursion services in Colorado, not Texas, and Mr. Hamric knew such when he signed the forms. Finally, the fifth factor is neutral because Mr. Hamric was a resident of Texas and WEI has its place of business in Colorado. With three factors favoring Colorado law, one factor inapplicable, and one factor neutral, the overall weight of the § 188 factors favors application of Colorado law.

Concluding that both § 6 and § 188 of the Restatement strongly support application of Colorado law, we hold that a Colorado court would choose to apply Colorado law, not Texas law, when determining whether the Registration Form and Medical Form contain a valid liability release. We, therefore, proceed to that analysis.

4. The Liability Release Is Valid under Colorado Law

Under Colorado law, “[a]greements attempting to exculpate a party from that party’s own negligence have long been disfavored.” Heil Valley Ranch, 784 P.2d at 783.But, such “[e]xculpatory agreements are not necessarily void,” as courts recognize that “[t]hey stand at the crossroads of two competing principles: freedom of contract and responsibility for damages caused by one’s own negligent acts.” Id. at 784.In assessing the validity of a release, “a court must consider: (1) the existence of a duty to the public; (2) the nature of the service performed; (3) whether the contract was fairly entered into; and (4) whether the intention of the parties is expressed in clear and unambiguous language.” Jones v. Dressel, 623 P.2d 370, 376 (Colo. 1981); see also Chadwick v. Colt Ross Outfitters, Inc., 100 P.3d 465, 467 (Colo. 2004) (a release agreement “must be closely scrutinized to ensure that the intent of the parties is expressed in clear and unambiguous language and that the circumstances and the nature of the service involved indicate that the contract was fairly entered into”).

Ms. Hamric challenges only WEI’s ability to show “whether the intention of the parties is expressed in clear and unambiguous language.”[ 9] “To determine whether the intent of the parties is clearly and unambiguously expressed, [the Colorado Supreme Court has] examined the actual language of the agreement for legal jargon, length and complication, and any likelihood of confusion or failure of a party to recognize the full extent of the release provisions.” Chadwick, 100 P.3d at 467. In general accord with this statement, federal district courts in Colorado have discerned five factors from Colorado Supreme Court decisions to determine if a release is unambiguous: (1) “whether the agreement is written in simple and clear terms that are free from legal jargon”; (2) “whether the agreement is inordinately long or complicated”; (3) “whether the release specifically addresses the risk that caused the plaintiff’s injury”; (4) “whether the contract contains any emphasis to highlight the importance of the information it contains”; and (5) “whether the plaintiff was experienced in the activity making risk of that particular injury reasonably foreseeable.” Salazar v. On the Trail Rentals, Inc., Civil Action No. 11-cv-00320-CMA-KMT, 2012 WL 934240, at *4 (D. Colo. Mar. 20, 2012) (deriving factors from Heil Valley Ranch, 784 P.2d at 785; Chadwick, 100 P.3d at 467); see also Eburn v. Capitol Peak Outfitters, Inc., 882 F.Supp.2d 1248, 1253 (D. Colo. 2012) (citing factors set forth in Salazar). Each and every factor, however, need not be satisfied for a court to uphold the validity of a liability release, as the Colorado Supreme Court has upheld the validity of a release where the signor was a novice at the outdoor activity in question. See B & B Livery, Inc., 960 P.2d at 138 (upholding liability release without finding every factor favored validity); id. at 139-40 (Hobbs, J., dissenting) (discussing signor’s inexperience riding horses).

The first four factors taken from Heil Valley Ranch and Chadwick support the validity of the liability release in the Registration Form and Medical Form. The forms span a mere two pages, with language pertinent to the liability release in only four sections of the forms. And those four sections are generally free of legal jargon. For instance, in detailing the scope of the release, the Registration Form required the participant/signor to “hold harmless Wilderness Expeditions, Inc. . . . for any injury or death caused by or resulting from my or my child’s participation in the activities.”[ 10] App. Vol. I at 57, 83. And this language comes after the form describes several of the risks associated with the activities, including “that accidents or illness can occur in remote places without medical facilities” and that “any route or activity chosen [by WEI] may not be of minimum risk, but may have been chosen for its interest and challenge.” Id. The Registration Form also twice places bolded emphasis on the fact that a participant was releasing WEI from liability: “By signing my initials below, I certify this is a release of liability.”Id. Finally, although not explicitly a factor identified by Colorado courts, we observe WEI provided the church group with the forms, and Mr. Hamric completed the forms, months before the booked excursion. Thus, if Mr. Hamric personally had difficulty understanding any of the language on the forms, he had ample time to contact WEI for an explanation or consult legal counsel.

The sole factor clearly cutting against enforcement of the liability release is Mr. Hamric’s lack of rappelling experience. However, as noted above, the Colorado Supreme Court has not found this consideration to be dispositive against the enforcement of a liability waiver. See B & B Livery, Inc., 960 P.2d at 138-39. And, where the liability release between Mr. Hamric and WEI is otherwise clear, specific, and uncomplicated, Mr. Hamric’s lack of experience rappelling is insufficient to defeat the release as a whole.

Accordingly, applying Colorado law, we hold the liability release is valid and its enforcement bars Ms. Hamric’s negligence claim. Therefore, we affirm the magistrate judge’s grant of summary judgment in favor of WEI.

III. CONCLUSION

We affirm the denial of Ms. Hamric’s motion for leave to amend her complaint because the magistrate judge did not abuse her discretion where Ms. Hamric did not attempt to satisfy the Federal Rule of Civil Procedure 16(b) standard for amending the Scheduling Order. We also affirm the denial of Ms. Hamric’s discovery motions, holding the magistrate judge did not abuse her discretion where the items Ms. Hamric sought to discover were either already in the record, were not necessary to determine the validity of the liability release, or went to Ms. Hamric’s effort to obtain exemplary damages, which she could not pursue given the denial of her motion for leave to amend her complaint. Finally, applying de novo review to the choice-of-law issue and the issue regarding the validity of the liability release, we conclude Colorado law applies and the release is valid and enforceable under that law. Therefore, we affirm the magistrate judge’s grant of summary judgment to WEI.

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Notes:

[ 1]Here, we summarize the Registration Form and the Medical Form. Copies of the full forms, taken from the Appendix submitted by Ms. Hamric, are attached to this opinion. We rely on the full forms, and all of the language thereon, when conducting our analysis. Further, as discussed infra at 25-27, Section II(C)(2)(b)(ii), while the Registration Form and Medical Form could be viewed as separate forms, Colorado law requires us to consider both forms together when conducting our analysis.

[ 2]Throughout our opinion, we cite simultaneously to the Registration Form or Medical Form attached to WEI’s motion for summary judgment, App. Vol. I at 57- 58, and the Registration Form or Medical Form attached to Ms. Hamric’s response to WEI’s motion for summary judgment, id. at 83-84. Although the language of the two sets of forms are identical, the clarity of the text varies somewhat, seemingly based on the proficiency of the respective copy machines used by the parties.

[ 3]In quoting the forms, we seek to replicate the font size, spacing, and bolding of the text of the Registration Form and Medical Form completed by Mr. Hamric.

[ 4] Under Colorado law: A claim for exemplary damages in an action governed by [§ 13-21-102 of the Colorado Revised Statutes] may not be included in any initial claim for relief. A claim for exemplary damages in an action governed by this section may be allowed by amendment to the pleadings only after the exchange of initial disclosures . . . and the plaintiff establishes prima facie proof of a triable issue.

Colo. Rev. Stat. § 13-21-102(1.5)(a).

[ 5]Although Ms. Hamric’s action sounds in tort law, on appeal, the parties do not contend that tort principles provide the framework for the choice-of-law analysis regarding the liability release. Thus, we reach no conclusion as to whether Colorado law or Texas law would govern if tort principles played a role in the choice-of-law analysis.

[ 6]While the magistrate judge incorrectly stated the standard governing WEI’s motion for summary judgment, it is not apparent the magistrate judge’s analysis and conclusion that WEI was entitled to summary judgment hinged on Ms. Hamric’s failure to identify evidence supporting each element of her negligence claim. Rather, the magistrate judge correctly granted WEI summary judgment based on the liability release and WEI’s affirmative defense.

[ 7]WEI has advanced inconsistent positions on whether the Registration Form and Medical Form comprised a single agreement. Although on appeal WEI argues the forms constitute a single agreement releasing liability, WEI’s Answer to Ms. Hamric’s Complaint treats the two forms as separate agreements, stating that “[d]ecedent Gerald Hamric executed a valid and enforceable liability release. Decedent Gerald Hamric also executed a medical evaluation.” App. Vol. I at 32 (emphasis added).

[ 8]Although we conclude that Colorado law, not Texas law, controls the validity of the liability release, infra at 28-33, Section II(C)(3), Texas law likewise permits a court to read separate but related documents together when determining the intent of the parties, see Fort Worth Indep. Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831, 840 (Tex. 2000) (“The City’s argument ignores well-established law that instruments pertaining to the same transaction may be read together to ascertain the parties’ intent, even if the parties executed the instruments at different times and the instruments do not expressly refer to each other, and that a court may determine, as a matter of law, that multiple documents comprise a written contract. In appropriate instances, courts may construe all the documents as if they were part of a single, unified instrument.” (footnotes omitted)).

[ 9]Ms. Hamric also argues that the question of whether Mr. Hamric and WEI entered into a liability release was a question of fact for a jury. But Ms. Hamric withdrew her fact-based challenge to the authenticity of the forms. Further, under Colorado law, “[t]he determination of the sufficiency and validity of an exculpatory agreement is a question of law for the court to determine.” Jones v. Dressel, 623 P.2d 370, 376 (Colo. 1981). And, where a liability release has force only if it is “clear and unambiguous,” id., the question of the existence of a liability release and its validity are one in the same because if the language relied on by a defendant does not form a valid release, then no liability release exists.

[ 10] The omitted language marked by the ellipses also required a signor/participant to hold federal and state agencies harmless for injuries or death that might occur as a result of WEI-led activities on federal or state land. Like the rest of the release, this language is plain and clear such that any reasonably educated individual would understand the nature of the release as to these third parties.


Washington Appellate court reviews release law in 2021 and the requirements on when a release is ambiguous and/or conspicuous.

Like most other states, if you signed the release, you read and agree to the release. However, that is about the only similarity to release law in other states as pointed out in this decision.

McCoy v. PFWA Lacey, LLC, dba Planet Fitness,

State: Washington, Court of Appeals of Washington, Division 2

Plaintiff: Carol J. McCoy

Defendant: PFWA Lacey, LLC, dba Planet Fitness

Plaintiff Claims: Negligence

Defendant Defenses: Release

Holding: For the Defendant

Year: 2021

Summary

The release used by the health club stopped the lawsuit filed by the plaintiff for her injuries. However, this decision points out two very different requirements Washington’s law requires for a release to be valid. No release will work in all 43 states that allow the use of a release.

Facts

On February 1, 2016, McCoy entered into a membership agreement at Planet Fitness in Lacey. The first page of the two-page membership agreement begins with a section covering personal information, membership rate, and financial terms of the membership. The final sentence of this section states, “Cancellation & Billing Policies: I have read and understand the cancellation rights and billing policies on the front and back of this agreement,” followed by McCoy’s signature/initials. Clerk’s Papers (CP) at 25. Below McCoy’s signature/initials is a large box marked “PAYMENT AUTHORIZATION” with McCoy’s bank account information, and her signature after the paragraph authorizing a monthly membership fee payment.

In July 2016, McCoy fell from a stair stepper machine at Planet Fitness. She alleged that the emergency stop button failed to stop the machine, causing her injury. In January 2019, McCoy filed an amended complaint, naming Planet Fitness and the manufacturer of the machine, the Brunswick Corporation, [ 2] as defendants. She alleged claims of negligence and failure to provide a safe product.

Planet Fitness filed a motion for summary judgment, arguing in part that McCoy had signed an enforceable liability waiver. In support of its motion, it provided a copy of the membership agreement as well as excerpts from a transcript of McCoy’s deposition testimony. In her deposition, when shown the membership agreement, McCoy stated that she did not remember seeing the membership agreement before and that she did not remember signing it.

McCoy responded to the motion, arguing that the waiver provision in the membership agreement was inconspicuous and ambiguous, and because McCoy was not given an opportunity to read or review the agreement, it was unwittingly signed. In a supporting declaration, McCoy recalled the day she signed the membership agreement: 3.I was there for a short time, and I spoke to a person who appeared to be the manager, or at least was working behind the desk, who presented me with some documents to sign. He identified these documents as mere formalities and that I had to sign them in order to join the club. He showed me where to sign on a couple documents and I signed them, but I was not given an opportunity to read all the language, and when I mentioned that, he told me he would send me copies of these documents in the mail to my home address. He never did. 4.What little I could see of the documents was in very fine, small print which I could not read, at least on one of the documents, and the first time I saw the documents was at my deposition. I did not have time to read them at my deposition and I would have had difficulty anyway because the print was so small. . . . . As I said, the only direction I got from the person who was working behind the counter was to “sign here” and I did. He immediately took the documents back and told me that he would mail them to me, but I never received copies in the mail so I never really had an opportunity to review them before the incident occurred, or any time afterwards.

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

Washington’s law since 1988 has allowed the use of releases to allow parties to stop litigation.

The Washington Supreme Court has recognized the right of 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.'”

Washington has three ways to void releases, one that is found in most states and two slightly different ways. The first, a release fails if it violates public policy. This means the release is void based on who the release is attempting to protect or the services being offered that are to be covered by the release. However, in Washington, the state has adopted six factors to define public policy.

Six factors are considered in determining whether exculpatory agreements violate public policy. The court considers whether (1) the agreement concerns an endeavor of a type generally thought suitable for public regulation; (2) the party seeking exculpation is engaged in performing a service of great importance to the public, which is often a matter of practical necessity for some members of the public; (3) such party holds itself 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; (4) because 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 the services; (5) 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; and (6) the person or property of members of the public seeking such services must be placed under the control of the furnisher of the services, subject to the risk of carelessness on the part of the furnisher, its employees or agents. Wagenblast v. Odessa Sch. Dist. 105-157-166J, 110 Wash.2d 845, 851-55, 758 P.2d 968 (1988) (citing Tunkl v. Regents of Univ. of Cal., 60 Cal.2d 92, 32 Cal.Rptr. 33, 383 P.2d 441, 446 (1963)).

The second and third ways are very different from other states. If the negligent act falls below the standard of protection for others, it is void. This phrase is not defined in Washington’s law that I can find, even though it is quoted in several cases. I am guessing it is similar to a gross negligence argument. The act or omission of the defendant was so great as to far exceed negligence. However, I’m not sure.

Generally, a liability waiver or exculpatory clause in a contract is “enforceable unless (1) it violates public policy, (2) the negligent act falls greatly below the legal standard for protection of others, or (3) it is inconspicuous.” The first two exceptions are not at issue here. A liability waiver provision is not enforceable if the releasing language is “‘so inconspicuous that reasonable persons could reach different conclusions as to whether the document was unwittingly signed.’

The inconspicuous argument was the main argument made by the defendant in this case and discussed by the court. Washington has six factors to determine if the language in a contract is inconspicuous.

Courts look to several factors in deciding whether a liability waiver provision is conspicuous, including: (1) whether the waiver provision is set apart or hidden within other provisions, (2) whether the heading or caption of the provision is clear, (3) whether the waiver provision is set off in capital letters or in bold type, (4) whether there is a signature line below the waiver provision, (5) what the language says above the signature line, and (6) whether it is clear that the signature is related to the waiver provision.

The is far more requirements than most states, in fact; most states only require the waiver or release provisions be set apart or not hidden within the contract. Washington also requires that there be a heading or caption providing notice of the importance of the release or waiver section. That language of the exculpatory provisions must be in capital letters or bold type. The signature on the document must be below the exculpatory provisions. That means if your contract has a signature on the front of the document but references release language on the back, the release will be void.

The language above the signature line must indicate the person is giving up their legal rights or the signature line must be specifically below the release provisions, and the signature must clearly relate to the release provisions.

This six-part analysis of conspicuous is not done individually but looking at the agreement as a whole. Yet the analysis the court made was of each point of the test and reviewed individually, not as a whole.

We do not look to whether the plaintiff unwittingly signed the form from her subjective viewpoint, but whether, “objectively, the waiver provision was so inconspicuous that it is unenforceable.” Essentially, if the waiver provision is hidden, i.e. inconspicuous, it is unenforceable. Nevertheless, even if the waiver provision is conspicuous, and a person signs without reading it, the provision is enforceable unless the signor was not given an opportunity to read it. (“[A] person who signs an agreement without reading it is bound by its terms as long as there was ‘ample opportunity to examine the contract in as great a detail as he cared, and he failed to do so for his own personal reasons.'”)

The following two pages of analysis in the decision by the court looked at the release in detail to determine if the six factors had been met. The court found the waiver language in the contract was conspicuous and thus valid.

The next argument made by the plaintiff was the plaintiff did not have time to read the release.

McCoy admits that she did not read the agreement. Even though she did not read the agreement, she would be bound by its terms only if there was opportunity to examine the contract in as great a detail as she cared, and she failed to do so for her own personal reasons. (“Where a party has signed a contract without reading it, that party cannot successfully argue that mutual assent was lacking as long as the party was not deprived of the opportunity to read the contract.”).

Basically, if you signed the agreement, you have read and understood the agreement.

So Now What?

No release or waiver can be written to satisfy the laws of all 50 states or the 43 states that allow the use of a release or waiver. Even though Washington’s law is similar to the law in most states, it is very different in several aspects, enough so that if you operate in or are based in Washington your release must be written to meet Washington’s law.

No other state has the requirements for conspicuous that are required for a waiver or release to be valid like Washington’s law. It is specific and as stated by the court, if all six parts of the requirements are not met the release is void.

What do you think? Leave a comment.

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McCoy v. PFWA Lacey, LLC, dba Planet Fitness,

McCoy v. PFWA Lacey, LLC, dba Planet Fitness,

Carol J. McCoy, a single person, Respondent,

PFWA Lacey, LLC, a Washington limited company, dba Planet Fitness, Petitioner,

and

BRUNSWICK CORPORATION, a foreign corporation, Defendant.

No. 54400-8-II

Court of Appeals of Washington, Division 2

May 11, 2021

UNPUBLISHED OPINION

Veljacic, J.

Carol McCoy brought suit against Planet Fitness-Lacey for negligence after she was injured using a fitness machine. Planet Fitness filed a motion for summary judgment, arguing that McCoy was precluded from bringing suit because she signed a membership agreement that contained a liability waiver provision.[ 1] McCoy argued that the waiver was inconspicuous and that she was not given an opportunity to read the membership agreement.

The court denied Planet Fitness’s motion, determining that material issues of fact remained regarding whether McCoy unwittingly signed the waiver provision because it was inconspicuous. Planet Fitness appeals. We reverse the order denying summary judgment because the waiver provision was conspicuous and McCoy did not demonstrate an issue of material fact bearing on whether she was provided an opportunity to read the membership agreement.

FACTS

On February 1, 2016, McCoy entered into a membership agreement at Planet Fitness in Lacey. The first page of the two-page membership agreement begins with a section covering personal information, membership rate, and financial terms of the membership. The final sentence of this section states, “Cancellation & Billing Policies: I have read and understand the cancellation rights and billing policies on the front and back of this agreement,” followed by McCoy’s signature/initials. Clerk’s Papers (CP) at 25. Below McCoy’s signature/initials is a large box marked “PAYMENT AUTHORIZATION” with McCoy’s bank account information, and her signature after the paragraph authorizing a monthly membership fee payment.

The waiver provision is found below the payment authorization box, a little more than halfway down the first page of the agreement. Image Omitted

CPat25.

Below a dark line is a banner containing the bolded, capitalized words “RELEASE OF LIABILITY,” “ASSUMPTION OF RISK,” “CLUB RULES,” and “BUYER’S NOTICE & RIGHT TO CANCEL.” CP at 25. Directly below that banner is a paragraph in the same small sized font as the majority of the agreement that enumerates the waiver of legal rights. The waiver provision states that certain risks are inherent in physical activity and that the signer understands and voluntarily accepts responsibility for risk of injury or loss arising from the use of Planet Fitness facilities. It goes on to state twice that the member agrees that Planet Fitness is not liable for injury resulting from negligent conduct or omission of Planet Fitness or anyone acting on its behalf. The second paragraph of the waiver provision reads: I understand that I am not obligated to sign this agreement and should not do so if there are any unfilled blanks. I understand my right of cancellation and the billing and refund policies. I understand my release of liability, assumption of risk and agreement to indemnify, defend and hold harmless and I have been given the opportunity to review and ask questions related to my use of facilities . . . and other equipment. . . . I agree to comply with Planet Fitness’ membership policies and club rules. . . . Planet fitness may, in its sole discretion, modify any policy or club rule at any time and from time to time without advance notice. Planet Fitness reserves the right, in its sole discretion, to refund the pro-rated cost of unused services. . . . By signing below, I acknowledge and agree to all of the terms contained on the front and back of this agreement.

CP at 25.

McCoy’s signature appears immediately below this paragraph, next to a Planet Fitness authorized signature.

Bold, capital letters at the bottom of the first page and underneath the signature line discuss the nonrefundable initiation fee, then an acknowledgement of receipt of a written description of the health studio services and equipment and a complete copy of the rules on separate lines, followed by lines for initials. Finally, the page details, again in bold capital letters, the process for cancellation of the membership agreement. The second page of the agreement has a large bold heading that reads “PLEASE READ AND UNDERSTAND THIS AGREEMENT BEFORE SIGNING.” CP at 26. The remaining language of the contract is immaterial to this appeal.

In July 2016, McCoy fell from a stair stepper machine at Planet Fitness. She alleged that the emergency stop button failed to stop the machine, causing her injury. In January 2019, McCoy filed an amended complaint, naming Planet Fitness and the manufacturer of the machine, the Brunswick Corporation, [ 2] as defendants. She alleged claims of negligence and failure to provide a safe product.

Planet Fitness filed a motion for summary judgment, arguing in part that McCoy had signed an enforceable liability waiver. In support of its motion, it provided a copy of the membership agreement as well as excerpts from a transcript of McCoy’s deposition testimony. In her deposition, when shown the membership agreement, McCoy stated that she did not remember seeing the membership agreement before and that she did not remember signing it.

McCoy responded to the motion, arguing that the waiver provision in the membership agreement was inconspicuous and ambiguous, and because McCoy was not given an opportunity to read or review the agreement, it was unwittingly signed. In a supporting declaration, McCoy recalled the day she signed the membership agreement: 3.I was there for a short time, and I spoke to a person who appeared to be the manager, or at least was working behind the desk, who presented me with some documents to sign. He identified these documents as mere formalities and that I had to sign them in order to join the club. He showed me where to sign on a couple documents and I signed them, but I was not given an opportunity to read all the language, and when I mentioned that, he told me he would send me copies of these documents in the mail to my home address. He never did. 4.What little I could see of the documents was in very fine, small print which I could not read, at least on one of the documents, and the first time I saw the documents was at my deposition. I did not have time to read them at my deposition and I would have had difficulty anyway because the print was so small. . . . . As I said, the only direction I got from the person who was working behind the counter was to “sign here” and I did. He immediately took the documents back and told me that he would mail them to me, but I never received copies in the mail so I never really had an opportunity to review them before the incident occurred, or any time afterwards.

CP at 140-41.

In reply, Planet Fitness argued that the waiver provision was conspicuous under Washington law, and provided a screen shot of an undated e-mail from Planet Fitness to McCoy with a copy of McCoy’s signed membership agreement attached.

The court denied Planet Fitness’s motion for summary judgment. Planet Fitness filed a motion for reconsideration, which the court also denied. We granted Planet Fitness’s motion for discretionary review.

ANALYSIS

I. Standard of Review

Summary judgment is appropriate where there is no genuine issue of material fact and the movant is entitled to a judgment as a matter of law. Chauvlier v. Booth Creek Ski Holdings, Inc., 109 Wn.App. 334, 338, 35 P.3d 383 (2001). On a motion for summary judgment, we view all evidence and draws all reasonable inferences in the light most favorable to the nonmoving party. Id. at 338-39. Where different competing inferences may be drawn from the evidence, the issue must be resolved by the trier of fact. Kuyper v. Dep’t. of Wildlife, 79 Wn.App. 732, 739, 904 P.2d 793 (1995). On appeal, we review an order denying summary judgement de novo. Chauvlier, 109 Wn.App. at 339.

On appeal, Planet Fitness argues that the court erred in denying its motion for summary judgment, because McCoy signed an enforceable liability waiver provision. Planet Fitness contends that the liability waiver provision was so conspicuous that it could not have been unwittingly signed and is therefore enforceable. McCoy argues that a genuine issue of material fact remains as to whether the waiver provision was conspicuous and whether she was given adequate opportunity to read the membership agreement.

II. Legal Principles

The Washington Supreme Court has recognized the right of 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.'” Wagenblast v. Odessa Sch. Dist., 110 Wn.2d 845, 848, 758 P.2d 968 (1988) (quoting W. Page Keeton, et al, Prosser and Keeton on Torts § 68, at 482 (5th ed. 1984)).

Generally, a liability waiver or exculpatory clause in a contract is “enforceable unless (1) it violates public policy, (2) the negligent act falls greatly below the legal standard for protection of others, or (3) it is inconspicuous.” Johnson v. Spokane to Sandpoint, LLC, 176 Wn.App. 453, 458, 309 P.3d 528 (2013). The first two exceptions are not at issue here. A liability waiver provision is not enforceable if the releasing language is “‘so inconspicuous that reasonable persons could reach different conclusions as to whether the document was unwittingly signed.'” Johnson v. UBAR, LLC, 150 Wn.App. 533, 538, 210 P.3d 1021 (2009) (quoting McCorkle v. Hall, 56 Wn.App. 80, 83, 782 P.2d 574 (1989)).[ 3]

Courts look to several factors in deciding whether a liability waiver provision is conspicuous including: (1) whether the waiver provision is set apart or hidden within other provisions, (2) whether the heading or caption of the provision is clear, (3) whether the waiver provision is set off in capital letters or in bold type, (4) whether there is a signature line below the waiver provision, (5) what the language says above the signature line, and (6) whether it is clear that the signature is related to the waiver provision. See Baker v. City of Seattle, 79 Wn.2d 198, 202, 484 P.2d 405 (1971); McCorkle, 56 Wn.App. at 83-84; Chauvlier, 109 Wn.App. at 342; Stokes v. Bally’s Pacwest, Inc., 113 Wn.App. 442, 448, 54 P.3d 161 (2002).

We do not look to whether the plaintiff unwittingly signed the form from her subjective viewpoint, but whether, “objectively, the waiver provision was so inconspicuous that it is unenforceable.” Stokes, 113 Wn.App. at 446. Essentially, if the waiver provision is hidden, i.e. inconspicuous, it is unenforceable. Nevertheless, even if the waiver provision is conspicuous, and a person signs without reading it, the provision is enforceable unless the signor was not given an opportunity to read it. Chauvlier, 109 Wn.App. at 341 (“[A] person who signs an agreement without reading it is bound by its terms as long as there was ‘ample opportunity to examine the contract in as great a detail as he cared, and he failed to do so for his own personal reasons.'”) (internal quotation marks omitted) (quoting Nat’l Bank of Wash. v. Equity Inv’rs, 81 Wn.2d 886, 913, 506 P.2d 20 (1973)).

III. Analysis

A. Conspicuousness of the Waiver Provision

We first consider whether the waiver provision is inconspicuous so as to invalidate the agreement. Stokes, 113 Wn.App. at 446. Here, the waiver provision contains some, but not all of the elements that we have found significant in determining the conspicuousness of waiver provisions.

1. The Waiver Provision is Set Apart from Other Provisions

To determine if the waiver provision is conspicuous, we first look at whether it is set apart or hidden within other provisions. In Baker, our Supreme Court held that the waiver provision was unenforceable because it was set in the middle of the agreement without anything to distinguish it from the rest of the terms of the agreement. 79 Wn.2d at 202. Here, the waiver provision is set off by a shaded banner or header with a title indicating that the subject of the following section is a “RELEASE OF LIABILITY” and “ASSUMPTION OF RISK.” CP at 25. The waiver language is not hidden within other provisions. This factor supports a finding of conspicuousness.

2. The Heading of the Waiver Provision is Clear

We also look to whether the heading or caption of the waiver provision is clear. For example, the plaintiff in McCorkle argued that the title “Liability Statement” in the agreement did not allow him to “conclude [that] future negligent conduct was being released.” 56 Wn.App. at 83. This court contrasted the title “Liability Statement” with the release provisions in two earlier cases that were deemed conspicuous because their titles clearly and unambiguously indicated that they dealt with a waiver of liability. Id. In contrast, in Chauvlier, this court found clear and enforceable a waiver provision entitled “LIABILITY RELEASE & PROMISE NOT TO SUE. PLEASE READ CAREFULLY!” 109 Wn.App. at 342.

Here, the shaded header reads: “RELEASE OF LIABILITY,” “ASSUMPTION OF RISK,” “CLUB RULES,” and “BUYER’S NOTICE & RIGHT TO CANCEL.” CP at 25. Although the header indicates that release of liability and assumption of the risk are not the only topics of the following paragraphs, it is clear from the header what the following provision contains-namely, a release of liability and an assumption of the risk. The inclusion of the other two subjects does not make the heading of the provision unclear or the reader ignorant of what is contained below the shaded header. This factor supports a finding of conspicuousness.

3. The Appearance of the Waiver Provision Language is Not Emphasized We then look to the appearance or attributes of the waiver provision itself, like whether the words are emphasized in capital letters or in bold type. For example, in Stokes and Chauvlier, the words indicating release of liability appear in bold or capital letters throughout the provisions. 113 Wn.App. at 448; 109 Wn.App. at 342. Here, the body of the waiver provision is in the same size and type of text as the remainder of the form and has no bold or capital letters. This factor does not support a finding of conspicuousness.

4. The Signature Line

We next consider the signature line and its relation to the waiver provision. Specifically, whether it is located below the waiver provision, what the language above the signature line indicates, and whether it is clear that the required signature is related to the release of liability. Chauvlier, 109 Wn.App. at 342; Stokes, 113 Wn.App. at 448; UBAR, LLC, 150 Wn.App. at 538.

a. The Signature Line is Below the Waiver Provision

Here, the signature line is below the waiver provision. This supports a finding of conspicuousness.

b. The Language Immediately Above the Signature Line does Not Relate only to the Waiver Provision

Here, although the signature line is located below the waiver provision, the signature and waiver are separated by an intervening paragraph. The first paragraph underneath the header relates to the waiver of liability. The second paragraph, situated directly above the signature line relates to the club rules and the right to cancel. This second paragraph also states: “By signing below, I acknowledge and agree to all of the terms contained on the front and back of this agreement.” CP at 25.

In Stokes, this court held that reasonable minds could not differ regarding the conspicuousness of a waiver provision contained in a retail installment contract. 113 Wn.App. at 448. This court’s determination relied in part on the fact that a statement immediately below the signature line said that the contract contained a waiver and release to which the signatory would be bound. Stokes, 113 Wn.App. at 448. In Chauvlier, this court relied in part on a statement directly above the signature line reading: “I have read, understood, and accepted the conditions of the Liability Release printed above” in making its determination that the waiver provision at issue was conspicuous and enforceable. 109 Wn.App. at 342. Here, the statement above the signature line is unlike those contained in the contracts held to be enforceable in Stokes and Chauvlier, because it relates to all provisions of the membership agreement, rather than only the waiver provision. This factor does not support a finding of conspicuousness.

c. The Required Signature Relates to the Waiver Provision

Although separated by a paragraph, the signature line clearly relates to the waiver provision because it is spatially oriented near the waiver provision. It is within the area set off by the large banner described above and by its own language relates to the “all of the terms contained” in the agreement. CP at 25. This factor also favors a finding of conspicuousness.

In summary, although the signature line does not correspond solely to the waiver provision, the provision is set apart from the other provisions of the contract by a banner, the caption heading within the banner clearly identifies the contents of the waiver, the signature line is below the waiver provision and it clearly relates to the waiver provision. We conclude that the waiver provision is conspicuous.

B. Opportunity to Examine the Agreement

McCoy admits that she did not read the agreement. Even though she did not read the agreement, she would be bound by its terms only if there was opportunity to examine the contract in as great a detail as she cared, and she failed to do so for her own personal reasons. Yakima County ( W.Valley) Fire Prot. Dist. No. 12 v. City of Yakima, 122 Wn.2d 371, 389, 858 P.2d 245 (1993) (“Where a party has signed a contract without reading it, that party cannot successfully argue that mutual assent was lacking as long as the party was not deprived of the opportunity to read the contract.”).

McCoy asserts that the Planet Fitness employee identified the agreement as a “mere formalit[y]” that she had to sign in order to join the club. CP at 140. The employee “showed [her] where to sign on a couple documents and [she] signed them, but [she] was not given an opportunity to read all the language” because he immediately took the papers back. CP at 140-41. When McCoy mentioned that she had not been able to read them, he told her that he would mail them to her home address. McCoy was apparently satisfied with not reading it before signing. Although McCoy asserts that she was not given the opportunity to read the membership agreement, there is no indication that she could not have read the contract either before or after she signed it if she had asked. Additionally, McCoy sought out the membership and there is no evidence that she was coerced. The waiver was conspicuous as a matter of law, McCoy has not shown that there is a genuine issue of material fact regarding her opportunity to read the membership agreement. In any case, even if she felt rushed to sign the document, the waiver language was, as a matter of law, conspicuous enough for her to notice it.

CONCLUSION

The liability waiver was conspicuous. McCoy did not demonstrate an issue of fact regarding her opportunity to read the membership agreement. Accordingly, we reverse.[ 4]

A majority of the panel having determined that this opinion will not be printed in the Washington Appellate Reports, but will be filed for public record in accordance with RCW 2.06.040, it is so ordered.

We concur: Worswick, J. Lee, C.J.

Notes:

[ 1] Alternatively, the parties and witnesses refer to the “membership agreement” as “the documents” and “the contract.” We will refer to it as the “membership agreement” throughout this opinion. The liability waiver provision is contained within the membership agreement. Throughout the remainder of this opinion, we will refer to this provision simply as the “waiver provision.”

[ 2] The claims against Brunswick are not at issue in this appeal.

[ 3] Although the inconspicuousness of a waiver provision appears to be a factual inquiry, the Supreme Court in Baker v. City of Seattle, 79 Wn.2d 198, 484 P.2d 405 (1971), determined that a liability waiver provision hidden in the middle of an agreement was so inconspicuous that, as a matter of public policy, it would be unconscionable to enforce it. Subsequent courts of appeal have treated the issue of conspicuousness, as the Baker holding implies, as a matter of law determined by the court. See e.g. Stokes v. Bally’s Pacwest, Inc., 113 Wn.App. 442, 448, 54 P.3d 161 (2002)(“The language is conspicuous, as a matter of law, and it was not unwittingly signed.”).

[ 4] Because we reverse the denial of summary judgment, we do not reach the issue of whether the court abused its discretion in denying the motion for reconsideration.


In a strange round about way, Missouri Appellate Court finds release stops tubing hill claim, but only after release identified the risk the plaintiff complained of.

Court comes to the conclusion the release is valid, but starts at the very beginning of the law and circles continuously to get there.

The Good News is releases are valid under Missouri’s law. The bad news is, you might never know from this decision.

Ferbet v. Hidden Valley Golf and Ski, Inc. and Peak Resorts, Inc.,

State: Missouri, Court of Appeals of Missouri, Eastern District, Fourth Division

Plaintiff: Douglas E. Ferbet

Defendant: Hidden Valley Golf and Ski, Inc. and Peak Resorts, Inc.

Plaintiff Claims: negligent maintenance and operation of the tubing hill

Defendant Defenses:

Holding: Release

Year: 2020

Summary

Plaintiff was snow tubing, and his foot got caught in a hole or divot breaking his leg. The plaintiff signed a release, which stopped the lawsuit. The court reviewed all the possible ways the plaintiff could win and lose the lawsuit in this 12-page opinion.

Facts

Hidden Valley’s snow tubing operation, located on a hillside adjacent to its ski resort, consists of a series of parallel and adjacent lanes descending down the hill. Customers slide down the lanes while perched on rubber inner tubes provided to them by Hidden Valley. Hidden Valley maintains the surface of the lanes covered in snow and ice and separates the lanes from each other by raised rows of packed snow and ice.

On January 25, 2013, when Ferbet arrived with his family at the ticket window, he was presented with this one-page, single-spaced, form agreement. He signed and dated the agreement in the spaces designated at the bottom, purchased tickets, and then proceeded to the tubing hill. Hidden Valley provided Ferbet an inner tube to use to slide down any of the tubing lanes he chose. And during what would turn out to be Ferbet’s last slide of the day, his right foot lodged into a crevice in the sliding surface fracturing his tibia and fibula when his momentum carried the rest of his body forward.

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

This court decided to write a law school analysis of the law concerning outdoor recreation injuries. The problem was the decision is extremely difficult to read because it keeps circling back on itself to bring up new legal topics.

The first issue the court reviewed was whether the release contained assumption of the risk language specific to the injury the plaintiff suffered.

Here, since Hidden Valley has asserted the release as an affirmative defense, we review de novo the legal and fact questions (1) whether the release before us is enforceable to release Ferbet’s claims as a matter of law, and (2) whether Hidden Valley has established as a matter of undisputed fact that the injury-causing negligent conduct alleged by Ferbet is within the purview of this release.

I’ve argued that releases need this language for years. However, my argument is based on proving assumption of the risk if the release is thrown out by the court. Here, the appellate court seems to require the language in a release in Missouri, but never comes right out and says so.

The first analysis the court undertook was whether the release met Missouri’s law. This is a common analysis of any case where a release is used to stop the lawsuit. The second analysis, whether the thing that caused the plaintiff’s injury was covered by the release, is also sometimes seen in reviewing releases. In that analysis, the issue is, was the release written broadly enough to cover the injury the plaintiff is complaining about.

However, in this case, the court wanted to know if the release specifically looked at the specific issue that caused the plaintiff’s injury. Did the release cover the cracks and divots in the snow where the plaintiff caught his foot?

First looking at whether the release was valid under Missouri’s law the court reviewed Missouri’s law.

It is a “well-established rule of construction that a contract provision exempting one from liability for his or her negligence will never be implied but must be clearly and explicitly stated.” In doing so, courts must ensure that the exculpatory clause complies with the bright-line test established in Alack, the seminal case on this question, requiring that the words “negligence” or “fault” or their equivalents be used conspicuously so that a clear and unmistakable waiver and shifting of risk occurs.

Here is where the case starts to veer into new areas. The exact same clause the court is reviewing was already found valid in a prior case involving the same defendant on the same tubing hill with a different plaintiff seven years earlier.

Moreover, this Court has already considered this exact same release in Guthrie v. Hidden Valley Golf and Ski, Inc., 407 S.W.3d 642 (Mo. App. E.D. 2013) (Van Amburg, J., dissenting), in which a divided panel of this Court affirmed summary judgment in Hidden Valley’s favor and found that the language in paragraph 7 releasing Hidden Valley from its future negligence was sufficiently clear and conspicuous. Id. at 648. There, Guthrie’s foot was broken when another snow tuber collided with him in the run-out portion of the hill, the area where all of the snow tubers end their runs. So, Guthrie differs somewhat from this case because of the mechanism of injury which was a collision with another snow tuber, a risk the release covered repeatedly and extensively in paragraph 2 and again in the 8th bullet point of paragraph 3, while here the injury was allegedly caused by the condition of the premises.

Normally once a court finds a release valid in a prior case, they won’t even review the latest decision, they court just issues an order saying the prior decision is controlling. Here, they acknowledge the prior case and still analyzed every possible aspect of release and assumption of risk law in Missouri.

The court found the language of the release was valid. The court also found the word negligence was a necessary requirement of the release.

The court then quoted the decision forming the basis for release law in Missouri, which stated the word negligence was not necessary as long as similar language was used and also requires a notification to the defendant of the specific risks of the activity.

Alack instructs that doing so would be insufficient because the agreement must not only pass the bright-line conspicuity test by employing the word “negligence” or its equivalent, but it also must notify the participant of the specific nature of the claims he or she is releasing.

I believe that the word negligence is not required under Missouri’s law, but I would not bet on it. If you are using a release in Missouri, make sure your release says you are not liable for your own negligence.

The court, after finding the release was valid because it was identical to a release in a prior decision, reviewed all aspects of the document, starting with whether or not the release met Missouri’s requirements for a contract.

Since this is a contract, we apply our rules of contract interpretation to determine whether the language of the agreement should be construed to encompass Ferbet’s specific claim of negligence and whether Hidden Valley is released from that claim. The Supreme Court in Alack framed the issue thusly: “There must be no doubt that a reasonable person agreeing to an exculpatory clause actually understands what future claims he or she is waiving.” “Because standardized contracts address the mass of users, the test for reasonable expectations is objective, addressed to the average member of the public who accepts such a contract, not the subjective expectations of an individual adherent

The cardinal principle of contract interpretation is to ascertain the intention of the parties and to give effect to that intent. The terms of a contract are read as a whole and are given their plain, ordinary, and usual meaning. Courts prefer a contract construction that gives meaning to all contract provisions and we avoid construing the contract so as to leave portions meaningless and inexplicable. Under the doctrine of contra proferentem, the language of the contract is construed against the drafting party. And this doctrine is enhanced in this case because we strictly construe contracts that seek to exonerate a party from acts of future negligence against the party claiming the benefit of that provision.

This is a pretty good analysis of contract law for any state. However, it is pages longer than any other decision reviewing a release as a contract, 99% of which do so in a paragraph.

The court then concluded that it was their job to determine if a reasonable party would have understood what they were signing.

Here, our task is to determine whether a reasonable person would clearly understand and be put on notice that he or she was releasing Hidden Valley from liability for a claim arising from an injury suffered as a result of Hidden Valley negligently maintaining in a dangerous condition the surface of the sliding area so that parts of the body extending from the tube would not become lodged in the sliding surface and cause injury.

It is that last section, that departs from all other reviews of releases. Whether the plaintiff knew, by reading the release, that his food could become lodged in a hole in the ice causing him injury. Normally, the analysis is, did the release say the plaintiff could be injured and was that clear and unambiguous.

The court then looked at inherent risk to determine if the risk of a hole in the snow and ice was inherent in tubing. A first in release law, but here the court found a way to tie it back in by including another area of the law never reviewed when looking at release law.

First, it looks at whether term inherent risks as mentioned in the release, define the inherent risks of the sport.

Unfortunately, while Hidden Valley tells its customers in paragraph 1 that “there are inherent and other risks associated with the sport . . .” it does not identify or define in the contract which risks are inherent and which are the “other risks.”

Inherent risks are identified as such because you assume them no matter what. You know the inherent risks of a sport or activity, by law. There is no need to list them in a release.

The court then looks to Missouri’s law to define inherent risks.

Our Supreme Court has defined a risk that is “inherent” to an activity as something “structural” or involving the “constitution or essential character” of the activity. And, generally, a participant is deemed to have assumed the risk of injury from the inherent risks of an activity that are known and understood, and the defendant is not liable for injuries stemming from such inherent risks because no duty is owed as to those risks.

The Missouri Supreme Court stated that a participant is “…deemed to have assumed the risk of injury from the inherent risks of an activity that are known and understood…” Why would there be any requirement to list them in a release? You know what they are. In fact, any releases that only protects the defendant from the inherent risks are worthless. You can’t sue for the inherent risks of a sport or activity. Therefore, you release does not need to protect you from the inherent risks. A release must protect you from the risks of the sport or activity that are not inherent.

If your release only protects you from claims from the inherent risks of a sport or activity send me a copy. jim@rec-law.us And get a new release written.

The court then veered into assumption of the risk under Missouri’s law. The case that was referenced to define inherent risks, and this court then determined a further review of assumption of the risk was needed.

Judge Wilson expounded on the history and current state of Missouri law regarding assumption of the risk. Coomer [a legal decision] identified three types of assumption of the risk, “express assumption of the risk,” “implied primary assumption of the risk,” and “implied secondary assumption of the risk.” For our purposes, implied primary assumption of the risk and express assumption of the risk are helpful to illustrate the concept of inherent risks raised by Hidden Valley in the participation agreement with Ferbet and the impact of assumption of the risk on duty. Implied primary assumption of the risk bars a plaintiff from recovery when the plaintiff has knowingly and voluntarily encountered risk that is inherent in the nature of the defendant’s activity. In express assumption of the risk, which is directly applicable to this case, the plaintiff makes an express statement that he is voluntarily accepting a specified risk and is barred from recovering damages for an injury resulting from that risk. The plaintiff’s consent relieves the defendant of any duty to protect the plaintiff from injury and as a result, the defendant cannot be negligent.

The definitions are the same as in most other states. What is confusing is why the court is taking this circuitous route to get to its decision? If the release is valid, it stops the claims, whether or not the risk is assumed or not in most states, including Missouri.

The court then attempted “tied” everything together, unsuccessfully.

Application of these principles to this case illustrates the circumstances to which the release here applies and those to which it may not and also the extent to which assumption of the risk principles may apply. It is for that reason that we have incorporated into our legal rationale these assumption of the risk principles even though the trial court relied solely on the release for its grant of summary judgment. Disposition of this case requires application of the release and of assumption of the risk.

The court circled back to the facts in this case by setting forth the analysis of the facts of the case. The court stated if the risk encountered by the plaintiff was an inherent risk of the activity, and the defendant did not increase that risk, there is no duty owed to the plaintiff. No duty, means there cannot be negligence.

Thus, if Ferbet’s injury resulted from a known and understandable risk deemed to be inherent to the sport of snow tubing, and Hidden Valley did not negligently enhance or increase that inherent risk, then the release language in paragraph 7 is not relevant nor applicable because Hidden Valley owed Ferbet no duty with respect to risks inherent to snow tubing. But if Hidden Valley negligently enhanced or increased that inherent risk, then the release language in the agreement is applicable and operative and we would look to the agreement as a whole to determine whether that enhanced risk was covered by the release.

A defendant owes no duty to anyone for the inherent risks of the activity. That is a basic year two of law school analysis.

However, if the defendant enhanced or increased the risk, then the risk is not inherent and whether or not the defendant is liable is based on the validity of the risk. Again, year two basic law school analysis.

Neither analysis has anything to do with release law. Is the release a valid contract? Doe the release meet the requirements of the state law on releases? If so, case over.

The court then looked at the issue if the risk was not an inherent risk.

In addition, if Ferbet’s injury was not the result of an inherent risk, but was the result of negligence on the part of Hidden Valley, then we apply the release and our analysis is whether that “other risk” was adequately covered by the release such that Ferbet was on notice that he was releasing Hidden Valley for its negligence in causing or creating the risk which resulted in his injury.

The analysis is correct, it is just written in a way that is confusing to read and seems to start a discission, leave it and then circle back to it. On top of that, it does not matter if the release is valid.

The court circled back again and reviewed if the risk suffered by the plaintiff was inherent in the activity.

We turn now to the crevice in the sliding surface that caused Ferbet’s injury and we find that an uneven sliding surface and the potential risks it creates for snow tubers are inherent risks of snow tubing because they are “structural” to the activity and involve the “essential character” of snow tubing.

Then the court changes its mind……. again. “But how uneven can the surface be and still be considered an inherent risk?

After more analysis, the court concluded the risk was not inherent and if the claim was to be stopped it must rely upon the release. Which it could have found in the first paragraph of the decision.

As a result, we find that to the extent the particular variation that resulted in Ferbet’s injury was the result of Hidden Valley’s negligence, then this release extinguished that claim.

The court found the risk was not inherent, and the release stopped the claim. (Inherent risks, if an issue for the decision, are usually determined by the trier of fact, the jury.)

The court took off on another deviation, one which I found entertaining and correct. Many releases have stupid language in them because they are written by attorneys who don’t understand releases or written by non-attorneys. One of those phrases is the person accepts the facilities as is.

Before we turn to Ferbet’s remaining points, we briefly address paragraph 4 in which Hidden Valley seeks to exonerate itself by having the participant accept the snow tubing facility “AS IS” and that “NO WARRANTIES” are being made with respect to the snow tubing facility. These are terms of art with specific meanings in the context of the sale of goods and the sale of real estate. But these concepts have no role in this case involving a business inviting a customer onto their premises for a fee to participate in a recreational activity. Hidden Valley’s customers are not buyers and there is little if any opportunity for them to inspect the snow tubing facility before executing the release and paying their money or even before plunging down the hill.

If your release uses the language “as is” or “no warranties” send me a copy. jim@rec-law.us And get a new release written.

The court points out that the language is from the sale of goods and real estate and has no place in a release. On top of that, you are asking a person, who probably has never seen the activity to agree it is OK. If there is an opportunity for a release to be invalidated, it is by forcing the signor to agree to something that they cannot legally agree to.

The plaintiff argued the snow tubing hill was a common carrier, which requires the highest level of care. The court quickly found a tubing hill is not a common carrier.

In Missouri, neither the common carrier designation nor the application of the highest degree of care has ever been extended to amusement parks or recreation areas such as ski resorts or snow tubing hills.

After that the issue of whether the plaintiff knew what he was signing came back, and the court dismissed the claim with this statement.

It has been uniformly held that a person who can read, and is in no way prevented from reading a written contract before he signs it, is bound by its terms, and cannot void it on the ground that he did not know its contents when he signed it.”). Ferbet testified that nothing prevented him from reading the document.

Which seems to be contrary to its statement where the court determined if the plaintiff would have been fully informed of the possible risks as I quoted above.

Here, our task is to determine whether a reasonable person would clearly understand and be put on notice that he or she was releasing Hidden Valley from liability for a claim arising from an injury suffered as a result of Hidden Valley negligently maintaining in a dangerous condition the surface of the sliding area so that parts of the body extending from the tube would not become lodged in the sliding surface and cause injury.

After twelve pages, the court concluded the defendant was not liable.

So Now What?

There is a great analysis of how the legal system looks; it is just rarely done outside of law school. However, reading and understanding the decision the way it jumps around makes it very difficult.

The decision makes several great points; it is just maddening to try to find them and understand them in the circular decision.

What is confusing it the courts’ statement about wanting the release to identify the inherent risks of the activity. Inherent risks are known by people under the law and do not need to be identified. You can’t sue over the inherent risks because they are inherent, and you know them.

The good news is Missouri allows the use of a release, if it is carefully written correctly.

If you email me, a release with either of the language pointed out above, include your mailing address, and I’ll send you a sticker or magnet or something cheap and kitschy!

What do you think? Leave a comment.

Copyright 2020 Recreation Law (720) 334 8529

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Ferbet v. Hidden Valley Golf and Ski, Inc. and Peak Resorts, Inc.,

Ferbet v. Hidden Valley Golf and Ski, Inc. and Peak Resorts, Inc.,

Douglas E. Ferbet, Appellant,

v.

Hidden Valley Golf and Ski, Inc. and Peak Resorts, Inc., Respondents.

No. ED108495

Court of Appeals of Missouri, Eastern District, Fourth Division

December 15, 2020

Appeal from the Circuit Court of St. Louis County 18SL-CC00050 Honorable Mary Elizabeth Ott.

James M. Dowd, P.J., Gary M. Gaertner, Jr., J., and Robin Ransom, J.

James M. Dowd, Presiding Judge.

Introduction

Appellant Douglas Ferbet’s recreational outing with his family on January 25, 2013 to Respondents’ snow tubing hill in Eureka, Missouri ended abruptly when as he slid down the hill seated on a large rubber inner tube, his dangling right foot engaged with a crevice in the sliding surface of the slippery slope breaking his leg in two places. Now, Ferbet appeals the trial court’s summary judgment entered in favor of Respondents Hidden Valley and Peak Resorts (Hidden Valley) on Ferbet’s negligence claim in which he alleged that his injuries were caused by Hidden Valley’s negligent maintenance of the tubing hill. Hidden Valley sought summary judgment based on release-of-liability language in an agreement Hidden Valley required Ferbet to sign before selling snow tubing tickets to him and his family just before they headed to the hill.

The trial court found the agreement enforceable and therefore that Ferbet had released Hidden Valley from his negligence claim based on the document’s references both to specific risks involved in snow tubing and that Ferbet was releasing Hidden Valley from liability for injuries including those caused by Hidden Valley’s own negligence.

We affirm the judgment, but our legal rationale is somewhat different than the trial court’s. We agree with the trial court that while exculpatory clauses like the one here that purport to release a party from its own future negligence are disfavored, they are not prohibited by Missouri public policy, and to the extent Ferbet has adequately pled a negligence claim, the language of this agreement is sufficiently specific to encompass Ferbet’s claim and, importantly, it also clearly and conspicuously states that even claims resulting from Hidden Valley’s negligence are released. We also affirm because to the extent that the risk Ferbet claims caused his injury was a known and understandable inherent risk of snow tubing for which Hidden Valley owed Ferbet no duty, his claim is without merit under the doctrine of assumption of the risk.

Background

Hidden Valley’s snow tubing operation, located on a hillside adjacent to its ski resort, consists of a series of parallel and adjacent lanes descending down the hill. Customers slide down the lanes while perched on rubber inner tubes provided to them by Hidden Valley. Hidden Valley maintains the surface of the lanes covered in snow and ice and separates the lanes from each other by raised rows of packed snow and ice.

At all relevant times, customers, in order to be permitted to buy tickets, were required to read and sign the following document, which we reproduce verbatim here, purporting to identify certain general and specific injury risks posed by snow tubing. The document also contains language that purports to release Hidden Valley from liability for injuries sustained while snow tubing including for claims arising from Hidden Valley’s own negligence: POLAR PLUNGE SNOW TUBING HIDDEN VALLEY SKI-TUBE-RIDE AREA, WILDWOOD, MISSOURI ACKNOWLEDGMENT OF RISK AND AGREEMENT NOT TO SUE THIS IS A CONTRACT! * * * * * * * * * * PLEASE READ! 1. I understand and acknowledge that snow tubing is a dangerous, risky sport and that there are inherent and other risks associated with the sport and that all of these risks can cause serious and even fatal injuries. 2. I understand that part of the thrill, excitement and risks of snow tubing is that the snow tubes all end up in a common, run-out area at various times and speeds and that [sic] is my responsibility to try to avoid hitting another snow tuber, and it is also my responsibility to try to avoid being hit by another snow tuber, but that notwithstanding these efforts by myself and other snow tubers, there is a risk of collisions. 3. I acknowledge that the risks of snow tubing include, but are not limited to, the following: • Variations in the steepness and configuration of the snow tubing chutes and run-out area; • Variations in the surface upon which snow tubing is conducted, which can vary from wet, slushy conditions to hard packed, icy conditions and everything in between; • Fence and/or barriers at or along portions of the snow tubing area, the absence of such fence and/or barriers and the inability of fences and/or barriers to prevent or reduce injury; • Changes in the speed at which snow tubers travel depending on surface conditions, the weight of snow tubers and the inter-linking of snow tubers together to go down the snow tubes runs; • The chance that a patron can fall out, be thrown out or otherwise leave the snow tube; • The chance that a snow tube can go from one run to another run, regardless of whether or not there is a barrier between runs, and the chance that a snow tube can go beyond the run-out area; • The chance that a snow tube can go up the run-out hill and then slide in the general run-out area; • Collisions in the run-out area and other locations of the snow tubing facility, with collisions happening between snow tubes, between a snow tube and another patron, between a snow tube and a snow tubing facility attendant, between a snow tubing patron who may or may not be in or on a snow tube at the time of the collision and other sorts of collisions; collisions with fixed objects, obstacles or structures located within or outside of the snow tube facility; • The use of the snow tubing carpet lift or tow, including falling out of a tube, slipping backwards, becoming entangled with equipment, railing and fencing, slipping and falling on the carpet lift and/or the adjacent deck and other risks. 4. I also acknowledge and understand that I am accepting AS IS the snow tube and any other equipment involved with the snow tubing activity, including lifts and tows, and further acknowledge and understand that NO WARRANTIES are being extended to me with respect to any aspect of the snow tubing facility. 5. I agree and understand that snow tubing is a purely voluntary, recreational activity and that if I am not willing to acknowledge the risk and agree not to sue, I should not go snow tubing. 6. I agree to allow the use of my image or likeness incidental in any photograph, live recorded video display or other transmission or reproduction of the event in any form to which this agreement admits me. 7. IN CONSIDERATION OF THE ABOVE AND BEING ALLOWED TO PARTICIPATE IN THE SPORT OF SNOWTUBING, I AGREE THAT I WILL NOT SUE AND WILL RELEASE FROM ANY AND ALL LIABILITY, HIDDEN VALLEY GOLF AND SKI, INC. OR PEAK RESORTS, INC., THEIR OWNERS, OPERATIONS, LESSORS, LESSEES, OFFICERS, AGENTS, AND EMPLOYEES IF I OR ANY MEMBER OF MY FAMILY IS INJURED WHILE USING ANY OF THE SNOWTUBING FACILITIES OR WHILE BEING PRESENT AT THE FACILITIES, EVEN IF I CONTEND THAT SUCH INJURIES ARE THE RESULT OF NEGLIGENCE ON THE PART OF THE SNOWTUBING FACILITY. 8. I further agree that I WILL INDEMNIFY AND HOLD HARMLESS HIDDEN VALLEY GOLF AND SKI, INC. AND PEAK RESORTS, INC. THEIR OWNERS, OPERATORS, LESSORS, LESSEES, OFFICERS, AGENTS, AND EMPLOYEES from any loss, liability, damages or cost of any kind that it may incur as the result of any injury to myself or to any member of my family or to any person for whom I am explaining that meaning of this agreement, even if it is contended that any such injury was caused by the negligence on the part of the snow tubing facility. 9. I understand and agree that this Agreement is governed by the laws of the State of Missouri. I further agree that if any part of this Agreement is determined to be unenforceable, all other parts shall be given full force and effect. 10. I have read and understand the foregoing Acknowledgement of Risks and Agreement Not to Sue. I understand by reading this that I may be giving up the rights of my child and spouse to sue as well as giving up my own right to sue.

On January 25, 2013, when Ferbet arrived with his family at the ticket window, he was presented with this one-page, single-spaced, form agreement. He signed and dated the agreement in the spaces designated at the bottom, purchased tickets, and then proceeded to the tubing hill. Hidden Valley provided Ferbet an inner tube to use to slide down any of the tubing lanes he chose. And during what would turn out to be Ferbet’s last slide of the day, his right foot lodged into a crevice in the sliding surface fracturing his tibia and fibula when his momentum carried the rest of his body forward.

On December 27, 2018, Ferbet filed suit alleging that his injuries and damages were caused by Hidden Valley’s negligent maintenance and operation of the tubing hill, specifically with respect to the dangerous condition of the sliding surface that he claims caused his injuries. After some discovery took place, Respondents filed their motion for summary judgment on the sole basis that Ferbet had released his claim against them by signing the above agreement.

In his response, Ferbet asserted that the release was unenforceable as against public policy. He also alleged that amusement park and recreational area operators such as Hidden Valley should be considered common carriers and therefore held to the highest degree of care, as opposed to ordinary care, and that an exculpatory clause should be unenforceable when the highest degree of care is owed.

After a June 7, 2019 hearing on the motion, the trial court granted summary judgment based on its findings that the facts were undisputed that Ferbet had signed the agreement; that the agreement was enforceable and not against public policy; that its operative release language clearly and explicitly exonerated Hidden Valley for its negligence in causing Ferbet’s injuries; and that Hidden Valley is not a common carrier subject to the highest degree of care. This appeal follows.

Standard of Review

On appeals from summary judgment, our review is essentially de novo and we review the record in the light most favorable to the party against whom judgment was entered. ITT Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). Missouri Supreme Court Rule 74.04 governs summary judgment procedures. The trial court shall grant summary judgment “[i]f the motion, the response, the reply and the sur-reply show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Rule 74.04(c)(6); See also, Id. at 378. The trial court and this Court look to the pleadings, depositions, answers to interrogatories and admissions on file together with any affidavits to determine whether the undisputed facts demonstrate that the moving party is entitled to judgment as a matter of law. Miller v. River Hills Development, 831 S.W.2d 756, 757 (Mo. App. E.D. 1992). But “[t]he key to a summary judgment is the undisputed right to a judgment as a matter of law; not simply the absence of a fact question.” Birdsong v. Christians, 6 S.W.3d 218, 223 (Mo. App. S.D. 1999) (quoting Southard v. Buccaneer Homes Corp., 904 S.W.2d 525, 530 (Mo. App. S.D. 1995)).

Where the defending party is the movant, it may establish a right to judgment by showing: (1) facts negating any one of the non-movant’s elements; (2) that the non-movant, after an adequate period of discovery, has not been able and will not be able to produce evidence sufficient to allow the trier of fact to find the existence of any one of the non-movant’s elements; or (3) that there is no genuine dispute as to the existence of each of the facts necessary to support the movant’s properly-pleaded affirmative defense. ITT, 854 S.W.2d at 381.

Here, since Hidden Valley has asserted the release as an affirmative defense, we review de novo the legal and fact questions (1) whether the release before us is enforceable to release Ferbet’s claims as a matter of law, and (2) whether Hidden Valley has established as a matter of undisputed fact that the injury-causing negligent conduct alleged by Ferbet is within the purview of this release. Alack v. Vic Tanny Intern. of Missouri, Inc., 923 S.W.2d 330, 337 (Mo. banc 1996); see also Abbott v. Epic Landscape Prods., L.C., 361 S.W.3d 13, 19 (Mo. App. W.D. 2011), as modified (Jan. 31, 2012).

Hidden Valley also asserted assumption of the risk as an affirmative defense. Although it did not seek summary judgment on that basis nor did the trial court rely on assumption of the risk in its grant of summary judgment here, our review is de novo and we may do so. See ITT Commercial, 854 S.W.2d at 387-88 (summary judgment may be “affirmed in this Court on an entirely different basis than that posited at trial”). In fact, for the reasons we provide below, we find it necessary to employ Hidden Valley’s assumption of the risk affirmative defense in addition to the release in order to resolve this case.

Discussion

1. In Missouri, exculpatory clauses are disfavored but not void as against public policy.

In his first point, Ferbet alleges the trial court failed to address his affirmative avoidance that the exculpatory clause before us violates public policy and is therefore unenforceable. While we may agree and acknowledge that there continue to be strong policy arguments why these anticipatory releases are problematic, e.g., the party best positioned to prevent the harm is relieved of liability and instead the burden of loss is placed upon the party least able to prevent it, the public policy implications of such releases have been litigated, analyzed, and largely decided by our Supreme Court. See Alack, 923 S.W.2d at 334 (“Although exculpatory clauses in contracts releasing an individual from his or her own future negligence are disfavored, they are not prohibited as against public policy.”) In short, that public policy ship has sailed aboard the S.S. Alack.

Thus, our initial analysis is whether the release here complies with the dictates of Alack and its progeny to which we now turn. It is a “well-established rule of construction that a contract provision exempting one from liability for his or her negligence will never be implied but must be clearly and explicitly stated.” Id. (citing Poslosky v. Firestone Tire and Rubber Co., 349 S.W.2d 847, 850 (Mo. 1961)). In doing so, courts must ensure that the exculpatory clause complies with the bright-line test established in Alack, the seminal case on this question, requiring that the words “negligence” or “fault” or their equivalents be used conspicuously so that a clear and unmistakable waiver and shifting of risk occurs. Alack, 923 S.W.2d at 337.[ 1]

Moreover, this Court has already considered this exact same release in Guthrie v. Hidden Valley Golf and Ski, Inc., 407 S.W.3d 642 (Mo. App. E.D. 2013) (Van Amburg, J., dissenting), in which a divided panel of this Court affirmed summary judgment in Hidden Valley’s favor and found that the language in paragraph 7 releasing Hidden Valley from its future negligence was sufficiently clear and conspicuous. Id. at 648. There, Guthrie’s foot was broken when another snow tuber collided with him in the run-out portion of the hill, the area where all of the snow tubers end their runs. Id. at 646. So, Guthrie differs somewhat from this case because of the mechanism of injury which was a collision with another snow tuber, a risk the release covered repeatedly and extensively in paragraph 2 and again in the 8th bullet point of paragraph 3, while here the injury was allegedly caused by the condition of the premises.

i. Paragraph 7’s release language satisfies Alack’s bright-line test.

Nevertheless, we abide by our previous holding in Guthrie that the release language here satisfies Alack’s conspicuity requirement. Paragraph 7, located three quarters down the one-page agreement, provides in all capital letters that snow tubing participants agree to release Hidden Valley for claims if injured while using or being present at the snow tubing facility “even if … such injuries are the result of negligence on the part of” Hidden Valley.

ii. The word “negligence” is necessary, but we still construe the whole contract.

But our inquiry does not end with the mere inclusion of the word “negligence.” If that was the case, Hidden Valley could have simply presented its customers with a 9-word declaration to sign: “I release Hidden Valley for all claims including negligence.” Alack instructs that doing so would be insufficient because the agreement must not only pass the bright-line conspicuity test by employing the word “negligence” or its equivalent, but it also must notify the participant of the specific nature of the claims he or she is releasing. Alack, 923 S.W.2d at 337.

Hidden Valley seems to concede this by virtue of its 850-word agreement here in which it endeavors to comprehensively identify the risks associated with, inherent to, or that may arise during snow tubing. And while paragraph 7 sets forth the release language on which Hidden Valley relies, paragraph 7 does not stand alone in this contract. In fact, with its opening phrase “[i]n consideration of the above…,” paragraph 7 incorporates the preceding six numbered paragraphs, the first four of which specifically address the types and nature of the risks involved in snow tubing.[ 2] In this way, Hidden Valley has sought to define and identify the risks of injury from snow tubing for which it not only seeks to obtain a release from its customers but also requests its customers to assume those risks.

Since this is a contract, we apply our rules of contract interpretation to determine whether the language of the agreement should be construed to encompass Ferbet’s specific claim of negligence and whether Hidden Valley is released from that claim. The Supreme Court in Alack framed the issue thusly: “There must be no doubt that a reasonable person agreeing to an exculpatory clause actually understands what future claims he or she is waiving.” Id. at 337-38. “Because standardized contracts address the mass of users, the test for reasonable expectations is objective, addressed to the average member of the public who accepts such a contract, not the subjective expectations of an individual adherent.” Woods v. QC Fin. Servs., Inc., 280 S.W.3d 90, 95 n.1 (Mo. App. E.D. 2008) (citations and quotations omitted).

The cardinal principle of contract interpretation is to ascertain the intention of the parties and to give effect to that intent. Dunn Indus. Group, Inc. v. City of Sugar Creek, 112 S.W.3d 421, 428 (Mo. banc 2003). The terms of a contract are read as a whole and are given their plain, ordinary, and usual meaning. Id.; Alack, 923 S.W.2d at 337-38. Courts prefer a contract construction that gives meaning to all contract provisions and we avoid construing the contract so as to leave portions meaningless and inexplicable. Storey v. RGIS Inventory Specialists, LLC, 466 S.W.3d 650, 655 (Mo. App. E.D. 2015). Under the doctrine of contra proferentem, the language of the contract is construed against the drafting party. Burns v. Smith, 303 S.W.3d 505, 509 (Mo. banc 2010). And this doctrine is enhanced in this case because we strictly construe contracts that seek to exonerate a party from acts of future negligence against the party claiming the benefit of that provision. Alack, 923 S.W.2d at 334.

Here, our task is to determine whether a reasonable person would clearly understand and be put on notice that he or she was releasing Hidden Valley from liability for a claim arising from an injury suffered as a result of Hidden Valley negligently maintaining in a dangerous condition the surface of the sliding area so that parts of the body extending from the tube would not become lodged in the sliding surface and cause injury.

The first three numbered paragraphs are the focus of our attention. In paragraph 1, Hidden Valley very broadly and generally puts customers on notice that snow tubing is dangerous and risky and that there are inherent and other risks associated with the activity that can cause injury or death. Paragraph 2 explains in detail the risk of collisions during snow tubing. And in paragraph 3 with its nine subparts, Hidden Valley identifies and notifies customers of a myriad of the risks they might face.

iii. Assumption of the risk – the nature of the risk determines whether a duty exists.

Hidden Valley’s reference to “inherent risks” of the sport of snow tubing[ 3] presents an important legal concept that requires our attention because the extent to which the risk that caused Ferbet’s injuries is an inherent risk to snow tubing will determine whether the release here even applies. Unfortunately, while Hidden Valley tells its customers in paragraph 1 that “there are inherent and other risks associated with the sport . . .” it does not identify or define in the contract which risks are inherent and which are the “other risks.”

Our Supreme Court has defined a risk that is “inherent” to an activity as something “structural” or involving the “constitution or essential character” of the activity. Coomer v. Kansas City Royals Baseball Corp., 437 S.W.3d 184, 202 (Mo. banc 2014). And, generally, a participant is deemed to have assumed the risk of injury from the inherent risks of an activity that are known and understood, and the defendant is not liable for injuries stemming from such inherent risks because no duty is owed as to those risks. Id. at 197.

In the Coomer opinion, which doubles as an ode to the national pastime, Judge Wilson expounded on the history and current state of Missouri law regarding assumption of the risk. Coomer identified three types of assumption of the risk, “express assumption of the risk,” “implied primary assumption of the risk,” and “implied secondary assumption of the risk.” Id. at 192. For our purposes, implied primary assumption of the risk and express assumption of the risk are helpful to illustrate the concept of inherent risks raised by Hidden Valley in the participation agreement with Ferbet and the impact of assumption of the risk on duty. Implied primary assumption of the risk bars a plaintiff from recovery when the plaintiff has knowingly and voluntarily encountered risk that is inherent in the nature of the defendant’s activity. Id. at 192. In express assumption of the risk, which is directly applicable to this case, the plaintiff makes an express statement that he is voluntarily accepting a specified risk and is barred from recovering damages for an injury resulting from that risk. Id. at 191. The plaintiff’s consent relieves the defendant of any duty to protect the plaintiff from injury and as a result, the defendant cannot be negligent. Id. at 193.

The rule that a defendant is not liable because it owes no duty for the known and understandable inherent risks of an activity “extends only to those risks” that the defendant “is powerless to alleviate without fundamentally altering” the activity. Id. But the defendant “still owes a duty of reasonable care not to alter or increase such inherent risks.” Id. at 197-198. Coomer illustrates this point with two examples. The first is the baseball spectator injured by a foul ball which he claimed he was prevented from seeing because he was being repeatedly jostled and distracted by the team’s dinosaur mascot. Id. at 198 (citing Lowe v. California League of Professional Baseball, 56 Cal.App.4th 112, 65 Cal.Rptr.2nd 105 (1997)). While getting hit by a foul ball is an inherent risk to attending a baseball game for which implied primary assumption of the risk precludes recovery because the team owes no duty of care, the jury may hold the team liable if the negligence of the mascot altered or increased that otherwise inherent risk and that negligence causes the plaintiff’s injuries. Coomer, at 198.

The second example Coomer cites is from Sheppard v. Midway R-1 Sch. Dist., 904 S.W.2d 257 (Mo. App. W.D. 1995), which involved a high school long-jumper injured during a competition by a bad landing in the landing pit. Id. at 259. The court held that even though the student cannot sue the school district for a bad landing because that is an inherent risk to long-jumping, the jury may hold the school district liable when that inherent risk is altered or increased by the defendant’s negligence in preparing the landing pit. Id. at 264.

Application of these principles to this case illustrates the circumstances to which the release here applies and those to which it may not and also the extent to which assumption of the risk principles may apply. It is for that reason that we have incorporated into our legal rationale these assumption of the risk principles even though the trial court relied solely on the release for its grant of summary judgment. Disposition of this case requires application of the release and of assumption of the risk.

Thus, if Ferbet’s injury resulted from a known and understandable risk deemed to be inherent to the sport of snow tubing, and Hidden Valley did not negligently enhance or increase that inherent risk, then the release language in paragraph 7 is not relevant nor applicable because Hidden Valley owed Ferbet no duty with respect to risks inherent to snow tubing. But if Hidden Valley negligently enhanced or increased that inherent risk, then the release language in the agreement is applicable and operative and we would look to the agreement as a whole to determine whether that enhanced risk was covered by the release. In addition, if Ferbet’s injury was not the result of an inherent risk, but was the result of negligence on the part of Hidden Valley, then we apply the release and our analysis is whether that “other risk” was adequately covered by the release such that Ferbet was on notice that he was releasing Hidden Valley for its negligence in causing or creating the risk which resulted in his injury.

iv. The risks created by an uneven sliding surface on Hidden Valley’s snow tubing hill are inherent to the activity of snow tubing.

We turn now to the crevice in the sliding surface that caused Ferbet’s injury and we find that an uneven sliding surface and the potential risks it creates for snow tubers are inherent risks of snow tubing because they are “structural” to the activity and involve the “essential character” of snow tubing. Coomer, 437 S.W.3d at 202. The packed snow and ice surface is outdoors at the mercy of both the changing meteorological conditions and the continual battering from plunging snow tubes and tubers. As with traditional snow sledding, an uneven surface and its impact on the participant’s experience and enjoyment seems to be part of the “essential character” of snow tubing.

But how uneven can the surface be and still be considered an inherent risk? Unfortunately, the record below is largely silent. We know little about the size or configuration of the spot on the surface in which Ferbet’s foot became lodged. Ferbet described it as an area of riprap which seemed to be along the raised rows of packed snow and ice that separated the individual lanes. The agreement, for its part, not only identified these rows but mentioned that snow tubers may slide up and over these rows into the next lane. We also know little about Hidden Valley’s care and maintenance of the surface and whether Hidden Valley was aware of the danger of body parts becoming lodged in crevices in the surface or whether there had been any, and if so, how many prior similar instances like Ferbet’s.

As the Supreme Court in Coomer recognized, a risk that is deemed inherent may become actionable if the risk is altered or enhanced by the negligence of the activity operator. Id. at 198. So, an uneven area that simply adds to snow tubers’ thrill by pitching them up, and perhaps occasionally out, of the tube is one thing. But a divot that repeatedly and unexpectedly catches and fractures customers’ limbs may go beyond being an inherent risk and become actionable because it is no longer a known and understandable risk that is part of the structure and essence of the activity.

While the paucity of this record certainly limits the concreteness of our factual findings, it does not prevent us from reaching the following legal conclusions and holdings, each of which ends in the demise of Ferbet’s appeal: First, to the extent the crevice was merely a known and understandable risk inherent to snow tubing, then Hidden Valley owed Ferbet no duty and the release is inapplicable and irrelevant because there is no claim to release; Second, if the record had demonstrated that the crevice was so big and dangerous that it went beyond what would be deemed an inherent risk to snow tubing and instead would constitute a negligently maintained surface, then Hidden Valley would owe Ferbet a duty and in that circumstance, the release would be triggered. Looking to the contract, specifically, paragraph 3, we find it adequately notified Ferbet that there could be “[v]ariations in the surface upon which snow tubing is conducted, which can vary from wet, slushy conditions to hard packed, icy conditions and everything in between.” As a result, we find that to the extent the particular variation that resulted in Ferbet’s injury was the result of Hidden Valley’s negligence, then this release extinguished that claim.

Before we turn to Ferbet’s remaining points, we briefly address paragraph 4 in which Hidden Valley seeks to exonerate itself by having the participant accept the snow tubing facility “AS IS” and that “NO WARRANTIES” are being made with respect to the snow tubing facility. These are terms of art with specific meanings in the context of the sale of goods and the sale of real estate. Davis Indus. Sales, Inc. v. Workman Const. Co., Inc., 856 S.W.2d 355, 359 (Mo. App. S.D. 1993); Harper v. Calvert, 687 S.W.2d 227, 230 (Mo. App. W.D. 1984). But these concepts have no role in this case involving a business inviting a customer onto their premises for a fee to participate in a recreational activity. Hidden Valley’s customers are not buyers and there is little if any opportunity for them to inspect the snow tubing facility before executing the release and paying their money or even before plunging down the hill.

In light of the above, we deny Ferbet’s first point.

2. Hidden Valley was not a common carrier in that its tubing hill was not a commercial ride for hire.

Ferbet asserts that because they operate rides and slides, recreation area operators such as Hidden Valley should be considered common carriers and should therefore be held to the highest degree of care. Ferbet then alleges without citation to any authority that such a degree of care is inconsistent with the enforcement of an exculpatory clause. We disagree.

Missouri law applies a heightened degree of care only to a very small number of well-defined activities including common carriers, such as railroads, buses, commercial airlines, streetcars, and elevator operators; electric companies; users of explosives; users of firearms; and motor vehicle operators. Chavez v. Cedar Fair, LP, 450 S.W.3d 291, 296 (Mo. banc 2014). Otherwise, the applicable standard is the ordinary degree of care. Id. (citing Lopez v. Three Rivers Elec. Co-op., Inc., 26 S.W.3d 151, 158 (Mo. banc 2000)) (“The common law ordinary negligence rule requires a defendant to exercise the degree of care of a reasonable person of ordinary prudence under similar circumstances, now commonly referred to as the ‘ordinary degree of care.'”).

In Missouri, neither the common carrier designation nor the application of the highest degree of care has ever been extended to amusement parks or recreation areas such as ski resorts or snow tubing hills. Id. at 296; see also McCollum v. Winnwood Amusement Co., 332 Mo. 779, 59 S.W.2d 693, 697 (1933) (holding the operator of a place of public amusement operating has a duty of ordinary care to its patrons); Lewis v. Snow Creek, Inc., 6 S.W.3d 388, 392 (Mo. App. W.D. 1999) (applying a duty of ordinary care when skiers were injured due to icy conditions). And, since this activity resembles both skiing and an amusement park ride, we decline Ferbet’s invitation to do so. Hidden Valley owed Ferbet a duty of ordinary care in connection with its operation and maintenance of its snow tubing hill.

Point two is denied.

3. The summary judgment entered in this case fully disposed of Ferbet’s affirmative avoidances and did not violate Ferbet’s due process rights.

Ferbet claims the trial court’s grant of summary judgment violated his due process rights because the court failed to address his numerous affirmative avoidances. We have reviewed Ferbet’s affirmative avoidances and find they fall into two groups. The first group attacks the formation of the agreement here by raising such issues as duress and that Ferbet had not actually read or understood the document before signing it. The second group of affirmative avoidances broadly attacks the exculpatory clause on public policy grounds. And we conclude from our review of the record and in our opinion here that Ferbet’s affirmative avoidances have been fully considered and resolved.

With respect to Ferbet’s attacks on the contract’s formation, the trial court’s enforcement of the agreement necessarily signifies that the trial court found as a matter of law that this was a properly formed agreement when Ferbet signed it and dated it. Austin v. Brooklyn Cooperage Co., 285 S.W. 1015, 1017 (Mo. App. 1926) (“It has been uniformly held that a person who can read, and is in no way prevented from reading a written contract before he signs it, is bound by its terms, and cannot void it on the ground that he did not know its contents when he signed it.”). Ferbet testified that nothing prevented him from reading the document.

As for Ferbet’s affirmative avoidances regarding the public policy considerations relevant to exculpatory clauses, we discussed at length above that Missouri case law is settled that though disfavored, exculpatory clauses are not prohibited as against public policy. Alack, 923 S.W.2d at 334. In effect, Ferbet’s public policy arguments have been baked into the controlling precedent by Alack and its progeny. We decline Ferbet’s invitation to ignore that precedent.

Point three is denied.

Conclusion

The trial court’s grant of summary judgment is affirmed.

Gary M. Gaertner, Jr., J. and Robin Ransom, J. concur.

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Notes:

[ 1] We also note that Alack sought to distinguish between ordinary negligence and gross negligence in the context of exculpatory clauses with the former being disfavored but enforceable and the latter void as against public policy. Id. at 337 (“there is no question that one may never exonerate oneself from future liability for intentional torts or for gross negligence[.]” (emphasis added)). However, in Decormier v. Harley-Davidson Motor Co. Group, Inc., the Supreme Court erased this distinction because “Missouri courts do not recognize degrees of negligence at common law.” 446 S.W.3d 668, 671 (Mo. banc 2014). Decormier permits exculpatory clauses to shield parties from negligence but holds exculpatory clauses provide no protection for reckless conduct or for intentional torts. Id. Here Ferbet’s claims against Hidden Valley were for ordinary negligence.

[ 2] But even if paragraph 7 had not included the phrase “[i]n consideration of the above…”, our rule of contract interpretation require us to consider paragraph 7 in conjunction with the remaining portions of the contract including the paragraphs that seek to identify the risks involved in snow tubing.

[ 3] Hidden Valley refers to snow tubing as a sport. We need not decide whether this is the case, or whether riding a roller coaster is a sport, whether descending the log flume at Six Flags is a sport or, for that matter, whether golf is a sport.

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South Dakota in Federal District Court decision seems to allow a release to stop the claims for a minor.

Release was effective in stopping ordinary negligence claims; however, the gross negligence claims were allowed to continue.

Reed v. Union Resort, LLC, 2018 U.S. Dist. LEXIS 225856, 2018 WL 8332583

State: South Dakota, United States District Court for the District of South Dakota, Western Division

Plaintiff: Brad Reed, Individually and as Joint Limited Conservators of I.R., a Minor; and Tara Reed, Individually and as Joint Limited Conservators of I.R., a Minor

Defendant: Union Resort, LLC, dba Mystic Miner

Plaintiff Claims: negligence and gross negligence

Defendant Defenses: Release

Holding: For both plaintiff and defendant, but proceeding to trial

Year: 2018

Summary

The minor child was injured on a tubing hill when her tube stopped in the middle of the hill, and she was hit and injured by her brother coming after her. The release the parents signed stopped the ordinary negligence claim but under South Dakota, law did not stop a claim for gross negligence.

There was no discussion in the decision as to whether the release stopped the claims of the minor child, the injured plaintiff. It just seemed to be taken for granted by the court, or at least not argued by the plaintiffs.

Facts

On March 13, 2015, Brad and Tara Reed brought their children to the defendant’s resort near Lead, South Dakota, for an afternoon of recreational snow tubing.1 The resort was owned and operated by Union Resort, LLC, dba Mystic Miner. Among the Reeds’ children with them that day was seven-year-old I.R. Accompanying the Reeds were another couple and Alex, a social worker from the Philippines.

Upon arriving shortly before noon, the Reed party entered the lodge area where customers are required to check in and purchase admission tickets for the resort. The Reeds purchased snow tubing day passes for themselves and their children, including I.R. As a condition of allowing I.R. to use the resort, Union required the Reeds to agree to a written release of liability. The Reeds signed the release and printed the names of each of their children, including I.R., as participants.

The Reeds understood the document was a release of liability agreement and that, by signing, they would be relinquishing certain unspecified rights. They did not ask any questions about the release. The release informed resort participants that tubing activities are extremely hazardous and can result in personal injury. The Reeds understood that tubing carried with it a degree of risk, including risk of trauma to the head, and that I.R. would be exposed to this risk.

After signing the release and paying the admission fee, the Reeds and their kids received individual tickets for the tube park. Those tickets included additional warnings.

At the resort, there are numerous bright red signs that provide instructions and warnings to participants. Among the messages on some of the signs was a warning that collisions with other tubers was one of the dangers of tubing. Other signs instructed the tubers to follow the attendant’s instructions and to wait for the attendant’s signal before starting [down the tube run]. The Reeds do not recall whether they saw or read any of these signs.

The Reeds were directed to select tubes from the resort’s selection of tubes, which they did. Defendant had approximately 50 to 70 tubes in inventory at the time, but there is no evidence how many of these tubes had already been selected by prior guests. No employee of defendant selected the tubes for the Reeds. Several defendant employees testified at their depositions that it was a practice at the resort to leave tubes with tears in the bottoms in circulation for guests to use. The employees explained that such tubes were slower and slower equated to safer in their minds.

During the Reeds’ stay at the resort, they went down the tube runs approximately 15 to 20 times. Two of the four tube runs at the resort were open that day. During the Reeds’ runs, there were two defendant employees at the bottom of the tube runs assisting guests with the tow rope (which towed guests to the top of the run).

On approximately two of the Reeds’ 15-20 tubing runs, there was a young man at the top of the tube runs who also appeared to be a resort employee with a radio in his possession. However, the young man never monitored the tube runs, never gave instructions to tubers, and never staged tubers going down the tube runs. “Staging” means controlling the entry of guests onto the tube runs to ensure that the prior tuber has finished the run and cleared the area before the next tuber is allowed to begin his or her descent. There was no staging and, instead, tubers decided themselves when to begin their descent, a situation Brad Reed described as a “free-for-all.”

At approximately 2 p.m., the Reeds decided to take one last run down the tube runs before leaving the resort. Up to this point, the Reeds had experienced no concerns or incidents. Up to this final run, I.R. had always completed her run down the slope as part of a group or with one of her parents. On the final run, she asked to be allowed to go down the tube run by herself, to which her parents agreed. Mrs. Reed told I.R. they would go down the run together, parallel to each other in each of the two open tube runs. At this point, Alex was directly behind I.R. in line for the same tube lane. Mr. Reed was behind Alex in the same line.

Once both lanes were clear, Mrs. Reed and I.R. began their descents. Mrs. Reed went all the way down the run, but I.R.’s tube stopped approximately 3/4 of the way down the slope. While I.R. was stopped, Alex began her descent before I.R. cleared the lane. When Alex’s tube reached I.R.’s tube, they collided. No defendant employee told Alex to begin her descent, but no defendant employee was present at the top of the run to tell her, instruct her, or prevent her from beginning her descent until I.R. cleared the lane.

From the top of the slope, Mr. Reed testified Alex should have been able to see I.R. had not cleared the lane had Alex been paying attention. Mr. Reed himself was able to observe the collision from his vantage point at the top of the slope.

After the accident, the Reeds observed an approximately 8-inch hole in the bottom of I.R.’s tube that had filled with snow. Defendant asserts it was its policy to stow the tubes under the deck each night and to pull them out the next day for guests’ use. Defendant asserts employees were directed to observe the tubes for significant tears or defects and to remove defective tubes during this process. However, several defendant employees testified they left tubes with tears in their bottoms in rotation for guest use because the tears would slow the tuber down as they descended the slope. Employees believed a slower descent was a safer descent.

If a lightweight child descended the slope with a tube with a tear in it, sometimes the tube would stop mid-way down the slope and a defendant employee would have to walk up the slope to retrieve the child. In such an instance, the defendant employee at the bottom of the slope would radio the employee at the top and tell them to stop sending guests down the slope until the child was retrieved and taken to the bottom.

No photograph was taken of I.R.’s tube at the beginning of the day, after the accident, or at any other time on the day of the accident. It is unknown if the tear in the bottom of her tube was there from the start of the day or whether the tear occurred during the Reeds’ use of the tube that day. The Reeds mixed and mingled the various tubes they checked out, so several members of the Reeds’ group could have used the accident tube at various times of the day.

The accident tube was the only tube checked out by the Reed group that had a tear in it. The Reeds did not notice the tear until after I.R.’s injury. The Reeds did not inform anyone at the resort about the tear in the tube after the accident occurred. There is no evidence that any defendant employee had specific knowledge that the Reeds had checked out a tube with a tear in it on the day of the accident, though defendant employees had general knowledge that such tubes were often retained in inventory because they were perceived to be “safer” because they were slower.

From the beginning of the 2010-11 season through the end of the 2014-15 season, defendant had incident reports of 17 collisions of tubers. During that same time frame, there were 72 total incident reports.3 Several of these collisions between tubers occurred within a few weeks and, in two examples, a few days, of I.R.’s collision. Specifically, there were 5 incident reports involving collisions between tubers going down the tube lane between December 30, 2014, and February 27, 2015. None of defendant’s incident reports record whether a hole in a tube contributed to the incident.

Defendant maintains that it had a proper protocol of having at least one employee at the top of the tube run and one employee at the bottom of the tube run at all times. The employee at the top of the tube run was supposed to “stage” the tubers going down. The employee at the bottom of the tube run would retrieve items lost by tubers going down the slope (hats, mittens, etc.) and also retrieve guests whose tubes stopped without fully descending the slope.

The Reeds assert defendant was chronically understaffed and that defendant made a deliberate decision not to station an employee at the top of the tube run the day of I.R.’s accident. Defendant asserts the Reeds have no evidence to support the assertion that the decision not to station an employee at the top of the tube run was a deliberate decision.

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

The plaintiff’s conceded that the release barred their claims for negligence, the first count in their complaint. That left the issue of whether the release barred their claims for gross negligence and whether they had pled enough facts to support a gross negligence claim.

Gross negligence under South Dakota law is the same as willful and wanton conduct:

Under South Dakota law, the phrase “gross negligence” is synonymous with the phrase “willful and wanton misconduct.” Both phrases refer “to a category of tort that is different in kind and characteristics than negligence.” Negligence occurs when one acts with an “unreasonable risk of harm to another.” Willful and wanton misconduct requires a risk of harm that is “substantially greater than that which is necessary to make the conduct negligent.” The threatened harm “must be an easily perceptible danger of death or substantial physical harm.”

The major difference between ordinary negligence and gross negligence is the mental state of the defendant.

In addition, proof of a negligence claim focuses on the ordinary standard of care, while a gross negligence claim focuses on the defendant’s mental state. A defendant acts willfully and wantonly when it knows or has reason to know at the time of its actions of the dire risk and proceeds without concern for the safety of others. The standard does not require proof of intent to harm, but it does “partake to some appreciable extent … of the nature of a deliberate and intentional wrong.” Gross negligence requires “an affirmatively reckless state of mind.” There must be “a conscious realization that a serious physical injury was a probable, as distinguished from a possible (ordinary negligence), result of such conduct.”

That creates a two-step test to determine if the defendant was grossly negligent.

Summarizing the above case law, gross negligence is distinguished from ordinary negligence by two factors. The risk of harm must be greater for gross negligence—whereas under ordinary negligence, the risk of harm can be anything from negligible harm to death, the risk of harm for gross negligence must be death or serious harm. Secondly, the likelihood that harm will come about, phrased in terms of the defendant’s state of mind, must be greater. For example, if there is a 10 percent chance some harm will happen and the defendant fails to take steps to ensure that harm does not come about, he is merely negligent. If there is an 85 percent chance serious harm or death will happen and the defendant fails to take steps to ensure the harm does not occur, he has acted willfully and wantonly or with gross negligence.

The court’s analysis of the chance of the harm occurring is a way of looking at the differences between ordinary and gross negligence that I have never seen before.

The court looked at the facts as presented by both sides and found both lacking the information the court felt would prove the plaintiff’s case. However, the court made this statement.

Under the law of gross negligence, South Dakota has recognized a plaintiff will rarely have direct evidence of the defendant’s state of mind. Rather, state of mind must be inferred from the circumstances. Id. Also, under the law of summary judgment, all inferences from the facts must be made in favor of the nonmoving party, Both sources of law, then, support taking the Reeds’ view of the inference to be drawn from the fact that defendant was chronically understaffed and did not have an employee stationed at the top of the tube run at the time of I.R.’s accident.

So, with the inferences created by the plaintiffs about the state of mind of the tubing hill, the court held that there was enough information plead to allow the gross negligence claim to continue.

The court then looked at the assumption of the risk argument made by the defendant. There was no case law in South Dakota stating that assumption of the risk was a defense to gross negligence, so the court held that assumption of the risk would not stop the gross negligence claim.

So Now What?

What did not arise in this case is whether the release stopped the claims of the minor child. The case was captioned as the parents suing on behalf of their minor child. In that regard, the release would bar the claims of the parents. However, this is a different way of suing on behalf of a minor, not away normally done in most states any more.

Also, this is a decision by a Federal District Court applying South Dakota law so, whether a not a release stops a minor’s claims is probably still up in the air until the South Dakota Supreme Court decides the issue.

However, it is a decision to lean on if you have participants who are minors in your program.

The other issues are classic situations where the defendant looks at a situation one way as a positive for patrons but the injured patron is able to turn the situation around and use it as a club against the defendant. Torn tubes were regarded by the defendant as good because they were slower than the other tubes. However, a torn tube is not a product that is 100%, in the condition it was received from the manufacturer. It was a defective product. So, the plaintiff was able to show the defendant was derelict in using them.

If they placed the tubes in a different location with a sign that said, slower tubes it might have been helpful.

What do you think? Leave a comment.

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What went wrong and how to beat the lawsuit when a guide sues to recover fees, he paid to climb mountain Everest after the trip was cancelled? Several things.

The client was not properly educated pre-trip, and the paperwork did not cover the right issues and/or say the right things.

All over the news, this past ten days is a story about a lawsuit by a Mt. Everest commercial client who is suing his guide service for a refund when the trip was canceled. After arriving in base camp, the trip was canceled because the Khumbu Icefall had a 15 story serac over hanging the route. The outfitter and the other clients decided to bail because of the risk.

I’m even quoted in one article in Outside Magazine.

A Tech CEO Suing His Guide Could Change Everest Travel

CEO Sues Climbing Guide – Could Set a Terrible Precedent for the Travel Industry

It is not the first time that I’ve heard or been involved in these types’ lawsuits. I knew of one from 20+ years ago where the threatened lawsuit was over a refund because the client did not summit Mt. Everest. I never heard what the outcome was.

One of my clients was threatened with a similar lawsuit. The client wanted his money back because he did not summit. I responded to the client’s demand letter listing every Everest summiteers I knew who would testify about the chances of submitting. I never heard anything else.

These refund attempts happen on mountains all over the world.

Usually these start with a guide service needing clients to stay alive or making a profit or not investigating the client thoroughly. When a climbing guide is broke, they have a tendency to say anything to get money in the door or take anyone. Worse are the ones that can right a check without hesitation or who come with a “climbing resume” but only with guide services.

Climbing with a guide is awesome, but the guide makes all the decisions, no matter what the agreement says and how the issue is phrased and the client never engages his brain or understands how decisions are made when climbing a mountain.

Everyone once in a while it is the client who is trying to save face with his friends and neighbors because he did not summit. Getting his money back proves it was not his fault, that he did not summit.

The next step in the process is education. Clients need to learn two things from the start.

  • Their chances of summiting are slim or low based on the mountain.
  • The money they pay to summit is spent way before the client ever sets foot in the country where he is climbing.

No matter the mountain your chances of summiting are based on a lot of factors.

  • The mountain
  • The guide service
    • What the guide service does to get you off the mountain before you can summit

The mountain is obvious, how many days in what conditions and can you survive.

At the same time, there are unscrupulous guide services.

Guide services have been playing games with clients for decades. One game that used to be played on Denali was running the client up the mountain before the client could acclimatize and getting the client sick. This was obvious when you looked at the schedule. There was never enough time between the next load of clients landing on the glacier to acclimatize and summit before the guide had another group to lead.

A different game is still being played on Kilimanjaro. No one tells clients that the hike through the jungle to the base camp is going to leave them and their gear soaking wet. I’ve heard of trips were every single client spent the first two nights shivering in wet sleeping bags before giving up and heading home. No one says to use a waterproof stuff sack or a garbage bag to protect your gear, so thousands each year get to the base of the mountain and turn around.

I’ve not heard of Everest guide services playing any of these games. I do know that your chances of summiting and living are higher based on the amount of money you pay. The past ten years, most of the fatalities have come from guide services that are locally run and very inexpensive compared to everyone else.

I also have only heard great things from the defendant in this case, Garret Madison.

The money paid is gone before you arrive.

Think about the food you will be eating on Mt. Everest. It is purchased in the US, packed for transportation to Katmandu, repacked for shipping to basecamp and repacked for carrying up the mountain. The cost of shipping and packing far outweighs the cost of the food. All of this is done before a US client leaves the US.

Airline tickets, hotel rooms and transportation inside Nepal are paid for in advance. Local guides are hired and paid for, or they find someone different to work for. Competition on Mt. Everest is stiff, so there are plenty of job opportunities for all aspects of getting to basecamp and who you will be climbing with.

Gear is always brought back to the US, cleaned, checked, replaced and then shipped back to Nepal, or used on other mountains in between seasons.

Most of the money you pay to climb a mountain is spent before you leave the US. There are no refunds for food shipped to basecamp, there are no refunds if you can’t summit. I would guess if you wanted some of your money back you can take thirty days of dehydrated food back home with you……. Most is given to the locals and the Sherpa who live on it.

The best way to stop any lawsuit is education and paperwork.

The agreement between the guide and the client must have the following.

  1. The guide is in command, makes mistakes but is in control. Decisions made by the guide are final yet you are in control of your life. You can ignore them at your own risk.
  2. You can’t sue and if you do, you will owe me money for breach of the covenants that go with this contract.
  3. If you do sue, you have to sue me in my little home town a long way from where you live.
  4. You must purchase travel insurance to protect your investment because I’m not going to.

The guide from the articles might have screwed up. To get the client off their back, he might have said something about a refund. The guide also did not do a good job of explaining with the other clients who were leaving what was going on and why. The plaintiff client was left out of the conversation.

However, climbing Everest is not a guaranty, and no guide will ever bet on who will summit and who will not because the odds are stacked and change constantly.

Worse, it is obvious that this plaintiff thinks his luck is pretty good or the amount of money he paid is too much to lose, e way he puts little value on his life.

Guide says to go home, too dangerous! my response is get out of my way!

Do Something

If you want to climb big mountains and intend to hire a guide to do so.

  1. Get in shape
  2. Learn how to climb and climb well. If you can’t run up your local mountains without fear or concern, don’t leave them.
  3. Go climb big mountains with and without guides. Learn how to make decisions and why on when to climb, where to camp, what to do and when to go home.
  4. Expect to spend a lot of money, go cheap you might never go home.
  5. Communicate. Make sure all the promises your guide makes are in writing.
  6. Cowboy up if you can’t get to the top, you probably ignored steps 1-4.
  7. Your money is gone and will not be coming back.

If you are a guide service.

  1. Have enough guts to withstand angry clients because you can’t keep them all happy.
  2. Get good contracts and releases. Get agreements written by an attorney who knows what a mountain is, what making decisions means and has made those decisions and most importantly knows what goes into the agreement and why!
  3. Understand that marketing makes promises that risk management has to pay for is true. You tell a client, he or she will summit, you better have a way to get their butt to the top, or you will be in court.
  4. Make sure your insurance covers advertising, and you have a comprehensive policy to cover those lawsuits that arise more than the negligence lawsuits do.
  5. Tell everyone you cannot guaranty they can get out of basecamp, even get to basecamp, let alone summit.
  6. Get good contracts and releases!

What do you think? Leave a comment.

Copyright 2020 Recreation Law (720) 334 8529

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Putting a saddle on a horse does not turn a livery into a saddle manufacturer. Release stops negligence claims and law stops product liability claims.

A woman who fell off a horse while on a horseback ride. She sued for negligence, which the release stopped, product liability which the law stopped and willful and wanton conduct, which will proceed to trial.

Messer v. Hi Country Stables Corp., 2013 U.S. Dist. LEXIS 2675, 2013 WL 93183

State: Colorado; United States District Court for the District of Colorado

Plaintiff: Alva Messer

Defendant: Hi Country Stables Corporation

Plaintiff Claims: negligence; product liability; and, willful and wanton conduct

Defendant Defenses: Release

Holding: Mostly for defendant, however plaintiff could continue on willful and wanton claims

Year: 2013

Summary

A woman purchased a trail ride from the defendant. On the ride, her saddle slipped, and she fell off the horse. She sued for negligence which the release stopped, product’s liability, which failed because the stable is not a manufacturer and willful and wanton conduct. The court allowed the willful and wanton claim to proceed.

Facts

On July 16, 2009, Plaintiff Alva Messer purchased a guided horseback ride from Hi County Stables. Defendant HCS operates commercial horse-back riding at Glacier Creek Stables in Rocky Mountain National Park (“RMNP”). HCS is one of two equestrian companies owned by Rex Walker. The other equestrian company is Sombrero Ranches, Inc. (“SRI”). Before beginning any guided horseback ride, both companies require customers to sign an exculpatory contract, titled “Release” (hereafter “the Release” or “Release Forms”). The Release Forms for HCS and SRI are identical, except for the name of the company being released from liability. The Release Forms for HCS and SRI are printed in tablets containing 100 tear-away forms per tablet. Once printed, the printing company delivers the tablets to the offices of HCS and SRI.

At the start of the 2009 riding season, one tablet of Release Forms labeled SRI was placed in a box of office supplies for delivery to HCS. For reasons that are unexplained by Defendant, those same Release Forms—which Released SRI from liability—were used by HCS at Glacier Creek Stables on July 16, 2009.

Typically, when customers arrive at HCS, they are informed that they must sign a Release. Amongst other employees at HCS, Dallas Marshall informs customers that they are required to sign the Release and “mark their riding ability.”

When the Messers arrived at HCS on July 16, 2009, Marshall followed her normal practice and informed the Messers of the Release. She also requested that they indicate their riding ability, which Plaintiff did. Following this, and before commencing the guided horseback ride, Plaintiff signed the Release. The Release expressly provides that the customer “understands. . .the specific risks. . .arising from riding a horse. . .and that the [customer] nevertheless intentionally agree[s] to assume these risks.”

After signing the Release, Plaintiff entered the corral where she was assigned her horse before commencing the trail ride. The wrangler who led the guests on Plaintiff’s trail ride was Terry Humphrey.

Plaintiff encountered problems with her saddle during the trail ride which required adjustment by Plaintiff and Humphrey.

At the midway point, the Messer group stopped to take a rest break. Plaintiff encountered further problems with her saddle—including slippage of the saddle to the horse’s right.

Sometime later, as Plaintiff’s horse was stepping down a “rock stair” in the trail, Plaintiff fell off the right side of the horse (the “Incident.”) Plaintiff allegedly sustained serious injuries and economic loss resulting from the Incident.

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

The first issue was the fact the release that was signed did not name the proper defendant. Two stables were owned by the same person, each with different names. Each had a release that named it as the entity being protected. Somehow, a pad of the wrong releases ended up at the defendant, and the release signed by the plaintiff had the name of a different stable on it then where she was riding.

To make changes in a contract like this is called reformation. The court can reform a contract if the party’s intention when signing the contract is the same, and the language does not express the correct intention of the parties.

Reformation of a written instrument is appropriate only when the instrument does not represent the true agreement of the parties and the purpose of reformation is to give effect to the parties’ actual intentions.” Mutual mistake of a contract provides grounds for reformation if the written instrument “does not express the true intent or agreement of the parties.”

A mutual mistake must have occurred for a reformation to be effective.

An “essential prerequisite to a court’s power to reform a contract on the ground of mutual mistake is the existence of a prior agreement that represents the actual expectations of the parties and provides the basis upon which a court orders reformation.”

Because it was obvious that the plaintiff intended to go on a horseback ride with the defendant, where she signed the release, where she paid her money and where she took the ride, the court had no problems correcting the mutual mistake and placing the correct language in the release. This meant placing the name of the defendant in the position of the person to be protected by the release.

Accordingly, the Court finds that there was a mutual mistake at the time the Release was entered into. Mutual intent of the parties was to enter into an agreement whereby HCS would be released from certain claims. This provides the equitable basis to grant the relief. The Court orders that the name “Sombrero Ranches, Inc.” (SRI) be deleted and substituted with “Hi Country Stables” (HCS) in the Release.

The next issue was the validity of the release itself. Under Colorado law, there is a four-part test that a release must pass to be valid.

To determine whether the Release bars Plaintiff’s negligence claim, the Court must consider four factors: (1) the existence of a duty to the public; (2) the nature of the service performed; (3) whether the contract was fairly entered into; and (4) whether the intention of the parties is expressed in clear and unambiguous language.

The first three parts of the test the court quickly covered. Prior Colorado Supreme Court cases held that a recreational activity owes no duty to the public; horseback riding is not an essential service that would bar the release under part two of the test and there was no evidence the release was entered into unfairly.

The fourth test the court also found was valid with this release.

With respect to the fourth factor, the Court looks to the language of the Release to elicit its intent. The Court must determine “whether the intent of the parties was to extinguish liability and whether this intent was clearly and unambiguously expressed.”

It was obvious that the intent of the parties was to decide in advance who would pay for the injuries of any patron of the ride. The release in this case repeatedly used the word negligence throughout the document so the plaintiff knew the purpose of the release. The release also pointed out specific risks of horseback riding that the signor could suffer.

The release was valid to stop the negligence claims.

The next issue was the product liability claim. The plaintiff argued that since the defendant had placed the saddle in the stream of commerce, by placing it on the horse, it was liable for any injuries caused by the defectiveness of the saddle.

The defendant argued that the release stopped this claim also. However, the law in Colorado is that a release cannot stop a product liability claim.

That case held that an agreement releasing “a manufacturer from strict products liability for personal injury, in exchange for nothing more than an individual consumer’s right to have or use the product, necessarily violates the public policy of this jurisdiction and is void.”

The court found the product liability claim was not barred by the release. However, the court did hold that just placing a saddle on a horse for a trail ride does not create a product liability claim for defective equipment in Colorado. Horseback riding is a service; it is not a manufacturing process. Placing a saddle on the horse does not change that. The horse-riding service could not exist (for 99.9% of the people) without the saddle.

Plaintiff entered into a contract for a guided five-hour horseback ride through RMNP. This service primarily relied upon a horse (which is not a product) and a saddle (which incidental to that service). Without a product, the product liability claims cannot succeed.

The saddle was not an item manufactured by the defendant; it was incidental to the service being offered by the defendant and so the product liability claim failed. Finally, the defendant was not a manufacturer of saddles.

The final issues were the claims for willful and wanton conduct. A release cannot bar claims that are greater than negligence, willful and wanton conduct or gross negligence.

Willful and wanton conduct claims are mental state claims. Meaning the claim goes to the actions, the mental state of the defendant in ignoring or creating the issue. This require conscious thought, not simple failure. “…willful and wanton conduct requires a mental state “consonant with purpose, intent and voluntary choice.”

The court then allowed the plaintiffs claims based on willful and wanton conduct of the defendant to proceed to trial.

So Now What?

First, there is a need to look at the product liability claim. Not in the fact that most recreation businesses are manufacturing items, but because they are repairing them. Although you can find outfitter made items such as old raft frames, most items used now days are manufactured by a third party. However, many outfitters and recreation businesses do repair items.

Repairing an item may bring the outfitter into the trial under a product liability claim in many states. The outfitter by making repairs has entered into the stream of commerce between the manufacturer and the end user. The outfitter is no longer a user of the product, but a manufacturer of the product.

Remember there are some items you should never repair or that may be illegal to repair.

PFD’s cannot be repaired by law. Climbing harnesses or any other item where the failure would result in catastrophic injury or death or where the manufacturing process is protected by statute or standard should never be repaired.

The reformation issue was stupid. The cost of printing one set of releases on tan paper and the other on white would have eliminated this problem. Other examples would be putting the page numbers on the bottom right of one release and the center or top of the other. Locating the logo of the defendant in a different location on each release would have worked. Anything to that any employee can recognize that they are using the wrong release.

Some day there will be a horseback riding case that does not involve a slipping saddle. Why there still are, is a mystery to me, and I grew up with horses.

What do you think? Leave a comment.

Copyright 2020 Recreation Law (720) 334 8529

If you like this let your friends know or post it on FB, Twitter or LinkedIn

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

Author: Outdoor Recreation Insurance, Risk Management and Law

To Purchase Go Here:

Facebook Page: Outdoor Recreation & Adventure Travel Law

Email: Jim@Rec-Law.US

By Recreation Law    Rec-law@recreation-law.com    James H. Moss

#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, #Recreation-Law.com, #RiskManagement, #RockClimbing, #RockClimbingLawyer, #RopesCourse, #RopesCourseLawyer, #SkiAreas, #Skiing, #SkiLaw, #Snowboarding, #SummerCamp, #Tourism, #TravelLaw, #YouthCamps, #ZipLineLawyer, #RecreationLaw, #OutdoorLaw, #OutdoorRecreationLaw, #SkiLaw,

 


Reed v. Union Resort, LLC, 2018 U.S. Dist. LEXIS 225856, 2018 WL 8332583

Reed v. Union Resort, LLC, 2018 U.S. Dist. LEXIS 225856, 2018 WL 8332583

United States District Court for the District of South Dakota, Western Division

November 15, 2018, Decided; November 15, 2018, Filed

5:17-CV-05047-JLV

Reporter

Brad Reed, Individually and as Joint Limited Conservators of I.R., a Minor; and Tara Reed, Individually and as Joint Limited Conservators of I.R., a Minor; Plaintiffs, vs. Union Resort, LLC, dba Mystic Miner, Defendant.

Subsequent History: Objection overruled by, Adopted by, Summary judgment granted by, in part, Summary judgment denied by, in part Reed v. Union Resort, LLC, 2019 U.S. Dist. LEXIS 49327 (D.S.D., Mar. 25, 2019)

Counsel:  [*1] For Brad Reed, Individually and as Joint Limited Conservators of I.R., a minor, other, I.R., Tara Reed, Individually and as Joint Limited Conservators of I.R., a minor, other, I.R., Plaintiffs: Kenneth E. Barker, LEAD ATTORNEY, Barker Wilson Law Firm, LLP, Belle Fourche, SD.

For Union Resort, LLC, doing business as Mystic Miner, Defendant: Shane E. Eden, LEAD ATTORNEY, Davenport, Evans, Hurwitz & Smith, LLP, Sioux Falls, SD.

Judges: VERONICA L. DUFFY, United States Magistrate Judge.

Opinion by: VERONICA L. DUFFY

Opinion

REPORT AND RECOMMENDATION

INTRODUCTION

This matter is before the court on the amended complaint of Brad and Tara Reed as conservators of I.R., their minor daughter. See Docket No. 16. The Reeds allege claims of negligence and gross negligence against defendant Union Resort, LLC, dba Mystic Miner (defendant) arising out of a tubing accident at defendant’s ski resort. Id. This matter rests on the court’s diversity jurisdiction, 28 U.S.C. § 1332.

Defendant has now filed a motion for summary judgment. See Docket No. 21. The Reeds oppose the motion. See Docket No. 30. The motion was referred to this magistrate judge for a recommended disposition pursuant to 28 U.S.C. § 636(b)(1)(B), the order of referral dated November 11, 2018 (Doc. 42), and the [*2]  October 16, 2014, standing order of the Honorable Jeffrey L. Viken, Chief United States District Judge.

FACTS

Defendant filed a statement of undisputed material facts, Docket No. 22, to which the Reeds have responded, Docket No. 31. The following facts have been drawn from those pleadings with disputes or discrepancies as noted.

On March 13, 2015, Brad and Tara Reed brought their children to the defendant’s resort near Lead, South Dakota, for an afternoon of recreational snow tubing.1 The resort was owned and operated by Union Resort, LLC, dba Mystic Miner. Among the Reeds’ children with them that day was seven-year-old I.R. Accompanying the Reeds were another couple and Alex, a social worker from the Philippines.

Upon arriving shortly before noon, the Reed party entered the lodge area where customers are required to check in and purchase admission tickets for the resort. The Reeds purchased snow tubing day passes for themselves and their children, including I.R. As a condition of allowing I.R. to use the resort, Union required the Reeds to agree to a written release of liability. The Reeds signed the release and printed the names of each of their children, including I.R., as participants. [*3] 

The Reeds understood the document was a release of liability agreement and that, by signing, they would be relinquishing certain unspecified rights. They did not ask any questions about the release. The release informed resort participants that tubing activities are extremely hazardous and can result in personal injury. The Reeds understood that tubing carried with it a degree of risk, including risk of trauma to the head, and that I.R. would be exposed to this risk.

After signing the release and paying the admission fee, the Reeds and their kids received individual tickets for the tube park. Those tickets included additional warnings.

At the resort, there are numerous bright red signs that provide instructions and warnings to participants. Among the messages on some of the signs was a warning that collisions with other tubers was one of the dangers of tubing. Other signs instructed the tubers to follow the attendant’s instructions and to wait for the attendant’s signal before starting [down the tube run]. The Reeds do not recall whether they saw or read any of these signs.

The Reeds were directed to select tubes from the resort’s selection of tubes, which they did. Defendant had approximately [*4]  50 to 70 tubes in inventory at the time, but there is no evidence how many of these tubes had already been selected by prior guests. No employee of defendant selected the tubes for the Reeds. Several defendant employees testified at their depositions that it was a practice at the resort to leave tubes with tears in the bottoms in circulation for guests to use. The employees explained that such tubes were slower and slower equated to safer in their minds.

During the Reeds’ stay at the resort, they went down the tube runs approximately 15 to 20 times. Two of the four tube runs at the resort were open that day. During the Reeds’ runs, there were two defendant employees at the bottom of the tube runs assisting guests with the tow rope (which towed guests to the top of the run).

On approximately two of the Reeds’ 15-20 tubing runs, there was a young man at the top of the tube runs who also appeared to be a resort employee with a radio in his possession. However, the young man never monitored the tube runs, never gave instructions to tubers, and never staged tubers going down the tube runs. “Staging” means controlling the entry of guests onto the tube runs to ensure that the prior tuber has [*5]  finished the run and cleared the area before the next tuber is allowed to begin his or her descent. There was no staging and, instead, tubers decided themselves when to begin their descent, a situation Brad Reed described as a “free-for-all.”

At approximately 2 p.m., the Reeds decided to take one last run down the tube runs before leaving the resort. Up to this point, the Reeds had experienced no concerns or incidents. Up to this final run, I.R. had always completed her run down the slope as part of a group or with one of her parents. On the final run, she asked to be allowed to go down the tube run by herself, to which her parents agreed. Mrs. Reed told I.R. they would go down the run together, parallel to each other in each of the two open tube runs. At this point, Alex was directly behind I.R. in line for the same tube lane. Mr. Reed was behind Alex in the same line.

Once both lanes were clear, Mrs. Reed and I.R. began their descents. Mrs. Reed went all the way down the run, but I.R.’s tube stopped approximately 3/4 of the way down the slope. While I.R. was stopped, Alex began her descent before I.R. cleared the lane. When Alex’s tube reached I.R.’s tube, they collided. No defendant [*6]  employee told Alex to begin her descent, but no defendant employee was present at the top of the run to tell her, instruct her, or prevent her from beginning her descent until I.R. cleared the lane.

From the top of the slope, Mr. Reed testified Alex should have been able to see I.R. had not cleared the lane had Alex been paying attention. See Docket No. 25-5 at p. 7 (depo. pp. 25-26). Mr. Reed himself was able to observe the collision from his vantage point at the top of the slope. Id. at p. 6 (depo. pp. 22-24).2

After the accident, the Reeds observed an approximately 8-inch hole in the bottom of I.R.’s tube that had filled with snow. Defendant asserts it was its policy to stow the tubes under the deck each night and to pull them out the next day for guests’ use. Defendant asserts employees were directed to observe the tubes for significant tears or defects and to remove defective tubes during this process. However, several defendant employees testified they left tubes with tears in their bottoms in rotation for guest use because the tears would slow the tuber down as they descended the slope. Employees believed a slower descent was a safer descent.

If a lightweight child descended the slope with [*7]  a tube with a tear in it, sometimes the tube would stop mid-way down the slope and a defendant employee would have to walk up the slope to retrieve the child. In such an instance, the defendant employee at the bottom of the slope would radio the employee at the top and tell them to stop sending guests down the slope until the child was retrieved and taken to the bottom.

No photograph was taken of I.R.’s tube at the beginning of the day, after the accident, or at any other time on the day of the accident. It is unknown if the tear in the bottom of her tube was there from the start of the day or whether the tear occurred during the Reeds’ use of the tube that day. The Reeds mixed and mingled the various tubes they checked out, so several members of the Reeds’ group could have used the accident tube at various times of the day.

The accident tube was the only tube checked out by the Reed group that had a tear in it. The Reeds did not notice the tear until after I.R.’s injury. The Reeds did not inform anyone at the resort about the tear in the tube after the accident occurred. There is no evidence that any defendant employee had specific knowledge that the Reeds had checked out a tube with [*8]  a tear in it on the day of the accident, though defendant employees had general knowledge that such tubes were often retained in inventory because they were perceived to be “safer” because they were slower.

From the beginning of the 2010-11 season through the end of the 2014-15 season, defendant had incident reports of 17 collisions of tubers. During that same time frame, there were 72 total incident reports.3 Several of these collisions between tubers occurred within a few weeks and, in two examples, a few days, of I.R.’s collision. Specifically, there were 5 incident reports involving collisions between tubers going down the tube lane between December 30, 2014, and February 27, 2015. None of defendant’s incident reports record whether a hole in a tube contributed to the incident.

Defendant maintains that it had a proper protocol of having at least one employee at the top of the tube run and one employee at the bottom of the tube run at all times. The employee at the top of the tube run was supposed to “stage” the tubers going down. The employee at the bottom of the tube run would retrieve items lost by tubers going down the slope (hats, mittens, etc.) and also retrieve guests whose [*9]  tubes stopped without fully descending the slope.

The Reeds assert defendant was chronically understaffed and that defendant made a deliberate decision not to station an employee at the top of the tube run the day of I.R.’s accident. Defendant asserts the Reeds have no evidence to support the assertion that the decision not to station an employee at the top of the tube run was a deliberate decision.

DISCUSSION

A. Summary Judgment Standard

Under Rule 56(a) of the Federal Rules of Civil Procedure, summary judgment is appropriate where the moving party “shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a).

The court must view the facts, and inferences from those facts, in the light most favorable to the nonmoving party. See Matsushita Elec. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986) (citing United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S. Ct. 993, 8 L. Ed. 2d 176 (1962)); Helton v. Southland Racing Corp., 600 F.3d 954, 957 (8th Cir. 2010) (per curiam). Summary judgment will not lie if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986); Allison v. Flexway Trucking, Inc., 28 F.3d 64, 66 (8th Cir. 1994).

The burden is placed on the moving party to establish both the absence of any genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). Once the movant has met its burden, the nonmoving party may not simply rest on the allegations in the pleadings, but [*10]  must set forth specific facts, by affidavit or other evidence, showing that a genuine issue of material fact exists. Anderson, 477 U.S. at 256; Fed. R. Civ. P. 56(e) (each party must properly support its own assertions of fact and properly address the opposing party’s assertions of fact, as required by Rule 56(c)).

The underlying substantive law identifies which facts are “material” for purposes of a motion for summary judgment. Anderson, 477 U.S. at 248. “Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted.” Id. (citing 10A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice And Procedure § 2725, at 93-95 (3d ed. 1983)). “[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Id. at 247-48.

Essentially, the availability of summary judgment turns on whether a proper jury question is presented: “The inquiry performed is the threshold inquiry of determining whether there is the need for a trial—whether, in other words, there are any genuine [*11]  factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.” Id. at 250.

B. Does the Release Signed by the Reeds Bar Their Claims?

Defendant’s first argument in favor of its summary judgment motion is that the clear and plain language of the release signed by the Reeds bars their claims and that there is no overriding public policy that serves to neutralize the release.

South Dakota law4 provides that a valid release of liability bars claims for ordinary negligence, but does not bar claims for gross or willful negligence or recklessness. Holzer v. Dakota Speedway, Inc., 2000 SD 65, 610 N.W.2d 787, 792-93 (S.D. 2000). The Reeds do not argue that the release was invalid in any way or that the activity I.R. was engaged in when she was injured was outside the scope of the release. In fact, the Reeds concede that their first claim in their amended complaint for ordinary negligence is barred by defendant’s release. See Docket No. 30 at p. 5. Accordingly, the court recommends that defendant’s motion for summary judgment as to the Reeds’ claim for ordinary negligence, count one of the amended complaint, be granted.

C. Are There Material Factual Disputes as to Gross Negligence?

Defendant argues the facts alleged [*12]  by the Reeds, even if true, allege a claim for ordinary negligence only, not gross negligence. Thus, since ordinary negligence is barred by the release, defendant argues it should be granted summary judgment on the Reeds’ gross negligence claim too.

Under South Dakota law, the phrase “gross negligence” is synonymous with the phrase “willful and wanton misconduct.” Fischer v. City of Sioux Falls, 919 N.W.2d 211, 2018 SD 71, 2018 WL 4779267 at *2 (S.D., 2018). Both phrases refer “to a category of tort that is different in kind and characteristics than negligence.” Id. Negligence occurs when one acts with an “unreasonable risk of harm to another.” Id. (citing W. Page Keeton et al., Prosser & Keeton on the Law of Torts, § 34, at 212 (5th ed. 1984)). Willful and wanton misconduct requires a risk of harm that is “substantially greater than that which is necessary to make the conduct negligent.” Id. The threatened harm “must be an easily perceptible danger of death or substantial physical harm.” Id. (all quotes from Fischer cleaned up).

In addition, proof of a negligence claim focuses on the ordinary standard of care, while a gross negligence claim focuses on the defendant’s mental state. Id. 2018 SD 71, [WL] at *3. A defendant acts willfully and wantonly when it knows or has reason to know at the time of its actions [*13]  of the dire risk and proceeds without concern for the safety of others. Id. The standard does not require proof of intent to harm, but it does “partake to some appreciable extent … of the nature of a deliberate and intentional wrong.” Id. Gross negligence requires “an affirmatively reckless state of mind.” Id. There must be “a conscious realization that a serious physical injury was a probable, as distinguished from a possible (ordinary negligence), result of such conduct.” Id. (all quotes from Fischer cleaned up).

The evidence must show more than “mere mistake, inadvertence, or inattention . . . there need not be an affirmative wish to injure another, but, instead, a willingness to injure another.” Gabriel v. Bauman, 2014 SD 30, 847 N.W.2d 537, 541 (S.D. 2014)). Generally, whether the facts constitute gross negligence is a question of fact “if reasonable minds might differ in interpreting the facts in arriving at different conclusions on whether the defendant was willful, wanton, or reckless.” Id. at 542. “Because willfulness, wantonness, or recklessness is almost never admitted, and can be proved only by the conduct and the circumstances, an objective standard must of necessity in practice be applied. Id. at 542-43.

Summarizing the above case law, gross negligence [*14]  is distinguished from ordinary negligence by two factors. The risk of harm must be greater for gross negligence—whereas under ordinary negligence, the risk of harm can be anything from negligible harm to death, the risk of harm for gross negligence must be death or serious harm. Fischer, 2018 SD 71, 2018 WL 4779267 at *2. Secondly, the likelihood that harm will come about, phrased in terms of the defendant’s state of mind, must be greater. For example, if there is a 10 percent chance some harm will happen and the defendant fails to take steps to ensure that harm does not come about, he is merely negligent. If there is an 85 percent chance serious harm or death will happen and the defendant fails to take steps to ensure the harm does not occur, he has acted willfully and wantonly or with gross negligence.

The Reeds posit three facts in support of their assertion the defendant in this case acted grossly negligent (or willfully and wantonly) with regard to I.R. First, the defendant had a practice of leaving tubes with tears in the canvas bottoms in rotation for guests to use because the torn tubes were slower and, therefore, in the eyes of defendant’s employees, safer. Second, the defendant knew the importance of staging—having [*15]  an employee at the top of the tube run to meter the guests as they descended the slope so that one guest could clear the run before the next guest began descending—but made a deliberate decision not to station an employee at the top of the tube run on the day of I.R.’s accident. And, finally, the existence of prior collisions on the tube run put the defendant on notice of the likelihood of harm.

Neither party speaks to the magnitude of the harm which, as discussed above, is one of the two factors distinguishing ordinary negligence from gross negligence. The defendant does not cite facts or circumstances to show that the prior collisions were minor bump-and-bruise types of encounters. The Reeds do not cite facts or circumstances to show the prior collisions resulted in concussions, closed head injuries, broken bones, surgeries or hospitalizations. The Reeds have supported their assertion that I.R.’s injuries were sufficiently serious—a fractured skull–something defendant does not dispute. Because the moving party has the burden, the court makes all inferences in favor of the nonmoving party. Accordingly, the court infers that previous accidents were sufficiently severe in nature to [*16]  satisfy the standard required for gross negligence.

Likewise, with regard to the number of prior incidents, neither party has placed into the record what the total number of tubers was during the period of time covered by the incidents. This fact goes to the likelihood of a collision—for gross negligence, there must be a greater probability of harm occurring than is the case with ordinary negligence. If 17 collisions occurred between fall of 2010 and March 15, 2015, and there were 5,000 tubers during that time, the number of prior accidents takes on one type of significance. But the significance of the number of prior accidents is different if the total number of tubers during that time frame is 100, 300, or even 500. There is a significantly bigger risk of harm the smaller the total number of tubers. Although the defendant alleges there were “thousands” of tubers, it has not supported that assertion with citation to an affidavit, deposition, or authenticated document. Again, there is a lack of evidence.

Also, neither party describes the scope of defendant’s incident reports. Do they encompass all kinds of incidents—those attributable to conditions on the slopes within defendant’s control [*17]  as well as incidents attributable to factors not within defendant’s control? Do they encompass heart attacks and strokes as well as collisions? Do the reports include drunken brawls between guests as well as injuries inflicted when a tow bar snaps?

Furthermore, is there any evidence suggesting that not all collisions at defendant’s resort are documented in incident reports? Are the incident reports the tip of the iceberg—or are they truly representative of all injuries occurring at defendant’s resort?

Finally, defendant does not dispute that no employee was stationed at the top of the tube run at the time of I.R.’s accident. The Reeds assert that defendant was “chronically understaffed” and that defendant made a “deliberate decision” not to place an employee at the top of the tube run that day. The Reeds have amply supported their assertion that defendant was chronically understaffed, with the result that positions that should have been filled by employees were left unattended. See Docket Nos. 33-4, 33-5, & 33-8. The Reeds also supplied testimony that, when there were not enough employees, the defendant prioritized putting an employee at the bottom of the tube slope rather than at the [*18]  top of the slope. See Docket No. 33-4 at p. 5 (depo p. 20). From these two facts, the Reeds infer that defendant made a “deliberate decision” the day of the accident not to place an employee at the top of the tube slope to stage the tubers.

Defendant disputes that it made a “deliberate decision” not to have an employee staging the tubers that day. Defendant’s disagreement with the Reeds’ assertion is based solely on the fact that they do not have testimony from any witness stating outright that a calculated decision was made. Defendant seems to assert that the Reeds may not rely upon an inference, but must have affirmative evidence of the fact a “deliberate decision” was made.

The court makes two observations. Under the law of gross negligence, South Dakota has recognized a plaintiff will rarely have direct evidence of the defendant’s state of mind. Gabriel, 847 N.W.2d at 542-43. Rather, state of mind must be inferred from the circumstances. Id. Also, under the law of summary judgment, all inferences from the facts must be made in favor of the nonmoving party. Matsushita Elec. Co., 475 U.S. at 587-88. Both sources of law, then, support taking the Reeds’ view of the inference to be drawn from the fact that defendant was chronically understaffed and did [*19]  not have an employee stationed at the top of the tube run at the time of I.R.’s accident.

Defendant attempts to eliminate a genuine issue of fact as to the presence of a staging employee by asserting that there was in fact an employee at the top of the tube hill with a radio. See Docket No. 34 at p. 6. In support of this assertion of fact, defendant cites Mr. and Mrs. Reeds’ depositions and argues they cannot claim a version of facts more favorable than their own testimony, an old chestnut of South Dakota Law.

Reading the Reeds’ depositions, however, leads one to conclude defendant’s assertion is, if not outright untrue, certainly misleading. Both Mr. and Mrs. Reed testified no one was at the top of the hill staging the tubers at the time of I.R.’s accident. Docket No. 27-1 at p. 10 (depo. p. 30); Docket No. 27-5 at p. 7 (depo. p. 25). Prior to the accident, both the Reeds had observed a young man with a radio they assumed was defendant’s employee at the top of the hill during one or two of the Reed party’s previous 15-20 tube runs. However, the young man never provided instruction to the tubers about when to go down the slope—he was not staging the tubers. Docket No. 27-1 at p. 10 (depo. [*20]  pp. 39-40). Thus, the Reeds have sustained their assertion of fact that defendant had no employee stationed at the top of the tube hill to stage tubers at the time of I.R.’s accident.

Defendant’s motion is decided with resort to two veins of law. First, the law applicable to summary judgment. As the movant, defendant has the burden to show that there are no genuine disputes of material fact and that, based upon those undisputed facts, it is entitled to judgment as a matter of law. All of the absences of crucial fact detailed by the court above cut against defendant as the moving party. Furthermore, all of the inferences from the facts that are present in the record must be drawn in favor of the Reeds. Applying those standards to the issue before the court, the conclusion is inescapable that there are genuine issues of material fact existing which prevent summary judgment in defendant’s favor.

The second vein of law which comes into play is the dictate of South Dakota law that, ordinarily, questions of whether a defendant acted with gross negligence are questions of fact for the jury if reasonable minds could differ as to the inferences to draw from the known facts. Gabriel, 847 N.W.2d at 542. That is the situation [*21]  here. The court recommends that defendant’s motion for summary judgment on the Reeds’ gross negligence claim be denied.

D. Are There Material Factual Disputes as to Assumption of the Risk?

Defendant’s final argument in favor of its summary judgment motion is that the Reeds assumed the risk of their daughter’s accident as a matter of law, thereby relieving defendant of any liability. The court addresses the first question apparent by defendant’s argument: whether assumption of the risk is even a defense to a claim of gross negligence. As legal authority for its position, defendant cites only the Restatement (Second) of Torts 496A, cmt. d (1965), and a dissenting opinion in Barger for Wares v. Cox, 372 N.W.2d 161, 170-71 (S.D. 1985) (Wuest, J., dissenting). See Defendant’s Brief, Docket No. 23 at pp. 29-30. Neither of these authorities represent binding South Dakota law.

The Reeds in their brief do not address the issue of whether assumption of the risk is a defense to a claim of gross negligence. They argue only that assumption of the risk is a quintessential issue of fact for the jury. See Docket No. 30 at pp. 13-14.

In the Holzer case discussed previously, the plaintiff signed defendant’s release of liability form which defendant called an “assumption of the risk” form. Holzer, 610 N.W.2d at 790. The court held [*22]  in that case that liability releases only serve to protect defendants from claims of ordinary negligence, not from claims of gross negligence. Id. at 793. However, the title the defendant chose to give its release form is not dispositive of the question in this case.

The South Dakota Supreme Court has said that when a defendant’s actions are merely negligent, the defense of contributory negligence applies. But when the defendant’s conduct is willful and wanton, the defense of contributory negligence does not apply. Carlson v. Johnke, 57 S.D. 544, 234 N.W. 25, 27-28 (S.D. 1931), overruled on other grounds Wittstruck v. Lee, 62 S.D. 290, 252 N.W. 874, 877 (S.D. 1934) (clarifying that it did not adopt the doctrine of comparative negligence in Johnke).

In a dissenting opinion in another case, Justice Henderson stated that while assumption of the risk was a defense to ordinary negligence, the plaintiff would nonetheless have recourse for willful or wanton acts of a defendant. Johnson v. Rapid City Softball Ass’n. , 514 N.W.2d 693, 703 (S.D. 1994) (Henderson, J., dissenting). See Rantapaa v. Black Hills Chair Lift Co., 2001 SD 111, 633 N.W.2d 196, 204 (S.D. 2001) (assumption of the risk is an affirmative defense to an ordinary negligence claim).

The court has found no South Dakota case directly on point addressing whether the defense of assumption of the risk applies to grossly negligent or willful and wanton conduct. Defendant cites § 496A, comment d, of the Restatement (Second) of Torts for the proposition that the defense is [*23]  available here. The section cited stands for the proposition that assumption of the risk is a defense to both ordinary negligence and to reckless conduct. The section does not address gross negligence or willful and wanton conduct. However, it is true that the South Dakota Supreme Court has, at times, used the word “reckless” interchangeably with “gross negligence” and “willful and wanton.”

If assumption of the risk is a defense to a claim of gross negligence, it is a subjective standard. Duda v. Phatty McGees, Inc., 2008 SD 115, 758 N.W.2d 754, 758 (S.D. 2008). Defendant has the burden to prove that “the particular plaintiff in fact sees, knows, understands and appreciates” the specific risk that caused the injury. Id. The defendant must prove three elements: (1) the plaintiff had actual or constructive knowledge of the risk; (2) the plaintiff appreciated its character; and (3) the plaintiff voluntarily accepted the risk, with the time, knowledge, and experience to make an intelligent choice. Id. “A person is deemed to have appreciated the risk if it is the type of risk that no adult of average intelligence can deny.” Id. (quoting Westover v. East River Elec. Power Coop., Inc., 488 N.W.2d 892, 901 (S.D. 1992)) (cleaned up).

The Restatement states that a plaintiff who knows generally of a danger does not necessarily assume the risk if [*24]  the danger appears to be slight or negligible. See
Restatement (Second) Torts §496D, cmt. b. The Restatement also echoes what South Dakota law establishes: because the standard for assumption of the risk is a subjective one based on whether the plaintiff knows of the existence of the risk as well as understands its magnitude and unreasonable character, the question of assumption of the risk is almost always a question of fact for the jury to decide. Id.; Ray v. Downes, 1998 SD 40, 576 N.W.2d 896, 900 (S.D. 1998).

Here, the Reeds have established that neither they nor their children had ever been tubing before the day they visited defendant’s resort. See Docket No. 27-1 at p.3 (depo. p. 12). They anticipated that tubing at defendant’s resort would be safe, fun and would build family memories. See Docket No. 33-1 at p. 103. Furthermore, there is no evidence produced by defendant showing that the Reeds anticipated, understood, and accepted the risk that defendant would provide no employee at the top of the tube run to stage the tubers—contrary to defendant’s own policy and its prominent signage at the resort (i.e. follow attendant’s instructions when going down the tube run).

The defense of assumption of the risk is a subjective one. There are material issues of fact as to what the [*25]  Reeds knew and appreciated in terms of the risk they and I.R. would encounter when tubing at defendant’s resort. Assuming that the defense applies at all to a claim of gross negligence, the court concludes summary judgment is inappropriate on this record.

Conclusion

Based on the foregoing facts, law and analysis, this magistrate judge respectfully recommends granting in part and denying in part defendant’s motion for summary judgment, Docket No. 21. Specifically, the court recommends defendant’s motion should be granted as to plaintiff’s claim for ordinary negligence, but recommends defendant’s motion should be denied as to plaintiff’s claim for gross negligence.

Notice To Parties

The parties have fourteen (14) days after service of this Report and Recommendation to file written objections pursuant to 28 U.S.C. § 636(b)(1), unless an extension of time for good cause is obtained. Failure to file timely objections will result in the waiver of the right to appeal questions of fact. Objections must be timely and specific in order to require de novo review by the District Court. Thompson v. Nix, 897 F.2d 356 (8th Cir. 1990); Nash v. Black, 781 F.2d 665 (8th Cir. 1986).

DATED November 15, 2018.

BY THE COURT:

/s/ Veronica L. Duffy

VERONICA L. DUFFY

United States Magistrate Judge


Federal District Court applying South Dakota law finds release was ineffective in stopping claims for injury that did not occur because of the risk the plaintiff was anticipating.

The plaintiff in this case signed a release to hunt, but was injured by an ATV waiting to hunt. As such the release did not apply.

Wimmer v. Top Gun Guide Serv., 421 F. Supp. 3d 849, 2019 U.S. Dist. LEXIS 185888, 2019 WL 5558308

State: South Dakota

Plaintiff: Anthony Wimmer

Defendant: Top Gun Guide Service, Inc., John Does 1-5

Plaintiff Claims: Negligence

Defendant Defenses: Release

Holding: for the Plaintiff

Year: 2019

Summary

A release must be written to cover all the risks your guests could suffer. Here the release covered hunting and did not cover being hit by an ATV when the plaintiff was not hunting. Write your release to inform your participants and to provide protection for you from all fronts.

Facts

This case arose from injuries that plaintiff Anthony Wimmer sustained while on a hunting trip hosted by defendant Top Gun near Aberdeen, South Dakota in April of 2015. Mr. Wimmer is a California resident and Top Gun is a Minnesota corporation. Id. On or about April 9, 2015, Mr. Wimmer arrived in Aberdeen, though he did not hunt on that day. At some point on April 9th, Mr. Wimmer signed a waiver purporting to release Top Gun from liability arising from the hunting trip.

The parties agree that in his deposition Mr. Wimmer testified that he read the release before signing it and that he did not disagree with anything contained therein. Mr. Wimmer also agreed in his deposition that hunting and fishing is a dangerous activity.

On April 10th, Mr. Wimmer arrived at the hunting site and began setting up hunting decoys. Shortly after having finished setting up the decoys, Mr. Wimmer was standing in the field where the hunt was to take place when he was struck from behind “by either an [all terrain vehicle (ATV)] or sled.” The sled was being towed behind the ATV. Id. The ATV was being operated by a Top Gun guide.

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

The plaintiff argued the normal arguments on why the release should fail. The main one was the release was written specific for the activity of and the risks created by hunting and fishing and at the time of the accident the plaintiff was doing neither of those things. Therefore, the release did not apply, his injuries were outside of the scope of the language of the release.

Plaintiff argues that he had no meaningful opportunity to negotiate the terms of the waiver and so it must be viewed as an “anticipatory release and contract of adhesion, which should be viewed with a skeptical and critical eye,” and any ambiguities should be construed against the drafter. Plaintiff argues that the waiver, by its terms, only applies to the limited activities of hunting and fishing. Plaintiff argues that his are not hunting injuries because, at the time of the accident, he had already finished setting up the decoys and was merely standing in the field waiting to be told what he should do next. Plaintiff urges that such activity should not be considered hunting.

The defendant argued the release was broad and covered the injury the plaintiff sustained and countered the plaintiff’s arguments.

Top Gun’s argument relies on the liability waiver being found to encompass the harm at issue in this case. Defendant then proceeds to argue that the waiver is valid and its enforcement would not contravene South Dakota’s public policy. Defendant argues that releases involving voluntary recreational activities have withstood attacks that they are contrary to South Dakota’s public policy many times before; only an attempted waiver of conduct rising to the level of willful negligence or intentional tort would contravene the state’s public policy. Because Mr. Wimmer does not allege willful negligence or any intentional torts, defendant argues that his claims must fail.

The court then looked at the law of South Dakota where the accident happened and, which law was to be applied, South Dakota law.

Under South Dakota law, a waiver of liability is contractual in nature and is governed by contract law. When interpreting a contract, “[t]he goal . . . is to see that the mutual intent of the parties is carried into effect.” Courts look to the language of the contract to determine the intent of the parties, and afford contractual terms their “plain and ordinary meaning,” “When the meaning of contractual language is plain and unambiguous, construction is not necessary” because the “intent of the parties can be derived from within the four corners of the contract.” (“When the words of a contract are clear and explicit and lead to no absurd consequences, the search for the parties’ common intent is at an end.”).

What most non-lawyers do not understand is a contract must be interrupted solely by the words in the contract. As lawyers say within the four corners of the document. Statements (parol evidence) said before or after the signing of the contract are inadmissible to interpret the contract. The exception to this rule is if the contract is determined by the court to be ambiguous, then evidence outside of the terms of the agreement can be introduced to explain the language of the contract. But only to explain the ambiguous language of the contract.

When a contract is found to be ambiguous, however, “parol evidence is admissible to explain the contract but inadmissible to vary or add terms to the contract.” A contract is not rendered ambiguous merely because the parties now disagree as to their intent at the time of contracting. “Instead, ‘a contract is ambiguous only when it is capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement.'”

The court found that the release was not ambiguous so no other evidence could be introduced to explain the meaning of the release.

The release at issue in the instant case is not ambiguous. Although it must be interpreted and read in a common sense manner. The release, by its terms, covers “all claims, demands, or causes of action, which are in any way connected with [plaintiffs] participation in this activity or [plaintiff’s] use of [Top Gun] equipment…”

The plaintiff and the defendant both argued the issues as they needed. The plaintiff stated he was standing around the, and the defendant argued the plaintiff was hunting. However, the court found the plaintiff was not hunting by law. “As a matter of law, plaintiff could not have legally been pursuing waterfowl because the accident happened long before legal shooting time.”

Under South Dakota law, hunting cannot begin until thirty minutes before sunrise. Since the accident happened several hours before sunrise, the plaintiff was not hunting.

This accident could not, as a matter of law, have been a part of legal hunting. In South Dakota, a hunter may not shoot waterfowl until one half hour before sunrise. At the time of the accident, all preparations for hunting had been completed. The parties were in a waiting period. Instead, plaintiff was struck by a motor vehicle. The fact that plaintiff is claimed to be hunting at the time he was struck by the ATV is irrelevant because being struck by an ATV is not a harm arising out of hunting, especially long before sunrise.

Therefore, the release was not written to cover the accident that occurred to the plaintiff.

The court also added that the release did not cover motor vehicle accidents, which is what occurred to the plaintiff. (Any accident that is caused by something with an engine and tires, the courts usually interpret that as a automobile accident and apply automobile law, on or off road.)

The court then looked at releases and how they are interpreted with respect to high-risk activities under South Dakota law.

First, the more inherently dangerous or risky the recreational activity, the more likely that an anticipatory release will be held valid. That is, individuals who engage in activities like mountain climbing, race car driving, parachute jumping, and the like, are more likely to be held to have an understanding of the risky nature of their chosen activity.

Second, releases are deemed more acceptable when they are written on a separate sheet of paper. Id. It is the first line of reasoning that is most relevant to the instant analysis.

The court stated that if you undertake a high-risk activity you cannot sue for your injuries.

The first line of reasoning recognizes that individuals who voluntarily engage in a particularly dangerous activity for recreational purposes must accept a certain amount of risk that is inherent in said activity. That is, when an individual chooses to go skydiving, signs a release with a vendor providing such services, and is injured while hurtling to the earth, he cannot then sue in contravention of that release. Hunting is likewise a dangerous activity; the hunter voluntarily exposes himself to all the dangers of the firearms enthusiast as well as those of the outdoorsman. It is agreed that the release in this case covers liability arising out plaintiff’s participation in the activity of hunting. However, plaintiff’s participation in the hunt did not cause his injury.

Summing the issues up, the court made the statement that in South Dakota, the Supreme Court looked at the validity of the release as it relates to the activity the release was supposed to cover.

Each case the Supreme Court of South Dakota has considered relating to the application of a release from liability has involved harm that arose out of the activity for which liability was waived.

However, here the plaintiff was not undertaking a high-risk recreational activity. He was standing in a field.

In the instant case, plaintiff’s injury did not arise from his participation in the hunt. He was not accidentally shot by a fellow hunter; he did not strain his back while placing a decoy, nor did he twist his ankle while standing around waiting to be told what to do next. Instead, plaintiff was struck from behind by a motor vehicle at a time before legal hunting could commence, something separate and apart from his participation in the hunt.

The release was signed so the plaintiff could hunt. He was not injured hunting, and the release was not written in a way to cover the risks the plaintiff encountered standing in a field.

The release was thrown out by the court and the plaintiff was allowed to continue his lawsuit.

So Now What?

Too many releases are written to cover the risks of the specific activity, hunting, climbing, rafting, etc. Yet accidents occur in the parking lot, on the way to the activity and just standing around waiting for kayaks to be unloaded, belays to be set up or the guides to get organized.

Make sure your release is broad enough to cover all the risks your clients will encounter during the activity.

At the same time, don’t let an idiot drive an ATV and if people are going to be standing around in the dark, put a bicycle light on them so you can find them.

What do you think? Leave a comment.

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Messer v. Hi Country Stables Corp., 2013 U.S. Dist. LEXIS 2675, 2013 WL 93183

Messer v. Hi Country Stables Corp., 2013 U.S. Dist. LEXIS 2675, 2013 WL 93183

United States District Court for the District of Colorado

January 8, 2013, Decided; January 8, 2013, Filed

Civil Action No. 11-cv-01500-WJM-MJW

Reporter

2013 U.S. Dist. LEXIS 2675 *; 2013 WL 93183

ALVA MESSER, Plaintiff, v. HI COUNTRY STABLES CORPORATION, Defendant.

Prior History: Messer v. Hi Country Stables Corp., 2012 U.S. Dist. LEXIS 170499 (D. Colo., Nov. 30, 2012)

Counsel:  [*1] For Alva Messer, Plaintiff: Donald L. Salem, Feldmann Nagel, LLC-Denver, Denver, CO.

For Hi Country Stables Corporation, Defendant, Counter Claimant: Kenneth H. Lyman, Malcolm S. Mead, Hall & Evans, LLC-Denver, Denver, CO.

For Alva Messer, Counter Defendant: Donald L. Salem, Michael G. Bryan, Feldmann Nagel, LLC-Denver, Denver, CO.

Judges: William J. Martinez, United States District Judge.

Opinion by: William J. Martinez

Opinion

AMENDED ORDER DENYING IN PART AND GRANTING IN PART MOTION FOR SUMMARY JUDGMENT

This matter is before the Court on Defendant’s Motion for Summary Judgment. (ECF. No. 41.) Plaintiff Alva Messer (“Plaintiff”) has filed a Response to this Motion (ECF No. 42.) and Defendant Hi Country Stables Corporation (“HCS” or “Defendant”) has filed a Reply. (ECF No. 45.) The Motion is ripe for adjudication.

Having reviewed the briefs and the relevant portions of the record, the Motion for Summary Judgment is granted in part and denied in part.

I. BACKGROUND1

A. Factual Background

On July 16, 2009, Plaintiff Alva Messer purchased a guided horseback ride from Hi County  [*2] Stables. (ECF No. 41 at 3.) Defendant HCS operates commercial horse-back riding at Glacier Creek Stables in Rocky Mountain National Park (“RMNP”). (ECF No. 41 at 7.) HCS is one of two equestrian companies owned by Rex Walker. (Id.) The other equestrian company is Sombrero Ranches, Inc. (“SRI”). (Id.) Before beginning any guided horseback ride, both companies require customers to sign an exculpatory contract, titled “Release” (hereafter “the Release” or “Release Forms”). (Id.) The Release Forms for HCS and SRI are identical, except for the name of the company being released from liability. (Id. at 4.) The Release Forms for HCS and SRI are printed in tablets containing 100 tear-away forms per tablet. Once printed, the printing company delivers the tablets to the offices of HCS and SRI. (Id.)

At the start of the 2009 riding season, one tablet of Release Forms labeled SRI was placed in a box of office supplies for delivery to HCS. (Id. at 5.) For reasons that are unexplained by Defendant, those same Release Forms—which Released SRI from liability—were used by HCS at Glacier Creek Stables on July 16, 2009. (Id. at 5; see also, Exh. C, Walker Dep. at 29:13 – 30:5.)

Typically, when customers  [*3] arrive at HCS, they are informed that they must sign a Release. (Id. at 6; Exh. D, Marshall Dep. at 29.) Amongst other employees at HCS, Dallas Marshall informs customers that they are required to sign the Release and “mark their riding ability.” (Id.)

When the Messers arrived at HCS on July 16, 2009, Marshall followed her normal practice and informed the Messers of the Release. (Id.) She also requested that they indicate their riding ability, which Plaintiff did. (Id.) Following this, and before commencing the guided horseback ride, Plaintiff signed the Release. (Id.) The Release expressly provides that the customer “understands. . .the specific risks. . .arising from riding a horse. . .and that the [customer] nevertheless intentionally agree[s] to assume these risks.” (ECF No. 41, Exh. A.)

After signing the Release, Plaintiff entered the corral where she was assigned her horse before commencing the trail ride. (Id. at 8; see also, Exh B, Alva Messer Dep. at 35:16-24). The wrangler who led the guests on Plaintiff’s trail ride was Terry Humphrey. (Id.)

Plaintiff encountered problems with her saddle during the trail ride which required adjustment by Plaintiff and Humphrey. (ECF No. 41,  [*4] Exh. B, Alva Messer Dep. at 49:1 – 50:1; Exh., Humphrey Dep. at 44:18-25; 45:7 – 46:1; 47:13-22; Exh. F, Donald Messer Dep. at 22:10-17).2

At the midway point, the Messer group stopped to take a rest break. (ECF No. 41, Exh. B, Alva Messer Dep. at 47:10-20). Plaintiff encountered further problems with her saddle—including slippage of the saddle to the horse’s right. (ld. at 50:2-9)

Sometime later, as Plaintiff’s horse was stepping down a “rock stair” in the trail, Plaintiff fell off the right side of the horse (the “Incident.”) (ECF No. 42, Exh. E, Humphrey Dep. at 54:15- 55:10; Exh. F, Donald Messer Dep. at 27:1- 28:6.) Plaintiff allegedly sustained serious injuries and economic loss resulting from the Incident. (ECF No.1 at ¶¶ 14 and 57.)

II. LEGAL STANDARDS

Summary judgment is warranted under Federal Rule of Civil Procedure 56 “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-50, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). A fact is “material” if under  [*5] the relevant substantive law it is essential to proper disposition of the claim. Wright v. Abbott Labs., Inc., 259 F.3d 1226, 1231-32 (10th Cir. 2001). An issue is “genuine” if the evidence is such that it might lead a reasonable jury to return a verdict for the nonmoving party. Allen v. Muskogee, 119 F.3d 837, 839 (10th Cir. 1997). In analyzing a motion for summary judgment, a court must view the evidence and all reasonable inferences therefrom in the light most favorable to the nonmoving party. Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998) (citing Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986)). With this approach of resolving factual ambiguities against the moving party, the Court, as it should, thus favors the right to a trial. See Houston v. Nat’l Gen. Ins. Co., 817 F.2d 83, 85 (10th Cir. 1987).

III. ANALYSIS

Defendant’s instant Motion seeks reformation of the Release and moves for summary judgment as to the Plaintiff’s claims—including: negligence; product liability; and, wilful and wanton conduct. If granted, Defendant argues that the Release should bar the negligence and product liability claims. The Court will first address  [*6] this issue.

A. Effect of the Release on the Negligence and Product Liability Claims

1. Reformation

Defendant seeks to reform the Release to reflect the true intent of the parties by substituting the name HCS for SRI. (ECF No. 41 at 22.)

Reformation of a contract is an “equitable remedy, and the formulation of such remedy rests with the court’s discretion.” May v. Travelers Property Casualty Co. 2006 U.S. Dist. LEXIS 80849, 2006 WL 3218852 at *2-3 (D. Colo. 2006, November 6, 2006). “Reformation of a written instrument is appropriate only when the instrument does not represent the true agreement of the parties and the purpose of reformation is to give effect to the parties’ actual intentions.” Maryland Cas. Co. v. Buckeye Gas Prod. Co., 797 P.2d 11, 13 (Colo. 1990).3 Mutual mistake of a contract provides grounds for reformation if the written instrument “does not express the true intent or agreement of the parties.” Segelke v. Kilmer, 145 Colo. 538, 360 P.2d 423, 426-27 (Colo. 1961).

An “essential prerequisite to a court’s power to reform a contract on the ground  [*7] of mutual mistake is the existence of a prior agreement that represents the actual expectations of the parties and provides the basis upon which a court orders reformation.” Maryland Cas. Co., 797 P.2d at 13. Prior agreement must be found from the evidence presented, which must be “clear and unequivocal”, and appropriate under the “circumstances.” Id.
See also, Segelke 360 P.2d at 426-27.

Here, Defendant asserts that the intent of the Release was to bind Plaintiff Alva Messer and Defendant HCS. Defendant contends that reference to SRI on the Release was a mutual mistake and that SRI should be substituted with HCS. The Court agrees. This holding is supported by Plaintiff Messer’s own testimony, which clearly reflects the parties’ common understanding of the signed document and shows acknowledgment by Plaintiff that the Release was, in fact, releasing HCS – not SRI. Such testimony is found in the following passage:

Q. You were told it was a release, correct?

A. Correct.

Q. And did you have any conception or understanding of what that meant?

A. Well, I assume a release is to release the people, you know, the stables.

Q. And when you were presented this at Hi Country Stables, was it your understanding  [*8] that you were releasing Hi Country [Stables]?

A. Correct.

(Messer Deposition at 32:3-22).

Because the above testimony is clear and unequivocal, the Court finds that it reflects the parties’ true intentions of the Release that the contract was between Plaintiff Messer and Defendant HCS.

Additionally, Plaintiff signed the Release at a location owned by HCS immediately before embarking on a trail ride guided by HCS employees. (ECF No. 41, Exh A.) Given that Plaintiff signed the document at HCS, it is difficult to see how the Release was intended to apply to any entity other than HCS.

Accordingly, the Court finds that there was mutual mistake at the time the Release was entered into. Mutual intent of the parties was to enter into an agreement whereby HCS would be released from certain claims. This provides the equitable basis to grant the relief. The Court orders that the name “Sombrero Ranches, Inc.” (SRI) be deleted and substituted with “Hi Country Stables” (HCS) in the Release.

2. Application of Release to Plaintiff’s Negligence Claim

As the Court has found that the Release should be reformed, the next issue is whether the Release shields Defendant from Plaintiff’s negligence claim. For the  [*9] reasons below, the Court concludes that it does.

To determine whether the Release bars Plaintiff’s negligence claim, the Court must consider four factors: (1) the existence of a duty to the public; (2) the nature of the service performed; (3) whether the contract was fairly entered into; and (4) whether the intention of the parties is expressed in clear and unambiguous language. Jones v. Dressel, 623 P.2d 370, 376 (Colo. 1981).4

As to the first factor, Colorado law is clear that businesses engaged in recreational services do not perform services that implicate  [*10] a public duty. This favors Defendant’s position as to the validity of the Release. Chadwick v. Colt Ross Outfitters, Inc., 100 P.3d 465, 469 (Colo. 2004).

With respect to the second factor, the Court similarly finds for Defendant because horse-back riding is “not an essential service.” Hamill v. Cheley Colorado Camps, 262 P.3d 945, 949-50 (Colo. App. 2011) Horse-back riding is one of choice, not necessity.

As to third factor, this also cuts in favor of Defendant since there is no evidence to suggest that the Release was entered into unfairly. Instead, Plaintiff signed the Release “in consideration for the opportunity” to ride the trail led by HCS wranglers. (ECF No. 41, Exh A.) Plaintiff also indicated her riding ability. This suggests that she had ample time to review the Release and become familiar with its conditions. It is these facts, amongst others, that rebut any notion that the Release was unfair. Bauer v. Aspen Highlands Skiing Corp., 788 F. Supp. 472, 474-475 (D. Colo. 1992).

With respect to the fourth factor, the Court looks to the language of the Release to elicit its intent. The Court must determine “whether the intent of the parties was to extinguish liability and whether  [*11] this intent was clearly and unambiguously expressed.” Heil Valley Ranch, Inc. v. Simkin, 784 P.2d 781, 785 (Colo. 1989). Here, the test is met since the Release specifically uses the word “negligence” throughout the document. Reference to the word negligence expressly indicated that HCS would not be liable for such claims. Also, like the release in Jones, the Release in this case similarly points to the “specific risks” of property and personal injury damage that may “arise out of negligence.” Jones, 623 P.2d at 376. Such language serves to reinforce the intent of the Release and thatPlaintiff agreed to “assume such risks” during the course of the HCS led trail-ride. (ECF No. 41, Exh. A.)

In sum, the Court concludes that the Release shields Defendant from Plaintiff’s negligence claim. To the extent that Defendant’s Motion is directed towards that claim, the Motion for Summary Judgment is granted.5

3. Application of the Release to Plaintiff’s Strict Product Liability Claims

In addressing whether the Release applies to Plaintiff’s product liability claims, the Court finds this result is controlled by existing case law: Boles v. Sun Ergoline, 223 P.3d 724, 727-728 (Colo. 2010). That case held that an agreement releasing “a manufacturer from strict products liability for personal injury, in exchange for nothing more than an individual consumer’s right to have or use the product, necessarily violates the public policy of this jurisdiction and is void.” Id. (emphasis added). The Court holds that this passage has equal application here. As distinct from the negligence claim, Boles provides that the Release does not shield Defendant from the strict product liability claims.

Alternatively, Defendant argues that the broad language of the Release covers product liability claims.  [*13] Clause 2 provides: “that [the Customer] know[s] and understand[s] that horse riding . . . risks of . . . including the risk that [HCS]. . . may act negligently in . . . preparing or maintaining the horse . . . equipment or premises . . .” (ECF No. 41 Exh A.) Nothing in Clause 2 suggests that the Release covers claims which involve “leasing” or “manufacturing” saddles used in conjunction with Defendant’s trail rides, which would give rise to a products liability claim. Because exculpatory agreements are strictly construed against the party seeking exception, Defendant’s argument that the Release bars this claim must fail. Barker v. Colorado Region-Sports Car Club, 35 Colo. App. 73, 532 P.2d 372, 377 (Colo. App., 1974.)6

Accordingly, Plaintiff’s product liability claims are not barred by the HCS Release.7

B. Merits of the Product Liability Claims

Defendant also moves for summary judgment on the merits of Plaintiff’s product liability claim. In these claims, Plaintiff alleges (1) that HCS leased a defective saddle to Plaintiff by placing it in the “stream of commerce” and (2) that HCS manufactured a defective saddle that was used by Plaintiff (ECF No. 41 at 35; ECF No. 25 at ¶ ¶ 36-55.)8 Defendant offers two alternative arguments below as to why grant of summary judgment is justified with respect to these claims. The Court will address each in turn.

1. Horse-Back Riding by HCS is a Service and Does Not Give Rise to Products Liability

Defendant contends that summary judgment should be granted on Plaintiff’s product liability claims because the primary purpose of the contract was the provision of a service—not a product. This, Defendant contends, does not give rise to liability in tort. (ECF No. 41 at 37.) See, Yarbro v. Hilton Hotels, 655 P.2d 822, 828 (Colo. 1982)

To buttress its position, Defendant relies on Kaplan v. C Lazy U Ranch, 615 F. Supp. 234 (D. Colo. 1985). There, Judge John L. Kane of this District Court refused to treat “a saddled horse, or a ride on a horse with a saddle” as a product. Id. at 238. Judge Kane held that it was incongruent with strict product liability doctrine and cited several cases that have refused to extend the concept of strict liability to “persons rendering services.”9
Id. at 238 n.3. Defendant asserts that Kaplan has equal application here.

Plaintiff seeks to distinguish Kaplan by making specific reference to “SADDLE EQUIPMENT” in the Complaint. (See ECF No. 25 at ¶ ¶ 36- 51.) Plaintiff seeks to separate the saddle from the horse, and attempt to succeed on that basis.

The Court finds Kaplan persuasive. Like that case, the Court holds that a saddle (on a horse) is not a product—particularly in the context of horse-back riding services. The Court further finds Plaintiff’s distinction is misplaced because it fails to appreciate that the saddle was incidental to the primary purpose of the contract. Plaintiff entered into a contract for a guided five-hour horse back ride through RMNP. This service primarily relied upon a horse (which is not a product) and a saddle (which incidental to that service).10 Without a product, the product liability claims cannot succeed. Yarbro 655 P.2d at 828.

Because the saddle was only incidental to the contract for services, Plaintiff has failed to show a “trial  [*17] worthy” issue as to her product liability claims. Harper v. Mancos Sch. Dist. RE-6, 837 F.Supp.2d 1211, 1223-24 (D.Colo.2011).

2. Use of the Saddle Did Not Constitute a Lease

In the alternative, Defendant argues that summary judgment is warranted on Plaintiff’s product liability claims because it is not a “seller”of a product. That is, Defendant does not fall within the definition of “seller” under the statute because Defendant is not a “lessor” of products, nor a “manufacturer”. See generally, C.R.S. § 13-21-401; Hidalgo v. Fagen, Inc., 206 F.3d 1013, 1018 (10th Cir. 2000).11 Again, the Court agrees.

Contrary to Plaintiff’s position, the Court finds that Defendant does not “lease” saddles to its customers. Plaintiff signed a Release “in consideration for the opportunity to ride” a horse through RMNP. (ECF No. 41, Exh A.) The “opportunity to ride” does not create a lease. Its use is too short. Nor does it constitute ownership of the saddle itself.

Moreover, HCS cannot be considered a manufacturer because it does not manufacture saddles. (ECF No. 41, Exh. G, Humphrey  [*18] Dep. at ¶11; Exh H, Walker Dep. at ¶ 8.) Plaintiff argues that the “offside billet [of the saddle] is a product and that it became defective while in the course of it distribution from the original manufacturer through Defendant to her as the consumer.” (ECF No. 42 at 34-35). The Court treats this as an admission that Defendant never manufactured the billet. It also supports the finding that no product is involved in the present case.

Plaintiff has failed to show a genuine issue of fact as to whether Defendant leased or manufactured a saddle. Thus, Defendant’s Motion as to both of the product liability claims is granted.

3. Plaintiff’s Argument re Blueflame Gas

Plaintiff argues that Defendant placed a defective saddle “in the course of the distribution process” and is, therefore, liable for product liability. (ECF No. 42 at 33. (emphasis added.)) In support, Plaintiff heavily relies on Blueflame Gas, Inc. v. Van Hoose, 679 P.2d 579 (Colo. 1984). There, the defendant purchased propane from Diamond Shamrock. Defendant then transported and sold the propane directly to residential customers. A gas explosion occurred at a residential home. The plaintiff claimed, inter alia, strict liability  [*19] based Defendant’s failure to odorize the propane, making it a defective product. The Supreme Court held that a defective product must have arisen at the time of manufacture or “in the course of the distribution process” to the plaintiff. Id. at 590.

The Court is not compelled to find in Plaintiff’s favor based on Blueflame.12 The saddle in this case was not sold to Plaintiff. The saddle was not part of a distribution process. And, unlike the customers in Blueflame, the Court finds that Plaintiff is not permitted to pursue her product liability claim based on a “distribution process” theory.

Therefore, in addition to the reasons addressed above, Plaintiff’s reliance on Blueflame does not save her product liability claims from summary judgment.

C. Merits of the Wilful and Wanton Claim

Plaintiff’s claim for wilful and wanton conduct is trial worthy. First, a waiver cannot release wilful tortfeasors (alleged or otherwise). The Release has no bearing  [*20] on this claim. Barker v. Colorado Region Sports Car Club, 35 Colo. App. 73, 532 P.2d 372, 377 (Colo. 1974).

Second, willful and wanton conduct requires a mental state “consonant with purpose, intent and voluntary choice.” Brooks v. Timberline Tours, 127 F.3d 1273, 1276 (10th Cir. 1997). Because key facts going to this mental state are disputed, Defendant is not entitled to judgment as a matter of law. For example, Plaintiff contends that Humphrey did not perform the number of saddle “checks” he asserts. (Alva Messer Dep. at 43:4-44:18; 48:3-11; 48:21-49:17.) Plaintiff also disputes whether Humphery noticed the “saddle rolling to the right” during the trail ride. (Id.) These examples reflect material facts ripe for jury determination. If the jury credits Plaintiff’s testimony on these points, it could reasonably find that Defendant’s actions were wilful and wanton.

The Court finds that Plaintiff has shown a genuine dispute of material fact as to her wilful and wanton conduct claim. As to this claim, Defendant’s Motion for Summary Judgment is denied. See Bausman v. Interstate Brands Corp., 252 F.3d 1111, 1115 (10th Cir. 2001).

III. CONCLUSION

Based on the foregoing, the Court hereby ORDERS as follows:

1. Defendant’s  [*21] Motion for Summary Judgment (ECF No. 41) is GRANTED IN PART and DENIED IN PART;

2. Defendant’s Motion for Summary Judgment is GRANTED as to Plaintiff’s claims for negligence and product liability;

3. The Clerk shall enter judgment in favor of Defendant on Plaintiff’s negligence and product liability claims;

4. Defendant’s Motion for Summary Judgment is DENIED as to Plaintiff’s wilful and wanton claim; and

5. Trial will proceed solely on Plaintiff’s willful and wanton claim, as previously scheduled, on March 11, 2013.

Dated this 8th day of January, 2013

BY THE COURT:

/s/ William J. Martinez

William J. Martinez

United States District Judge


Wimmer v. Top Gun Guide Serv., 421 F. Supp. 3d 849, 2019 U.S. Dist. LEXIS 185888, 2019 WL 5558308

Wimmer v. Top Gun Guide Serv., 421 F. Supp. 3d 849, 2019 U.S. Dist. LEXIS 185888, 2019 WL 5558308

United States District Court for the District of South Dakota, Northern Division

October 26, 2019, Decided; October 28, 2019, Filed

1:18-CV-01001-CBK

Reporter

421 F. Supp. 3d 849 *; 2019 U.S. Dist. LEXIS 185888 **; 2019 WL 5558308

ANTHONY WIMMER, Plaintiff, v. TOP GUN GUIDE SERVICE, INC., JOHN DOES 1-5, Defendants.

Counsel:  [**1] For Plaintiff Anthony Wimmer: Michael W. Strain, LEAD ATTORNEY, Strain Morman Law Firm, Sturgis, SD; Scott G. Hoy, Hoy Trial Lawyers, Prof. L.L.C., Sioux Falls, SD.

For Defendant Top Gun Guide Service, Inc.: Gordon H. Hansmeier, LEAD ATTORNEY, Rajkowski Hansmeier Ltd., St. Cloud, MN.

Judges: CHARLES B. KORNMANN, United States District Judge.

Opinion by: CHARLES B. KORNMANN

Opinion

 [*851]  MEMORANDUM AND ORDER

This matter is before the Court on defendant Top Gun Guide Service, Inc.’s (“Top Gun”) motion for summary judgment pursuant to Federal Rule of Civil Procedure 56. Doc. 14.

BACKGROUND

This case arose from injuries that plaintiff Anthony Wimmer sustained while on a hunting trip hosted by defendant Top Gun near Aberdeen, South Dakota in April of 2015. Doc. 1 at 2; Doc. 6 at 1. Mr. Wimmer is a California resident and Top Gun is a Minnesota corporation. Id. On or about April 9, 2015, Mr. Wimmer arrived in Aberdeen, though he did not hunt on that day. Doc. 15 at 5; Doc. 22 at 1. At some point on April 9th, Mr. Wimmer signed a waiver purporting to release Top Gun from liability arising from the hunting trip. Doc. 15 at 5; Doc. 22 at 2. The release form provided, in pertinent part:

I acknowledge that hunting and fishing entails known and unanticipated risks which [**2]  could result in physical or emotional injury, paralysis, death, or damage to myself; . . . I understand that such risks are essential qualities of the activity. The risks include, among other things: Accidental shootings, or falls to myself . . . trip or fall accidents to myself . . . medical problems from preexisting conditions . . . to myself . . . I expressly agree and promise to accept and assume all of the risks existing in this activity. My participation in this activity is purely voluntary, and I elect to participate in spite of the risks to others and myself; I fully understand that hunting and fishing is a dangerous activity. I hereby voluntarily release, forever discharge, and agree to indemnify and hold harmless [Top Gun] from any and all claims, demands, or causes of action, which are in any way connected with my participation in this activity or my use of [Top Gun] equipment or facilities, including any such claims which allege negligent acts or omissions of [Top gun].

Doc. 17, Ex. D. The parties agree that in his deposition Mr. Wimmer testified that he read the release before signing it and that he did not disagree with anything contained therein. Doc. 15 at 6; Doc. 22 [**3]  at 2-4. Mr. Wimmer also agreed in his deposition that hunting and fishing is a dangerous activity. Anthony Wimmer Dep. at 41:7-9.

On April 10th, Mr. Wimmer arrived at the hunting site and began setting up hunting decoys. Doc. 15 at 7; Doc. 22 at 5. Shortly after having finished setting up the decoys, Mr. Wimmer was standing in the field where the hunt was to take place when he was struck from behind “by either an [all terrain vehicle (ATV)] or sled.” Id. The sled was being towed behind the ATV. Id. The ATV was being operated by a Top Gun guide.

Id. The accident  [*852]  occurred between 3:30 a.m. — 4:30 a.m. Doc. 15 at 4. Mr. Wimmer alleges that he sustained severe injuries. Doc. 1 at 2. •

Defendant argues that “[b]ecause Mr. Wimmer knowingly, voluntarily, and fairly signed a release that unambiguously covers the injuries that he suffered and that does not contravene public policy,” his claims should be dismissed with prejudice. Doc. 15 at 8. Defendant contends that the liability waiver Mr. Wimmer signed before participating in the hunt releases Top Gun from all liability in relation to the ATV accident. Id. In short, Top Gun’s argument relies on the liability waiver being found to encompass [**4]  the harm at issue in this case. Defendant then proceeds to argue that the waiver is valid and its enforcement would not contravene South Dakota’s public policy. Id. at 9-11. Defendant argues that releases involving voluntary recreational activities have withstood attacks that they are contrary to South Dakota’s public policy many times before; only an attempted waiver of conduct rising to the level of willful negligence or intentional tort would contravene the state’s public policy. Id. at 11. Because Mr. Wimmer does not allege willful negligence or any intentional torts, defendant argues that his claims must fail. Id.

Plaintiff responds that the harm that befell him was outside the scope of the waiver. Plaintiff argues that he had no meaningful opportunity to negotiate the terms of the waiver and so it must be viewed as an “anticipatory release and contract of adhesion, which should be viewed with a skeptical and critical eye,” and any ambiguities should be construed against the drafter. Doc. 20 at 5. Plaintiff argues that the waiver, by its terms, only applies to the limited activities of hunting and fishing. Id. Plaintiff argues that his are not hunting injuries because, at the time of the accident, [**5]  he had already finished setting up the decoys and was merely standing in the field waiting to be told what he should do next. Id. at 6. Plaintiff urges that such activity should not be considered hunting. Id.

Plaintiff next argues that even if he was hunting at the time of the accident, the release is contrary to South Dakota law as it purports to waive liability for acts of gross negligence and, so, enforcing it would be against South Dakota’s public policy. Id. at 7. Plaintiff also argues that provisions of South Dakota law related to motor vehicle liability preclude enforcement of the waiver as against the state’s public policy. Id. at 9.

Defendant replies that plaintiff’s reading of the waiver is too narrow, the terms of the waiver are broad enough to cover any injury “in any way connected with” the activity of hunting. Doc. 23 at 3. Thus, defendant contends, the terms of the waiver apply to plaintiff’s injury whether or not he was actively shooting or pursuing birds at the time of the injury. Id. Defendant further contends that setting up decoys is a part of pursuing birds, which is within the definition of hunting adopted in South Dakota’s laws. Id. at 4.

Defendant also argues that enforcing the release against [**6]  plaintiff would not violate South Dakota public policy because plaintiff only claims ordinary negligence, liability for which may be waived. Id. at 5. Defendant argues that plaintiff has produced no evidence that defendant’s agent operated the ATV in a reckless or willfully negligent manner. Id. at 6-7. Defendant argues that there was no disparity in bargaining power that would warrant this waiver being viewed as a contract of adhesion. Id. at 7. Finally, defendant argues that the waiver does not allow Top Gun to circumvent South Dakota’s motor vehicle insurance laws, as plaintiff has claimed, and enforcing the waiver would not be  [*853]  contrary to the public policy those laws espouse. Id. at 8.

LEGAL STANDARD

Summary judgment is proper where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Knutson v. Schwan’s Home Service, Inc., 711 F.3d 911, 913 (8th Cir. 2013). The United States Supreme Court has held that:

The plain language of Rule 56(c) mandates the entry of summary judgment . . . against a party who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial. In such a situation, there can be no genuine issue as to any material [**7]  fact, since a complete failure of proof concerning an essential element of the non-moving party’s case necessarily renders all other facts immaterial.

Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986) (internal quotations omitted).

“As to materiality, the substantive law will identify which facts are material. Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted.” Id. at 248. That is, to make summary judgment inappropriate, there must be a factual dispute concerning facts the existence or nonexistence of which would “be outcome determinative under [the] prevailing [substantive] law.” Grey v. City of Oak Grove, Mo., 396 F.3d 1031, 1034 (8th Cir. 2005).

Thus, in accordance with Rule 56(c), the party seeking summary judgment must first identify grounds demonstrating the absence of a genuine issue of material fact. Celotex Corp., 477 U.S. at 323. Upon such a showing, the burden shifts to the non-movant to present affirmative evidence, beyond the pleadings, showing that a genuine issue of material fact exists. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256-57, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). To meet its burden, the non-movant “must do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Ind. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986). Rather, the non-movant must be able to “show there [**8]  is sufficient evidence to support a jury verdict in [its] favor.” Nat’l Bank of Commerce v. Dow Chem. Co., 165 F.3d 602, 607 (8th Cir. 1999). After this exercise, “we view the facts and the inferences to be drawn from them in the light most favorable to the nonmoving party.” Northport Health Servs. of Arkansas, LLC v. Posey, 930 F.3d 1027, 1030 (8th Cir. 2019).

DISCUSSION

“Because this is a diversity action, we apply the substantive law of the forum state.” Vandewarker v. Cont’l Res., Inc., 917 F.3d 626, 629 (8th Cir. 2019), reh’g denied (Apr. 10, 2019) (citing
N. Oil & Gas, Inc. v. Moen, 808 F.3d 373, 376 (8th Cir. 2015). Under South Dakota law, a waiver of liability is contractual in nature and is governed by contract law. Johnson v. Rapid City Softball Ass’n, 514 N.W.2d 693, 697 (S.D. 1994). When interpreting a contract, “[t]he goal . . . is to see that the mutual intent of the parties is carried into effect.” Nelson v. Schellpfeffer, 2003 SD 7, 656 N.W.2d 740, 743 (S.D. 2003). Courts look to the language of the contract to determine the intent of the parties, Roseth v. Roseth, 2013 SD 27, 829 N.W.2d 136, 142 (S.D. 2013), and afford contractual terms their “plain and ordinary meaning,” Bunkers v. Jacobson, 2002 SD 135, 653 N.W.2d 732, 738 (S.D. 2002) (citation  [*854]  and quotation marks omitted). “When the meaning of contractual language is plain and unambiguous, construction is not necessary” because the “intent of the parties can be derived from within the four corners of the contract.” Roseth, 829 N.W.2d at 142 (citation omitted); see also
Nelson, 656 N.W.2d at 743 (“When the words of a contract are clear and explicit and lead to no absurd consequences, the search for the parties’ common intent is at an end.”).

When a contract is found to be ambiguous, however, “parol evidence [**9]  is admissible to explain the contract but inadmissible to vary or add terms to the contract.” Couch v. Lyon, No. CIV. 12-3029-RAL, 2013 U.S. Dist. LEXIS 160770, 2013 WL 5942607, at *4 (D.S.D. Nov. 5, 2013)
(citing
Roseth, 829 N.W.2d at 142.). A contract is not rendered ambiguous merely because the parties now disagree as to their intent at the time of contracting. Roseth, 829 N.W.2d at 142. “Instead, ‘a contract is ambiguous only when it is capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement.'” Id.
(quoting
Vander Heide v. Boke Ranch, Inc., 2007 SD 69, 736 N.W.2d 824, 836 (S.D. 2007)).

The release at issue in the instant case is not ambiguous. Although it must be interpreted and read in a common sense manner. The release, by its terms, covers “all claims, demands, or causes of action, which are in any way connected with [plaintiffs] participation in this activity or [plaintiff’s] use of [Top Gun] equipment…” Doc. 17, Ex. D. Furthermore, plaintiff has not challenged the validity of the release or any of its terms; thus, the Court will apply the release and construe it by its terms, using common sense methods.

Defendant argues that, at the time of injury, plaintiff was in the process of pursuing birds, that is, plaintiff was on a hunting trip, in a hunting field regardless of whether [**10]  he was actively shooting or preparing to shoot at the time. Because plaintiff was pursuing birds at the time he was injured, defendant argues that his injury is “connected with” the activity of hunting. Plaintiff argues that he was done setting up decoys at the time he was injured and, as a result, he was not pursuing birds at the time of the harm—he was merely a man standing in a field. As a matter of law, plaintiff could not have legally been pursuing waterfowl because the accident happened long before legal shooting time. Thus, both parties focused their arguments on what the plaintiff was doing at the time of the accident.

This accident could not, as a matter of law, have been a part of legal hunting. In South Dakota, a hunter may not shoot waterfowl until one half hour before sunrise. At the time of the accident, all preparations for hunting had been completed. The parties were in a waiting period. Instead, plaintiff was struck by a motor vehicle. The fact that plaintiff is claimed to be hunting at the time he was struck by the ATV is irrelevant because being struck by an ATV is not a harm arising out of hunting, especially long before sunrise. In addition, the release makes no [**11]  mention of a motor vehicle accident.

The language in the release, “in any way connected with [plaintiffs] participation in this activity,” is so broad that it necessitates an exercise in line drawing. At some point, it would be absurd to find an activity that, while distantly connected with plaintiff’s participation in the hunt, is covered by a waiver of liability for a hunting trip. For example, if plaintiff had been injured when the car in which he was being transported from the hotel to the hunting grounds was involved in an accident, would any negligence from that activity be covered  [*855]  by the release? It is certainly an activity in some way connected with plaintiff’s participation in the hunt, as the party was on the way to the hunting grounds. But to say that a waiver of liability for a hunting trip covered negligence related to a car trip from the hotel to the hunting grounds would be to stretch the bounds of what general, catch-all provisions of a contract can accomplish.

That is not to say that general contract provisions are not enforceable. Indeed, South Dakota case law has upheld the efficacy of broad waivers of liability. There are generally two lines of reasoning that permeate [**12]  South Dakota case law concerning releases from liability.

First, the more inherently dangerous or risky the recreational activity, the more likely that an anticipatory release will be held valid. That is, individuals who engage in activities like mountain climbing, race car driving, parachute jumping, and the like, are more likely to be held to have an understanding of the risky nature of their chosen activity.

Johnson, 514 N.W.2d at 700 (Wuest, J. concurring) (internal citations omitted). Second, releases are deemed more acceptable when they are written on a separate sheet of paper. Id. It is the first line of reasoning that is most relevant to the instant analysis. 1

The first line of reasoning recognizes that individuals who voluntarily engage in a particularly dangerous activity for recreational purposes must accept a certain amount of risk that is inherent in said activity. That is, when an individual chooses to go skydiving, signs a release with a vendor providing such services, and is injured while hurtling to the earth, he cannot then sue in contravention of that release. Hunting is likewise a dangerous activity; the hunter voluntarily exposes himself to all the dangers of the firearms enthusiast as well [**13]  as those of the outdoorsman. It is agreed that the release in this case covers liability arising out plaintiff’s participation in the activity of hunting. However, plaintiff’s participation in the hunt did not cause his injury. Defendant asserts that setting up decoys is a means of pursuing birds—hunting—but, while that may be true, neither the decoys themselves, nor any part of the process of placing them, caused plaintiff’s injuries.

Each case the Supreme Court of South Dakota has considered relating to the application of a release from liability has involved harm that arose out of the activity for which liability was waived. In Johnson, the signed release concerned the plaintiff’s participation in a softball league. She subsequently “injured her right ankle sliding into third base during a softball game.” Johnson, 514 N.W.2d at 694. In Holzer, the signed release concerned the plaintiff’s presence in the “pit” area of a race track; he was subsequently hit by a tire that flew off one of the racecars and over protective barricades. Holzer, 610 N.W.2d at 789-91. In Lee v. Beauchene, the signed release covered the plaintiff’s participation in an automobile race; subsequently his “car struck a hole [in the track] that he estimated was one [**14]  to one and one-half feet deep. The car flipped.” Lee v. Beauchene, 337 N.W.2d 827, 828 (S.D. 1983). In each of the foregoing cases, the plaintiff’s injury was caused by his or her participation in the activity for which liability was waived. That is, the injury arose from the activity itself. If that were not the case, however, those cases might have turned out quite differently. For instance, if the plaintiff in Holzer had been accidentally shot while working in the pit area, the question of whether he had waived the track’s liability  [*856]  for such harm would have been a different question.

In the instant case, plaintiff’s injury did not arise from his participation in the hunt. He was not accidentally shot by a fellow hunter, he did not strain his back while placing a decoy, nor did he twist his ankle while standing around waiting to be told what to do next. Instead, plaintiff was struck from behind by a motor vehicle at a time before legal hunting could commence, something separate and apart from his participation in the hunt. Thus, while liability was effectively waived for injury arising out of the activities of hunting or fishing, there was no release for the harm that befell plaintiff. The ATV was being driven by Top Gun staff, [**15]  presumably to transport the decoys from the cars to the hunting grounds. At some point in that process, the employee struck plaintiff with the ATV. While such work is in some way connected with the hunt, it is not connected with plaintiff’s participation in the hunt in any way beyond plaintiff’s mere presence on the hunting grounds. When plaintiff signed a release for harm arising out of hunting or fishing, he was simply not there giving up his right to sue for harm arising out of a motor vehicle accident, or any other activity when he could not have been legally hunting.

As the Court finds that the release does not apply to the harm at issue in this case, the parties’ arguments concerning South Dakota’s insurance law and public policy concerning releases of liability in claims for gross negligence, respectively, will not be addressed.

IT IS ORDERED that defendant Top Gun’s motion for summary judgment pursuant to Federal Rule of Civil Procedure 56, Doc. 14, is hereby DENIED.

DATED this 26th day of October, 2019.

BY THE COURT:

/s/ CHARLES B. B. KORNMANN

CHARLES B. B. KORNMANN

United States District Judge