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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James H. Moss

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