Galvan, et al., v. The Salvation Army, 2011 U.S. Dist. LEXIS 47257
Bruce Galvan, et al., Plaintiffs, v. The Salvation Army, Defendant.
CIVIL ACTION NO. H-10-3365
United States District Court For The Southern District Of Texas, Houston Division
2011 U.S. Dist. LEXIS 47257
May 3, 2011, Decided
May 3, 2011, Filed
CORE TERMS: Charitable Immunity Act, summary judgment, Charitable, amount of damages, conspicuousness, premature, matter of law, own negligence, settlement, affirmative defense, font, charitable organization, liability insurance coverage, per person, per occurrence, notice requirements, bodily injury, jury verdict, conscious indifference, reckless disregard, self-insurance, conspicuous, discovery, retention, qualify, cap, insurance coverage, enforceable, undisputed, attended
COUNSEL: [*1] For Bruce Galvan, Individually and as Next Friend, Cynthia Perez, Individually And as Next Friend, Plaintiffs: John Paul Venzke, LEAD ATTORNEY, The Venzke Law Firm LLP, Houston, TX; Michael Andrew Fisher, Dyment & Fisher, Houston, TX.
For Salvation Army, Defendant: Teresa Jones Del Valle, LEAD ATTORNEY, Del Valle Law Firm, P.C., Houston, TX.
JUDGES: Nancy F. Atlas, United States District Judge.
OPINION BY: Nancy F. Atlas
MEMORANDUM AND ORDER
This personal injury case is before the Court on the Motion for Partial Summary Judgment Regarding Defendant’s Affirmative Defense of Release (“Release Motion”) [Doc. # 23] filed by Plaintiffs Bruce Galvan and Cynthia Perez. Defendant filed an Opposition [Doc. # 27], and Plaintiffs filed a Reply [Doc. # 28]. Also pending is Plaintiffs’ Motion for Partial Summary Judgment Regarding Defendant’s Defense of The Charitable Immunity and Liability Act of 1987 (“Charitable Immunity Motion”), to which Defendant filed an Opposition [Doc. # 29], and Plaintiffs filed a Reply [Doc. # 34]. Having reviewed the full record and having considered relevant legal authorities, the Court grants the Release Motion and denies without prejudice the Charitable Immunity Motion.
Plaintiffs [*2] Bruce Galvan and Cynthia Perez are parents of Plaintiff Christopher Galvan. Christopher was eleven years old when he attended Camp Hoblitzelle, a facility owned and operated by Defendant The Salvation Army. In June 2010, while at Camp Hoblitzelle, Christopher Galvan fell 40-50 feet from a zip-line and was seriously injured. Before Christopher attended Camp Hoblitzelle, Cynthia Perez signed a “Permission/Waiver Form for Residential Camps.” See Exh. A to Release Motion.
Plaintiffs filed this lawsuit seeking to recover from The Salvation Army for the injury to Christopher Galvan. Defendant has asserted the existence of the Release as an affirmative defense. Defendant has asserted also that The Charitable Immunity and Liability Act of 1987 (“Charitable Immunity Act”) limits its liability in this case to $500,000.00 per person and $1,000,000.00 per occurrence. Plaintiffs have moved for summary judgment on each of these arguments. The motions have been fully briefed.
II.STANDARD FOR SUMMARY JUDGMENT
Rule 56 of the Federal Rules of Civil Procedure provides for the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a sufficient showing [*3] of the existence of an element essential to the party’s case for which that party will bear the burden at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc); see also Baton Rouge Oil and Chem. Workers Union v. ExxonMobil Corp., 289 F.3d 373, 375 (5th Cir. 2002). In deciding a motion for summary judgment, the Court must determine whether the “pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c); Celotex Corp., 477 U.S. at 322-23; Weaver v. CCA Indus., Inc., 529 F.3d 335, 339 (5th Cir. 2008). Summary judgment is an appropriate mechanism for resolving issues of law arising from a materially complete factual record. See Trevino v. Yamaha Motor Corp., 882 F.2d 182, 184 (5th Cir. 1989).
Defendant has asserted the existence of the Release signed by Cynthia Perez as an affirmative defense. Plaintiffs argue that they are entitled to summary judgment on the release defense because the Release in this case fails to satisfy the [*4] requirements for it to be enforceable.
Under Texas law, there are two fair notice requirements for release agreements: (1) the express negligence doctrine and (2) the conspicuousness requirement. See Storage & Processors, Inc. v. Reyes, 134 S.W.3d 190, 192 (Tex. 2004); Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 509 (Tex. 1993). The express negligence doctrine requires that a party’s intent to be released from the consequences of that party’s own negligence must be expressed in specific terms within the four corners of the release document. See Fisk Elec. Co. v. Constructors & Assocs., Inc., 888 S.W.2d 813, 814 (Tex. 1994); Ethyl Corp. v. Daniel Constr. Co., 725 S.W.2d 705, 708 (Tex. 1987). The conspicuousness requirement provides that the releasing language must be conspicuously written, such that a reasonable person would have noticed it. See Dresser, 853 S.W.2d at 511. Examples of conspicuous language include language that appears in contrasting type or color, in all capital letters, or otherwise calls attention to itself. See Reyes, 134 S.W.3d at 192 (citing Littlefield v. Schaefer, 955 S.W.2d 272, 274-75 (Tex. 1997)); Dresser, 853 S.W.2d at 511.
Compliance with [*5] the fair notice requirements is a question of law for the Court. Dresser, 853 S.W.2d at 509. A release that fails to satisfy both of the two requirements is unenforceable as a matter of law. Storage & Processors, 134 S.W.3d at 192. In this case, the Court concludes that the Release asserted by Defendant does not satisfy either requirement.
The Release provides that the signer “hereby voluntarily releases The Salvation Army from any and all liability resulting from or arising in any manner whatsoever out of any participation in any Activity.” See Release, Exh. 1 to Release Motion. As an initial matter, the Release purports to release Defendant from liability for injury suffered while participating in any “Activity.” The “Activity” is to be identified by filling in a blank line on the Release form. On the Release at issue in this case, the “Activity” line contains no identified activity but, instead, has “Cynthia Perez” written in as the “Activity.”
More importantly, the Release language does not specifically state that Defendant is being released from liability for its own future negligence. Indeed, there is no express mention of negligence at all. Although there is no requirement that [*6] the release contain the specific word “negligence,” the intent to release a party from liability for its own negligence must be clearly expressed. See Atlantic Richfield Co. v. Petroleum Personnel, Inc., 768 S.W.2d 724, 726 (Tex. 1989); Silsbee Hosp., Inc. v. George, 163 S.W.3d 284, 290 (Tex. App. — Beaumont 2005, review denied). In the Release at issue in this case, there is no clear expression of an intent to release Defendant from its own negligence in connection with Christopher Galvan’s participation in zip-lining.
The Release fails also to satisfy the conspicuousness requirement. The release language is in the same font and font size as the remainder of the document. There is no bolding, underlining, or other mechanism to make the release language conspicuous. Instead, the release language is buried in a full page of single-spaced, small font size text.
The Court concludes that the Release in this case does not satisfy the express negligence or conspicuousness requirements and, as a result, the Release is not enforceable as a matter of law.
IV.CHARITABLE IMMUNITY MOTION
The Charitable Immunity Act limits liability of a qualified charitable organization to $500,000.00 per person and [*7] $1,000,000.00 per occurrence. See Tex. Civ. Prac. & Rem. Code § 84.006. To qualify for the limitation, the charitable organization must have liability insurance coverage “in the amount of at least $500,000 for each person and $1,000,000 for each single occurrence for death or bodily injury . . ..” See Tex. Civ. Prac. & Rem. Code § 84.007(g). The Charitable Immunity Act provides that the liability insurance coverage “may be provided under a contract of insurance or other plan of insurance authorized by statute and may be satisfied by the purchase of a $1,000,000 bodily injury and property damage combined single limit policy.” See id.
Defendant asserts that it is entitled to the damages limitation of the Charitable Immunity Act. It is undisputed that Defendant has over $35,000,000.00 of insurance coverage. It is also undisputed, however, that the first $500,000.00 is in the form of a self-insurance retention and the next $4,500,000.00 is in the form of The Salvation Army’s Risk Trust. Plaintiffs argue that Defendant is not entitled to the damages limitation because Defendant is self-insured and self insurance does not meet the statutory requirement of the Charitable Immunity Act. 1
1 Plaintiffs [*8] also argue that Defendant is judicially estopped to assert the Charitable Immunity Act’s limitation because a different Salvation Army entity in Maine asserted in a lawsuit in 1997 that the Salvation Army entity in Maine did not have insurance coverage. The Court concludes on this limited record that Plaintiffs have not established an adequate factual basis for judicial estoppel to apply.
Plaintiffs in this case have not alleged an amount of damages. They allege that the amount in controversy is in excess of $75,000.00. See Amended Complaint [Doc. # 16], ¶ 1. Plaintiffs allege also that Christopher Galvan’s medical bills exceed $200,000.00. See id., ¶ 5. Thus, on this record, the specific amounts alleged by Plaintiffs do not exceed the Charitable Immunity Act’s limitation. Moreover, the amount of damages has not been established by either settlement or a jury award to be in excess of the Charitable Immunity Act’s limitation. As a result, the Court concludes that a decision on whether the limitation applies to a fully-funded self insurance retention is premature at this stage of the proceedings. See, e.g., Morgan v. Fellini’s Pizza, Inc., 64 F. Supp. 2d 1304, 1316, n.6 (N.D. Ga. 1999) [*9] (noting that a request for summary judgment as to whether a damages cap applies was premature); Rafferty v. Howard, 2010 U.S. Dist. LEXIS 98423, 2010 WL 3768142, *1 (S.D. Miss. Sept. 20, 2010) (holding that preliminary ruling on whether statutory cap applies was premature). If there is a settlement or jury verdict for more than $1,000,000.00 in this case, the Court will at that time decide whether Defendant qualifies for the Charitable Immunity Act’s limitation.
Additionally, the Charitable Immunity Act provides that its limitations do not apply “to an act or omission that is intentional, wilfully negligent, or done with conscious indifference or reckless disregard for the safety of others.” See Tex. Civ. Prac. & Rem. Code § 84.007(a). Plaintiffs specifically allege that Defendant’s actions in this case were “intentional, willfully negligent, or done with conscious indifference or reckless disregard for the safety of Christopher Galvan and others.” See Amended Complaint [Doc. # 16], ¶ 12. Should the jury find that Defendant’s actions were as alleged by Plaintiffs in paragraph 12 of the Amended Complaint, the issue regarding whether self-insurance satisfies the insurance requirement of the Charitable Immunity Act [*10] would become moot.
V.CONCLUSION AND ORDER
The release relied upon by Defendant satisfies neither the express negligence doctrine nor the conspicuousness requirement. As a result, there has been no effective release of Defendant for its alleged negligence in this case. Plaintiffs have not alleged an amount of damages and no amount of damages has been determined either through settlement or by jury verdict. As a result, it is premature to decide whether the Act limits the amount of damages recoverable in this case. It is, therefore,
ORDERED that Plaintiffs’ Release Motion [Doc. # 23] is GRANTED and Plaintiffs’ Charitable Immunity Motion [Doc. # 26] is DENIED WITHOUT PREJUDICE as premature.
SIGNED at Houston, Texas this 3rd day of May, 2011.
/s/ Nancy F. Atlas
Nancy F. Atlas
United States District Judge
Too bad no one read the law to the Salvation Army in this case.
This case was filed in the Federal District Court of the Southern District of Texas. The decision was based on a Motion for Summary Judgment filed by the plaintiff to throw out the defendant’s defense of release. Normally, these types of motions are filed by the defendants to end the litigation not by the plaintiff. There was also an issue of whether the charitable immunity statute applied to limit the damages in the case.
The facts which gave rise to the case are the defendants were parents of an eleven year-old boy who attended Camp Hoblitzelle which was owned and operated by the Salvation Army of Texas. While attending the camp the minor was riding a zip line when he fell 40-50’ suffering unnamed injuries.
There was a blank in the release where the activity the parties were releasing was to be filled in. The blank line in this case was filled in with the plaintiff’s name Cynthia Perez written in as the activity. The court took delight in pointing this out.
Summary of the case
The plaintiff filed their motion for summary judgment to eliminate the defense of release. The minor’s mother signed the Permission/Waiver Form for Residential Camps prior to the minor attending camp.
Under Texas law, there are two tests to determine if a release is valid; (1) the express negligence doctrine and (2) the conspicuousness requirement test.
“A release that fails to satisfy both of the two requirements is unenforceable as a matter of law.”
The Express Negligence Doctrine is:
The express negligence doctrine requires that a party’s intent to be released from the consequences of that party’s own negligence must be expressed in specific terms within the four corners of the release document.
The release in this case used the language “…hereby voluntarily releases The Salvation Army from any and all liability resulting from or arising in any manner whatsoever out of any participation in any Activity.” This language was not strict enough to place the signor on notice that they were giving up their legal rights according to the court.
The release was not clear. It did not state that the defendant was being released for its future negligence. Although there is no requirement that the word negligence be in the release and referenced, it is clear the release would be difficult to write without the word negligence. The court held the release at issue had no clear expression or language showing intent to release the defendant from its own negligence.
Consequently, the release failed the Express Negligence Doctrine.
The Conspicuousness requirement test requires.
… the releasing language must be conspicuously written, such that a reasonable person would have noticed it. Examples of conspicuous language include language that appears in contrasting type or color, in all capital letters, or otherwise calls attention to itself.
With regard to the conspicuousness, requirement test the court stated.
The release language is in the same font and font size as the remainder of the document. There is no bolding, underlining, or other mechanism to make the release language conspicuous. Instead, the release language is buried in a full page of single-spaced, small font size text.
Here is a great example that your release cannot hide the important legal language from anyone signing it.
The court also looked into the Charitable Immunity Act and held the issue was not ripe because whether or not the defendant was subject to the limitation of damages would not be an issue unless the plaintiff was able to recover an amount greater than the limitation of $500,000 per person and $1,000,000 per occurrence.
The court also stated the Charitable Immunity Act did not apply to defendants whose “act or omission that is intentional, wilfully negligent, or done with conscious indifference or reckless disregard for the safety of others.” The plaintiff had plead actions of the defendant in almost identical language which was another issue making the issue not ripe for decision.
So Now What?
This decision is a road map on what not to do with a release in Texas.
1. Make sure your release states that it is a release and the person signing it is giving up their legal rights.
2. Make sure the language in the release is clear. The plaintiff is releasing you from liability for your negligence in advance of any injury. You are going to have to use the word negligence in your release.
3. The release language cannot be hidden. It must be set out in such a way that it is identifiable as something important that the signor needs to know about.
4. All blanks in the document need to be located in one place so it only takes a quick scan to make sure everything is completed properly.
5. Anything that can be completed by the defendant or filled in must be completed by the defendant.
6. Have an attorney that knows and understands your operation and the law affecting your business write your release.
Writing a release is not like cooking. When you cook you have to really screw up to make something that is not edible. (I’ve been single my entire life so my definition of edible may be different from yours……) Writing a release is a much more precise endeavor.
What do you think? Leave a comment.
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