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What the term “strictly construed” actually means when used to describe how a release will be viewed by the court.

The decision involves several legal issues, the one that concerns us is the issue of a release for a product. In Kansas, releases are strictly construed. In this case that meant that the language of the release did not meet the requirements of state law for a release. However, the court stretched incredibly far to come to that conclusion.

Fee v. Steve Snyder Enterprises, Inc.; Et. Al., 1986 U.S. Dist. LEXIS 28158

State: Kansas, United States District Court for the District of Kansas

Plaintiff: Patricia Fee

Defendant: Steve Snyder Enterprises, Inc.; Russell Young; SSE, Incorporated; Greene County Sport Parachute Center of Wellsville, Kansas, Inc.; and John Doe Corporation

Plaintiff Claims: Wrongful death and survival claims based on negligence, product liability and breach of warranty

Defendant Defenses: Statute of Limitations ran,

Holding: for the plaintiff

Year: 1986

Summary

The lawsuit was brought over the failure of an automatic opener, which did not during a sky dive. The widow sued the manufacture of the device and the sky-diving center who sold the device to the deceased. The deceased signed a release and indemnity agreement, two separate documents when purchasing the automatic opener.

In Kansas, releases are allowed but strictly construed. Here strict construction is used, improperly, to interpret the release in an extremely narrow way to allow the lawsuit to proceed.

Facts

The deceased died when he was sky diving, and his automatic opening device failed to open. The automatic opening device was manufactured by the defendant.

The plaintiff spent eight years attempting to serve the defendant, starting in 1977 and finally serving the defendant in 1985. This lead to a discussion about when the lawsuit actually started, which takes the first half of the decision. Because the defendant had avoided service of process, because he knew about it and made attempts not to get sued, the date of the lawsuit started was the date he was served. However, due to the defendant’s actions, the statute of limitations did not run.

The widow purchased the automatic opener for the deceased, although the dates in the decision must be incorrect. The decision states the device was purchased a year after the deceased died. The device failed the first time it was used by the decedent.

The deceased signed a release for the parachute center. The defendant manufacturer raised the release as a defense to the claims of the plaintiff against the manufacture as well as those claims against the dive center.

The release was on one side of the paper and on the reverse was an assumption of risk language. The deceased also signed a separate indemnify agreement. The decedent signed both agreements.

This decision is that of the Federal District Court in Kansas.

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

The court first looked at release law in Kansas. If not against public policy, then Kansas recognizes exculpatory agreements, releases. However, like many state’s releases, the courts in Kansas use the language that releases “are not favored by the law and are strictly construed against the party relying on them.” Strictly construed does not require the specific term negligence but must clearly appear to express the intent to release from liability the defendant.

It is not necessary; however, that the agreement contained specific or express language covering in so many words the party’s negligence, if the intention to exculpate the party from liability clearly ap-pears from the contract, the surrounding circumstances and the purposes and objects of the parties.

The court in reading the release found it did not stop the plaintiff’s claims.

The court first in looking at the language found the language covered use of the product but did not cover liability for “sale” of the product.

First, a review of the agreement itself shows that, although it specifically releases the Parachute Center from liability for injuries or death arising out of the “ownership, operation, use, maintenance or control” of many devices,” the agreement fails to mention any release of liability revolving around the sale of any product to the parachuter.

The court admitted the deceased understood that parachuting was dangerous, that was not enough. By making the determination that the product was defective when sold, the court found the release would not stand because you cannot release liability for selling a defective product.

Strictly construing the agreement; however, we do not believe that this should be interpreted to exempt the Parachute Center from a failure to use due care in furnishing safe equipment, or should allow it to sell a product in a defective condition unreasonably dangerous to the parachuter. To do so would impermissibly extend the terms of the agreement to situations not plainly within its language.

The court then determined the release would also not work to stop the plaintiff’s claims for breach of either express or implied warranty. The court found attempting to release the defendant parachute center from liability was unconscionable. Under Kansas law, a release could be used to stop warranty claims, unless that was found to be unconscionable.

We, therefore, hold that plaintiff’s action is not barred by the release, covenant not to sue and indemnity clause signed by the plaintiff’s decedent. Summary judgment in favor of the defendants Parachute Center and Russell Young is therefore, inappropriate.

The indemnification agreement seemed to be ignored in reaching this determination by the court.

So Now What?

Strict construction is a term that gives leeway to a court to review the language of the release to make sure it conforms to the language required under state law. However, that term was created and applied to release’s decades ago and rarely used now except in rare situations like this. When the judge wants the defendant to pay.

Probably the term was created when courts were first asked to apply releases to a plaintiff’s claims and wanted a way to soften the blow. Now days, in most states it is quoted in the decision at the beginning and never heard of again. Eventually if the courts review enough releases, the term is not even quoted.

Few states allow a release to be used to stop product liability claims. However, several states do and several states allow assumption of risk to stop product liability claims. A well-written release that incorporates assumption of risk language is still effective in many product liability cases.

Here, however, the court reached as far as it could to find that the release was barred from stopping the claims. Part of that desire to allow the suit to proceed was probably because of the actions of the manufacturer who spend eight years avoiding service of the lawsuit.

The rest, however, was simply a stretch to allow the lawsuit to proceed.

What do you think? Leave a comment.

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New Jersey does not support fee shifting provisions (indemnification clauses) in releases in a sky diving case.

Plaintiff’s claims were dismissed because the plaintiff failed to present enough evidence to support any elements of his claim for his injuries skydiving.

Dare v. Freefall Adventures, Inc., 349 N.J. Super. 205; 793 A.2d 125; 2002 N.J. Super. LEXIS 155

State: New Jersey, Superior Court of New Jersey, Appellate Division

Plaintiff: Joseph Dare and Patricia Dare

Defendant: Freefall Adventures, Inc., John Ed-Dowes, Warren Acron and Eric Keith Johnson, Defendants-Respondents.

Plaintiff Claims:

Defendant Defenses:

Holding:

Year: 2002

The plaintiff was injured when he attempted to avoid colliding with another sky diver. The co-participant had left the airplane first and was lower than the plaintiff; therefore, the co-participant had the right of way.

The plaintiff had been jumping from this site with the defendant for two years, which totaled 137 jumps, including every week the six months before the accident.

Prior to jumping the plaintiff signed a release. The release was five pages long and included an indemnity agreement. The plaintiff also signed a release for Cross Keys Airport, Inc.

The plaintiff sued his co-participant sky diver, as well as the jump facility for his injuries.

The plaintiff denied that it was the cause of his injury; however, he had made arrangements to have his wife photograph him during the jump. In order to allow his wife the opportunity to photograph him, he had to steer through buildings towards the concession trailer where his wife was located.

The defendants filed a motion for summary judgment, which was granted because the plaintiff failed to establish a prima facie case of negligence.

Prima facie, Latin for first look, which legally means the plaintiff, could not establish any facts or sufficient facts to support its claims. A plaintiff must show enough to the court to establish the very basics supporting the elements in its claim.

The defendant had argued that based on the release it should be awarded its attorney fees and costs also; however, the trial court did not grant this motion.

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

The court first looked at the standard of care between participants in a sporting event.

…the duty of care applicable to participants in informal recreational sports is to avoid the infliction of injury caused by reckless or intentional conduct.” The Court’s determination was grounded on two policy considerations; the promotion of vigorous participation in athletic activities, and the avoidance of a flood of litigation generated by voluntary participation in games and sports.

The reckless standard is a greater standard than the negligence standard. That means the acts of the co-participant to be liable for the injuries of another participant must be beyond negligent acts.

The applicability of the heightened standard of care for causes of action for personal injuries occurring in recreational sports should not depend on which sport is involved and whether it is commonly perceived as a “contact” or “noncontact” sport. The recklessness or intentional conduct standard of care articulated in Crawn was not meant to be applied in a crabbed fashion. That standard represented the enunciation of a more modern approach to our common law in actions for personal injuries that generally occur during recreational sporting activities.

Another reason for the application of the reckless standard rather than the negligence standard is the concern that the lower standard would create a flood of lawsuits for any sporting injury.

Recklessness under New Jersey law “entails highly unreasonable conduct, involving “an extreme departure from ordinary care, in a situation where a high degree of danger is apparent.”

“The standard is objective and may be proven by showing that a defendant ‘proceeded in disregard of a high and excessive degree of danger either known to him [or her] or apparent to a reasonable person in his [or her] position.'”. “Recklessness, unlike negligence, requires a conscious choice of a course of action, with knowledge or a reason to know that it will create serious danger to others.”

The court also felt that a failure on the part of the plaintiff to provide expert testimony as to what standard of care was for skydiving doomed the plaintiff’s claims.

   skydiving requires the training and licensing of participants. According to the record, it involves knowledge and conduct peculiar to the activity, including an understanding of wind direction and velocity, proper diver spacing, control of descent, and avoidance of ground hazards.

The appellate court upheld the trial courts dismissal of the plaintiff’s claims against the other co-participant sky diver. The court then looked at the plaintiffs’ claims against the defendant sky diving operation. The court found that the recklessness standard did not apply to the facility.

Consequently, the question here was whether, under the ordinary duty owed to business invitees, considering the nature of the risks associated with skydiving and the foreseeability of injury, plaintiff’s risk of injury was materially increased beyond those reasonably anticipated by skydiving participants as a result of the manner by which Freefall operated its facility. Plaintiffs failed to demonstrate such a material increase in risk.

For the plaintiff to make a claim against the defendant facility, he would have to prove that facility materially increased the risks over that of a normal sky-diving facility. Again, the plaintiff failed to prove that or provide enough evidence to proceed with his claims.

There was absolutely no evidence presented that Freefall failed to supervise the divers on the day of plaintiff’s accident. The record established that the loading of the aircraft, its operation, and the jumps themselves, were uneventful. Nothing suggests that Freefall personnel knew or should have known that plaintiff, or any other diver, was in peril because of the conduct of other participants. Moreover, Freefall had no way of controlling plaintiff’s, Johnson’s, or any other jumper’s maneuvering of their parachute canopies during the descent. Both plaintiff and Johnson were trained and licensed sky-divers. It is undisputed that once airborne, it was their duty alone to proceed with due care.

Plaintiff also claimed the landing zone of the defendant facility was not in accordance with regulatory minimums; however, he never stated what those minimums were or how the defendant’s facility failed to meet those minimums.

The appellate court upheld the dismissal of the plaintiff’s claims.

We conclude that the recklessness standard applied to Johnson and the ordinary negligence standard applied to Freefall, and, based on the evidentiary material submitted, summary judgment was properly granted to all defendants.

The court then looked at the indemnification provisions in the release which the court called “fee shifting provisions.”

The court looked at how other states had handled fee shifting provisions in sky-diving cases. New Jersey had not looked at the issue in skydiving, but had examined the issue in other cases, which had found the provisions were void.

The court reiterated that the plaintiff’s claim had been dismissed based on the plaintiff’s failure to present a prima facie case, not based on the release. The fee shifting provisions were part of the release. Under New Jersey law, “that sound judicial administration is best advanced if litigants bear their own counsel fees.” Even when fee shifting provisions are allowed, they will be strictly construed.

Essentially, the fee-shifting clause in Freefall’s release/waiver may be construed as an indemnification agreement, whereby plaintiff has agreed to pay counsel fees incurred by Freefall in defending plaintiffs’ suit, even if the cause of plaintiff’s injuries was Freefall’s own negligence. Such agreements, of course, must also be strictly construed against the indemnitee.

Reviewing construction law and finding no recreational case law where a fee shifting provision had been upheld the court determined the provisions were void as a violation of public policy.

Against this backdrop, we conclude that the fee-shifting provision in Freefall’s agreement is void as against public policy. It obviously runs counter to our strong policy disfavoring fee shifting of attorneys’ fees.

The deterrent effect of enforcing such a fee-shifting agreement offends our strong policy favoring an injured party’s right to seek compensation when it is alleged that the injury was caused by the tortious conduct of another.

The court also justified its decision by saying that because skydiving was regulated boy by the FAA and the New Jersey Department of Transportation it would be wrong to allow recovery of attorney fees by the defendant when the plaintiff argued the regulations had been violated, Even though the plaintiff’s arguments had no proof.

The defendant also attempted to argue the plaintiff’s complaint was frivolous which under a New Jersey statute would have allowed the defendant to recover their attorney fees defending a frivolous claim. However, the court found there were enough bases in the plaintiff’s complaint that it did not meet the frivolous claim threshold.

So Now What?

As stated in several other cases, indemnification clauses, even when well written, as you might assume from a five-page release, rarely result in recovery of attorney fees.

This also shows that the length of the release is not a deterrent, whether the release is effective in some court. Some people balk at a release over one page. However, when stopping a multi-million dollar claim a few pieces of paper are not a big issue.

Have your release written so that it protects you and all possible co-defendants and maybe includes a well-written indemnification clause.

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Sky Diving Release defeats claim by Naval Academy student

Boucher v. Riner, et al. 68 Md. App. 539; 514 A.2d 485; 1986 Md. App. LEXIS 391

Boucher v. Riner is a case that examines three issues under Maryland law that are important and to understand an appellate rule of civil procedure in one case. Those issues are: (1) the liability of a third party contractor to a military participant, (2) the validity of releases under Maryland law, and (3) how Maryland law defines Gross Negligence. The release in question also had a bargain component that allowed the signor to opt out of the release for the payment of additional fees. Finally, the appellate civil procedure rules are explained as to why appellate courts do not review issues not previously argued at the trial court level.

The Bargain component of releases is rarely seen now days. However, you can find it referenced in a few current cases. At one time, some states required the opportunity for a signor of a release to be able to bargain or pay more for the option of not signing a release. The normal trip was $100 and to do the trip without a release was $125.00. The $25 difference was not ever opted by enough people to justify the increased risk or cost to the company and their insurance company and has gradually fallen out of favor.

The plaintiff in this case was a student at the US Naval Academy. He signed up to become a member of the Naval Academy Parachuting Club (the Club), a voluntary extracurricular club at the Academy. The club was administered by upperclassman and had a faculty advisor. The plaintiff was trained by upperclassman in how to skydive. The club had a contractual relationship with Parachutes Are Fun, Inc. (Parachutes) a co-defendant in the suit. The club paid a reduced fee and used Parachutes facility and jumpmaster for skydiving. The club used its own equipment and training for club members.

On the day of the accident, the plaintiff jumped with two upper classmen, and a Parachutes jump master. A Parachutes employee was on the ground with a loud speaker directing skydivers as they neared the ground. The employee noticed the plaintiff was going to come close to some electrical lines but decided not to tell the plaintiff. The plaintiff hit the electrical lines suffering injury.

Prior to his jump, the plaintiff had signed a release. The release clause that is quoted in the case is the negligence clause and uses the word negligence. The release covers the defendant Parachutes and “its owners, officers, agents, servants, employees, and lessors and the County of Sussex, its officers, agents, servants and employees.”

The plaintiff filed a two count complaint alleging:

(1) Negligence on the part of the appellees as owners or occupiers of the drop zone, because of the location of the electric lines in relation to the drop zone, and

(2) Gross negligence on the part of the appellees in the performance of their duties.

The defendants filed a motion for summary judgment at the trial court level that was granted. The plaintiff then appealed the decision arguing three issues on appeal.

I. Whether the evidence presented a genuine issue of fact as to the defendants’ gross negligence?

II. Whether the exculpatory agreement signed by the plaintiff shortly before the accident precluded all recovery against the defendants based on negligence?

III. Whether there exists a genuine issue of fact as to the defendant Dunker’s status as an independent contractor?

Under Maryland law, like the majority of states, a release does not protect a defendant from a claim of gross negligence. Gross negligence is defined by the Maryland Courts as conduct “of an extraordinary or outrageous character.” Another definition is looks at the care given to the plaintiff by the defendant: “which even inattentive and thoughtless men never fail to take of their own property,’ it is a violation of good faith.” Alternatively, defined as “an intentional failure to perform a manifest duty in reckless disregard of the consequences as affecting the life or property of another, and also implies a thoughtless disregard of the consequences without the exertion of any effort to avoid them.

Here the acts of Parachutes employee did not rise to the definition of gross negligence. The court reviewed the actions of the employee and determined that the employee:

[W]as attentive to Boucher’s descent, that he was stationed in the proper location, and that he was calling out instructions to Boucher as was expected of him. There was no showing of indifference on the part of Dunker. Rather, the conduct alleged here reflects, at worst, poor judgment on the part of Dunker that, while perhaps amounting to ordinary negligence….

We see no evidence of a premeditated decision, deliberately arrived at, by an indifferent jumpmaster that should have indicated almost certain harm to others.

The second issue the court reviewed was whether the release was valid under Maryland law. Maryland has six factors that may invalidate a release.

[1] It concerns a business 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] The party holds himself out as willing to perform this service for any member of the public who seeks it, or at least for any member coming within certain established standards.

[4] As a result of the essential nature of the service, in the economic setting of the transaction, the party invoking exculpation possesses a decisive advantage of bargaining strength against any member of the public who seeks his services.

[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.

[6] Finally, as a result of the transaction, the person or property of the purchaser is placed under the control of the seller, subject to the risk of carelessness by the seller or his agents.

The court found that the defendants had not performed any of the six criteria that would invalidate the release. Parachutes was not performing a service important or a necessity to the public. The legislature of Maryland had not identified skydiving as important to control. Parachutes had no bargaining advantage, and the plaintiff was not under the control of Parachutes. Moreover, the plaintiff was under no requirement to jump.

The third issue was whether the individual defendant, the employee of the defendant Parachutes, who was directing the plaintiff from the ground was an employee covered under the release or an independent contractor who the plaintiff claimed would not be covered under the release. The court did not look at all issues because the court found the issue had not been argued at the lower court.

Appellate courts have always ruled that they will only review those issues that have already been reviewed at the court below. No new issues can be argued at the appellate court. All information and legal arguments must be brought up, at some point at the trial court level. Failing to do this, a party waives an issue if they do not raise it at the trial court level. For many, this seems like the court is just avoiding the issues but there are valid legal and common sense reasons for this policy, which this court enumerates.

The policy requires that the attorneys fully prepare for trial. If not, trails and appeals would go on forever because every case would be appealed and new evidence would be introduced at each appeal. Having this requirement limits the amount of appeals and forces everyone to be ready from the start. At one time, all important issues are litigated, and the jury has 100% of the information to make a fair and informed decision.

More importantly, because an appellate court cannot hear new evidence, the court would be making a judgment on issues that may not be fully explained or the court has not fully understood.

This brings up a litigation point, the references to the Rules of Civil Procedure. There are several sets of rules that an attorney must follow when litigating a case. These rules are created by the Supreme Court of each state and then modified occasionally by the court by edict and or by court decision. The Rules of Evidence control what the jury can see and hear so that the jury only hears the best evidence, and evidence does not prejudice the jury or one party. The Rules of Civil Procedure are the rules that dictate how you get to trial and appeal cases. Most of the rules define the time when things must occur or filed. However, there are several civil rules that dictate what your pleadings must contain, what size type and how those documents are conveyed to the court and the other parties in a case.

The case is a good case to read in understanding Maryland law, which is consistent with most other cases. Identifying the six areas where releases may not be valid is a major help to someone looking to a release to protect them from lawsuits.

What do you think? Leave a comment.

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