Did a Federal District Court in New Hampshire allow a release to bar a minor’s claims? Maybe, but only by omission, not by intent I believe.

Posted: June 5, 2017 | Author: | Filed under: New Hampshire, Release (pre-injury contract not to sue) | Tags: , , , , , , , , , | Leave a comment

This decision also looks at requiring initials in a release. Stupid move to require initials in any document, it just creates an argument for the plaintiff and requires more time on the defendant’s part to review the signed document.

Lizzol v. Brothers Property Management Corporation, Et. Al., 2016 DNH 199; 2016 U.S. Dist. LEXIS 150427

State: New Hampshire, United States District Court for the District of New Hampshire

Plaintiff: Jennifer Lizzol, Michael Lizzol, and T.G.,

Defendant: Brothers Property Management Corporation, Out Back Kayak, Inc., and Martin Welch,

Plaintiff Claims: negligence, including negligent training and supervision, vicarious liability, bystander liability, and loss of consortium

Defendant Defenses: Release

Holding: For the Defendant

Year: 2016

This case has two important articles regarding release law. The first is whether a plaintiff can sign away a minor’s right to sue. The results of the decision are yes; however, the issue was never argued or discussed in the decision.

The second is the use of places to initial in a release. The court ruled them of no value. However, because two of the plaintiff’s had not initialed certain sections, it allowed the plaintiff to argue those sections were not valid. Get rid of places to initial in your release because not all courts will rule this way.

The plaintiffs were a husband, wife and minor child who had booked a vacation at the defendant resort. As part of that vacation, they booked  a snowmobile (snow machine in the decision) instructions and tour. The booking was done online and occurred as soon as the plaintiff’s checked into the resort.

The snowmobile tours were run by a third party, also a defendant, Out Back Kayak, Inc. This defendant was not named on the release as a party to be protected. Upon arriving at the tour the plaintiffs were instructed to pick out a helmet and sign the release.

Mountain View Grand employee, who told them to quickly pick out helmets and sign a two-page document that bore the following heading:

Snow Machine Tour

ACKNOWLEDGEMENT OF RISKS AND HAZARDS

COVENANT NOT TO SUE

WAIVER AND RELEASE OF LIABILITY

(the “Release”). The Lizzols felt rushed during the process, see, e.g., Defs.’ Mot. for Summary Judgment, Exh. C. at p. 3, but both Jennifer and Michael had an opportunity to review the Release, and each signed and initialed it. (Jennifer executed the release on behalf of her minor son, T.G.). [Emphasize added]

The release had five sections, Section A through E, which had to be initialed. The mother did not initial two sections and the father did not initial one section.

The Release includes five lettered paragraphs that provide tour participants with a designated space in which to place his or her initials, thereby confirming that he or she understands and acknowledges the following:

********************

Id. Jennifer did not initial Paragraph B or Paragraph D, and Michael did not initial Paragraph B. [Emphasize added]

The plaintiff’s received a few minutes of instruction on how to steer brake and operate the snow machines then the tour took off. The plaintiff husband and wife were riding together right behind the guide, and their son was farther back in the line.

The guide told everyone he would not exceed twenty miles per hour. The guide exceeded the self-imposed speed limit immediately and continued to speed. The plaintiff mother was driving the snow machine, and she quickly fell behind and was lost. While attempting to follow the tracks of the guide, she lost control of the machine which flipped and she and her husband fell down an embankment.

Jennifer and Michael rode on a two-person snow machine, with Jennifer operating the vehicle. They were directly behind Welch in the line of snowmobiles. Their son, T.G., rode by himself and was farther back in the line. Welch drove rather quickly during the tour, and far exceeded the self-imposed 20 miles per hour speed limitation he had announced earlier. Jennifer did not keep pace, and, as Welch increased his speed during the second half of the tour, Jennifer lost sight of him. Jennifer attempted to follow Welch’s tracks in the snow, but, in doing so, lost control of the snowmobile, which left the path and flipped over. Jennifer, Michael, and the snow machine fell down a steep embankment that was approximately seventy-five feet high.

The plaintiff’s later learned that numerous customers complained about the guide driving too fast. One manager of the resort asked the husband if the guide had been driving too fast. plaintiff’s later learned that numerous customers complained about the guide driving too fast. One manager of the resort asked the husband if the guide had been driving too fast.

The plaintiffs later learned that other customers may have complained that Welch drove too quickly during earlier snow machine tours. After the accident, Mountain View Grand manager, Chris Diego, asked Michael if Welch had been “going too fast again.”

The defendant filed a motion for summary judgment based on the release. The court granted the motion for summary judgment and dismissed the case.

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

In making its decision reviewed here the court first looked at the requirements for releases in New Hampshire. New Hampshire has three requirements to make a release enforceable.

Exculpatory contracts are enforceable if: “(1) they do not violate public policy; (2) the plaintiff understood the import of the agreement or a reasonable person in [plaintiff’s] position would have understood the import of the agreement; and (3) the plaintiff’s claims fall within the contemplation of the parties when they executed the contract.”

The plaintiff first argued the release did not apply because the release language looked at renting the equipment and did not contemplate the guide’s failure to act reasonably.

Altogether, they say, the impression is given that the Release applies only to injuries inherent to snow machine activity and the use of snow machine equipment, but not to harm resulting from an instructor’s or guide’s failure to act with reasonable care.

However, the court did not find this argument persuasive because releases are reviewed applies the common meaning to the words in the release and as long as the language is clear and specifically indicates the intent of the parties it will be upheld.

Under applicable New Hampshire law, courts examine the language of a release and “give the language used by the parties its common meaning and give the contract itself the meaning that would be attached to it by a reasonable person.” “As long as the language of the release clearly and specifically indicates the intent to release the defendant from liability for personal injury caused by the defendant’s negligence, the agreement will be upheld.”

However, any doubt in the language as to whether the plaintiff agreed to assume the risk, and the release would not be enforced.

However, a defendant “will not be released from liability when the language of the contract raises any doubt as to whether the plaintiff has agreed to assume the risk of a defendant’s negligence.

The language in the release was broad in reach, detailed and clear and as such upheld against this argument of the plaintiff.

The language of the Release unarguably applies to claims or suits based on the negligence of Mountain View Grand owners, employees, officers or agents. The Release does not qualify or limit the “negligence” being released in any way, nor is the Release ambiguous in that regard. [Emphasize added for further discussion.]

A reasonable person “would have contemplated that the agreements released the defendants from any negligence, not just from negligence inherent” in snowmobiling.

The next argument was another that would not have gone in favor of the defendants in many states. The actual party that employed the guide, OBK, was not a named defendant in the release. However, case law in New Hampshire had held that parties protected by a release did not necessarily have to be named in the release. (This is an exception to the rule! Do not rely upon this when writing your release.)

Under New Hampshire law, the release need not specifically name the parties to be protected by only provide functional identification of the parties.

An exculpatory contract need not specifically identify the defendant by name.” “However, the contract must at least provide a functional identification of the parties being released.”

In this release enough of an agency relationship was covered in the release to protect the defendant OBK.

…the Release here makes evident that it pertains not just to the furnishing and use of equipment associated with the snow machine activity, but also to the furnishing of services associated with that activity.

The initial issue was next reviewed. The plaintiff made a great argument to void the sections of the release not initialed by the plaintiff.

Plaintiffs next argue that, even if the Release does encompass the claims at issue, it is still not enforceable against Jennifer, because she failed to initial paragraphs B and D of the Release. Plaintiffs characterize the lettered paragraphs as “several distinct exculpatory clauses” that they were required to agree to separately, and which, as structured, give the impression that “the participant might agree to certain terms, but not others.

However, the court found the concluding language of the release encompassed the entire agreement and by signing the release right below that language the plaintiff agreed to the entire agreement.

Jennifer Lizzol’s failure to initial paragraphs B and D of the Release does not render the Release or those paragraphs unenforceable against her. The same general analysis applies to Michael Lizzol’s failure to initial Paragraph B of the Release.

The first requirement for a valid release under New Hampshire law is that does not violate public policy. This was the last argument raised by the plaintiff and reviewed in the court’s decision. Under New Hampshire law, a release must not violate public policy.

“A defendant seeking to avoid liability must show that the exculpatory agreement does not contravene public policy; i.e., that no special relationship existed between the parties and that there was no other disparity in bargaining power.” “‘A special relationship exists when “the defendant is a common carrier, innkeeper or public utility, or is otherwise charged with a duty of public service.'” Additionally, a release may be against public policy if, among other things, “it is injurious to the interests of the public, violates some public statute, or tends to interfere with the public welfare or safety.”

The plaintiff’s relied on the “disparity of bargaining power” argument to claim the release violated New Hampshire public policy. “”Where there is a disparity in bargaining power, the plaintiff may not be deemed to have freely chosen to enter into the contract.” However, the court found this would not work.

Here, the plaintiffs were “under no physical or economic compulsion to sign the release,” and “[s]ince the defendants’ service is not an essential one, the defendants had no advantage of bargaining strength” over the plaintiffs or others who sought to participate in the snowmobile lesson and tour.

The plaintiff’s also argued public policy was violated because they were fraudulent induced to sign the release based upon the knowledge that the guide drove too fast.

Plaintiffs assert that defendants had prior knowledge that Welch generally drove too quickly when conducting snow machine tours, and, notwithstanding that knowledge, failed (negligently) to take reasonable steps to ensure that Welch conducted the tours safely. Plaintiffs further contend that they were induced to sign the Release based upon defendants’ false assurances that the lesson and tour would be conducted in a safe manner, with adequate instruction, and at a safe speed. Relying on those assurances, plaintiffs signed the Release. Plaintiffs argue that, at the very least, whether the defendants made assurances (and omissions) regarding the nature of the snow machine tour with conscious indifference to the truth, and whether the plaintiffs justifiably relied upon those statements when signing the Release, are disputed issues of material fact precluding summary judgment.

Fraud in the inducement is a valid defense to contracts and releases. (Remember Marketing Makes Promises Risk Management has to Pay For) to prove fraud in the inducement the plaintiffs must prove:

As the parties seeking to invalidate the Release on fraudulent inducement grounds, plaintiffs bear a substantial burden: they “must establish that the other party made a representation with knowledge of its falsity or with conscious indifference to its truth with the intention to cause another to rely upon it. In addition, the party seeking to prove fraud must demonstrate justifiable reliance.”

However, the plaintiffs could produce no facts to support fraud, an intentional act so to speak on the part of the defendants to support their argument.

Because plaintiffs have not produced sufficient evidence from which a finder of fact could conclude that the defendants knowingly made fraudulent representations to them, they have not established that a genuine issue of fact exists with respect to whether their execution of the Release was fraudulently induced, and is therefore ineffective.

The Release is valid and enforceable, and it encompasses the plaintiffs’ bystander liability claim as well as their negligence claims.

For those reasons, the plaintiff’s claims were dismissed, and the case closed.

So Now What?

There are several important points made in this decision.

Whether or not the court intended for the release to be valid against the claims of the minor is not known. A defendant was probably a minor, and his claims were dismissed based upon the signature on a release signed by his mother.  However, this is not a strong enough decision to rely upon at this time.

The statement by the court that the language of the release “does not qualify or limit the “negligence” being released in any way…” is important. So often releases are written with the intent to soften the effect in the mind of the writer or the release is inadvertently written in a way that limits the value of the release. Write a release as broadly as possible and allow the court to restrict it. Why do the court’s job in advance and eliminate a possible defense you may have to a claim.

The final issue is initials. GET RID OF INITIALS in your release. They have no value. You need a signature at the end of the contract and nothing else. The only value initials provide is to the plaintiff to make an argument that a place on the release that is not initialed should void the release or at least void that section of the release.

This case would probably have a different outcome in another jurisdiction.

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

What do you think? Leave a comment.

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