The interaction between a release and worker’s compensation laws for an employee

If you are injured at work and covered by worker’s compensation you cannot sue your employer. However, you might be able to sue a third party who may be liable for injury.

However, the employer of the plaintiff had the plaintiff sign a release that prevented the employee from suing the place where he was injured, which was upheld by the court.

Merlien v. JM Family Enters, 2020 Fla. App. LEXIS 10525

State: Florida, Court of Appeal of Florida, Fourth District

Plaintiff: Diveston Merlien, Appellant

Defendant: JM Family Enterprises, Inc., Sheridan 441, LLC and Bendles Rentals, LLC

Plaintiff Claims: premises liability

Defendant Defenses: release

Holding: for the defendant

Year: 2020

Summary

The defendant security firm provided onsite security personnel to its clients. The security firm required its employees to sign a release that limited their recovery for an injury to their worker’s compensation benefits. The release would not be effective necessarily against the employer. However, it was effective in keeping the employee from suing the customer of the security firm.

Facts

The plaintiff was employed by AlliedBarton, a firm that provides security services for various clients. He was assigned to work as a security guard for one of those clients. The plaintiff was allegedly injured due to a slip and fall on stairs at the JM facility where he was assigned to work. He subsequently filed a premises liability suit against JM, alleging that his slip and fall was proximately caused by JM’s negligent maintenance of the stairs.

The primary focus of this appeal is the enforceability of a waiver which the plaintiff signed as a condition of employment that prohibits suit against any customer of AlliedBarton for injuries covered by the workers’ compensation statutes.

Two years after the plaintiff filed his complaint, JM filed a motion for summary judgment, arguing that the plaintiff waived his right to bring suit by executing the above waiver at the commencement of his employment. After hearing argument from both parties, the trial court granted JM’s motion for summary judgment. This timely appeal followed.

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

Worker’s compensation is an insurance system created to take care of the medical bills and lost wages of workers who are injured on the job. Before the creation of the worker’s compensation system, an injured worker had to sue an employer to recover their damages from the injury.

In return for receiving the benefits of worker’s compensation, you give up your right to sue the employer. You can waive those benefits, pay back any benefits or money paid and sue the employer, but that is usually an unwise investment in time and money.

In this case, the employer requested the employees to sign a release, so they could not sue third party customers of the employer. In this case, the security company that employed the plaintiff had their employees, such as the plaintiff, on the property of the customers. The release provided if the employee was injured in a claim that was covered by worker’s compensation, that was the extent of the recovery they could receive. They could not sue the customer of the employer for damages.

This is a smart move on the part of the employer. The employer would lose a customer every time an employee was hurt on the job if the employee sued the customer.

It is important to understand the release did not stop lawsuits against the employer, only customers of the employer. Worker’s compensation statutes stop lawsuits against the employer.

The plaintiff first argued the release was ambiguous and unenforceable. In Florida for a release was enforceable when the release could be read by an ordinary and knowledgeable person who understood what they were contracting away.

Florida courts have upheld the enforceability of exculpatory provisions in contracts only when the language of the provision clearly and unambiguously communicates the scope and nature of the disclaimer.

The law also required a clear an understandable intent.

…provisions are deemed to be unambiguous and enforceable when the language unequivocally demonstrates a clear and understandable intention for the defendant to be relieved from liability such that an ordinary and knowledgeable person will know what he or she is contracting away.

The court found the release was easily read, understood and had no confusing language or made any promises to the signor.

The next argument the plaintiff made was the release was void because it violated Florida’s public policy.

Public policy disfavors exculpatory contracts because they relieve one party of the obligation to use due care. . . . Nevertheless, because of a countervailing policy that favors the enforcement of contracts, as a general proposition, unambiguous exculpatory contracts are enforceable unless they contravene public policy.”

A release violates Florida’s public policy “it is injurious to the interests of the public or contravenes some established interest of society.” The plaintiff argued that Florida’s law allowed employees who received worker’s compensation payments to sue third parties and recover those benefits if the third parties were negligent.

The appellate court held that the law allowing those third-party lawsuits were not a mandatory law but a permissive law. It allowed the lawsuits but did not require them.

The court did open up one area that it might have sided with the plaintiff. If the release was mandatory for employment, the court stated the plaintiff could have rejected the release.

The court concluded by noting that the plaintiff voluntarily entered into the agreement and declined to invalidate the contract on the basis that it was offered on a “take it or leave it” basis.

However, the plaintiff did not plead that in this case or argue it at the time of his employment; Therefore, it was moot. The court also, in one effect closed the loop hole.

…the plaintiff here was not coerced into signing the agreement and voluntarily agreed, as a condition of employment, to limit his avenues for recovery with respect to any future injuries to the State’s workers’ compensation program. The disclaimer was limited in both scope and application and did not prevent the “the quick and efficient delivery of disability and medical benefits to an injured worker.”

The court held the release was valid and prevented the lawsuits against the customer of his employer.

So Now What?

This is a very interesting and carefully thought-out use of a release. The purpose is to keep the clients of the firm happy at the expense of its own employees.

However, it shows another way a release can be used to stop litigation.

What do you think? Leave a comment.

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New York court shreds Tough Mudder online release and arbitration clause because the reader could assent to the release without reading the release.

The clauses in the release were not clearly identified and could be avoided by plaintiff. Release was found to be void because if violated New York General Obligations Law § 5-326

Scotti v Tough Mudder Inc., 63 Misc. 3d 843, 97 N.Y.S.3d 825, 2019 N.Y. Misc. LEXIS 1525, 2019 NY Slip Op 29098, 2019 WL 1511142

State: New York, Supreme Court of New York, Kings County

Plaintiff: Richard E. Scotti et al. (Richard E. Scotti and Joseph Russo)

Defendant: Tough Mudder Incorporated et al. (Tough Mudder Incorporated and Tough Mudder Event Production Incorporated)

Plaintiff Claims: Negligence

Defendant Defenses: Arbitration Clause & Release

Holding: for the Plaintiffs

Year: 2019

Summary

Tough Mudder has been having a tough time in court. This was another court that found several ways to void the release. Tough Mudder was attempting to compel arbitration; however, the arbitration clause in the release did not meet the legal requirements of New York Law. The release itself failed because if violated New York General Obligations Law § 5-326 which voids releases for recreation.

Facts

This personal injury action stems from an accident which occurred on July 23, 2016, when the plaintiffs Richard E. Scotti and Joseph Russo participated in the “Tough Mudder,” a physically challenging obstacle course event (hereinafter the TM event), which took place at 1303 Round Swamp Road, Old Bethpage, New York. Defendants Tough Mudder Incorporated and Tough Mudder Event Production Incorporated (collectively, Tough Mudder) are the business entities that organized the TM event. Plaintiffs commenced the within action on or about November 17, 2017, against Tough Mudder alleging that they each sustained injuries as a result of defendants’ negligent operation of an activity at the event, referred to as the “salmon ladder.” Tough Mudder joined issue on or about December 20, 2017, with the service of a verified answer. In their answer, Tough Mudder denied all material allegations and asserted various affirmative defenses, including that the plaintiffs’ action is barred by the participation/registration agreement, which included an arbitration clause.

Tough Mudder now moves, pursuant to CPLR 7501 and 7503, to compel arbitration, arguing that the plaintiffs are barred from pursuing the instant action in this court because they each waived the right to sue by virtue of agreeing to arbitrate any “disputes, controversies, or claims” arising out of their participation in the TM event. Tough Mudder claims that the plaintiffs each entered into an agreement to arbitrate all claims related to their participation in the TM event when they completed an online Internet registration form. In support of this contention, Tough Mudder has submitted the sworn affidavit of Jenna Best, the manager of customer relations for Tough Mudder Incorporated. Best avers that she is fully familiar with the TM event online registration process as it existed in 2016 when the plaintiffs registered for the TM event at issue. Tough Mudder has submitted copies of the online registration forms that the plaintiffs allegedly completed for the TM event (Cash affirmation, exhibit D). Best states that, during the online registration process, the plaintiffs were required to scroll down to a section containing the “Participant Waiver and Course Rules” (hereinafter PWCR), a document version of which has been submitted herein She contends that the full text of the PWCR was contained in a box on the screen, which could be read by scrolling down in the text box. Best contends that the initial visible content of the scrollable box, which preceded the full PWCR document, which could be read in its entirety by scrolling down…

Below the box containing the scrollable PWCR was another box next to the statement: “I agree to the above waiver.” Best avers that it was necessary for the plaintiffs, or any other registrant, to click on the box to indicate his or her consent to the PWCR in order for the registrant to complete his or her registration for the TM event. According to Best, the Internet registration form cannot proceed to the payment page, and registration cannot be completed, until the registrant checks the box indicating his or her consent to the PWCR She further avers that both plaintiffs did in fact click on the box indicating their consent to the PWCR, as otherwise they would not have been able to participate in the TM event. Based upon the foregoing, Tough Mudder contends that the plaintiffs agreed to the terms of the online waiver, which included the arbitration clause, and, therefore, are barred from pursuing the instant action.

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

The court looked at the plaintiff’s arguments first.

In opposition, plaintiffs argue that the arbitration provision at issue is unenforceable because Tough Mudder has failed to establish that they actually agreed to it. In this regard, plaintiffs point out that the webpage where the PWCR was located contained a text box that did not show the entire document. In order to read the full PWCR, including the arbitration provision, plaintiffs contend it would have been necessary to scroll down through many screens of text using the arrows on the right-hand side of the text box. The PWCR fills seven single-spaced pages of text.

On top of that, the court stated the evidence presented by the defendant Tough Mudder was not sufficient to prove that either plaintiff checked the box or agreed to the terms of the contract.

Plaintiffs further argue that Tough Mudder has failed to proffer any evidence that either plaintiff actually signed/checked the consent box, or any evidence identifying the computers or electronic devices from which their respective registrations were completed.

The burden was on Tough Mudder to prove the plaintiffs signed the agreement which contained the arbitration clause.

It is well settled that “[a] party to an agreement may not be compelled to arbitrate its dispute with another unless the evidence establishes the parties’ clear, explicit and unequivocal agreement to arbitrate” When one party seeks to compel the other to arbitrate any disputes between them, the court must first determine whether the parties made a valid arbitration agreement. The party seeking arbitration bears the burden of establishing that an agreement to arbitrate exists

To prove the existence of the contract and the agreement to the arbitration clause the courts look for evidence that the website user had actual or constructive knowledge of clauses in the contract.

The question of whether there is agreement to accept the terms of an online contract turns on the particular facts and circumstances. Courts generally look for evidence that a website user had actual or constructive notice of the terms by using the website. Where the person’s alleged consent is solely online, courts seek to determine whether a reasonably prudent person would be put on notice of the provision in the contract, and whether the terms of the agreement were reasonably communicated to the user. In Specht v Netscape Communications Corp, the court emphasized that “[r]easonably conspicuous notice of the existence of contract terms and unambiguous manifestation of assent to those terms by consumers are essential if electronic bargaining is to have integrity and credibility”

The seven-page agreement had no headings, no italics, no bold print, nothing to indicate the agreement covered more issues than were identified in the heading. The heading stated:

“ASSUMPTION OF RISK, WAIVER OF LIABILITY, AND INDEMNITY AGREEMENT “PARTICIPANTS: READ THIS DOCUMENT CAREFULLY BEFORE ACCEPTING. THIS DOCUMENT HAS LEGAL CONSEQUENCES AND WILL AFFECT YOUR LEGAL RIGHTS AND WILL ELIMINATE YOUR ABILITY TO BRING FUTURE LEGAL ACTIONS.”

No where in the heading was a mention of a mandatory arbitration clause. (Ambush by small print was eliminated by the courts in the 70’s, this lawsuit was in 2019; someone should have realized that by now.)

The court the defined the agreement as one of four types of agreements found online “the four “general types of online consumer contracts [are identified as] (a) browsewrap; (b) clickwrap; (c) scrollwrap; and (d) sign-in-wrap.”

Based on the evidence presented by the defendants the court found the agreement was a “clickwrap” agreement.

Here, the PWCR at issue appears to be a click-wrap agreement as identified in Berkson in that the clickable box is located directly below the scrollable text box that allegedly contained the full text of the agreement. Only by scrolling down in the text box would the user see all of the terms of the PWCR, including the arbitration clause at issue.

The court then held that you could agree to the agreement without scrolling through the agreement; therefore, you could sign the agreement without knowing what was in the agreement.

However, the user could proceed to complete the registration process without necessarily scrolling down through the text box to view the full document, thereby rendering it a click-wrap agreement.

The plaintiff could be bound by a clickwrap agreement, but only if they were given sufficient opportunity to read the agreement and agree to it. There must also be a way to decline a click-wrap agreement.

A party may be bound to a click-wrap agreement by clicking a button declaring assent, so long as the party is given a “sufficient opportunity to read the . . . agreement, and assents thereto after being provided with an unambiguous method of accepting or declining the offer.”

Then the court closed the door on the defendants attempt to compel arbitration.

…[a] court cannot presume that a person who clicks on a box that appears on a . . . screen has notice of all contents not only of that page but of other content that requires further action (scrolling, following a link, etc.). The presentation of the online agreement matters: Whether there was notice of the existence of additional contract terms presented on a webpage depends heavily on whether the design and content of that webpage rendered the existence of terms reasonably conspicuous. Clarity and conspicuousness of arbitration terms are important in securing informed assent.” (Internal quotation marks and citations omitted.)

Understand, the court did not say the contract was invalid; the court was only looking at the issue of the arbitration clause. Under New York law for the arbitration clause to be valid, the plaintiff had to “had actual or constructive notice of the terms….” Since there was no notice of arbitration in the heading, and you could agree to the agreement without reading it, the agreement failed the heightened requirements to prove an arbitration clause existed between the parties.

Thus, on a motion to compel arbitration, a valid agreement to arbitrate exists where the notice of the arbitration provision was reasonably conspicuous, and manifestation of assent is unambiguous as a matter of law. Therefore, the issue herein is whether Tough Mudder’s website registration screen put a reasonably prudent user on inquiry notice of the relevant terms of the PWCR, particularly the arbitration clause at issue.

Then the court jumped on the issue that the evidence in front of the court did not prove their argument. Black-and-white copies were provided to the court rather than color copies. The font size was small and barely legible.

In addition, the court notes that the purported copies of the plaintiffs’ respective online registration forms (screenshots) submitted by Tough Mudder are black and white copies of poor quality, the text of which is in an extremely small font size and is barely legible. Tough Mudder has not proffered any color copies of any screenshots depicting its online registration process. In addition, the full text of the PWCR, as provided by Tough Mudder, is not a screenshot but a black and white document, consisting of seven pages of single-spaced language, all in the same font and size, with no underlined, hyperlinked or bolded terms.

The court then attacked how the document would have been presented online from the evidence in front of it.

In order to view the “Mediation and Arbitration” clause, the plaintiffs, by using the arrows inside the text box, needed to scroll down significantly beyond what is initially visible, to page four of the seven-page single-spaced PWCR document. The court additionally notes that, as with the entire document, the arbitration provision is neither underlined, bolded nor hyperlinked. Further, since this court has only been provided with a black and white document, not screenshots, it is unable to discern how the subject arbitration clause actually appeared to the user. Indeed, “[i]n the context of web-based contracts, [courts] look to the design and content of the relevant interface to determine if the contract terms were presented to the offeree in a way that would put her [or him] on inquiry notice of such terms

It is laughable that in 2019 you read a case where the court complains about the type being too small to read.

The court found that based on the evidence in front of it, there was not an arbitration clause between the parties.

The court then looked at the release.

New York General Obligations Law § 5-32 voids releases for recreation activities where a fee is paid.

That statute protects consumers from the effect of form releases printed on membership applications and similar documents when such releases are offered in connection with the use of a “place of amusement or recreation” for which a fee is paid

The court found New York General Obligations Law § 5-32 voided the release.

The terms of this statute apply to the plaintiffs herein, who paid a fee to use Tough Mudder’s obstacle course, which, contrary to Tough Mudder’s assertion, is a place of recreation. Indeed, the nature of the TM event as described by Tough Mudder—a rigorous, athletic competition requiring proper training—is comparable to the other activities, such as horseback riding, auto racing, cycling and skiing, which have been held to be covered by General Obligations Law § 5-326.

The final issue was the agreement had a severability clause. This is a clause that states if a portion of the contract is found unenforceable or void by the court it does not void the entire document. Only the portions the court finds void, are severed from the document, and the document without those clauses can be used as evidence in court.

However, as Tough Mudder correctly argues, the unenforceable provisions of the PWCR do not nullify the entire agreement. Where an agreement consists partially of an unlawful objective, the “court may sever the illegal aspects . . . and enforce the legal ones, so long as the illegal aspects are incidental to the legal aspects and are not the main objective of the agreement.

Which is exactly what the court did.

Here, the waiver of liability provision in the PWCR releasing Tough Mudder from liability, as well as the arbitration clause, are severable from the remainder of the PWCR agreement on the ground that the unenforceable provisions are incidental to the legal aspects and not the main objective of the agreement. Further, the severability provision in the PWCR reflects the intent of the parties that the legal provisions of the agreement be severed from any provisions determined to be void and unenforceable.

So, hopefully the seven-page document had language that could be used to prove assumption of the risk by the defendants.

So Now What?

On paper, this release might have survived. However, there are more issues with online releases. This is the second case where the court found the proof offered by the defense to prove the release was signed was found to be lacking because of poor copies of the website. That is just stupid. With color printers now days, computers and monitors that can be brought into court or linked to in a document you should be able to have anyone see what the document actually looked and how the software performed.

When you have several different issues in a contract, it is common to identify the new issues with a heading or bold type. In this case not only where there are new issues in the release besides release language there was an arbitration agreement. New York, as most states, have specific language in how an arbitration agreement should be written. This release failed that test.

The arbitration agreement was an attempt to lose the value of the entire release because releases for recreation where a person pays money to recreation are void. New York General Obligations Law § 5-32

§ 5-326.  Agreements exempting pools, gymnasiums, places of public amusement or recreation and similar establishments from liability for negligence void and unenforceable

Every covenant, agreement or understanding in or in connection with, or collateral to, any contract, membership application, ticket of admission or similar writing, entered into between the owner or operator of any pool, gymnasium, place of amusement or recreation, or similar establishment and the user of such facilities, pursuant to which such owner or operator receives a fee or other compensation for the use of such facilities, which exempts the said owner or operator from liability for damages caused by or resulting from the negligence of the owner, operator or person in charge of such establishment, or their agents, servants or employees, shall be deemed to be void as against public policy and wholly unenforceable.

The big issue the court seemed to be pushing was the game of hide and seek that Tough Mudder plays both with its courses and with the release. Contestants never know what they will encounter when competing in a Tough Mudder event. Consequently, you eliminate a lot of the defense of assumption of the risk. You can’t assume a risk you don’t know about.

Tough Mudder then tried that game with its release (or did not have an attorney write its release) and tried to slide the arbitration clause past the participants. It failed because the court held it must meet New York law and be written and visible in a way that the signor understands they are signing an arbitration agreement. That is a bigger burden then just signing a release.

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

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Merlien v. JM Family Enters, 2020 Fla. App. LEXIS 10525

Merlien v. JM Family Enters, 2020 Fla. App. LEXIS 10525

Court of Appeal of Florida, Fourth District

July 22, 2020, Decided

No. 4D19-2911

Reporter

2020 Fla. App. LEXIS 10525 *

DIVESTON MERLIEN, Appellant, v. JM FAMILY ENTERPRISES, INC., SHERIDAN 441, LLC and BENDLES RENTALS, LLC, Appellees.

Notice: NOT FINAL UNTIL DISPOSITION OF TIMELY FILED MOTION FOR REHEARING.

Prior History: [*1] Appeal from the Circuit Court for the Seventeenth Judicial Circuit, Broward County; Raag Singhal, Judge; L.T. Case No. CACE17-007427 21.

Counsel: Neil Rose, Esq., Hollywood, and Morgan Weinstein of Weinstein Law, P.A., Fort Lauderdale, for appellant.

Kansas R. Gooden of Boyd & Jenerette, P.A., Miami, and Ian E. Waldick of Boyd & Jenerette, P.A., Jacksonville, for appellee JM Family Enterprises, Inc.

Judges: FORST, J. LEVINE, C.J., and DAMOORGIAN, J., concur.

Opinion by: FORST

Opinion

Forst, J.

Appellant Diveston Merlien (“the plaintiff”) appeals from the trial court’s final summary judgment entered in favor of JM Family Enterprises (“JM”). The trial court found that the plaintiff’s negligence lawsuit was precluded by an exculpatory clause in his employment agreement. On appeal, the plaintiff argues that the disclaimer at issue was void for ambiguity and, even if the disclaimer was properly considered and not void for ambiguity, it was nevertheless unenforceable because it contravenes Florida public policy. We disagree and affirm.1

Background

The plaintiff was employed by AlliedBarton, a firm that provides security services for various clients. He was assigned to work as a security guard for one of those clients, JM The plaintiff [*2] was allegedly injured due to a slip and fall on stairs at the JM facility where he was assigned to work. He subsequently filed a premises liability suit against JM, alleging that his slip and fall was proximately caused by JM’s negligent maintenance of the stairs.

The primary focus of this appeal is the enforceability of a waiver which the plaintiff signed as a condition of employment that prohibits suit against any customer of AlliedBarton for injuries covered by the workers’ compensation statutes. The waiver provides:

WORKER’S COMPENSATION DISCLAIMER Payment on Work-Related Injuries

I understand that state Workers’ Compensation statues [sic] cover work-related injuries that may be sustained by me. If I am injured on the job, I understand that I am required to notify my manager immediately. The manager will inform me of my state’s Workers’ Compensation law as it pertains to seeking medical treatment. This is to assure that reasonable medical treatment for an injury will be paid for by Alliedbarton’s [sic] Workers’ Compensation insurance.

As a result, and in consideration of AlliedBarton Security Services offering me employment, I hereby waive and forever release any and all rights I may [*3] have to:

– make a claim, or

– commence a lawsuit, or

– recover damages or losses

from or against any customer (and the employees of any customer) of AlliedBarton Security Services to which I may be assigned, arising from or relating to injuries which are covered under the Workers’ Compensation statues [sic].

Two years after the plaintiff filed his complaint, JM filed a motion for summary judgment, arguing that the plaintiff waived his right to bring suit by executing the above waiver at the commencement of his employment. After hearing argument from both parties, the trial court granted JM’s motion for summary judgment. This timely appeal followed.

Analysis

HN1[] “The standard of review of an order granting summary judgment is de novo.” Fini v. Glascoe, 936 So. 2d 52, 54 (Fla. 4th DCA 2006). When “the enforceability of [a] pre-injury release is a question of law arising from undisputed facts, the standard of review is de novo.” Kirton v. Fields, 997 So. 2d 349, 352 (Fla. 2008).

Brooks v. Paul, 219 So. 3d 886, 887 (Fla. 4th DCA 2017); see also Sanislo v. Give Kids the World, Inc., 157 So. 3d 256, 260 (Fla. 2015) (“The enforceability of a pre-injury exculpatory clause arising from undisputed facts is reviewed de novo.”).

I. Whether the disclaimer was ambiguous and unenforceable.

HN2[] “Public policy disfavors exculpatory contracts because they relieve one party of the obligation to use due care. . . . Nevertheless, because of a [*4] countervailing policy that favors the enforcement of contracts, as a general proposition, unambiguous exculpatory contracts are enforceable unless they contravene public policy.” Sanislo, 157 So. 3d at 260 (internal citations omitted).

HN3[] Florida courts have upheld the enforceability of exculpatory provisions in contracts only when the language of the provision clearly and unambiguously communicates the scope and nature of the disclaimer. See id. at 260-61; Fresnedo v. Porky’s Gym III, Inc., 271 So. 3d 1185, 1186 (Fla. 3d DCA 2019); Brooks, 219 So. 3d at 888. “Such provisions are deemed to be unambiguous and enforceable when the language unequivocally demonstrates a clear and understandable intention for the defendant to be relieved from liability such that an ordinary and knowledgeable person will know what he or she is contracting away.” Pillay v. Pub. Storage, Inc., 284 So. 3d 566, 569 (Fla. 4th DCA 2019) (citing Sanislo, 157 So. 3d at 260-61).

In addressing the trial court’s determination that the AlliedBarton release was clear and unambiguous, the plaintiff cites to UCF Athletics Ass’n Inc. v. Plancher, 121 So. 3d 1097 (Fla. 5th DCA 2013), quashed in part on other grounds, 175 So. 3d 724 (Fla. 2015), and argues that the waiver at issue in that case is analogous to AlliedBarton’s current disclaimer. We disagree and find the case to be distinguishable.

In Plancher, the parents of a University of Central Florida football player brought a negligence action against the university after their son collapsed and died during [*5] conditioning drills during practice. Id. at 1099. In affirming the decision of the trial court, the Fifth District found the exculpatory clause contained in “the agreement to participate clause of the Medical Examination and Authorization Waiver” to be ambiguous and unenforceable. Id. at 1099, 1103.

In pertinent part, the exculpatory clause at issue in Plancher contained the following language:

I recognize the importance of following all instructions of the coaching staff, strength and conditioning staff, and/or Sports Medicine Department. Furthermore, I understand that the possibility of injury, including catastrophic injury, does exist even though proper rules and techniques are followed to the fullest. . . .

In consideration of the University of Central Florida Athletic Association, Inc. permitting me to participate in intercollegiate athletics and to engage in all activities and travel related to my sport, I hereby voluntarily assume all risks associated with participation and agree to exonerate, save harmless and release the University of Central Florida Athletic Association, Inc., its agents, servants, trustees, and employees from any and all liability, any medical expenses not covered by the University of [*6] Central Florida Athletic Association’s athletics medical insurance coverage, and all claims, causes of action or demands of any kind and nature whatsoever which may arise by or in connection with my participation in any activities related to intercollegiate athletics.

The terms hereof shall serve as release and assumption of risk for my heirs, estate, executor, administrator, assignees, and all members of my family.

Id. at 1100-01. The Fifth District explained its determination that the release language was ambiguous, and the release was thus unenforceable:

This preamble, when coupled with a clause that does not expressly state that [the decedent] would be waiving a negligence action, could have easily led [the decedent] to believe that UCFAA would be supervising his training and instructing him properly (non-negligently), and that he was only being asked to sign the exculpatory clause to cover injuries inherent in the sport-that could occur “even though proper rules and techniques are followed to the fullest.”

Id. at 1102.

The ruling in Plancher is similar to the rulings of two other cases cited in the plaintiff’s initial brief. In Brooks, we invalidated an exculpatory clause in an agreement between a surgeon [*7] and patient because the language was unclear and ambiguous. 219 So. 3d at 891. In so holding, we explained that the release was unenforceable because the disclaimer was “qualified” by the statement that the surgeon would “do the very best to take care of [the patient] according to community medical standards”; this rendered the “purported release” contradictory and ambiguous. Id. We compared the release to the waiver in Goyings v. Jack & Ruth Eckerd Foundation, 403 So. 2d 1144 (Fla. 2d DCA 1981), disapproved of on other grounds by Sanislo, 157 So. 3d 256, which also included “additional language” that “create[d] ambiguity about exactly what type of claims are being released.” Brooks, 219 So. 3d at 891. In Goyings, ambiguity arose in a children’s camp contract in which the camp agreed to take reasonable precautions to assure the safety of the children, yet also sought to disclaim all liability. Goyings, 403 So. 2d at 1145-46. The court held this language to be ambiguous and contradictory because the camp “[b]y their own choice of language . . . agreed to take reasonable precautions to assure [the child’s] safety.” Id. at 1146.

The instant case is clearly distinguishable from Plancher, Brooks, and Goyings, as the disclaimer at issue here does not contain a misleading preamble or otherwise suggest that either AlliedBarton or its clients will take responsibility for [*8] an employee’s safety when working at client facilities. The disclaimer is limited to injuries which are covered under the workers’ compensation statutes and makes no promises or representations other than “state Workers’ Compensation statu[t]es cover work-related injuries that may be sustained by [the employee],” and that “reasonable medical treatment for an injury will be paid for by [AlliedBarton’s] Workers’ Compensation insurance.”

One other case cited by the plaintiff to support his ambiguity argument is Tatman v. Space Coast Kennel Club, Inc., 27 So. 3d 108 (Fla. 5th DCA 2009). In that case, there was some ambiguity as to whether the disclaimer released claims for injuries caused by one dog to another dog and/or to a person. Id. at 110-11. The court faulted the waiver agreement for its failure to “define whose injuries are covered in a circumstance, even though there are multiple possibilities.” Id.

No such ambiguity exists here, as the disclaimer specifically explains the rights released (“all rights . . . to make a claim, or commence a lawsuit, or recover damages or losses”); the beneficiaries of that release (“any customer (and the employees of any customer) of AlliedBarton Security Services to which I may be assigned”); and the situations in which this release [*9] applies (“arising from or relating to injuries which are covered under the Workers’ Compensation statu[t]es”). As in Sanislo, the exculpatory clause here is “unambiguous and enforceable [because] the intention to be relieved from liability was made clear and unequivocal and the wording was so clear and understandable that an ordinary and knowledgeable person w[ould] know what he or she is contracting away.” 157 So. 3d at 260-61.

II. Whether the disclaimer violates Florida public policy.

HN4[] Even waivers that are clear and unambiguous may nevertheless be unenforceable if they contravene Florida public policy. See id. at 260. However, “[a] contract is not void, as against public policy, unless it is injurious to the interests of the public or contravenes some established interest of society.” Griffin v. ARX Holding Corp., 208 So. 3d 164, 170 (Fla. 2d DCA 2016) (quoting Atl. Coast Line R.R. Co. v. Beazley, 54 Fla. 311, 45 So. 761, 785 (Fla. 1907)) (alteration omitted).

The plaintiff argues that even if AlliedBarton’s disclaimer is not void for ambiguity, it should be found unenforceable based on public policy considerations. Specifically, the plaintiff argues that “part of the purpose of the workers’ compensation statute is to permit negligence claims against a third-party tortfeasor—in this case the customers of AlliedBarton.”

In making this argument, the plaintiff [*10] references section 440.39, Florida Statutes (2017), which provides that an employee injured in the course of his or her employment by the negligent actions of a third-party tortfeasor “may accept compensation benefits under the provisions of this law, and at the same time such injured employee . . . may pursue his or her remedy by action at law or otherwise against such third-party tortfeasor.” § 440.39, Fla. Stat. (2017) (emphasis added).

HN5[] The plain language of this section establishes a permissive rather than mandatory option on the part of the employee to pursue an action at law. Agile Assurance Grp. Ltd. v. Palmer, 147 So. 3d 1017, 1018 (Fla. 2d DCA 2014) (“Generally, use of the word may deems relevant language permissive.”). Here, the plaintiff contracted away his right under section 440.39 to assert a claim against a third-party tortfeasor. HN6[] “[B]ecause of a . . . policy that favors the enforcement of contracts, as a general proposition, unambiguous exculpatory contracts are enforceable unless they contravene public policy.” Sanislo, 157 So. 3d at 260.

The disclaimer did not “contravene public policy.” It conforms to public policy. Section 440.015, Florida Statutes (2017), states:

It is the intent of the Legislature that the Workers’ Compensation Law be interpreted so as to assure the quick and efficient delivery of disability and medical benefits to an injured worker and to facilitate [*11] the worker’s return to gainful reemployment at a reasonable cost to the employer. . . . The workers’ compensation system in Florida is based on a mutual renunciation of common-law rights and defenses by employers and employees alike.

§ 440.015, Fla. Stat. (2017). HN7[] Our Supreme Court offered a similar view:

Fundamentally, the workers’ compensation system establishes a system of exchange between employees and employers, as well as employees and insurance carriers, that is designed to promote efficiency and fairness. Our governing precedent, as well as that of our district courts, has recognized that under this no-fault system, the employee relinquishes certain common-law rights with regard to negligence in the workplace and workplace injuries in exchange for strict liability and the rapid recovery of benefits.

Aguilera v. Inservices, Inc., 905 So. 2d 84, 90 (Fla. 2005).

Here, it is undisputed that the plaintiff’s injury fell under the scope of the workers’ compensation statutes and that he received payment for his injuries under AlliedBarton’s policy. HN8[] This result places the plaintiff in the same position as any AlliedBarton employee who may be injured while working directly for the employer on the employer’s premises. See Suarez v. Transmontaigne Servs., Inc., 127 So. 3d 845, 847 (Fla. 4th DCA 2013) (“Where an employee covered by the workers’ compensation [*12] act is injured on the job, the employee’s sole remedy against his employer is through the provisions of the act. His employer is immune from negligence claims arising out of the same injury.” (citing § 440.11(1), Fla. Stat. (2012)). AlliedBarton’s disclaimer does not subvert the workers’ compensation scheme, but rather, fully utilizes the statutory scheme as the plaintiff’s sole means of recovery. In no way does the disclaimer interfere with “the quick and efficient delivery of disability and medical benefits to an injured worker.” See § 440.015, Fla. Stat. (2017).

We also note that this waiver extends only to negligent conduct and does not infringe on the public policy prohibition of waiving liability for intentional torts, as the waiver only extends to injuries covered by workers’ compensation. See Aguilera, 905 So. 2d at 90 (“Functionally, the worker’s compensation system limits liability only for negligent workplace conduct which produces workplace injury, but does not extend to immunize intentional tortious conduct.”); Turner v. PCR, Inc., 754 So. 2d 683, 687 (Fla. 2000) (“Today we reaffirm our prior decisions recognizing, as have our district courts and many jurisdictions around the country, that workers’ compensation law does not protect an employer from liability for an intentional tort against [*13] an employee.”), superseded by statute on other grounds, § 440.11(1)(b), Fla. Stat. (2003), as noted in R.L. Haines Constr., LLC v. Santamaria, 161 So. 3d 528, 530-31 (Fla. 5th DCA 2014); see also § 440.11(1)(b), Fla. Stat. (2017) (the intentional tort exception).

At least two courts from other states have considered this same AlliedBarton disclaimer and found that it did not contravene public policy. See Bowman v. Sunoco, Inc., 620 Pa. 28, 65 A.3d 901 (Pa. 2013); Brown v. 1301 K Street Ltd. P’ship, 31 A.3d 902 (D.C. 2011).2

In Bowman, the Pennsylvania Supreme Court accepted jurisdiction to determine whether AlliedBarton’s disclaimer contravened Pennsylvania public policy. 65 A.3d at 908. The court ruled that the waiver did not violate the text of section 204(a) of Pennsylvania’s Workers’ Compensation Act—a statutory provision prohibiting agreements that waive a claim for damages prior to an injury. Id. The court explained that the workers’ compensation statute was intended to apply to agreements barring a claim against an employer, rather than to claims against a third party. Id. After examining the history of the Pennsylvania workers’ compensation statute, the court determined that the legislature provided two alternative tracks by which an employee could recover for a workplace injury. Id. The employee could recover under a statutory scheme or through a traditional action at law. Id. The court held:

 [*14] [B]ecause the Act once provided for a dual system of recovery, which made it a violation of public policy for an employer to avoid both recovery tracks, and continues to provide for an action at law when the employer is uninsured, we conclude public policy is not violated where, as here, the employee is absolutely covered under one of those two tracks, namely, the compensation scheme provided by Article III.

Id. The court concluded by noting the similar decisions of other courts and stated:

Appellant was not forced to sign the release, and the release did not in any way prevent her from receiving compensation for her work-related injuries as provided by the Act. As the Appeals Court of Massachusetts found in Horner v. Boston Edison Company, 45 Mass. App. Ct. 139, 695 N.E.2d 1093 (1998), the disclaimer here “extinguishes only the employee’s right to recover additional amounts as a result of a work-related injury for which the employee has already received workers’ compensation benefits.” Id. at 1095. Similarly, the Supreme Court of Arkansas found, with facts nearly identical to the present case, a similar disclaimer did not violate public policy because it did not indicate the employer was “attempting to escape liability entirely, but [was] instead, attempting to shield its [*15] clients from separate tort liability for those injuries that are covered by workers’ compensation . . . .” Edgin v. Entergy Operations, Inc., 331 Ark. 162, 961 S.W.2d 724, 727 (1998).

Id. at 910 (alteration in original) (footnote omitted).

Similar to the Pennsylvania decision, the District of Columbia Court of Appeals found that the exculpatory clause at issue here did not violate public policy. See Brown, 31 A.3d at 906-07. The court explained that it had invalidated exculpatory clauses disclaiming liability for self-dealing by a personal representative of a will and in the housing context with landlords trying to contract around the implied warranty of habitability. Id. The court continued, however, by explaining: “[i]n this case . . . we find nothing violative of public policy in an employer’s choice to protect its customers from liability for workplace injuries, choosing instead to compensate its employees itself exclusively through workers’ compensation.” Id. at 907. The court concluded by noting that the plaintiff voluntarily entered into the agreement and declined to invalidate the contract on the basis that it was offered on a “take it or leave it” basis. See id. at 907, n.4 (quoting Moore v. Waller, 930 A.2d 176, 182 (D.C. 2007)).

Here, as in Bowman and Brown, the plaintiff here was not coerced into signing the agreement and voluntarily agreed, as a condition [*16] of employment, to limit his avenues for recovery with respect to any future injuries to the State’s workers’ compensation program. The disclaimer was limited in both scope and application and did not prevent the “the quick and efficient delivery of disability and medical benefits to an injured worker.” See § 440.015, Fla. Stat. (2017). As such, we hold that AlliedBarton’s disclaimer is not void based on public policy considerations.

Conclusion

We agree with the trial court that the disclaimer signed by the plaintiff is unambiguous, not in violation of Florida public policy and, thus, enforceable. Accordingly, the trial court’s final summary judgment is affirmed.

Affirmed.

Levine, C.J., and Damoorgian, J., concur.


Federal District Court in Utah voids release for bicycle racing because of public policy!

Plaintiff was injured pre-riding a race course when he struck a barrier closing a street. Although the release was determined to be valid under Utah’s law, the court determined the Utah legislature had created laws and regulations to protect people that voided the release.

What is confusing is, but for a race being held at that location at a later date, everyone would be immune from suit for a road closure. Meaning cities and transportation departments are hard if not impossible to sue. How then could a race sponsor be sued for an accident on a road before the race?

Finken v. USA Cycling, Inc., 2020 U.S. Dist. LEXIS 97928

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

Plaintiff: Gerald Finken

Defendant: USA Cycling, Inc.; Breakaway Promotions, LLC; Ogden/Weber Convention Visitors Bureau, and Does 1-10

Plaintiff Claims: Negligence

Defendant Defenses: Release

Holding: For the Plaintiff

Year: 2020

Summary

Master bicycle racer training for race struck barricade on a closed road. Plaintiff was following race course map prior to race day. Court interpreted confusing Utah’s law on the subject of releases to hold the inherent risks of cycling did not cover barricades on the course and under Utah law, the release was void as against Utah Public Policy.

Facts

The 2014 USA Cycling Masters Road Championship race (“2014 Championship”) was held in Weber County, Utah on September 3-7, 2014. “USA Cycling is the national governing body for the sport of cycling in the United States of America and was responsible for conducting the 2014 Championships.” Amended Complaint, It entered into an Independent Contractor Agreement with Breakaway Promotions, LLC (“Breakaway”), where Breakaway agreed to perform multiple duties, including implementing the “course design and layout for each race course as well as start and finish areas.” Breakaway also agreed to be responsible for “[a]ll organization and course safety evaluations for each race venue.” Id. Breakaway further agreed to supply information “for the race Technical Guide” and contracted that such information would be “precise and accurate[].”USA Cycling retained the responsibility, however, to publish the Technical Guide “in a reproducible format that [could] be printed or sent digitally.” Id. The Technical Guide included maps and course route information.

Before publication, USA Cycling typically reviewed maps to ensure compliance with its rules. Once a map “was approved, [it] would post it online and make it part of the event materials.” “One of the purposes of posting” the map online was so “participants or prospective participants [could] see . . . where the course [was to be] located.” Chad Sperry, the owner of Breakaway, asserts Breakaway prepared “a preliminary map” for USA Cycling to review, and then “USA Cycling created their own map for the technical guide and to post online of this particular race course. USA Cycling disputes it prepared the map.

Part of the route for the race went along State Road 226, which is known as the Old Snowbasin Road. Prior to “submit[ing] the course layout to USA Cycling for the event,” Breakaway knew a portion of the road was closed near the Ard Nord Trailhead. A concrete barricade had been placed across the road due to the road’s condition beyond the barricade. The plan was to have the barricade removed after the road was repaired for the race. No warnings about the road closure were noted when the course map was posted for participants to view.

Sperry did a site visit in early August 2014, and saw the concrete barriers were still in place at that time. Additionally, Rachel Leif, USA Cycling’s National Events Manager, also learned prior to the race that a portion of the road was closed. “[A] concerned masters rider” sent an email to USA Cycling, which contained photographs of the route, including a picture of the concrete “barriers across the road and a ‘Road Closed’ sign.” The Vice President of National Events, Micah Rice, forwarded the email to Sperry on August 5, 2014, and copied Leif on it. “[B]y August 5th or 6th, 2014, [Leif] understood the road was closed.” Although she “was the point person,” and knew she was viewing pictures of the racecourse, she did not take action to notify participants of the road closure at that time. Her conversations with participants pertained only to potholes that needed to be fixed in the road. This is so even though Leif knew that “race participants will often pre-ride a course to prepare.” Similarly, Sperry took no action to notify participants about the closure.

On August 25, 2014, Finken did a pre-ride of the course using the map provided by USA Cycling. Finken alleges he rode the route cautiously during his pre-ride due to his lack of knowledge about the course and wet road conditions. Nevertheless, as he came around a turn and saw the concrete barriers across the road, he “locked up the brakes” but was not able to stop. He attempted to swerve onto a worn path beside the barrier, but his handlebars and left hand struck the barrier. Finken became airborne and landed on his right side. He was hospitalized for two days for serious neck and back injuries.

After the accident, USA Cycling modified the Technical Guide to warn participants doing a pre-ride that a portion of the route was closed and would remain closed until the day before the event.

Finken registered for the race on or about July 27, 2014. Part of that registration required Finken to sign the Waiver. Finken does not recall seeing or signing the Waiver, but for purposes of these summary judgment motions, it is undisputed that he signed it. The Waiver is broad. It notes “that cycling is an inherently dangerous sport” and includes dangers such as “collision with pedestrians, vehicles, other riders, and fixed or moving objects.” (emphasis omitted). It further notes “the possibility of serious physical and/or mental trauma or injury, or death associated with the event.” Finken agreed to “waive, release, discharge, hold harmless, and promise to indemnify and not to sue” USA Cycling and specified others for “any and all rights and claims including claims arising from [their] own negligence.” Finken also agreed to release “all damages which may be sustained by [him] directly or indirectly in connection with, or arising out of, [his] participation in or association with the event, or travel to or return from the event.”

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

The court first looked at Utah’s law on releases. The Supreme Court in Utah generally supported releases, but there were several exceptions to the law that made interpreting Utah’s law on releases difficult. See Utah Supreme Court Reverses long position on releases in a very short period of time.
The court found that three types of releases were void under Utah’s law.

Specifically, (1) releases that offend public policy are unenforceable; (2) releases for activities that fit within the public interest exception are unenforceable; and (3) releases that are unclear or ambiguous are unenforceable.

The court looked at the indemnification language in the release and found that most jurisdictions did not support indemnification, including Utah.

As to indemnification provisions, “[i]n general, the common law disfavors agreements that indemnify parties against their own negligence because one might be careless of another’s life and limb, if there is no penalty for carelessness.” “Because of this public safety concern,” Utah court’s “strictly construe indemnity agreements against negligence.”

For a release to be enforceable, the release must be communicated in a clear and unequivocal manner.

[Utah] Supreme Court has stated, “[t]o be effective, a release need not achieve perfection . . . . It suffices that a release be clear, unambiguous, and explicit, and that it express an agreement not to hold the released party liable for negligence.” Id. (quotations and citation omitted). Whether a contract is facially ambiguous is a question of law

If a release is not clear on its face, then it is unenforceable. The court found the release used by USA cycling was clear and released USA Cycling from claims of negligence. However, the court took issue with the language that was obviously intended to cover the race, and the accident occurred on a pre-race ride. The court found that this was a risk that was not inherent to a race on a public road.

But the plaintiff was not racing; he was riding, and closed roads are an inherent risk of cycling or driving or walking even!

After reviewing the language of the release, the court held the release was clear as to USA Cycling.

A co-defendant, Breakaway argued it was also covered by the release. The court found the language “Event Directors, Affiliates, Agents, and Officials” was not broad enough to cover Breakaway, which was an independent contractor. The court did not find that Breakaway was covered by that language and therefore, not protected by the release.

In addition, the agreement between Breakaway and USA Cycling stated that Breakaway would be “solely and entirely responsible for its acts….” Nowhere in the agreement “was Breakaway as an event director, or as an affiliate, agent, or official of USA Cycling.”

Having found the release was valid for USA Cycling the court then looked at whether or not the release was void for some other reasons, such as a violation of Utah Public Policy.

To determine whether a contract offends public policy,” a court must “first determine whether an established public policy has been expressed in either constitutional or statutory provisions or the common law.” The Utah Supreme Court also has stated, “for a contract to be void on the basis of public policy, there must be a showing free from doubt that the contract is against public policy.”

The court then reviewed two cases decided by the Utah Supreme Court. In both of those cases, one, an equine case and the other the Rothstein case (See Utah Supreme Court Reverses long position on releases in a very short period of time.) the court held that since the Utah Legislature had created statutes to protect the activities, the release was barred because the accidents that had happened to the plaintiffs in those cases were not an inherent risk of the activity.

Looking at the incident in this case, the court applied the inherent risks of bicycle racing to the facts, even though the plaintiff was not racing at the time. The court found that hitting a barricade closing a road was not an inherent risk of cycle racing.

The analysis for this was the requirement that the requirement that bicycle races have a special event permit and liability insurance. Since the liability insurance would not have to pay for a claim based on the inherent risk of cycling, but only those non-inherent risks, the State of Utah must believe that those non-inherent risks should not be precluded by a release.

Based on the Rothstein analysis and harmonization of the relevant statutes and regulations, the court concludes the Legislature and Department of Transportation allow bike races on public highways but recognize inherent risks associated with such races. Safety is paramount because a bike race can impact not only those in the race, but spectators, or motorists who have no association with it. Detailed maps and liability insurance are pre-requisites to obtaining a special event permit to help protect against risks. As the Utah Supreme Court noted in Hawkins, “one might be careless of another’s life and limb, if there is no penalty for carelessness.” Thus, the requirement for liability insurance helps ensure safety for participants, spectators, and the traveling public.

The court then made its stretch and found:

The court concludes, however, if an operator is allowed to obtain a waiver from participants even for risks that are not inherent in the sport, it would alter one of the elements for a special event permit. Liability insurance is meant to cover liabilities. If all liability has been waived for bike participants, then the purpose for carrying liability insurance is altered as to those participants. Because bike races on highways are prohibited unless the reasonable safety of participants, spectators, and the travelling public may be assured, a balance was struck and cannot be altered via a waiver of liability. Accordingly, the court concludes as a matter of public policy, the Waiver in this case is unenforceable because it attempts to waive liability even for non-inherent risks arising from or associated with the negligent acts of USA Cycling.

The court then denied the motion for summary judgment of both defendants USA Cycling and Breakaway Promotions, LLC.

So Now What?

Sometimes you are going to find a judge that is going to give the plaintiff’s money no matter what the law dictates. This appears to be one of those cases. However, this case is still going on and perhaps instead of settling the defendants will take the case to trial and win. At least appeal this decision so Utah is not stuck within an even worse decision.

In this case applying the risks of bicycle racing, which is sometimes done on a closed course with directors, smooth roads and no obstructions to everyday cycling. If you are riding along, and you come onto a closed road, you better be able to stop before you hit the barrier closing the road. That is a risk of cycling. That is not a risk of racing, and the plaintiff in this case was not racing. The plaintiff even admitted he was going.

There are going to be a lot more disclaimers on maps and information supplied to racers in the future from USA Cycling. The map will say this is the course ON RACE DAY. The release should be written to cover more than just the race, but all training and attendance at any USA Cycling event.

The USA Cycling release needs to be rewritten because as it was quoted by the court, the language limits the risks to the inherent risks of the sport, greatly reducing the value of the release. See Plaintiff argues that release was limited to the risks that were inherent in climbing walls. Inherent is a limiting term and does not expand the scope of the risks a release is written to include and Here is another reason to write releases carefully. Release used the term inherent to describe the risks which the court concluded made the risk inherently dangerous and voids the release.

At the very least, it is going to be difficult if not impossible to hold an amateur bicycle race, possibly even a professional bicycle race in Utah in the future. The liability is too great. The judge commented several times about the economic value cycling brought to the state then wrote a decision to end that financial benefit.

What do you think? Leave a comment.

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Finken v. USA Cycling, Inc., 2020 U.S. Dist. LEXIS 97928

Finken v. USA Cycling, Inc., 2020 U.S. Dist. LEXIS 97928

United States District Court for the District of Utah

June 3, 2020, Decided; June 3, 2020, Filed

Civil No. 1:17-cv-79

Counsel:  [*1] For Gerald Finken, Plaintiff: P. Matthew Muir, LEAD ATTORNEY, Lesley A. Manley, JONES WALDO HOLBROOK & MCDONOUGH, SALT LAKE CITY, UT.

For USA
Cycling, Defendant: Robert L. Janicki, LEAD ATTORNEY, Lance H. Locke, STRONG & HANNI, SANDY, UT.

For Ogden Weber Convention Visitors Bureau, Ogden/Weber Convention & Visitors Bureau, Defendants: Lloyd R. Jones, LEAD ATTORNEY, LAW OFFICE OF LLOYD R JONES, OKLAHOMA CITY, OK.

For Breakaway Promotions, LLC, Defendant: Dennis R. James, LEAD ATTORNEY, MORGAN MINNOCK RICE & MINER, SALT LAKE CITY, UT.

Judges: Clark Waddoups, United States District Judge. Magistrate Judge Paul M. Warner.

Opinion by: Clark Waddoups

Opinion

MEMORANDUM DECISION AND ORDER

INTRODUCTION

Plaintiff Gerald Finken entered the 2014 USA
Cycling Masters Road Championship race. On August 25, 2014, Finken did a pre-ride of the course using the map published for the race. As he came around a turn on the route, he saw a concrete barrier blocking the road. Finken attempted to swerve around it, but crashed and suffered serious neck and back injuries. He has filed suit against USA Cycling, Inc. and Breakaway Promotions, LLC for negligently failing to warn riders about the barricade. Defendants have moved for summary judgment [*2]  on the ground that Finken signed a waiver of liability. For the reasons stated below, the court denies the motions for summary judgment.

FACTUAL BACKGROUND

The 2014 USA
Cycling Masters Road Championship race (“2014 Championship”) was held in Weber County, Utah on September 3-7, 2014. “USA
Cycling is the national governing body for the sport of cycling in the United States of America and was responsible for conducting the 2014 Championships.” Amended Complaint, ¶ 11 (ECF No. 20); USA
Cycling Answer, ¶ 11 (ECF No. 30). It entered into an Independent Contractor Agreement with Breakaway Promotions, LLC (“Breakaway”), where Breakaway agreed to perform multiple duties, including implementing the “course design and layout for each race course as well as start and finish areas.” Breakaway Agmt., ¶ 7 (ECF No. 56-7). Breakaway also agreed to be responsible for “[a]ll organization and course safety evaluations for each race venue.” Id. Breakaway further agreed to supply information “for the race Technical Guide” and contracted that such information would be “precise and accurate[].” Id.
USA
Cycling retained the responsibility, however, to publish the Technical Guide “in a reproducible format that [*3]  [could] be printed or sent digitally.” Id. The Technical Guide included maps and course route information.
1
USA
Cycling Depo., 33:19-35:1 (ECF No. 38-5) (given by Charles R. Hodge).

Before publication, USA
Cycling typically reviewed maps to ensure compliance with its rules. Leif Depo., 9:24-10:10 (ECF No. 45-1). Once a map “was approved, [it] would post it online and make it part of the event materials.” Id. 10:10-14. “One of the purposes of posting” the map online was so “participants or prospective participants [could] see . . . where the course [was to be] located.” Id. at 10:15-20. Chad Sperry, the owner of Breakaway, asserts Breakaway prepared “a preliminary map” for USA
Cycling to review, and then “USA
Cycling created their own map for the technical guide and to post online of this particular race course.” Sperry Depo., 30:4-17 (ECF No. 56-8). USA
Cycling disputes it prepared the map. Id. at 30:18-23; Leif Depo., 11:1-5 (ECF No. 45-1).

Part of the route for the race went along State Road 226, which is known as the Old Snowbasin Road. Prior to “submit[ing] the course layout to USA
Cycling for the event,” Breakaway knew a portion of the road was closed near the Ard Nord Trailhead. [*4]  Sperry Depo., 20:10-14, 23:1-3 (ECF No. 56-8). A concrete barricade had been placed across the road due to the road’s condition beyond the barricade. Id. at 21:2-6, 22:16-20. The plan was to have the barricade removed after the road was repaired for the race. Id. at 26:21-23. No warnings about the road closure were noted when the course map was posted for participants to view.

Sperry did a site visit in early August 2014, and saw the concrete barriers were still in place at that time. Id. at 22:9-15, 23:8-11. Additionally, Rachel Leif, USA
Cycling‘s National Events Manager, also learned prior to the race that a portion of the road was closed. Leif Depo., 12:22-24 (ECF No. 45-1). “[A] concerned masters rider” sent an email to USA
Cycling, which contained photographs of the route, including a picture of the concrete “barriers across the road and a ‘Road Closed’ sign.” Id. at 14:1-19, 15:3-5. The Vice President of National Events, Micah Rice, forwarded the email to Sperry on August 5, 2014, and copied Leif on it. Id. at 14:18-22, 39:24-40:2. “[B]y August 5th or 6th, 2014, [Leif] understood the road was closed.” Id. at 15:10-13. Although she “was the point person,” and knew she was viewing [*5]  pictures of the racecourse, she did not take action to notify participants of the road closure at that time. See id. at 13:11-17, 15:6-9, 16:13-22. Her conversations with participants pertained only to potholes that needed to be fixed in the road. Id. at 17:14-18. This is so even though Leif knew that “race participants will often pre-ride a course to prepare.” Id. at 30:3-10. Similarly, Sperry took no action to notify participants about the closure. Sperry Depo., at 40:10-25 (ECF No. 56-8).

On August 25, 2014, Finken did a pre-ride of the course using the map provided by USA
Cycling. Finken Depo., 60:5-7, 63:6-16 (ECF No. 38-3). Finken alleges he rode the route cautiously during his pre-ride due to his lack of knowledge about the course and wet road conditions. Id. at 68:8-25. Nevertheless, as he came around a turn and saw the concrete barriers across the road, he “locked up the brakes” but was not able to stop. Id. at 78:18-79:12. He attempted to swerve onto a worn path beside the barrier, but his handlebars and left hand struck the barrier. Id. at 77:10-16, 80:7-12, 82:24-83:21. Finken became airborne and landed on his right side. Id. at 82:4-5, 83:25-84:2. He was hospitalized for [*6]  two days for serious neck and back injuries. Id. at 107:16-108:25.

After the accident, USA
Cycling modified the Technical Guide to warn participants doing a pre-ride that a portion of the route was closed and would remain closed until the day before the event. Leif Depo., 24:23-25:3, 26:3-7, 27:9-21. Finken contends Breakaway and USA
Cycling were negligent in not giving that warning sooner. Both defendants contend, however, they cannot be liable for negligence because Finken signed a pre-injury waiver entitled, “Acknowledgment of Risk, Release of Liability, Indemnification Agreement and Covenant not to Sue” (the “Waiver”).

Finken registered for the race on or about July 27, 2014. Order Summary, at 4 (ECF No. 45-1). Part of that registration required Finken to sign the Waiver. Finken does not recall seeing or signing the Waiver, but for purposes of these summary judgment motions, it is undisputed that he signed it. The Waiver is broad. It notes “that cycling is an inherently dangerous sport” and includes dangers such as “collision with pedestrians, vehicles, other riders, and fixed or moving objects.” Waiver, 2 (ECF No. 56-6) (emphasis omitted). It further notes “the possibility of serious [*7]  physical and/or mental trauma or injury, or death associated with the event.” Id.
Finken agreed to “waive, release, discharge, hold harmless, and promise to indemnify and not to sue” USA
Cycling and specified others for “any and all rights and claims including claims arising from [their] own negligence.” Id. (emphasis omitted). Finken also agreed to release “all damages which may be sustained by [him] directly or indirectly in connection[] with, or arising out of, [his] participation in or association with the event, or travel to or return from the event.” Id.

ANALYSIS

I. SUMMARY JUDGMENT STANDARD

“Summary judgment is proper if the movant demonstrates that there is ‘no genuine issue as to any material fact’ and that it is ‘entitled to judgment as a matter of law.'” Thom v. Bristol-Myers Squibb Co., 353 F.3d 848, 851 (10th Cir. 2003) (quoting Fed. R. Civ. P. 56(c)). The defendants’ motions seek summary judgment based on the terms of a preinjury waiver. The parties have applied Utah law to address the claims in this case.

II. WAIVER AND INDEMNITY AGREEMENTS

In Utah, “[i]t is well settled that preinjury releases of claims for ordinary negligence can be valid and enforceable.” Penunuri v. Sundance Partners, Ltd., 2013 UT 22, ¶ 25, 301 P.3d 984 (citation omitted). “Indeed . . . the majority of jurisdictions” permit “people to surrender their rights [*8]  to recover in tort for the negligence of others.” Id. (citations omitted). This does not mean, however, that preinjury waivers are favored. Rather, “the shortcomings of exculpatory clauses . . . provide ample cause to approach preinjury releases with caution.” Berry v. Greater Park City Co., 2007 UT 87, ¶ 11, 171 P.3d 442, overruled in part by Penunuri, 2017 UT 54, ¶¶ 22, 27, 423 P.3d 1150. Thus, not all preinjury waivers are valid. “Specifically, (1) releases that offend public policy are unenforceable; (2) releases for activities that fit within the public interest exception are unenforceable; and (3) releases that are unclear or ambiguous are unenforceable.” Penunuri, 2013 UT 22, ¶ 25, 301 P.3d 984 (quotations and citations omitted).

As to indemnification provisions, “[i]n general, the common law disfavors agreements that indemnify parties against their own negligence because one might be careless of another’s life and limb, if there is no penalty for carelessness.” Hawkins v. Peart, 2001 UT 94, ¶ 14, 37 P.3d 1062 (quotations and citation omitted). “Because of this public safety concern,” Utah court’s “strictly construe indemnity agreements against negligence.” Id. (citation omitted).

A. Clarity of the Waiver

“Preinjury releases, to be enforceable, must be communicated in a clear and unequivocal manner.” Pearce v. Utah Athletic Found., 2008 UT 13, ¶ 22, 179 P.3d 760, 767, overruled in part by Penunuri v. Sundance Partners, Ltd., 2017 UT 54, ¶¶ 22, 27, 423 P.3d 1150, (quotations and citations omitted). The Utah [*9]  Supreme Court has stated, “[t]o be effective, a release need not achieve perfection . . . . It suffices that a release be clear, unambiguous, and explicit, and that it express an agreement not to hold the released party liable for negligence.” Id. (quotations and citation omitted). Whether a contract is facially ambiguous is a question of law. Daines v. Vincent, 2008 UT 51, ¶ 25, 190 P.3d 1269 (citation omitted). If there is ambiguity as to the intent of the parties, that is a question of fact requiring admission of parol evidence. Id. (citation omitted). In this case, however, the court only addresses facial ambiguity because if the Waiver is not clear on its face, it is unenforceable.

i. USA
Cycling

The Waiver has clear language releasing USA
Cycling from negligence. What is less clear is negligence from what activity? The Waiver notes “that cycling is an inherently dangerous sport” due to such dangers as “collision with pedestrians, vehicles, other riders, and fixed or moving objects.” Waiver, at 2 (ECF No. 56-6) (emphasis added). It further notes “the possibility of serious physical and/or mental trauma or injury, or death associated with the event.” Id. (emphasis added). These provisions appear to provide notice about the event itself and [*10]  the dangers that may arise from it. Finken‘s injuries, however, arose from a pre-ride. When a map is published of a racecourse on a public road, one reasonably anticipates that road is open to travel. Although both defendants knew the road was closed until the race, they did not inform participants of that fact. Thus, they exposed pre-riders to a risk that is not inherent in a race on a public road. See Rutherford v. Talisker Canyons Fin., Co., LLC, 2019 UT 27, ¶¶ 19, 79, 445 P.3d 474 (citation omitted) (noting inherent risks are those that are an essential characteristic of a sport and “cannot be alleviated by the use of reasonable care” by an operator).

The Waiver goes on to state, however, that it releases “all damages which may be sustained by [Finken] directly or indirectly in connection[] with, or arising out of, [his] participation in or association with the event, or travel to or return from the event.” Id. (emphasis added). The only reason Finken was on the Old Snowbasin Road was in preparation for the event. His pre-ride therefore was in connection with his participation in that 2014 Championship race. Accordingly, the court concludes the Waiver was clear as to USA
Cycling.

ii. Breakaway

Breakaway contends the waiver also applied to it because it releases [*11]  “USA
Cycling‘s Event Directors, Affiliates, Agents, and Officials.” Mem. in Supp., at 14 (ECF No. 56). While the Waiver does release those persons, Breakaway has not specified which of those it was. It has failed to show it was an event director, affiliate, agent, or official.

The Waiver was USA
Cycling‘s waiver, and it appears to protect those persons directly affiliated with USA
Cycling. Based on Leif’s title as National Event Manager and Rice’s title as Vice President of National Events, the “Event Directors” may reference them and not Breakaway. The term is not defined in the Waiver and is too ambiguous for the court to conclude the Waiver is sufficiently clear on its fact to apply to Breakaway.

Breakaway entered an Independent Contractor Agreement that specifies it was “not an employee, or servant of” USA
Cycling. Breakaway Agmt., ¶ 2 (ECF No. 56-7). The agreement further specifies that Breakaway would “be solely and entirely responsible for its acts, and for the acts of independent contractor’s agents, employees, servants and subcontractors during the performance of this agreement.” Id. ¶ 3 (emphasis omitted). Nowhere in the agreement does it identify Breakaway as an event director, [*12]  or as an affiliate, agent, or official of USA
Cycling.

Because the Waiver does not clearly and unambiguously extend to Breakaway as an independent contractor, the court concludes Finken‘s claim against Breakaway is not barred67 c x.

B. Public Interest Exception

The public interest exception invalidates a preinjury release when “it attempts to limit liability for activities in which there is a strong public interest.” Berry, 2007 UT 87, ¶ 12, 171 P.3d 442. The Utah Supreme Court has adopted the six factors stated in Tunkl v. Regents of the University of California, 60 Cal. 2d 92, 32 Cal. Rptr. 33, 383 P.2d 441, 445-46 (Cal. 1963) to determine if the public interest exception applies. Pearce, 2008 UT 13, ¶ 17, 179 P.3d 760 (citations omitted). For recreational activities, however, it has gone one step further. In Pearce, the Court “join[ed] other states in declaring, as a general rule, that recreational activities do not constitute a public interest and that, therefore, preinjury releases for recreational activities cannot be invalidated under the public interest exception.” Id. at ¶¶ 18, 21.

As stated above, Finken‘s pre-ride was done in connection with his expected participation in the 2014 Championship. Because the event and the pre-ride were recreational activities, the court concludes the public interest exception is inapplicable in this case.

C. Public Policy Exception

Finken [*13]  further contends the Waiver is unenforceable because it is contrary to public policy. “To determine whether a contract offends public policy,” a court must “first determine whether an established public policy has been expressed in either constitutional or statutory provisions or the common law.” Penunuri, 2013 UT 22, ¶ 26, 301 P.3d 984. The Utah Supreme Court also has stated, “for a contract to be void on the basis of public policy, there must be a showing free from doubt that the contract is against public policy.” Id. (quotations, citation, and alteration omitted). Thus, this exception should be applied, “if at all, only with the utmost circumspection.” Id. (quotations and citation omitted).

i. Penunuri Analysis – Equine Act

In Penunuri, the Utah Supreme Court addressed whether Utah’s Equine and Livestock Activities Act made certain preinjury waivers unenforceable as a matter of public policy. The waiver at issue in Penunuri, noted “that horseback riding involves significant risk of serious personal injury, and that there are certain inherent risks associated with the activity . . . that may result in injury, harm, or death to persons on or around them.” Id. at ¶ 3 (quotations omitted).

Utah’s Equine Act specifies “equine [*14]  activity sponsors are not liable for injuries caused by the ‘inherent risks’ associated with equine activities.” Id. at ¶ 9 (citing Utah Code Ann. § 78B-4-202)). The same section also specifies, however, that a sponsor may be liable if an injury results from actions of the sponsor. Utah Code Ann. § 78B-4-202(2). The plaintiff argued the Legislature struck a balance as a matter of public policy by removing liability for inherent risks but keeping liability for negligent actions. She asserted the balancing of interests was similar to the Court’s analysis in Rothstein v. Snowbird Corp., 2007 UT 96, 175 P.3d 560. Thus, she argued any waiver barring recovery from a sponsor who was negligent was contrary to public policy. The Court disagreed.

It found the Equine Act did not have a public policy statement like Utah’s Inherent Risk of Skiing Act addressed in Rothstein. Id. at ¶ 24. When the Legislature eliminated liability for the inherent risks of horseback riding, it did “not explain the motivation behind” that decision. Id. at ¶ 32. Nor did the Equine Act note the economic importance of the activity for the State. Most importantly, it lacked the central purpose of the Skiing Act to “permit equine sponsors to purchase insurance at affordable rates.” Id. at ¶ 33 (quotations and citation omitted). [*15]  “[I]t was that ‘central purpose’ . . . that led [the Court] to infer that the Legislature had struck a ‘public policy bargain’ when it eliminated liability for the inherent risks of skiing.” Id. Without “a similar expression . . . in the Equine Act,” the Court “resist[ed] the temptation to add language or meaning to the Act where no hint of it exist[ed] in the text.” Id. (quotations and citation omitted). Thus, the Court concluded the waiver in Penunuri did not violate public policy. The Court reached a similar conclusion in Pearce, whereby “a preinjury release between a public bobsled ride operator and an adult bobsled rider” was deemed enforceable. Pearce, 2008 UT 13, ¶ 15, 179 P.3d 760.

ii. Rothstein Analysis – Skiing Act

The distinguishing factor between Rothstein and other cases is the combination of a public policy statement and a legislative balancing of risks between operators and participants. In Rothstein, a skier “collided with a retaining wall constructed of stacked railroad ties and embedded partially in the mountain.” Rothstein, 2007 UT 96, ¶ 3, 175 P.3d 560. “At the time of the accident, a light layer of snow camouflaged the retaining wall from [the skier’s] view. . . . [T]he retaining wall was unmarked and no measures had been taken to alert skiers [*16]  to its presence.” Id. Rather, the ski resort “had placed a rope line with orange flagging near the wall,” but the rope stopped short and created “a large gap between the end of the rope and a tree.” Id. The skier thought the gap “indicated an entrance to the Fluffy Bunny run.” Id. He suffered serious injuries when he collided with the retaining wall. Id.

When analyzing Utah’s Skiing Act, the Court observed that “[s]eldom does a statute address directly the public policy relevant to the precise legal issue confronting a court.” Id. ¶ 11. It nevertheless found a clear “public policy rationale” for the Skiing Act. Id. Within that statute, the Legislature found that skiing “‘significantly contribute[es] to the economy of this state.'” Id. ¶ 12 (quoting Utah Code Ann. § 78-27-51 renumbered at
§ 78B-4-401). The Legislature also found ski operators were having difficulty obtaining insurance at an affordable rate or at all. Id. (citing Utah Code Ann. § 78-27-51). Thus, it struck a balance where operators could not be held liable “‘for injuries resulting from those inherent risks.'” Id. (quoting Utah Code Ann. § 78-27-51).

The Court therefore found the following:

The bargain struck by the Act is both simple and obvious from its public policy provision: ski area operators would [*17]  be freed from liability for inherent risks of skiing so that they could continue to shoulder responsibility for noninherent risks by purchasing insurance. By extracting a preinjury release from [the skier] for liability due to their negligent acts, [the resort] breached this public policy bargain.

Id. ¶ 16. The distinguishing factor between the balance struck in the Equine Act and the balance struck in Skiing Act was the express public policy statement that the balance was necessary due to the economic benefit to the State and the ski resort’s inability to insure itself for the inherent risks associated with skiing.

iii. Bike Racing Analysis

The facts giving rise to Finken‘s injuries are closely analogous to the facts in Rothstein. In Rothstein, a wall was unmarked and where one did not expect it to be. In this case, a barricade was unmarked on the course map and where one did not expect it to be. Neither the wall nor the barricade was within the inherent risks of the relevant sport. Although the facts are similar between the two cases, the issue before the court is whether Utah has a public policy that precludes USA
Cycling from avoiding liability for risks that are not inherent in a [*18]  bike race.

The Utah Legislature has found there are inherent risks associated with bike riding. Utah Code Ann. § 78B-4-509(1)(a), (d). For injuries arising from inherent risks of participating in bike riding, the Legislature has afforded protection to “a county, municipality, local district, . . . or special service district.” Id.
§ 78B-4-509(2)(a). It also has afforded protection to “the owner of property that is leased, rented, or otherwise made available to” the government “for the purpose of providing or operating a recreational activity.” Id.
§ 78B-4-509(2)(b). The Legislature chose not to “relieve any other person from an obligation that the person would have in the absence of this section to exercise due care.” Id.
§ 78B-4-509(3)(b). That balance is different from the Equine Act and the Skiing Act because it leaves operators of biking events without any statutory protections.

In another section of statute, the Legislature more particularly addressed bike races. It stated bike racing is permitted on a highway only if approved by the highway authority of the relevant jurisdiction. Id.
§ 41-6a-1111. The State has a significant interest in ensuring safety on its public highways. Bike racing can impact not just the participants, but spectators or those in a motor vehicle trying [*19]  to navigate the same highway. Thus, the Legislature specified before approval may be granted, conditions must exist to “assure reasonable safety for all race participants, spectators, and other highway users.” Id.
§ 41-6a-1111(2)(b).

The Utah Department of Transportation instituted regulations to carry out the intent and purpose of the statute. The Department noted one purpose of its regulation was to “[e]ncourage and support special events such as . . . bicycle races” because it “recognize[d] their importance to Utah’s economy and to the well-being of residents of and visitors to Utah.” Utah Admin. Code R920-4-1(1)(b). Nevertheless, “to further . . . governmental interests,” it implemented safety protocols to ensure “[t]he safety of all participants in, and spectators of, special events,” as well as the travelling public. Id. at R920-4-1(2)(b), (c).

One protocol requires a person or entity to obtain a special event permit before holding a bike race on a highway. Id. at R920-4-1(4)(g), (i). To obtain a special event permit, the applicant must “provide a detailed map.” Id. at R920-4-13. The applicant also must have “liability insurance,” and such insurance must list the State of Utah “as an additional insured.” Id. at R920-4-9(1);  [*20] see also id. at R920-4-6. Consistent with statute, the applicant must obtain a waiver and release of liability from participants that releases the State and governmental personnel. Id. at R920-4-9(3)-(4). Although the statutory provision bars claims against the government for inherent risks, the regulatory waiver bars all claims. Similarly, though, there is no exclusion from liability for the operator of a bike race.

Based on the Rothstein analysis and harmonization of the relevant statutes and regulations, the court concludes the Legislature and Department of Transportation allow bike races on public highways but recognize inherent risks associated with such races. Safety is paramount because a bike race can impact not only those in the race, but spectators, or motorists who have no association with it. Detailed maps and liability insurance are pre-requisites to obtaining a special event permit to help protect against risks. As the Utah Supreme Court noted in Hawkins, “one might be careless of another’s life and limb, if there is no penalty for carelessness.” Hawkins, 2001 UT 94, ¶ 14, 37 P.3d 1062 (quotations and citation omitted). Thus, the requirement for liability insurance helps ensure safety for participants, spectators, [*21]  and the travelling public.

Utah has recognized, however, that if liability insurance must cover inherent and non-inherent risks of a sport, the cost may be prohibitive and thereby hinder holding events or activities that would provide an economic benefit to the state. Hindering such economic benefits would be contrary to one of the stated purposes of the regulation. Thus, one may reasonably conclude that liability for inherent risks may be waived by the bike race participants so as not to hinder the economic benefits to the State.

The court concludes, however, if an operator is allowed to obtain a waiver from participants even for risks that are not inherent in the sport, it would alter one of the elements for a special event permit. Liability insurance is meant to cover liabilities. If all liability has been waived for bike participants, then the purpose for carrying liability insurance is altered as to those participants. Because bike races on highways are prohibited unless the reasonable safety of participants, spectators, and the travelling public may be assured, a balance was struck and cannot be altered via a waiver of liability. Accordingly, the court concludes as a matter of [*22]  public policy, the Waiver in this case is unenforceable because it attempts to waive liability even for non-inherent risks arising from or associated with the negligent acts of USA
Cycling.
2

iv. Modification of the Utah’s Skiing Act

An additional issue has arisen since briefing on the motions. From 2007 until 2020, the Rothstein balance existed between operators and skiers whereby preinjury waivers were enforceable for risks inherent in skiing, but not for unforeseen risks arising from the negligent actions of the operator. See Rothstein, 2007 UT 96, ¶¶ 16, 19, 175 P.3d 560. In 2020, the Utah Legislature altered this balance by passing legislation that allows preinjury waivers without regard to whether the risk was unforeseen. Utah Code Ann. § 78B-4-405 (2020). Moreover, claims brought on or after May 12, 2020, if not otherwise barred, have a noneconomic damages cap of $1,000,000. Id. at § 78B-4-406. The Legislature’s actions have abrogated the ruling in Rothstein and will necessarily impact future preinjury waiver analyses for other recreational activities.

The question here is whether the Legislature’s change of public policy should be applied retroactively to the analysis in this case. The United States Supreme Court has stated “the principle that the legal effect [*23]  of conduct should ordinarily be assessed under the law that existed when the conduct took place has timeless and universal appeal.” Landgraf v. USI Film Prods., 511 U.S. 244, 265, 114 S. Ct. 1483, 1497, 128 L. Ed. 2d 229 (1994) (quotations and citation omitted). Moreover, the Due Process Clause “protects the interests in fair notice and repose that may be compromised by retroactive legislation.” Id. at 266 (citation omitted).

Here, the legislation was approved on March 28, 2020, but made effective May 12, 2020. This shows a clear intent for future application of law. Accordingly, the public policy analysis applied in Rothstein was still applicable at the time of the events in this case and informs this court’s decision.

CONCLUSION

For the reasons stated above, the court DENIES the Motions for Summary Judgment filed by USA
Cycling and Breakaway (ECF Nos. 38, 56).

DATED this 3rd day of June, 2020.

BY THE COURT:

/s/ Clark Waddoups

Clark Waddoups

United States District Judge


Tennessee Supreme Court makes writing releases a little trickier.

The facts support throwing out the release, but the way the court did makes it tough to write a release.

Copeland v. HealthSouth/Methodist Rehab. Hosp., 2018 Tenn. LEXIS 745

State: Tennessee

Plaintiff: Frederick Copeland

Defendant: MedicOne Medical Response Delta Region, Inc.

Plaintiff Claims: Negligence

Defendant Defenses: Release

Holding: For the plaintiff

Year: 2018

Summary

To get to a physical therapy appointment arranged by a hospital the patient was forced to sign a release. While exiting the car service the plaintiff was injured. The Tennessee Supreme Court worked hard but said if you treat people this badly, we will throw out your release and did.

Facts

Mr. Copeland was a seventy-seven-year-old hospital patient recovering from knee replacement surgery who needed to go to a follow-up appointment at his doctor’s office. Mr. Copeland did not select, hire, or pay MedicOne. Instead, the hospital where Mr. Copeland was a patient arranged for his transportation with MedicOne. The MedicOne driver presented Mr. Copeland with a pre-printed, two-sided document containing two different forms — the Run Report and the Agreement — which Mr. Copeland had limited time to review and sign before being transported to his doctor’s appointment. The Agreement consisted of nine single-spaced paragraphs, including three paragraphs of exculpatory language. The MedicOne driver spent only nineteen minutes at the hospital, which began with his arrival, and included going to Mr. Copeland’s room, pushing Mr. Copeland in a wheelchair to the hospital entrance, getting him into the van, loading his walker into the back of the van, and having Mr. Copeland review and sign the two forms.

The MedicOne driver presented the Agreement to Mr. Copeland on a take-it-or-leave-it basis with the expectation that he would sign it. The driver did not understand the implications of the Agreement, could not have explained it if asked, had no authority to alter it, and would not have transported Mr. Copeland to his appointment if he had not signed the document.

The Agreement consisted of nine single-spaced paragraphs, including three paragraphs of exculpatory language. The exculpatory language provided that Mr. Copeland was releasing MedicOne from any and all claims arising from or in any way associated with any transportation services provided by MedicOne.

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

The facts explain the plaintiff was put in a position where he had no choice, suffer further injury by missing his appointment or sign the document.

The court said releases are fine in Tennessee, but not this one.

We find the exculpatory language in the Agreement to be overly broad and ambiguous. Although the Agreement also contains a severability clause, the three paragraphs containing broad, all-encompassing exculpatory language combined with the severability paragraph do not make it clear and unmistakable what Mr. Copeland was giving up by signing the Agreement, especially during the limited time he was given to read and comprehend the document.

That practical necessity distinguishes this case from those involving purely voluntary or recreational activities, which generally do not affect the public interest or raise public policy concerns.

Based on the circumstances of the parties, including contemporary societal expectations, we conclude that enforcement of the Agreement against a member of the public in Mr. Copeland’s position would be contrary to the public interest.

The court went through the five steps necessary to write a valid release in Tennessee.

First, a party may not, for public policy reasons, exempt itself from liability for gross negligence, reckless conduct, or intentional wrongdoing.

Second, exculpatory provisions in contracts involving common carriers are unenforceable on the grounds of public policy and disparity of bargaining power.

Third, although exculpatory agreements are generally enforceable, in many states they are disfavored.

Fourth, most courts require that the exculpatory language be unequivocal and clear. An exculpatory clause must “clearly, unequivocally, specifically, and unmistakably” state the intention to exempt one of the parties from liability for its own negligence.

Fifth, most jurisdictions do not enforce exculpatory provisions that are contrary to public policy.

Releases in Tennessee are still valid in Tennessee.

After reviewing precedent in this state and across the country, we conclude that the public policy in Tennessee has historically favored freedom of contract. Thus, contracts exempting one party from liability for negligence are not disfavored and are generally enforceable.

However, the court tightened up the requirements for a release to be valid. The court then created 3 factors that any release must meet to be valid in Tennessee.

…we hold that the enforceability of an exculpatory agreement should be determined by considering the totality of the circumstances and weighing these non-exclusive factors: (1) relative bargaining power of the parties; (2) clarity. of the exculpatory language, which should be clear, unambiguous, and unmistakable about what the party who signs the agreement is giving up; and (3) public policy and public interest implications.

The court also decided the bargaining power of the parties should also be taken into consideration.

Relative bargaining power. Although there is no precise rule by which to define sufficient disparity in bargaining power between the parties to invalidate an exculpatory agreement, two key criteria are the importance of the service at issue for the physical or economic well-being of the party signing the agreement and the amount of free choice that party has in seeking alternate services.

The court did carve out a specific exception, to some extent for recreational activities.

That practical necessity distinguishes this case from those involving purely voluntary or recreational activities, which generally do not affect the public interest or raise public policy concerns.

So Now What?

If your activities are in Tennessee or your business is in Tennessee you need to check to make sure your release meets these new requirements.

What do you think? Leave a comment.

Copyright 2018 Recreation Law (720) 334 8529

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Copeland v. HealthSouth/Methodist Rehab. Hosp., 2018 Tenn. LEXIS 745

Copeland v. HealthSouth/Methodist Rehab. Hosp., 2018 Tenn. LEXIS 745

Supreme Court of Tennessee, At Jackson

May 31, 2018, Session Heard at Nashville1; December 20, 2018, Filed

No. W2016-02499-SC-R11-CV

FREDERICK COPELAND v. HEALTHSOUTH/METHODIST REHABILITATION HOSPITAL, LP ET AL.

Prior History: Tenn. R. App. P. 11 [*1] Appeal by Permission; Judgment of the Court of Appeals Reversed; Judgment of the Trial Court Vacated; Remanded to the Trial Court. Appeal by Permission from the Court of Appeals, Circuit Court for Shelby County. No. CT-000196-16. Rhynette N. Hurd, Judge.

Counsel: Donald K. Vowell, Knoxville, Tennessee, and David E. Gordon and Erin L. Hillyard, Memphis, Tennessee, for the appellant, Frederick Copeland.

Diana M. Comes, Memphis, Tennessee, for the appellee, MedicOne Medical Response Delta Region, Inc.

Judges: SHARON G. LEE, J., delivered the opinion of the Court, in which JEFFREY S. BIVINS, C.J., and CORNELIA A. CLARK, HOLLY KIRBY, and ROGER A. PAGE, JJ., joined.

Opinion by: SHARON G. LEE

OPINION

I.

Frederick Copeland was a patient at HealthSouth Rehabilitation Hospital North Memphis (HealthSouth [*3] or the hospital) after having knee replacement surgery. On December 2, 2014, Mr. Copeland had an appointment to see his orthopedic surgeon. The hospital had contracted with MedicOne Medical Response Delta Region, Inc. (MedicOne), a medical transportation company, to provide transportation services for its patients, including Mr. Copeland.

On the day of Mr. Copeland’s appointment at his orthopedic surgeon’s office, a MedicOne employee driving a wheelchair van2 arrived at the hospital to take Mr. Copeland to and from the appointment. After the driver pushed Mr. Copeland in a wheelchair from his room to the entrance of the hospital, Mr. Copeland got out of the wheelchair, walked to the van using a walker, and climbed into the front passenger seat. Before leaving HealthSouth, the MedicOne driver gave Mr. Copeland a pre-printed two-sided document that contained on one side a Wheelchair Van/Transportation Run Report (Run Report) and on the other side a Wheelchair Van Transportation Agreement (Agreement). The Run Report provided that HealthSouth was responsible for MedicOne’s charges. The Agreement consisted of nine single-spaced paragraphs, including three paragraphs of exculpatory language. [*4] The exculpatory language provided that Mr. Copeland was releasing MedicOne from any and all claims arising from or in any way associated with any transportation services provided by MedicOne. After Mr. Copeland signed the Run Report and the Agreement, the MedicOne driver took him to his doctor’s appointment.

After the appointment, the MedicOne driver returned to the doctor’s office to take Mr. Copeland back to the hospital. As Mr. Copeland was getting into the van, he lost his footing on the running board, fell, and was injured.

Mr. Copeland sued MedicOne for negligence in the Shelby County Circuit Court.3 MedicOne moved to dismiss or, in the alternative, for summary judgment based on the exculpatory language in the Agreement. The trial court granted summary judgment in favor of MedicOne.4 The trial court found that the Agreement was not a contract of adhesion and that the services provided by MedicOne were not professional services, but merely transportation services, and so, the exculpatory provisions were enforceable. The Court of Appeals affirmed, finding that the case involved non-professional transportation services and presented no significant public interest considerations. Copeland [*5] v. HealthSouth/Methodist Rehab. Hosp., LP, No. W2016-02499-COA-R3-CV, 2017 Tenn. App. LEXIS 548, 2017 WL 3433130, at *3, *5 (Tenn. Ct. App. Aug. 10, 2017).

II.

The issue here is the validity of the exculpatory language in the Agreement signed by Mr. Copeland releasing MedicOne from any liability. HN3[] We review the trial court’s summary judgment ruling on this question of law de novo with no presumption of correctness. Rye v. Women’s Care Ctr. of Memphis, MPLLC, 477 S.W.3d 235, 250 (Tenn. 2015) (citing Bain v. Wells, 936 S.W.2d 618, 622 (Tenn. 1997)); Circle C Constr., LLC v. Nilsen, 484 S.W.3d 914, 917 (Tenn. 2016) (citing Hamblen Cnty. v. City of Morristown, 656 S.W.2d 331, 335-36 (Tenn. 1983)) (stating that contract interpretation is a question of law).

There is a natural tension between Tennessee’s public policy that favors allowing parties to have freedom to contract5 and the public policy that disfavors allowing a party to escape the consequences of the party’s negligence. In Olson v. Molzen, 558 S.W.2d 429 (Tenn. 1977), we adopted factors to be considered when determining the enforceability of an exculpatory agreement. Olson involved an agreement, signed by a patient before a medical procedure, releasing the doctor from “any present or future legal responsibility associated with” the procedure. Id. at 429-30. The procedure was unsuccessful, and the patient sued the doctor. The trial court dismissed the lawsuit based on the agreement. Id. at 429. The Court of Appeals affirmed the dismissal. Id.

On review, we acknowledged that HN4[] parties may agree that one party will not be liable for negligence to [*6] the other party, subject to certain exceptions. Id. at 430 (citing Moss v. Fortune, 207 Tenn. 426, 340 S.W.2d 902 (Tenn. 1960)). This Court recognized a line of Tennessee cases upholding such agreements,6 but none involving a physician, who is a “professional person operating in an area of public interest and pursuing a profession subject to licensure by the state.” Id. at 430. We distinguished between “tradesmen in the market place” and those “experts” who were practicing state regulated professions. Id. This Court noted that because certain relationships require of one party “‘greater responsibility than that required of the ordinary person,'” an exculpatory agreement between such parties is “‘peculiarly obnoxious.'” Id. (quoting Williston on Contracts § 1751 (3d ed. 1972)). To guide the analysis, this Court adopted a series of factors from Tunkl v. Regents of University of California, 60 Cal. 2d 92, 32 Cal. Rptr. 33, 383 P.2d 441 (Cal. 1963), to be considered in determining whether a transaction affected the public interest:

a. It concerns a business of a type generally thought suitable for public regulation.

b. 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.

c. The party holds himself out as willing to perform this service for any member [*7] of the public who seeks it, or at least for any member coming within certain established standards.

d. As a result of the essential nature of the services, 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.

e. 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 fees and obtain protection against negligence.

f. 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.

Olson, 558 S.W.2d at 431. Noting that HN5[] not all of these factors must be present for the exception to apply, we found that all the factors were present in Olson and held that the exculpatory agreement was unenforceable. Id. at 431-32.

After our decision in Olson, there was some confusion about whether the Olson factors applied only to exculpatory agreements involving professional services. In two cases, the Court of Appeals determined that the Olson analysis did not [*8] apply because the cases did not involve contracts for professional services. In Schratter v. Development Enterprises, Inc., 584 S.W.2d 459, 461 (Tenn. Ct. App. 1979), the Court of Appeals upheld an exculpatory provision in a residential lease, based in part on its determination that this Court had limited application of the Olson factors to professional service contracts.7 Likewise, in Parton v. Mark Pirtle Oldsmobile-Cadillac-Isuzu, Inc., 730 S.W.2d 634, 636 (Tenn. Ct. App. 1987) (citing Olson, 558 S.W.2d at 430), the Court of Appeals declined to apply the Olson factors to a contract for automobile repair because it concluded that this Court did not intend for the Olson analysis to apply to tradesmen in the market place.8 By the same token, in Petty v. Privette, 818 S.W.2d 743 (Tenn. Ct. App. 1989), the Court of Appeals applied the Olson factors to exculpatory language in a will that was intended to protect the attorney who had drafted the will. Finding only two of the Olson factors were present, the Court of Appeals held that this was insufficient to render the exculpatory clause in the will unenforceable as against public policy. Id. at 746.9

Yet the Court of Appeals in other cases applied the Olson factors when ruling on the enforceability of exculpatory provisions in contracts not involving professional services. In Childress v. Madison County, 777 S.W.2d 1 (Tenn. Ct. App. 1989), the Court of Appeals analyzed an exculpatory release for participation in the Special Olympics. The intermediate appellate [*9] court held that the release did not fall under the exception provided by Olson based on the lack of any business motivations, citing the references in Olson to “‘business, bargaining strength in economic settings, purchasers, and payment of additional fees, to obtain protection against negligence'” and concluded that “the rule was intended to operate primarily in the marketplace.” Id. at 4 (quoting Olson, 558 S.W.2d at 431). The Court of Appeals in Smith v. Peoples Bank of Elk Valley, No. 01A01-9111-CV-00421, 1992 Tenn. App. LEXIS 477, 1992 WL 117061, at *5 (Tenn. Ct. App. June 3, 1992), analyzed an exculpatory provision in a safe deposit box rental contract using the Olson factors. The intermediate appellate court held that the exculpatory provision was unenforceable because all factors were present — safe deposit box rental was regulated by statute and involved a service of great importance to the public; banks hold themselves out as willing to perform this service for any member of the public able to pay the rental fees; banks have greater bargaining power because most people cannot provide that type of protection for their valuables; it was a standardized contract of adhesion not open to negotiation; and the customer’s property was placed under the control of the bank. 1992 Tenn. App. LEXIS 477, [WL] at *4.

In still other post-Olson cases, the Court of Appeals did not mention the Olson [*10] factors or any professional services requirement but relied on the language of the contract to determine the enforceability of the exculpatory provisions. In Hays v. Ernesto’s, Inc., 1987 Tenn. App. LEXIS 2684, 1987 WL 11119, at *2 (Tenn. Ct. App. May 19, 1987), the Court of Appeals found that exculpatory language in a release signed by a party before riding a mechanical bull was enforceable because parties may contract for a release from liability and an assumption of the risk incident to negligence. Similarly, in Buckner v. Varner, 793 S.W.2d 939, 941 (Tenn. Ct. App. 1990), the Court of Appeals upheld a waiver of liability signed by the plaintiff before participating in horseback riding.

After Olson, this Court upheld contractual provisions limiting liability to a sum certain. In Affiliated Professional Services v. South Central Bell Telephone Co., 606 S.W.2d 671, 672 (Tenn. 1980), the Court declined to apply the Olson analysis to a provision in a contract with a telephone company that limited the company’s liability for errors or omissions in yellow pages advertisements to the cost of the advertisement. Citing Smith v. Southern Bell Telephone & Telegraph Co., 51 Tenn. App. 146, 364 S.W.2d 952 (Tenn. 1962) and noting that nearly every appellate court that had considered this frequently litigated issue had upheld the limitation of liability in these contracts with telephone companies, the Court found that the case did not fall within the purview of Olson and upheld the agreement. Affiliated Professional Services, 606 S.W.2d at 672. Later, in Houghland v. Security Alarms & Services, Inc., 755 S.W.2d 769, 773 (Tenn. 1988), this Court upheld a clause limiting the liability [*11] of a company providing security alarm monitoring to a sum certain, citing cases from other jurisdictions and noting that such limitations of liability have generally been upheld in these types of cases against providers of alarm monitoring services. The Court in Houghland mentioned Olson, observing that agreements such as the one examined there would be unenforceable if licensed professional personnel were involved. Id. (citing Olson, 558 S.W.2d 429). Houghland and its progeny involved limitations of liability and liquidated damages provisions, and thus were distinguishable from the agreement in Olson. In addition, the alarm monitoring company in Houghland did not present the contract on a “take-it-or-leave-it” basis, but offered the customer the opportunity to pay more for the services in return for the company assuming greater liability. Id.; see also Underwood v. Nat’l Alarm Servs., Inc., No. E2006-00107-COA-R3-CV, 2007 Tenn. App. LEXIS 305, 2007 WL 1412040 (Tenn. Ct. App. May 14, 2007); E.B. Harvey & Co., Inc. v. Protective Sys., Inc., 1989 Tenn. App. LEXIS 105, 1989 WL 9546 (Tenn. Ct. App. 1989).

In another post-Olson case, Adams v. Roark, 686 S.W.2d 73, 75 (Tenn. 1985), this Court did not reference the Olson factors in finding that a release signed by a participant in a motorcycle race was enforceable in a claim for ordinary negligence.10 Instead, the Court noted that the public policy of Tennessee favors freedom to contract and [*12] that releases from liability in motor racing events are expressly permitted by statute in Tennessee.11
Id. at 75-76.

This Court next considered the applicability of the Olson factors to a nonprofessional services contract in Crawford v. Buckner, 839 S.W.2d 754 (Tenn. 1992). Analyzing an exculpatory clause in a residential lease contract, the Court found that the landlord-tenant relationship satisfied all of the Olson factors, and thus the exculpatory clause in the lease was unenforceable because it was contrary to public policy. Id. at 758-59. The Court explained HN6[] “where there is no declaration in the Constitution or the statutes, and the area is governed by common law doctrines, it is the province of the courts to consider the public policy of the state as reflected in old, court-made rules.” Id. at 759. Thus, “the exception to the freedom of contract rule for exculpatory [provisions] affecting the public interest is also a judicial declaration of public policy.” Id.

The Court in Crawford expressly overruled Schratter and other prior inconsistent decisions, noting Schratter’s conclusion that the Olson factors applied only to contracts involving professional services. Id. at 760. The Court held that “under the facts here,” the exculpatory clause in the lease was against public policy. Id. [*13] This limiting language appears to have added to the confusion about the applicability of the Olson factors because even after Crawford, the inconsistency in application continued.

In some post-Crawford cases, the Court of Appeals determined that the Olson factors did not apply because the agreement did not involve professional services. Petry v. Cosmopolitan Spa Int’l, Inc., 641 S.W.2d 202, 203 (Tenn. Ct. App. 1982) (stating that “Olson did not overrule Empress” because spas are not “businesses ‘of a type generally thought suitable for regulation'”) (quoting Olson, 558 S.W.2d at 431); Floyd v. Club Sys. of Tenn., Inc., No. 01-A-01-9807-CV-00399, 1999 Tenn. App. LEXIS 473, 1999 WL 820610, at *4 (Tenn. Ct. App. July 20, 1999) (finding, based on Petry, that the Olson test did not apply to health club contracts); Henderson v. Quest Expeditions, Inc., 174 S.W.3d 730, 732-33 (Tenn. Ct. App. 2005) (upholding an exculpatory waiver for whitewater rafting because it did not involve a professional trade affecting the public interest); Thrasher v. Riverbend Stables, LLC, No. M2008-02698-COA-RM-CV, 2009 Tenn. App. LEXIS 50, 2009 WL 275767, at *3 (Tenn. Ct. App. Feb. 5, 2009) (quoting Russell v. Bray, 116 S.W.3d 1, 6 (Tenn. Ct. App. 2003)) (upholding an exculpatory provision in a contract for boarding and training horses because the Olson test applied only to agreements involving a professional person).

Yet in other post-Crawford cases, the Court of Appeals applied the Olson analysis to contracts that did not involve professional services. Lomax v. Headley Homes, No. 02A01-9607-CH-00163, 1997 Tenn. App. LEXIS 360, 1997 WL 269432, at *7-9 (Tenn. Ct. App. May 22, 1997) (holding an exculpatory provision in a home construction loan agreement [*14] unenforceable under the Olson analysis); Hancock v. U-Haul Co. of Tenn., No. 01-A-01-9801-CC-00001, 1998 Tenn. App. LEXIS 828, 1998 WL 850518, at *4-5 (Tenn. Ct. App. Dec. 10, 1998) (concluding an exculpatory provision was enforceable in a self-storage facility contract because although three of the Olson factors were present, the “important questions” of state regulation, reasonable alternatives for the plaintiff, and control over the plaintiff’s property were lacking); Lane-Detman, L.L.C. v. Miller & Martin, 82 S.W.3d 284, 293-94 (Tenn. Ct. App. 2002) (applying the Olson analysis to a contract with a law firm to provide background checks and holding that the contract was enforceable because “at most” three of the Olson factors were present, both parties to the contract were sophisticated commercial entities, and the services provided were not subject to regulation); Tompkins v. Helton, No. M2002-01244-COA-R3-CV, 2003 Tenn. App. LEXIS 433, 2003 WL 21356420, at *4 (Tenn. Ct. App. June 12, 2003) (applying the Olson factors to uphold a waiver signed at a racetrack because races are not of great importance to the public or a practical necessity; there was no disparity in bargaining power; and because the activity was voluntary, the plaintiff had not been placed under the control of the racetrack owner); Maxwell v. Motorcycle Safety Found., Inc., 404 S.W.3d 469, 474-75 (Tenn. Ct. App. 2013) (citing Henderson, 174 S.W.3d at 733; Tompkins, 2003 Tenn. App. LEXIS 433, 2003 WL 21356420 at *1) (determining that a release for a motorcycle safety course was enforceable under the Olson analysis because it was a voluntary activity much like a motor speedway race or whitewater [*15] rafting).

In other post-Crawford cases, the Court of Appeals found that exculpatory provisions were unenforceable and against public policy under the Olson analysis specifically because the cases involved professional services or services that affected the public interest in a way analogous to a professional services contract. In Russell v. Bray, 116 S.W.3d 1, 6 (Tenn. Ct. App. 2003) (citing Olson, 558 S.W.2d at 430; Parton, 730 S.W.2d at 636), the Court of Appeals stated that the Olson analysis should be “limited to situations involving a contract with a professional person, rather than a tradesman.” The Russell court found that an exculpatory provision in a home inspection contract was suitable for analysis under the Olson test because unlike tradesmen, home inspectors do not perform hands-on tasks but sell their expert analysis and opinions. Id.; see also Carey v. Merritt, 148 S.W.3d 912 (Tenn. Ct. App. 2004) (holding an exculpatory clause in a home inspection contract unenforceable based on the holding in Russell). In Maggart v. Almany Realtors, Inc., No. M2005-02532-COA-R3-CV, 2007 Tenn. App. LEXIS 482, 2007 WL 2198204 at *5 (Tenn. Ct. App. July 26, 2007) (quoting Olson, 558 S.W.2d at 430-31), aff’d on other grounds, 259 S.W.3d 700 (Tenn. 2008), the Court of Appeals analogized an exculpatory agreement between employer and employee to exculpatory provisions in business contracts with consumers, observing that the relationship was one requiring greater responsibility [*16] on the part of the employer, which would render an exculpatory release in favor of the employer “obnoxious.”

There are also post-Crawford cases in which the Court of Appeals did not mention Olson, but relied solely on the common law of contracts and the language of the agreement to determine the enforceability of an exculpatory provision. Pettit v. Poplar-Union Extended Mini-Storage, 1995 Tenn. App. LEXIS 32, 1995 WL 30602, at *2 (Tenn. Ct. App. Jan. 26, 1995) (holding an exculpatory provision in a self-storage contract enforceable because the language was unambiguous); Burks v. Belz-Wilson Props., 958 S.W.2d 773, 777 (Tenn. Ct. App. 1997) (citation omitted) (finding a release for participation in a work-sponsored athletic event unenforceable because the wording was ambiguous and thus construed against the drafter); Fleming v. Murphy, No. W2006-00701-COA-R3-CV, 2007 Tenn. App. LEXIS 451, 2007 WL 2050930, at *14 (Tenn. Ct. App. July 19, 2007) (citing Ouzts v. Womack, 160 S.W.3d 883, 885 (Tenn. Ct. App. 2004)) (“Under the common law of contracts, we interpret exculpatory clauses according to the plain meaning of their terms.”); Gibson v. Young Men’s Christian Ass’n of Middle Tenn., No. M2015-01465-COA-R9-CV, 2016 Tenn. App. LEXIS 337, 2016 WL 2937320, at *2-3 (Tenn. Ct. App. May 16, 2016) (applying the rules of contract interpretation and looking at the plain meaning of the words to find the exculpatory provision enforceable where the agreement was clear and the plaintiff was injured while using the facilities as contemplated by the parties).

Federal courts have followed suit by inconsistently applying [*17] Olson. See Teles v. Big Rock Stables, L.P., 419 F. Supp. 2d 1003, 1008-09 (E.D. Tenn. 2006) (analyzing a contract with a horse stable under the Olson test and finding that it did not fall under the Olson exception prohibiting exculpatory provisions, although there was a genuine issue of material fact as to gross negligence that precluded summary judgment); Farris v. KTM N. Am., Inc., No. 3:04-CV-354, 2006 U.S. Dist. LEXIS 1635, 2006 WL 73618, at *3 (E.D. Tenn. Jan. 11, 2006) (quoting Olson, 558 S.W.2d at 430) (citing Olson in support of enforcing an exculpatory waiver for test driving motorcycles because it did not involve a service of great importance to the public, but noting that application of the Olson factors is typically limited to a contract for professional services).

This Court has not addressed the enforceability of exculpatory agreements since Crawford in 1992.12 Because of the inconsistency in how these agreements have been reviewed, we take this opportunity to restate the proper analysis to be applied to these agreements.

III.

Although courts throughout the country have taken numerous and varied approaches to exculpatory agreements, there are some common principles.13 First, HN7[] a party may not, for public policy reasons, exempt itself from liability [*18] for gross negligence, reckless conduct, or intentional wrongdoing. Restatement (Second) of Contracts § 195 (1981); Maxwell, 404 S.W.3d at 476 (citing Buckner, 793 S.W.2d at 941).

Second, HN8[] exculpatory provisions in contracts involving common carriers are unenforceable on the grounds of public policy and disparity of bargaining power. 14 Am. Jur. 2d Carriers § 853 (Nov. 2018 update) (noting that public policy forbids relieving carriers of responsibility based on their position of advantage over members of the public who are compelled to deal with them); see also Trailmobile, Inc. v. Chazen, 51 Tenn. App. 576, 370 S.W.2d 840, 841-42 (Tenn. Ct. App. 1963); Moss, 340 S.W.2d at 904. The same rule applies to inns and airports that assume “a duty of public service” to certain segments of the public. 1A Stuart M. Speiser et al., American Law of Torts § 5:39 (Mar. 2018 update).14

Third, HN10[] although exculpatory agreements are generally enforceable, in many states they are disfavored. See 8 Williston on Contracts § 19:25 (4th ed. 1993).15

Fourth, HN12[] most courts require that the exculpatory language be unequivocal and clear. Williston § 19:22. An exculpatory clause must “clearly, unequivocally, specifically, and unmistakably” state the intention to exempt one of the parties from liability for its own negligence. Id. § 19:25; see also, e.g., Parton, 730 S.W.2d at 638 (holding an exculpatory [*19] clause invalid based on a lack of evidence that it had been pointed out to the plaintiff or that “a person of ordinary intelligence and experience” would understand that the agreement relieved the defendant of all liability); Sirek v. Fairfield Snowbowl, Inc., 166 Ariz. 183, 800 P.2d 1291, 1295 (Ariz. Ct. App. 1990) (stating that exculpatory language should alert the party signing the release that “it is giving up a very substantial right”); Sanislo v. Give Kids the World, Inc., 157 So. 3d 256, 261 (Fla. 2015) (holding exculpatory agreements enforceable if the language is “so clear and understandable that an ordinary and knowledgeable person will know what he or she is contracting away”).

Fifth, HN13[] most jurisdictions do not enforce exculpatory provisions that are contrary to public policy. There is no bright line rule defining when a provision is contrary to public policy, but Williston suggests that whether an exculpatory agreement is void as against public policy depends on:

all of the facts and circumstances surrounding the making of the agreement; society’s expectations; the identity and nature of the parties involved, including their relative education, experience, sophistication, and economic status; and the nature of the transaction itself, including the subject matter, the existence or absence of competition, the relative bargaining strength [*20] and negotiating ability of the economically weaker party, and the terms of the agreement itself, including whether it was arrived at through arm’s length negotiation or on terms dictated by the stronger party and on an adhesive, take-it-or-leave-it basis.

Williston § 19:22.

This Court adopted the Olson factors based on the Tunkl analysis. Tunkl, however, is the minority approach, with only five other states currently relying on the Tunkl factors to determine the enforceability of exculpatory provisions.16 Courts in several states have observed that the factors fail to consider the totality of circumstances and, as a result, are overly rigid and arbitrary. See Wolf v. Ford, 335 Md. 525, 644 A.2d 522, 527 (Md. 1994) (declining to adopt Tunkl because of concern that the six fixed factors may be too rigid and arbitrary); Schlobohm v. Spa Petite, Inc., 326 N.W.2d 920, 924 (Minn. 1982) (noting that although a number of courts cite Tunkl with approval, post-Tunkl cases generally consider disparity in bargaining power and whether the agreement involves a public or essential service); Hanks v. Powder Ridge Rest. Corp., 276 Conn. 314, 885 A.2d 734, 744 (Conn. 2005) (stating that public interest cannot adequately be defined within the four corners of a formula, and thus the analysis should be guided but not limited by the Tunkl factors).

After reviewing precedent in this state and across the country, we conclude that HN14[] the public policy in Tennessee has historically favored freedom of contract. Thus, contracts exempting one party from liability for negligence are not disfavored and are generally enforceable. Olson, 558 S.W.2d at 430. That said, not all exculpatory agreements should be enforceable, and courts should determine their enforceability by consideration of the circumstances of the parties, the language used in the agreement, and the public interest. While the factors adopted in Olson remain instructive and may be considered when relevant, the Olson approach is too rigid, fails to consider all the relevant circumstances, and is followed by only a handful of jurisdictions.

We, therefore, need to restate our approach to determining the validity of exculpatory agreements. After surveying the factors adopted by courts in other states17 and considering Tennessee precedent, we hold that HN15[] the enforceability of an exculpatory agreement should be determined by considering the totality of the circumstances and weighing these non-exclusive factors: (1) relative bargaining power of the parties; (2) clarity [*22] of the exculpatory language, which should be clear, unambiguous, and unmistakable about what the party who signs the agreement is giving up; and (3) public policy and public interest implications. HN16[] The totality of the facts and circumstances of each case will dictate the applicability of and the weight to be given to each of these factors. The factors need not be weighed equally in any given case — rather, the analysis should involve balancing each of these considerations given the facts and circumstances surrounding the formation of the agreement. In addition, we hold that there is no “professional services criterion” that restricts application of this analysis to contracts for professional services. Therefore, we overrule Parton, 730 S.W.2d 634; Petty, 818 S.W.2d 743; Petry, 641 S.W.2d 202; Floyd, 1999 Tenn. App. LEXIS 473, 1999 WL 820610; Henderson, 174 S.W.3d 730; Thrasher, 2009 Tenn. App. LEXIS 50, 2009 WL 275767; Russell, 116 S.W.3d 1; Carey, 148 S.W.3d 912; and any other previous decisions to the extent these cases conflict with our holding.

We next turn to defining these factors to provide additional guidance in their application to the facts and circumstances of each case.

Relative bargaining power. HN17[] Although there is no precise rule by which to define sufficient disparity in bargaining power between the parties to invalidate an exculpatory agreement, two key [*23] criteria are the importance of the service at issue for the physical or economic well-being of the party signing the agreement and the amount of free choice that party has in seeking alternate services. Schmidt v. United States, 1996 OK 29, 912 P.2d 871, 874 (Okla. 1996). For example, a standardized form offered on a take-it-or-leave-it basis may be invalid if there was great disparity of bargaining power, no opportunity for negotiation, and the services could not reasonably be obtained elsewhere. Schlobohm, 326 N.W.2d at 924.18

Clarity of language. HN18[] The language of an exculpatory agreement must clearly and unequivocally state a party’s intent to be relieved from liability, and the wording must be “so clear and understandable that an ordinary and knowledgeable person will know what he or she is contracting away.” Sanislo, 157 So. 3d at 260-61.19 The language must also alert the party agreeing to the exculpatory provision that the provision concerns a substantial right. Sirek, 800 P.2d at 1295. The language in the agreement should not be so broad as to relieve the exculpated party from liability for any injury for any reason. Burks, 958 S.W.2d at 777 (holding exculpatory provision relieving the defendant “from any and all liability . . . relating to participation in these events” unenforceable as overly broad and ambiguous); Roberts v. T.H.E. Ins. Co., 2016 WI 20, 367 Wis. 2d 386, 879 N.W.2d 492, 503 (Wis. 2016) (citing Richards v. Richards, 181 Wis. 2d 1007, 513 N.W.2d 118, 121 (Wis. 1994)).20 Ambiguous language [*24] will be construed against the party that drafted the agreement. Burks, 958 S.W.2d at 777.

Public policy and the public interest. HN21[] The third factor, public policy and the public interest, is the most difficult to articulate. Public policy has been defined as “‘that principle of law under which freedom of contract or private dealings is restricted by law for the good of the community.'” Roberts, 879 N.W.2d at 501-02 (quoting Atkins v. Swimwest Family Fitness Ctr., 2005 WI 4, 277 Wis. 2d 303, 691 N.W.2d 334, 339 (Wis. 2005)). A private contract violates public policy if it conflicts with the constitution, statutes, or judicial decisions of this state or tends to be harmful to the public good, public interest, or public welfare. Spiegel v. Thomas, Mann & Smith, P.C., 811 S.W.2d 528, 530 (Tenn. 1991). As this Court explained in Crawford, without a declaration in the constitution or the statutes of Tennessee, a judicial declaration of public policy is within the province of the courts. 839 S.W.2d at 759. Public policy is also determined by societal expectations that are flexible and change over time. See Wolf, 644 A.2d at 527-28 (“The ultimate determination of what constitutes the public interest must be made considering the totality of the circumstances of any given case against the backdrop of current societal expectations.”).

HN22[] Whether the public interest is affected may be determined by considering whether a party to [*25] the transaction has a public service obligation, such as a public utility, common carrier, or innkeeper. Wolf, 644 A.2d at 526. This analysis also includes transactions that are not as readily defined, but are so important to the public good that an exculpatory clause would be contrary to society’s expectations. Id. (quoting Md.-Nat’l Capital Park & Planning Comm’n v. Wash. Nat’l Arena, 282 Md. 588, 386 A.2d 1216, 1228 (Md. 1978)); see also Hanks v. Powder Ridge Rest. Corp., 276 Conn. 314, 885 A.2d 734, 744 (Conn. 2005) (citations omitted) (agreeing with the Maryland and Vermont Supreme Courts that the public interest must be determined based on the totality of the circumstances and that the analysis, guided but not limited by Tunkl, “is informed by any other factors that may be relevant given the factual circumstances of the case and current societal expectations”); Williston § 19:22.

In determining whether the service involved is a public or essential service, courts should consider whether it is a type of service generally considered suitable for public regulation. Schlobohm, 326 N.W.2d at 925-26. And in deciding whether enforcement of an exculpatory provision would be against public policy, courts should consider whether the services involved are of great importance to the public, which are a practical necessity for some members of the public. Id.; see also Plant v. Wilbur, 345 Ark. 487, 47 S.W.3d 889, 893 (Ark. 2001) (upholding release signed by a spectator at a car race because [*26] that activity involved a narrow segment of the public, unlike a public utility, common carrier, or “a similar entity connected with the public interest”).

IV.

In applying this restated analysis to the facts before us, we take the strongest legitimate view of the evidence in favor of Mr. Copeland as the non-moving party for summary judgment and allow all reasonable inferences in his favor. B & B Enters. of Wilson Cnty., LLC v. City of Lebanon, 318 S.W.3d 839, 844-45 (Tenn. 2010); Martin v. Norfolk S. Ry. Co., 271 S.W.3d 76, 84 (Tenn. 2008) (citing Staples v. CBL & Assocs., Inc., 15 S.W.3d 83, 89 (Tenn. 2000)).

We begin with the first factor — disparity in bargaining power. Mr. Copeland was a seventy-seven-year-old hospital patient recovering from knee replacement surgery who needed to go to a follow-up appointment at his doctor’s office. Mr. Copeland did not select, hire, or pay MedicOne. Instead, the hospital where Mr. Copeland was a patient arranged for his transportation with MedicOne. The MedicOne driver presented Mr. Copeland with a pre-printed, two-sided document containing two different forms — the Run Report and the Agreement — which Mr. Copeland had limited time to review and sign before being transported to his doctor’s appointment. The Agreement consisted of nine single-spaced paragraphs, including three paragraphs of exculpatory language. The MedicOne driver spent only nineteen minutes [*27] at the hospital, which began with his arrival, and included going to Mr. Copeland’s room, pushing Mr. Copeland in a wheelchair to the hospital entrance, getting him into the van, loading his walker into the back of the van, and having Mr. Copeland review and sign the two forms.

The MedicOne driver presented the Agreement to Mr. Copeland on a take-it-or-leave-it basis with the expectation that he would sign it. The driver did not understand the implications of the Agreement, could not have explained it if asked, had no authority to alter it, and would not have transported Mr. Copeland to his appointment if he had not signed the document.

Mr. Copeland had a practical necessity to get to his medical appointment. He had the difficult choice of signing the Agreement or delaying or forgoing his medical care that day. Mr. Copeland’s situation was analogous to the difficult choice presented to the plaintiff in Wofford v. M.J. Edwards & Sons Funeral Home, Inc., 490 S.W.3d 800 (Tenn. Ct. App. 2015). There, a funeral home presented the plaintiff with a contract for funeral services after her father’s body had been embalmed. Relying on Buraczynski v. Eyring, 919 S.W.2d 314 (Tenn. 1996), the Wofford court ruled that the arbitration clause in the contract was unenforceable because it was a contract of adhesion, offered on a take-it-or-leave-it [*28] basis, and the plaintiff’s failure to sign the agreement would have interrupted the rendition of services and caused delay, resulting in a “difficult choice.” 490 S.W.3d at 824. Recognizing that the Buraczynski analysis rests on the critical finding of a unique relationship built on trust (such as the doctor-patient relationship in Buraczynski), the Wofford court found that the plaintiff had no realistic choice other than to sign the contract, and that asking her to stop the funeral services at that point would be like asking her “to swap horses midstream.” Id. at 816. Mr. Copeland may not have had a preexisting relationship with MedicOne that was “unique and built on trust,” but he did have a hospital-patient relationship with HealthSouth, the entity that had arranged for his transportation by MedicOne. Mr. Copeland also faced the same kind of difficult choice — refusing to sign the Agreement, offered on a take-it-or-leave-it basis that would have potentially interrupted and caused a delay in his medical care by requiring him to reschedule his appointment or, as the Court of Appeals suggested, calling a taxi. In our view, asking Mr. Copeland to make such a choice would be like asking him to “swap horses in [*29] midstream.” Id. There is ample evidence in the record of relative disparity in the parties’ bargaining power.

We now turn to the second factor — the clarity of the Agreement’s exculpatory language. Much of the exculpatory language appears in bold print and all capital letters. Even so, although portions of paragraphs three and four purport to limit the exculpatory language in those paragraphs to simple negligence by expressly excluding gross negligence and willful misconduct, this limiting language begins by stating, “WITHOUT LIMITATION OF THE FOREGOING . . . .” The “foregoing” in paragraph three reads:

Client does hereby release and forever discharge MedicOne . . . from any and all claims, suits, rights, interests, demands, actions, causes of action, liabilities, accident, injury (including death), costs, fees, expenses and any and all other damages or losses of any kind whatsoever, whether to person or property . . . arising out of, incidental to, associated with, or in any way related to any transportation services provided to Client by MedicOne.

Similarly, the “foregoing” in paragraph four reads:

CLIENT WILL INDEMNIFY, DEFEND AND HOLD HARMLESS MEDICONE RELATED PARTIES FROM AND AGAINST [*30] ANY AND ALL CLAIMS ASSERTED BY CLIENT, ANY PERSON OR ENTITY RELATED TO CLIENT OR ASSERTING A CLAIM BY OR THROUGH CLIENT, OR ANY OTHER THIRD PARTIES OR ENTITIES WHICH, IN ANY WAY, ARISE OUT OF, ARE INCIDENTAL TO, ASSOCIATED WITH, OR IN ANY WAY RELATED TO ANY TRANSPORTATION SERVICES PROVIDED TO CLIENT BY MEDICONE.

Paragraph six contains no limitation for claims of gross negligence or willful misconduct, but purports to release MedicOne from “any liability, damage or expense arising out of any claim in any way associated with or relating to any transportation services provided to Client by MedicOne.”

HN23[] Courts in many jurisdictions, including Tennessee, have found such unlimited language to be so overly broad as to render the provisions unenforceable. See Burks, 958 S.W.2d at 777 (holding release “from any and all liability claims, demands, actions or causes of action whatsoever, arising out of or any injury, illness loss or damage including death relating to participation in these events” unenforceable because it would “extend its exculpation to unbounded limits”); Fisher v. Stevens, 355 S.C. 290, 584 S.E.2d 149, 152-53 (S.C. Ct. App. 2003) (finding a waiver signed at a racetrack to be overly broad and unenforceable based on public policy because the waiver released from liability “any [*31] persons in any restricted area”); Jesse v. Lindsley, 149 Idaho 70, 233 P.3d 1, 7-8 (Idaho 2008) (holding exculpatory clause in a residential lease unenforceable because it purported to release the landlord from liability “for any occurrence of any nature”); Alack v. Vic Tanny Int’l of Mo., Inc., 923 S.W.2d 330, 337-38 (Mo. 1996) (finding exculpatory clause unenforceable based on its ambiguity because the clause did not specifically state that the customer was releasing the health club from liability for negligence and used words like “any” and “all” injuries and claims, which could include intentional or grossly negligent conduct that cannot be excluded from liability); Roberts, 879 N.W.2d at 503 (holding waiver unenforceable because it was too broad and all-inclusive, ambiguous about whether it covered injury while waiting in line for the activity, and was a standard pre-printed form with no opportunity to negotiate).

We find the exculpatory language in the Agreement to be overly broad and ambiguous. Although the Agreement also contains a severability clause,21 the three paragraphs containing broad, all-encompassing exculpatory language combined with the severability paragraph do not make it clear and unmistakable what Mr. Copeland was giving up by signing the Agreement, especially during the limited time he was given to read and comprehend [*32] the document.

Finally, we turn to the third factor — public policy and public interest implications. Mr. Copeland’s appointment with his doctor was a medical necessity. That practical necessity distinguishes this case from those involving purely voluntary or recreational activities, which generally do not affect the public interest or raise public policy concerns. Maxwell, 404 S.W.3d at 475; Henderson, 174 S.W.3d at 733. Although public policy and the [*33] public interest are difficult concepts to define, some relationships require greater responsibility of one of the parties. Olson, 558 S.W.2d at 430. MedicOne was in a position of greater responsibility when it undertook to transport Mr. Copeland to and from his doctor’s office. Mr. Copeland had limited time to read and comprehend the overly broad and ambiguous Agreement and the Run Report. Under these circumstances, it is not reasonable to conclude that Mr. Copeland could have just called a taxi or rescheduled his appointment. HN24[] Our public policy protects patients and clients of professionals, residential tenants, employees, bank customers, and homebuyers from exculpatory provisions. It only makes sense that our public policy should also protect a hospital patient under the circumstances faced by Mr. Copeland when he signed the Agreement. Based on the circumstances of the parties, including contemporary societal expectations, we conclude that enforcement of the Agreement against a member of the public in Mr. Copeland’s position would be contrary to the public interest.

V.

In sum, after considering the totality of the circumstances and weighing the inequality in the relative bargaining power of the parties, the [*34] lack of clarity of the exculpatory language, and the public policy and public interest implications, we hold that, as a matter of law, the exculpatory provisions in the Agreement signed by Mr. Copeland are unenforceable and do not bar his claim against MedicOne. We vacate the judgment of the trial court, reverse the judgment of the Court of Appeals, and remand to the trial court for further proceedings consistent with this opinion. We tax the costs of this appeal to MedicOne Medical Response Delta Region, Inc., for which execution may issue if necessary.

SHARON G. LEE, JUSTICE


Texas appellate court upholds release for claims of gross negligence in trampoline accident that left plaintiff a paraplegic.

However, the decision is not reasoned and supported in Texas by other decisions or the Texas Supreme Court.

Quiroz et. al. v. Jumpstreet8, Inc., et. al., 2018 Tex. App. LEXIS 5107

State: Texas, Court of Appeals of Texas, Fifth District, Dallas

Plaintiff: Graciela Quiroz, Individually, a/n/f of Xxxx (“John Doe 1”) and Xxxx (“John Doe 2”), Minors, and Robert Sullivan, Individually, a/n/f of Xxxx (“John Doe 3”)

Defendant: Jumpstreet8, Inc., Jumpstreet, Inc. and Jumpstreet Construction, Inc.

Plaintiff Claims: negligence and gross negligence and as next friend of two minor children for their loss of parental consortium and their bystander claims for mental anguish.

Defendant Defenses: Release

Holding: for the Defendant

Year: 2018

Summary

Adult paralyzed in a trampoline facility sues for her injuries. The release she signed before entering stopped all of her claims, including her claim for gross negligence.

However, the reasoning behind the support for the release to stop the gross negligence claim was not in the decision, so this is a tenuous decision at best.

Facts

The plaintiff and her sixteen-year-old son went to the defendant’s business. Before entering she signed a release. While on a trampoline, the plaintiff attempted to do a back flip, landed on her head and was rendered a paraplegic from the waist down.

The plaintiff sued on her behalf and on behalf of her minor. Her claim was a simple tort claim for negligence. Her children’s claims were based on the loss of parental consortium and under Texas law bystander claims for seeing the accident or seeing their mother suffer. The plaintiff’s husband also joined in the lawsuit later for his loss of consortium claims.

The defendant filed a motion for summary judgment which the trial court granted and the plaintiff appealed.

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

The original entity named on the release was a corporation that was no longer in existence. Several successor entities now owned and controlled the defendant. The plaintiff argued the release did not protect them because the release only spoke to the one defendant.

The court did not agree, finding language in the release that stated the release applied to all “jumpstreet entities that engaged in the trampoline business.”

…it also stated the Release equally applied to “its parent, subsidiaries, affiliates, other related entities, successors, owners, members, directors, officers, shareholders, agents, employees, servants, assigns, investors, legal representatives and all individuals and entities involved in the operation of Jumpstreet.”

The next argument was whether the release met the requirements on Texas law for a release. The court pointed out bold and capital letters were used to point out important parts of the release. An assumption of the risk section was separate and distance from the release of liability section, and the release warned people to read the document carefully before signing.

Texas also has an express negligence rule, the requirements of which were also met by the way the release was written.

Further, on page one in the assumption of risk paragraphs, the person signing the Release acknowledges the “potentially hazardous activity,” and the Release lists possible injuries including “but not limited to” sprains, heart attack, and even death. Although paralysis is not specifically named as an injury, it is certainly less than death and thus would be included within the “but not limited to” language. Also, the release of liability paragraph above Quiroz’s signature expressly lists the types of claims and causes of action she is waiving, including “negligence claims, gross negligence claims, personal injury claims, and mental anguish claims.

Next the plaintiff argued that the release covered her and her sixteen-year-old minor son. As such the release should be void because it attempted to cover a minor and releases in Texas do not work for minors.

The court ignored this argument stating it was not the minor who was hurt and suing; it was the plaintiff who was an adult. The court then also added that the other plaintiffs were also covered under the release because all of their claims, loss of parental consortium and loss of consortium are derivative claims. Meaning they only succeed if the plaintiff s claim succeeds.

The final argument was the plaintiff plead negligence and gross negligence in her complaint. A release in Texas, like most other states, was argued by the plaintiff to not be valid.

The appellate court did not see that argument as clearly. First, the Texas Supreme Court had not reviewed that issue. Other appellate courts have held that there is no difference in Texas between a claim for negligence and a claim for gross negligence.

The Texas Supreme Court has not ruled on whether a pre-injury release as to gross negligence is against public policy when there is no assertion that intentional, deliberate, or reckless acts cause injury. Some appellate courts have held that negligence, and gross negligence are not separable claims and a release of liability for negligence also releases a party from liability for gross negligence.

(For other arguments like this see In Nebraska a release can defeat claims for gross negligence for health club injury.)

The court looked at the release which identified negligence and gross negligence as claims that the release would stop.

Quiroz’s Release specifically stated that both negligence and gross negligence claims were waived. The assumption of risk paragraph that lists the specific types of claims/causes of actions that were included in the Release was encased in a box, had all capital lettering, and appeared above the signature line. As noted above, Quiroz received fair notice regarding the claims being waived.

Although not specifically writing in the opinion why the release stopped the gross negligence claims, the court upheld the release for all the plaintiff claims.

…Quiroz’s Release specifically stated that both negligence and gross negligence claims were waived. The assumption of risk paragraph that lists the specific types of claims/causes of actions that were included in the Release was encased in a box, had all capital lettering, and appeared above the signature line. As noted above, Quiroz received fair notice regarding the claims being waived.

The court affirmed the trial court’s dismissal of the plaintiff’s claims.

So Now What?

First this case is a great example of believing that once you have a release you don’t have to do anything else. If the defendant’s release would have been checked every year, someone should have noticed that the named entity to be protected no longer existed.

In this case that fact did not become a major issue, however, in other states the language might not have been broad enough to protect everyone.

Second, this case is also proof that being specific with possible risks of the activities and have an assumption of risk section pays off.

Finally, would I go out and pronounce that Texas allows a release to stop claims for gross negligence. No. Finger’s crossed until the Texas Supreme Court rules on the issue or another appellate court in Texas provides reasoning for its argument, this is thin support for that statement.

What do you think? Leave a comment.

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Quiroz v. Jumpstreet8, Inc., 2018 Tex. App. LEXIS 5107

Graciela Quiroz, Individually, a/n/f of Xxxx (“John Doe 1”) and Xxxx (“John Doe 2”), Minors, and Robert Sullivan, Individually, a/n/f of Xxxx (“John Doe 3”), Appellants v. Jumpstreet8, Inc., Jumpstreet, Inc. and Jumpstreet Construction, Inc., Appellees

No. 05-17-00948-CV

COURT OF APPEALS OF TEXAS, FIFTH DISTRICT, DALLAS

2018 Tex. App. LEXIS 5107

July 9, 2018, Opinion Filed

PRIOR HISTORY: [*1] On Appeal from the 298th Judicial District Court, Dallas County, Texas. Trial Court Cause No. 15-02671.

In re Quiroz, 2017 Tex. App. LEXIS 7423 (Tex. App. Dallas, Aug. 7, 2017)

CASE SUMMARY:

OVERVIEW: HOLDINGS: [1]-The trampoline facility owner met its burden of establishing it was entitled to summary judgment as a matter of law because the release was enforceable when it met both the fair notice requirement for conspicuousness and the express negligence rule.

OUTCOME: Order affirmed.

CORE TERMS: summary judgment, entity, gross negligence, public policy, negligence claims, partial, matter of law, cause of action, pre-injury, consortium, waive, cross-motion, notice requirements, trampoline, bystander, specifically named, unenforceable, signing, mental anguish, signature line, conspicuousness, distinguishable, enforceable, derivative, lettering, parental, waiving, notice, void, issue of material fact

COUNSEL: For Graciela Quiroz, et al, Appellant: John T. Kirtley, Lead counsel, Ferrer, Poirot and Wansbrough, Dallas, TX.

For Jumpstreet8, Inc., Jumpstreet, Inc. and Jumpstreet Construction, Inc., Appellee: Cassie Dallas, Shelby G. Hall, Wade C. Crosnoe, Lead Counsel, Thompson, Coe, Cousins & Irons, L.L.P., Dallas, TX; Michael A. Yanof, Lenahan Law, P.L.L.C., Dallas, TX; Randy Alan Nelson, Thompson Coe, Dallas, TX.

JUDGES: Before Justices Myers, Boatright, and O’Neill.1 Opinion by Justice O’Neill.

1 The Hon. Michael J. O’Neill, Justice, Assigned

OPINION BY: MICHAEL J. O’NEILL

OPINION

MEMORANDUM OPINION

Opinion by Justice O’Neill

Appellant Graciela Quiroz brought a negligence suit against appellees Jumpstreet8, Inc., Jumpstreet, Inc., and Jumpstreet Construction, Inc. (collectively Jumpstreet) for injuries she sustained while jumping on a trampoline at a Jumpstreet facility. Jumpstreet moved for summary judgment based upon a pre-injury release signed by Quiroz. Quiroz responded and filed a cross-motion for partial summary judgment. The trial court granted Jumpstreet’s motion for summary judgment, denied Quiroz’s cross-motion for partial summary judgment, and dismissed all of Quiroz’s claims. In one issue, Quiroz contends the trial court erred in granting Jumpstreet’s motion for summary judgment and denying her motion for partial summary judgment. We affirm the trial court’s order.

Background

On November 29, 2014, Quiroz and her sixteen-year-old son went to Jumpstreet. Prior to using the facility, Quiroz was given a pre-injury release form that was titled “Jumpstreet, LLC Release [*2] and Parent/Guardian Waiver of Liability and Assumption of Risk.” The Release recited the following statements under the title: “PLEASE READ THIS DOCUMENT CAREFULLY. BY SIGNING IT, YOU ARE GIVING UP LEGAL RIGHTS.” After signing the Release, Quiroz and her son jumped on a trampoline. When Quiroz attempted to do a flip, she injured her neck. Quiroz is now paralyzed from the waist down. Quiroz brought suit, individually, against Jumpstreet for negligence and gross negligence and as next friend of two minor children for their loss of parental consortium and their bystander claims for mental anguish. Robert Sullivan (Quiroz’s spouse) joined the suit for loss of consortium and as next friend of a third minor child for loss of parental consortium and a bystander claim for mental anguish.

Jumpstreet filed a “Traditional Motion for Summary Judgment” alleging summary judgment was proper because Quiroz had signed a Release. In the motion, Jumpstreet stated that because Quiroz alleged negligence and gross negligence claims against Jumpstreet arising from her utilizing a Jumpstreet facility, the Release signed by Quiroz expressly released any negligence and gross negligence claims. Jumpstreet asserted [*3] the Release was valid and enforceable because it specifically named the party to be released, it met the fair notice requirements of conspicuousness and the express negligence rule, and it met the contractual elements of mutual intent and valid consideration.

Quiroz filed a response to Jumpstreet’s motion for summary judgment and a cross-motion for partial summary judgment that alleged summary judgment for Jumpstreet was improper because there was an issue of material fact regarding the Release. Quiroz alleged she was entitled to a partial summary judgment because the Release was “void, voidable and unenforceable” because the named entity did not exist at the time of her injury, the Release was ambiguous, a parent could not waive claims of minors, and the Release could not waive gross negligence claims because it would be against public policy to do so. The trial court granted Jumpstreet’s traditional motion for summary judgment and denied Quiroz’s cross-motion for partial summary judgment. Quiroz timely filed this appeal.

Issue Presented

In her sole issue on appeal, Quiroz contends the trial court erred by granting Jumpstreet’s motion for summary judgment and denying her cross-motion [*4] for partial summary judgment. Quiroz asserts that as a matter of law, no contract existed between her and Jumpstreet, LLC, the entity named in the Release. Quiroz argues there was no “meeting of the minds on the contract’s essential terms” between her and Jumpstreet, LLC because Jumpstreet, LLC had been dissolved in June 2011 and did not exist at the time of her injury in November 2014. Quiroz contends that because a nonexistent entity cannot form or enter into a contract, the Release is void and unenforceable as a matter of law.

Quiroz further contends the Release did not meet the “fair notice requirement” because none of the Jumpstreet defendants are named in the Release; only the nonexistent entity “Jumpstreet, LLC” is specifically named in the Release. Quiroz argues the Release also never specifically identified or released a claim for an injury due to paralysis. Further, Quiroz asserts that as a matter of law, a parent cannot waive a minor’s claims, and a Release cannot waive any claims for gross negligence because that is against public policy.

Jumpstreet responds that the trial court properly granted summary judgment in their favor because Quiroz signed a valid, enforceable Release [*5] before using its facility. The Release satisfied both the fair notice requirement and the express negligence rule as to both negligence and gross negligence claims. Jumpstreet also argues the Release meets the general requirements of a valid contract because it shows a “meeting of the minds” and valid consideration. Jumpstreet further responds that because the consortium and bystander claims are derivative claims, they are barred as a matter of law.

Applicable Law

[HN1] We review a trial court’s summary judgment order de novo. Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010). A party moving for summary judgment has the burden of showing that no genuine issue of material fact existed and that it was entitled to judgment as a matter of law. City of Dallas v. Dallas Morning News, LP, 281 S.W.3d 708, 712 (Tex. App.–Dallas 2009, no pet.); see also Tex. R. Civ. P. 166a(c). When reviewing a summary judgment, we take as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant’s favor. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). When both sides move for summary judgment, however, each party bears the burden of establishing it is entitled to judgment as a matter of law. City of Garland v. Dallas Morning News, 22 S.W.3d 351, 356 (Tex. 2000). When the trial court grants one motion and denies the other, we review the summary judgment evidence presented by both parties and determine all the questions presented. [*6] S. Crushed Concrete, LLC v. City of Houston, 398 S.W.3d 676, 678 (Tex. 2013).

The Release signed by Quiroz was a prospective release of future claims, including claims based on Jumpstreet’s own negligence. [HN2] A release is an absolute bar to the released matter and extinguishes a claim or cause of action. Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 509 (Tex. 1993). Jumpstreet had to show that the Release’s language met the fair notice requirement of conspicuousness and the express negligence rule. See id. “Conspicuous” means the terms must be presented in a manner that a reasonable person against whom it is to operate ought to have notice. Quintana v. CrossFit Dallas, L.L.C., 347 S.W.3d 445, 450 (Tex. App.–Dallas 2011, no pet,).

The express negligence rule is not an affirmative defense, but it is a rule of contract interpretation. See Fisk Elec. Co. v. Constructors & Assocs., Inc., 888 S.W.2d 813, 814 (Tex. 1994). This rule states that if a party intends to be released from its own future negligence, it must express that intent in clear, unambiguous terms within the four corners of the contract. Atl. Richfield Co. v. Petroleum Pers., Inc., 768 S.W.2d 724, 726 (Tex. 1989); Quintana, 347 S.W.3d at 450.

Discussion

[HN3] Parties have the right to contract as they see fit as long as their agreement does not violate the law or public policy. In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 129 & n.11 (Tex. 2004). Texas law recognizes and protects a broad freedom of contract. Fairfield Ins. Co. v. Stephens Martin Paving, LP, 246 S.W.3d 653, 671 (Tex. 2008). Under Texas law, a release is a contract and is subject to avoidance just like any other contract. Williams v. Glash, 789 S.W.2d 261, 264 (Tex. 1990). When construing a contract, the court’s primary concern is to give effect to the written [*7] expression of the parties’ intent. Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 133 (Tex. 1994). Public policy dictates that courts are not to interfere lightly with this freedom of contract. See, e.g., Gym-N-I Playgrounds, Inc. v. Snider, 220 S.W.3d 905, 912 (Tex. 2007) (commercial lease expressly waiving warranties); In re Prudential, 148 S.W.3d at 129 & n.11 (contractual jury waiver); BMG Direct Mktg., Inc. v. Peake, 178 S.W.3d 763, 767 (Tex. 2005) (liquidated damages clause); Missouri, K. & T. R. Co. v. Carter, 95 Tex. 461, 68 S.W. 159, 164 (Tex. 1902) (contract waiving responsibility for fires caused by railroad engines).

[HN4] A tortfeasor can claim the protection of a release only if the release refers to him by name or with such descriptive particularity that his identity or his connection with the tortious event is not in doubt. Duncan v. Cessna Aircraft Co., 665 S.W.2d 414, 420 (Tex. 1984); see also Frazer v. Tex. Farm Bureau Mut. Ins. Co., 4 S.W.3d 819, 823-24 (Tex. App.–Houston [1st Dist.] 1999, no pet.) (with use of “and its affiliated companies,” release sufficiently identified Texas Farm Bureau Underwriters such that its identity is not in doubt.). Here, the Release clearly and unambiguously stated it applied to all Jumpstreet entities that are engaged in the trampoline business. Although the Release specifically named “Jumpstreet, LLC,” it also stated the Release equally applied to “its parent, subsidiaries, affiliates, other related entities, successors, owners, members, directors, officers, shareholders, agents, employees, servants, assigns, investors, legal representatives and all individuals and entities involved in the operation of [*8] Jumpstreet.”

The record shows the entity named “Jumpstreet, LLC” was dissolved in June, 2011. The record also contains a deposition transcript from Martin L. Brooks who testified he and Tim Crawford were cousins and the sole owners of all the Jumpstreet entities, all the Jumpstreet entities were engaged in the trampoline business, and the entity named “Jumpstreet, Inc.” was the parent company. The record shows that in her original petition, Quiroz named seventeen different Jumpstreet entities, including “Jumpstreet, Inc.,” the parent company. In her “fourth amended petition” that was in effect at the time of the summary judgment hearing, however, she named only three of the Jumpstreet entities, including the parent company. The Jumpstreet appellees in this case are all engaged in the trampoline business and described with such particularity that their identity was never in doubt. Duncan, 665 S.W.2d at 420; Frazer, 4 S.W.3d at 823-24.

Although the Release in this case contains two pages, it conspicuously contains several paragraphs with bolded headings and capitalized font. On page one, an “assumption of risk” section is separate from a “release of liability” section. The Release warns prospective patrons to “please read this document [*9] carefully” and “by signing it, you are giving up legal rights.” This warning appears directly under the title of the Release and is written in all capital letters. On page two, the Release has an “assumption of the risk” paragraph in all capital letters and surrounded by a box, calling specific attention to it. On both pages, there are several references to the risks and dangers of participating in Jumpstreet services throughout the Release. The “waiver and release” language is repeated a final time, in capital lettering, immediately above the signature line where Quiroz printed her name, date of birth, age, address, and telephone number. See Quintana, 347 S.W.3d at 452 (concluding a two-page contract titled “Health Assessment Waiver and Goals Work Sheet” that included word “release” in larger and bold print near top of second page and initialed by party was “sufficiently conspicuous to provide fair notice”).

The Release also does not run afoul of the express negligence rule. As noted above, the waiver and release language is in capital lettering immediately above the signature line where Quiroz printed her name, date of birth, age, address, and telephone number. See Quintana, 347 S.W.3d at 452. Further, on page one in the assumption of [*10] risk paragraphs, the person signing the Release acknowledges the “potentially hazardous activity,” and the Release lists possible injuries including “but not limited to” sprains, heart attack, and even death. Although paralysis is not specifically named as an injury, it is certainly less than death and thus would be included within the “but not limited to” language. Also, the release of liability paragraph above Quiroz’s signature expressly lists the types of claims and causes of action she is waiving, including “negligence claims, gross negligence claims, personal injury claims, and mental anguish claims.” Id.

Quiroz next argues that a parent cannot waive a minor child’s claims. Quiroz asserts Munoz v. II Jaz Inc., 863 S.W.2d 207 (Tex. App.–Houston [14th Dist.] 1993), is the leading Texas case. In Munoz, the parents sued an amusement park for damages after their child was injured on a ride. The trial court granted the park’s motion for summary judgment based upon a pre-injury release signed by the parents. The appellate court reversed, holding that the Family Code did not give parents the power to waive a child’s cause of action for personal injuries. Munoz is distinguishable from Quiroz’s claims in that Quiroz sustained the injury and not her children. [*11] Moreover, [HN5] the cause of action for loss of parental consortium, like the cause of action for loss of spousal consortium, is a derivative cause of action. As such, the defenses that bar all or part of the injured parent’s recovery have the same effect on the child’s recovery. Reagan v. Vaughn, 804 S.W.2d 463, 468 (Tex. 1990), on reh’g in part (Mar. 6, 1991). And although bystander claims are considered independent and not derivative, it is also true that the bystander plaintiff cannot recover unless the injured person can recover. Estate of Barrera v. Rosamond Vill. Ltd. P’ship, 983 S.W.2d 795, 799-800 (Tex. App.–Houston [14th Dist.] 1998, no pet.).

Quiroz lastly argues a pre-injury release cannot apply to gross negligence claims because that is against public policy. Generally, a contract provision “exempting a party from tort liability for harm caused intentionally or recklessly is unenforceable on grounds of public policy. Restatement (Second) of Contracts § 195(1 (1981). Quiroz cites our case in Van Voris v. Team Chop Shop, 402 S.W.3d 915 (Tex. App.–Dallas 2013, no pet.), for this proposition. There is disagreement among the courts of appeals as to whether a party may validly release claims for gross negligence. The Texas Supreme Court has not ruled on whether a pre-injury release as to gross negligence is against public policy when there is no assertion that intentional, deliberate, or reckless acts cause injury.2 Some appellate courts have held that negligence [*12] and gross negligence are not separable claims and that therefore a release of liability for negligence also releases a party from liability for gross negligence. See Tesoro Petroleum Corp. v. Nabors Drilling U.S., 106 S.W.3d 118, 127 (Tex. App.–Houston [1st Dist.] 2002, pet. denied); Newman v. Tropical Visions, Inc., 891 S.W.2d 713, 722 (Tex. App.–San Antonio 1994, writ denied).

2 We note that Quiroz cited Zachry Construction Corp. v. Port of Houston Authority Of Harris County., 449 S.W.3d 98 (Tex. 2014), in her “First Supplemental Brief,” for the proposition that “a pre-injury release of future liability for gross negligence is void as against public policy.” In Zachry, the Texas Supreme Court had to decide, in a breach of contract case, whether a no-damages-for-delay provision shielded the owner from liability for deliberately and wrongfully interfering with the contractor’s work. In Zachry, the Texas Supreme Court held the no-damages-for-delay provision at issue was unenforceable as against public policy. Zachry, however, is distinguishable because that case concerned how a no-delay-for-damages provision could be enforced if the Port’s intentional misconduct caused the delay. Here, Quiroz has not asserted that Jumpstreet’s alleged negligence was intentional, deliberate, or reckless.

In contrast, we recently held that a plaintiff’s execution of a contract specifically releasing a defendant from liability for negligence did not release the defendant from liability for gross negligence. Van Voris, 402 S.W.3d at 926. We reasoned that the public policy requiring an express release from negligence also requires an express release from gross negligence. See id. We specifically pointed out that “our conclusion is limited to the context presented by this case.” See id. Other courts have held that pre-accident waivers of gross negligence are invalid as against public policy. See Sydlik v. REEIII, Inc., 195 S.W.3d 329, 336 (Tex. App.–Houston [14th Dist.] 2006, no pet.); Smith v. Golden Triangle Raceway, 708 S.W.2d 574, 576 (Tex. App.–Beaumont 1986, no writ).

Van Voris is distinguishable from the case here in that Quiroz’s Release specifically stated that both negligence and gross negligence claims were waived. The assumption of risk paragraph that lists the specific types of claims/causes of actions that were included in the Release was encased in a box, had all capital lettering, and appeared above the signature line. As noted above, Quiroz received fair notice regarding the [*13] claims being waived. See Quintana, 347 S.W.3d at 450.

Conclusion

The Release met both the fair notice requirement for conspicuousness and the express negligence rule. It was, thus, enforceable. See Quintana, 347 S.W.3d at 452. As a result, Jumpstreet met its burden of establishing it was entitled to summary judgment as a matter of law. See City of Garland, 22 S.W.3d at 356. We conclude the trial court properly granted Jumpstreet’s motion for summary judgment. See Travelers Ins. Co., 315 S.W.3d at 862.

We affirm the trial court’s order granting Jumpstreet’s motion for summary judgment and denying Quiroz’s cross-motion for partial summary judgment.

/s/ Michael J. O’Neill

MICHAEL J. O’NEILL

JUSTICE, ASSIGNED

In accordance with this Court’s opinion of this date, the judgment of the trial court is AFFIRMED.

It is ORDERED that appellees Jumpstreet8, Inc., Jumpstreet, Inc. and Jumpstreet Construction, Inc. recover their costs of this appeal from appellants Graciela Quiroz and Robert Sullivan.

Judgment entered this 9th day of July, 2018.


Duhon v. Activelaf, LLC, 2016-0818 (La. 10/19/16); 2016 La. LEXIS 2089

Duhon v. Activelaf, LLC, 2016-0818 (La. 10/19/16); 2016 La. LEXIS 2089

James Duhon versus Activelaf, LLC, D/B/A Skyzone Lafayette and Underwriters at Lloyds, London

No. 2016-CC-0818

SUPREME COURT OF LOUISIANA

2016-0818 (La. 10/19/16); 2016 La. LEXIS 2089

October 19, 2016, Decided

NOTICE:

THIS DECISION IS NOT FINAL UNTIL EXPIRATION OF THE FOURTEEN DAY REHEARING PERIOD.

SUBSEQUENT HISTORY: Rehearing denied by Duhon v. Activelaf, LLC, 2016 La. LEXIS 2483 (La., Dec. 6, 2016)

US Supreme Court certiorari denied by ActiveLAF, LLC v. Duhon, 2017 U.S. LEXIS 4039 (U.S., June 19, 2017)

PRIOR HISTORY: [*1] ON WRIT OF CERTIORARI TO THE COURT OF APPEAL, FIRST CIRCUIT, PARISH OF EAST BATON ROUGE.

Duhon v. Activelaf, LLC, 2016 La. App. LEXIS 629 (La.App. 1 Cir., Apr. 5, 2016)

DISPOSITION: REVERSED AND REMANDED TO THE DISTRICT COURT FOR FURTHER PROCEEDINGS.

CASE SUMMARY:

OVERVIEW: HOLDINGS: [1]-Where plaintiff patron sued defendant trampoline park, alleging he was injured due to its negligence, the provision of an agreement he signed waiving his right to trial and compelling arbitration was adhesionary and thus unenforceable due to the lack of mutuality of obligations together with the obscure placement of the arbitration language in the agreement; [2]-As the high court applied Louisiana law applicable to contracts generally, not just to arbitration agreements, its ruling was consistent with the savings clauses in 9 U.S.C.S. § 2 of the FAA and La. Rev. Stat. § 9:4201.

OUTCOME: The judgment of the intermediate appellate court was reversed.

CORE TERMS: arbitration clause, arbitration, arbitration agreement, adhesionary, box, mutuality, patron’s, arbitration provision, contract of adhesion, unenforceable, auction, standard form, enforceable, bargaining positions, enforceability, weaker, ren, bargaining power, unequal, print, state law, physical characteristics, invalidate, arbitrate, consented, printed, real estate, distinguishing features, non-drafting, recreational

LexisNexis(R) Headnotes

Civil Procedure > Appeals > Standards of Review > De Novo Review

Civil Procedure > Appeals > Standards of Review > Fact & Law Issues

[HN1] Where a case involves legal questions, the appellate court reviews the matter de novo.

Civil Procedure > Alternative Dispute Resolution > Validity of ADR Methods

Governments > Legislation > Interpretation

Constitutional Law > Supremacy Clause > Federal Preemption

Civil Procedure > Alternative Dispute Resolution > Arbitrations > Federal Arbitration Act > Arbitration Agreements

Contracts Law > Contract Conditions & Provisions > Arbitration Clauses

[HN2] Louisiana and federal law explicitly favor the enforcement of arbitration clauses in written contracts. Louisiana Binding Arbitration Law (LBAL) is set forth in La. Rev. Stat. Ann. § 9:4201 et seq. and expresses a strong legislative policy favoring arbitration. § 9:4201. Such favorable treatment echoes the Federal Arbitration Act (FAA), 9 U.S.C.S. § 1 et seq. The LBAL is virtually identical to the FAA, and determinations regarding the viability and scope of arbitration clauses are the same under either law; thus, federal jurisprudence interpreting the FAA may be considered in construing the LBAL. Further, to the extent that federal and state law differ, the FAA preempts state law as to any written arbitration agreement in a contract involving interstate commerce.

Contracts Law > Contract Conditions & Provisions > Arbitration Clauses

Civil Procedure > Alternative Dispute Resolution > Arbitrations > Federal Arbitration Act > Arbitration Agreements

Contracts Law > Formation

Civil Procedure > Federal & State Interrelationships > Choice of Law

[HN3] The Federal Arbitration Act, 9 U.S.C.S. § 1 et seq., makes arbitration agreements valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contact. 9 U.S.C.S. § 2. This provision reflects both a liberal federal policy favoring arbitration, and the fundamental principle that arbitration is a matter of contract. In line with these principles, courts must place arbitration agreements on an equal footing with other contracts. Despite this policy favoring enforcement of arbitration agreements, the U.S. Supreme Court has also recognized that, under the savings clause in § 2, general state contract principles still apply to assess whether those agreements to arbitrate are valid and enforceable, just as they would to any other contract dispute arising under state law. Accordingly, ordinary state-law principles that govern the formation of contracts are applied when deciding whether the parties agreed to arbitration. Importantly, the savings clause in § 2 does not permit courts to invalidate an arbitration agreement under a state law applicable only to arbitration provisions.

Contracts Law > Formation > Execution

Computer & Internet Law > Internet Business > Contracts > Electronic Contracts

Computer & Internet Law > Internet Business > Contracts > Digital Signatures

[HN4] Louisiana law gives legal effect to both electronic contracts and signatures. La. Rev. Stat. Ann. § 9:2607. The court interprets and analyzes the terms of an electronic agreement using the same rules that it would apply to oral and written contracts.

Contracts Law > Defenses > Unconscionability > Adhesion Contracts

Contracts Law > Formation > Meeting of Minds

[HN5] Broadly defined, a contract of adhesion is a standard contract, usually in printed form, prepared by a party of superior bargaining power for adherence or rejection of the weaker party. Often in small print, these contracts sometimes raise a question as to whether or not the weaker party actually consented to the terms. Although a contract of adhesion is a contract executed in a standard form in the vast majority of instances, not every contract in standard form may be regarded as a contract of adhesion. Therefore, the Louisiana Supreme Court is not willing to declare all standard form contracts adhesionary; rather, it finds standard form serves merely as a possible indicator of adhesion. The real issue in a contract of adhesion analysis is not the standard form of the contract, but rather whether a party truly consented to all the printed terms. Thus, the issue is one of consent.

Contracts Law > Formation > Meeting of Minds

Contracts Law > Defenses > Unconscionability > Adhesion Contracts

[HN6] In determining if a contract is adhesionary, consent is called into question by the standard form, small print, and most especially the disadvantageous position of the accepting party, which is further emphasized by the potentially unequal bargaining positions of the parties. An unequal bargaining position is evident when the contract unduly burdens one party in comparison to the burdens imposed upon the drafting party and the advantages allowed to that party. Once consent is called into question, the party seeking to invalidate the contract as adhesionary must then demonstrate the non-drafting party either did not consent to the terms in dispute or his consent was vitiated by error, which in turn, renders the contract or provision unenforceable. A contract is one of adhesion when either its form, print, or unequal terms call into question the consent of the non-drafting party and it is demonstrated that the contract is unenforceable, due to lack of consent or error, which vitiates consent. Accordingly, even if a contract is standard in form and printed in small font, if it does not call into question the non-drafting party’s consent and if it is not demonstrated that the non-drafting party did not consent or his consent is vitiated by error, the contract is not a contract of adhesion.

Contracts Law > Contract Conditions & Provisions > Arbitration Clauses

Civil Procedure > Alternative Dispute Resolution > Validity of ADR Methods

Evidence > Procedural Considerations > Burdens of Proof > Allocation

[HN7] The party seeking to enforce an arbitration provision has the burden of showing the existence of a valid contract to arbitrate.

Civil Procedure > Alternative Dispute Resolution > Arbitrations > Federal Arbitration Act > Arbitration Agreements

Constitutional Law > Supremacy Clause > Federal Preemption

Contracts Law > Defenses

[HN8] The U.S. Supreme Court has admonished that, under the doctrine of preemption, state courts cannot adopt defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue. Nor can courts apply state law rules that stand as an obstacle to the accomplishment of the objectives of the Federal Arbitration Act (FAA), 9 U.S.C.S. § 1 et seq. Setting forth a legal requirement relative to a particular form or method of distinguishing or highlighting arbitration clauses, or requiring term-for-term mutuality in an arbitration clause could risk running afoul of the FAA. However, the Supreme Court has made it clear that state courts may apply standard state law contract defenses to arbitration agreements.

Contracts Law > Defenses > Unconscionability > Adhesion Contracts

Contracts Law > Defenses > Unconscionability > Arbitration Agreements

Contracts Law > Formation > Meeting of Minds

Civil Procedure > Alternative Dispute Resolution > Arbitrations > Federal Arbitration Act > Arbitration Agreements

Constitutional Law > Supremacy Clause > Federal Preemption

[HN9] Consideration of enforceability of contracts of adhesion is an issue of consent, and determining whether a party truly consented to the contract terms. Consideration of consent is not limited to arbitration clauses; courts consider the issue of consent in any contract. Lack of consent is a generally applicable contract defense. La. Civ. Code Ann. art. 1927. The factors discussed in Aguillard v. Auction Management Corp. simply provide a template for considering consent to an arbitration clause contained in a standard contract. Aguillard did not create a per se rule that any degree of non-mutuality in an arbitration agreement renders it unenforceable, nor did Aguillard prescribe a definitive rule that arbitration agreements must be delineated a particular way to be enforceable.

Contracts Law > Defenses > Unconscionability > Adhesion Contracts

Contracts Law > Defenses > Unconscionability > Arbitration Agreements

[HN10] The determination of whether an arbitration clause in a standard form contract is adhesionary is necessarily made on a case by case basis.

COUNSEL: WILLIAMSON, FONTENOT, CAMPBELL & WHITTINGTON, LLC, Christopher Lee Whittington; For Applicant.

TAYLOR, PORTER, BROOKS & PHILLIPS, LLP, Tom Samuel Easterly; For Respondent.

JUDGES: JOHNSON CHIEF JUSTICE. WEIMER J. dissenting. GUIDRY J. dissents and assigns reasons. CRICHTON J. additionally concurs and assigns reasons. CLARK J. concurring. Hughes J. concurring.

OPINION BY: JOHNSON

OPINION

[Pg 1] JOHNSON, CHIEF JUSTICE

Patrons of Sky Zone Lafayette, an indoor trampoline park, are required to complete a “Participant Agreement, Release and Assumption of Risk” document (“Agreement”) prior to entering the facility. The Agreement contains a clause waiving the participant’s right to trial and compelling arbitration. Plaintiff, James Duhon, was a patron at Sky Zone and was injured in the course of participating in the park’s activities. After Mr. Duhon filed suit seeking damages, Sky Zone filed an exception of prematurity seeking to compel arbitration pursuant to the Agreement. The district court overruled Sky Zone’s exception, but the court of appeal reversed, finding the arbitration provision should be enforced.

For the following reasons, we reverse the ruling of the court of appeal, holding the arbitration clause in the Sky Zone agreement [*2] is adhesionary and therefore unenforceable.

FACTS AND PROCEDURAL HISTORY

On April 19, 2015, James Duhon, accompanied by three minors, went to Sky Zone in Lafayette. Upon entering the facility, Mr. Duhon was directed by Sky Zone staff to a computer screen to check himself and the minors into the facility. Check-in [Pg 2] required all participants to complete a Participation Agreement which requested names and dates of birth for all participants, required participants to check three boxes next to certain terms of the Agreement, and required participants to digitally sign the Agreement.

The Agreement provided that in consideration for gaining access to Sky Zone Lafayette and engaging in the services, patrons agreed:

[ ] I acknowledge that my participation in [Sky Zone] trampoline games or activities entails known and unanticipated risks that could result in physical or emotional injury including, but not limited to broken bones, sprained or torn ligaments, paralysis, death, or other bodily injury or property damage to myself my children, or to third parties. I understand that such risks simply cannot be eliminated without jeopardizing the essential qualities of the activity. I expressly agree [*3] and promise to accept and assume all of the risks existing in this activity. My and/or my children’s participation in this activity is purely voluntary and I elect to participate, or allow my children to participate in spite of the risks. If I and/or my children are injured, I acknowledge that I or my children may require medical assistance, which I acknowledge will be at my own expense or the expense of my personal insurers. I hereby represent and affirm that I have adequate and appropriate insurance to provide coverage for such medical expense.

[ ] In consideration for allowing me and the minor child(ren) identified herein to participate in the [Sky Zone] activities and use the [Sky Zone] facility, I expressly and voluntarily agree to forever release, acquit, indemnify and discharge [Sky Zone] and agree to hold [Sky Zone] harmless on behalf of myself, my spouse, my children, my parents, my guardians, and my heirs, assigns, personal representative and estate, and any and all other persons and entities who could in any way represent me, or the minor children identified herein or act on our respective halves, from any and all actions or omissions, cause and causes of action, suits, debts, [*4] damages, judgments, costs, including, but not limited to attorney’s fees, and claims and demands whatsoever, in law or in equity, for any personal injury, death, or property damages that I and/or the minor children’s use of [Sky Zone] activities, [Sky Zone] premises or at offsite and camp activities related to [Sky Zone]. This waiver is intended to be a complete release of any and all responsibility or duties owed by [Sky Zone] as indemnitees for personal injuries, death and/or property loss/damage sustained by myself or any minor children identified herein while on the [Sky Zone] premises, or with respect to [Sky Zone] activities, whether using [Sky Zone] equipment or not, even if such injury or damage results from [Sky Zone] negligence, [Sky Zone] employee [Pg 3] negligence, improper supervision, improper maintenance of [Sky Zone] equipment or premises or negligence by other [Sky Zone] guests.

[ ] I certify that I and/or my child(ren) are physically able to participate in all activities at the Location without aid or assistance. I further certify that I am willing to assume the risk of any medical or physical condition that I and/or my child(ren) may have. I acknowledge that I have [*5] read the rules, (the “Sky Zone Rules”) governing my and/or my child(ren)’s participation in any activities at the Location. I certify that I have explained the [Sky Zone] Rules to the child(ren) identified herein. I understand that the [Sky Zone] Rules have been implemented for the safety of all guests at the Location. I agree that if any portion of this Agreement is found to be void and unenforceable, the remaining portions shall remain in full force and effect. If there are any disputes regarding this agreement, I on behalf of myself and/or my child(ren) hereby waive any right I and/or my child(ren) may have to a trial and agree that such dispute shall be brought within one year of the date of this Agreement and will be determined by binding arbitration before one arbitrator to be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures. I further agree that the arbitration will take place solely in the state of Louisiana and that the substantive law of Louisiana shall apply. If, despite the representations made in this agreement, I or anyone on behalf of myself and/or my child(ren) file or otherwise initiate a lawsuit against [Sky Zone], in addition to [*6] my agreement to defend and indemnify [Sky Zone], I agree to pay within 60 days liquidated damages in the amount of $5,000 to [Sky Zone]. Should I fail to pay this liquidated damages amount within the 60 day time period provided by this Agreement, I further agree to pay interest on the $5,000 amount calculated at 12% per annum.

I further grant [Sky Zone] the right, without reservation or limitation, to videotape, and/or record me and/or my children on closed circuit television.

I further grant [Sky Zone] the right, without reservation or limitation, to photograph, videotape, and/or record me and/or my children and to use my or my children’s name, face, likeness, voice and appearance in connection with exhibitions, publicity, advertising and promotional materials.

I would like to receive free email promotions and discounts to the email address provided below. I may unsubscribe from emails from Sky Zone at any time.

By signing this document, I acknowledge that if anyone is hurt or property is damaged during my participation in this activity, I may be found by a court of law to have waived my right to maintain a lawsuit [Pg 4] against [Sky Zone] on the basis of any claim from which I have [*7] released them herein. I have had sufficient opportunity to read this entire document. I understand this Agreement and I voluntarily agree to be bound by its terms.

I further certify that I am the parent or legal guardian of the children listed above on this Agreement or that I have been granted power of attorney to sign this Agreement on behalf of the parent or legal guardian of the children listed above.

Mr. Duhon electronically completed the Agreement on behalf of himself and the minors by checking the three boxes provided in the agreement, furnishing the relevant personal identifying information, and clicking on an “accept” button. Mr. Duhon and the minors then entered the facility.

Mr. Duhon asserts he was injured at the facility due to Sky Zone’s negligence. On August 12, 2015, Mr. Duhon filed suit against Activelaf, L.L.C., d/b/a Sky Zone Lafayette and its insurer (“Sky Zone”). In response, Sky Zone filed several exceptions, including an exception of prematurity. Sky Zone alleged that the Agreement contained a mandatory arbitration clause, thereby rendering Mr. Duhon’s suit premature. Mr. Duhon asserted he did not knowingly consent to arbitration, and argued the Agreement was adhesionary [*8] and ambiguous.

Following a hearing, the district court determined there was a lack of mutuality in the Agreement relative to the arbitration clause because only Mr. Duhon was bound to arbitrate claims. Thus, relying on this court’s decision in Aguillard Auction Management Corp., 04-2804 (La. 6/29/05), 908 So. 2d 1 and the Third Circuit’s opinion in Sutton Steel & Supply, Inc. v. Bellsouth Mobility, Inc., 07-146 (La. App. 3 Cir. 12/12/07), 971 So. 2d 1257, the district court refused to enforce the arbitration agreement and overruled Sky Zone’s exception of prematurity.

The court of appeal granted Sky Zone’s writ and reversed the district court’s ruling:

There is a strong presumption favoring the enforceability of arbitration [Pg 5] clauses. The weight of this presumption is heavy and arbitration should not be denied unless it can be said with positive assurance that an arbitration clause is not susceptible of an interpretation that could cover the dispute at issue. Aguillard v. Auction Management Corp., 2004-2804 (La. 6/29/05), 908 So. 2d 1. We find that plaintiff failed to establish that this arbitration provision is adhesionary, and accordingly, the arbitration provision should be enforced.

Judge Theriot dissented without reasons, stating he would deny the writ application. Duhon v. ActiveLaf, LLC, 16-0167, 2016 La. App. LEXIS 629 (La. App. 1 Cir. 4/5/16) (unpublished).

On Mr. Duhon’s application, we granted certiorari to review the correctness of the court of appeal’s ruling. Duhon v. ActiveLaf, LLC, 16-0818 (La. 6/17/16), 192 So. 3d 762.

DISCUSSION

This [HN1] case involves the legal [*9] questions of whether the court of appeal erred in its “contract of adhesion” analysis of the arbitration clause in the Agreement, and whether the arbitration clause is unenforceable on general contract principles of consent or adhesion. Thus, we review the matter de novo. See Aguillard, 908 So. 2d at 3; Prasad v. Bullard, 10-291 (La. App. 5 Cir. 10/12/10), 51 So. 3d 35, 39; Horseshoe Entertainment v. Lepinski, 40,753 (La. App. 2 Cir. 3/8/06), 923 So. 2d 929, 934, writ denied, 06-792 (La. 6/2/06), 929 So. 2d 1259.

[HN2] Louisiana and federal law explicitly favor the enforcement of arbitration clauses in written contracts. Aguillard, 908 So. 2d at 7. Louisiana Binding Arbitration Law (“LBAL”) is set forth in La. R.S. 9:4201 et seq. and expresses a strong legislative policy favoring arbitration. La. R.S. 9:4201 provides:

A provision in any written contract to settle by arbitration a controversy thereafter arising out of the contract, or out of the refusal to perform the whole or any part thereof, or an agreement in writing between two or more persons to submit to arbitration any controversy existing between them at the time of the agreement to submit, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.

As this court recognized in Aguillard, “[s]uch favorable treatment echos the Federal [Pg 6] Arbitration Act (“FAA”), 9 U.S.C. § 1, et seq.” 908 So. 2d at 7. We noted the LBAL is virtually identical to the FAA, and determinations regarding [*10] the viability and scope of arbitration clauses are the same under either law, thus federal jurisprudence interpreting the FAA may be considered in construing the LBAL. Id. at 18. Further, to the extent that federal and state law differ, the FAA preempts state law as to any written arbitration agreement in a contract involving interstate commerce. Hodges v. Reasonover, 12-0043 (La. 7/2/12), 103 So. 3d 1069, 1072; FIA Card Services, N.A. v. Weaver, 10-1372 (La. 3/15/11), 62 So. 3d 709, 712; Collins v. Prudential Ins. Co. of America, 99-1423 (La. 1/19/00), 752 So. 2d 825, 827.

[HN3] The FAA makes arbitration agreements “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contact.” 9 U.S.C. §2 (emphasis added). The United States Supreme Court has explained that this provision reflects both a “liberal federal policy favoring arbitration,” and the “fundamental principle that arbitration is a matter of contract.” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339, 131 S. Ct. 1740, 1745, 179 L.Ed. 2d 742 (2011) (citing Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed. 2d 765 (1983) and Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 67, 130 S.Ct. 2772, 2776, 177 L.Ed. 2d 403 (2010)). The Supreme Court has instructed that in line with these principles, courts must place arbitration agreements on an equal footing with other contracts. Concepcion, 563 U.S. at 339 (citing Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443, 126 S.Ct. 1204, 163 L.Ed. 2d 1038 (2006)). Despite this policy favoring enforcement of arbitration agreements, the Supreme Court has also recognized that, under the savings clause in §2, general state contract principles still apply to assess whether those agreements to arbitrate are valid and enforceable, just as they would to any other [*11] contract dispute arising under state law.[Pg 7] Doctor’s Associates, Inc. v. Casarotto, 517 U.S. 681, 686-87, 116 S.Ct. 1652, 1656, 134 L. Ed. 2d 902 (1996). Accordingly, ordinary state-law principles that govern the formation of contracts are applied when deciding whether the parties agreed to arbitration. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944, 115 S.Ct. 1920, 1924, 131 L.Ed. 2d 985 (1995). Importantly, the savings clause in § 2 does not permit courts to invalidate an arbitration agreement under a state law applicable only to arbitration provisions. Concepcion, 563 U.S. at 339; Aguillard, 908 So. 2d at 8.

With these principles in mind, we consider whether the arbitration clause in the Sky Zone Agreement should be invalided under Louisiana law. As an initial matter, we note the electronic nature of the Agreement in this case is of no legal consequence and does not fundamentally change the principles of contract. [HN4] Louisiana law gives legal effect to both electronic contracts and signatures. See La. R.S. 9:2607. We interpret and analyze the terms of the Agreement using the same rules that we would apply to oral and written contracts.

Aguillard is the seminal case from this court addressing the validity of an arbitration agreement in a standard form contract. In Aguillard, the winning bidder at a real estate auction brought suit to enforce the auction sales agreement. This court, pursuant to its authority under La. R.S. 9:4201 and 9 U.S.C. § 2, applied a “contract [*12] of adhesion” analysis to determine the enforceability and validity of an arbitration agreement in the auction contract. In discussing the “contract of adhesion” doctrine, we explained: [HN5] “Broadly defined, a contract of adhesion is a standard contract, usually in printed form, prepared by a party of superior bargaining power for adherence or rejection of the weaker party. Often in small print, these contracts sometimes raise a question as to whether or not the weaker party actually consented to the terms.” 908 So. 2d at 10. This court further stated that “although a contract of adhesion is a contract executed in a standard form in the vast majority of instances, not every [Pg 8] contract in standard form may be regarded as a contract of adhesion. Therefore, we are not willing to declare all standard form contracts adhesionary; rather, we find standard form serves merely as a possible indicator of adhesion.” Id. (Internal citations removed). We made clear that the “real issue in a contract of adhesion analysis is not the standard form of the contract, but rather whether a party truly consented to all the printed terms. Thus, the issue is one of consent.” Id. (Internal citations removed). The court explained: [*13]

[HN6] Consent is called into question by the standard form, small print, and most especially the disadvantageous position of the accepting party, which is further emphasized by the potentially unequal bargaining positions of the parties. An unequal bargaining position is evident when the contract unduly burdens one party in comparison to the burdens imposed upon the drafting party and the advantages allowed to that party. Once consent is called into question, the party seeking to invalidate the contract as adhesionary must then demonstrate the non-drafting party either did not consent to the terms in dispute or his consent was vitiated by error, which in turn, renders the contract or provision unenforceable.

In summation, a contract is one of adhesion when either its form, print, or unequal terms call into question the consent of the non-drafting party and it is demonstrated that the contract is unenforceable, due to lack of consent or error, which vitiates consent. Accordingly, even if a contract is standard in form and printed in small font, if it does not call into question the non-drafting party’s consent and if it is not demonstrated that the non-drafting party did not consent or his [*14] consent is vitiated by error, the contract is not a contract of adhesion.

Id. at 10-11. Thus, the question we consider is whether Mr. Duhon truly consented to the arbitration provision in the Agreement.

In concluding the arbitration provision in Aguillard was not adhesionary, we noted (1) the arbitration provision was contained in a short, two-page document and was contained in a single sentence paragraph; (2) the arbitration provision was not concealed; (3) the contract did not lack mutuality because defendants did not reserve their right to litigate issues arising from the contract; and (4) the parties did not have a significant difference in bargaining power because a real estate auction is not a [Pg 9] necessary transaction that plaintiff was compelled to enter. Id. Thus, while not declaring a definitive test, this court effectively established a framework for examining the validity of an arbitration clause within a standard form contract by generally describing the characteristics of an unenforceable adhesionary agreement. Finding our analysis in Aguillard instructive, we consider the following factors to determine the enforceability of the arbitration clause in the Sky Zone Agreement: (1) [*15] the physical characteristics of the arbitration clause, (2) the distinguishing features of the arbitration clause, (3) the mutuality of the arbitration clause, and (4) the relative bargaining strength of the parties. After our review of the Agreement in light of the above factors, we hold the arbitration clause is adhesionary and not enforceable because of its placement in the Agreement and its lack of mutuality.

Examining the physical characteristics of the arbitration clause, we observe the arbitration language is consistent in size and font with the other provisions in the Agreement. However, the lack of distinguishing features and the specific placement of the arbitration clause serve to conceal the arbitration language from Sky Zone patrons. The Agreement is structured with check boxes next to the first three paragraphs, followed by five additional paragraphs without corresponding check boxes. The first check box is placed next to a single, six-sentence paragraph generally discussing participants’ risks of injuries and assumption of those risks. The second check box is placed next to a single paragraph containing two long sentences purporting to release Sky Zone from any liability. [*16] The third check box is placed next to one long paragraph discussing multiple topics. Specifically, the arbitration language is located starting in the eleventh line of this third paragraph, following provisions regarding patrons’ physical ability to participate in the activities, assumption of the risks, certification that Sky Zone’s rules have been explained to any children, and expressing agreement to follow those rules.

[Pg 10] In Aguillard, we noted “the arbitration provision, although not distinguished, was not concealed in any way, but rather was contained in a single sentence paragraph separated from the preceding and following paragraphs by double spacing.” 908 So. 2d at 16. Sky Zone argues the paragraph containing the arbitration clause was sufficiently distinguished and brought to patrons’ attention through the use of the check box feature. We disagree. Although patrons are required to check a box adjacent to the top of the third paragraph, significantly no check box was placed next to the arbitration language. In contrast, the other two check boxes in the Agreement were placed next to paragraphs limited to one subject matter. The Agreement also contains five additional paragraphs following [*17] the third paragraph that do not include corresponding check boxes. Each of these are short one-topic paragraphs addressing such items as Sky Zone’s right to videotape and record patrons and to use recordings for promotional materials. Thus, looking at the Agreement as a whole, the arbitration language appears to be the only specific provision not relegated to a separate paragraph or set apart in some explicit way. Here, the two-sentence provision mandating arbitration is camouflaged within the confines of an eleven sentence paragraph, nine of which do not discuss arbitration. The effect of the placement of the arbitration language is to cloak it within a blanket of boilerplate language regarding rules and risks of participating in the Sky Zone activities. Thus, although it is undisputed that Mr. Duhon electronically signed the Agreement, purportedly demonstrating an acceptance of its terms, under Louisiana contract law, we find Mr. Duhon did not truly consent to the arbitration provision.

Additionally, the lack of mutuality in the arbitration clause fortifies our finding that it is adhesionary. The arbitration provision requires only Sky Zone patrons to submit their claims to arbitration. [*18] The entire contract, including the arbitration clause, repeatedly includes “I acknowledge” and “I agree” language, with the “I” referencing [Pg 11] the “applicant” – here, Mr. Duhon. Specifically, the Agreement provides if there are any disputes regarding this agreement “I … hereby waive any right … to a trial and agree that such dispute shall be … determined by binding arbitration …” Although Sky Zone does not expressly reserve itself the right to pursue litigation, nowhere in the Agreement are “the parties” or Sky Zone particularly bound to arbitration. This is in stark contrast to the arbitration clause in Aguillard which clearly applied to both parties by providing: “Any controversy or claim arising from or relating to this agreement or any breach of such agreement shall be settled by arbitration administered by the American Arbitration Association under is [sic] rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.” 908 So. 2d at 4. Thus, in Aguillard, we found the arbitration clause did not lack sufficient mutuality to invalidate the clause as adhesionary because the arbitration clause severely limited both the defendants’ [*19] and the plaintiff’s right to litigate, and the defendants did not reserve their right to litigate in the document. Id. at 16. Even more troublesome in this case is the punitive provision compelling patrons to pay Sky Zone liquidated damages of $5,000 within sixty days should the patron file suit, with legal interest added at 12% per year. Sky Zone has no mutual obligation in the Agreement.

[HN7] The party seeking to enforce an arbitration provision has the burden of showing the existence of a valid contract to arbitrate. FIA Card Services, 62 So. 3d at 719. Sky Zone has failed to meet this burden. Considering the lack of mutuality together with the obscure placement of the arbitration language in the Agreement, and in comparison to the contract in Aguillard, we are compelled to find the arbitration clause in the Sky Zone Agreement is adhesionary and unenforceable.

In finding this arbitration clause invalid, we have carefully considered [HN8] the Supreme Court’s admonition that, under the doctrine of preemption, state courts [Pg 12] cannot adopt defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue. See, e.g., Concepcion, 563 U.S. at 339; Casarotto, 517 U.S. at 687. Nor can we apply state law rules that stand as an obstacle [*20] to the accomplishment of the FAA’s objectives. Concepcion, 563 U.S. at 343. We are mindful that setting forth a legal requirement relative to a particular form or method of distinguishing or highlighting arbitration clauses, or requiring term-for-term mutuality in an arbitration clause could risk running afoul of the FAA. However, the Supreme Court has made it clear that state courts may apply standard state law contract defenses to arbitration agreements. Id. at 339. Our application of Louisiana contract law to invalidate the arbitration provision in the instant case is consistent with § 2 of the FAA, and we find no conflict between our holding today and Supreme Court decisions discussing preemption.

As explained earlier, [HN9] consideration of enforceability of contracts of adhesion is an issue of consent, and determining whether a party truly consented to the contract terms. Consideration of consent is not limited to arbitration clauses; we consider the issue of consent in any contract. Lack of consent is a generally applicable contract defense. See La. C.C. art. 1927. The factors discussed in Aguillard simply provided a template for considering consent to an arbitration clause contained in a standard contract. Aguillard did not create a per se rule that any [*21] degree of non-mutuality in an arbitration agreement renders it unenforceable, nor did Aguillard prescribe a definitive rule that arbitration agreements must be delineated a particular way to be enforceable. Considering the Aguillard analysis in its entirety, it is clear we viewed the arbitration provision in the context of the overall contract and the surrounding circumstances, and our determination was based on weighing several factors. Were we not to consider factors relative to consent when examining the validity of an arbitration agreement, we would be operating in contravention to the mandate of the Supreme Court by [Pg 13] treating arbitration agreements differently from other contracts. Thus, we find our application of Louisiana contract law to invalidate the arbitration provision in this case is consistent with the savings clauses in § 2 of the FAA and La. R.S. 9:4201.

CONCLUSION

[HN10] The determination of whether an arbitration clause in a standard form contract is adhesionary is necessarily made on a case by case basis. Based on the facts of this case, the concealment of the arbitration clause and the lack of mutuality compels us to find the arbitration clause in the Sky Zone Agreement is adhesionary and unenforceable. [*22] Accordingly, we find the court of appeal erred in reversing the district court’s ruling on Sky Zone’s exception of prematurity.1 Therefore, the ruling of the court of appeal is reversed, and the ruling of the district court is reinstated.

1 Because we hold the arbitration clause is adhesionary and unenforceable based on consideration of the factors set forth in Aguillard, we pretermit discussion of Mr. Duhon’s additional arguments relative to ambiguity of the Agreement or whether the scope of the arbitration clause covers personal injury.

DECREE

REVERSED AND REMANDED TO THE DISTRICT COURT FOR FURTHER PROCEEDINGS.

CONCUR BY: CRICHTON; CLARK

CONCUR

[Pg 1] CRICHTON, J., additionally concurs and assigns reasons.

I agree with the majority decision, and write separately to emphasize that I do not view this decision as a rejection of arbitration agreements. To the contrary, Louisiana law favors the enforcement of arbitration agreements. See La. R.S. 9:4201 (Validity of arbitration agreements). Consistent with the Federal Arbitration Act (“FAA”), arbitration agreements must be placed “upon the same footing” as other types of contracts.” Scherk v. Alberto-Culver Co., 417 U.S. 506, 511, 94 S. Ct. 2449, 41 L. Ed. 2d 270 (1974); see also 9 U.S.C. § 2. But just as Louisiana law should not create obstacles to the enforceability of arbitration [*23] agreements, see AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 131 S. Ct. 1740, 179 L. Ed. 2d 742 (2011) (applying the FAA to preempt a state law condition to the enforceability of an arbitration agreement), neither should Louisiana law create exceptions for arbitration agreements that do not exist for other types of contracts.

Without question, arbitration can be a waiver of the traditional access to our judicial system. And so, applying Aguillard v. Auction Management Corp., 04-2804 (La. 6/29/05), 908 So. 2d 1, this waiver must be in accord with Louisiana contract law, otherwise a party’s consent may be called into question. Thus, a [Pg 2] business entity or individual seeking to draft a contract that includes an arbitration agreement must meet all of the elements of an enforceable contract.

By concealing the existence of the arbitration agreement, this agreement deprives a party of redress in the justice system. To make a bad situation worse, this agreement does not bind Sky Zone to arbitration, yet it penalizes a Sky Zone patron–but not Sky Zone–for seeking to initiate a lawsuit. These blatant asymmetries exhibit a stunning lack of draftsmanship and fail to adhere to the principles set forth in Aguillard. Accordingly, in my view, this Court is bound to deem this agreement unenforceable.

CLARK, J., concurring.

I find that the contract at issue [*24] lacks mutuality to such an extent that the contract is adhesionary. Not only does the contract bind only patrons to arbitration, the contract stipulates that if a patron files a lawsuit against Sky Zone, the patron is liable for $5,000 in liquidated damages. At the same time, Sky Zone is free to file a lawsuit against the patron without any penalty.

[Pg 1] Hughes, J., concurring.

Although I do not agree that the arbitration language was hidden, I concur that it lacked mutuality, and thus with the result.

DISSENT BY: WEIMER; GUIDRY

DISSENT

[Pg 1] WEIMER, J., dissenting.

I agree with the majority’s assessment that the factors outlined in Aguillard v. Auction Management Corp., 04-2804 (La. 6/29/05), 908 So.2d 1, are an appropriate starting point for analyzing the issue presented in this matter.1 See Duhon v. ActiveLaf, LLC, 16-0818, slip op. at 7 (La. 10/ /16). However, I respectfully disagree with the majority’s conclusion that analysis of the Sky Zone Agreement using Aguillard’s four-factor “framework” supports a finding that the arbitration clause is adhesionary and not enforceable. To the contrary, I find the arbitration clause to be valid and enforceable. I also find that analysis of the clause using Aguillard’s factors, viewed in light of the strong and, as Aguillard describes it, “heavy” [*25] presumption in favor of arbitration, dictates that finding of enforceability. Aguillard, 04-2804 at 25, 908 So.2d at 18.

1 While I dissented in Aguillard, I did so solely on grounds that there was a threshold legal question that I believed needed to be resolved before reaching the issue of the enforceability of the arbitration clause: whether the arbitration clause at issue even applied in light of the fact that the Auction Agreement for the Purchase and Sale of Real Estate had been completed. Aguillard, 04-2804 at 1, 980 So.2d at 20-21 (Weimer, J., dissenting.).

As the majority recognizes, a contract of adhesion is broadly defined as “a standard contract, usually in printed form, [often in small print,] prepared by a party [Pg 2] of superior bargaining power for adherence or rejection of the weaker party.” Duhon, 16-0818, slip op. at 7-8 (quoting Aguillard, 04-2804 at 9, 908 So.2d at 8-9.) (Emphasis added.) Pursuant to this definition, a predicate factor to consider in determining whether a contract is adhesionary is the existence of unequal bargaining power. Indeed, this is one of the four factors delineated in the Aguillard analysis. Yet, the majority opinion does not mention, much less weigh, this factor in conducting its analysis-this, despite [*26] the fact that there must be unequal bargaining power for the contract to meet the definitional hurdle of a contract of adhesion in the first instance.

In this case, it is clear that, as in Aguillard, there was not “such a difference in bargaining positions between the parties so as to justify the application of the principle of contract of adhesion to the arbitration clause.” Aguillard, 04-2804 at 22, 908 So.2d at 16-17. As Aguillard explained in defining a contract of adhesion, “[o]wing to the necessities of modern life a particular kind of contract has been developed where one of the parties is not free to bargain.” Id., 04-2804 at 10, 908 So.2d at 9 (quoting Saul Litvinoff, Consent Revisited: Offer, Acceptance, Option, Right of First Refusal, and Contracts of Adhesion in the Revision of the Louisiana Law of Obligations, 47 La.L.Rev. 699, 757-59 (1986-1987)). Such a lack of bargaining power exists where “[t]he party in the weaker position is left with no other choice than to adhere to the terms proposed by the other.” Id. (Emphasis added.) Typical examples of such contracts include those entered into with “airlines, public utilities, railroad or insurance companies.” Id.

In Aguillard, this court recognized that the relative bargaining positions of the real estate auctioneer and the [*27] individual auction participant involved in that case were not so unequal as to justify invalidating the arbitration clause on grounds of adhesion, [Pg 3] reasoning that, although the participant was required to sign the agreement containing the arbitration clause in order to participate in the auction, “the underlying transaction, the real estate auction, [was] not … such a necessary transaction” that the participant “was compelled to enter it.” Id., 04-2804 at 22-23, 908 So.2d at 16-17. Indeed, the participant could have avoided arbitration by not signing the agreement, not participating in the auction, and simply walking away. See Id. 04-2804 at 22, 908 So.2d at 17. Under such circumstances, the court found “nothing sufficient to establish the [auctioneers] were in such a superior bargaining position as to render the [auction participant] a far weaker party or the contract adhesionary.” Id. 04-2804 at 23, 908 So.2d at 17.

The rationale of the court in Aguillard applies with equal force to the Sky Zone Agreement at issue in this case. Here, the Agreement concerns not a “necessity of modern life,” but a purely voluntary recreational activity. The plaintiff was not compelled-physically, economically or otherwise-to visit the trampoline park, jump on its trampolines, or sign the Agreement [*28] containing the arbitration clause. Jumping on a trampoline is simply not a practical necessity of modern living like water, electricity, or even airline flight. Like the auction participant in Aguillard, the plaintiff, here, retained the ultimate bargaining chip in this situation: he could have refused to sign Sky Zone’s Agreement, walked away, and pursued an alternative form of recreational activity. Given these circumstances, there is simply no evidence to establish that Sky Zone was in such a superior bargaining position as to render the plaintiff a far weaker party or the contract adhesionary.

Further, and also contrary to the majority, I find nothing in the Sky Zone Agreement, itself, that would call into question the validity of the plaintiff’s consent to the terms of the Agreement. This determination is based on my analysis of the [Pg 4] three factors that are addressed in the majority’s Aguillard analysis-(1) the physical characteristics of the arbitration clause; (2) the distinguishing features of that clause; and (3) the mutuality of the clause-and my differing conclusions as to each.

In addressing the first Aguillard factor-the physical characteristics of the arbitration clause-the [*29] majority acknowledges that “the arbitration language is consistent in size and font with the other provisions in Agreement.” Duhon, slip op. at 9. In fact, the clause is not in small print or otherwise unreadable, but is just as legible as every other word in the Agreement. The majority apparently concedes, therefore, and I agree, that the physical characteristics of the arbitration clause weigh in favor of finding the clause enforceable.

In addressing the second of the Aguillard factors-the distinguishing features of the clause-the majority, in my view, falls into error. It downplays the very feature that distinguishes the arbitration clause and calls its attention to the participant: the box located next to the paragraph in which the clause appears, a box which must be affirmatively checked before the Agreement can be completed. The majority chooses, instead, to focus solely on the fact that the arbitration language is not set out in a stand-alone paragraph to reach the conclusion that it is “camouflaged” and “cloak[ed] … within a blanket of boilerplate language” to such an extent that plaintiff could not have not consented to its terms, despite affirmatively indicating by checking the electronic box that he [*30] did just that. See Duhon, 16-0818, slip op. at 10. While it is true that the arbitration clause appears in a paragraph not limited to the single topic of arbitration, more than one-half of that paragraph concerns the agreed-upon arbitration, its procedure, its locale, governing law, and the consequences for refusing or otherwise breaching the agreement to arbitrate.2 The arbitration language is hardly [Pg 5] camouflaged. Further, the majority’s suggestion, that failure to set the arbitration language out in a stand-alone paragraph fails to sufficiently distinguish the arbitration clause, ignores the check box. See Duhon, 16-0818, slip op. at 10. The presence of that box is akin to, and has the same legal force and effect as, requiring the plaintiff to initial next to the paragraph, a requirement that affirmatively alerts the participant to the contents and significance of the paragraph.3 Like the arbitration provision in Aguillard, and contrary to the majority, I find the arbitration language in the Sky Zone Agreement was not concealed in any way and that the use of the electronic check boxes reasonably distinguished the clause.

2 See Duhon, 16-0818, slip op’n at 3.

3 Modern technology has introduced what is referred [*31] to as a “clickwrap” agreement as a mechanism for having a “user manifest his or her assent to the terms of the … agreement by clicking on an icon.” See Register.com, Inc. v. Verio, Inc., 356 F.3d 393, 429 (2nd Cir. 2004).

Finally, as to the third Aguillard factor, the mutuality of the obligation to arbitrate, the majority acknowledges that “Aguillard did not create a per se rule that any degree of non-mutuality in an arbitration agreement renders it unenforceable,”4 and that “requiring term-for-term mutuality in an arbitration clause could risk running afoul of the [Federal Arbitration Act],”5 but then inexplicably invalidates the arbitration clause in the Sky Zone Agreement precisely because it lacks the term-for-term mutuality that it acknowledges the law does not require, and may even prohibit.6 In truth, the only difference between the arbitration clause in Aguillard and the one in the Sky Zone Agreement is the use of the “I” in the Sky Zone Agreement. However, the mere use of the word “I” does not render the clause non-mutual, [Pg 6] particularly in light of the fact, acknowledged by the majority, that the Agreement does not reserve to Sky Zone the right to pursue litigation.7

4 See Duhon, 16-0818, slip op. at 13.

5 See Duhon, 16-0818, slip op. at 12.

6 See Duhon, 16-0818, slip op. at 11-13.

7 See [*32] Duhon, 16-0818, slip op. at 11.

Consequently, unlike the majority, I find an analysis of all four of the factors outlined in Aguillard leads to the conclusion that the Sky Zone Agreement is not adhesionary and is valid and enforceable. This conclusion is strengthened, not only by the strong legislative policy that favors arbitration,8 but also by the long-standing principle that signatures to documents are not mere ornaments.9 As Aguillard notes: “It is well[-]settled that a party who signs a written instrument is presumed to know its contents and cannot avoid its obligations by contending that he did not read it, that he did not understand it, or that the other party failed to explain it to him.” Id., 04-2804 at 22, 908 So.2d at 17. In this case, as in Aguillard, the plaintiff signed the Agreement acknowledging that he “had sufficient opportunity to read this entire document … understand this Agreement and … voluntarily agree to be bound by its terms.”10 As in Aguillard, there was no evidence that the plaintiff was not in an equal bargaining position with Sky Zone because the plaintiff could have avoided arbitration and the contractual provisions as a whole by simply not signing the Sky Zone Agreement and pursuing an alternative recreational [*33] activity. Also as in Aguillard, there is nothing in the Sky Zone Agreement itself-its physical or distinguishing characteristics-that would call into question the validity of the plaintiff’s consent to the terms of the Sky Zone Agreement as indicated by his signature. I would affirm the decision of the court of appeal.

8 See Duhon, 16-0818, slip op. at 5 (citing La. R.S. 9:4201, et seq.).

9 See Tweedel v. Brasseaux, 433 So. 2d 133, 137 (La. 1983) (quoting Boullt v. Sarpy, 30 La.Ann. 494, 495 (La. 1878)).

10 See Duhon, 16-0818, slip op. at 4.

[Pg 1] GUIDRY, J., dissents and assigns reasons.

I respectfully dissent from the majority’s reversal of the ruling of the court of appeal. In my view, the arbitration clause in the Sky Zone Agreement is not part of a contract of adhesion which would render it unenforceable.

As the majority correctly states, a contract of adhesion is a “standard contract, usually in printed form, prepared by a party of superior bargaining power for adherence or rejection of the weaker party.” Aguillard v. Auction Management Corp., 2004-2804, 2004-2857, p.9 (La. 6/29/05), 908 So.2d 1, 8-9. It is undisputed that the real issue in a contract of adhesion analysis is consent, whether the non-drafting party, considered to be the weaker party, truly consented to all the printed terms. Id. In addressing the issue of consent, a court must look to the form, print, or unequal terms [*34] of the contract by considering the factors set forth in Aguillard, namely, the physical characteristics and distinguishing features of the arbitration clause, the relative bargaining position of the parties, and the mutuality or lack thereof in the arbitration clause. Id., 2004-2804, 2004-2857, p. 9, 908 So.2d at 17.

As an initial matter, I disagree with the majority’s finding that the arbitration clause was hidden and camouflaged within the Sky Zone Agreement in such a way that would indicate the plaintiff’s consent to the agreement could be called into [Pg 2] question. Neither the print nor the font size of the arbitration clause differed from that of the remainder of the contract executed by the plaintiff. The standard form agreement was relatively short and straightforward, consisting of a total of nine paragraphs, three of which were set off with boxes to be checked to signify the patron’s consent. The arbitration clause, while not set off alone, consisted of one-half of a paragraph that was required to be checked off. The clause commenced midway through the paragraph and ran until the end of the paragraph. The plaintiff does not dispute that he checked off the box reflecting his consent to the terms of the arbitration [*35] clause.

Furthermore, the record is absent any evidence that the plaintiff was not in an equal bargaining position with the defendants. At the heart of the transaction, the plaintiff was seeking admittance to a recreational facility. Indisputably, this was not a contract to which the plaintiff was compelled to enter into the terms. He could have simply elected to not sign the agreement and bypass the recreational activity. Instead, the plaintiff signed the arbitration agreement acknowledging that he had sufficient opportunity to read the entire document and understood its terms. Having signed the agreement, the plaintiff cannot seek to avoid his obligations by contending that he did not read or understand it. Basic contract law dictates that a party who signs a written instrument is presumed to know its contents and cannot avoid its obligations by contending that he did not read it, that he did not understand it, or that the other party failed to explain it to him. Coleman v. Jim Walter Homes, Inc., 2008-1221, p. 7 (La. 3/17/09), 6 So.3d 179, 183 (citing Tweedel v. Brasseaux, 433 So.2d 133, 137 (La.1983)). To overcome the presumption, the party has the burden of proving with reasonable certainty that he was deceived. Id. The plaintiff is unable to satisfy this burden, because there is no evidence in the record that [*36] the plaintiff made any effort to contact the defendant for an explanation or to discuss the terms of the contract in [Pg 3] any respect.

Next, the arbitration clause at issue substantially mirrors the Aguillard arbitration clause, which this court found to be mutual. The plaintiff has not shown anything in the clause that reserves Sky Zone’s right to litigate disputes related to the agreement that is not equally afforded to the plaintiff. As such, the majority errs in finding the lack of mutuality as to the parties.

Finally, in Aguillard, this court addressed the presumption of arbitrability:

[E]ven when the scope of an arbitration clause is fairly debatable or reasonably in doubt, the court should decide the question of construction in favor of arbitration. The weight of this presumption is heavy and arbitration should not be denied unless it can be said with positive assurance that an arbitration clause is not susceptible of an interpretation that could cover the dispute at issue. Therefore, even if some legitimate doubt could be hypothesized, this Court, in conjunction with the Supreme Court, requires resolution of the doubt in favor of arbitration.

Id., 04-2804 at 18, 908 So.2d at 18.

Id., 04-2804 at 18, 908 So.2d at 25. In light of the controlling law indicating [*37] the favorable consideration afforded arbitration agreements, coupled with the plaintiff’s failure to satisfy his burden of proving the contract was adhesionary, the majority erred in invalidating the contract. Accordingly, I respectfully dissent and would affirm the ruling of the court of appeal.


Twenty Years ago, releases were void in New York, here; a release stopped a claim for an injury from a plaintiff playing flag football

New York has a statute that voids releases if used by places of amusement where you pay to enter. Issue in this case was, did the plaintiff pay to enter the field or pay the league.

By paying the league, he did not pay a place of amusement, and the release stopped his claims.

Marcf v. Middle Country Center School District, Long Island Flag Football League, Inc. et. Al. 57 Misc. 3d 1225(A); 2017 N.Y. Misc. LEXIS 4717; 2017 NY Slip Op 51678(U)

State: New York: Supreme Court of New York, Suffolk County

Plaintiff: Murat Marcf

Defendant: Middle Country Center School District, Long Island Flag Foot-Ball League, Inc. and Long Island Flag Football, Inc.,

Plaintiff Claims: Negligence

Defendant Defenses: Release

Holding: for the Defendant

Year: December 2017

This case is one of many showing how release law has changed over the years. New York was a state that once barred releases and now easily enforces them. If you use releases, you must stay current on the law affecting your release. You probably also need to have your release updated. Contact me if you need your release checked.

Summary

New York GOL § 5-326 states that in New York places of amusement, where the patrons pay to enter or play are void. Here the place of amusement was a football field owned by the defendant. However, the plaintiff did not pay the defendant to play on the field; he paid the flag football league so the release he signed was valid and stopped his claims.

Facts

The plaintiff was injured playing flag football. His flag football game was part of a league. The plaintiff paid the league to play, and the league organized games and places to play.

The plaintiff jumped to receive a pass and landed on a concealed sprinkler head inuring is foot. He sued to recover for his injuries. The field he was playing on was owned by the defendant school district.

Before playing the plaintiff signed a release. The defendants filed a motion to dismiss the plaintiff claims based upon the release. The following is the court’s analysis and dismissal of the plaintiff’s complaint.

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

The court thoroughly went through release law in New York. The court referred to the release as documentary evidence that must resolve all factual issues if the motion was to be granted.

For the release to be valid, the terms of the release must be clear, unambiguous and conclusively dispose of the matter. A release is a contract and will be governed by contract law. If the release is not void by statute or public policy a release absolving a party of negligence will be enforced.

The court found the language of the release was clear and unambiguous and thus enforceable and binding upon the parties. The release is valid and enforceable unless the plaintiff claims duress, illegality, fraud or mutual mistake. Here the plaintiff did not plead any of those.

Plaintiff in this matter makes no claim of duress, illegality, fraud, or mutual mistake in the signing of the subject Release. Instead, plaintiff alleges in opposition to the motion that the Release is void as against public policy pursuant to GOL § 5-326, and that defendant is, therefore, barred from relying on the Release in seeking dismissal of the plaintiff’s complaint. GOL § 5-326 renders void and unenforceable agreements that exempt certain places of public amusement, recreation and similar establishments from liability.

General Obligations Law § 5-326 was enacted to stop gyms from using a release. The courts have not looked at the statute from stopping places of amusement from using a release.

In general, when a participant pays a fee to use recreational facilities, or pays league fees and the league pays for use of those facilities, a waiver and release of liability signed by the participant is void pursuant to GOL § 5-326 To void a release of liability executed by a user of a recreational facility pursuant to GOL § 5-326, there must be an evidentiary showing that the individual paid a fee for use of the facility…

Here the plaintiff did not pay to use the field, the place of amusement. The plaintiff paid to join the league. The field was used for free by the league.

A plaintiff’s complaint will be properly dismissed pursuant to CPLR 3211(a)(5) where the plaintiff claims that the Release is void pursuant to GOL §5-326, but fails to establish that he or she paid a fee directly to the owner or operator of the recreational facility for use of the facility where the alleged injury occurred…

Because the plaintiff did not pay the “place of amusement” the owner of the field, GOL §5-326 did not apply.

So Now What?

Release law evolves, constantly. The evolution of releases in New York went from they were void because of GOL §5-326, to unless the plaintiff can prove an exact relationship to the defendant and the statute the release will be valid.

If you use a release, you must stay current on release law. Read these articles and if your release has not been updated in a while contact me.

What do you think? Leave a comment.

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Marcf v. Middle Country Center School District, LONG ISLAND FLAG FOOTBALL LEAGUE, INC. et. Al. 57 Misc. 3d 1225(A); 2017 N.Y. Misc. LEXIS 4717; 2017 NY Slip Op 51678(U)

Marcf v. Middle Country Center School District, LONG ISLAND FLAG FOOTBALL LEAGUE, INC. et. Al. 57 Misc. 3d 1225(A); 2017 N.Y. Misc. LEXIS 4717; 2017 NY Slip Op 51678(U)

Murat Marcf, Plaintiff(s), against Middle Country Center School District, LONG ISLAND FLAG FOOTBALL LEAGUE, INC. and LONG ISLAND FLAG FOOTBALL, INC., Defendant(s).

3015-2016

SUPREME COURT OF NEW YORK, SUFFOLK COUNTY

57 Misc. 3d 1225(A); 2017 N.Y. Misc. LEXIS 4717; 2017 NY Slip Op 51678(U)

December 11, 2017, Decided

NOTICE: THIS OPINION IS UNCORRECTED AND WILL NOT BE PUBLISHED IN THE PRINTED OFFICIAL REPORTS.

CORE TERMS: league, football, flag, void, documentary evidence, signing, public policy, establishment, unambiguous, supporting papers, recreational facilities, unenforceable, participating, conclusively, recreation, amusement, playing, binding, matter of law, causes of action, entitlement, enforceable, illegality, gymnasium, producing, dispose, duress, mutual, exempt, facie

HEADNOTES

Release–Scope of Release–General Obligations Law § 5-326 did not void unambiguous waiver and release of liability where plaintiff paid fee to league to play flag football on field on which he was injured since no part of fee went to field owner. General Obligations Law § 5-326 (Agreements exempting pools, gymnasiums, places of public amusement or recreation and similar establishments from liability for negligence void and unenforceable).

COUNSEL: [*1] For Plaintiff: Siben & Siben, LLP, Bay Shore, New York.

For Defendants: Havkins Rosenfeld Ritzert & Varriale, New York, New York.

JUDGES: PETER H. MAYER, J.S.C.

OPINION BY: PETER H. MAYER

OPINION

Peter H. Mayer, J.

Upon the reading and filing of the following papers in this matter: (1) Notice of Motion by the defendants, dated June 15, 2016, and supporting papers; (2) Affirmation in Opposition by the plaintiff, dated August 22, 2016, and supporting papers; (3) Reply Affirmation by the defendants, dated September 15, 2016, and supporting papers; (4) Sur Reply by the plaintiff, dated September 21, 2016, and supporting papers; and now

UPON DUE DELIBERATION AND CONSIDERATION BY THE COURT of the foregoing papers, the motion is decided as follows: it is

ORDERED that the motion (seq. # 001) by defendants, Middle Country Central School District (“School District”) and Long Island Flag Football, Inc., s/h/a Long Island Flag Football League, Inc. and Long Island Flag Football, Inc. (“the League”), which seeks an Order dismissing the plaintiff’s complaint pursuant to CPLR 3211(a)(1) and (5), is hereby granted; and it is further

ORDERED that counsel for defendants shall promptly serve a copy of this Order upon counsel for all parties by First Class [*2] Mail, and shall promptly thereafter file the affidavit(s) of such service with the Suffolk County Clerk.

In this action, plaintiff alleges that on October 4, 2015 he injured his left foot while playing in a League flag football game, when he jumped to catch a pass and landed on a concealed sprinkler head. The game was being played on a field located on the grounds of Newfield High School, which is operated by the defendant School District. Prior to playing in the football game, plaintiff and his teammates signed a Waiver and Release of Liability (“Release”), which states:

In return for my being allowed to participate in any way in the LONG ISLAND FLAG FOOTBALL LEAGUE, INC., I release and agree not to sue the LONG ISLAND FLAG FOOTBALL LEAGUE, INC., its employees directors and non-employees such as referees, coaches, agents, sponsors, and owners of fields used, from all present and future claims made by me or my family, estate, heirs or assigns for property damage, personal injury, or wrongful death arising as a result of my participation in the LONG ISLAND FLAG FOOTBALL LEAGUE, INC. and caused by the ordinary negligence of the parties above, wherever, whenever, or however the same may [*3] occur. I understand and agree that those listed above are not responsible for any injury or property damage arising out of my participation out of my participation (sic) in the LONG ISLAND FLAG FOOTBALL LEAGUE, INC., even if caused by their ordinary negligence. I understand that participation in the LONG ISLAND FLAG FOOTBALL LEAGUE, INC. involves certain risks including, but not limited to, serious injury, severe economic losses, permanent disability, and even death. I am voluntarily participating in the LONG ISLAND FLAG FOOTBALL LEAGUE, INC. with knowledge of the danger involved and agree to accept all risks of such participation. I certify that I am in excellent physical health, and may participate [**2] in strenuous and hazardous physical activities, including the flag football to be played in the LONG ISLAND FLAG FOOTBALL LEAGUE, INC. I agree that prior to participating, I will inspect the facilities and equipment to be used, and if I believe anything unsafe, I will immediately advise my coach of said condition(s) and refuse to participate. Permission is granted for me to receive medical treatment, if needed. I also agree to indemnify and hold harmless those listed above for all claims [*4] arising out of my participation in the LONG ISLAND FLAG FOOTBALL LEAGUE, INC. and all related activities. I understand that this document is intended to be as broad and inclusive as permitted by the State of New York and agree that if any portion of this agreement is invalid, the remainder will continue in full legal force and effect. I further agree that any legal proceedings related to this waiver will take place in Suffolk County, New York. I am of legal age and am freely signing this agreement.

We have read this agreement and understand that by signing this form, we are giving up legal rights and remedies and that the terms of this release are binding on each one of us.

The defendants contend in their dismissal motion that the plaintiff assumed the risk of injury while playing in the game, and that by signing the Release, the plaintiff effectively released the defendants from liability for any injuries plaintiff allegedly sustained during the game. Defendants conclude, therefore, that they are entitled to dismissal of plaintiff’s complaint pursuant to CPLR 3211(a)(1) and (5).

Generally, on a CPLR 3211 motion to dismiss, the court will accept the facts alleged in the complaint as true, accord plaintiffs the [*5] benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory (see Walton v New York State Dept. of Corr. Services, 13 NY3d 475, 484, 921 N.E.2d 145, 893 NYS2d 453 [2009], quoting Nonnon v City of New York, 9 NY3d 825, 827, 874 N.E.2d 720, 842 NYS2d 756 [2007]). Pursuant to CPLR 3211(a)(1), a party may move for dismissal of one or more causes of action on the ground that “a defense is founded upon documentary evidence.” Likewise, a party may move for dismissal pursuant to CPLR 3211(a)(5) on the ground that “the cause of action may not be maintained because of … [a] release” of liability.

A motion to dismiss pursuant to CPLR 3211(a)(1) on the ground that the action is barred by documentary evidence may be appropriately granted where the documentary evidence utterly refutes the plaintiff’s factual allegations, conclusively establishing a defense as a matter of law (see AG Capital Funding Partners, L.P. v State Street Bank and Trust Co., 5 NY3d 582, 842 N.E.2d 471, 808 NYS2d 573 [2005]; Goshen v Mutual Life Ins. Co. of New York, 98 NY2d 314, 774 N.E.2d 1190, 746 NYS2d 858 [2002]; Leon v Martinez, 84 NY2d 83, 638 N.E.2d 511, 614 NYS2d 972 [1994]; Thompsen v Baier, 84 AD3d 1062, 923 NYS2d 607 [2d Dept 2011]; Rietschel v Maimonides Medical Center, 83 AD3d 810, 921 NYS2d 290 [2d Dept 2011]). In other words, the documentary evidence must resolve all factual issues as a matter of law and conclusively dispose of the plaintiff’s claim (see Palmetto Partners, L.P. v AJW Qualified Partners, LLC, 83 AD3d 804, 921 NYS2d 260 [2d Dept 2011]; Paramount Transp. Sys., Inc. v Lasertone Corp., 76 AD3d 519, 520, 907 NYS2d 498 [2d Dept 2010]).

When a defendant moves for CPLR 3211(a)(1) dismissal based on documentary evidence that the plaintiff signed a release of liability in favor of the defendant, dismissal may be granted where the terms of the release are clear, unambiguous and conclusively dispose of the matter (see Burgos v New York Presbyterian Hosp., 155 AD3d 598, 2017 NY Slip Op 07585 [2d Dept 2017]; Rudovic v Rudovic, 131 AD3d 1225, 16 NYS3d 856 [2d Dept 2015]). In effect, a release is a contract and its construction [*6] is governed by contract law (see Outdoors Clothing Corp. v Schneider, 153 AD3d 717, 60 NYS3d 302 [2d Dept 2017]; Kaminsky v Gamache, 298 AD2d 361, 751 NYS2d 254 [2d Dept 2002]). Absent a statute or public policy to the contrary, a contractual provision absolving a party from its own negligence will be enforced (see Sommer v Federal Signal Corp., 79 NY2d 540, 593 N.E.2d 1365, 583 NYS2d 957 [1992]; Deutsch v Woodridge Segway, LLC, 117 AD3d 776, 985 NYS2d 716 [2d Dept 2014]; Princetel, LLC v Buckley, 95 AD3d 855, 944 NYS2d 191 [2d Dept 2012]). A defendant establishes its prima facie entitlement to dismissal by producing the waiver and release signed by the plaintiff (see Brookner v New York Roadrunners Club, Inc., 51 AD3d 841, 858 NYS2d 348 [2d Dept 2008]; Bufano v National Inline Roller Hockey Ass’n, 272 A.D.2d 359, 707 N.Y.S.2d 223 [2d Dept 2000]).

If the language of a release is clear and unambiguous, the signing of a release is a “jural act” binding on the parties (see Booth v 3669 Delaware, Inc., 92 NY2d 934, 703 N.E.2d 757, 680 NYS2d 899 [2d Dept 1998]; Mangini v McClurg, 24 NY2d 556, 249 N.E.2d 386, 301 NYS2d 508 [1969]). The Court finds that the language of the subject Release is clear and unambiguous and is, therefore, valid, enforceable and binding on the parties (see Lago v Krollage, 78 NY2d 95, 575 N.E.2d 107, 571 NYS2d 689 [1991]; Booth v 3669 Delaware, Inc., 92 NY2d 934, 703 N.E.2d 757, 680 NYS2d 899 [2d Dept 1998]). A release will not be treated lightly, and will not be set aside by a court without a showing of duress, illegality, fraud, or mutual mistake (see Liotti v Galasso, Langione and Botter, 128 AD3d 912, 8 NYS3d 578 [2d Dept 2015]; Seff v Meltzer, Lippe, Goldstein & Schlissel, P.C., 55 AD3d 592, 865 NYS2d 323 [2d Dept 2008]; Shklovskiy v Khan, 273 AD2d 371, 709 NYS2d 208 [2d Dept 2000]; Delaney v County of Westchester, 90 AD2d 819, 455 NYS2d 839 [2d Dept 1982], appeal dismissed 59 NY2d 763 [1983]; Thives v Holmes Ambulance Service Corp., 78 AD2d 651, 432 NYS2d 235 [2d Dept 1980]). Plaintiff in this matter makes no claim of duress, illegality, fraud, or mutual mistake in the signing of the subject Release. Instead, plaintiff alleges in opposition to the motion that the Release is void as against pubic policy pursuant to GOL § 5-326, and that defendant is, therefore, barred from relying on the Release in seeking dismissal of plaintiff’s complaint. GOL § 5-326 renders void and unenforceable agreements that exempt certain [*7] places of public amusement, recreation and similar establishments from liability. In this regard GOL § 5-326 states:

Every covenant, agreement or understanding in or in connection with, or collateral to, any contract, membership application, ticket of admission or similar writing, entered into between the owner or operator of any pool, gymnasium, place of amusement or recreation, or similar establishment and the user of such facilities, pursuant to which such owner or operator receives a fee or other compensation for the use of such facilities, which exempts the said owner or operator from liability for damages caused by or resulting from the negligence of the owner, operator or person in charge of such establishment, or their agents, servants or employees, shall be deemed to [**3] be void as against public policy and wholly unenforceable.

In general, when a participant pays a fee to use recreational facilities, or pays league fees and the league pays for use of those facilities, a waiver and release of liability signed by the participant is void pursuant to GOL § 5-326 (see Falzone v City of New York, 128 AD3d 889, 9 NYS3d 165 [2d Dept 2015]). To void a release of liability executed by a user of a recreational facility pursuant to GOL § 5-326, there must be an evidentiary showing that the [*8] individual paid a fee for use of the facility (see Lago v Krollage, 78 NY2d 95, 575 N.E.2d 107, 571 NYS2d 689 [1991]; Stuhlweissenburg v Town of Orangetown, 223 AD2d 633, 636 NYS2d 853 [2d Dept 1996]; Stone v Bridgehampton Race Circuit, 217 AD2d 541, 629 NYS2d 80 [2d Dept 1995]; Miranda v Hampton Auto Raceway, 130 AD2d 558, 515 NYS2d 291 [2d Dept 1987]).

A plaintiff’s complaint will be properly dismissed pursuant to CPLR 3211(a)(5) where the plaintiff claims that the Release is void pursuant to GOL §5-326, but fails to establish that he or she paid a fee directly to the owner or operator of the recreational facility for use of the facility where the alleged injury occurred (see Brookner v New York Roadrunners Club, Inc., 51 AD3d 841, 858 NYS2d 348 [2d Dept 2008]; Bufano v National Inline Roller Hockey Ass’n, 272 AD2d 359, 707 NYS2d 223 [2d Dept 2000]). When a plaintiff fails to produce any evidence that he or she paid a fee for admission to, or use of, a municipality’s field, GOL § 5-326 will not void a release of liability executed by the plaintiff prior to participating in a sporting event (see Stuhlweissenburg v Town of Orangetown, 223 AD2d 633, 636 NYS2d 853 [2d Dept 1996]). Under such circumstances, the plaintiff’s waiver of liability is enforceable and not void as against public policy in violation of GOL § 5-326 (see Lago v Krollage, 78 NY2d 95, 575 N.E.2d 107, 571 NYS2d 689 [1991]; Lee v Boro Realty, LLC, 39 AD3d 715, 832 NYS2d 453 [2d Dept 2007]; Castellanos v Nassau/Suffolk Dek Hockey, 232 AD2d 354, 648 NYS2d 143 [2d Dept 1996]; Stuhlweissenburg v Town of Orangetown, 223 AD2d 633, 636 NYS2d 853 [2d Dept 1996]; Stone v Bridgehampton Race Circuit, 217 AD2d 541, 629 NYS2d 80 [2d Dept 1995]; Koster v Ketchum Communications, 204 AD2d 280, 611 NYS2d 298 [2d Dept 1994]).

Here, by producing the Waiver and Release signed by the plaintiff, the defendants established prima facie entitlement to dismissal of the plaintiff’s complaint (see Brookner v New York Roadrunners Club, Inc., 51 AD3d 841, 858 NYS2d 348 [2d Dept 2008]; Bufano v National Inline Roller Hockey Ass’n, 272 A.D.2d 359, 707 N.Y.S.2d 223 [2d Dept 2000]). In opposition, plaintiff has failed to show he paid to use the field where he was allegedly injured, or that any portion of his League fee was paid to the School District for the use of the field. In fact, the affidavit of the defendant League’s President, George Hignell, shows [*9] that the School District “did not require a fee for the use of its fields” and that “[n]either the plaintiff nor the [L]eague paid a fee for use of Newfield High School athletic field” where the plaintiff is alleged to have been injured. Therefore, the Release is not void as against public policy pursuant to GOL § 5-326.

Based upon the foregoing, the plaintiff’s complaint is dismissed pursuant to CPLR 3211(a)(1) and (a)(5) (see CPLR 3211[a][1]; CPLR 3211[a][5]; Burgos v New York Presbyterian Hosp., 155 AD3d 598, 2017 NY Slip Op 07585 [2d Dept 2017]; Rudovic v Rudovic, 131 A.D.3d 1225, 16 NYS3d 856 [2d Dept 2015] [**4] ; Brookner v New York Roadrunners Club, Inc., 51 AD3d 841, 858 NYS2d 348 [2d Dept 2008]; Bufano v National Inline Roller Hockey Ass’n, 272 AD2d 359, 707 NYS2d 223 [2d Dept 2000]).

This constitutes the Decision and Order of the Court.

Dated: December 11, 2017

PETER H. MAYER, J.S.C.


This decision is either normal, or ground breaking. The release info is nothing new. However, the court found the language on the back of the lift ticket created a release which barred the plaintiff’s claims.

11th Circuit Court of Appeals upholds lower decision dismissing claims of a plaintiff who broke her femur unloading a lift during a ski lesson.

Lower Court decision was based on Colorado Premises Liability Act. This decision was based on the release the plaintiff signed to take the ski lesson.

For an analysis of the lower court decision see: Question answered; Colorado Premises Liability Act supersedes Colorado Ski Area Safety act. Standard of care owed skiers on chairlift’s reasonable man standard?

Brigance, v. Vail Summit Resorts, Inc., 2018 U.S. App. LEXIS 397

State: Colorado: United States Court of Appeals for the Tenth Circuit

Plaintiff: Teresa Brigance

Defendant: Vail Summit Resorts, Inc. (Keystone Ski Area)

Plaintiff Claims: (1) negligence, (2) negligence per se, (3) negligent supervision and training, (4) negligence (respondeat superior), (5) negligent hiring, and (6) violation of the Colorado Premises Liability Act (the “PLA”), Colo. Rev. Stat. § 13-21-115

Defendant Defenses: Release and the lift ticket

Holding: For the Defendant Ski Area, Vail

Year: 2018

This case looks at the law concerning releases in Colorado. Writing a release requires three skills. The first is an understanding of the law that will be applied to the release in question. The second is an understanding of the activity, and the risks associated with the activity the release must cover. The third is what do judges want to see in the release and what they don’t want to see.

The first and third items are what I specialize in. The second item is what we have to specialize in. Writing a release is not handing a contract job to an attorney. It is understanding how you want to run your business, the guests you want to serve and the types of problems you want to prevent from turning into litigation.

If you need a release for your business, activity or program consider working with me to design one. You also have the option of purchasing a pre-written release based upon the needs of your business, type of activity and the state where you are located.

To help you understand release law, here is an article about how a release was written correctly and then used to stop a claim.

Summary

This decision does not stand out among decisions concerning release law in Colorado. However, it is an extreme change from Colorado law and the law of most other states when it states the backside of a lift ticket is a release. The lower court decision was analyzed in Question answered; Colorado Premises Liability Act supersedes Colorado Ski Area Safety act. Standard of care owed skiers on chairlift’s reasonable man standard?

The plaintiff was taking a ski lesson when she fell getting off the lift. She sued for the normal negligent issues. The court throughout her claims based upon the release she signed to take the ski lesson.

Facts

The plaintiff signed up to take a ski lesson with Keystone Resorts, a ski area owned by the defendant Vail Summit Resorts, Inc. and ultimately by Vail Resorts Management Company. (There may be some more corporations or LLC’s in the middle.) When she signed up for the lesson, she signed a release which is a common practice at ski areas.

When she was unloading a lift, the edge of the chair caught the top of her ski boot, and she fell eventually breaking her femur.

She sued. Her case was thrown out by the trial court. See Brigance v. Vail Summit Resorts, Inc., 2016 U.S. Dist. LEXIS 31662 analyzed in Question answered; Colorado Premises Liability Act supersedes Colorado Ski Area Safety act. Standard of care owed skiers on chairlift’s reasonable man standard?

On a side note. One of her claims was the lift did not stop immediately. One defense I never see to this claim; lifts don’t stop immediately. If the lift stopped immediately, everyone riding the lift would be thrown off. Lift’s decelerate at a speed that allows the lift to stop as quickly as possible without ejecting everyone riding on the lift. If nothing else it is a save everyone else on the lift and sacrifice the person who can’t unload.

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

The 10th Circuit Court of Appeals is a federal court. The plaintiff filed this case in federal court because she was from Florida. Vail and the locations of the accident are in Colorado. That allowed her to have federal jurisdiction in the case because the plaintiff and the defendant were from two different states.

When a federal court has a case like this, it applies the law of the state that has jurisdiction as if the case were not in federal court. In this case, the decision looks at Colorado law as it applies to ski areas and releases. There is no Federal law concerning ski areas, other than general laws on leasing Forest Service land for a ski area.

The court started its analysis by reviewing the release and Colorado law on releases.

Colorado has a tag it applies to releases; like a few other states, that releases are disfavored under Colorado law. However, disfavored a release may be; that statement seems to be something to provide the plaintiff with an idea of fairness rather than the reality that if you write your release correctly, it will be upheld in Colorado.

For a decision that was lost because the defendant did not write the release correctly see Colorado Appellate Court rules that fine print and confusing language found on most health clubs (and some climbing wall) releases is void because of the Colorado Premises Liability Act.

There are four tests a release must pass to be valid in Colorado.

(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 court found plenty of Colorado law stating that a recreation service or activity does not owe a duty to the public and is not a service that should be questioned, which covers the first two requirements. The release was well-written, and the plaintiff did not argue that the release was not entered into fairly. Consequently, the court was able to state the release was valid the plaintiff’s claims were barred by the release.

One argument of the plaintiff’s the court did spend some time on was the Ski Area Safety Statute and the Passenger Tramway Safety Act created a public duty. Thus, the nature of the relationship between the ski area and a guest was one not of recreation but of a public duty, therefore, the release was not valid. This argument was an attempt to void the release based on the first two requirements set out above.

However, the court found that the creation of both statutes was done so that releases were not voided for skiing in Colorado. Looking at Colorado law the court found:

Our conclusion that the SSA and PTSA do not bar exculpatory agreements is supported by the Colorado Supreme Court’s regular enforcement of exculpatory agreements involving recreational activities, particularly in the context of equine activities, as well as the General Assembly’s relatively recent pronouncements regarding the public policy considerations involved in a parent’s ability to execute exculpatory agreements on behalf of its child with respect to prospective negligence claims.

The court found all four requirements for a release to be valid in Colorado were met.

What was exciting about this case wad the Court found the lift ticket was a release.

What is of note about this case is the Appellate Court like the lower court, looked at the language on the back side of the lift ticket as a release. The court starts by calling the language a “Lift Ticket Waiver.”

The Lift Ticket Waiver–approximately two paragraphs in length–is not as detailed as the Ski School Waiver, but contains somewhat similar language regarding the ticket holder’s assumption of risk and waiver of claims. After detailing some of the inherent dangers and risks of skiing that the holder of the ticket assumes, as well as identifying other risks and responsibilities, the Lift Ticket Waiver provides that the “Holder agrees to ASSUME ALL RISKS, inherent or otherwise” and “to hold the ski area harmless for claims to person and property.”

Emphasize added

No other court in Colorado has ever looked at the language on the back of the lift ticket as being a release. That language is there because it is required by statute. Colorado Ski Safety Act C.R.S. §§ 33-44-107. Duties of ski area operators – signs and notices required for skiers’ information. (8) states:

(8) (a) Each ski area operator shall post and maintain signs which contain the warning notice specified in paragraph (c) of this subsection (8). Such signs shall be placed in a clearly visible location at the ski area where the lift tickets and ski school lessons are sold and in such a position to be recognizable as a sign to skiers proceeding to the uphill loading point of each base area lift. Each sign shall be no smaller than three feet by three feet. Each sign shall be white with black and red letters as specified in this paragraph (a). The words “WARNING” shall appear on the sign in red letters. The warning notice specified in paragraph (c) of this subsection (8) shall appear on the sign in black letters, with each letter to be a minimum of one inch in height.

(b) Every ski lift ticket sold or made available for sale to skiers by any ski area operator shall contain in clearly readable print the warning notice specified in paragraph (c) of this subsection (8).

(c) The signs described in paragraph (a) of this subsection (8) and the lift tickets described in paragraph (b) of this subsection (8) shall contain the following warning notice:

WARNING

Under Colorado law, a skier assumes the risk of any injury to person or property resulting from any of the inherent dangers and risks of skiing and may not recover from any ski area operator for any injury resulting from any of the inherent dangers and risks of skiing, including: Changing weather conditions; existing and changing snow conditions; bare spots; rocks; stumps; trees; collisions with natural objects, man-made objects, or other skiers; variations in terrain; and the failure of skiers to ski within their own abilities.

    Emphasize added

The court specifically stated the language highlighted above in yellow contains “waiver of claims.” Based on the statute and the language, this is solely a list of the risks a skier assumes by statute when skiing inbounds in Colorado. However, now this court has found more in the text.

For more on lift tickets baring claims see Lift tickets are not contracts and rarely work as a release in most states. The reason most courts find that the language on the back of a lift ticket is not a release is there is no meeting of the minds, no one points out to the purchaser of a lift ticket there is a contract they are agreeing to.

In this case that would be impossible because the case states the husband purchased the lift ticket so the plaintiff could not have agreed to the contract.

In addition, Dr. Brigance’s husband purchased a lift ticket enabling her to ride the ski lifts at Key-stone. Dr. Brigance received the ticket from her husband and used it to ride the Discovery Lift. The lift ticket contained a warning and liability waiver (the “Lift Ticket Waiver”) on its back side, which provides in pertinent part:

Emphasize added

As stated above, the court notes that the husband and not the plaintiff purchased the lift tickets. No contract could be created in this case, yet somehow; the court found the lift ticket was a contract and as such was a release of liability. There was no meeting of the minds and there was no consideration passing between the plaintiff and the ski area.

However, this has monstrous meaning to all other ski areas in Colorado. If the language required by statute to be placed on the back of lift tickets is also a release of liability, then a new defense is available to all injuries of any skier, boarder, tuber or other person on the ski area who purchases a lift ticket.

More importantly you could require everyone coming on to the ski area to purchase a lift ticket no matter the reason. The cost could only be one dollar, but the savings to the ski area would be immense. If you are skiing you lift ticket is $200. If you are just going to dinner or watching your kids ski the lift ticket is $1.00 and gives you a $1.00 discount on your first drink.

Everyone who has a lift ticket at a ski area has effectively signed a release now.

However, remember, this is a federal court interpreting state law, the law of Colorado. Until the Colorado Courts weight in on the subject and the Colorado Supreme Court decides the issue, its value may be suspect. It is reliable in Federal Court as this condition is precedent setting, however, I would lean hard on the decision, not stand on it.

The court concluded, and in doing so provided a better idea about how Colorado looks are releases, that:

In summary, Colorado’s “relatively permissive public policy toward recreational releases” is one “that, no doubt, means some losses go uncompensated.” And the Colorado Supreme Court and General Assembly may someday “prefer a policy that shifts the burden of loss to the service provider, ensuring compensation in cases like this.” Id. But “that decision is their decision to make, not ours, and their current policy is clear.” Id. As a result, for the reasons stated above, we conclude the Ski School Waiver and Lift Ticket Waiver are enforceable and accordingly bar Dr. Brigance’s claims.

So Now What?

Overall, the case has nothing new on release law and is another affirmation that releases in Colorado, if written correctly, will stop claims for negligence.

However, if the Colorado courts follow the reasoning contained in this decision about the validity of the language on the back of a lift ticket as a bar to claims, then this is the first step in making almost impossible to sue a ski area in Colorado for any reason.

What do you think? Leave a comment.

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Brigance, v. Vail Summit Resorts, Inc., 2018 U.S. App. LEXIS 397

Brigance, v. Vail Summit Resorts, Inc., 2018 U.S. App. LEXIS 397

Teresa Brigance, Plaintiff – Appellant, v. Vail Summit Resorts, Inc., Defendant – Appellee.

No. 17-1035

UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT

2018 U.S. App. LEXIS 397

January 8, 2018, Filed

PRIOR HISTORY: [*1] Appeal from the United States District Court for the District of Colorado. (D.C. No. 1:15-CV-01394-WJM-NYW).

Brigance v. Vail Summit Resorts, Inc., 2017 U.S. Dist. LEXIS 5447 (D. Colo., Jan. 13, 2017)

CASE SUMMARY:

OVERVIEW: HOLDINGS: [1]-In an action brought by an injured skier, an examination of each of the Jones v. Dressel factors for determining the enforceability of an exculpatory agreement led to the conclusion that none of them precluded enforcement of a Ski School Waiver or Lift Ticket Waiver. The factors included the existence of a duty to the public, the nature of the service performed, whether the contract was fairly entered into, and whether the intention of the parties was expressed in clear and unambiguous language; [2]-The district court properly determined that the provisions of the Colorado Ski Safety Act of 1979 and the Passenger Tramway Safety Act had no effect on the enforceability of defendant ski resort’s waivers. Colorado law had long permitted parties to contract away negligence claims in the recreational context; [3]-The skier’s claims were barred by the waivers.

OUTCOME: The court affirmed the district court’s grant of summary judgment in favor of the ski resort and the partial grant of the resort’s motion to dismiss.

CORE TERMS: ski, exculpatory, skiing, lift ticket, recreational, lesson, lift, ski area, practical necessity, recreational activities, public policies, bargaining, skier, inherent dangers, unenforceable, service provided, essential service, inherent risks, discovery, holder, signer, summary judgment, riding, equine, common law, ski lifts, negligence per se, quotation marks omitted, practically, harmless

COUNSEL: Trenton J. Ongert (Joseph D. Bloch with him on the briefs), Bloch & Chapleau, LLC, Denver, Colorado, for Plaintiff – Appellant.

Michael J. Hofmann, Bryan Cave LLP, Denver, Colorado, for Defendant – Appellee.

JUDGES: Before PHILLIPS, KELLY, and McHUGH, Circuit Judges.

OPINION BY: McHUGH

OPINION

McHUGH, Circuit Judge.

During a ski lesson at Keystone Mountain Resort (“Keystone”), Doctor Teresa Brigance’s ski boot became wedged between the ground and the chairlift. She was unable to unload but the chairlift kept moving, which caused her femur to fracture. Dr. Brigance filed suit against Vail Summit Resorts, Inc. (“VSRI”), raising claims of (1) negligence, (2) negligence per se, (3) negligent supervision and training, (4) negligence (respondeat superior), (5) negligent hiring, and (6) violation of the Colorado Premises Liability Act (the “PLA”), Colo. Rev. Stat. § 13-21-115. The district court dismissed Dr. Brigance’s negligence and negligence per se claims at the motion to dismiss stage. After discovery, the district court granted VSRI’s motion for summary judgment on the remaining claims, concluding the waiver Dr. Brigance signed before participating [*2] in her ski lesson, as well as the waiver contained on the back of her lift ticket, are enforceable and bar her claims against VSRI. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.

I. BACKGROUND

A. Factual Background

Keystone is a ski resort located in Colorado that is operated by VSRI. In March 2015, Dr. Brigance visited Keystone with her family and participated in a ski lesson. At the time, ski lesson participants, including Dr. Brigance, were required to sign a liability waiver (the “Ski School Waiver”) before beginning their lessons. The Ski School Waiver signed1 by Dr. Brigance contained, among other things, the following provisions:

RESORT ACTIVITY, SKI SCHOOL, & EQUIPMENT RENTAL WARNING, ASSUMPTION OF RISK, RELEASE OF LIABILITY & INDEMNITY AGREEMENT

THIS IS A RELEASE OF LIABILITY & WAIVER OF CERTAIN LEGAL RIGHTS.

. . .

2. I understand the dangers and risks of the Activity and that the Participant ASSUMES ALL INHERENT DANGERS AND RISKS of the Activity, including those of a “skier” (as may be defined by statute or other applicable law).

3. I expressly acknowledge and assume all additional risks and dangers that may result in . . . physical injury and/or death above and beyond the inherent dangers [*3] and risks of the Activity, including but not limited to: Falling; free skiing; following the direction of an instructor or guide; . . . equipment malfunction, failure or damage; improper use or maintenance of equipment; . . . the negligence of Participant, Ski Area employees, an instructor . . . or others; . . . lift loading, unloading, and riding; . . . . I UNDERSTAND THAT THE DESCRIPTION OF THE RISKS IN THIS AGREEMENT IS NOT COMPLETE AND VOLUNTARILY CHOOSE FOR PARTICIPANT TO PARTICIPATE IN AND EXPRESSLY ASSUME ALL RISKS AND DANGERS OF THE ACTIVITY, WHETHER OR NOT DESCRIBED HERE, KNOWN OR UNKNOWN, INHERENT OR OTHERWISE.

4. Participant assumes the responsibility . . . for reading, understanding and complying with all signage, including instructions on the use of lifts. Participant must have the physical dexterity and knowledge to safely load, ride and unload the lifts. . . .

. . .

6. Additionally, in consideration for allowing the Participant to participate in the Activity, I AGREE TO HOLD HARMLESS, RELEASE, INDEMNIFY, AND NOT TO SUE [VSRI] FOR ANY . . . INJURY OR LOSS TO PARTICIPANT, INCLUDING DEATH, WHICH PARTICIPANT MAY SUFFER, ARISING IN WHOLE OR IN PART OUT OF PARTICIPANT’S PARTICIPATION [*4] IN THE ACTIVITY, INCLUDING, BUT NOT LIMITED TO, THOSE CLAIMS BASED ON [VSRI’s] ALLEGED OR ACTUAL NEGLIGENCE . . . .

Aplt. App’x at 117 (emphasis in original).

1 Although VSRI did not produce an original or copy of the Ski School Waiver signed by Dr. Brigance, it provided evidence that all adults participating in ski lessons at Keystone are required to sign a waiver and that the Ski School Waiver was the only waiver form used by VSRI for adult ski lessons during the 2014-15 ski season. Before it was clear that VSRI could not locate its copy of the signed waiver, Dr. Brigance indicated in discovery responses and deposition testimony that she signed a waiver before beginning ski lessons. See Brigance v. Vail Summit Resorts, Inc. (“Brigance II“), No. 15-cv-1394-WJM-NYW, 2017 U.S. Dist. LEXIS 5447, 2017 WL 131797, at *3-4 (D. Colo. Jan. 13, 2017). Based on this evidence and Dr. Brigance’s failure to argue “that a genuine question remains for trial as to whether she did in fact sign the Ski School Waiver in the form produced or whether she agreed to its terms,” 2017 U.S. Dist. LEXIS 5447, [WL] at *4, the district court treated her assent to the Ski School Waiver as conceded and concluded that “there is no genuine dispute as to whether [Dr. Brigance] consented to the terms of the Ski School Waiver,” id.

On appeal, Dr. Brigance offers no argument and points to no evidence suggesting that the district court’s conclusion was erroneous in light of the evidence and arguments before it. Instead, she merely denies having signed the Ski School Waiver and reiterates that VSRI has yet to produce a signed copy of the waiver. But in response to questioning at oral argument, counsel for Dr. Brigance conceded that this court could proceed with the understanding that Dr. Brigance signed the Ski School Waiver. Oral Argument at 0:41-1:23, Brigance v. Vail Summit Resorts, Inc., No. 17-1035 (10th Cir. Nov. 13, 2017). Three days later, counsel for Dr. Brigance filed a notice with the court effectively revoking that concession.

Dr. Brigance’s assertion that she did not execute the Ski School Waiver is forfeited because she failed to adequately raise it as an issue below. Avenue Capital Mgmt. II, L.P. v. Schaden, 843 F.3d 876, 884 (10th Cir. 2016); see also Brigance II, 2017 U.S. Dist. LEXIS 5447, 2017 WL 131797, at *4 (“[N]otwithstanding the absence of a signed copy of the [Ski School Waiver], [Dr. Brigance] does not argue that this issue presents a genuine dispute requiring trial.”). But even if we were to entertain the argument, it would fail to defeat summary judgment. Despite her obfuscation, VSRI’s inability to produce the signed Ski School Waiver and Dr. Brigance’s assertions that she did not sign the waiver–which contradict her discovery responses and deposition testimony–are insufficient to establish that the district court erred in concluding that no genuine dispute exists as to whether Dr. Brigance agreed to the terms of the waiver. [HN1] “Although the burden of showing the absence of a genuine issue of material fact” rests with the movant at summary judgment, “the nonmovant must do more than simply show that there is some metaphysical doubt as to the material facts.” Champagne Metals v. Ken-Mac Metals, Inc., 458 F.3d 1073, 1084 (10th Cir. 2006) (internal quotation marks omitted). Indeed, the

party asserting that a fact . . . is genuinely disputed must support the assertion by: (A) citing to particular parts of materials in the record . . . ; or (B) showing that the materials cited do not establish the absence . . . of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.

Fed. R. Civ. P. 56(c)(1)(A)–(B). Dr. Brigance made no such showing below, nor does she attempt to do so on appeal.

In addition, Dr. Brigance’s husband purchased a lift ticket enabling her to ride the ski lifts at Keystone. Dr. Brigance received the ticket from her husband and used it to ride the Discovery Lift. The lift ticket contained a warning and liability waiver (the “Lift Ticket Waiver”) on its back side, which provides in pertinent part:

HOLDER AGREES AND UNDERSTANDS THAT SKIING . . . AND USING A SKI AREA, INCLUDING LIFTS, CAN BE HAZARDOUS.

WARNING

Under state law, the Holder of this pass assumes the risk of any injury to person or property resulting from any of the inherent dangers and risks of skiing and may not recover from the [*5] ski area operator for any injury resulting from any of the inherent dangers and risks of skiing. Other risks include cliffs, extreme terrain, jumps, and freestyle terrain. Holder is responsible for having the physical dexterity to safely load, ride and unload the lifts and must control speed and course at all times. . . . Holder agrees to ASSUME ALL RISKS, inherent or otherwise. Holder agrees to hold the ski area harmless for claims to person or property. . . .

. . .

NO REFUNDS. NOT TRANSFERABLE. NO RESALE.

Id. at 121 (emphasis in original).

After receiving some instruction during her ski lesson on how to load and unload from a chairlift, Dr. Brigance boarded the Discovery Lift. As Dr. Brigance attempted to unload from the lift, her left ski boot became wedged between the ground and the lift. Although she was able to stand up, she could not disengage the lift because her boot remained squeezed between the ground and the lift. Eventually, the motion of the lift pushed Dr. Brigance forward, fracturing her femur.

B. Procedural Background

Dr. Brigance filed suit against VSRI in the United States District Court for the District of Colorado as a result of the injuries she sustained while attempting to unload [*6] from the Discovery Lift.2
In her amended complaint Dr. Brigance alleged that the short distance between the ground and the Discovery Lift at the unloading point–coupled with the inadequate instruction provided by her ski instructor, the chairlift operator’s failure to stop the lift, and VSRI’s deficient hiring, training, and supervision of employees–caused her injuries. She consequently asserted the following six claims against VSRI: (1) negligence; (2) negligence per se; (3) negligent supervision and training; (4) negligence (respondeat superior); (5) negligent hiring; and (6) liability under the PLA.

2 The district court properly invoked diversity jurisdiction because Dr. Brigance is a citizen of Florida and VSRI is a Colorado corporation with its principal place of business in Colorado, and the amount in controversy exceeds $75,000. See 28 U.S.C. §§ 1332(a), (c)(1)(B)–(C).

VSRI moved to dismiss all claims raised by Dr. Brigance with the exception of her respondeat superior and PLA claims. The district court granted in part and denied in part VSRI’s motion. Brigance v. Vail Summit Resorts, Inc. (“Brigance I“), No. 15-cv-1394-WJM-NYM, 2016 U.S. Dist. LEXIS 31662, 2016 WL 931261, at *1-5 (D. Colo. Mar. 11, 2016). It dismissed Dr. Brigance’s negligence claim as preempted by the PLA. 2016 U.S. Dist. LEXIS 31662, [WL] at *3-4. It also dismissed her negligence per se claim, concluding that she “fail[ed] to identify any requirement” of the Colorado Ski Safety Act of 1979 (the “SSA”), Colo. Rev. Stat. §§ 33-44-101 to -114, that VSRI had allegedly violated. Brigance I, 2016 U.S. Dist. LEXIS 31662, 2016 WL 931261, at *2. In dismissing this claim, the district court also held that the [*7] provisions of the Passenger Tramway Safety Act (the “PTSA”), Colo. Rev. Stat. §§ 25-5-701 to -721, relied upon by Dr. Brigance “do[ ] not provide a statutory standard of care which is adequate to support [a] claim for negligence per se.” Brigance I, 2016 U.S. Dist. LEXIS 31662, 2016 WL 931261, at *2 (emphasis omitted). But the district court refused to dismiss Dr. Brigance’s claims regarding negligent supervision and training and negligent hiring. 2016 U.S. Dist. LEXIS 31662, [WL] at *4-5.

Upon completion of discovery, VSRI moved for summary judgment on the basis that the Ski School Waiver and Lift Ticket Waiver completely bar Dr. Brigance’s remaining claims. In the alternative, VSRI argued that summary judgment was appropriate because (1) Dr. Brigance failed to satisfy the elements of her PLA claim and (2) her common-law negligence claims are preempted by the PLA and otherwise lack evidentiary support. Dr. Brigance opposed the motion, contending in part that the waivers are unenforceable under the SSA and the four-factor test established by the Colorado Supreme Court in Jones v. Dressel, 623 P.2d 370 (Colo. 1981). Dr. Brigance also asserted that her common-law negligence claims are not preempted by the PLA and that she presented sufficient evidence to allow her claims to be heard by a jury.

The district court granted VSRI’s motion. Brigance v. Vail Summit Resorts, Inc. (“Brigance II“), No. 15-cv-1394-WJM-NYW, 2017 U.S. Dist. LEXIS 5447, 2017 WL 131797, at *10 (D. Colo. Jan. 13, 2017) [*8] . It determined that the Ski School Waiver and Lift Ticket Waiver are enforceable under the factors established by the Colorado Supreme Court in Jones and that the SSA and PTSA do not otherwise invalidate the waivers. 2017 U.S. Dist. LEXIS 5447, [WL] at *5-9. It then determined that all of Dr. Brigance’s remaining claims fall within the broad scope of the waivers and are therefore barred. 2017 U.S. Dist. LEXIS 5447, [WL] at *10. This appeal followed.

II. DISCUSSION

Dr. Brigance challenges the district court’s enforcement of both the Ski School Waiver and Lift Ticket Waiver, as well as the dismissal of her negligence and negligence per se claims. [HN2] “[B]ecause the district court’s jurisdiction was based on diversity of citizenship, [Colorado] substantive law governs” our analysis of the underlying claims and enforceability of the waivers. Sylvia v. Wisler, 875 F.3d 1307, 2017 WL 5622916, at *3 (10th Cir. 2017) (internal quotation marks omitted). We “must therefore ascertain and apply [Colorado] law with the objective that the result obtained in the federal court should be the result that would be reached in [a Colorado] court.” Id. (internal quotation marks omitted). In doing so, “we must defer to the most recent decisions of the state’s highest court,” although “stare [*9] decisis requires that we be bound by our own interpretations of state law unless an intervening decision of the state’s highest court has resolved the issue.” Id. (internal quotation marks omitted).

Although the substantive law of Colorado governs our analysis of the waivers and underlying claims, [HN3] federal law controls the appropriateness of a district court’s grant of summary judgment and dismissal of claims under Federal Rule of Civil Procedure 12(b)(6). See Stickley v. State Farm Mut. Auto. Ins. Co., 505 F.3d 1070, 1076 (10th Cir. 2007). We therefore review the district court’s grant of summary judgment and dismissal of claims pursuant to Rule 12(b)(6) de novo, applying the same standards as the district court. Id.; see also Sylvia, 875 F.3d 1307, 2017 WL 5622916, at *4, 16. “However, we may affirm [the] district court’s decision[s] on any grounds for which there is a record sufficient to permit conclusions of law, even grounds not relied upon by the district court.” Stickley, 505 F.3d at 1076 (internal quotation marks omitted).

“Summary judgment should be granted if 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.” Sylvia, 875 F.3d 1307, 2017 WL 5622916, at *16 (internal quotation marks omitted). Because it is undisputed that all of Dr. Brigance’s claims–including those dismissed pursuant [*10] to Rule 12(b)(6)–fall within the broad scope of either waiver if they are deemed enforceable under Colorado law, the first, and ultimately only, question we must address is whether the Ski School Waiver and Lift Ticket Waiver are enforceable.

[HN4] Under Colorado law, “exculpatory agreements have long been disfavored,” B & B Livery, Inc. v. Riehl, 960 P.2d 134, 136 (Colo. 1998), and it is well-established that such agreements 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). See also Espinoza v. Ark. Valley Adventures, LLC, 809 F.3d 1150, 1152 (10th Cir. 2016) (“Under Colorado common law, it’s long settled that courts will not give effect to contracts purporting to release claims for intentional, knowing, or reckless misconduct.”). “But claims of negligence are a different matter. Colorado common law does not categorically prohibit the enforcement of contracts seeking to release claims of negligence.” Espinoza, 809 F.3d at 1152; accord Chadwick v. Colt Ross Outfitters, Inc., 100 P.3d 465, 467 (Colo. 2004). Neither does it always preclude exculpatory agreements as to claims of negligence per se. Espinoza, 809 F.3d at 1154-55.

Accordingly, [HN5] the Colorado Supreme Court has instructed courts to consider the following four factors when determining the enforceability of an exculpatory agreement: “(1) the existence of a duty to the public; (2) the nature of the service performed; (3) whether the [*11] contract was fairly entered into; and (4) whether the intention of the parties is expressed in clear and unambiguous language.” J/ones, 623 P.2d at 376. It appears that if an exculpatory agreement satisfies any of the four factors, it must be deemed unenforceable. Although consideration of these factors is generally sufficient to determine the enforceability of exculpatory agreements, the Colorado Supreme Court has clarified that “other public policy considerations” not necessarily encompassed in the Jones factors may invalidate exculpatory agreements. See Boles, 223 P.3d at 726 (“[M]ore recently, we have identified other public policy considerations invalidating exculpatory agreements, without regard to the Jones factors.”); see, e.g., Cooper v. Aspen Skiing Co., 48 P.3d 1229, 1232-37 (Colo. 2002), superseded by statute, Colo. Rev. Stat. § 13-22-107.

The district court examined each of the Jones factors and concluded that none of them preclude enforcement of the Ski School Waiver or Lift Ticket Waiver. Brigance II, 2017 U.S. Dist. LEXIS 5447, 2017 WL 131797, at *5-8. It also determined that the provisions of the SSA and PTSA “have no effect on the enforceability” of the waivers. 2017 U.S. Dist. LEXIS 5447, [WL] at *9. We agree.

A. The Jones Factors

1. Existence of a Duty to the Public

[HN6] The first Jones factor requires us to examine whether there is an “existence of a duty to the public,” Jones, 623 P.2d at 376, or, described another way, “whether [*12] the service provided involves a duty to the public,” Mincin v. Vail Holdings, Inc., 308 F.3d 1105, 1109 (10th Cir. 2002). The Colorado Supreme Court has not specified the precise circumstances under which an exculpatory agreement will be barred under this factor, but it has explained that unenforceable exculpatory agreements

generally involve businesses suitable for public regulation; that are engaged in performing a public service of great importance, or even of practical necessity; that offer a service that is generally available to any members of the public who seek it; and that possess a decisive advantage of bargaining strength, enabling them to confront the public with a standardized adhesion contract of exculpation.

Chadwick, 100 P.3d at 467. The Colorado Supreme Court has expressly “distinguished businesses engaged in recreational activities” from the foregoing class of businesses because recreational activities “are not practically necessary” and therefore “the provider[s of such activities] owe[ ] no special duty to the public.” Id.; see also Espinoza, 809 F.3d at 1153 (“Though some businesses perform essential public services and owe special duties to the public, the [Colorado Supreme] [C]ourt has held that ‘businesses engaged in recreational activities’ generally do not.” (quoting Chadwick, 100 P.3d at 467)).

And, indeed, [*13] Colorado courts examining exculpatory agreements involving recreational activities under Colorado law have almost uniformly concluded that the first Jones factor does not invalidate or render unenforceable the relevant agreement. See, e.g., Chadwick, 100 P.3d at 467-69; Jones, 623 P.2d at 376-78; Stone v. Life Time Fitness, Inc., No. 15CA0598, 2016 COA 189M, 2016 WL 7473806, at *3 (Colo. App. Dec. 29, 2016) (unpublished) (“The supreme court has specified that no public duty is implicated if a business provides recreational services.”), cert. denied, No. 17SC82, 2017 Colo. LEXIS 572, 2017 WL 2772252 (Colo. Jun. 26, 2017); Hamill v. Cheley Colo. Camps, Inc., 262 P.3d 945, 949 (Colo. App. 2011) (“Our supreme court has held that businesses engaged in recreational activities that are not practically necessary, such as equine activities, do not perform services implicating a public duty.”); see also Espinoza, 809 F.3d at 1153-56; Mincin, 308 F.3d at 1110-11; Patterson v. Powdermonarch, L.L.C., No. 16-cv-00411-WYD-NYW, 2017 U.S. Dist. LEXIS 151229, 2017 WL 4158487, at *5 (D. Colo. July 5, 2017) (“Businesses engaged in recreational activities like [defendant’s ski services] have been held not to owe special duties to the public or to perform essential public services.”); Brooks v. Timberline Tours, Inc., 941 F. Supp. 959, 962 (D. Colo. 1996) (“Providing snowmobile tours to the public does not fall within” the first Jones factor.); Lahey v. Covington, 964 F. Supp. 1440, 1445 (D. Colo. 1996) (holding white-water rafting is recreational in nature and is therefore “neither a matter of great public importance nor a matter of practical necessity” (internal quotation marks omitted)), aff’d sub nom., Lahey v. Twin Lakes Expeditions, Inc., 113 F.3d 1246 (10th Cir. 1997).

The relevant services provided by VSRI–skiing and ski lessons–are [*14] clearly recreational in nature. Like horseback riding and skydiving services, see Chadwick, 100 P.3d at 467; Jones, 623 P.2d at 377, skiing and ski lessons are not of great public importance or “matter[s] of practical necessity for even some members of the public,” Jones, 623 P.2d at 377. They therefore do not implicate the type of duty to the public contemplated in the first Jones factor. Although it appears the Colorado Supreme Court and Colorado Court of Appeals have yet to address the first Jones factor within the context of skiing or ski lesson services, the few courts that have considered similar issues have reached the unsurprising conclusion that ski-related services are recreational activities and do not involve a duty to the public. See, e.g., Rumpf v. Sunlight, Inc., No. 14-cv-03328-WYD-KLM, 2016 U.S. Dist. LEXIS 107946, 2016 WL 4275386, at *3 (D. Colo. Aug. 3, 2016); Potter v. Nat’l Handicapped Sports, 849 F. Supp. 1407, 1409 (D. Colo. 1994); Bauer v. Aspen Highlands Skiing Corp., 788 F. Supp. 472, 474 (D. Colo. 1992).

Dr. Brigance fails to address the principle “that businesses engaged in recreational activities that are not practically necessary . . . do not perform services implicating a public duty.” Hamill, 262 P.3d at 949. Instead, she contends VSRI owes a duty to the public because the ski and ski lesson services provided by VSRI implicate a number of additional factors the California Supreme Court relied upon in Tunkl v. Regents of Univ. of Cal., 60 Cal. 2d 92, 32 Cal. Rptr. 33, 383 P.2d 441, 444-46 (Cal. 1963), to determine whether an exculpatory agreement should be deemed invalid as affecting [*15] public interest.3 Specifically, Dr. Brigance contends VSRI owes a duty to the public because the Colorado ski industry is subject to express regulation under the SSA and PTSA, VSRI is willing to perform its services for any member of the public who seeks them, VSRI maintains an advantage in bargaining strength, and skiers are placed under the complete control of VSRI when riding their lifts.

3 Dr. Brigance separately argues that the waivers are invalid under the provisions and public policies contained within the SSA, PTSA, and PLA. Although she incorporates these arguments in her analysis of the first Jones factor, we address them separately in Section II.B, infra.

The Colorado Supreme Court has cited Tunkl and noted its relevance in determining whether a business owes a duty to the public. Jones, 623 P.2d at 376-77. But when analyzing the first Jones factor, particularly within the context of recreational services, courts applying Colorado law focus on and give greatest weight to whether the party seeking to enforce an exculpatory agreement is engaged in providing services that are of great public importance or practical necessity for at least some members of the public. See, e.g., Espinoza, 809 F.3d at 1153-54; Rowan v. Vail Holdings, Inc., 31 F. Supp. 2d 889, 896-97 (D. Colo. 1998); Potter, 849 F. Supp. at 1409; Jones, 623 P.2d at 376-77; Stone, 2016 COA 189M, 2016 WL 7473806, at *3; Hamill, 262 P.3d at 949. And the additional factors listed by Dr. Brigance are insufficient to establish that the recreational services offered by VSRI are of great public importance or practically necessary. An activity does not satisfy the first Jones factor simply because it is subject to state regulation. [*16] As we have explained, the first Jones factor does not

ask whether the activity in question is the subject of some sort of state regulation. Instead, [it] ask[s] whether the service provided is of “great importance to the public,” a matter of “practical necessity” as opposed to (among other things) a “recreational one. [Jones,] 623 P.2d at 376-77. And the distinction the Jones factors draw between essential and recreational services would break down pretty quickly if the presence of some state regulation were enough to convert an otherwise obviously “recreational” service into a “practically necessary” one. After all, state law imposes various rules and regulations on service providers in most every field these days–including on service providers who operate in a variety of clearly recreational fields.

Espinoza, 809 F.3d at 1154; see also Chadwick, 100 P.3d at 467-68. Furthermore, Dr. Brigance’s argument regarding VSRI’s bargaining strength is more properly addressed under the third Jones factor, and her remaining arguments concerning VSRI’s willingness to provide services to the public and its control over skiers are not sufficiently compelling to sway us from departing from the principle “that [HN7] no public duty is implicated if a business provides recreational services.” [*17] Stone, 2016 COA 189M, 2016 WL 7473806, at *3.

The district court therefore did not err in concluding that the first Jones factor does not render the Ski School Waiver and the Lift Ticket Waiver unenforceable.

2. Nature of the Service Performed

[HN8] Under the second Jones factor, we examine “the nature of the service performed.” Jones, 623 P.2d at 376. Analysis of this factor is linked to and in many respects overlaps the analysis conducted under the first Jones factor, as it calls for an examination of whether the service provided is an “essential service” or a “matter of practical necessity.” See Espinoza, 809 F.3d at 1153; Stone, 2016 COA 189M, 2016 WL 7473806, at *3; Hamill, 262 P.3d at 949. As is evident from our discussion of the first Jones factor, Colorado “courts have consistently deemed recreational services to be neither essential nor a matter of practical necessity.” Stone, 2016 COA 189M, 2016 WL 7473806, at *3; see also Chadwick, 100 P.3d at 467 (noting “recreational activities . . . are not practically necessary”); Jones, 623 P.2d at 377-78 (holding the skydiving service provided by defendants “was not an essential service”); Hamill, 262 P.3d at 949 (acknowledging recreational camping and horseback riding services are not essential or matters of practical necessity). And as previously established, the ski and ski lesson services offered by VSRI are recreational in nature and therefore, like other recreational activities examined by this and other [*18] courts, cannot be deemed essential or of practical necessity. See, e.g., Mincin, 308 F.3d at 1111 (“[M]ountain biking is not an essential activity.”); Squires ex rel. Squires v. Goodwin, 829 F. Supp. 2d 1062, 1073 (D. Colo. 2011) (noting the parties did not dispute that skiing “is a recreational service, not an essential service”); Rowan, 31 F. Supp. 2d at 897 (“[S]kiing is not an essential service.”); Potter, 849 F. Supp. at 1410 (disagreeing with plaintiff’s argument that “ski racing for handicapped skiers rises to the level of an essential service [as] contemplated by Colorado law”); Bauer, 788 F. Supp. at 474 (noting “free skiing[, equipment rentals, and ski lessons] for travel agents do[ ] not rise to the level of essential service[s] contemplated by Colorado law.”).

Dr. Brigance raises no argument specific to this factor other than asserting that “the ski industry is a significant revenue generator for the State of Colorado” and the services provided by VSRI are “public [in] nature.” Aplt. Br. 47. Dr. Brigance cites no authority suggesting that either factor would render the recreational services provided by VSRI essential in nature. And given Colorado courts’ assertion that “recreational services [are] neither essential nor . . . matter[s] of practical necessity,” Stone, 2016 COA 189M, 2016 WL 7473806, at *3, we conclude the district court did not err in determining that the second Jones factor also does not dictate that the waivers be [*19] deemed unenforceable.

3. Whether the Waivers Were Fairly Entered Into

[HN9] The third Jones factor requires us to examine “whether the contract was fairly entered into.” Jones, 623 P.2d at 376. “A contract is fairly entered into if one party is not so obviously disadvantaged with respect to bargaining power that the resulting contract essentially places him at the mercy of the other party’s negligence.” Hamill, 262 P.3d at 949 (citing Heil Valley Ranch, Inc. v. Simkin, 784 P.2d 781, 784 (Colo. 1989)). When engaging in this analysis, we examine the nature of the service involved, Espinoza, 809 F.3d at 1156, the circumstances surrounding the formation of the contract, id., and whether the services provided are available from a source other than the party with which the plaintiff contracted,
see Stone, 2016 COA 189M, 2016 WL 7473806, at *3; Hamill, 262 P.3d at 950.

The Colorado Court of Appeals has identified “[p]ossible examples of unfair disparity in bargaining power [as] includ[ing] agreements between employers and employees and between common carriers or public utilities and members of the public.” Stone, 2016 COA 189M, 2016 WL 7473806, at *3. It has also expressly acknowledged an unfair disparity in bargaining power in residential landlord-tenant relationships, presumably based in part on its holding “that housing rental is a matter of practical necessity to the public.” Stanley v. Creighton Co., 911 P.2d 705, 708 (Colo. App. 1996). But the Colorado Court of Appeals has also held that “this type of unfair disparity [*20] is generally not implicated when a person contracts with a business providing recreational services.” Stone, 2016 COA 189M, 2016 WL 7473806, at *3. This is because recreational activities are not essential services or practically necessary, and therefore a person is not “at the mercy” of a business’s negligence when entering an exculpatory agreement involving recreational activities. Hamill, 262 P.3d at 949-50. As we have previously explained, “Colorado courts have repeatedly emphasized that . . . because recreational businesses do not provide ‘essential’ services of ‘practical necessity[,]’ individuals are generally free to walk away if they do not wish to assume the risks described” in an exculpatory agreement. Espinoza, 809 F.3d at 1157; see also Mincin, 308 F.3d at 1111 (noting that a disparity of bargaining power may be created by the “practical necessity” of a service, but that no such necessity existed because “mountain biking is not an essential activity” and therefore the plaintiff “did not enter into the contract from an inferior bargaining position”).

We reiterate, at the risk of redundancy, that the ski and ski lesson services offered by VSRI are recreational in nature and do not constitute essential services or matters of practical necessity. As a result, Dr. Brigance did not enter the Ski [*21] School Waiver or Lift Ticket Waiver from an unfair bargaining position because she was free to walk away if she did not wish to assume the risks or waive the right to bring certain claims as described in the waivers. This conclusion is supported by a number of cases involving similar recreational activities, including those we have previously addressed under the first two Jones factors. See, Jones, 623 P.2d at 377-78 (holding an exculpatory release related to skydiving services was not an unenforceable adhesion contract “because the service provided . . . was not an essential service” and therefore the defendant “did not possess a decisive advantage of bargaining strength over” the plaintiff); see also Squires, 829 F. Supp. 2d at 1071 (“Where, as here, the service provided is a recreational service and not an essential service, there is no unfair bargaining advantage.”); Day v. Snowmass Stables, Inc., 810 F. Supp. 289, 294 (D. Colo. 1993) (“[T]he recreational services offered by [defendant] were not essential and, therefore, [it] did not enjoy an unfair bargaining advantage.”); Bauer, 788 F. Supp. at 475 (“Here, defendants’ recreational services were not essential and, therefore, they did not enjoy an unfair bargaining advantage.”).

Moreover, the circumstances surrounding Dr. Brigance’s entry into the exculpatory agreements indicate she [*22] did so fairly. Dr. Brigance does not identify any evidence in the record calling into question her competency, ability to comprehend the terms of the agreements, or actual understanding of the agreements. Nor does she point to anything in the record reflecting an intent or attempt by VSRI to fraudulently induce her to enter the agreements or to conceal or misconstrue their contents. In addition, there is nothing in the record to suggest Dr. Brigance’s agreement to the terms of the Ski School Waiver was not voluntary. See Brigance II, 2017 U.S. Dist. LEXIS 5447, 2017 WL 131797, at *3-4.

Notwithstanding the well-established law that exculpatory agreements involving businesses providing recreational services do not implicate the third Jones factor, Dr. Brigance argues her assent to the terms of the Lift Ticket Waiver was obtained unfairly and that VSRI had an advantage in bargaining strength. This is so, she contends, because she “did not have a chance to review the exculpatory language contained on the back of the non-refundable [lift] ticket before she purchased it” and that “[o]nce the ticket was purchased, she was forced to accept the exculpatory language or lose the money she invested.” Aplt. Br. 47. Dr. Brigance’s argument fails to account for her [*23] voluntary acceptance of the Ski School Waiver. And although Dr. Brigance asserts she “did not have a chance to review” the Lift Ticket Waiver before purchasing it, she does not identify any evidence that VSRI prevented her from reviewing the Lift Ticket Waiver before she used it to ride the Discovery Lift, and “Colorado courts have repeatedly emphasized that individuals engaged in recreational activities are generally expected to read materials like these.” Espinoza, 809 F.3d at 1157. Most importantly, Dr. Brigance did not raise this argument below and does not provide a compelling reason for us to address it on appeal.4
See Crow v. Shalala, 40 F.3d 323, 324 (10th Cir. 1994) (“Absent compelling reasons, we do not consider arguments that were not presented to the district court.”).

4 In fact, the district court noted that Dr. Brigance “neither disputes the relevant facts nor counters VSRI’s argument that she accepted the contractual terms of the Lift Ticket Waiver by skiing and riding the lifts.” Brigance II, 2017 U.S. Dist. LEXIS 5447, 2017 WL 131797, at *4. As a result, the district court concluded Dr. Brigance had agreed to the terms of the Lift Ticket Waiver and would be bound to its terms to the extent it was otherwise enforceable. Id.

For these reasons, the district court did not err in concluding that the third Jones factor does not render the Ski School Waiver or the Lift Ticket Waiver unenforceable.

4. Whether the Parties’ Intent Was Expressed Clearly and Unambiguously

[HN10] The fourth and final Jones factor is “whether the intention of the parties is expressed in clear and unambiguous language.” Jones, 623 P.2d at 376. The inquiry conducted under this factor “should be whether the intent of the parties was to extinguish liability and [*24] whether this intent was clearly and unambiguously expressed.Heil Valley Ranch, 784 P.2d at 785. The Colorado Supreme Court has explained that “[t]o determine whether the intent of the parties is clearly and unambiguously expressed, we [may] examine[ ] 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. We may also take into account a party’s subsequent acknowledgement that it understood the provisions of the agreement. Id.
In addition, it is well-established that the term “negligence” is not invariably required for an exculpatory agreement to be deemed an unambiguous waiver or release of claims arising from negligent conduct. Id.

The Ski School Waiver contains approximately a page and a half of terms and conditions in small, but not unreadable, font.5 It prominently identifies itself as, among other things, a “RELEASE OF LIABILITY . . . AGREEMENT”–a fact that is reiterated in the subtitle of the agreement by inclusion of the statement “THIS IS A RELEASE OF LIABILITY & WAIVER OF CERTAIN LEGAL RIGHTS.” Aplt. App’x 117. The provisions of the waiver include the signer’s express acknowledgment [*25] and assumption of “ALL INHERENT DANGERS AND RISKS of the Activity, including those of a ‘skier’ (as may be identified by statute or other applicable law),” as well as “all additional risks and dangers that may result in . . . physical injury and/or death above and beyond the inherent dangers and risks of the Activity, including but not limited to” a lengthy list of specific events and circumstances that includes “lift loading, unloading, and riding.” Id. In addition to this assumption-of-the-risk language, the Ski School Waiver provides that the signer

AGREE[S] TO HOLD HARMLESS, RELEASE, INDEMNIFY, AND NOT TO SUE [VSRI] FOR ANY . . . INJURY OR LOSS TO PARTICIPANT, INCLUDING DEATH, WHICH PARTICIPANT MAY SUFFER, ARISING IN WHOLE OR IN PART OUT OF PARTICIPANT’S PARTICIPATION IN THE ACTIVITY, INCLUDING, BUT NOT LIMITED TO, THOSE CLAIMS BASED ON ANY RELEASED PARTY’S ALLEGED OR ACTUAL NEGLIGENCE OR BREACH OF ANY CONTRACT AND/OR EXPRESS OR IMPLIED WARRANTY.

Id.

5 Although Dr. Brigance denies that she signed the Ski School Waiver, see supra note 1, she has not made any arguments regarding the readability or font size of the terms and conditions.

The Lift Ticket Waiver–approximately two paragraphs in length–is not as detailed as the Ski School Waiver, but contains somewhat similar language regarding the ticket holder’s assumption of risk and waiver of claims. After detailing [*26] some of the inherent dangers and risks of skiing that the holder of the ticket assumes, as well as identifying other risks and responsibilities, the Lift Ticket Waiver provides that the “Holder agrees to ASSUME ALL RISKS, inherent or otherwise” and “to hold the ski area harmless for claims to person and property.” Id. at 121.

Neither waiver is unduly long nor complicated, unreadable, or overburdened with legal jargon. Most importantly, the intent of the waivers is clear and unambiguous. In addition to the language indicating Dr. Brigance’s assumption of all risks of skiing, inherent or otherwise, both waivers contain clear language stating that Dr. Brigance agreed to hold VSRI harmless for injuries to her person as a result of skiing at Keystone. Moreover, the Ski School Waiver clearly and unambiguously provides that Dr. Brigance agreed to “RELEASE, INDEMNIFY, AND NOT TO SUE” VSRI for personal injuries arising in whole or in part from her participation in ski lessons, including claims based on VSRI’s “ALLEGED OR ACTUAL NEGLIGENCE.” Id. at 117. Dr. Brigance does not argue that any of the language regarding her agreement to hold harmless, indemnify, release, or not to sue VSRI is ambiguous or confusing. [*27] And like this and other courts’ examination of similarly worded provisions, we conclude the relevant release language of the Ski School Waiver and Lift Ticket Waiver cannot be reasonably understood as expressing anything other than an intent to release or bar suit against VSRI from claims arising, in whole or in part, as a result of Dr. Brigance’s decision to ski and participate in ski lessons at Keystone, including claims based on VSRI’s negligence. See Espinoza, 809 F.3d at 1157-58; Mincin, 308 F.3d at 1112-13; Chadwick, 100 P.3d at 468-69; B & B Livery, 960 P.2d at 137-38; Hamill, 262 P.3d at 950-51.

Dr. Brigance’s argument on appeal regarding the fourth Jones factor centers on the assumption-of-the-risk language contained in both waivers. Specifically, Dr. Brigance contends the intent of the waivers is ambiguous because the provisions providing that she assumes all risks of skiing, “inherent or otherwise,” conflict with the SSA because the statute’s provisions only bar a skier from recovering against a ski area operator “for injury resulting from any of the inherent dangers and risks of skiing.” Colo. Rev. Stat. § 33-44-112; see also id. at 33-44-103(3.5). Because of this alleged conflict, Dr. Brigance asserts that she could not know whether she was “releasing [VSRI] of all liability as indicated by the [waivers], or only for the inherent risks of skiing as [*28] mandated by the SSA.” Aplt. Br. 50-51.

Dr. Brigance’s argument is unavailing for a number of reasons. First, it only addresses the assumption-of-the-risk language contained in each waiver. But the more pertinent provisions of the waivers are those regarding Dr. Brigance’s agreement to hold harmless, release, indemnify, and not to sue VSRI. These provisions appear independent from the assumption-of-the-risk language and therefore their plain meaning is unaffected by any potential ambiguity in the “inherent or otherwise” clauses. Dr. Brigance does not contest the clarity of the release provisions and, as previously described, we believe those provisions unambiguously reflect the parties’ intent to release VSRI from claims arising from Dr. Brigance’s participation in ski lessons at Keystone.

Second, the Lift Ticket Waiver’s “assumes all risks, inherent or otherwise” phrase, as well as a similar phrase contained in the Ski School Waiver, are not ambiguous. Rather, their meanings are clear–the signer of the agreement or holder of the ticket is to assume all risks of skiing, whether inherent to skiing or not. The term “otherwise,” when “paired with an adjective or adverb to indicate its contrary”–as [*29] is done in both waivers–is best understood to mean “NOT.” Webster’s Third New Int’l Dictionary 1598 (2002). The plain language and meaning of the phrases therefore reflect a clear intent to cover risks that are not inherent to skiing. Dr. Brigance offers no alternative reading of the phrases and does not specify how “inherent or otherwise” could be understood as only referring to the inherent risks identified in the SSA. And while the Ski School Waiver contains a provision in which the signer agrees to assume all inherent dangers and risks of skiing as may be defined by statute or other applicable law, the next provision of the agreement clearly expands that assumption of risk, stating that the signer “expressly acknowledge[s] and assume[s] all additional risks and dangers that may result in . . . physical injury and/or death above and beyond the inherent dangers and risks of the Activity, including but not limited to” a rather extensive list of circumstances or events that may occur while skiing, including “lift loading, unloading, and riding.” Aplt. App’x at 117. That same provision continues, indicating that the signer understands the description of risks in the agreement is “NOT COMPLETE,” but that the signer nevertheless [*30] voluntarily chooses to “EXPRESSLY ASSUME ALL RISKS AND DANGERS OF THE ACTIVITY, WHETHER OR NOT DESCRIBED HERE, KNOWN OR UNKNOWN, INHERENT OR OTHERWISE.” Id. Reading the “inherent or otherwise” phrase in context clearly indicates that, at a minimum, the Ski School Waiver includes an assumption of risk above and beyond the inherent risks and dangers of skiing as defined in the SSA. See Ringquist v. Wall Custom Homes, LLC, 176 P.3d 846, 849 (Colo. App. 2007) (“In determining whether a provision in a contract is ambiguous, the instrument’s language must be examined and construed in harmony with the plain and generally accepted meanings of the words used, and reference must be made to all the agreement’s provisions.”); Moland v. Indus. Claim Appeals Office of State, 111 P.3d 507, 510 (Colo. App. 2004) (“The meaning and effect of a contract is to be determined from a review of the entire instrument, not merely from isolated clauses or phrases.”).

Third, the Colorado Supreme Court rejected a similar argument in B & B Livery, Inc. v. Riehl, 960 P.2d 134 (Colo. 1998). There, the Colorado Supreme Court examined an exculpatory agreement that included a statutorily mandated warning that equine professionals are not liable to others for the inherent risks associated with participating in equine activities, “as well as a broader clause limiting liability from non-inherent risks.” Id. at 137-38. It concluded that “the [*31] insertion of a broader clause further limiting liability does not make the agreement ambiguous per se” and instead “merely evinces an intent to extinguish liability above and beyond that provided” in the statute. Id. at 137; see also Hamill, 262 P.3d at 951 (upholding enforcement of an exculpatory agreement that purported to cover “inherent and other risks,” as well as claims against “any legal liability,” and noting that “[t]o hold . . . that the release did not provide greater protection than the release from liability of inherent risks provided by the equine act . . . would render large portions of the agreement meaningless”). Furthermore, the waivers do not conflict with the SSA merely because they purport to cover a broader range of risks than those identified by the statute as inherent to skiing. See Fullick v. Breckenridge Ski Corp., No. 90-1377, 1992 U.S. App. LEXIS 9988, 1992 WL 95421, at *3 (10th Cir. Apr. 29, 1992) (unpublished) (“If one could never release liability to a greater degree than a release provided in a statute, then one would never need to draft a release, in any context.”); Chadwick, 100 P.3d at 468 (“[T]his court has made clear that parties may, consistent with the [equine] statute, contract separately to release sponsors even from negligent conduct, as long as the intent of the parties is clearly expressed in the contract.”).

Finally, the single [*32] case relied upon by Dr. Brigance that applies Colorado law is distinguishable. In Rowan v. Vail Holdings, Inc., 31 F. Supp. 2d 889, 899-900 (D. Colo. 1998), the district court determined an exculpatory agreement was ambiguous and therefore unenforceable in part because it first recited “the risks being assumed in the broadest possible language,” expressly including risks associated with the use of ski lifts, and then later addressed the assumption of risk in terms of the inherent risks and dangers of skiing as defined in the SSA, which indicates the use of ski lifts does not fall within its definition of inherent risks. The release therefore conflicted with itself and the relevant statutory language.
See Cunningham v. Jackson Hole Mountain Resort Corp., 673 F. App’x 841, 847 (10th Cir. Dec. 20, 2016) (unpublished). But unlike the waiver at issue in Rowan, the Ski School Waiver and Lift Ticket Waiver do not define the inherent risks of skiing in a manner contrary to the SSA. Nor do they contain conflicting provisions. The non-exhaustive list of inherent risks identified in the Lift Ticket Waiver appears to be drawn directly from the SSA, while the Ski School Waiver indicates inherent risks include those “as may be defined by statute or other applicable law.” Aplt. App’x at 117, 121. In addition, after referencing the inherent risks of skiing and providing that the signer [*33] of the agreement assumes those risks, the Ski School Waiver goes on to identify other, non-inherent risks associated with skiing and ski lessons and expressly provides that the signer assumes those risks. Specifically, the waiver makes clear that the risks assumed by Dr. Brigance include “all additional risks and dangers . . . above and beyond the inherent dangers and risks” of skiing and ski lessons, whether described in the waiver or not, known or unknown, or inherent or otherwise. Id. at 117. Unlike the provisions at issue in Rowan that provided conflicting statements regarding the risks assumed, the waivers here unambiguously provide that Dr. Brigance agreed to not only assume risks and dangers inherent to skiing, but also those risks and dangers not inherent to skiing.

Accordingly, the district court did not err in concluding that the fourth Jones factor does not invalidate the waivers.

***

Based on the foregoing analysis, we agree with the district court that application of the Jones factors to the Ski School Waiver and Lift Ticket Waiver do not render them unenforceable.

B. The SSA and PTSA

Although analysis of the Jones factors is often sufficient to determine the validity of an exculpatory [*34] agreement, the Colorado Supreme Court has “identified other public policy considerations invalidating exculpatory agreements, without regard to the Jones factors.” Boles, 223 P.3d at 726. At various points on appeal, either as standalone arguments or embedded within her analysis of the Jones factors, Dr. Brigance contends the Ski School Waiver and the Lift Ticket Waiver are unenforceable as contrary to Colorado public policy because they conflict with the SSA, PTSA, and the public policies announced therein.6 The district court considered these arguments and determined that the statutes do not affect the enforceability of either waiver as to Dr. Brigance’s claims. We find no reason to disagree.

6 Dr. Brigance also argues that the PLA prohibits use of exculpatory agreements as a defense to claims raised under its provisions and that the Ski School Waiver and Lift Ticket Waiver conflict with the public policies set forth in its provisions. But Dr. Brigance forfeited these arguments by failing to raise them in the district court. Avenue Capital Mgmt. II, 843 F.3d at 884. Although we may consider forfeited arguments under a plain-error standard, we decline to do so when, as here, the appellant fails to argue plain error on appeal. Id. at 885; see also Richison v. Ernest Grp., Inc., 634 F.3d 1123, 1130-31 (10th Cir. 2011). We decline to address Dr. Brigance’s argument that the waivers are unenforceable because their language is broad enough to encompass willful and wanton behavior for the same reason.

In 1965, the Colorado General Assembly enacted the PTSA with the purpose of assisting “in safeguarding life, health, property, and the welfare of the state in the operation of passenger tramways.” Bayer v. Crested Butte Mountain Resort, Inc., 960 P.2d 70, 73 (Colo. 1998). [HN11] The PTSA provides that “it is the policy of the state of Colorado to establish a board empowered to prevent unnecessary mechanical hazards in the operation of passenger tramways” and to assure that reasonable design and construction, periodic inspections, and adequate devices and personnel are provided with respect to passenger [*35] tramways. Colo. Rev. Stat. § 25-5-701. The General Assembly empowered the board “with rulemaking and enforcement authority to carry out its functions,” including the authority to “conduct investigations and inspections” and “discipline ski area operators.” Bayer, 960 P.2d at 73-74; see also Colo. Rev. Stat. §§ 25-5-703 to -704, -706 to -707. With its authority, the board adopted the standards, with some alterations, utilized by the American National Standards Institute for passenger tramways. Bayer, 960 P.2d at 73-74.

The General Assembly enacted the SSA fourteen years later. The SSA “supplements the [PTSA]’s focus on ski lifts, but its principal function is to define the duties of ski areas and skiers with regard to activities and features on the ski slopes.” Id. at 74. [HN12] The provisions of the SSA indicate that “it is in the interest of the state of Colorado to establish reasonable safety standards for the operation of ski areas and for the skiers using them” and that the SSA’s purpose is to supplement a portion of the PTSA by “further defin[ing] the legal responsibilities of ski area operators . . . and . . . the rights and liabilities existing between the skier and the ski area operator.” Colo. Rev. Stat. § 33-44-102. [HN13] In addition to the SSA’s provisions defining various responsibilities and duties of skiers and ski area operators, [*36] the 1990 amendments to the SSA limited the liability of ski area operators by providing that “no skier may make any claim against or recover from any ski area operator for injury resulting from any of the inherent dangers and risks of skiing.” Id. at 33-44-112. The SSA also provides that any violation of its provisions applicable to skiers constitutes negligence on the part of the skier, while “[a] violation by a ski area operator of any requirement of [the SSA] or any rule or regulation promulgated by the passenger tramway safety board . . . shall . . . constitute negligence on the part of such operator.” Id. at 33-44-104. “The effect of these statutory provisions is to make violations of the [SSA] and [the rules and regulations promulgated by passenger tramway safety board] negligence per se.Bayer, 960 P.2d at 74. [HN14] Ultimately, the SSA and PTSA together “provide a comprehensive . . . framework which preserves ski lift common law negligence actions, while at the same time limiting skier suits for inherent dangers on the slopes and defining per se negligence for violation of statutory and regulatory requirements.” Id. at 75.

Dr. Brigance contends the waivers conflict with the public policy objectives of the SSA and PTSA because enforcing [*37] either waiver would allow VSRI to disregard its statutorily defined responsibilities and duties. We find Dr. Brigance’s argument unpersuasive.

At the outset, it is worth reiterating that [HN15] under Colorado law exculpatory agreements are not invalid as contrary to public policy simply because they involve an activity subject to state regulation. Espinoza, 308 F.3d at 1154; see also id. at 1155 (acknowledging the Colorado Supreme Court has allowed enforcement of exculpatory agreements with respect to equine activities despite the existence of a statute limiting liability for equine professionals in certain circumstances, while still allowing for liability in other circumstances); Mincin, 308 F.3d at 1111 (“The fact that the Colorado legislature has limited landowner liability in the contexts of horseback riding and skiing is relevant to the question of whether landowner liability might be limited in other circumstances absent a contract.”). Similarly, exculpatory agreements do not conflict with Colorado public policy merely because they release liability to a greater extent than a release provided in a statute.
See Fullick, 1992 U.S. App. LEXIS 9988, 1992 WL 95421, at *3; Chadwick, 100 P.3d at 468; B & B Livery, 960 P.2d at 137-38.

[HN16] It is true that the SSA and PTSA identify various duties and responsibilities that, if violated, may subject a ski area operator to [*38] liability. But the acts establish a framework preserving common law negligence actions in the ski and ski lift context, Bayer, 960 P.2d at 75, and do nothing to expressly or implicitly preclude private parties from contractually releasing potential common law negligence claims through use of an exculpatory agreement. While “a statute . . . need not explicitly bar waiver by contract for the contract provision to be invalid because it is contrary to public policy,” Stanley v. Creighton Co., 911 P.2d 705, 707 (Colo. App. 1996), Dr. Brigance does not identify a single provision in either the SSA or PTSA suggesting the enforcement of exculpatory agreements in the ski and ski lift context is impermissible or contrary to public policy. Moreover, “Colorado law has long permitted parties to contract away negligence claims in the recreational context” and we “generally will not assume that the General Assembly mean[t] to displace background common law principles absent some clear legislative expression of that intent.” Espinoza, 809 F.3d at 1154, 1155. This principle is particularly relevant in the context of exculpatory agreements because “[t]he General Assembly . . . has shown that–when it wishes–it well knows how to displace background common law norms and preclude the release of civil claims.” Espinoza, 809 F.3d at 1154-55.

Our conclusion that [*39] the SSA and PTSA do not bar exculpatory agreements is supported by the Colorado Supreme Court’s regular enforcement of exculpatory agreements involving recreational activities, particularly in the context of equine activities, as well as the General Assembly’s relatively recent pronouncements regarding the public policy considerations involved in a parent’s ability to execute exculpatory agreements on behalf of its child with respect to prospective negligence claims. In 2002, the Colorado Supreme Court concluded that Colorado public policy prohibits a parent or guardian from releasing a minor’s prospective claims for negligence. See Cooper, 48 P.3d at 1237. The Colorado Supreme Court’s broad holding appeared to apply even within the context of recreational activities, as the relevant minor had injured himself while skiing. Id. at 1231-35. The following year, the General Assembly enacted Colo. Rev. Stat. § 13-22-107, which expressly declared that the General Assembly would not adopt the Colorado Supreme Court’s holding in Cooper. Colo. Rev. Stat. § 13-22-107(1)(b). Instead, the General Assembly explained that, among other things, it is the public policy of Colorado that “[c]hildren . . . should have the maximum opportunity to participate in sporting, recreational, educational, and other activities [*40] where certain risks may exist” and that “[p]ublic, private, and non-profit entities providing these essential activities to children in Colorado need a measure of protection against lawsuits.” Id. at 13-22-107(1)(a)(I)-(II). Accordingly, the General Assembly established that “[a] parent of a child may, on behalf of the child, release or waive the child’s prospective claim for negligence.” Id. at 13-22-107(3). The General Assembly’s enactment of § 33-22-107 reaffirms Colorado’s permissive position on the use of exculpatory agreements in the recreational context, and its authorization of parental releases and waivers suggests it did not intend and would not interpret the SSA as barring such agreements for adults.

Notwithstanding the lack of any statutory suggestion that the SSA and PTSA prohibit the enforcement of exculpatory agreements as a matter of public policy, Dr. Brigance contends two Colorado Court of Appeals decisions support her assertion to the contrary. In Stanley v. Creighton, the Colorado Court of Appeals analyzed an exculpatory clause in a residential rental agreement under the Jones factors and concluded that the agreement involved a public interest sufficient to invalidate the exculpatory [*41] clause. 911 P.2d at 707-08. The Stanley court reached this conclusion because, among other things, Colorado has long regulated the relationship between landlords and tenants, the PLA “confirms that landowner negligence is an issue of public concern,” and “a landlord’s services are generally held out to the public and . . . housing rental is a matter of practical necessity to the public.” Id. Although the Stanley court’s partial reliance on the existence of state regulations tends to support Dr. Brigance’s assertion that the existence of the SSA and PTSA render the Ski School Wavier and Lift Ticket Waiver either contrary to public policy or sufficient to satisfy the first Jones factor, the circumstances here are readily distinguishable. Unlike residential housing, skiing is not essential nor a matter of practical necessity. Among other considerations not present here, the Stanley court “placed greater emphasis on the essential nature of residential housing” and “alluded to a distinction between residential and commercial leases, implying that an exculpatory clause might well be valid in the context of a commercial lease.” Mincin, 308 F.3d at 1110.

Similarly, Dr. Brigance’s reliance on Phillips v. Monarch Recreation Corp., 668 P.2d 982 (Colo. App. 1983), does not alter our conclusion. In Phillips [*42]
, the Colorado Court of Appeals stated that “[s]tatutory provisions may not be modified by private agreement if doing so would violate the public policy expressed in the statute.” Id. at 987. Applying this principle, the Phillips court concluded that because the SSA “allocate[s] the parties’ respective duties with regard to the safety of those around them, . . . the trial court correctly excluded a purported [exculpatory] agreement intended to alter those duties.” Id. But apparently unlike the agreement at issue in Phillips, the Ski School Waiver and Lift Ticket Waiver do not appear to alter the duties placed upon VSRI under the SSA. See, Fullick, 1992 U.S. App. LEXIS 9988, 1992 WL 95421, at *3. And the court’s application of this principle to the SSA appears to be inconsistent with the more recent pronouncements by the Colorado Supreme Court and General Assembly regarding Colorado policies toward the enforceability of exculpatory agreements in the context of recreational activities. Moreover, as detailed above, the SSA and PTSA do not express a policy against exculpatory agreements.

“Given all this,” particularly the SSA’s and PTSA’s silence with respect to exculpatory agreements, “we do not think it our place to adorn the General Assembly’s handiwork with revisions to [*43] the [SSA, PTSA, and] common law that it easily could have but declined to undertake for itself.” Espinoza, 809 F.3d at 1155.

In summary, Colorado’s “relatively permissive public policy toward recreational releases” is one “that, no doubt, means some losses go uncompensated.” Espinoza, 809 F.3d at 1153. And the Colorado Supreme Court and General Assembly may someday “prefer a policy that shifts the burden of loss to the service provider, ensuring compensation in cases like this.” Id. But “that decision is their decision to make, not ours, and their current policy is clear.” Id. As a result, for the reasons stated above, we conclude the Ski School Waiver and Lift Ticket Waiver are enforceable and accordingly bar Dr. Brigance’s claims.

III. CONCLUSION

We AFFIRM the district court’s grant of summary judgment in favor of VSRI and, on this alternative basis, its partial grant of VSRI’s motion to dismiss.


Tennessee still does not allow a parent to sign away a minor’s right to sue, but might enforce a jurisdiction and venue clause, maybe an arbitration clause.

The release was written poorly choosing California as the forum state for the lawsuit and applying California law. The accident occurred in Tennessee, and the defendant was based in Nevada so the court quickly through the venue and jurisdiction clauses out.

Blackwell, v. Sky High Sports Nashville Operations, LLC. 2017 Tenn. App. LEXIS 6

State: Tennessee, Court of Appeals of Tennessee, at Nashville

Plaintiff: Crystal Blackwell, as Next Friend to Jacob Blackwell, a Minor

Defendant: Sky High Sports Nashville Operations, LLC

Plaintiff Claims: negligence

Defendant Defenses: release

Holding: for the plaintiff

Year: 2017

Another trampoline case, another stretch outside the normal subject matter of these articles, however, the case is instructive on two points. (1.) The court just slammed the defendant’s release based on a jurisdiction and venue clause that had nothing to do with the place where the accident occurred and (2.) The judge stated a jurisdiction and venue clause in a release; if it met Tennessee’s law would be valid when signed by a parent to stop the claims of a child.

The minor plaintiff was injured while jumping on a trampoline at the defendant’s facility in Nashville, Tennessee. Prior to his injury, his mother signed a release. The minor plaintiff visited the defendant’s facilities on numerous occasions prior to his injury. He was injured playing a game of trampoline dodgeball.

The release included a forum selection (venue) clause, which stipulated California was the site of any lawsuit applying California law. (California allows a mother to sign away a parent’s right to sue. See States that allow a parent to sign away a minor’s right to sue).

The mother and the son sued the defendant. The defendant filed a motion to change parties, meaning the defendant named in the lawsuit was not the defendant who owned the facility where the accident occurred. The parties eventually stipulated to that, and the correct parties were identified and in the lawsuit. The defendant filed a motion to enforce the contract between the parties, meaning the lawsuit should be moved to California as stated in the release. The motion also stated the claims made by the mother should be dismissed because she signed the release.

The mother voluntarily dismissed her claims against the defendant. By doing so, the defendant was now arguing release law only against the minor plaintiff in a state with a long history of denying those releases. (See States that allow a parent to sign away a minor’s right to sue).

The trial court had a hearing on the issue of the venue and jurisdiction clauses and ruled them unenforceable.

Therein, the trial court ruled that neither the forum selection clause nor the choice of law provision were valid because their enforcement would cause a great hardship for Son to prosecute his action in California and, Tennessee, rather than California, has “a more significant relationship to the facts surrounding this case.”

The court also ruled that the release was not valid to protect against the claims of the minor, now the sole plaintiff in the case finding “The trial court also noted that Tennessee’s law included a fundamental public policy regarding the protection of children.”

The trial court eventually granted the defendant’s motion for an interlocutory appeal. An interlocutory appeal is an appeal prior to the granting of a final decision by the court. This type of appeal is rare and only done when one party can argue the issue should be decided by the appellate court prior to going to trial and has a good basis for their argument.

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

The Appellate Court found four issues to review:

1. Whether the trial court erred in refusing to enforce the forum selection clause contained in the release?

2. Whether the trial court erred in refusing to enforce the choice of law provision contained in the release?

3. Whether the trial court erred in refusing to enforce the waiver of liability against Son contained in the release signed by Mother?

4. Whether the trial court erred in refusing to allow the amendment to the complaint to allow Son to recover for pre-majority medical expenses.

Starting with issue one the court looked at the exact same issues discussed in Your Jurisdiction and Venue clause must be relevant to the possible location of the accident. Screw this up and you can void your release as occurred in this ski racing case. The court started with the general law concerning venue or forum selection clauses.

Generally, a forum selection clause is enforceable and binding on the parties entering into the contract. A forum selection clause will be upheld if it is fair and reasonable in light of all the circumstances surrounding its origin and application.

Forum selection clauses will be enforced unless:

(1) the plaintiff cannot secure effective relief in the other state, for reasons other than delay in bringing the action; (2) or the other state would be a substantially less convenient place for the trial of the action than this state; (3) or the agreement as to the place of the action was obtained by misrepresentation, duress, abuse of economic power, or other unconscionable means; (4) or it would for some other reason be unfair or unreasonable to enforce the agreement.

The forum selection clause is valid unless the party arguing against the clause proves it would be unfair and inequitable. “Tennessee law is clear, however, that the party challenging the enforcement of the forum selection clause “should bear a heavy burden of proof.”

The plaintiffs were from Tennessee, and the accident occurred in Tennessee. All the plaintiff’s witnesses were from Tennessee because that is where the injured minor received his medical treatment. The defendant was a Nevada corporation doing business in Nevada. However, the defendant’s release stated that California was the place for any litigation. The reason for that is California allows a parent to sign away a minor’s right to sue. (See States that allow a parent to sign away a minor’s right to sue).

California was obviously a “less convenient place” to have a trial because the majority, if not all the witnesses, were based in Tennessee. However, inconvenience or annoyance is not enough to invalidate a venue clause, nor will increased cost of litigating the case.

Still, the Tennessee Supreme Court has previously held that where neither company at issue was a resident of the proposed forum and none of the witnesses were residents of the proposed forum, the party resisting a forum selection clause had met its burden to show that the proposed forum was a substantially less convenient forum.

What triggered the court in its decision is the total lack of any real relationship of the parties to the case or the facts of the case to California. Add to that California first issue, the law would allow the release to be effective. Under Tennessee’s law, California would not provide a fair forum for the plaintiff. The release was signed in Tennessee, which the court stated was the default location for the litigation. “Tennessee follows the rule of lex loci contractus. This rule provides that a contract is presumed to be governed by the law of the jurisdiction in which it was executed absent a contrary intent.”

The choice of law or jurisdiction question sunk for the same reason.

Instead, the choice of law provision fails for largely the same reason that the forum selection clause fails: no material connection exists between the transaction at issue and California. As previously discussed, the contract at issue was signed in Tennessee, between Tennessee residents and a Nevada company, concerning activities taking place in Tennessee. Black’s Law Dictionary defines “material” as “[h]aving some logical connection with the consequential facts.” The simple fact that Sky High’s parent company was founded in California over a decade ago and now operates several facilities there is simply not sufficient to show a logical connection to the transaction at issue in this case.

The choice of law provision in Tennessee and most if not all states, will be honored when there is a “material connection” to the transactions at issue. That means that a jurisdiction and venue clause must be based where the plaintiff is, where the defendant is or where the accident happened. IF the jurisdiction and venue clause is based on the defendant’s location, the courts are looking for more than just location. They want witnesses needed to be there or a real reason why the defendant’s location to be the site of the trial and the law to be applied.

After throwing out the jurisdiction and venue clauses in the release for being an attempt to get around an issue, the court then looked at the release itself. The court first looked at limitations on releases in Tennessee.

These types of agreements, however, are subject to some important exceptions, such as waivers involving gross negligence or willful conduct or those involving a public duty. These types of provisions must also be clear and unambiguous.

The plaintiff’s argument was the release violated Tennessee’s public policy.

[T]he public policy of Tennessee is to be found in its constitution, statutes, judicial decisions and applicable rules of common law.'” “Primarily, it is for the legislature to determine the public policy of the state, and if there is a statute that addresses the subject in question, the policy reflected therein must prevail.”

To determine if a contract violates public policy the court must look at the purpose of the contract, if the contract will have a detrimental effect on the public. “‘The principle that contracts in contravention of public policy are not enforceable should be applied with caution and only in cases plainly within the reasons on which that doctrine rests.’”

The court then reviewed the Childress decision in detail and found it to still be viable law in Tennessee.

Based on the foregoing, we conclude that there is no basis to depart from this Court’s well-reasoned decision in Childress. Because the law in Tennessee states that parents may not bind their minor children to pre-injury waivers of liability, releases, or indemnity agreements, the trial court did not err in refusing to enforce the waiver of liability and indemnity provisions of the release signed by Mother on behalf of Son.

This court agreed, releases signed by parents to stop claims of a minor are invalid in Tennessee. Tennessee now has two appellate court decisions prohibiting a parent from signing away a minor’s right to sue. The Tennessee Supreme Court declined to review the decision, Blackwell v. Sky High Sports Nashville Operations, LLC, 2017 Tenn. LEXIS 305.

The court then looked at a motion filed by the plaintiff to increase the damages based on pre-majority medical expenses. These were medical bills paid by the mother prior to the injured plaintiff reaching the age of 18. Those bills under Tennessee’s law where the mother’s bills, the person who paid them, however, since she had dismissed her claims, those damages were no longer part of the suit. Now the plaintiff was trying to include them in the injured plaintiff’s claims.

The court denied that motion based on the release the mother signed, which prevented her claims and the plaintiff as a minor had no legal duty to pay those bills, only the mother could. Therefore, those damages could not be included in the lawsuit.

The release in that regard proved valuable to the defendant because the medical bills incurred right after the accident were the largest amount of claims to be paid.

So Now What?

This is a great example of a case where the local business accepted the release from above, home office, without checking to see if that release was valid. This occurs every day, with the same results, when an insured asks for a release from their insurance company or a new franchise opens up and accepts the paperwork from the franchisor as is.

Always have your release reviewed to see if it meets the needs of your business and the laws of your state.

The release was effective to stop the lawsuit for claims made by the mother of the injured minor. Those medical bills paid by the mother were probably substantial and would the largest amount of claims owed. In many cases with the reduced amount of medical bills, other damages would be significantly reduced because those damages tend to be a factor of the medical bills.

What is of note in this decision is the jurisdiction and venue clause, or choice of law and forum selection clause as defined in the decision would have been upheld if it was not so absurd. If the choice of law clause was based on the requirements that it have some relationship to the parties or the accident, it seems to have been a valid decision and upheld.

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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Author: Outdoor Recreation Insurance, Risk Management and Law

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Blackwell, v. Sky High Sports Nashville Operations, LLC. 2017 Tenn. App. LEXIS 6

Blackwell, v. Sky High Sports Nashville Operations, LLC. 2017 Tenn. App. LEXIS 6

Crystal Blackwell, as Next Friend to Jacob Blackwell, a Minor v. Sky High Sports Nashville Operations, LLC.

No. M2016-00447-COA-R9-CV

COURT OF APPEALS OF TENNESSEE, AT NASHVILLE

2017 Tenn. App. LEXIS 6

November 16, 2016, Session

January 9, 2017, Filed

SUBSEQUENT HISTORY: Appeal denied by Blackwell v. Sky High Sports Nashville Operations, LLC, 2017 Tenn. LEXIS 305 (Tenn., May 18, 2017)

PRIOR HISTORY: Tenn. R. App. P. 9 [*1]  Interlocutory Appeal; Judgment of the Circuit Court Affirmed in Part; Reversed in Part; and Remanded. Appeal from the Circuit Court for Davidson County. No. 14C524 Thomas W. Brothers, Judge.

COUNSEL: David J. Weissman, Nashville, Tennessee, for the appellant, Crystal Blackwell, as next friend of Jacob Blackwell, a minor.

Ben M. Rose and Joshua D. Arters, Brentwood, Tennessee, for the appellee, Sky High Sports Nashville Operations, LLC.

JUDGES: J. STEVEN STAFFORD, P.J., W.S., delivered the opinion of the court, in which D. MICHAEL SWINEY, C.J., and BRANDON O. GIBSON, J., joined.

OPINION BY: J. STEVEN STAFFORD

OPINION

In this interlocutory appeal, the defendant trampoline park argues that the trial court erred by refusing to enforce a forum selection clause, a choice of law provision, and a waiver of liability and indemnity clause against the minor plaintiff. Additionally, the minor plaintiff argues that the trial court erred in denying his motion to alter or amend his complaint to allow him to claim pre-majority medical expenses. We reverse the trial court’s denial of the minor plaintiff’s motion to amend only to the extent that the minor plaintiff [*2]  may be permitted to assert pre-majority medical expenses that were paid by him or that he is legally obligated to pay. We affirm the trial court in all other respects. Affirmed in part, reversed in part, and remanded.

OPINION

Background

On July 3, 2012, Plaintiff/Appellant Crystal Blackwell (“Mother”) signed a contract entitled “Customer Release of Liability and Assumption of Risk” (“the release”) with Defendant/Appellee Sky High Sports Nashville Operations, LLC (“Sky High”) in order for her son, Jacob Blackwell (“Son,” and, as represented by Mother as next friend in this lawsuit, “Appellants”) to participate in activities at an indoor trampoline park operated by Sky High. The release included a forum selection clause designating California as the proper forum for litigation, a choice of law provision stipulating California as the applicable law governing the contract, and a liability waiver on behalf of both Mother and Son, as discussed in detail infra. The release further provided that it would remain in effect for any future visits to Sky High until Son turned eighteen. Mother and Son returned to Sky High to participate in trampolining activities on multiple occasions after Mother [*3]  signed the contract. On March 26, 2013, Son was allegedly injured at Sky High while participating in a trampoline dodgeball tournament.

On February 5, 2014, Appellants filed a complaint in the Davidson County Circuit Court against “Sky High Sports Nashville, LLC.” The complaint alleged that Son moved in an awkward fashion on a trampoline to dodge the ball and landed “awkwardly,” that another player’s “double bounce” contributed to his awkward landing, and that Son suffered from a torn patellar tendon and broken tibia as a result, necessitating surgery. According to Appellants, Sky High “knew or should have known that playing dodgeball on a trampoline was a very dangerous activity” and therefore was guilty of negligence. The complaint further alleged that any warnings, disclaimers, or waivers of liability signed by Mother were “void, invalid, and/or inadequate.” The complaint sought damages, including past medical expenses, future medical expenses, pain and suffering, emotional injury and suffering, loss of enjoyment of life, lost wages, and loss of consortium in the amount of $500,000.00.

On May 5, 2014, Sky High Sports Nashville, LLC filed an answer denying the material allegations [*4]  contained in the complaint. In addition, Sky High Sports Nashville, LLC raised several affirmative defenses: (1) that Sky High Sports Nashville, LLC was not the proper party; (2) that pursuant to the parties’ contract, California was the proper forum and California law was applicable to the dispute; and (3) that Appellants’ claims were barred by the release signed by Mother individually and on Son’s behalf. On November 3, 2014, Sky High was substituted as the proper defendant by agreement of the parties and an amended complaint was filed reflecting the change.

On March 17, 2015, Sky High filed its motion to enforce the contract between the parties. The motion first argued that any claims on behalf of Mother should be dismissed because the release contained a forum selection clause, a choice of law provision, and a waiver of liability, all of which were enforceable against Mother. Sky High also argued that the forum selection clause, choice of law provision, and liability waiver should be enforced against Son as well, despite “dated Tennessee authority to the contrary” which did “not reflect the current state of the law.” In sum, Sky High offered the following various alternative methods [*5]  for resolving this dispute: (1) that the trial court should dismiss the case based on the forum selection clause; (2) that the trial court retain jurisdiction but apply California law; or (3) that the trial court should enforce the release’s liability waiver and dismiss the case as to both Mother and Son.

Appellants filed a response to the motion to enforce on May 4, 2015. Therein, Appellants argued that the forum selection clause and choice of law provision were invalid because the dispute involved in this case has no connection to California. Appellants also asserted that based upon this Court’s decision in Childress v. Madison County, 777 S.W.2d 1 (Tenn. Ct. App. 1989), a parent may not effectively waive liability on behalf of a minor. The response offered no argument, however, that the release of liability did not apply to any claims on behalf of Mother. Accordingly, on the same day, Mother filed a notice of voluntary dismissal of her claims against Sky High.

In response to Appellants’ contention that the dispute in this case had no connection with California, Sky High filed the affidavit of Rolland Weddell on May 6, 2015. In his affidavit, Mr. Weddell asserted that he helped found Sky High Sports, “a larger national brand” of which Sky High [*6]  was a part. According to Mr. Weddell, the company’s first two stores were founded in California in 2006. Mr. Weddell explained that ten trampoline parks under the Sky High Sports brand currently operate in California. Mr. Weddell, however, resides in Nevada, where he serves as the loss prevention manager for Sky High. There is no dispute that Sky High’s corporate headquarters is also in Nevada.

The trial court held a hearing on Sky High’s motion to enforce on May 8, 2014. On May 22, 2015, the trial court entered an order denying Sky High’s motion to enforce in its entirety. Therein, the trial court ruled that neither the forum selection clause nor the choice of law provision were valid because their enforcement would cause a great hardship for Son to prosecute his action in California and, Tennessee, rather than California, has “a more significant relationship to the facts surrounding this case.” The trial court also noted that Tennessee law included a fundamental public policy regarding the protection of children. Consequently, the trial court denied Sky High’s request to enforce the waiver of liability as to the Son’s claims, noting that such a contract is not permissible in Tennessee [*7]  under the holding in Childress.

On June 22, 2015, Sky High filed a motion to alter or amend the trial court’s judgment, or in the alternative, for an interlocutory appeal of the trial court’s denial of the motion to enforce pursuant to Rule 9 of the Tennessee Rules of Appellate Procedure. While this motion was pending, on July 31, 2015, Appellants filed a motion to amend their complaint. Therein, Appellants contended that because the individual claims of Mother had been voluntarily dismissed, an amendment was necessary to ensure the proper parties were named in the complaint and to request medical expenses, both past and future, on behalf of Son, with Mother acting as next friend. Sky High opposed the amendment, arguing that only a parent could bring a claim for past medical expenses for a minor child. Sky High contended that, because Mother’s claims were barred by the release, neither Mother nor Son was entitled to recover these damages.

On February 23, 2016, the trial court entered an order on the pending motions to amend the complaint and to alter or amend, or in the alternative, for an interlocutory appeal. First, the trial court denied Sky High’s motion to alter or amend but granted their request for an interlocutory appeal of the [*8]  denial of the motion to enforce. Additionally, the trial court granted Appellants’ motion to alter or amend, except to the extent that the amendment would allow “recovery of any pre-majority medical expenses.” The trial court, however, also allowed an interlocutory appeal of this ruling. Eventually, this Court also granted the requested interlocutory appeal as to both issues. Accordingly, this appeal followed.

Issues Presented

As we perceive it, this appeal involves four issues:

1. Whether the trial court erred in refusing to enforce the forum selection clause contained in the release?

2. Whether the trial court erred in refusing to enforce the choice of law provision contained in the release?

3. Whether the trial court erred in refusing to enforce the waiver of liability against Son contained in the release signed by Mother?

4. Whether the trial court erred in refusing to allow the amendment to the complaint to allow Son to recover for pre-majority medical expenses.

Standard of Review

In this case, the trial court denied Sky High’s motion to dismiss based upon a forum selection clause, a choice of law provision, and a liability waiver contained in the release.  [HN1] In considering an appeal from [*9]  a trial court’s ruling on a motion to dismiss, we take all allegations of fact in the complaint as true and review the trial court’s legal conclusions de novo with no presumption of correctness. Mid-South Industries, Inc. v. Martin Mach. & Tool, Inc., 342 S.W.3d 19, 27 (Tenn. Ct. App. 2010) (citing Owens v. Truckstops of America, 915 S.W.2d 420, 424 (Tenn. 1996)); see also Stevens ex rel. Stevens v. Hickman Cmty. Health Care Servs., Inc., 418 S.W.3d 547, 553 (Tenn. 2013) (citing Graham v. Caples, 325 S.W.3d 578, 581 (Tenn. 2010)) (“The trial court’s denial of [d]efendants’ motions to dismiss involves a question of law, and, therefore, our review is de novo with no presumption of correctness.”).

In addition, the trial court denied Appellants’ motion to amend their complaint.  [HN2] A trial court’s decision to deny a motion to amend a complaint is reviewed under an abuse of discretion standard. Merriman v. Smith, 599 S.W.2d 548, 559 (Tenn. Ct. App. 1979).

Discussion

I.

We begin first by considering whether the trial court erred in refusing to dismiss Appellants’ complaint on the basis of the forum selection clause contained in the release, or in the alternative, in refusing to apply California law to this dispute. The release signed by Mother on behalf of Son contains the following language: “In the event that I file a lawsuit against Sky High [], I agree to do so solely in the state of California and I further agree that the substantive law of California shall apply in that action without regard to the conflict [*10]  of law rules of that state.”

The trial court did not rule that the forum selection and choice of law provisions were unenforceable because the release containing them was signed by Mother on behalf of Son, as is true of the liability waiver discussed in detail infra; instead, the trial court ruled that the forum selection and choice of law provisions were unenforceable based upon the Tennessee framework regarding provisions of this type. Likewise, in their reply brief to this Court, Appellants do not assert that the forum selection and choice of law provisions are unenforceable against Son simply due to the fact that the provisions were included in a contract signed by Mother on behalf of Son. Rather, Appellants assert that the trial court correctly determined that California has so little interest in this case and litigating in California would be substantially less convenient than in Tennessee so as to militate against enforcement of both the forum selection and choice of law provisions. Accordingly, we assume arguendo for purposes of this appeal that both the forum selection clause and choice of law provision are binding against Son unless otherwise rendered unenforceable by Tennessee [*11]  law. We therefore first proceed to address whether Tennessee law renders the forum selection clause unenforceable in this case.

A.

[HN3] Generally, a forum selection clause is enforceable and binding on the parties entering into the contract. Lamb v. MegaFlight, Inc., 26 S.W.3d 627, 631 (Tenn. Ct. App. 2000). A forum selection clause will be upheld if it is fair and reasonable in light of all the circumstances surrounding its origin and application. Id. (citing Dyersburg Mach. Works, Inc. v. Rentenbach Eng’g Co., 650 S.W.2d 378 (Tenn. 1983)). According to the Tennessee Supreme Court, a court must give effect to a forum selection clause and refuse to entertain the action unless:

(1) the plaintiff cannot secure effective relief in the other state, for reasons other than delay in bringing the action; (2) or the other state would be a substantially less convenient place for the trial of the action than this state; (3) or the agreement as to the place of the action was obtained by misrepresentation, duress, abuse of economic power, or other unconscionable means; (4) or it would for some other reason be unfair or unreasonable to enforce the agreement.

Dyersburg, 650 S.W.2d at 380 (quoting The Model Choice Forum Act of 1968). The Dyersburg Court further stated that Tennessee courts should give consideration to the above factors and should enforce a forum selection clause [*12]  unless the party challenging the clause demonstrates that enforcement would be unfair or inequitable. Id. Our research demonstrates that the factors promulgated by the Dyersburg Court have been followed in numerous subsequent cases. E.g., Cohn Law Firm v. YP Se. Advert. & Publ’g, LLC, No. W2014-01871-COA-R3-CV, 2015 Tenn. App. LEXIS 497, 2015 WL 3883242, at *11 (Tenn. Ct. App. June 24, 2015); Sevier Cnty. Bank v. Paymentech Merch. Servs., No. E2005-02420-COA-R3-CV, 2006 Tenn. App. LEXIS 553, 2006 WL 2423547 (Tenn. Ct. App. Aug. 23 2006); Spell v. Labelle, No. W2003-00821-COA-R3-CV, 2004 Tenn. App. LEXIS 255, 2004 WL 892534 (Tenn. Ct. App. Apr. 22, 2004); Signal Capital, No. E2000-00140-COA-R3-CV, 2000 Tenn. App. LEXIS 603, 2000 WL 1281322 (Tenn. Ct. App. Sept. 7, 2000); Tennsonita (Memphis), Inc. v. Cucos, Inc., No. 6, 1991 Tenn. App. LEXIS 297, 1991 WL 66993 (Tenn. Ct. App. May 2, 1991). Tennessee law is clear, however, that the party challenging the enforcement of the forum selection clause “should bear a heavy burden of proof.” Chaffin v. Norwegian Cruise Line Ltd., No. 02A01-9803-CH-00080, 1999 Tenn. App. LEXIS 231, 1999 WL 188295, *4 (Tenn. Ct. App. Apr. 7, 1999).

We first note that there are no allegations in this case that the forum selection clause at issue was “obtained by misrepresentation, duress, abuse of economic power, or other unconscionable means[.]” Dyersburg, 650 S.W.2d at 380. We agree with both Appellants and the trial court, however, that, with respect to the second Dyersburg factor, California is a substantially less convenient place to hold this lawsuit. We recognize that  [HN4] a “party resisting a forum selection clause must show more than inconvenience or annoyance[.]” [*13]  ESI Cos., Inc. v. Ray Bell Constr. Co., No. W2007-00220-COA-R3-CV, 2008 Tenn. App. LEXIS 115, 2008 WL 544563, at *7 (Tenn. Ct. App. Feb. 29, 2008). Accordingly, mere increased litigation expenses will be insufficient to invalidate a forum selection clause. Still, the Tennessee Supreme Court has previously held that where neither company at issue was a resident of the proposed forum and none of the witnesses were residents of the proposed forum, the party resisting a forum selection clause had met its burden to show that the proposed forum was a substantially less convenient forum. See Dyersburg, 650 S.W.2d at 381 (holding that the second factor was met because the chosen forum of Kentucky was “a substantially less convenient place for trial . . . wherein all witnesses are Tennessee residents, the plaintiffs and the defendants, . . . are Tennessee corporations”).

The same is true in this case. Here, Mother and Son are Tennessee residents. Moreover, the alleged injury to Son and his later treatment all occurred in Tennessee. It thus appears that Appellants’ witnesses to both the alleged negligence and later treatment may all be found in Tennessee. On the other hand, Sky High has not presented this Court with any prospective witnesses regarding the events at issue in this case that are California residents. [*14]  While it is true that Sky High is not a Tennessee corporation, as were the corporations in Dyersburg, nothing in the record suggests that Sky High is incorporated or has its principal place of business in California, the forum designated in the release. Rather, the only information in the record indicates that Sky High has its headquarters in Nevada. Instead, from the affidavit of Mr. Weddell, we discern that Sky High’s limited contact with California involves only that the “larger brand” under which Sky High operates was founded in California over a decade ago and now operates several facilities in California. Respectfully, a decades-old contact by a parent company with a state and the operation of several trampoline parks in a state is insufficient to undermine Appellants’ contentions regarding the inconvenience that would be posed by litigating in California. Accordingly, we hold that Appellants have met their burden to show that California presents a substantially less convenient forum than Tennessee.

We also agree that, with respect to the first and fourth Dyersburg factors, California is unlikely to provide Son with effective relief and that forcing Son to litigate in California [*15]  would otherwise be unfair. As discussed in detail infra,  [HN5] Tennessee law and California law differ as to whether waivers of liability signed by parents may be enforced as to their children. Compare Childress v. Madison Cnty., 777 S.W.2d 1 (Tenn. Ct. App. 1989) (refusing to enforce such a waiver), with Hohe v. San Diego Unified Sch. Dist., 224 Cal. App. 3d 1559, 274 Cal. Rptr. 647 (Ct. App. 1990) (enforcing such a waiver). Because we reaffirm Tennessee law that parents cannot effectively sign pre-injury waivers on behalf of their children, as discussed in detail infra, allowing Son to litigate his case in Tennessee provides him with a better opportunity for full relief.

B.

We next consider whether the trial court erred in refusing to enforce the release’s choice of law provision indicating that California law should apply to this case.  [HN6] Generally, absent a choice of law provision in a contract, “Tennessee follows the rule of lex loci contractus. This rule provides that a contract is presumed to be governed by the law of the jurisdiction in which it was executed absent a contrary intent.” Messer Griesheim Indus., Inc. v. Cryotech of Kingsport, Inc., 131 S.W.3d 457, 474-75 (Tenn. Ct. App. 2003) (quoting Vantage Tech., LLC v. Cross, 17 S.W.3d 637, 650 (Tenn. Ct. App. 1999)). As this Court explained:

If the parties manifest an intent to instead apply the laws of another jurisdiction, then that intent will be honored provided certain requirements are met. The [*16]  choice of law provision must be executed in good faith. Goodwin Bros. Leasing, Inc. v. H & B Inc., 597 S.W.2d 303, 306 (Tenn. 1980). The jurisdiction whose law is chosen must bear a material connection to the transaction. Id. The basis for the choice of another jurisdiction’s law must be reasonable and not merely a sham or subterfuge. Id. Finally, the parties’ choice of another jurisdiction’s law must not be “contrary to ‘a fundamental policy’ of a state having [a] ‘materially greater interest’ and whose law would otherwise govern.” Id., n.2 (citing RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 187(2) (1971)).

Messer Griesheim, 131 S.W.3d at 475 (quoting Vantage, 17 S.W.3d at 650).1

1 Sky High asserts that the party seeking to invalidate a choice of law provision bears a “heavy burden,” citing Security Watch, Inc. v. Sentinel Systems, Inc., 176 F.3d 369 (6th Cir. 1999). First, we note that a federal decision, even when interpreting Tennessee law, is not binding on this Court. See Elias v. A & C Distrib. Co., Inc., 588 S.W.2d 768, 771 (Tenn. Ct. App. 1979) (“[D]ecisions of [ f]ederal . . . [c]ourts are not binding authority upon this Court and other State Courts in Tennessee[.]”). Furthermore, the phrase “heavy burden” as quoted by Sky High simply does not appear in the Security Watch Opinion. See Security Watch, 176 F.3d at 375. Finally, we note that the Security Watch Opinion does not concern a choice of law provision, but rather, a forum selection clause. Id.

Here, there is no allegation that the choice of law provision at issue was not executed in good faith. Instead, the choice of law provision fails for largely the same reason that the forum selection clause fails: no material connection exists between the transaction at issue and California. As previously discussed, the contract at issue was signed in Tennessee, between Tennessee residents and a Nevada company, concerning activities taking place in Tennessee. Black’s Law Dictionary  [HN7] defines “material” as “[h]aving some logical connection with the consequential facts.” Black’s Law Dictionary 1066 (9th ed. 2009). The [*17]  simple fact that Sky High’s parent company was founded in California over a decade ago and now operates several facilities there is simply not sufficient to show a logical connection to the transaction at issue in this case.

We do not disagree with Sky High’s assertion that it is reasonable and generally enforceable for a company to “limit where it is subject to suit.”  [HN8] Tennessee law is clear, however, that a company’s choice of law provision will only be honored where the proposed state’s law has a material connection to the transaction at issue. See Messer Griesheim, 131 S.W.3d at 475. Furthermore, the cases that Sky High cites for this proposition do not support their argument in this case. First, in Bright v. Spaghetti Warehouse, Inc., No. 03A01-9708-CV-00377, 1998 Tenn. App. LEXIS 286, 1998 WL 205757 (Tenn. Ct. App. Apr. 29, 1998), the Court of Appeals enforced a choice of law provision designating that Texas law would apply to the contract where the contract was largely negotiated in Texas and the defendant was a Texas corporation. 1998 Tenn. App. LEXIS 286, [WL] at *5. As such, the transaction at issue in Bright had far more contact with the state whose law was named in the contract than is present in this case. Even more puzzling, Thomas v. Costa Cruise Lines N.V., 892 S.W.2d 837 (Tenn. Ct. App. 1994), does not involve either a choice of law provision or the application of Tennessee law to determine its enforceability; rather, Thomas [*18]  involves a forum selection clause, whose enforcement was governed by federal law. Id. at 840. Accordingly, the trial court did not err in denying Sky High’s request to enforce the choice of law provision on this basis. Because the contract’s choice of law provision is unenforceable, the general rule of lex loci contractus applies in this case. See Messer Griesheim, 131 S.W.3d at 474. As such, Tennessee law, as the law of the place where the contract was executed, governs the dispute in this case.

II.

Having determined that this case has been properly brought in a Tennessee court and that Tennessee law applies, we next consider whether the trial court erred in refusing to enforce the waiver of liability and the indemnity language contained in the release pursuant to Tennessee law. Here, the contract at issue contains the following language, in relevant part:

3. I hereby voluntarily release, forever discharge, and agree to defend indemnify and hold harmless [Sky High] from any and all claims, demands, causes of action, which are in any way connected with my participation in this activity or any use of [Sky High’s] equipment or facilities, including any such claims which allege negligent acts or omissions of [Sky High]. [*19]

4. Should [Sky High] or anyone acting on their behalf, be required to incur attorney’s fees and costs to enforce this agreement, I agree to indemnify and hold them harmless for all such fees and costs. This means that I will pay all of those attorney’s fees and costs myself.

5. I certify that I have adequate insurance to cover any injury or damage that I may cause or suffer while participating, or else I agree to bear the costs of such injury or damage myself. I further certify that I am willing to assume the risk of any medical or physical condition that I may have.

* * *

8. If the participant is a minor, I agree that this Release of Liability and Assumption of Risk agreement (“RELEASE”) is made on behalf of that minor participant and that all of the releases, waivers and promises herein are binding on that minor participant. I represent that I have full authority as Parent or Legal Guardian of the minor participant to bind the minor participant to this agreement.

9. If the participant is a minor, I further agree to defend, indemnify and hold harmless SKY HIGH SPORTS from any and all claims or suits for personal injury, property damage or otherwise, which are brought by, or on behalf of [*20]  the minor, and which are in any way connected with such use or participation by the minor, including injuries or damages caused by the negligence of [Sky High], except injuries or damages caused by the sole negligence or willful misconduct of the party seeking indemnity.

(Emphasis added).

In the trial court, Sky High argued that the above language constituted a legal and enforceable waiver of liability and indemnity agreement against both the claims brought by Mother and the claims brought on behalf of Son. There is no dispute in this case that  [HN9] “parties may contract that one shall not be liable for his negligence to another but that such other shall assume the risk incident to such negligence.” Moss v. Fortune, 207 Tenn. 426, 429, 340 S.W.2d 902, 903-04 (Tenn. 1960). These types of agreements, however, are subject to some important exceptions, such as waivers involving gross negligence or willful conduct or those involving a public duty. Id. at 904. These types of provisions must also be clear and unambiguous. See Pitt v. Tyree Org. Ltd., 90 S.W.3d 244, 253 (Tenn. Ct. App. 2002) (citing Kroger Co. v. Giem, 215 Tenn. 459, 387 S.W.2d 620 (Tenn. 1964)).

Here, Appellants do not argue, nor did the trial court find, that the liability waiver above was unenforceable on its face against Mother pursuant to the above law. Rather, the trial court found that the waiver of liability [*21]  was ineffective to waive Son’s claims due to Tennessee public policy, as expressed in this Court’s Opinion in Childress v. Madison County, 777 S.W.2d 1 (Tenn. Ct. App. 1989). A brief discussion of the facts and holding in Childress is therefore helpful.

A.

In Childress, the parents of a young man with severe intellectual disabilities brought suit on behalf of their son. According to the parents, the young man, who was twenty years old at the time of the accident, was injured while training for the Special Olympics in connection with his school. Id. at 2. Specifically, while on a trip to a local YMCA supervised by a teacher and aide from the Madison County school district, the young man was found on the floor of the YMCA pool. The young man was successfully resuscitated but sustained injuries and incurred medical expenses as a result of the incident. Id.

The parents, individually and on behalf of their son, sued Madison County and the Madison County Board of Education for negligence in failing to properly supervise the students in the pool. After a bench trial, the trial court ruled in favor of the defendants, finding that they had committed no negligence. The parents thereafter appealed to this Court. Id.

This Court first reversed the trial court’s finding [*22]  that the defendants had not committed negligence in failing to supervise the young man while he was in the pool. Id. at 3. The defendants argued, however, that even if they were guilty of negligence, any liability had been waived by parents when the mother “executed a release of all liability of these defendants.” Id. at 3. In response, the parents argued, inter alia, that the waiver was unenforceable because it was against Tennessee public policy to allow parents or guardians to release the claims of incompetent persons. Id. at 6-7.

The Court of Appeals, in what the concurrence characterized as an “excellent opinion,” agreed that the parents could not release the claims of their incompetent son. Id. at 8 (Tomlin, J., concurring). The Childress Court first noted that the adult son had not personally signed the release but that, instead, his mother had signed the document. Id. at 6. The Court held that had the young man signed the release, it would certainly have been invalid, as the young man was “incompetent, incapable of understanding the nature of his action, [and, thus,] the execution could not be given effect.” Id. (citing 44 C.J.S. Insane Persons § 49 (1945)). The question was therefore whether the mother’s action in signing [*23]  the form, which included an indemnity agreement and an assumption of risk clause that were applicable to the son’s claims, were sufficient to bar the young man’s claims.2

2 In Childress, this Court held that by the contract’s own terms, the waiver of liability only applied to the mother. Id. at 6 (“[T]here is no indication in the language of the form or in the manner in which [the mother] signed that she did in fact . . . release or discharge the Special Olympics on [her son’s] behalf”). The Court of Appeals therefore affirmed the trial court’s dismissal of the mother’s individual claims. The Court held, however, that the contract provided that both the indemnity clause and assumption of risk provision applied to both the mother and the son. Id. (“[The mother] did clearly agree to indemnify the Special Olympics ‘from all liabilities for damage, injury or illness to the entrant or his/her property during his/her participation in or travel to or from any Special Olympics event.’ . . . [A]ccording to the language of the release, [the mother], as his mother and natural parent, acknowledged on [her son’]s behalf that he would be participating at his own risk.”).

In reaching its decision, the Childress Court analogized “the status of guardians of incompetent persons” with “that of guardians of infants” under well-settled Tennessee law. Id. According to the Court:

 [HN10] The general rule is that a guardian may not waive the rights of an infant or an incompetent. 39 Am. Jur. 2d, Guardian & Ward § 102 (1968); 42 Am. Jur. 2d, Infants § 152 (1969). Specifically, the Supreme Court of Tennessee long ago stated that a guardian cannot settle an existing claim apart from court approval or statutory authority. Miles v. Kaigler, 18 Tenn. (10 Yerg.) 10 (1836)[;] Spitzer v. Knoxville Iron, Co., 133 Tenn. 217, 180 S.W. 163 (1915)[;] Tune v. Louisville & Nashville Railroad Co., 223 F. Supp. 928 (M[.]D[.] Tenn. 1963). It has also been held that a guardian may not waive the statutory requirements for service of process on an infant or incompetent by accepting service of process on himself alone. Winchester v. Winchester, 38 Tenn. (1 Head) 460 (1858).3

Childress, 777 S.W.2d at 6.

3 We note that this statement was supported by what appears to be an incorrect citation to authority. See Watterson v. Watterson, 38 Tenn. 1, 2 (1858) (not involving an infant or service of process); Winchester v. Winchester, 23 Tenn. 51, 51 (1843) (same). Regardless, the Childress Court is correct as to this – 11 – proposition of law. See Taylor v. Walker, 48 Tenn. 734, 738 (Tenn. 1870) (“It is a settled law of this State, that a sale without service of process on an infant who has no regular guardian, is void, and that the want of such service can not [sic] be waived by the appearance of a guardian ad litem.”); Robertson v. Robertson, 32 Tenn. 197, 199 (Tenn. 1852) (“‘A guardian ad litem cannot, by his consent, make his ward a party to a suit.’ The infant must be served with process.”); Wheatley’s Lessee v. Harvey, 31 Tenn. 484, 485 (Tenn. 1852) (holding that “the guardian ad litem had no authority to waive the service of process, without which the infant was no party to the suit”).

The Childress Court then considered the decisions of other states that also refused to enforce waivers made on behalf of minors or incompetent persons. See id. at 6-7 (citing Gibson v. Anderson, 265 Ala. 553, 92 So. 2d 692, 695 (1956) (legal guardian’s acts do not estop ward from asserting rights [*24]  in property); Ortman v. Kane, 389 Ill. 613, 60 N.E.2d 93, 98 (1945) (guardian cannot waive tender requirements of land sale contract entered into by ward prior to incompetency); Stockman v. City of South Portland, 147 Me 376, 87 A.2d 679 (1952) (guardian cannot waive ward’s property tax exemption); Sharp v. State, 240 Miss. 629, 127 So.2d 865, 90 A.L.R.2d 284 (1961) (guardian cannot waive statutory requirements for service of process on ward); Jones v. Dressel, 623 P.2d 370 (Colo.1981) (ratification by parent of contract executed by child does not bind child); Whitcomb v. Dancer, 140 Vt. 580, 443 A.2d 458 (1982) (guardian cannot settle personal injury claim for a ward without court approval); Natural Father v. United Methodist Children’s Home, 418 So.2d 807 (Miss. 1982) (infant not bound by evidentiary admissions of parent); Colfer v. Royal Globe Ins. Co., 214 N.J.Super. 374, 519 A.2d 893 (1986) (guardian cannot settle personal injury claim for ward without court approval)). This Court found the decisions of three states particularly helpful. First, the Court noted that the Mississippi Supreme Court had previously “expressed in broad terms” that under Mississippi law: “‘Minors can waive nothing. In the law they are helpless, so much so that their representatives can waive nothing for them.'” Childress, 777 S.W.2d at 7 (quoting Khoury v. Saik, 203 Miss. 155, 33 So.2d 616, 618 (Miss. 1948)). Further, the Court cited with approval the Supreme Court of Connecticut, which held that “an agreement, signed by one of the parents of a minor as a condition to his being allowed to attend a camp, waiving the minor’s claims against a camp for damages in the event of an injury was ineffective to waive the [*25]  rights of the minor against the defendant camp.” Childress, 777 S.W.2d at 7 (citing Fedor v. Mauwehu Council, Boy Scouts of America, Inc., 21 Conn. Sup. 38, 143 A.2d 466, 468 (1958)). Finally, the Childress Court also noted that the Maine Supreme Court came to a similar conclusion, holding that the release in question was ineffective “because a parent cannot release the child’s action.” Childress, 777 S.W.2d at 7 (citing Doyle v. Bowdoin College, 403 A.2d 1206, 1208 n.3 (Me. 1979)).

The Childress Court, however, did not rely solely on the law from other jurisdictions. It also noted the conflict created by such agreements, as well as the fundamental public policy inherent in Tennessee law to protect the financial interests of minors. For example, this Court explained that agreements wherein a parent agrees to indemnify a third party for injuries to his or her child “are invalid as they place the interests of the child or incompetent against those of the parent or guardian.” Childress, 777 S.W.2d at 7 (citing Valdimer v. Mt. Vernon Hebrew Camps, Inc., 9 N.Y.2d 21, 210 N.Y.S.2d 520, 172 N.E.2d 283, 285 (1961)). In addition, the Court noted that refusing to enforce a waiver of the child’s rights by the parent “is in keeping with the protection which Tennessee has afforded to the rights of infants and minors in other situations.” Childress, 777 S.W.2d at 7. The Childress Court noted that arguments to the contrary exist, specifically with regard to the chilling effect of its chosen rule, stating:

We do not deny that there are good and logical reasons [*26]  for giving effect to exculpatory and indemnification clauses executed by parents and guardians on behalf of infants and incompetents. Risk is inherent in many activities that make the lives of children richer. A world without risk would be an impoverished world indeed. As Helen Keller well said, “Security is mostly a superstition. It does not exist in nature, nor do the children of men as a whole experience it. Avoiding danger is no safer in the long run than outright exposure. Life is either a daring adventure or nothing.” Partnow, Quotable Woman, 173 (1977). Ultimately, this case is a determination of who must bear the burden of the risk of injury to infants and minors.

It is not our intention, nor do we feel the result of this case will be, to put a chill on activities such as the Special Olympics. The law is clear that a guardian cannot on behalf of an infant or incompetent, exculpate or indemnify against liability those organizations which sponsor activities for children and the mentally disabled.

Id. at 7-8.

Ultimately, the Court of Appeals agreed with those courts that had held that  [HN11] a parent cannot release a child’s claim against a third party. See id. at 7 (“We, therefore, hold that [the mother] [*27]  could not execute a valid release or exculpatory clause as to the rights of her son against the Special Olympics or anyone else, and to the extent the parties to the release attempted and intended to do so, the release is void.”). The Court likewise held that the indemnity language contained in the contract was invalid. Id. The Childress Court therefore adopted a rule wherein  [HN12] parents or guardians cannot sign indemnity agreements or liability waivers on behalf of minor children or the incompetent. Noting the impact that the rule would have on many organizations, however, this Court specifically invited either the Tennessee Supreme Court or the Tennessee General Assembly to “remedy” this situation if either believed that Tennessee law should be otherwise. Id. at 8 (“If this rule of law is other than as it should be, we feel the remedy is with the Supreme Court or the legislature.”).

An application for permission to appeal to the Tennessee Supreme Court was eventually filed in Childress. The application was denied, however, by order of August 7, 1989. The issue was raised again in the Court of Appeals in 1990 by the case of Rogers v. Donelson-Hermitage Chamber of Commerce, 807 S.W.2d 242 (Tenn. Ct. App. 1990), perm. app. denied (Tenn. 1991), wherein this Court again held that the [*28]  parent’s purported release of the child’s cause of action was unenforceable, even in the context of a wrongful death action. Id. at 246-47. Again, an application for permission to appeal to the Tennessee Supreme Court was filed and rejected by order of March 11, 1991. In addition, no legislative action has been taken to alter the rule established in Childress over twenty-five years ago.

B.

Sky High does not argue that Childress is not controlling or that it was wrongly decided in 1989. See Tenn. R. Sup. Ct. 4(G)(2) (“Opinions reported in the official reporter . . . shall be considered controlling authority for all purposes unless and until such opinion is reversed or modified by a court of competent jurisdiction.”). As such, there is no dispute that if the Childress rule remains the law in Tennessee, Son’s cause of action is not barred by the waiver and indemnity language contained in the release signed by Mother. Instead, Sky High asserts that this Court should revisit the rule set forth in Childress because changes in constitutional law concerning parental rights following the Tennessee Supreme Court’s decision in Hawk v. Hawk, 855 S.W.2d 573 (Tenn. 1993), and the United States Supreme Court’s decision in Troxel v. Granville, 530 U.S. 57, 120 S. Ct. 2054, 147 L. Ed. 2d 49 (2000), have resulted in a “strong shift” in the law in this [*29]  area across the country. Accordingly, we begin with a brief discussion of the Hawk decision.

In Hawk, paternal grandparents sought court-ordered visitation with their grandchildren pursuant to the Grandparents’ Visitation Act located in Tennessee Code Annotated section 36-6-301 (1985). Hawk, 855 S.W.2d at 575. The facts showed that grandparents and the children’s married parents had an acrimonious relationship and that, eventually, grandparents had been denied any visitation with the children. Id. Under the version of Section 36-6-301 then in existence, a court could order “‘reasonable visitation’ with grandparents if it is ‘in the best interests of the minor child.'” Id. at 576 (quoting Tenn. Code Ann. § 36-6-301). Although the trial court declined to find that parents were unfit, it nevertheless ordered substantial visitation between grandparents and the children. Id. at 577. The trial court also noted that the grandparents “don’t have to answer to anybody when they have the children.” Id.

The Court of Appeals affirmed the judgment of the trial court, and the Tennessee Supreme Court eventually granted the parents’ application for permission to appeal. Id. at 573, 577. The Tennessee Supreme Court first characterized the trial court’s ruling as “a virtually unprecedented intrusion into a protected sphere of family life.” [*30]  Id. at 577. Because Section 36-6-301 “suggest[ed] that this level of interference is permissible,” the Tennessee Supreme Court determined that it was necessary to examine the constitutionality of the statute “as it applies to married parents whose fitness as parents is unchallenged.” Id.

Ultimately, the Tennessee Supreme Court held that the trial court’s and Section 36-6-301’s intrusion into parental decisions was unconstitutional because it interfered with the fundamental liberty interest allowing parents the “right to rear one’s children.” Id. at 578 (citing Meyer v. Nebraska, 262 U.S. 390, 399, 43 S. Ct. 625, 626, 67 L. Ed. 1042 (1923)). According to the Tennessee Supreme Court, this right stemmed from the United States Supreme Court’s “larger concern with privacy rights for the family.” Id. at 578 (citing Prince v. Massachusetts, 321 U.S. 158, 166, 64 S. Ct. 438, 442, 88 L. Ed. 645 (1944)). As such, the Tennessee Supreme Court concluded that the right to privacy inherent in both the United States and Tennessee Constitutions “fully protects the right of parents to care for their children without unwarranted state intervention.” Id. at 579.

The grandparents in Hawk asserted, however, that grandparent visitation was “a ‘compelling state interest’ that warrants use of the state’s parens patriae power to impose visitation in [the] ‘best interests of the children.'” Id. (footnote omitted). The Tennessee Supreme Court rejected this [*31]  argument, however, holding that “without a substantial danger of harm to the child, a court may not constitutionally impose its own subjective notions of the ‘best interests of the child’ when an intact, nuclear family with fit, married parents is involved.” Id. In reaching this decision, the Hawk Court noted that “[i]mplicit in Tennessee case and statutory law has always been the insistence that a child’s welfare must be threatened before the state may intervene in parental decision-making.” Id. at 580 (citing Tenn. Code Ann. § 36-6-101 (allowing court intervention into custody matters in cases of divorce); Tenn. Code Ann. §37-1-113 & -114 (allowing court intervention into custody matters in dependency and neglect)). The Court also noted that its ruling was in line with federal decisions “requir[ing] that some harm threaten a child’s welfare before the state may constitutionally interfere with a parent’s right to rear his or her child.” Hawk, 855 S.W.2d at 580 (citing Wisconsin v. Yoder, 406 U.S. 205, 230, 92 S. Ct. 1526, 1540, 32 L. Ed. 2d 15 (1972) (noting that the children at issue would not be harmed by receiving an Amish education); Pierce v. Society of Sisters, 268 U.S. 510, 534, 45 S. Ct. 571, 573, 69 L. Ed. 1070 (1925) (noting that the parents’ choice of private school was “not inherently harmful”); Meyer v. Nebraska, 262 U.S. 390, 402-03, 43 S.Ct. 625, 628, 67 L. Ed. 1042 (1923) (opining that “proficiency in a foreign language . . . is not injurious to the health, morals or understanding of the ordinary child”)). As the Tennessee [*32]  Supreme Court explained: “The requirement of harm is the sole protection that parents have against pervasive state interference in the parenting process.” Hawk, 855 S.W.2d at 581. As such, the Hawk Court held that “neither the legislature nor a court may properly intervene in parenting decisions absent significant harm to the child from those decisions.” Id. The trial court’s award of grandparent visitation absent a showing of harm was therefore deemed unconstitutional. Id. Only a year later, the Tennessee Supreme Court extended the holding in Hawk to be applicable to all fit parents, not merely those part of “an intact, nuclear family[.]” Nale v. Robertson, 871 S.W.2d 674, 678 & 680 (Tenn. 1994).

A similar situation was at issue in the United States Supreme Court’s decision in Troxel v. Granville. In Troxel, the paternal grandparents of two non-marital children filed a petition for grandparent visitation against the children’s mother. Troxel, 530 U.S. at 61. Under the Washington statute applicable at that time, any person could petition the court for visitation with a child at any time so long as the child’s best interests would be served by the visitation. Id. at 60. The trial court eventually entered an order allowing visitation. Id. at 61. The Washington Court of Appeals reversed the trial court’s [*33]  order, holding that the paternal grandparents lacked standing to seek visitation under the statute where no custody proceeding was pending. Id. at 62. In the meantime, the mother remarried, and her new husband adopted the children. Eventually, the Washington Supreme Court reversed the Washington Court of Appeals on the issue of standing, holding that the statute at issue allowed a visitation petition at any time. The Washington Supreme Court concluded, however, that the trial court nevertheless erred in ordering visitation under the statute, holding that the statute infringed on the fundamental right of parents to rear their children. Id. at 63. The United States Supreme Court eventually granted a writ of certiorari on the constitutional issue. Id.

The United States Supreme Court first recognized that “the interest of parents in the care, custody, and control of their children–is perhaps the oldest of the fundamental liberty interests recognized by this Court.” Id. at 65. Citing decades of United States Supreme Court precedent, similar to the Tennessee Supreme Court in Hawk, the Court opined that “it cannot now be doubted that the Due Process Clause of the Fourteenth Amendment protects the fundamental right of parents to make decisions concerning the care, [*34]  custody, and control of their children.” Id. at 66. The Troxel Court therefore held that the Washington statute, as applied to the facts of the case, “unconstitutionally infringes on [] fundamental parental right[s].” Id. at 67. The Court noted that the statute essentially permitted judges, based solely on their personal evaluation of the child’s best interests, to “disregard and overturn any decision by a fit custodial parent concerning visitation whenever a third party affected by the decision files a visitation petition[.]” Id. The Court noted that none of the courts below had ever found the parents to be unfit, an important omission, as “there is a presumption that fit parents act in the best interests of their children.” Id. at 68. As such, “so long as a parent adequately cares for his or her children (i.e., is fit), there will normally be no reason for the State to inject itself into the private realm of the family to further question the ability of that parent to make the best decisions concerning the rearing of that parent’s children.” Id. at 68-69. Because the trial court failed to honor this presumption, failed to give any weight to the preferences of the parents, and also failed to consider whether the parents had even [*35]  denied visitation, the Troxel Court held that the visitation award was unconstitutional in that case. Id. at 72. The United States Supreme Court declined, however, to rule on “whether the Due Process Clause requires all nonparental visitation statutes to include a showing of harm or potential harm to the child as a condition precedent to granting visitation.” Id. at 73. Accordingly, the Court did not “define . . . the precise scope of the parental due process right in the visitation context.” Id.

C.

Although this case does not involve grandparent visitation, Sky High argues that the Hawk Court’s rejection of the state’s parens patriae power to interfere in a parenting decision is also applicable to Mother’s decision to waive Son’s claims against Sky High. Because the Hawk holding has never been applied in the context of an exculpatory clause, Sky High cites several decisions relying on the recognition of fundamental parental rights in upholding liability waivers signed by parents on behalf of children. Indeed, Sky Hall asserts that in the wake of the Troxel decision, the law has seen a “strong shift” in favor of enforceability.

Sky High heavily relies on the Ohio Supreme Court’s decision in Zivich v. Mentor Soccer Club, Inc., 82 Ohio St. 3d 367, 1998 Ohio 389, 696 N.E.2d 201 (Ohio 1998). In Zivich, the child was injured [*36]  while participating in a non-profit soccer club. Id. at 202. Prior to the child’s participation, his mother signed a registration form for the activity, which contained a waiver of liability against the soccer club on behalf of the child. Id. When the parents sued the soccer club for the child’s injuries, the soccer club responded that the claim was barred by the waiver. The trial court agreed with the soccer club and granted summary judgment in its favor. Id. The Court of Appeals affirmed the dismissal but held that the child’s cause of action, once he reached the age of majority, had not been waived. See Zivich v. Mentor Soccer Club, Inc., No. 95-L-184, 1997 Ohio App. LEXIS 1577, 1997 WL 203646, at *1 (Ohio Ct. App. Apr. 18, 1997), aff’d on other grounds, 82 Ohio St. 3d 367, 1998 Ohio 389, 696 N.E.2d 201 (hereinafter, “Court of Appeals’s Zivich”). Id. One Judge concurred in the result only, opining that that Ohio public policy favored enforcement of the exculpatory agreement against both parents and the child. Court of Appeals’s Zivich, 1997 Ohio App. LEXIS 1577, 1997 WL 203646, at *23 (Ford, J., concurring in result only).

The Ohio Supreme Court likewise affirmed the trial court’s decision that the claims of both the parents and the child were barred by the exculpatory clause contained in the registration form. Zivich, 696 N.E.2d at 207. In reaching this result, the Ohio Supreme Court first rejected [*37]  the parents’ argument that the agreement should not be enforced on public policy grounds, given that contracts entered into by minors were generally unenforceable in Ohio. Id. at 204. Rather, the Ohio Supreme Court held that Ohio public policy actually favored enforcement of the agreement, citing Ohio statutes enacted to “encourage landowners to open their land to public use for recreational activities without fear of liability.” Id. at 204-05 (citing Ohio Rev. Code Ann. §§ 1533.18 & 1533.181). Indeed, the Ohio Supreme Court noted that, although the statute was not applicable to the case-at-bar, the Ohio General Assembly had recently enacted statutes that “accord qualified immunity to unpaid athletic coaches and sponsors of athletic events.” Id. at 205 (citing Ohio Rev. Code Ann. §§ 2305.381 & 2305.382). The Zivich Court also noted the inherent benefits in allowing children to participate in sporting activities:

Organized recreational activities offer children the opportunity to learn valuable life skills. It is here that many children learn how to work as a team and how to operate within an organizational structure. Children also are given the chance to exercise and develop coordination skills. Due in great part to the assistance of volunteers, nonprofit organizations are able to offer these [*38]  activities at minimal cost. . . . Clearly, without the work of its volunteers, these nonprofit organizations could not exist, and scores of children would be without the benefit and enjoyment of organized sports. Yet the threat of liability strongly deters many individuals from volunteering for nonprofit organizations. Developments in the Law–Nonprofit Corporations–Special Treatment and Tort Law (1992), 105 Harv. L. Rev. 1667, 1682. Insurance for the organizations is not the answer, because individual volunteers may still find themselves potentially liable when an injury occurs. Markoff, Liability Threat Looms: A Volunteer’s Thankless Task (Sept. 19, 1988), 11 Natl. L.J. 1, 40. Thus, although volunteers offer their services without receiving any financial return, they place their personal assets at risk.

Id. Given these risks, the Ohio Supreme Court noted that these organizations “could very well decide that the risks are not worth the effort,” which would reduce the number of low-cost sporting activities available to the youth. Id.

In addition to the Ohio public policy favoring low-cost youth sporting activities, the Zivich Court noted that its decision aligned with “the importance of parental authority.” Id. [*39]  (citing Court of Appeals’s Zivich, 1997 Ohio App. LEXIS 1577, 1997 WL 203646, at *23 (Ford, J., concurring in result only)) (agreeing with the reasoning espoused by Judge Ford in his concurrence to the Court of Appeals’s Zivich). As the Zivich Court explained, parents have a right to raise their children, a fundamental liberty interest in the “the care, custody, and management of their offspring[,]” and “a fundamental, privacy-oriented right of personal choice in family matters,” all of which are protected by due process. Id. at 206 (citing Court of Appeals’s Zivich, 1997 Ohio App. LEXIS 1577, 1997 WL 203646, at *24 (Ford, J., concurring in result only)). In addition, the Ohio Supreme Court provided examples where Ohio statutory law empowers parents to make decisions for their children, including the right to consent or decline medical treatment. Id. (citing Ohio Rev. Code Ann. § 2317.54[C]; Lacey v. Laird, 166 Ohio St. 12, 19, 1 O.O.2d 158, 161, 139 N.E.2d 25, 30 (Ohio 1956) (Hart, J., concurring)). Thus, the Zivich Court concluded that invalidating the release would be “inconsistent with conferring other powers on parents to make important life choices for their children.” Id. at 206 (citing Court of Appeals’s Zivich, 1997 Ohio App. LEXIS 1577, 1997 WL 203646, at *25-26 (Ford, J., concurring in result only)). According to the Ohio Supreme Court, the decision to allow the child to participate in a potentially dangerous activity after having signed a liability waiver on behalf of the child is “an important family decision” in which a parent makes a decision regarding whether “the benefits to her child outweighed the risk of physical injury.” Id. at 207. After concluding that this decision is protected by the fundamental right of parental authority, the Ohio Supreme Court ultimately held that the decision could not be “disturb[ed]” by the courts. Id. Accordingly, the Zivich Court ruled that the waiver was enforceable.

Sky High emphasizes that at least three other states have similarly held that pre-injury waivers of a minor’s claims by parents were enforceable due to the court’s inability to interfere with fit parents’ decisions. See Saccente v. LaFlamme, No. CV0100756730, 2003 Conn. Super. LEXIS 1913, 2003 WL 21716586 (Conn. Super. Ct. July 11, 2003); Sharon v. City of Newton, 437 Mass. 99, 769 N.E.2d 738 (Mass. 2002); BJ’s Wholesale Club, Inc. v. Rosen, 435 Md. 714, 80 A.3d 345 (Md. 2013). First, in Saccente v. LaFlamme, the child’s father signed an indemnity agreement on behalf of his daughter to participate in horseback riding lessons. Saccente, 2003 Conn. Super. LEXIS 1913, 2003 WL 21716586, at *1. When the child was injured and the mother sued on her behalf, the defendant farm raised the indemnity agreement as a defense. Id. The Superior Court of Connecticut ultimately held that the indemnity agreement signed by the child’s parent was enforceable to bar the child’s claim. 2003 Conn. Super. LEXIS 1913, [WL] at 7.4 In reaching this result, the Saccente Court relied, in part, on the fundamental parental rights recognized by the United States Supreme Court in Troxel. 2003 Conn. Super. LEXIS 1913, [WL] at *6 (citing Troxel, 530 U.S. at 65). In the Saccente Court’s view, a parent’s right to make decisions regarding the rearing of children extends to “the right to control their associations,” including the “[t]he decision here by her father to let the minor plaintiff waive her claims [*40]  against the defendants in exchange for horseback riding lessons at their farm[.]” Saccente, 2003 Conn. Super. LEXIS 1913, 2003 WL 21716586, at *6-7 (distinguishing cases where releases have been held invalid by the fact that Connecticut statutory law did not forbid parents from settling the claims of their children).

4 The Superior Court in Saccente comes to the opposite conclusion as the Superior Court previously came to in Fedor v. Mauwehu Council, Boy Scouts of Am., Inc., 21 Conn. Supp. 38, 143 A.2d 466 (Conn. Super. Ct. 1958). The Saccente Court distinguished Fedor on the basis that parents there had “had no choice but to sign the waiver” in order to participate in a Boy Scout camp for low-income families. Saccente, 2003 Conn. Super. LEXIS 1913, 2003 WL 21716586, at *4. The Saccente Court concluded that the same was not true of the child’s horseback riding lessons.

In Sharon v. City of Newtown, a student sued the city for injuries she had incurred while participating in cheerleading practice at a public school. Sharon, 769 N.E.2d at 741. In rejecting the student’s argument that a waiver signed by the student’s father was invalid, the Massachusetts Supreme Judicial Court held that enforcing the waiver “comports with the fundamental liberty interest of parents in the rearing of their children, and is not inconsistent with the purpose behind our public policy permitting minors to void their contracts.” Id. at 747. In addition, the Sharon Court noted that its decision was in line with Massachusetts statutes exempting certain nonprofit organizations, volunteer managers and coaches, and owners of land who permit the public to use their land for recreational purposes without imposing a fee from liability for negligence. Id. (noting that enforcement also comports with a policy of “encouragement of athletic activities [*41]  for minors” and does not conflict with Massachusetts statutory law requiring court approval of minor settlements).

Likewise in BJ’s Wholesale Club, Inc. v. Rosen, the defendant wholesale club sought to dismiss a negligence claim brought on behalf of a minor due to the fact that the parents had signed an exculpatory agreement on behalf of the child. Rosen, 80 A.3d at 346. The Maryland Court of Appeals, Maryland’s high court, held that the exculpatory agreement was valid, rejecting the parents’ argument that the agreement should be invalidated through the States’ parens patrie authority. The Rosen Court noted, however, that such authority was only invoked where a parent is unfit or in the context of juvenile delinquency. Id. at 361. As the Maryland Court of Appeals explained: “We have, thus, never applied parens patriae to invalidate, undermine, or restrict a decision, such as the instant one, made by a parent on behalf of her child in the course of the parenting role.” Id. at 362. Ultimately, the Maryland Court of Appeals upheld the validity of the agreement, relying also on Maryland statutes allowing parents to make financial, medical, mental health, and educational decisions for their children Id. (citing Md. Code Ann., Cts. & Jud. Proc. § 6-405 (allowing parents [*42]  to settle claims on behalf of minors without court approval);5 Md. Code Ann., Educ. § 7-301 (allowing parents the choice to homeschool their children); Md. Code Ann., Health-Gen. § 10-610 (allowing a parent to commit a child to mental health services under limited circumstances); Md. Code Ann., Health-Gen. § 20-102 (giving parents the authority to consent to a minor’s medical treatment)). At least one federal case interpreting state law has also enforced such an agreement. See Kelly v. United States, No. 7:10-CV-172-FL, 2014 U.S. Dist. LEXIS 135289, 2014 WL 4793009, at *5 (E.D. N.C. Sept. 25, 2014) (holding that upholding releases signed by parents on behalf of children “serve[s] the public interest by respecting the realm of parental authority to weigh the risks and costs of physical injury to their children against the benefits of the child’s participation in an activity”).

5 The Rosen Court found this statute particularly instructive, as other jurisdictions where exculpatory agreements signed by parents were unenforceable had often relied upon statutes that required court approval for parents to settle lawsuits on behalf of minors as next friend. Rosen, 80 A.3d at 356-57; see also infra, for additional discussion of this factor.

In addition to these cases, it appears that other jurisdictions have likewise upheld similar exculpatory agreements signed on behalf of children without reliance on the fundamental parental rights doctrine. See Hohe v. San Diego Unified Sch. Dist., 224 Cal. App. 3d 1559, 274 Cal. Rptr. 647 (Ct. App. 1990) (holding, with little analysis regarding the public policy in favor or against such a rule, that “[a] parent may contract on behalf of his or her children” even in the context of a release); Kondrad ex rel. McPhail v. Bismarck Park Dist., 2003 ND 4, ¶ 5, 655 N.W.2d 411, 413 (including no analysis as to the issue of whether [*43]  a parent may waive claims on behalf of a minor); Osborn v. Cascade Mountain, Inc., 2003 WI App 1, ¶ 10, 259 Wis. 2d 481, 655 N.W.2d 546 (same). In still other states, court decisions refusing to enforce such agreements have been legislatively overturned. See Cooper v. Aspen Skiing Co., 48 P.3d 1229 (Colo. 2002), superseded by Colo. Rev. Stat. Ann. § 13-22-107 (declaring it the public policy of Colorado to permit “a parent of a child to release a prospective negligence claim of the child against” organizations that provide “sporting, recreational, educational, and other activities where certain risks may exist”); Kirton v. Fields, 997 So. 2d 349, 358 (Fla. 2008), somewhat superseded by Fla. Stat. Ann. § 744.301 (permitting a parent to waive a child’s future cause of action only as to the inherent risks of an activity against a “commercial activity provider,” not claims resulting from the provider’s own negligence). Sky High therefore argues that this Court should follow the “strong shift” in the law in favor of enforceability based upon Tennessee and federal constitutional law regarding the state’s inability to interfere in the parenting decisions of fit parents.

That is not to say, however, that jurisdictions that enforce exculpatory agreements or liability waivers signed on behalf of children by their parents enjoy a distinct majority in the United States. Indeed, even as recently as 2010, one court [*44]  characterized the state of the law as the opposite–that “a clear majority” of courts have held in favor of finding such agreements unenforceable. Galloway v. State, 790 N.W.2d 252, 258 (Iowa 2010). Compared with the approximately nine jurisdictions wherein courts or legislatures have enforced such agreements, our research has revealed at least fourteen jurisdictions wherein courts have specifically held that exculpatory, release, or indemnification agreements signed by parents on behalf of children are unenforceable. See Chicago, R.I. & P. Ry. Co. v. Lee, 92 F. 318, 321 (8th Cir. 1899); J.T. ex rel. Thode v. Monster Mountain, LLC, 754 F. Supp. 2d 1323, 1328 (M.D. Ala. 2010) (applying Alabama law and “the weight of authority in other jurisdictions”); Fedor v. Mauwehu Council, Boy Scouts of Am., Inc., 21 Conn. Supp. 38, 143 A.2d 466 (Conn. Super. Ct. 1958); Meyer v. Naperville Manner, Inc., 262 Ill. App. 3d 141, 145, 634 N.E.2d 411, 413, 199 Ill. Dec. 572 (Ill. 1994); Galloway v. State, 790 N.W.2d 252, 258 (Iowa 2010); Doyle v. Bowdoin College, 403 A.2d 1206, 1208 n.3 (Me. 1979); Woodman ex rel. Woodman v. Kera LLC, 486 Mich. 228, 785 N.W.2d 1 (Mich. 2010); Khoury v. Saik, 203 Miss. 155, 33 So. 2d 616, 618 (1948) (reaffirmed in Burt v. Burt, 841 So. 2d 108 (Miss. 2001)); Fitzgerald v. Newark Morning Ledger Co., 111 N.J. Super. 104, 108, 267 A.2d 557, 559 (N.J. Law. Div. 1970); Valdimer v. Mount Vernon Hebrew Camps, Inc., 9 N.Y.2d 21, 24, 172 N.E.2d 283, 285, 210 N.Y.S.2d 520 (N.Y. 1961); Ohio Cas. Ins. Co. v. Mallison, 223 Or. 406, 412, 354 P.2d 800, 803 (Or. 1960); Shaner v. State Sys. of Higher Educ., 40 Pa. D. & C.4th 308, 313 (Com. Pl. 1998), aff’d without opinion, 738 A.2d 535 (Pa. Commw. Ct. 1999); Hawkins ex rel. Hawkins v. Peart, 2001 UT 94, 37 P.3d 1062, somewhat superseded by Utah Code Ann. § 78B-4-203 (allowing a release against an “equine or livestock activity sponsor”);6 Munoz v. II Jaz Inc., 863 S.W.2d 207, 210 (Tex. App. 1993); Scott By & Through Scott v. Pac. W. Mountain Resort, 119 Wash. 2d 484, 494, 834 P.2d 6, 11 (Wash. 1992).

6 The Utah Supreme Court has recently announced that Hawkins remains valid law as to whether public policy invalidates an exculpatory agreement “in the absence of statutory language.” See Penunuri v. Sundance Partners, Ltd., 2013 UT 22, ¶ 28, 301 P.3d 984, 992

A few courts refusing to enforce these agreements have expressly considered, and rejected, similar arguments contending that enforcement is necessary to comport with a parent’s fundamental right to control his or her children. For example, the court in Woodman ex rel. Woodman v. Kera LLC rejected this argument on the ground that under such an analysis “a parent would be able to bind the child in any contract, [*45]  no matter how detrimental to the child,” including contracts where the law is well-settled that parents may not consent on behalf of their children. Woodman, 785 N.W.2d at 8 (quoting McKinstry v. Valley Obstetrics-Gynecology Clinic, P.C., 428 Mich. 167, 405 N.W.2d 88 (1987) (noting the general rule that “a parent has no authority to waive, release, or compromise claims by or against a child”). Rather, the Woodman Court noted that if such a massive shift in the law was warranted, the change should originate in the legislature, rather than the courts. Id. at 9-10.

The Iowa Supreme Court likewise considered an argument that the enforcement of pre-injury releases was in line with the “public policy giving deference to parents’ decisions affecting the control of their children and their children’s affairs.” Galloway, 790 N.W.2d at 256. The Galloway Court recognized that parents have a fundamental liberty interest “in the care, custody, and control of [their] children[.]” Id. (quoting Lamberts v. Lillig, 670 N.W.2d 129, 132 (Iowa 2003)). The Court noted, however, that this interest was “restricted to some extent by the public’s interest in the best interests of children.” Id. In support, the Court cited Iowa law preventing parents from waiving child support payments, preventing parents from receiving payments on behalf of a child of more than $25,000.00, and preventing conservators from compromising [*46]  a child’s cause of action absent court approval. Id. at 256-57 (citing Iowa Code § 598.21C(3) (stating that any modification to child support is void unless approved by the court); Iowa Code § 633.574 (limiting a parent’s ability to receive property on behalf of child to an aggregate value of $25,000.00); Iowa Code § 633.647(5) (requiring a child’s conservator to obtain court approval for the settlement of the child’s claim)). The Court further rejected the defendants’ claim that “recreational, cultural, and educational opportunities for youths will cease because organizations sponsoring them will be unable or unwilling to purchase insurance or otherwise endure the risks of civil liability,” finding such fear “speculative and overstated.” Id. at 258-59. The Galloway Court therefore held that inherent in Iowa law was “a well-established public policy that children must be accorded a measure of protection against improvident decisions of their parents.” Id. at 256. The Iowa Supreme Court therefore held that public policy prevented enforcement of the pre-injury release signed by a student’s mother regarding injuries the child sustained while on an educational field trip organized by a state university. Id. at 253.

Although the holding was later superseded by statute, the reasoning of the Colorado [*47]  Supreme Court on this issue is also illuminating. Cooper v. Aspen Skiing Co. involved a child injured in a skiing accident whose mother had signed a pre-injury release on his behalf. Cooper, 48 P.3d at 1230. In invalidating the release, the Colorado Supreme Court specifically held that a parent’s fundamental right to “the care, custody, and control of their children” did not extend to a parent’s decision to disclaim a minor’s potential future recovery for injuries caused by the negligence of a third party. Id. at 1235 n.11 (quoting Troxel, 530 U.S. at 65). As the Cooper Court explained:

 [HN13] A parental release of liability on behalf of his child is not a decision that implicates such fundamental parental rights as the right to “establish a home and bring up children,” Meyer v. Nebraska, 262 U.S. 390, 399, 43 S.Ct. 625, 67 L. Ed. 1042 (1923), and the right “to direct the upbringing and education of children under their control,” Pierce v. Soc’y of Sisters, 268 U.S. 510, 534-35, 45 S. Ct. 571, 69 L. Ed. 1070 (1925). Moreover, it does not implicate a parent’s “traditional interest . . . with respect to the religious upbringing of their children,” Wisconsin v. Yoder, 406 U.S. 205, 214, 92 S. Ct. 1526, 32 L. Ed. 2d 15 (1972), or such medical decisions as a parent’s right to “retain a substantial . . . role” in the decision to voluntary commit his child to a mental institution (with the caveat that the child’s rights and the physician’s independent judgment also plays a role), Parham v. J.R., 442 U.S. 584, 604, 99 S. Ct. 2493, 61 L. Ed. 2d 101 (1979); rather [*48]  a parental release on behalf of a child effectively eliminates a child’s legal right to sue an allegedly negligent party for torts committed against him. It is, thus, not of the same character and quality as those rights recognized as implicating a parents’ fundamental liberty interest in the “care, custody, and control” of their children.

Furthermore, even assuming arguendo, that a parental release on behalf of a minor child implicates a parent’s fundamental right to the care, custody, and control of his child, this right is not absolute. Prince v. Massachusetts, 321 U.S. 158, 166, 64 S. Ct. 438, 88 L. Ed. 645 (1944); People v. Shepard, 983 P.2d 1, 4 (Colo. 1999). Indeed, “[a]cting to guard the general interest in youth’s well being, the state as parens patriae may restrict the parent’s control by requiring school attendance, regulating or prohibiting the child’s labor and in many other ways.” Prince v. Massachusetts, 321 U.S. [at] 166 . . . (footnotes omitted). In fact, “in order to protect a child’s well-being, the state may restrict parental control.” Shepard, 983 P.2d at 4.

Cooper, 48 P.3d at 1235 n.11.

Appellants argue that this Court should likewise reject any argument that the enforcement of liability waivers against minors is required by the fundamental parental rights doctrine. Based upon this split of authority, we must determine whether Tennessee public [*49]  policy favors a change in the rule established by this Court in Childress.

D.

[HN14] “‘[T]he public policy of Tennessee is to be found in its constitution, statutes, judicial decisions and applicable rules of common law.'” In re Baby, 447 S.W.3d 807, 823 (Tenn. 2014) (quoting Cary v. Cary, 937 S.W.2d 777, 781 (Tenn.1996)). “Primarily, it is for the legislature to determine the public policy of the state, and if there is a statute that addresses the subject in question, the policy reflected therein must prevail.” Hyde v. Hyde, 562 S.W.2d 194, 196 (Tenn. 1978) (citing United States v. Trans-Missouri Freight Ass’n, 166 U.S. 290, 17 S. Ct. 540, 41 L. Ed. 1007 (1897)). In order to determine whether a contract “is inconsistent with public policy, courts may consider the purpose of the contract, whether any violation is inherent in the contract itself, as opposed to merely a collateral consequence, and, finally, whether the enforcement of the contract will have a detrimental effect on the public.” Baby, 447 S.W.3d at 823 (citing Baugh v. Novak, 340 S.W.3d 372, 382 (Tenn. 2011)). “‘The principle that contracts in contravention of public policy are not enforceable should be applied with caution and only in cases plainly within the reasons on which that doctrine rests.'” Home Beneficial Ass’n v. White, 180 Tenn. 585, 589, 177 S.W.2d 545, 546 (1944) (quoting Twin City Pipe Line Co. v. Harding Glass Co., 283 U.S. 353, 356-57, 51 S. Ct. 476, 477, 75 L. Ed. 1112 (1931)).

Here, there can be no doubt that the Tennessee public policy, as evidenced by the Tennessee Supreme Court’s decision in Hawk, does not favor intervention in the parental decisions of fit parents. See Hawk, 855 S.W.2d at 579. As such, where a fit [*50]  parent makes a parental decision, our courts generally will not interfere. Id. Courts in Tennessee have cited Hawk to protect a parent’s right most often in the context of dependency and neglect proceedings, termination of parental rights proceedings, parentage actions, child custody proceedings, and grandparent visitation proceedings. See, e.g., In re Carrington H., 483 S.W.3d 507 (Tenn.), cert. denied sub nom. Vanessa G. v. Tenn. Dep’t of Children’s Servs., 137 S. Ct. 44, 196 L. Ed. 2d 28 (2016) (involving termination of parental rights); Lovlace v. Copley, 418 S.W.3d 1, 26 (Tenn. 2013) (involving grandparent visitation); In re Adoption of A.M.H., 215 S.W.3d 793, 809 (Tenn. 2007) (involving termination of parental rights); In re Adoption of Female Child, 896 S.W.2d 546, 548 (Tenn. 1995) (involving custody of a child); Broadwell by Broadwell v. Holmes, 871 S.W.2d 471, 476-77 (Tenn. 1994) (limiting parental immunity only “to conduct that constitutes the exercise of parental authority, the performance of parental supervision, and the provision of parental care and custody”); McGarity v. Jerrolds, 429 S.W.3d 562 (Tenn. Ct. App. 2013) (involving grandparent visitation); State v. Cox, No. M1999-01598-COA-R3-CV, 2001 Tenn. App. LEXIS 496, 2001 WL 799732, at *10 (Tenn. Ct. App. July 17, 2001) (involving dependency and neglect); Matter of Hood, 930 S.W.2d 575, 578 (Tenn. Ct. App. 1996) (involving a parentage action). In one case, Hawk was cited as support for a parent’s right to control a child’s access to the telephone and to “consent . . . vicariously to intercepting, recording and disclosing the child’s conversation with [f]ather.” Lawrence v. Lawrence, 360 S.W.3d 416, 421 (Tenn. Ct. App. 2010). In another case, however, this Court held that a parent’s [*51]  fundamental right to rear his or her children was not violated by a Tennessee law allowing physicians to prescribe contraceptives to minors without parental authorization. See Decker v. Carroll Acad., No. 02A01-9709-CV-00242, 1999 Tenn. App. LEXIS 336, 1999 WL 332705, at *13 (Tenn. Ct. App. May 26, 1999).

Additionally, this policy of protecting fundamental parental rights is often reflected in our statutory law. For example, Tennessee Code Annotated section 34-1-102 provides that parents are equally charged with the “care, management and expenditure of [their children’s] estates.” Another statute, Tennessee Code Annotated section 37-1-140, states in relevant part:

A custodian to whom legal custody has been given by the court under this part has the right to the physical custody of the child, the right to determine the nature of the care and treatment of the child, including ordinary medical care and the right and duty to provide for the care, protection, training and education, and the physical, mental and moral welfare of the child, subject to the conditions and limitations of the order and to the remaining rights and duties of the child’s parents or guardian.

Tenn. Code Ann. § 37-1-140(a).7 Other statutes littered throughout the Tennessee Code also reflect this policy. See, e.g., Tenn. Code Ann. § 33-8-303 (giving a parent authority to submit minor child to convulsive therapy, but only if neither the child nor the child’s [*52]  other parent object to the treatment); Tenn. Code Ann. § 36-3-106 (giving a parent authority to consent to a minor’s marriage); Tenn. Code Ann. § 47-25-1105 (giving parents the authority to solicit minor child’s name, photograph, or likeness); Tenn. Code Ann. § 49-2-124 (giving a parent authority to submit their minor child to involuntary mental health or socioemotional screening); Tenn. Code Ann. § 50-5-105 (giving parents the authority to consent to the employment of their minor children aged sixteen or seventeen with certain restrictions set by the state); Tenn. Code Ann. § 62-38-305 (giving a parent the authority to consent to a minor’s body piercing, given certain limitations); Tenn. Code Ann. § 68-1-118 (allowing parents to consent to the release of protected health information of their minor children); Tenn. Code Ann. § 68-117-104 (allowing parents to consent to minor’s use of tanning devices).

7 We note that this Court recently held that under the specific language of the trust agreement at issue, it was “without question the trustee has the right under the Trust Agreement to agree to arbitration binding the Minor beneficiary as to claims or demands once they have arisen.” Gladden v. Cumberland Trust & Inv. Co., No. E2015-00941-COA-R9-CV, 2016 Tenn. App. LEXIS 203, 2016 WL 1166341, at *5 (Tenn. Ct. App. Mar. 24, 2016), perm. app.granted (Aug. 18, 2016). The Court held however that the trustee had no power to agree to arbitration of unknown future claims. 2016 Tenn. App. LEXIS 203, [WL] at *6. The situation is distinguishable from this cause for three reasons: (1) the case involved a question of a trustee’s authority under a specific trust agreement, rather than a question of a parent’s authority based upon the Tennessee and federal constitutions; (2) the Court held that the language of the agreement, rather than public policy considerations, required it to hold that the trustee had no power to agree to arbitrate unknown disputes; (3) the agreement at issue was an agreement to arbitrate, which limits only the forum in which a claim may be raised, rather than limiting liability. See Buraczynski v. Eyring, 919 S.W.2d 314, 319 (Tenn. 1996) (holding that arbitration agreements “do not limit liability, but instead designate a forum that is alternative to and independent of the judicial forum”). As such, the Gladden Opinion is inapposite to the issues raised in this case. Furthermore, because the Tennessee Supreme Court recently granted permission for appeal of the Gladden case, we await final resolution of the issues decided therein. – 26 –

The fundamental parental rights doctrine, however, is not absolute. See Prince, 321 U.S. at 166 (“Acting to guard the general interest in youth’s well[-]being, the state as parens patriae may restrict the parent’s control by requiring school attendance, regulating or prohibiting the child’s labor, and in many other ways.”) (footnotes omitted). Indeed, as recently as 2011, the Tennessee Supreme [*53]  Court recognized the courts’ power to invalidate certain contracts made by parents on behalf of minors. See Wright ex rel. Wright v. Wright, 337 S.W.3d 166 (Tenn. 2011). In Wright, a minor was seriously injured in an automobile accident, and her father retained the services of an attorney to represent him and the child in a lawsuit to recover for her injuries. Id. at 170. In connection with the representation, the father signed a one-third contingency fee with the attorney. The agreement noted, however, that fees on behalf of the minor would require court approval. The father thereafter filed a complaint on behalf of the child as next friend. Because the child’s parents were divorced, the trial court eventually appointed a guardian ad litem for the child. Ultimately, the parties agreed to settle the case for $425,000 on behalf of the child, as well as courts costs, guardian ad litem fees, and other expenses. The document evincing the agreement also indicated that the parties agreed to the “contractual attorney’s fees.” Id. at 171.

A dispute soon arose between the guardian ad litem and the retained attorney over the amount of attorney’s fees owed to the attorney; while the retained attorney contended he was entitled to one-third of [*54]  the settlement amount, the guardian ad litem asserted that the retained attorney was only entitled to a reasonable fee as set by the court. Id. The trial court eventually entered an order awarding the retained attorney his full fee under the contingency contract. Id. at 172. The Court of Appeals reversed and remanded for a recalculation of the fees. Id. The trial court held a hearing and ultimately awarded $131,000.00 in attorney’s fees. Id. at 175 (citing Wright v. Wright, No. M2007-00378-COA-R3-CV, 2007 Tenn. App. LEXIS 764, 2007 WL 4340871, at *1 (Tenn. Ct. App. Dec. 12, 2007) (hereinafter, “Wright I”)). After the fee was affirmed by the Court of Appeals, the Tennessee Supreme Court granted the guardian ad litem’s application for permission to appeal. Id. at 176.

As is relevant to this case, the Tennessee Supreme Court first reaffirmed “the long-standing” principle in Tennessee that “a next friend representing a minor cannot contract with an attorney for the amount of the attorney’s fee so as to bind the minor[.]” Id. at 179 (citing City of Nashville v. Williams, 169 Tenn. 38, 82 S.W.2d 541, 541 (1935)). In reaching this decision, the Wright Court noted two statutes allowing Tennessee courts the power to approve settlements made on behalf of minors. Wright, 337 S.W.3d at 178. First, Tennessee Code Annotated section 34-1-121 provides, in pertinent part:

In any action, claim, or suit in which a minor or person with a disability is a party [*55]  or in any case of personal injury to a minor or person with a disability caused by the alleged wrongful act of another, the court in which the action, claim, or suit is pending, or the court supervising the fiduciary relationship if a fiduciary has been appointed, has the power to approve and confirm a compromise of the matters in controversy on behalf of the minor or person with a disability. If the court deems the compromise to be in the best interest of the minor or person with a disability, any order or decree approving and confirming the compromise shall be binding on the minor or person with a disability.

Tenn. Code Ann. § 34-1-121(b); see also Vannucci v. Memphis Obstetrics & Gynecological Ass’n, P.C., No. W2005-00725-COA-R3-CV, 2006 Tenn. App. LEXIS 464, 2006 WL 1896379, at *11 (Tenn. Ct. App. July 11, 2006) (holding that where a settlement involves a minor, section 34-1-121 “requir[es]” that the trial court “go beyond its normal role” and approve or disapprove of the proposed settlement). Likewise, Section 29-34-105 requires an in-chambers hearing attended by both the minor and his or her guardian in order to approve a settlement totaling more than $10,000.00. From these statutes, the Tennessee Supreme Court concluded that  [HN15] Tennessee public policy allows courts to “assume a special responsibility to protect a minor’s interests.” [*56]  Wright, 337 S.W.3d at 178. The Wright Court therefore affirmed the ruling that the retained attorney was not entitled to the contractual fee, but merely to a reasonable fee as set by the court. Id. Ultimately, the Tennessee Supreme Court affirmed the trial court’s award of $131,000.00 in attorney’s fees. Id. at 188.

From Wright, we can glean that  [HN16] Tennessee’s public policy includes a well-settled principle requiring courts to act as parens patriae to protect a child’s financial interests. Indeed, Tennessee statutory law, the most salient source of Tennessee public policy, includes several statutes that offer protections for a minor’s financial interests, even if that protection interferes with a parent’s decisions. See Tenn. Code Ann. § 29-34-105 (requiring court approval of settlements on behalf of minors of more than $10,000.00); Tenn. Code Ann. § 34-1-102(a) (limiting a parent’s use of child’s income to only “so much . . . as may be necessary . . . (without the necessity of court authorization) for the child’s care, maintenance and education”); Tenn. Code Ann. § 34-1-121(b) (giving the court power to approve settlements on behalf of minors where the settlement is in the minor’s best interest); Tenn. Code Ann. § 34-1-122 (authorizing the court to approve or disapprove of “expenditures of income or principal of the property of [*57]  the minor or person with a disability” and providing limits on the type of “gift program[s]” that may be approved). The Tennessee Supreme Court previously characterized these statutes as “plac[ing] the responsibility and burden upon the court to act for the minor.” Busby v. Massey, 686 S.W.2d 60, 63 (Tenn. 1984). When these statutes are implicated, “the trial court is not bound by desires, interests or recommendations of attorneys, parents, guardians or others.” Id. (citing Rafferty v. Rainey, 292 F. Supp. 152 (E.D. Tenn. 1968)); see also Wright I, 2007 Tenn. App. LEXIS 764, 2007 WL 4340871, at *1 (“By caselaw and by statute the settlement of a case brought by a minor for personal injuries must be approved by the court, and the court must ensure that the settlement itself is in the best interests of the minor.”) (emphasis added).

In addition to statutes on this subject, Tennessee caselaw provides another significant protection for the financial interests of a minor even against his or her parent: a parent may not, by agreement, waive the child’s right to support from the other parent. Huntley v. Huntley, 61 S.W.3d 329, 336 (Tenn. Ct. App. 2001) (citing Norton v. Norton, No. W1999-02176-COA-R3-CV, 2000 Tenn. App. LEXIS 13, 2000 WL 52819, at *4 (Tenn. Ct. App. Jan.10, 2000)). As this Court explained: “It is against public policy to allow the custodial parent to waive the child’s right to support[,]” as the child is the beneficiary of the support, not the parent. [*58]  A.B.C. v. A.H., No. E2004-00916-COA-R3-CV, 2005 Tenn. App. LEXIS 18, 2005 WL 74106, at *7 (Tenn. Ct. App. Jan. 13, 2005) (citing Pera v. Peterson, 1990 Tenn. App. LEXIS 874, 1990 WL 200582 (Tenn. Ct. App. Dec. 14, 1990)); see also Berryhill v. Rhodes, 21 S.W.3d 188, 192, 194 (Tenn. 2000) (holding that private agreements to circumvent child support obligations are against public policy). Such agreements are therefore “void as against public policy as established by the General Assembly.” Witt v. Witt, 929 S.W.2d 360, 363 (Tenn. Ct. App. 1996); see also Galloway, 790 N.W.2d at 256-57 (relying on Iowa law preventing parents from entering into agreements waiving child support as a reason for its rule invalidating waivers of liability signed by parents on behalf of minors). The Tennessee Supreme Court has likewise held that parents engaged in a child custody dispute “cannot bind the court with an agreement affecting the best interest of their children.” Tuetken v. Tuetken, 320 S.W.3d 262, 272 (Tenn. 2010). Finally, we note that Rule 17.03 of the Tennessee Rules of Civil Procedure allows a court to appoint a guardian ad litem for a child “at any time after the filing of the complaint” in two instances: (1) when the child has no duly appointed representative; or (2) when “justice requires” the appointment. Thus, Rule 17.03 allows the appointment of a guardian ad litem even when the child is represented by his or her parent in the capacity of next friend. See Gann v. Burton, 511 S.W.2d 244, 246 (Tenn. 1974) (holding that the court’s decision to appoint a guardian ad litem when “justice requires” is discretionary and is determined on a case-by-case basis). [*59]

Tennessee statutory law also contains other protections that arguably interfere with a parent’s right to the custody and control of his or her children, albeit not in a financial context. See Tenn. Code Ann. § 34-6-307 (granting a parent the right to refuse medical treatment for his or her child, unless the parent’s decision “jeopardize[s] the life, health, or safety of the minor child”); Tenn. Code Ann. § 37-10-303 (granting the parent the right to consent to his or her child’s abortion, but providing that, in the absence of parental consent, consent may be obtained from the court); Tenn. Code Ann. §§ 37-10-401 to -403 (placing on the parent the duty to vaccinate a child, unless certain religious exceptions apply); Tenn. Code Ann. § 49-6-3001 (requiring parents to enroll their school-aged children in school, unless exempted); Tenn. Code Ann. § 49-6-3009 (making it a crime for a parent who has control of a child to allow the child to be truant from a remedial institution); Tenn. Code Ann. § 49-6-3050 (regulating home schooling); Term. Code Ann. § 68-34-107 (allowing a physician to provide a minor with contraceptive if the minor obtains parental consent or simply if the minor “requests and is in need of birth control procedures, supplies or information”). Indeed, one statute specifically invalidates a contract entered into by the biological and adoptive parents if the [*60]  parties agree to visitation post-adoption. See Tenn. Code Ann. § 36-1-121(f) (“Any provision in an order of the court or in any written agreement or contract between the parent or guardian of the child and the adoptive parents requiring visitation or otherwise placing any conditions on the adoption shall be void and of no effect whatsoever[.]”).

Because of the statutory and caselaw in Tennessee providing protection for a minor’s financial and other interests, we first note that Tennessee law is clearly distinguishable from many of the cases in which enforcement of liability waivers was held to be appropriate. For example, the Connecticut Superior Court in Saccente v. LaFlamme specifically noted that its decision did not conflict with Connecticut public policy as evidenced by statutes because there was “no Connecticut law, and the [parties have] cited none, which affords such specific protections for minors.” Saccente, 2003 Conn. Super. LEXIS 1913, 2003 WL 21716586, at *6-7 (citing Conn. Gen. Stat. Ann. § 45a-631 (allowing parents to settle the claims of their children if the amount recovered is less than $10,000.00)). Likewise in BJ’s Wholesale Club, Inc. v. Rosen, the Maryland Court of Appeals noted that rather than having no statute prohibiting the practice of parental consent to minor settlements without [*61]  court approval, such practice was actually authorized by Maryland statutory law. See Rosen, 80 A.3d at 362 (citing Md. Code Ann., Cts. & Jud. Proc. § 6-405 (allowing parents to settle “any” claims on behalf of minors without court approval)). Clearly, the legal framework in Tennessee differs significantly from these other jurisdictions in this regard.

In addition, unlike in Sharon and Zivich, Sky High has cited to no statutes, nor has our research revealed any, that reflect Tennessee public policy in favor of sheltering from liability owners of land opened for recreational uses or unpaid athletic coaches and sponsors. See Sharon, 769 N.E.2d at 747 (citing Mass. Gen. Laws Ann. ch. 21, § 17C; Mass. Gen. Laws Ann. ch. 231, § 85V); Zivich, 696 N.E.2d at 204-05 (citing Ohio Rev. Code Ann. §§ 1533.18; 1533.181; 2305.381; 2305.382); Indeed, in Justice Deborah L. Cook’s concurrence in Zivich, she emphasized that her decision to concur was “firmly grounded in the public policy of the General Assembly, as evinced by the legislative enactments cited by the majority,” rather than any constitutional policy regarding parental rights. Zivich, 696 N.E.2d at 208 (Cook, J., concurring). Tennessee law has no such statutes that evince the Tennessee General Assembly’s desire to shield the operators of for-profit trampoline parks from liability.

Based on the foregoing, we conclude that the Colorado Supreme Court’s analysis on [*62]  this issue best aligns with existing Tennessee law. See Cooper, 48 P.3d at 1235 n.11. First, we note that Sky High has cited no law in which the fundamental right to care for and to control children, as recognized by the Tennessee Supreme Court in Hawk, has ever been utilized to uphold financial contracts entered into by the parent on behalf of the child, especially where the child’s right to recover money may be negated by the parents’ agreement. See id. (holding that “[a] parental release of liability on behalf of his child is not a decision that implicates such fundamental parental rights”). Indeed,  [HN17] where a child’s financial interests are threatened by a parent’s contract, it appears to be this State’s longstanding policy to rule in favor of protecting the minor. See Huntley, 61 S.W.3d at 336 (preventing parent from agreeing to waive child support). Moreover, as previously discussed, our General Assembly has enacted a multitude of statutes evincing a policy of protecting children’s finances from improvident decisions on the part of their parents. See, e.g., Tenn. Code Ann. §§ 34-1-102; 34-1-121(b). This policy of allowing courts to “assume a special responsibility to protect a minor’s interests” was reaffirmed by the Tennessee Supreme Court in [*63]  2011, well after the decisions in both Hawk and Troxel. See Wright, 337 S.W.3d at 178. Accordingly,  [HN18] parents in Tennessee, like parents in Colorado, simply do not have plenary power over the claims of their children, regardless of their fundamental parental rights. C.f. Cooper, 48 P.3d at 1235 n.11 (holding that a parent’s right to the custody, care, and control of his or her children is “not absolute”).8

8 Moreover, unlike the Colorado legislature, which enacted new law to overturn the decision in Cooper a mere year after that decision was filed, see Colo. Rev. Stat. Ann. § 13-22-107 (eff. May 14, 2003), the Tennessee General Assembly has chosen to take no action to overturn the rule adopted in Childress for the last twenty-five years.

We are cognizant that the above statutes as well as the Wright decision concern only the parent’s ability to settle a claim after an injury has occurred. See Wright, 337 S.W.3d at 178. At least two courts have held that similar rules have no application to a pre-injury waiver. See Sharon, 769 N.E.2d at 747 n.10 (citing Mass. Gen. Laws Ann. ch. 231, § 140C1/2) (providing that a court may approve a settlement on behalf of a minor when approval is requested by a party); Zivich, 696 N.E.2d at 201. As the Sharon Court explained:

[T]he policy considerations underlying [a post-injury release] are distinct from those at issue in the preinjury context. A parent asked to sign a preinjury release has no financial motivation to comply and is not subject to the types of conflicts and financial pressures that may arise in the postinjury settlement context, when simultaneously coping with an injured child. Such pressure can create the [*64]  potential for parental action contrary to the child’s ultimate best interests. In short, in the preinjury context, there is little risk that a parent will mismanage or misappropriate his child’s property.

Sharon, 769 N.E.2d at 747 n.10 (citing Zivich, 82 Ohio St. 3d 367, 1998 Ohio 389, 696 N.E.2d 201). This Court previously rejected a similar argument in Childress, stating:

Indemnification agreements executed by a parent or guardian in favor of tort feasors, actual or potential, committing torts against an infant or incompetent, are invalid as they place the interests of the child or incompetent against those of the parent or guardian. . . . Th[e] fact [that] the agreements at issue were executed pre-injury] does not change the rule, and indemnity provisions executed by the parent prior to a cause of action in favor of a child cannot be given effect. Were the rule otherwise, it would circumvent the rule regarding exculpatory clauses and the policy of affording protection in the law to the rights of those who are unable effectively to protect those rights themselves.

Childress, 777 S.W.2d at 7 (citing Valdimer, 172 N.E.2d at 285 (“Clearly, a parent who has placed himself in the position of indemnitor will be a dubious champion of his infant child’s rights.”)).

Nothing in Hawk or otherwise cited to this Court leads us to believe [*65]  that the decision in Childress on this particular issue was in error at the outset or has been changed by the fundamental parental rights doctrine. An agreement to waive all future claims arising out of an incident and to hold a third party harmless even from the third party’s negligence clearly has the potential to place the parent’s interest in conflict with the child’s interest. As the New Jersey Superior Court explained: “If such an agreement could be enforced it would be for the benefit of the [parent] to prevent the bringing of any suit on the claim of the infant no matter how advantageous such suit might be for the infant.” Fitzgerald, 267 A.2d at 559. The Oregon Supreme Court came to a similar conclusion:

As parent-guardian he owes a duty to act for the benefit of his child. That duty is not fully discharged where the parent enters into a bargain which gives rise to conflicting interests. The conflict may arise at the time of settlement when the parent has the opportunity to receive a sum of money in his own right as a part of the settlement in consideration for which he agrees to indemnity the defendant, and it may arise later when it is found advisable that his child bring action against the defendant [*66]  for injuries which had not been known at the settlement date. On either of these occasions there is a real danger that the child’s interest will be put in jeopardy because of the parent’s concern over his or her own economic interests. Certainly a parent who is called upon to decide whether his child should bring an action for injuries not known at the time of settlement is not likely to proceed with such an action in the face of knowledge that any recovery eventually will result in his own liability under an indemnity agreement.

Mallison, 354 P.2d at 802. The parent-child relationship has likewise been described as fiduciary by Tennessee courts in some situations. See Bayliss v. Williams, 46 Tenn. 440, 442 (1869) (“The relation may be of any kind which implies confidence, as trustee and beneficiary, attorney and client, parent and child, guardian and ward, physician and patient, nurse and invalid, confidential friend and adviser, indeed, any relation of confidence between persons which give one dominion or influence over the other[.]”); see also Robinson v. Robinson, 517 S.W.2d 202, 206 (Tenn. Ct. App. 1974) (noting that while the parent-child relationship may give rise to a fiduciary duty, that does not necessarily mean that the relationship is confidential for purposes of [*67]  undue influence or other legal questions). Accordingly, we agree with the courts in New Jersey, New York, and Oregon that  [HN19] the conflict requiring court approval of post-injury settlements involving minors is largely equal to the conflict created by a parent’s decision to sign a preinjury waiver on behalf of a minor.

Furthermore, in our view, a pre-injury waiver is largely analogous to a contract containing a contingency fee. In the context of a pre-injury waiver, the parent must weigh the benefit of the activity with potential injury that may occur, but the injury is merely hypothetical at that time. Likewise, when a parent signs a contingency fee agreement, the parent must weigh the benefits of the representation against the attorney’s fees that will be owed from the child’s recovery. At the time of the signing of the agreement, however, such recovery is merely hypothetical. Accordingly, similar interests and conflicts are inherent in both transactions.  [HN20] Because the Tennessee Supreme Court has held that contingency fee agreements signed by parents are invalid, despite the fact that no statute expressly prohibits such action, see Wright, 337 S.W.3d at 178, we likewise conclude that pre-injury waivers of [*68]  liability and indemnification agreements are unenforceable under Tennessee law.

Finally, we cannot discount the fact that Tennessee’s public policy may also be determined from our case law. See Baby, 447 S.W.3d at 823. As previously discussed, this Court determined in 1989 that contracts such as the one at issue in this case were unenforceable under Tennessee law. See Childress, 777 S.W.2d at 6. This Court has previously grappled with the question of whether our Opinions, published in the official reporter and denied permission to appeal by the Tennessee Supreme Court, are entitled to stare decisis effect. Compare Evans v. Steelman, No. 01-A-01-9511-JV00508, 1996 Tenn. App. LEXIS 625, 1996 WL 557844, at *2 (Tenn. Ct. App. Oct. 2, 1996), aff’d, 970 S.W.2d 431 (Tenn. 1998) (holding that where only one issue was decided by the Court of Appeals, the denial of permission to appeal by the Tennessee Supreme Court should be read as approval of the Court of Appeals’s holding until the Tennessee Supreme Court “change[s] its mind”); with Evans, 1996 Tenn. App. LEXIS 625, 1996 WL 557844, at *8 (Koch, J., dissenting) (citing Swift v. Kirby, 737 S.W.2d 271, 277 (Tenn. 1987)) (“The doctrine of stare decisis does not apply with full force to principles that have not been directly adopted by the Tennessee Supreme Court.”); see also Hardy v. Tournament Players Club at Southwind, Inc., No. W2014-02286-COA-R9-CV, 2015 Tenn. App. LEXIS 524, 2015 WL 4042490, at *16 (Tenn. Ct. App. July 2, 2015) (Gibson, J., dissenting), perm. app. [*69]  granted (Tenn. Dec. 9, 2015) (noting the “the oddity of a Court of Appeals judge asserting that our own opinions may not have stare decisis effect[,]” in the context of an unpublished opinion of the Court of Appeals). If entitled to consideration under the stare decisis doctrine, we are “require[d] . . . to uphold our prior precedents to promote consistency in the law and to promote confidence in this Court’s decisions . . . [unless there is] an error in the precedent, when the precedent is obsolete, when adhering to the precedent would cause greater harm to the community than disregarding stare decisis, or when the prior precedent conflicts with a constitutional provision.” Cooper v. Logistics Insight Corp., 395 S.W.3d 632, 639 (Tenn. 2013).

It appears that the issue was settled, however, by the Tennessee Supreme Court’s 1999 amendment to Rule 4 of the Rules of the Tennessee Supreme Court. See In re Amendment to Supreme Court Rule 4 (Tenn. Nov. 10, 1999), https://www.tncourts.gov/sites/default/files/sc_rule_4_amd_publ_opin.pdf (deleting the prior rule and adopting a new rule). Under Rule 4 of the Rules of the Tennessee Supreme Court, “[o]pinions reported in the official reporter . . . shall be considered controlling authority for all purposes unless and until such opinion is reversed or modified by a court of competent jurisdiction.” Accordingly, regardless of whether stare decisis applies in this case, it remains controlling authority in this case until overturned. As such, we will not [*70]  overrule the Childress decision lightly, especially given the over twenty-five years that it has operated as the law in Tennessee.

A similar issue was raised in Woodman ex rel. Woodman v. Kera LLC, 486 Mich. 228, 785 N.W.2d 1 (Mich. 2010). As previously discussed, the Michigan Supreme Court first recognized the well-settled rule that “a parent has no authority to waive, release, or compromise claims by or against a child[.]” Id. at 8. The Woodman Court therefore framed the issue as whether that well-settled rule should be altered due to changing policy considerations. The Michigan Supreme Court declined the invitation, holding that such a dramatic shift in public policy was best left to the state legislature:

There is no question that, if this Court were inclined to alter the common law, we would be creating public policy for this state. Just as “legislative amendment of the common law is not lightly presumed,” this Court does not lightly exercise its authority to change the common law. Indeed, this Court has acknowledged the prudential principle that we must “exercise caution and . . . defer to the Legislature when called upon to make a new and potentially societally dislocating change to the common law.”

Woodman, 785 N.W.2d at 9 (footnotes omitted) (quoting Wold Architects & Engineers v. Strat, 474 Mich. 223, 233, 713 N.W.2d 750 (Mich. 2006); Henry v. Dow Chem. Co., 473 Mich. 63, 89, 701 N.W.2d 684 (Mich. 2005)) (citing Bott v. Commission of Natural Resources, 415 Mich. 45, 327 N.W.2d 838 (Mich. 1982)).

The same is true in [*71]  this case. As previously discussed, the Childress Opinion was decided over twenty-five years ago. Since that time, both the Tennessee Supreme Court and the Tennessee General Assembly have had ample opportunity to affirmatively act to change the rule established in Childress. See Childress, 777 S.W.2d at 1 (noting that permission to appeal to the Tennessee Supreme Court was denied); Rogers v, 807 S.W.2d at 242 (same). Indeed, the Childress Opinion specifically invited both the Tennessee Supreme Court and the Tennessee General Assembly to scrutinize its holding. See Childress, 777 S.W.2d at 8. Despite this fact, the Childress rule has remained unaltered for more than two decades.

Other courts have questioned the danger presented to recreational activities participated in by minors in refusing to enforce liability waivers or exculpatory agreements. See, e.g., Sharon, 769 N.E.2d at 747 (holding that declining to enforce these waivers would “inevitably [be] destructive to school-sponsored programs”); Zivich, Inc., 696 N.E.2d at 205 (noting the threat that recreational activities will not be available to children without the enforcement of waivers). Indeed, even the Childress Court noted that possible threat posed by its ruling. See Childress, 777 S.W.2d at 7-8 (discussing whether its rule will have a chilling [*72]  effect on recreational activities for children). Given the twenty-five years under which Tennessee has been applying the rule adopted in Childress, however, we need not speculate as to the dire consequences that may result to children’s recreational opportunities. Indeed, Tennessee law is replete with instances of children participating in, and becoming injured by, recreational activities. See, e.g., Neale v. United Way of Greater Kingsport, No. E2014-01334-COA-R3-CV, 2015 Tenn. App. LEXIS 607, 2015 WL 4537119, at *1 (Tenn. Ct. App. July 28, 2015) (involving a child injured in a woodworking shop operated by the Boys and Girls Club); Pruitt v. City of Memphis, No. W2005-02796-COA-R3-CV, 2007 Tenn. App. LEXIS 24, 2007 WL 120040, at *1 (Tenn. Ct. App. Jan. 18, 2007) (involving a child injured at a public swimming pool); Tompkins v. Annie’s Nannies, Inc., 59 S.W.3d 669 (Tenn. Ct. App. 2000) (involving a child injured in a downhill race organized by her day care center); Livingston, as Parent, Next Friend of Livingston v. Upper Cumberland Human Res. Agency, No. 01A01-9609-CV-00391, 1997 Tenn. App. LEXIS 163, 1997 WL 107059, at *1 (Tenn. Ct. App. Mar. 12, 1997) (involving a child injured at a church retreat); Cave v. Davey Crockett Stables, No. 03A01-9504CV00131, 1995 Tenn. App. LEXIS 560, 1995 WL 507760, at *1 (Tenn. Ct. App. Aug. 29, 1995) (involving a child injured at summer camp).9 In fact, Sky High has provided this Court with no evidence that recreational activities open to minors have in any way been hindered by the Childress rule. Accordingly, we can easily dismiss any claim that refusing to enforce waivers of liability against children will in any way limit the recreational opportunities open to children in Tennessee.

9 In Cave, the child’s parent signed “a consent [form] for the child to participate in the activity and . . . a release releasing [one of the defendants] from any liability for personal injuries received by the child.” 1995 Tenn. App. LEXIS 560, [WL] at *1. The Court never reached the issue, however, because of a statute that precluded liability for certain equine activities. Id. (citing Tenn. Code Ann. § 44-20-103).

Based [*73]  on the foregoing, we conclude that there is no basis to depart from this Court’s well-reasoned decision in Childress. Because the law in Tennessee states that parents may not bind their minor children to pre-injury waivers of liability, releases, or indemnity agreements, the trial court did not err in refusing to enforce the waiver of liability and indemnity provisions of the release signed by Mother on behalf of Son.

IV.

Appellants next argue that the trial court erred in denying their request to amend their complaint to include a request for pre-majority medical expenses incurred on behalf of the child. Here, the trial court specifically found that “for a minor’s injuries[,] the claim for medical expenses [is] a separate and distinct claim of the parent[.]” According to the trial court, because Mother waived her right to recover from Sky High, Mother “could not effectively assign them or waive them to her son to allow him to pursue them.” The trial court therefore partially denied Appellants’ motion to amend their complaint.

As previously discussed,  [HN21] a trial court’s decision on a motion to amend a pleading is reviewed under an abuse of discretion standard. Fann v. City of Fairview, 905 S.W.2d 167, 175 (Tenn.Ct.App.1994). Rule 15.01 of the Tennessee Rules of Civil Procedure provides that leave of court [*74]  to amend pleadings “shall be freely given when justice so requires.” The Tennessee Supreme Court has recognized that the language of Rule 15.01 “substantially lessens the exercise of pre-trial discretion on the part of a trial judge.” Branch v. Warren, 527 S.W.2d 89, 91 (Tenn. 1975); see also Hardcastle v. Harris, 170 S.W.3d 67, 80-81 (Tenn. Ct. App. 2004). In considering a motion to amend, a trial court is to consider several factors, including: “undue delay in filing the amendment, lack of notice to the opposing party, bad faith by the moving party, repeated failure to cure deficiencies by previous amendments, undue prejudice to the opposing party, and the futility of the amendment.” Gardiner v. Word, 731 S.W.2d 889, 891-92 (Tenn. 1987).

Although not termed as such by the trial court, it appears to this Court that the trial court denied Appellants’ motion to alter or amend on the basis of futility–that is, because Son could not recover pre-majority medical expenses even if requested in the complaint, the amendment served no purpose.10 Sky High argues that the trial court was correct in its decision, citing the Tennessee Supreme Court’s decision in Dudley v. Phillips, 218 Tenn. 648, 651, 405 S.W.2d 468 (Tenn. 1966).  [HN22] In Dudley, the Tennessee Supreme Court held that when a child is injured, two “separate and distinct causes of action” are created: (1) a cause of action on behalf of the parent for “loss [*75]  of services [and] medical expenses to which [the parent] will be put”; and (2) “another and distinct cause of action arises in favor of the child for the elements of damage to him, such as pain and suffering, disfigurement, etc.” Id. at 469 (quoting 42 A.L.R. 717 (originally published in 1926)). The rule expressed in Dudley has been reaffirmed by Tennessee courts on multiple occasions. See Vandergriff v. ParkRidge E. Hosp., 482 S.W.3d 545, 549 (Tenn. Ct. App. 2015); Neale v. United Way of Greater Kingsport, No. E2014-01334-COA-R3-CV, 2015 Tenn. App. LEXIS 607, 2015 WL 4537119, at *5 (Tenn. Ct. App. July 28, 2015); Luther, Anderson, Cleary & Ruth, P.C. v. State Farm Mut. Auto. Ins. Co., No. 03A01-9601-CV-00015, 1996 Tenn. App. LEXIS 244, 1996 WL 198233, at *3 (Tenn. Ct. App. Apr. 25, 1996); Rogers v. Donelson-Hermitage Chamber of Commerce, 807 S.W.2d 242, 247 (Tenn. Ct. App. 1990)). Indeed, the rule has been codified into Tennessee’s statutory law at Tennessee Code Annotated section 20-1-105, which provides, in relevant part: “The father and mother of a minor child have equal rights to maintain an action for the expenses and the actual loss of service resulting from an injury to a minor child in the parents’ service or living in the family . . . .” Tenn. Code Ann. § 20-1-105(a).

10 We note that this Court has previously held:

The court . . . should not deny a plaintiff’s Tenn. R. Civ. P. 15 Motion to Amend based on an examination of whether it states a claim on which relief can be granted. As the United States Supreme Court explained, “[i]f underlying facts or circumstances relied on by plaintiff may be proper subject of relief, he ought to be afforded opportunity to test his claim on merits and therefore should be permitted to amend [*76]  complaint.” Foman v. Davis, 371 U.S. 178, 182, 83 S. Ct. 227, 230, 9 L. Ed. 2d 222 (1962). If the legal sufficiency of the proposed Complaint is at issue–instead of delay, prejudice, bad faith or futility–the better protocol is to grant the motion to amend the pleading, which will afford the adversary the opportunity to test the legal sufficiency of the amended pleading by way of a Tenn. R. Civ. P. 12.02(6) Motion to Dismiss. See McBurney v. Aldrich, 816 S.W.2d 30, 33 (Tenn. Ct. App. 1991).

Conley v. Life Care Centers of Am., Inc., 236 S.W.3d 713, 724 (Tenn. Ct. App. 2007). Here, it does appear that the trial court judged the merits of Son’s claim for pre-majority expenses in denying Appellants’ motion to alter or amend. If we were to remand to the trial court with directions to grant the amendment, it is likely that the trial court would later grant a motion to dismiss this claim on the same basis that it denied the motion to amend. Consequently, we cannot discern how judicial economy would be furthered by requiring the above procedure. Furthermore, this Court in its order granting the interlocutory appeal specifically indicated that the question of “whether the minor child can recover medical expenses on his own behalf” was “appropriate” for interlocutory review. Accordingly, we proceed to consider the merits of this issue.

Sky High argues that because Mother’s claims were extinguished by her valid and undisputed execution of the waiver and indemnification language in the release, any claim for pre-majority medical expenses is likewise barred. Appellants agree that Mother has waived “her individual right to recover medical expenses incurred by her son.” Indeed, all of Mother’s individual claims were voluntarily dismissed in the trial court. Appellants also do not dispute the general rule that  [HN23] children may not claim pre-majority medical expenses as a measure of damages in the child’s lawsuit because those damages are owed solely to the parents. See Dudley, 405 S.W.2d at 469; see also Burke v. Ellis, 105 Tenn. 702, 58 S.W. 855, 857 (Tenn. 1900) (“It is not alleged or shown that the boy incurred any expense for medical services. It is alleged these were incurred by the father. Such an element was not proper in estimating the [*77]  damages in a case brought like this, by next friend, for the minor[.]”). Instead, Appellants argue that because Mother waived her claims by signing the release, the child is permitted to claim the medical expenses on his own behalf, with Mother acting in her capacity as next friend.

In support of their argument, Appellants cite the Tennessee Supreme Court’s decision in Wolfe v. Vaughn, 177 Tenn. 678, 152 S.W.2d 631 (Tenn. 1941). In Wolfe, the minor was injured in an automobile accident. Because her mother was deceased and her father incompetent, the minor filed suit with her grand uncle acting as next friend. Id. at 633. The jury eventually awarded the minor plaintiff damages, including pre-majority medical expenses. Id. at 632. On appeal, the defendants argued that the minor could not recover those expenses “the insistence being that the law confers no cause of action upon an infant for such expenses.” Id. at 633. The Tennessee Supreme Court agreed with the defendant’s contention generally, noting:

 [HN24] “Since the parent is entitled to the services and earnings of the child so long as the latter is legally under his custody or control, ordinarily an infant suing for personal injuries cannot recover for the impairment of his earning capacity during infancy, or for loss of time, [*78]  or for expenses in curing his injuries, when, and only when, he is under the control of his parents; after emancipation he may do so. However, he may recover for his mental or physical pain and sufferings, his permanent injuries, and for the impairment of his power to earn money after arriving at majority.”

Id. at 634 (quoting 31 C. J. 1114, 1115). The Wolfe Court held, however, that an exception to the rule should be present “where a child has no parent who can sue for such expenses that she can sue for and recover the same.” Wolfe, 152 S.W.2d at 634. Accordingly, the Tennessee Supreme Court adopted the following rule:

 [HN25] “A parent may waive or be estopped to assert his right to recover for loss of services, etc., by reason of injury to his minor child, and permit the child to recover the full amount to which both would be entitled, as where the parent as next friend brings an action on behalf of the child for the entire injury, or permits the case to proceed on the theory of the child’s right to recover for loss of services and earning capacity during minority. In such case the parent treats the child as emancipated in so far as recovery for such damages is concerned, and cannot thereafter be permitted to claim that he, [*79]  and not the child, was entitled to recover therefor.”

Id. at 633-34 (quoting 46 C. J. 1301, 1302).

This Court has considered the rule set down in Wolfe on a number of occasions. See Neale v. United Way of Greater Kingsport, No. E2014-01334-COA-R3-CV, 2015 Tenn. App. LEXIS 607, 2015 WL 4537119, at *8 (Tenn. Ct. App. July 28, 2015); Palanki ex rel. Palanki v. Vanderbilt Univ., 215 S.W.3d 380 (Tenn. Ct. App. 2006); Smith v. King, No. CIV.A. 958, 1984 Tenn. App. LEXIS 3174, 1984 WL 586817 (Tenn. Ct. App. Sept. 21, 1984). In Smith, the child, with his parent acting in the capacity of next friend, filed suit to recover for her injuries incurred when she was struck by a car. Smith, 1984 Tenn. App. LEXIS 3174, 1984 WL 586817, at *1. Because the parent’s claim was barred by the applicable statute of limitations, the child sought to recover not only the damages owed to him, but also for pre-majority medical expenses. Id. In Smith, we held that based upon a theory of waiver, as set down in Wolfe, “under circumstances where the parent has acted as next friend,” the child “may maintain an action for his medical expenses provided that he has paid them, as suggested in Burke, or is legally obligated to pay them.” Smith, 1984 Tenn. App. LEXIS 3174, 1984 WL 586817, at *2 (citing Burke, 58 S.W. at 857 (holding that it was error for the trial court to allow evidence of pre-majority medical expenses that were paid by the child’s parent)). The Smith court therefore remanded to determine “whether the child could bring herself within the exception to the general rule[.]” Id. The Smith Court, however, was not abundantly [*80]  clear as to who was actually required to have paid the expenses, the child or the parent, in order for the child to recover those damages in his or her suit.

The question was answered by this Court in Palanki ex rel. Palanki v. Vanderbilt Univ., 215 S.W.3d 380 (Tenn. Ct. App. 2006), no perm. app. filed. Like the child in Smith, the child in Palanki filed suit through his next friend. Although the parents’ claim was not barred by the statute of limitations, the child in Palanki nevertheless requested medical expenses incurred while he was a minor. Id. at 384. This Court held that the child “could properly maintain his own action for pre-majority medical expenses incurred or likely to be incurred by [the child’s mother] on his behalf[.]” Id. at 394. In reaching this result, this Court in Palanki characterized the rule “adopted” in Smith as allowing “a child under circumstances where the parent has acted as next friend [to] maintain an action for his medical expenses provided that [the parent] has paid for them . . . or is legally obligated to pay them.” Id. (alteration in original) (quoting Smith, 1984 Tenn. App. LEXIS 3174, 1984 WL 586817, at *2).11 This Court therefore held that evidence regarding the child’s pre-majority medical expenses was properly admitted and considered by the jury. Id. at 394.

11 The Palanki Court inexplicably states that this rule was adopted in Smith with no citation of any kind to the Tennessee Supreme Court’s seminal decision in Wolfe, upon which the Smith Court bases its analysis.

Recently, the United States District [*81]  Court for the Eastern District of Tennessee called into question the holding in Palanki. See Grant v. Kia Motors Corp., No. 4:14-CV-79, 2016 Tenn. LEXIS 816, 2016 WL 6247319 (E.D. Tenn. May 10, 2016).12 In Grant, the minor children were injured in an automobile accident, and the children’s mother filed suit in her capacity as next friend. 2016 Tenn. LEXIS 816, [WL] at *1. The district court, relying on Dudley, first ruled that any claims brought by the mother individually were not tolled due to the children’s minority. 2016 Tenn. LEXIS 816, [WL] at *8 (citing Tenn. Code Ann. § 29-28-103(a)) (containing an express tolling provision applicable to minors). Because the mother filed her action after the expiration of the statute of repose, her claims were barred. Grant, 2016 Tenn. LEXIS 816, 2016 WL 6247319, at *9.

12 Although federal interpretations of Tennessee law are not controlling on this Court, we may consider their analysis helpful in appropriate circumstances. See State v. Hunt, 302 S.W.3d 859, 863-64 (Tenn. Crim. App. 2009) (“[A] federal court’s interpretation of Tennessee law is not binding on the courts of this state.”).

The mother argued, however, that given that her individual claims were barred, her children were able to pursue pre-majority medical expenses under the theory of waiver espoused in Palanki. Id. The district court noted that under the interpretation of the waiver rule adopted in Palanki, Tennessee’s intermediate courts “would likely permit the minor Plaintiffs in this action to bring claims for their pre-majority medical expenses through their mother . . . as next friend.” Id. Under well-settled rules regarding federal courts sitting in diversity, the Grant court noted [*82]  that it “must follow state law as announced by the Supreme Court of Tennessee[,]” and “[w]here, as here, ‘a state appellate court has resolved an issue to which the high court has not spoken, we will normally treat [those] decisions . . . as authoritative absent a strong showing that the state’s highest court would decide the issue differently.'” Id. (quoting Kirk v. Hanes Corp. of North Carolina, 16 F.3d 705, 707 (6th Cir. 1994) (emphasis in original)). Based upon its reading of Wolfe and Smith, however, the district court stated that it was “convinced that the Supreme Court of Tennessee would not apply the waiver rule as announced in Palanki to the case at bar.” Grant, 2016 Tenn. LEXIS 816, 2016 WL 6247319, at *9. Specifically, the Grant court concluded that the Palanki Court wrongly interpreted the ambiguous language in Smith to allow a child to sue for expenses paid by the child’s parent when the opposite rule was intended by the Smith Court. 2016 Tenn. LEXIS 816, [WL] at *10 (citing Palanki, 215 S.W.3d at 394 (citing Smith, 1984 Tenn. App. LEXIS 3174, 1984 WL 586817, at *2)).

In reaching this conclusion, the district court first referenced the Tennessee Supreme Court’s ruling in Wolfe, noting that “the Wolfe court clearly addressed a situation in which the parents neither paid for nor were legally responsible for the child’s medical expenses.” Grant, 2016 Tenn. LEXIS 816, 2016 WL 6247319, at *10. The court in Grant likewise concluded that the Court of Appeals in Smith was concerned [*83]  only with those expenses paid by the minor himself. 2016 Tenn. LEXIS 816, [WL] at 11. In support, the district court noted that the proviso in the Smith Court’s holding that a claim for pre-majority medical expenses may stand “provided he has paid them,” cites the Tennessee Supreme Court’s decision in Burke v. Ellis. Grant, 2016 Tenn. LEXIS 816, 2016 WL 6247319, at *11 (citing Smith, 1984 Tenn. App. LEXIS 3174, 1984 WL 586817 at *2 (citing Burke, 58 S.W. at 857)). In Burke, the Tennessee Supreme Court ruled that the trial court erred in allowing evidence of pre-majority medical expenses in a case brought by the minor through his next friend. Burke, 58 S.W. at 857. Indeed, the Burke Court mentioned that there was no proof that the child was required to pay his own medical expenses. Id. (“[W]hile there is no proof that the child paid any expenses for medical treatment, there is a statement that such expenses were incurred and paid by the father[.]”). As such, the Grant court concluded that:

 [HN26] Burke unmistakably stands for the proposition that it is improper for a jury to consider medical expenses as relevant to damages where, as here, a minor brings claims by next friend. Moreover, by explicitly mentioning twice that there is no proof that the child paid any expenses for medical treatment, the court implies that the outcome may be different if such proof were presented. Accordingly, where [*84]  the Smith court says that the waiver rule applies to permit a child to recover medical expenses “provided that he has paid them, as suggested in Burke,” Smith, 1984 Tenn. App. LEXIS 3174, 1984 WL 586817 at *2, it is clear that the “he” to which the Smith court referred was intended to be “the child.”

Grant, 2016 Tenn. LEXIS 816, 2016 WL 6247319, at *11.

The Grant court also noted other portions of the ruling in Smith that supported its interpretation. For example, the Smith court cited two cases regarding the question of when a child is liable for necessaries furnished to him. Id. (citing Smith, 1984 Tenn. App. LEXIS 3174, 1984 WL 586817 at *2 (citing Gardner v. Flowers, 529 S.W.2d 708 (Tenn. 1975); Foster v. Adcock, 161 Tenn. 217, 30 S.W.2d 239 (Tenn. 1930)). In both of these cases, however, the dispute involved whether a child, not the child’s parent, was liable on a debt. See Grant, 2016 Tenn. LEXIS 816, 2016 WL 6247319, at *11 (citing Gardner, 529 S.W.2d at 711; Foster, 30 S.W.2d at 240). Additionally, the Grant court noted that the remand order in Smith indicates that the only pre-majority medical expenses that may be raised by the child are those that were paid by him or her. See Grant, 2016 Tenn. LEXIS 816, 2016 WL 6247319, at *12 (“It is clear . . . that the court remanded the case so that the minor plaintiff could present evidence that she, the child, had paid the medical expenses or was legally obligated to pay same.”). Indeed, the Smith Court remanded to the trial court to determine “whether the child could bring herself within the exception to the general rule[,]” despite the [*85]  fact that the record contained evidence that the father was billed for the child’s medical expenses. Smith, 1984 Tenn. App. LEXIS 3174, 1984 WL 586817 at *2. Were the rule in Smith that the child could bring a claim for pre-majority medical expenses paid by him or his parent, a remand would not have been necessary to ascertain whether the child could “bring herself within the [waiver] rule.” See id.

Finally, the Grant court noted two other considerations that required it to depart from this Court’s holding in Palanki: (1) the purpose of the waiver rule was allow a claim where there was no threat of double recovery; and (2) accepting the Palanki interpretation of the waiver rule would “allow a parent to collect as damages his/her child’s pre-majority medical expenses notwithstanding the fact that the parent’s individual claims are barred.” Grant, 2016 Tenn. LEXIS 816, 2016 WL 6247319, at *12. The Grant court concluded that such a result was untenable because it blurred the demarcation between the parent’s claims and the child’s claims and permitted the parent to evade the fact that his or her own claim was barred. Id.

Although it is certainly unusual for this Court to depart from the most recent reported Tennessee case on this subject in favor of an interpretation offered by a federal district [*86]  court, we must agree with the Court in Grant that the child in this case should not be able to claim pre-majority expenses paid by his parents in an effort to circumvent Mother’s execution of the release, including its waiver and indemnity provision. First, we note that although the Palanki decision is reported in the official reporter and therefore “controlling for all purposes,” Tenn. R. Sup. Ct. 4(G)(2), Palanki was published pursuant to Rule 11 of the Rules of the Tennessee Court of Appeals, where no application for permission to appeal to the Tennessee Supreme Court was filed. See Palanki, 215 S.W.3d at 380; see also Tenn. R. Ct. App. 11. As previously discussed, there is some question as to whether opinions of the Tennessee Court of Appeals which have been denied permission to appeal by the Tennessee Supreme Court are entitled to stare decisis effect. See generally Evans v. Steelman, No. 01-A-01-9511-JV00508, 1996 Tenn. App. LEXIS 625, 1996 WL 557844, at *2, *8 (Tenn. Ct. App. Oct. 2, 1996). But see Tenn. R. Sup. Ct 4(G)(2). Regardless, the Tennessee Supreme Court has specifically held that:R3-CV, 2009 Tenn. App. LEXIS 874, 2009 WL 4931324, at *4 (Tenn. Ct. App. Dec. 22, 2009) (quoting Davis v. Davis, No. M2003-02312-COA-R3-CV, 2004 Tenn. App. LEXIS 664, 2004 WL 2296507, at *6 (Tenn. Ct. App. Oct. 12, 2004) (“Once the Tennessee Supreme Court has addressed an issue, its decision regarding that issue is binding on the lower courts.”)); Thompson v. State, 958 S.W.2d 156, 173 (Tenn. Crim. App. 1997) (quoting State v. Irick, 906 S.W.2d 440, 443 (Tenn. 1995) (“[I]t is a controlling principle that inferior courts [*87]  must abide the orders, decrees and precedents of higher courts. The slightest deviation from this rigid rule would disrupt and destroy the sanctity of the judicial process.”)); Levitan v. Banniza, 34 Tenn. App. 176, 185, 236 S.W.2d 90, 95 (Tenn. Ct. App. 1950) (“This court is bound by the decisions of the Supreme Court.”). Accordingly, to the extent that the decision in Palanki conflicts with either Wolfe or Burke, we are required to disregard it.

 [HN27] [W]hen no application for review of an opinion of the intermediate courts is sought, it has no stare decisis effect, and such an opinion cannot serve to modify or change existing law. The doctrine of sta[r]e decisis, especially as respects rules of property, does not apply with full force until the question has been determined by a court of last resort.

Swift v. Kirby, 737 S.W.2d 271, 277 (Tenn. 1987). As such, the decision in Palanki simply cannot serve to alter or change the decisions by the Tennessee Supreme Court in Wolfe and Burke. See also Bloodworth v. Stuart, 221 Tenn. 567, 572, 428 S.W.2d 786, 789 (Tenn. 1968) (citing City of Memphis v. Overton, 54 Tenn. App., 419, 392 S.W.2d 86 (Tenn.1964) (“The Court of Appeals has no authority to overrule or modify [the Tennessee] Supreme Court’s opinions.”)). Morris v. Grusin, No. W2009-00033-COA-R3-CV, 2009 Tenn. App. LEXIS 874

Furthermore, we agree with the Grant court’s comment that in both Smith and Wolfe, the Court was concerned with the situation wherein the child himself paid the medical [*88]  expenses. See Grant, 2016 Tenn. LEXIS 816, 2016 WL 6247319, at *11-12 (citing Wolfe, 152 S.W.2d at 634; Smith, 1984 Tenn. App. LEXIS 3174, 1984 WL 586817 at *2). Indeed, in Wolfe, the child’s parents were not at all involved in her life. Wolfe, 152 S.W.2d at 634. Accordingly to deprive her of the pre-majority medical expenses which she herself paid simply due to a legal fiction that all parents must pay for the pre-majority medical expenses of their children would have been fundamentally unfair. The Smith Court, likewise, indicated that the child, rather than the parent, must have paid the medical expenses and specifically cited the Tennessee Supreme Court’s decision in Burke in announcing its rule. Smith, 1984 Tenn. App. LEXIS 3174, 1984 WL 586817 at *2. Again, Burke unequivocally held that the child could not present proof of pre-majority medical expenses paid by his parent. Burke, 58 S.W. at 857.

Interpreting the Wolfe waiver rule in this fashion best comports with Tennessee law. First, allowing the minor child to recover those expenses he himself has paid harmonizes with Tennessee’s public policy of protecting the financial interests of minors. See discussion, supra. To hold otherwise would prevent the child from being fully compensated for the damages that he actually incurred based upon an arbitrary determination that those expenses were paid by the child’s parent, even in the face of proof to the contrary. [*89]  Furthermore, to allow the child in this case to claim Mother’s damages despite the fact that she executed a valid release and indemnity agreement would be to frustrate this state’s public policy of enforcing clear and unambiguous exculpatory agreements entered into freely by adults. See Moss v. Fortune, 207 Tenn. 426, 429, 340 S.W.2d 902, 903-04 (Tenn. 1960). Indeed, the Smith Court specifically confined the rule to only those claims that the parent “might have[.]” Smith, 1984 Tenn. App. LEXIS 3174, 1984 WL 586817 at *2. In this case, however, Mother’s claims have been extinguished by her execution of the release. Accordingly, she has no claim that she may waive in favor of the child.

A recent Tennessee Supreme Court case supports our analysis. In Calaway ex rel. Calaway v. Schucker, 193 S.W.3d 509 (Tenn. 2005), as amended on reh’g in part (Feb. 21, 2006), the child’s mother filed a medical malpractice action in federal district court as next friend of her minor child. Id. at 512. There was no dispute that the mother’s claims were barred by the applicable statute of repose. The dispute in the case concerned whether the child’s claim was likewise barred by the statute of repose or whether the statutory time limit was tolled during the child’s minority. Id. Because the dispute involved Tennessee law, the Tennessee Supreme Court accepted four certified questions from [*90]  the federal court. Id. The Tennessee Supreme Court ultimately concluded that the medical malpractice statute of repose was not tolled by a child’s minority but held that the rule would only be applied prospectively. Id. at 517-18. The Calaway Court thereafter answered the following certified question:

Question 1: Does a minor child have a personal claim for medical expenses arising from an injury caused by the fault of another when the claim of the child’s parent for such medical expenses is barred by a statute of limitation or repose?

Answer: No.

Id. at 519. We acknowledge that this rule is offered with no elaboration and only expressly addresses the situation wherein a parent’s claim is barred by a statute of limitation or repose. Id. Regardless, we find it highly persuasive that  [HN28] the Tennessee Supreme Court does not intend to allow a child to raise claims belonging to his parent simply because the parent cannot maintain his or her action, either because of the expiration of a statute of limitation or repose or the waiver of that claim through an exculpatory agreement.

Based on the foregoing, we conclude that Son cannot maintain an action for pre-majority medical expenses that were paid or will be paid by his [*91]  parents. Rather, under the rule in Wolfe and Smith, Son may only maintain an action for those medical expenses that he paid or is obligated to pay. Here, the motion to amend Appellants’ complaint does not conclusively illustrate whether the requested damages constitute medical expenses paid by Son’s parents or medical expenses paid by Son. Like the Smith Court, we are reluctant to hinder Son’s ability to fully recover for his injuries. Accordingly, we reverse the trial court’s ruling denying the motion to amend the complaint only so as to allow Appellants to raise a claim for those pre-majority medical expenses paid by Son or for which Son is obligated to pay. With regard to any pre-majority medical expenses paid by Son’s parents, we affirm the trial court’s order denying the motion to amend the complaint.

Conclusion

The judgment of the Davidson County Circuit Court is reversed as to the motion to amend the complaint only to the extent of allowing Son to raise a claim for those pre-majority medical expenses paid by Son or for which Son is obligated to pay. The judgment of the trial court is affirmed in all other respects. Costs of this appeal are taxed one-half to Appellants Crystal [*92]  Blackwell as next friend to Jacob Blackwell, and their surety, and one-half to Appellee Sky High Sports Nashville Operations, LLC, for all of which execution may issue if necessary.

J. STEVEN STAFFORD, JUDGE

 


Rarely do you see recreation or release cases from the District of Columbia; in this case, the appellate court upheld the release for an injury in a gym

Plaintiff’s arguments about the release and attempt to invalidate the release by claiming gross negligence all failed.

Moore v. Waller, et al., 930 A.2d 176; 2007 D.C. App. LEXIS 476

State: District of Columbia, District of Columbia Court of Appeals

Plaintiff: Richard J. Moore

Defendant: Terrell Waller and Square 345 Limited Partnership T/A Grand Hyatt Hotel

Plaintiff Claims: negligence

Defendant Defenses: Release

Holding: for the defendant health club

Year: 2007

The plaintiff was a member of the exercise facility and had signed a release when he joined. One day while at the facility to exercise, he was asked by a kick boxing instructor to hold an Everlast body bag so the instructor could demonstrate kicks to the class. The plaintiff reluctantly did so.

The kick boxing instructor showed the plaintiff how to hold the bag. The instructor then kicked the bag five times in rapid succession. The plaintiff was out of breath after the demonstration and stated with irony that it was not hard to do.

A month after the class the plaintiff determined he had been injured from holding the bag and sued.

The defendants motioned for summary judgment with the trial court which was granted, and the plaintiff appealed.

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

The court stated that it did not often look at releases in this context. The court looked at Maryland and other states for their laws concerning releases as well as the release law in DC, which was mostly in other types of business contracts.

DC like most other states will not allow a release to stop claims for “intentional harms or for the more extreme forms of negligence, i.e., reckless, wanton, or gross [negligence].” The plaintiff did not argue the acts of the defendant were grossly negligent, but did argue the acts were reckless.

However, the court could find nothing in the pleadings that indicated the defendant’s actions were reckless. In fact, the pleadings found the instructors efforts to show the plaintiff how to hold the bag was for safety purposes and as such; safety is inconsistent with recklessness or gross negligence.

The appellate court also looked at the release itself and found it was clear and unambiguous.

…”exculpation must be spelled out with such clarity that the intent to negate the usual consequences of tortious conduct is made plain”; also recognizing that in most circumstances modern law “permit[s] a person to exculpate himself by contract from the legal consequences of his negligence”

The plaintiff also argued the release was written so broadly that it was written to cover reckless or gross negligence and as such should be thrown out. However, the court looked at the issue in a different way. Any clause in a release that attempts to limit the liability for gross negligence is not valid; however, that does not invalidate the entire release.

We disagree. “‘A better interpretation of the law is that any “term” in a contract which at-tempts to exempt a party from liability for gross negligence or wanton conduct is unenforceable, not the entire [contract].

This is the acceptable way under contract law to deal with clauses or sections that are invalid. However, many contracts have clauses that say if any clause is invalid only that clause can be thrown out; the entire contract is still valid.

DC recognizes that some releases can be void if they reach too far.

We, of course, would not enforce such a release if doing so would be against public policy. “An exculpatory clause [in a will] that excuses self-dealing [by the personal representative] or attempts to limit liability for breaches of duty committed in bad faith, intentionally, or with reckless indifference to the interest of the beneficiary, is generally considered to be against public policy.”)

However, releases found within health club agreements do not violate public policy.

However, we agree with the Maryland Court of Special Appeals and with numerous other courts which have held that it does not violate public policy to enforce exculpatory clauses contained in membership contracts of health clubs and fitness centers.

The appellate court upheld the decision of the trial court.

So Now What?

This decision does not leap with new information or ideas about releases. What is reassuring are two points. The first is releases are valid in DC. The second is when in doubt the court looked to Maryland, which has held that a release signed by a parent can stop a minor’s right to sue. See States that allow a parent to sign away a minor’s right to sue.

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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Author: Outdoor Recreation Insurance, Risk Management and Law

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Moore v. Waller, et al., 930 A.2d 176; 2007 D.C. App. LEXIS 476

Moore v. Waller, et al., 930 A.2d 176; 2007 D.C. App. LEXIS 476

Richard J. Moore, Appellant, v. Terrell Waller and Square 345 Limited Partnership T/A Grand Hyatt Hotel, Appellees.

No. 05-CV-695

DISTRICT OF COLUMBIA COURT OF APPEALS

930 A.2d 176; 2007 D.C. App. LEXIS 476

June 20, 2006, Argued

August 2, 2007, Decided

PRIOR HISTORY:  [**1]

Appeal from the Superior Court of the District of Columbia. (CA-1522-04). (Hon. Michael L. Rankin, Trial Judge).

COUNSEL: John P. Fatherree for appellant.

Terrell Waller, Pro se.

Rocco P. Porreco for appellee, Square 345 Limited Partnership.

JUDGES: Before GLICKMAN, KRAMER, and FISHER, Associate Judges.

OPINION BY: FISHER

OPINION

[*177]  FISHER, Associate Judge: Appellant Richard Moore claims that he was injured on February 26, 2001, while participating in a demonstration of kick boxing at Club Fitness, which is operated by the appellee, Square 345 Limited Partnership (hereinafter Grand Hyatt). Relying on a waiver and release of liability Moore signed when he joined the fitness center, the Superior Court granted summary judgment, first for Grand Hyatt and then for Terrell Waller, the instructor who allegedly injured Moore. We affirm.

I.

Plaintiff Moore alleged that he had gone to the fitness center on February 26, 2001, to exercise. Although “he was not participating in the kick boxing classes, the instructor [*178]  , defendant Waller, asked [Moore] to hold . . . a detached Everlast body bag, so [Mr.] Waller could demonstrate a kick to his class.” According to Mr. Moore, he “reluctantly agreed, saying to [Mr. Waller], ‘Not hard.’ Defendant  [**2] Waller showed [Mr. Moore] how to hold the bag, braced against his body, and then kicked the bag five times, in rapid succession, with great force.” He claims that when Waller finished, “he was out of breath from the strenuous effort, and commented with obvious sarcasm and irony, ‘That wasn’t hard, was it.'” Moore states that he “immediately felt trauma to his body,” felt “stiff and achy” the next day, and consulted a physician about one month later. Mr. Moore asserts that “[h]e has been diagnosed as having torn ligaments and tendons from the trauma of the injury, and may have neurological damage, as well.” The resulting limitations on his physical activity allegedly have diminished the quality of his life in specified ways.

Mr. Moore had joined the fitness center on January 16, 2001, signing a membership agreement and initialing that portion of the agreement that purports to be a waiver and release of liability.

Article V – WAIVER AND LIABILITY

Section 1. The Member hereby acknowledges that attendance at or use of the Club or participation in any of the Club’s activities or programs by such Member, including without limitation, the use of the Club’s equipment and facilities, . . . exercises  [**3] (including the use of the weights, cardiovascular equipment, and apparatus designed for exercising), [and] selection of exercise programs, methods, and types of equipment, . . . could cause injury to the Member or damage to the Member’s personal property. As a material consideration for the Club to enter into this Agreement, to grant membership privileges hereunder and to permit the Member and the Member’s guests to use the Club and its facilities, the Member, on its own behalf and on behalf of the Member’s guests, agrees to assume any and all liabilities associated with the personal injury, death, property loss or other damages which may result from or arise out of attendance at or use of the Club or participation in any of the Club’s programs or activities, notwithstanding any consultation on any exercise programs which may be provided by employees of the Club.

By signing this Agreement, the Member understands that the foregoing waiver of liability on its behalf and on the behalf of the Member’s guests will apply to any and all claims against the Club and/or its owners, shareholders, officers, directors, employees, agents or affiliates . . . for any such claims, demands, personal  [**4] injuries, costs, property loss or other damages resulting from or arising out of any of foregoing risks at the Club, the condominium or the associated premises.

The Member hereby, on behalf of itself and the Member’s heirs, executors, administrators, guests and assigns, fully and forever releases and discharges the Club and the Club affiliates, and each of them, from any and all claims, damages, demands, rights of action or causes of action, present or future, known or unknown, anticipated or unanticipated resulting from or arising out of the attendance at or use of the Club or their participation in any of the Club’s activities or programs by such Member, including those which arise out of the negligence of the Club and/or the Club and the Club affiliates from any and all liability for any loss, or theft of, or damage to personal property, including, without limitation, automobiles and the contents of lockers.

 [*179]  THE MEMBER, BY INITIALING BELOW, ACKNOWLEDGES THAT HE/SHE HAS CAREFULLY READ THIS WAIVER AND RELEASE AND FULLY UNDERSTANDS THAT IT IS A WAIVER AND RELEASE OF LIABILITY, AND ASSUMES THE RESPONSIBILITY TO INFORM HIS/HER GUESTS OF THE PROVISIONS OF THIS AGREEMENT.

If effective,  [**5] this provision waives and releases not only claims against the Club but also claims against its “employees [and] agents.” 1

1 We assume for purposes of analysis that the Grand Hyatt is responsible for the conduct of Mr. Waller at issue here, but we need not determine whether he was an employee or an independent contractor.

Ruling on Grand Hyatt’s motion for summary judgment, the trial court concluded:

The Waiver and Liability section of the contract . . . expresses a full and complete release of all liability for personal injury occurring in the fitness center. Moore signed an acknowledgment indicating that [he] had read and understood that he was releasing Grand Hyatt from all liability for personal injuries that he might sustain. Furthermore, there is no allegation of fraud or overreaching in the amended complaint. In the circumstances, the court finds that the waiver and release is valid and enforceable and is a complete defense for Grand Hyatt in this action.

The court later held “that the terms of the waiver . . . apply equally to defendant Terrell Waller….”

II.

This court has not often addressed the validity of exculpatory clauses in contracts. We have enforced them, however. For  [**6] example, “[i]t is well settled in this jurisdiction that a provision in a bailment contract limiting the bailee’s liability will be upheld in the absence of gross negligence, willful act, or fraud.” Houston v. Security Storage Co., 474 A.2d 143, 144 (D.C. 1984). Accord, Julius Garfinckel & Co. v. Firemen’s Insurance Co., 288 A.2d 662, 665 (D.C. 1972) (“gross negligence or willful misconduct”); Manhattan Co. v. Goldberg, 38 A.2d 172, 174 (D.C. 1944) (“a bailee may limit his liability except for gross negligence”). We recently considered such a clause contained in a home inspection contract and concluded that it would be sufficient to waive or limit liability for negligence. Carleton v. Winter, 901 A.2d 174, 181-82 (D.C. 2006). However, after surveying “leading authorities” and cases from other jurisdictions, we recognized that “courts have not generally enforced exculpatory clauses to the extent that they limited a party’s liability for gross negligence, recklessness or intentional torts.” Id. at 181. See also Wolf v. Ford, 335 Md. 525, 644 A.2d 522, 525 (Md. 1994) ( [HN1] “a party will not be permitted to excuse its liability for intentional harms or for the more extreme forms of negligence, i.e., reckless,  [**7] wanton, or gross”); Seigneur v. National Fitness Institute, Inc., 132 Md. App. 271, 752 A.2d 631, 638 (Md. Ct. Spec. App. 2000) (exculpatory clause will not be enforced “when the party protected by the clause intentionally causes harm or engages in acts of reckless, wanton, or gross negligence”). In Carleton, the court remanded for further proceedings to determine whether the conduct of the defendants “was not just simple negligence, but rather gross negligence.” 901 A.2d at 182.

As Moore’s counsel conceded at oral argument, he does not claim that Waller intentionally or purposefully injured  [*180]  him. The complaint does allege reckless conduct, however, 2 and he argued to the trial court, as he does to us, that the fitness center could not exempt itself from liability for reckless or wanton behavior or gross negligence. Nevertheless, the defendants had moved for summary judgment, and  [HN2] “[m]ere conclusory allegations on the part of the non-moving party are insufficient to stave off the entry of summary judgment.” Musa v. Continental Insurance Co., 644 A.2d 999, 1002 (D.C. 1994); see also Super. Ct. Civ. R. 56 (e) (“the . . . response, by affidavits or as otherwise provided in this Rule, must set forth specific  [**8] facts showing that there is a genuine issue for trial”). “‘[T]here is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party.'” Brown v. George Washington Univ., 802 A.2d 382, 385 (D.C. 2002) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986)). “‘The mere existence of a scintilla of evidence . . . will be insufficient; there must be evidence on which the jury could reasonably find for the [non-moving party].'” LaPrade v. Rosinsky, 882 A.2d 192, 196 (D.C. 2005) (quoting Liberty Lobby, 477 U.S. at 252).

2 In his second amended complaint, Moore alleged that “defendant Waller recklessly disregarded [his] duty of due care [and] acted with deliberate indifference to the likelihood that his action would injure the plaintiff. Defendant Waller’s reckless action was the direct and proximate cause of plaintiff’s injuries.” He also alleged that the Grand Hyatt was responsible for Waller’s actions.

Nothing Moore presented in opposition to summary judgment would be sufficient to prove gross negligence or reckless conduct. Indeed, in one of his affidavits Mr. Moore stated that “as I was shown by defendant  [**9] Waller exactly how to hold the body bag while he demonstrated his kick(s), the purpose of his directions as communicated to me as to how to hold the bag were plainly for safety.” Such concern for safety is inconsistent with recklessness or gross negligence. See generally In re Romansky, 825 A.2d 311, 316 (D.C. 2003) (defining “recklessness”); District of Columbia v. Walker, 689 A.2d 40, 44 (D.C. 1997) (defining “gross negligence” for purposes of D.C. Code § 2-412 (2001) (formerly D.C.Code § 1-1212 (1981)). Moreover, Moore did not allege that defendant Waller kicked an unprotected portion of his body. Nor did he proffer expert testimony suggesting that the demonstration was so hazardous that it was reckless to undertake it, even with the protection of the Everlast body bag.

Because there is no viable claim for gross negligence, recklessness, or an intentional tort, we turn to the question of whether this particular contractual provision is sufficient to bar claims for negligence. 3 Although this is a suit for personal [*181]  injury, not merely for economic damage, the same principles of law apply. See Wright v. Sony Pictures Entertainment, Inc., 394 F. Supp. 2d 27, 34 (D.D.C. 2005) (“by voluntarily  [**10] signing the Contestant Release Form, plaintiff waived his right to bring any claims for negligently caused personal injury”; applying District of Columbia law). This court has not previously considered the effect of an exculpatory clause in a membership agreement with a health club or fitness center, but many jurisdictions have done so. After surveying the legal landscape, the Maryland Court of Special Appeals concluded that most courts hold “that  [HN3] health clubs, in their membership agreements, may limit their liability for future negligence if they do so unambiguously.” Seigneur, 752 A.2d at 636. We have found the analysis in Seigneur to be very helpful.

3 Appellant’s brief explains that he “claims damages from Waller based upon negligent infliction of injury, and against Square 345 Limited Partnership based upon respondeat superior and upon apparent agency and authority, as well as negligent failure to properly select, train and supervise a person whose services were retained to provide lessons in an activity which would certainly be dangerous if not expertly and responsibly performed.” He later elaborates: “While kick boxing is an inherently dangerous activity, had the demonstration  [**11] been conducted in a responsible, non-negligent way, it would not have been dangerous.” The words “strict liability” appear under the caption of the second amended complaint, but appellant has not cited any statute or regulation that purports to impose strict liability on demonstrations of kick boxing, nor has he alleged the common law elements of strict liability in tort. See Word v. Potomac Electric Power Co., 742 A.2d 452, 459 (D.C. 1999). Neither has he proffered facts which would support such a theory. In sum, the waiver is sufficient to cover any theory of liability which is supported by more than conclusory allegations.

 [HN4] A fundamental requirement of any exculpatory provision is that it be clear and unambiguous. Maiatico v. Hot Shoppes, Inc., 109 U.S. App. D.C. 310, 312, 287 F.2d 349, 351 (1961) (“exculpation must be spelled out with such clarity that the intent to negate the usual consequences of tortious conduct is made plain”; also recognizing that in most circumstances modern law “permit[s] a person to exculpate himself by contract from the legal consequences of his negligence”). Cf. Adloo v. H.T. Brown Real Estate, Inc., 344 Md. 254, 686 A.2d 298, 305 (Md. 1996) (“Because it does not clearly,  [**12] unequivocally, specifically, and unmistakably express the parties’ intention to exculpate the respondent from liability resulting from its own negligence, the clause is insufficient for that purpose.”). The provision at issue here meets the requirement of clarity. Article V is entitled, in capital letters, “WAIVER AND LIABILITY.” The Article ends with a prominent “box” containing a sentence typed in capital letters. Appellant Moore initialed that box, verifying that he had “carefully read this waiver and release and fully understands that it is a waiver and release of liability . . . .” By accepting the terms of membership, Moore “agree[d] to assume any and all liabilities associated with the personal injury, death, property loss or other damages which may result from or arise out of attendance at or use of the Club or participation in any of the Club’s programs or activities . . . .” He understood that this waiver of liability would “apply to any and all claims against the Club and/or its owners, shareholders, officers, directors, employees, agents or affiliates . . . for any . . . personal injuries . . . resulting from or arising out of any of [the] foregoing risks at the Club .  [**13] . . .” He “release[d] and discharge[d] the Club . . . from any and all claims, damages, demands, rights of action or causes of action…, including those which arise out of the negligence of the Club . . . .” This release is conspicuous and unambiguous, and it is clearly recognizable as a release from liability. Moreover, the injuries alleged here were reasonably within the contemplation of the parties. “Because  [HN5] the parties expressed a clear intention to release liability and because that release clearly included liability for negligence, that intention should be enforced.” Anderson v. McOskar Enterprises, Inc., 712 N.W.2d 796, 801 (Minn. Ct. App. 2006) (health and fitness club). 4

4 Because this waiver expressly refers to “claims . . . which arise out of the negligence of the Club,” its effect is clear. We have held, however, that it is not always necessary to use the word “negligence” in order to relieve a party of liability for such conduct. See Princemont Construction Corp. v. Baltimore & Ohio R.R. Co. 131 A.2d 877, 878 (D.C. 1957) (“the terms of an indemnity agreement may be so broad and comprehensive that although it contains no express stipulation indemnifying against a party’s  [**14] own negligence, it accomplishes the same purpose”); see also Avant v. Community Hospital, 826 N.E.2d 7, 12 (Ind. Ct. App. 2005)( [HN6] “an exculpatory clause need not include the word ‘negligence’ so long as it conveys the concept specifically and explicitly through other language”).

 [*182]  Appellant protests that the waiver provisions are so broad that they could be construed to exempt the Club from liability for harm caused by intentional torts or by reckless or grossly negligent conduct. Because such provisions are unenforceable, he argues that the entire release is invalid. We disagree. “‘A better interpretation of the law is that  [HN7] 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].'” Anderson, 712 N.W.2d at 801 (quoting Wolfgang v. Mid-American Motorsports, Inc., 898 F. Supp. 783, 788 (D. Kan. 1995) (which in turn quotes RESTATEMENT (SECOND) OF CONTRACTS § 195(1) (1981) (“A term exempting a party from tort liability for harm caused intentionally or recklessly is unenforceable on grounds of public policy.” (emphasis added))). See Ellis v. James V. Hurson Associates, Inc., 565 A.2d 615, 617 (D.C. 1989)  [**15] (“The Restatement sets forth the relevant principles. Where less than all of an agreement is unenforceable on public policy grounds, a court may nevertheless enforce the rest of the agreement ‘in favor of a party who did not engage in serious misconduct.'” (quoting RESTATEMENT (SECOND) OF CONTRACTS § 184(1) (1981))).

Nor is Article V (the waiver and release) unenforceable due to unequal bargaining power, as Mr. Moore asserts. We do not suppose that the parties in fact had equal power, but Moore does not meet the criteria for invalidating a contract on the grounds he invokes. He does not invite our attention to any evidence that he objected to the waiver provision or attempted to bargain for different terms. Nor has he shown that the contract involved a necessary service.

 [HN8] 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. There must be a showing that the parties were greatly disparate in bargaining power, that there was no opportunity for negotiation and that the services could not be obtained elsewhere.

Schlobohm v. Spa Petite, Inc., 326 N.W.2d 920, 924-25 (Minn. 1982) (emphasis in  [**16] original). “Health clubs do not provide essential services[,]” Shields v. Sta-Fit, Inc., 79 Wn. App. 584, 903 P.2d 525, 528 (Wash. Ct. App. 1995), and “[t]he Washington metropolitan area . . . is home to many exercise and fitness clubs.” Seigneur, 752 A.2d at 639 (rejecting argument that patron’s bargaining position was grossly disproportionate to that of the fitness club).

We, of course, would not enforce such a release if doing so would be against public policy. See Godette v. Estate of Cox, 592 A.2d 1028, 1034 (D.C. 1991) ( [HN9] “An exculpatory clause [in a will] that excuses self-dealing [by the personal representative] or attempts to limit liability for breaches of duty committed in bad faith, intentionally, or with reckless indifference to the interest of the beneficiary, is generally considered to be against public policy.”); George Washington Univ. v. Weintraub, 458 A.2d 43, 47 (D.C. 1983) (exculpatory clause in lease was ineffective to waive tenants’ rights under implied warranty of habitability); see also Wolf v. Ford, 335 Md. 525, 644 A.2d 522, 526 (Md. 1994) (public policy will not permit exculpatory agreements in certain transactions affecting the performance of a public service obligation or “so important [*183]   [**17] to the public good that an exculpatory clause would be patently offensive”). However, we agree with the Maryland Court of Special Appeals and with numerous other courts which have held that it does not violate public policy to enforce exculpatory clauses contained in membership contracts of health clubs and fitness centers. Seigneur, 752 A.2d at 640-41 (and cases cited therein); see also, e.g., Schlobohm, 326 N.W.2d at 926 (“the exculpatory clause in the contract before us was not against the public interest”); Ciofalo v. Vic Tanney Gyms, Inc., 10 N.Y.2d 294, 177 N.E.2d 925, 927, 220 N.Y.S.2d 962 (N.Y. 1961) (“there is no special legal relationship and no overriding public interest which demand that this contract provision, voluntarily entered into by competent parties, should be rendered ineffectual”); Massengill v. S.M.A.R.T. Sports Medicine Clinic, P.C., 996 P.2d 1132 (Wyo. 2000). 5

5 The Supreme Court of Wisconsin refused to enforce one such clause on grounds of public policy. Atkins v. Swimwest Family Fitness Center, 2005 WI 4, 277 Wis. 2d 303, 691 N.W.2d 334 (Wis. 2005). That decision was based on several factors, however, and we do not understand the court to have announced a categorical rule. See id. at 340-42 (waiver was “overly broad  [**18] and all-inclusive,” the word “negligence” was not included, the provision was not “sufficiently highlight[ed],” and there was “no opportunity to bargain”).

The trial court properly held that “the waiver and release is valid and enforceable and is a complete defense for Grand Hyatt [and Mr. Waller] in this action.” The judgment of the Superior Court is hereby

Affirmed.