Jim Porter: Two new cases on release clauses in recreation contracts
Special to the Sun
TRUCKEE/TAHOE, Calif. and#8212; It seems more and more these days that whenever you are participating in a sporting event like renting a water ski boat, renting skis or bikes or trail riding on a horse, you are asked to sign a release. Do they hold up?
Generally a well-written release that is clear and covers the risks to be released is enforceable, at least as long as the party signing the Release understands it is a release, not just a sporting event application form.
Two new Court of Appeal cases show there is a real art to preparing a Release of all Claims.
Scuba equipment rental
Raffi Huverserian and his son Ari rented scuba diving equipment from Catalina Scuba Luv. They signed an equipment rental agreement which included a Release of all Claims.
The Huverserians entered the water at a beach in Avalon. Raffi ran out of air at 60 feet and buddy-breathed with his son, but after coming to the surface, died of cardiac arrest. The Huverserian family sued the scuba shop.
Release of all Claims
The release signed by Raffi and Ari was well-written. They understood they were assuming the risk of diving and therefore were releasing the dive shop of any claims, no matter how an injury or death may occur. All in all, the release would have been upheld, except for one small detail.
The bold face title to the release read: and#8220;Equipment Rental Agreement, Liability Release and Assumption of Risk of Scuba and Snorkel Gear for Boat Dives or Multiple Day Rentals.and#8221;
The flaw is that the Huverserians didnand#8217;t rent the scuba gear for a boat dive or multiple days.
Dive shop loses
The Court of Appeal followed California law, and#8220;To be effective, such a Release must be clear, unambiguous and explicit in expressing the intent of the subscribing parties.and#8221; Because the title to the otherwise effective Release did not apply to a single day rental of scuba and snorkel gear, it was ambiguous. The Huverserian family was able to take its case to the jury. Not sure how they are going to prove negligence by the dive shop, but that is for the jury to decide.
24 Hour Fitness
Our second release case was filed against 24 Hour Fitness USA. Plaintiff Susana Ontiveros signed a membership contract including a release at the 24 Hour Fitness facility in Panorama City. While exercising on stair step equipment, both and#8220;stepsand#8221; of the machine lost all resistance causing Susana to fall backward onto the floor, causing severe injuries. I assume they were severe, the case didnand#8217;t say.
Again, as in our first case, the liability release language Susana signed was comprehensive, including the following that turned out to be critical: and#8220;You understand and acknowledge that 24 Hour Fitness is providing recreational services and may not be held liable for defective products.and#8221;
Services vs. products
The legal analysis is somewhat complicated, but suffice it to say that the critical issue became whether 24 Hour Fitness was providing primarily recreational services or the use of exercise equipment. Hereand#8217;s why the distinction is important. As a matter of public policy, product liability claims, e.g. defective equipment, cannot be waived, so if Susanaand#8217;s claim was primarily that 24 Hour Fitness provided a defective product, the release would be ineffective.
Susana argued 24 Hour Fitness mainly provided equipment, with complementary recreational services. 24 Hour Fitness noted it does not manufacture fitness equipment.
The Court of Appeal analogized to a Grand Canyon rafting case filed against Grand Canyon Dories, where the court ultimately ruled in favor of the rafting company, finding it primarily provided recreational services and not a product, like a defective raft. The release worked.
24 Hour Fitness wins
The Court of Appeal ruled the dominant purpose of the membership agreement was to make fitness services available, so the Release of all Claims was effective. Susanaand#8217;s case was thrown out of court.
The enforceability of a Release of all Claims you sign before participating in a recreational event may depend upon its precise wording.
Jim Porter is an attorney with Porter Simon, with offices in Truckee, South Lake Tahoe, Incline Village and Reno. He is a mediator and was the Governor’s appointee to the Fair Political Practices Commission and McPherson Commission, both involving election law and the Political Reform Act. He may be reached at firstname.lastname@example.org or at the firmand#8217;s web site http://www.portersimon.com.
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