UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

PATSY A. WAGGONER,

Plaintiff-Appellant,

v.

No. 97-1394

NAGS HEAD WATER SPORTS,

INCORPORATED,

Defendant-Appellee.

Appeal from the United States District Court

for the Eastern District of North Carolina, at Elizabeth City.

Terrence W. Boyle, Chief District Judge.

(CA-96-30-2-BO)

Argued: January 27, 1998

Decided: April 6, 1998

Before MURNAGHAN, NIEMEYER, and MOTZ, Circuit Judges.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

_________________________________________________________________

COUNSEL

ARGUED: Edward Francis Halloran, Virginia Beach, Virginia, for

Appellant. Edward James Powers, VANDEVENTER, BLACK,

MEREDITH & MARTIN, L.L.P., Norfolk, Virginia, for Appellee.

ON BRIEF: Michael G. Sweeney, Virginia Beach, Virginia, for

Appellant. R. John Barrett, VANDEVENTER, BLACK, MEREDITH

& MARTIN, L.L.P., Norfolk, Virginia, for Appellee.

_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Patsy Waggoner rented a jet ski from Nags Head Water Sports for

herself and her daughter. As part of the rental agreement, she signed

a waiver that purported to release Nags Head from"all claims . . . that

may arise from [her] use of the craft." Waggoner was injured while

riding on the jet ski and sued, alleging that Nags Head negligently

maintained and operated the watercraft. The district court dismissed

the suit on the grounds that it was barred by the waiver, and Waggoner appealed.

This case arises under our admiralty jurisdiction, 28 U.S.C. § 1333,

and is governed by principles of maritime law. See Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co., 513 U.S. 527, 543

(1995) (noting that maritime law applies to "the navigation or berthing of pleasure boats, despite the facts that the pleasure boat activity

took place near shore, where States have a strong interest in applying

their own tort law, or was not on all fours with the maritime shipping

and commerce that has traditionally made up the business of most

maritime courts"); Richards v. Blake Builders Supply Inc., 528 F.2d

745, 749 (4th Cir. 1975).

I. BACKGROUND

On September 26, 1993, Patsy A. Waggoner, the plaintiff, rented

a personal water craft (a jet ski) from the defendant Nags Head Water

Sports, Inc. As part of the rental agreement, she signed a pre-printed

form titled "Rental Agreement/Waiver." The bottom of the form contained an exculpatory clause which read:

WAIVER AND ASSUMPTION OF RISKS: I Pat

Waggoner voluntary [sic] with knowledge, assume all risk

of accident or damages to my person, my passenger of[sic]

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property which may be incurred from or be connected in any

manner with my use, operation or rental of the craft checked

above. I hereby release Nags Head Watersports, Inc., it's

[sic] agent and emplorees[sic] from all claims, demand,

actions, cause of action, and from all liability for damages,

losses or injuries that may arise from my use of the craft

checked above, including but not limited to attorney's fees.

This release and indemnification shall be binding upon my

heirs, Administrators, executors and assigns.

CUSTOMER SIGNATURE (Lessee)[signed] 

According to Waggoner's affidavit, she did not understand that form

to allow the defendant to escape liability for its own wrongdoing.

Waggoner rented a single-seated jet ski for her daughter to ride,

and a two-seated jet ski for her other daughter which Waggoner and

she were to ride together. As the first daughter rode around on the

single-seated jet ski, Waggoner claims, the defendant's attendant had

difficulty starting the second jet ski. It stalled in attempts to start it,

smelled strongly of gas, left a rainbow-colored film on the water, and

"made a lot of smelly smoke."

Waggoner was able to ride on the two-seated jet ski, with her

daughter driving, for "one loop, or about one and one-half city

blocks." While that loop progressed, the two-seated jet ski would only

go very slowly and allegedly did not respond proportionately to the

use of the throttle. Suddenly the jet ski "accelerated with terrific speed

and threw [Waggoner and her daughter] off the back." Waggoner sustained a compression fracture to her vertebra during the fall.

Waggoner sued Nags Head in admiralty, asserting, inter alia, that

the injury was due to a malfunction of the jet ski caused by its negligent maintenance. The district court granted summary judgment for

Nags Head on the basis that the exculpatory clause signed by Waggoner barred her claim. Waggoner appeals.

II. DISCUSSION

Although Waggoner had some trouble complying with Rule 56(e)'s

requirements for opposing a Motion for Summary Judgment, she may

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have managed to allege sufficient evidence to make out a claim for

negligence, but not for gross negligence or recklessness. As the

appeal is from a grant of summary judgment, we view the facts in the

light most favorable to the non-moving party. See Halperin v. Abacus

Technology Corp., 128 F.3d 191, 196 (4th Cir. 1997). However, the

plaintiff "may not rest upon the mere allegations or denials of [her]

pleading, but [her] response, by affidavits or as otherwise provided in

[Rule 56(e)], must set forth specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(e).

A. Waggoner's Response to the

Summary Judgment Motion

On October 25, 1996, Nags Head served a motion for summary

judgment on Waggoner's attorneys. The docket records the motion as

having been filed on October 8, 1996. According to Rule 4.05 of the

Local Rules of Practice and Procedure of the U.S. District Court for

the Eastern District of North Carolina, a party has 20 days after the

service of a motion to file a written response. Waggoner failed to

respond within the allotted 20 days. Instead, on November 29, 1996,

Waggoner filed a "rough draft" of a Brief in Opposition to the Motion

for Summary Judgment. On December 5, 1996, she filed a "final

draft" of that Brief. Neither brief contained any sworn affidavits or

other evidence demonstrating that there was a genuine issue for trial.

After Nags Head filed a Reply Brief in support of its summary

judgment motion, Waggoner filed a Response to the Reply Brief

along with her affidavit. However, Nags Head asserts that it

has never received copies of these documents, and only

became aware of their existence during this appeal upon

receipt of the district court's docketing statement. Nags

Head was first provided with an unsigned1 copy of Plaintiff's Affidavit when counsel for [Waggoner] delivered a

copy of the Joint Appendix filed herein.

_________________________________________________________________

1 While it is true that the affidavit provided in the Joint Appendix is

unsigned (marked "file copy"), the record contains the original, signed

and notarized, affidavit.

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Brief of Appellee at 5 n.2.

A district court has discretion to consider a late affidavit if it

chooses to do so. See Orsi v. Kirkwood, 999 F.2d 86, 91 (4th Cir.

1993) (citing Fed. R. Civ. P. 6). A court should generally allow such

an exception "only if cause or excusable neglect has been shown by

the party failing to comply with the time provisions." Id. Waggoner

has offered us no excuse for, nor even mentioned, her delay and we

cannot tell whether she provided such excuse to the district court. In

fact, we cannot tell from the district court's order whether it chose to

consider Waggoner's affidavit or not. Since Waggoner's claim was

properly dismissed in any event, we have assumed, arguendo, that we

may consider her affidavit.

In addition to the affidavit, Waggoner filed two"expert statements," neither notarized nor accompanied by authenticating affidavits. "To be admissible at the summary judgment stage, `documents

must be authenticated by and attached to an affidavit that meets the

requirements of Rule 56(e).'" Id., at 92 (quoting 10A Charles A.

Wright et al., Federal Practice and Procedure § 2722, at 58-60 (1983

& 1993 Supp.)). The unsworn "expert statements," even if they had

been submitted on time, are hearsay and we may not consider them

in evaluating the summary judgment motion. See Rohrbough v. Wyeth

Laboratories, Inc., 916 F.2d 970, 974 n.8 (4th Cir. 1990).

Without the "expert statements," there is no evidence in the record

supporting Waggoner's claim that Nags Head was grossly negligent

or reckless in its maintenance of the jet skis. Therefore, the two

claims were properly dismissed on summary judgment. Even if we

accept Waggoner's affidavit, however, she may not have alleged sufficient evidence to support a claim for ordinary negligence, because

much of the affidavit is inadmissible hearsay.

B. By Its Terms, the Exculpatory Clause Bars

Waggoner's Claim

Even assuming that Waggoner had attested to sufficient evidence

to make out a general claim for negligence, however, the exculpatory

clause here at issue bars her suit. It is true that"[a]s a general rule of

contract law, contracts releasing a party from liability resulting from

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his own negligence are looked upon with disfavor, and are strictly

construed against the releasee." Krazek v. Mountain River Tours, Inc.,

884 F.2d 163, 165 (4th Cir. 1989) (citing Newport News Shipbuilding

and Dry Dock Co. v. United States, 226 F.2d 137, 142 (4th Cir.

1955)). Yet, the exculpatory clause here is conspicuous and unambiguous.

The exculpatory clause that Waggoner signed is titled, in all capital

letters, "WAIVER AND ASSUMPTION OF RISKS." Her attention

was drawn to it, as illustrated by the facts that she had to write her

name in the first sentence of the clause and that she signed the document immediately below the clause.

The exculpatory clause states that Waggoner "assume[s] all risk of

accident or damages to [her] person . . . which may be incurred from

or connected in any manner with [her] use, operation or rental" of the

craft. (Emphasis added.) The injury to her back resulting from her fall

off of the jet ski was clearly a damage to her person connected with

her use of the craft. By signing the clause, therefore, Waggoner

assumed the risk of this accident.

Furthermore, the clause recites that its signator"release[s]" Nags

Head from "all claims, demand, actions, cause of action, and from all

liability for damages, losses or injuries that may arise from [her] use

of the craft." (Emphasis added.) Waggoner's claim for negligence is

clearly included within the category of "all claims" and "all liability

for . . . injuries." Her injury, even if it was the fault of the negligence

of Nags Head, arose from her use of the craft. By signing the clause,

therefore, Waggoner released Nags Head from this claim.

Waggoner has argued that the exculpatory clause does not bar an

action for negligence because it does not expressly state the word

"negligence." But the term "all claims" must doubtless include a claim

for negligence.2 Although it applied West Virginia law, the decision

_________________________________________________________________

2 We need not answer the question whether such a waiver could extend

to gross negligence or recklessness on Nags Head's part or whether considerations of public policy would void the waiver in those circumstances, since gross negligence or recklessness has not been adequately

demonstrated to survive summary judgment.

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in Krazek provides useful guidance here. In that case a woman injured

during a white-water rafting trip sued the rafting company. We held

that a broad exculpatory clause that did not specifically mention the

word "negligence" was sufficient to bar a claim for negligence:

The second paragraph of the release, however, clearly

waives Ms. Krazek's right to assert any claim of any kind

or nature whatsoever. This language is obviously sufficient

to waive a negligence action. To hold otherwise would

create a requirement that to bar negligence claims all

releases must include the words "negligence" or "negligent

acts." We decline, however, to formulate a rule that requires

the use of specific "magic words" in contracts such as this

one.

Krazek, 884 F.2d at 166. The United States Supreme Court has similarly declined to hold that the express mention of the word "negligence" is necessary to limit liability for negligent acts, at least in a

case regarding an indemnification contract between sophisticated parties. See United States v. Seckinger, 397 U.S. 203, 213 n.17 (1970)

("We specifically decline to hold that a clause that is intended to

encompass indemnification for the indemnitee's negligence must

include an `indemnify and hold harmless' clause or that it must

explicitly state that indemnification extends to injuries occasioned by

the indemnitee's negligence.").

Waggoner further has argued that because the waiver only applies

to claims arising from her use of the watercraft, it does not bar this

action which resulted from the defendant's negligence. Instead, she

asserts that the clause was "clearly intended to apply to the Plaintiff's

causing injury or property damage to third parties by virtue of her use

of the craft." Brief of Appellant at 25. However, a waiver signed by

Waggoner that limited Nags Head's liability for damages caused by

Waggoner negligently injuring third parties would have no legal

effect. Waggoner can only waive claims that she possesses, and she

could only have any claims against Nags Head if it had been negligent, not if she were negligent.

Waggoner's argument that the waiver should not be construed to

cover gross negligence or reckless conduct is on stronger ground --

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courts have held that public policy forbids the avoidance of liability

for gross negligence in these circumstances. But there is no genuine

issue of gross negligence or recklessness in this case, since we may

not consider the unsworn statements of her "experts." The failure

properly to maintain the jet ski may have been negligent, but Waggoner has offered no evidence that it so far exceeded the bounds of

proper care as to constitute gross negligence or recklessness.

In sum, the exculpatory clause, by its terms, bars Waggoner's suit.

C. Public Policy Does Not Bar Enforcement

of the Exculpatory Clause

Waggoner argues that the exculpatory clause should not be

enforced because it violates the policies of admiralty law, North Carolina law, and general contract principles found in the Restatement. We

disagree.

1. Admiralty Principles

Although Waggoner can point to no specific policy or statute of

admiralty law that would render unenforceable the exculpatory clause

that she signed, she argues that the Limitation of Liability Act, 46

U.S.C. App. §§ 181 - 196, "if not in its letter, in its spirit, would bar

enforcement of the Defendant's exculpatory clause." Brief of Appellant at 36. The Limitation of Liability Act limits the liability of a vessel owner for property damage or injury due to collision or other

accident at sea to the value of the vessel plus its cargo. 46 U.S.C.

§ 183(a). Section 183c of that Act prohibits a vessel owner from further limiting its liability for negligence when transporting passengers

from port to port. That section provides:

(a) Negligence

 It shall be unlawful for the manager, agent, master, or

owner of any vessel transporting passengers between ports

of the United States or between any such port and a foreign

port to insert in any rule, regulation, contract, or agreement

any provision or limitation (1) purporting, in the event of

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loss of life or bodily injury arising from the negligence or

fault of such owner or his servants, to relieve such owner,

master, or agent from liability, or from liability beyond any

stipulated amount, for such loss or injury . . . . All such provisions or limitations contained in any such rule, regulation,

contract, or agreement are declared to be against public policy and shall be null and void and of no effect.

46 U.S.C. App. § 183c(a) (emphasis added).

Although the Act as a whole applies to pleasure craft, Richards v.

Blake Builders Supply Inc., 528 F.2d 745, 748-49 (4th Cir. 1975),

including jet skis, Keys Jet Ski, Inc. v. Kays , 893 F.2d 1225 passim

(11th Cir. 1990), this section is limited by its terms to common carriers. The limitation reflects the principle that it is against public policy

for a common carrier to attempt to limit its liability for its own negligence. See Santa Fe, Prescott & Phoenix Ry. Co. v. Grant Bros.

Constr. Co., 228 U.S. 177, 184 (1913) ("It is the established doctrine

of this court that common carriers cannot secure immunity from liability for their negligence by any sort of stipulation."). This restriction

on freedom of contract is justified by the need to"secure the utmost

care in the rendering of a service of the highest importance to the

community." Id. at 184-85. Furthermore, the Court "recognized that

the carrier and the individual customer are not on an equal footing":

in most cases the individual has no choice but to accept the terms

offered by the carrier or forgo its essential service. Id. at 185.

That policy has no application where the defendant is not acting as

a common carrier, however. See id. "In such a case, it is dealing with

matters involving ordinary considerations of contractual relation;

those who choose to enter into engagements with it are not at a disadvantage; and its stipulations even against liability for its own neglect

are not repugnant to the requirements of its public service." Id.; KerrMcGee Corp. v. Law, 479 F.2d 61, 64 (4th Cir. 1973) (holding that

parties to contract of private carriage were free under admiralty law

"to make whatever contractual allocation of risk they desired").

Nags Head was not acting as a common carrier. It was not engaged

in "transporting passengers between ports of the United States or

between any such port and a foreign port." 46 U.S.C. App. § 183c. No

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port has been mentioned, which suggests that support is lacking for

Waggoner's argument. Rather it was providing recreational services,

"which are not embraced within its duty as a common carrier although

their performance may incidentally involve the actual transportation

of persons and things, whose carriage in other circumstances might

be within its public obligation." Santa Fe, Prescott & Phoenix Ry.

Co., 228 U.S. at 185. The policy of admiralty law expressed in 46

U.S.C. App. § 183c, therefore, does not invalidate the exculpatory

clause at issue.

2. North Carolina Law

It is unclear to what extent North Carolina law applies to this case.

First, Nags Head asserts that Waggoner never pled any cause of

action arising under North Carolina law, but rather relied exclusively

on maritime law before the district court, and so may not raise issues

of North Carolina law on this appeal. See Brief of Appellee at 4 n.1.

However, Waggoner's complaint accused Nags Head of numerous

acts of negligence, including negligence in hiring inexperienced

employees in its rental business. Such negligence clearly sounds in

North Carolina law, although it may sound in maritime law as well.

Furthermore, where maritime law applies, state law is often displaced. "[I]n several contexts, [the Supreme Court has] recognized

that vindication of maritime policies demanded uniform adherence to

a federal rule of decision, with no leeway for variation or supplementation by state law." Yamaha Motor Corp., U.S.A. v. Calhoun, 116 S.

Ct. 619, 626 (1996). The requirement of uniformity is not absolute,

however. See American Dredging Co. v. Miller, 510 U.S. 443, 451

(1994). "[I]t would be difficult, if not impossible, to define with

exactness just how far the general maritime law may be changed,

modified, or affected by state legislation." Id. (quoting Southern

Pacific Co. v. Jensen, 244 U.S. 205, 216 (1917)) (internal quotation

marks omitted) (alteration in original).

Luckily, in this case the same policies recognized by the maritime

law are recognized in North Carolina law. "Under North Carolina

law, parties are free to allocate the risk of injury by means of exculpatory contracts, unless the subject matter of such contracts affects a

public interest." Bertotti v. Charlotte Motor Speedway, 893 F. Supp.

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565, 566 (W.D.N.C. 1995). Although North Carolina courts assert

that "[r]eleases which exculpate persons from liability for negligence

are not favored by the law," Johnson v. Dunlap, 280 S.E.2d 759, 763

(N.C. Ct. App. 1981), except in specific circumstances they "recogniz[e] the right to contract against liability," Alston v. Monk, 373

S.E.2d 463, 466 (N.C. Ct. App. 1988).

North Carolina courts will enforce an exculpatory clause unless it

is violative of a statute, gained through inequality of bargaining

power, or contrary to a substantial public interest. See Andrews v.

Fitzgerald, 823 F. Supp. 356, 378 (M.D.N.C. 1993); see generally

Hall v. Sinclair Refining Co., 89 S.E.2d 396, 397-98 (N.C. 1955) (discussing the general rule that parties may contract to allocate the risk

of their own negligence, and the circumstances under which such contracts will be held void). Although Waggoner asserts that the instant

exculpatory clause falls within all three of these categories, she is

mistaken.

First, Waggoner directs our attention to the North Carolina Boating

Safety Act, N.C. Gen. Stat. § 75A-1 to -19 (1994). Although this statute explains that it is the policy of North Carolina to promote boating

safety, its terms deal almost exclusively with the operation of water

craft and do not address the duties owed by one who rents such craft

for recreational use. The closest provision is section 75A-8, which

provides that:

It shall be unlawful for the owner of a boat livery to rent a

vessel to any person unless the provisions of this Chapter

have been complied with. It shall be the duty of owners of

boat liveries to equip all vessels rented as required by this

Chapter.

However, Waggoner does not assert that there has been any violation

of this provision, nor do we find that there has been any such violation. Waggoner merely asserts that the statute as a whole exhibits a

policy toward promoting boating safety. This is a far cry from a prohibition of exculpatory clauses in recreational rental agreements.

Waggoner further has asserted that she suffered from an inequality

in bargaining power because the contract was an adhesion contract.

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It is true that Waggoner could not negotiate the terms of the contract,

but either had to sign the exculpatory clause or decline to rent the jet

ski; however, this supposed "inequality of bargaining power . . . is

more apparent than real. It is not different from that which exists in

any other case in which a potential seller is the only supplier of the

particular article or service desired." Gas House, Inc. v. Southern Bell

Tel. and Tel. Co., 221 S.E.2d 499, 505 (N.C. 1976), overruled on

other grounds, State ex rel. Utilities Comm'n v. Southern Bell Tel.

and Tel. Co., 299 S.E.2d 763 (N.C. 1983). Only where "it is necessary

for [the plaintiff] to enter into the contract to obtain something of

importance to him which for all practical purposes is not obtainable

elsewhere" will "unequal bargaining power" void an exculpatory

clause. Hall, 89 S.E.2d at 398.

Waggoner has cited Hill v. Carolina Freight Carriers Corp., 71

S.E.2d 133 (N.C. 1952), for the proposition that a release "will never

be so construed as to exempt the indemnitee from liability for his own

negligence or the negligence of his employees in the absence of

explicit language clearly indicating that such was the intent of the parties." Id. at 137. In that case the North Carolina Supreme Court held

that an exculpatory clause purporting to cover "all losses" did not

extend to losses caused by the negligence of the defendant, because

it would be against public policy for a common carrier to be allowed

to indemnify itself against its own negligence. Both North Carolina

law and admiralty law recognize such a public policy regarding common carriers. However, Nags Head was not a common carrier and no

similar public policy protects Waggoner from the plain language of

her contract.

Finally, Waggoner has contended that the regulation of recreational

boat rentals is infused with a public interest, and thus the exculpatory

clause should be held invalid.3 However, North Carolina courts have

not held that recreational boat renting, as opposed to the services of

_________________________________________________________________

3 Waggoner has asserted that this clause is one for a public service

because it is a bailment. The argument is meritless. Waggoner fails to

appreciate the difference between a bailment and a lease, and in any case

the rule regarding bailment only prohibits the limitation of liability of a

bailee when entrusted with property of the bailor, whereas in this case

Waggoner would have been the bailee and Nags Head the bailor.

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a common carrier, is sufficiently important to justify such an imposition on the freedom of contract. As the Supreme Court of North Carolina has explained:

 The reason for the rule that a common carrier, or other

public utility, may not contract away its liability for negligence in the performance of its public utility service and

may not claim the benefit of an unreasonable contract limiting the amount of its liability therefor, is that every member

of the public is entitled by law to demand such service with

full liability at a reasonable rate therefor. For the company

to refuse to serve unless the customer agrees to release it

from liability for its negligent performance of its obligation

to serve would be a denial of this legal right in the wouldbe customer. Thus, such a contract limiting the liability of

the carrier, or other public utility, unless reasonable, is contrary to public policy and invalid. This limitation upon the

right of the common carrier, or other public utility, to contract applies, however, only to its undertakings to render services which fall within its public service business.

Gas House, Inc., 221 S.E.2d at 505. See also Bertotti, 893 F. Supp.

at 569 (explaining that the public interest exception only applies to

heavily regulated industries such as medicine and cosmetology, not

recreational go-kart racing).

3. Restatement (Second) of Contracts

The Restatement (Second) of Contracts does not suggest that the

exculpatory clause at issue here should be invalidated. The relevant

provision states, in pertinent part:

(1) A term exempting a party from tort liability for harm

caused intentionally or recklessly is unenforceable on

grounds of public policy.

(2) A term exempting a party from tort liability for harm

caused negligently is unenforceable on grounds of public

policy if

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 (a) the term exempts an employer from liability to an

employee for injury in the course of his employment;

 (b) the term exempts one charged with a duty of public

service from liability to one to whom that duty is owed for

compensation for breach of that duty, or

 (c) the other party is similarly a member of a class protected against the class to which the first party belongs.

Restatement (Second) of Contracts § 195 (1979). There is no evidence in the record to support the assertion that Nags Head acted

intentionally or recklessly, there is no employer/employee relationship, no "duty of public service" (as would be the case if Nags Head

were a common carrier, see id. at § 195 cmt. a), and Waggoner is not

a member of any class protected against recreational boat rental companies. This case instead falls within the Restatement's explanation

that "a party to a contract can ordinarily exempt himself from liability

for harm caused by his failure to observe the standard of reasonable

care imposed by the law of negligence." Id. 

III. CONCLUSION

Because Waggoner may not have demonstrated any admissible evidence of negligence sufficient to withstand Nags Head's summary

judgment motion, and because, even if she had, her negligence claim

would be barred by the exculpatory clause that she signed, the judgment of the district court is

AFFIRMED.

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