Opinion ID: 2637287
Heading Depth: 2
Heading Rank: 1

Heading: mr. berry's agreement to release pcmr from liability for its negligent acts is enforceable

Text: ¶ 9 Preinjury exculpatory releases turn against one another the freedom of persons to regulate their affairs by contract and the social bargain at the heart of tort law that persons who fail to exercise reasonable care should be accountable in damages to those injured by negligent acts. We have not previously had occasion to consider whether the sponsor of a competitive ski race may shield itself from negligence by obtaining prospective exculpatory agreements from participants. This appeal is not, however, our introduction to preinjury releases. ¶ 10 In our most recent encounter, we held that a preinjury release could not foreclose claims of negligence brought by the parent of a minor child who was injured during a guided equestrian trail ride. Hawkins v. Peart, 2001 UT 94, 37 P.3d 1062. Mr. Berry interprets Hawkins as a case containing sufficient kinetic energy to move it beyond its facts to guide the outcome of this appeal. According to Mr. Berry, Hawkins signaled that we had found common cause with a growing consensus of jurisdictions that rejected as contrary to public policy preinjury releases generally and those releasing ski areas particularly. To support his interpretation, Mr. Berry drew on our statement in Hawkins that [a]n exculpatory clause that relieves a party from future liability may remove an important incentive to act with reasonable care. These clauses are also routinely imposed in a unilateral manner without any genuine bargaining or opportunity to pay a fee for insurance. The party demanding adherence to an exculpatory clause simply evades the necessity of liability coverage and then shifts the full burden of risk of harm to the other party. Id. ¶ 13. ¶ 11 We made observations critical of preinjury releases in the context of the point that sound reasons exist for the law to treat preinjury releases with greater suspicion than postinjury releases. Regardless of the context in which they appear, we readily acknowledge that the shortcomings of exculpatory clauses cited in Hawkins provide ample cause to approach preinjury releases with caution. Indeed, the reasoning used by courts to reject as contrary to public policy preinjury releases is persuasive. See Hiett v. Lake Barcroft Cmty. Ass'n, 244 Va. 191, 418 S.E.2d 894 (1992); see also Jaffe v. Pallotta TeamWorks, 374 F.3d 1223, 1226 (D.C.Cir.2004); Coughlin v. T.M.H. Int'l Attractions Inc., 895 F.Supp. 159 (W.D.Ky. 1995); Dalury v. S-K-I, Ltd., 164 Vt. 329, 670 A.2d 795, 799 (1995); cf. N.Y. Gen. Oblig. §§ 5-321 to -326 (2007). In the Commonwealth of Virginia, for example, public policy forbids exculpatory agreements because `to hold that it was competent for one party to put the other parties to the contract at the mercy of its own misconduct . . . can never be lawfully done where an enlightened system of jurisprudence prevails.' Hiett, 418 S.E.2d at 896 (quoting Johnson's Adm'x v. Richmond & Danville R.R. Co., 86 Va. 975, 11 S.E. 829, 829 (1890)). This approach is certainly defensible both as a statement of legal and social philosophy  the right to contract is always subordinate to the obligation to stand accountable for one's negligent acts  and on an operational level inasmuch as such a clear statement eliminates any ambiguity over whether a court would later deem a particular preinjury release enforceable. Our recognition of the undesirable features of preinjury releases and of the merits of arguments that we should brand all preinjury releases unenforceable falls short of convincing us that freedom to contract should always yield to the right to recover damages on the basis of another's fault. See, e.g., Jones v. Dressel, 623 P.2d 370 (Colo.1981); Porubiansky v. Emory Univ., 156 Ga.App. 602, 275 S.E.2d 163, 167-68 (1980); Olson v. Molzen, 558 S.W.2d 429, 431 (Tenn.1977); Wagenblast v. Odessa Sch. Dist., 110 Wash.2d 845, 758 P.2d 968 (1988); Kyriazis v. Univ. of W. Va., 192 W.Va. 60, 450 S.E.2d 649 (1994). ¶ 12 Our analysis in Hawkins disclosed both our conviction that a person should retain the power to contract away the right to recover damages for the negligence of another and our understanding that the authority to exercise the right was subject to many conditions and limitations. [1] We began that analysis by acknowledging, uncritically, the general principle of common law that `those who are not engaged in public service may properly bargain against liability for harm caused by their ordinary negligence in performance of contractual duty.' Hawkins, 2001 UT 94, ¶ 9, 37 P.3d 1062 (quoting 6A Arthur Linton Corbin, Corbin on Contracts § 1472 (1962)). After canvassing the legal landscape for perspective on how courts have received and interpreted the Corbin principle, we noted that most of the cases from jurisdictions that were not among the minority rejecting all preinjury releases focused their analytical energy on ascertaining how to know who is and who is not engaged in public service. Id. ¶ 9. Because it was not necessary to do so, we did not delve into this question in Hawkins and instead limited ourselves to the observation that most jurisdictions that permit prospective releases draw the line at attempts to limit liability for activities in which there is a strong public interest. These cases did not, however, aid us in making progress toward a proper outcome because Hawkins concerned the unique circumstance of the release of a minor's prospective claim for negligence and did not implicate the public service exception. Our analysis in Hawkins relied, then, on a public policy exception to the Corbin principle specifically relating to releases of a minor's claims. Id. ¶ 10. ¶ 13 The lesson of Hawkins is that all of the analytical approaches we discussed were exceptions to the general principle that preinjury releases are enforceable. The viability of the principle itself was never challenged. We assumed its controlling force then and make explicit our adoption of the principle now. ¶ 14 Had we intended our observations concerning the deleterious effects of preinjury releases to be our final expression of views on the proper place of such releases in our law, little reason would have existed for us to have refrained from using Hawkins to declare categorically that such releases offend public policy and are unenforceable. The proper inference to draw from Hawkins is that this general rule is well embedded in our common law despite its flaws. Our position on this matter can coexist with our endorsement of the prevailing view that the law disfavors preinjury exculpatory agreements. See Hanks v. Powder Ridge Rest. Corp., 276 Conn. 314, 885 A.2d 734, 739 (2005). ¶ 15 Having determined that our public policy does not foreclose the opportunity of parties to bargain for the waiver of tort claims based on ordinary negligence, we confront the issues we stopped short of resolving in Hawkins: selecting and applying a standard relating to the public interest exception to the general rule recognizing the enforceability of preinjury releases. [2] 2001 UT 94, ¶ 10, 37 P.3d 1062. This is an inquiry that directs our attention to the nature of the activity seeking to be shielded from liability for its negligence and away from Hawkins ' focus on the status of the person from whom the release is sought. [3] In Hawkins, we stated that many states had come to rely on the guidelines for evaluating the applicability of the public interest exception to preinjury releases set out in Tunkl v. Regents of The University of California, 60 Cal.2d 92, 32 Cal.Rptr. 33, 383 P.2d 441, 445-46 (1963). The Tunkl guidelines have retained their vitality over the years since Utah, through Hawkins, became one of many jurisdictions to permit preinjury releases. See, e.g., Omni Corp. v. Sonitrol Corp., 476 F.Supp.2d 125, 128 (D.Conn.2007); Am. Structural Composites, Inc. v. Int'l Conference of Bldg. Officials, 325 F.Supp.2d 1148, 1151 (D.Nev.2004); Moore v. Hartley Motors, Inc., 36 P.3d 628, 632 (Alaska 2001); Brown v. Soh, 280 Conn. 494, 909 A.2d 43, 48-51 (2006); Courbat v. Dahana Ranch, Inc., 111 Hawai`i 254, 141 P.3d 427, 437-39 (2006); Berlangieri v. Running Elk Corp., 134 N.M. 341, 76 P.3d 1098, 1109-10 (2003). The Tunkl standard, which identifies the traits of an activity in which an exculpatory provision may be invalid, is as follows: [1] [The transaction] concerns a business of a type generally thought suitable for public regulation. [2] The party seeking exculpation is engaged in performing a service of great importance to the public, which is often a matter of practical necessity for some members of the public. [3] The party holds himself out as willing to perform this service for any member of the public who seeks it, or at least for any member coming within certain established standards. [4] As a result of the essential nature of the service, in the economic setting of the transaction, the party invoking exculpation possesses a decisive advantage of bargaining strength against any member of the public who seeks his services. [5] In exercising a superior bargaining power the party confronts the public with a standardized adhesion contract of exculpation, and makes no provision whereby a purchaser may pay additional reasonable fees and obtain protection against negligence. [6] Finally, as a result of the transaction, the person or property of the purchaser is placed under the control of the seller, subject to the risk of carelessness by the seller or his agents. Hawkins, 2001 UT 94, ¶ 9 n. 3, 37 P.3d 1062 (quoting Tunkl, 32 Cal.Rptr. 33, 383 P.2d at 445-46). ¶ 16 Consideration of these traits is a flexible endeavor; the activity at issue need exhibit only a sufficient number of Tunkl characteristics such that one may be convinced of the activity's affinity to the public interest. When a preinjury release is contrary to the public interest, it is invalid. Applying this approach, we test the King of the Wasatch race against each of the six Tunkl guidelines. ¶ 17 First, while as an academic matter it may be debatable whether the sport of skiing is of a type generally thought to be suitable for public regulation, in Utah there can be no debate. In Utah, skiing is regulated by the Inherent Risk of Skiing Act, Utah Code Ann. §§ 78-27-51 to -54 (2002 & Supp. 2007). Although the parties assume that the Act applies to skiercross events like the King of the Wasatch race, it is less clear that the applicability of the Act to skiercross racing would qualify the competition as suitable for public regulation. The Act was animated by a legislative finding that the sport of skiing is practiced by a large number of residents of Utah and attracts a large number of nonresidents. Id. § 78-27-51. The same cannot be said for skiercross racing. This form of competition has simply not generated sufficient public interest either through its popularity or because of hazards associated with it to generate a call for intervention of state regulatory authority. Skiercross racing is but one of an almost countless number of competitive sporting events occurring at any particular time in Utah. Among these, Utah law regulates only competitive boxing and equestrian events. See id. §§ 63C-11-301 to -318; id. §§ 63C-11-320 to -325; id. §§ 78-27b-101 to -102 (Supp.2007). ¶ 18 Thus, while the reach of the Act may extend to ski-related activities that fall outside the public policy considerations underlying the adoption of the Act, those activities, like skiercross racing, are nevertheless subject to a separate analysis for the purpose of evaluating the enforceability of preinjury releases. Put another way, while the services provided by a business operating a recreational ski area and the services provided by a business sponsoring a competitive ski race may be covered by the provisions of the Act, the differences between recreational and competitive skiing are substantial enough to warrant the application of a separate analysis concerning their suitability for public regulation. In our view, skiercross racing is not generally thought suitable for public regulation. ¶ 19 Second, for all the benefits that the King of the Wasatch race may have bestowed on its competitors, sponsors, and spectators, the race sponsors were in no way performing a service of great importance to the public, nor was race participation a matter of practical necessity for anyone. ¶ 20 Third, the record suggests that PCMR made race participation available to anyone who sought to enter. Based on the description of the King of the Wasatch race in the record, a clear inference exists that competitors came from a limited group of expert, competitive skiers. ¶ 21 The fourth Tunkl guideline diminishes the likelihood that we might find a preinjury release enforceable considering that the essential nature of the activity or service results in endowing the party seeking exculpation with a decisive advantage of bargaining strength. We have little doubt that Mr. Berry possessed no bargaining strength whatsoever. If he wanted to compete in the King of the Wasatch race, he was required to sign the preprinted release form. In this setting, however, PCMR's decisive advantage in bargaining strength was of little consequence since the race was a nonessential activity. ¶ 22 Fifth, PCMR's superior bargaining power, its use of a contract of adhesion, and its failure to provide Mr. Berry an option to purchase protection against PCMR's negligence is similarly of little consequence because of the nonessential nature of the race. ¶ 23 The final Tunkl factor, that Mr. Berry was placed under PCMR's control as a result of signing the release and made subject to the risk of PCMR's carelessness, is of questionable application. PCMR appears to have been capable of exercising a negligible degree of control over the manner in which Mr. Berry traversed the racecourse or whether he elected to complete the course at all after inspecting its features. ¶ 24 After considering the facts of Mr. Berry's case with the Tunkl guidelines in mind, we are convinced that the release Mr. Berry executed in favor of PCMR is enforceable.