CLAIMS LAW UPDATE PARENTAL LIABILITY WAIVERS. American Educational Institute, Inc. [Ref. Law of Contracts, Para. 3.03]

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1 American Educational Institute, Inc. CLAIMS LAW UPDATE A SUPPLEMENT TO CLAIMS LAW COURSES IN CASUALTY, PROPERTY, WORKERS COMPENSATION, FRAUD INVESTIGATION AND AUTOMOBILE Summer, 2013 PARENTAL LIABILITY WAIVERS [Ref. Law of Contracts, Para. 3.03] You are a claims professional handling a claim against your insured who operates a go-cart facility open to the general public. For a fee, patrons rent and ride go-carts around the facility s track. The plaintiff, a 12-year-old boy, suffered head and back injuries when his go-cart flipped. He sued your insured for negligent maintenance of the go-cart and track. Your insured believes there is no liability based on a waiver of liability signed by the boy s father prior to the incident. The insured requires all patrons to sign a waiver before entering the facility, and if a patron is a minor the waiver must be signed by a parent or guardian. There is no dispute that the language of the waiver unambiguously exculpates the insured for its negligence. The plaintiff argues that the waiver is void because it is against public policy. He also asserts that, as a minor, the common law gives him the right to disaffirm any contract he enters into and that the insured cannot circumvent his common law rights by contracting with his parent. Courts that consider the validity of parental waivers must balance competing interests. On the one hand there is a strong foundation in law and public policy that favors the freedom to contract. In addition, both the United States Constitution and many state constitutions grant parents broad discretion to raise their children as they see fit, limited only by their duty to act in the best interests of the children. Cases involving parental waivers often hinge on this very issue is it in the child s best interest for his parent to waive a future tort claim against a negligent tortfeasor in exchange for the child s participation in a recreational activity? This update will examine court decisions that have considered parental waivers. Most courts have found parental waivers unenforceable, either because of contract law or public policy. This is especially true in cases that involve commercial activity. Some courts, however, have enforced parental waivers in the context of non-profit activities that involve schools, volunteers, or community organizations. Statutes have been enacted in other states to address this issue.

2 PARENTAL WAIVERS FOUND ENFORCEABLE Most reported court decisions upholding parental waivers have involved not-for-profit and volunteer organizations or schools. In Sharon v. City of Newton, 769 NE2d 738 (Mass. 2002), the plaintiff, a 16-year-old high school cheerleader, suffered a compound fracture when she fell from the top of a cheerleading pyramid. When she reached the age of majority she sued the city, alleging negligent hiring and retention of her coach. The city argued that it was not liable based on a waiver signed by the plaintiff and her father shortly before the accident. The waiver provided: I the undersigned father... of Merav Sharon, a minor, do hereby consent to her participation in voluntary athletic programs and do forever RELEASE, acquit, discharge, and covenant to hold harmless the City of Newton... from any and all actions, causes of action, and claims... on account of, or in any way growing out of, directly or indirectly, all known and unknown personal injuries or property damage which I may now or hereafter have as the parent... of said minor, and also all claims or right of action for damages which said minor has or hereafter may acquire, either before or after she has reached her majority resulting from... her participation in the Newton Public Schools Physical Education Department s athletic programs. The plaintiff first argued that it is contrary to public policy to permit schools to require students to sign liability waivers as a prerequisite to engaging in certain activities and that it undermines the duty of care that a school owes its students. The Massachusetts Supreme Court disagreed, citing case law that generally supports the enforcement of waivers. The court added that there was no public policy that prevented an organization from requiring someone to sign a waiver in exchange for engaging in a potentially dangerous activity. The court suggested that its opinion could be different if there was a requirement to execute a waiver as a condition of receiving an essential service such as a public education or medical attention. The court, however, concluded that the city s extracurricular activity of cheerleading was neither compelled nor essential, and as a result public policy was not violated. The plaintiff also argued that her father could not waive a tort claim belonging to her, and that as a minor she had the right to disaffirm the waiver, which she did. The court again disagreed noting that under Massachusetts law parents have a fundamental right to make decisions relating to the care, custody, and control of their children and that fit parents are presumed to act in the best interests of their children: In the instant case, Merav s father signed the release in his capacity as parent because he wanted his child to benefit from participating in cheerleading, as she had done for four previous seasons. He made an important family decision cognizant of the risk of personal injury to his child and the financial risk to the family as a whole. In the circumstances of a voluntary, nonessential activity, we will not disturb this parental judgment. This comports with the fundamental liberty interests 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. The court also rejected the argument that a parental waiver could not be enforced because Massachusetts law requires court approval anytime a minor s personal injury claim is settled. The court distinguished pre-injury waivers, like these, from post-injury claims on the basis that a parent signing a pre-injury waiver has no financial pressures that may arise in the post-injury settlement context when simultaneously coping with an injured child.

3 Finally, the court recognized a strong public policy supporting a minor s participation in extracurricular activities. The court also cited statutes that make volunteers, including coaches, immune from liability and limit the liability of landowners who make land available for recreational activities. Although these statutes are not directly on point, the court made a comparison: To hold releases of the type in question here are unenforceable would expose public schools, who offer many of the extracurricular sports opportunities available to children, to financial costs and risks that will inevitably lead to the reduction of those programs. It would also create the anomaly of a minor who participates in a program sponsored and managed by a nonprofit organization not having a cause of action for negligence that she would have had had she participated in the same program sponsored as an extracurricular activity by the local public school. This distinction seems unwarranted, inevitably destructive to school sponsored programs, and contrary to public policy. Other cases that reached the same conclusion on similar facts include: California Ohio Hohe v. Sand Diego Unified School District, 224 Cal. App. 3d (Cal. App. 1990) court held pre-injury waiver executed by father on behalf of his minor child enforceable against claims resulting from child s participation in school sponsored event. Zivich v. Mentor Soccer Club, 696 NE2d 201 (Ohio 1998) court held parent may bind minor child to release of volunteers and sponsors of nonprofit sports activity from liability for negligence because threat of liability would otherwise deter individuals from volunteering for nonprofit organizations. PARENTAL WAIVERS FOUND UNENFORCEABLE A number of court decisions have found parental waivers unenforceable, typically, although not always, when the defendant is a commercial entity. Hojnowski v. Vans Skate Park, 901 A2d 381 (NJ 2006), involved a 12-year-old plaintiff who fractured his femur at a skateboard facility when an aggressive skateboarder, about whom the plaintiff s parents had complained to defendant in the past, forced him off a skateboarding ramp. Prior to entering the defendant s premises, the plaintiff s mother signed a waiver that provided, in part: Because using Vans Park, or even entering the Park as a spectator may increase your risk of harm, Vans is asking you to give up certain valuable legal rights. Here are the rights you are giving up when you sign this document: ( c) You give up the right to claim money from Vans if you are injured unless Vans intentionally failed to prevent or correct a hazard caused by unsafe equipment or devices. (e) You give up the right to claim money from Vans, Inc. if you are injured by another person. The plaintiff s parents filed a suit against the defendant on behalf of the plaintiff and themselves for negligent supervision, negligent failure to provide a safe place, and for failure to warn. Although there were a number of disputed legal issues, the issue of the waiver s validity reached the New Jersey Supreme Court. Striking down the waiver and ruling for the plaintiff, the court first analyzed a

4 public policy called parens patriae in the context of post-injury releases involving children: The relevant public policy implicated in this matter is the protection of the best interests of the child under the parens patriae doctrine. Parens patriae refers to the state in its capacity as provider of protection to those unable to care for themselves. In keeping with that policy, the Legislature and the courts historically have afforded considerable protection to claims of minor children. The most significant of those protections concerns the compromise or release of a minor s post-injury claims. Under Rule 4:44, after a minor has suffered a tortious injury, a minor s parent or guardian may not dispose of a minor s existing cause of action without statutory or judicial approval. Drawing a comparison between post-injury and pre-injury waivers, the New Jersey Supreme Court recognized that children deserve as much protection as possible, irrespective of whether the potential claim involves enforcing their rights after an injury, or compromising their rights before one occurs. In both cases, the primary concern is the child retaining the ability to obtain compensation for the injury. If a parent waives a child s right to seek recourse, the parent would be left to provide for the child s injuries while the responsible tortfeasor escapes liability. Even worse, the child may be left without needed medical support if the child s parents cannot finance the child s care. It s these types of situations that the doctrine of parens patriae is meant to prevent. The New Jersey Supreme Court next addressed the fact that the defendant was a commercial entity. Recognizing that business owners owe business invitees a duty of reasonable care and that the concerns raised by the doctrine of parens patriae are even more acute in the context of commercial premises liability, the court made the following observation: The operator of a commercial recreational enterprise can inspect the premises for unsafe conditions, train his or her employees with regard to the facility s proper operation, and regulate the types of activities permitted to occur. Such an operator also can obtain insurance and spread the costs of insurance among its customers. Children, on the other hand, are not in a position to discover hazardous conditions or insure against risks. Moreover, the expectation that a commercial facility will be reasonably safe to do that which is within the scope of the invitation... is especially important where the facility s patrons are minor children. If we were to permit waivers of liability, we would remove a significant incentive for operators of commercial enterprises that attract children to take reasonable precautions to protect their safety. The court was mindful that its decision impacts the fundamental right of parents to make decisions on the upbringing of their children. The court, however, said that the greater public policy concern is protecting the best interests of children, a policy that would be frustrated by releasing commercial tortfeasors from liability for their negligence. Other cases that reached the same conclusion on similar facts include: Florida Illinois Maryland Kirton v. Fields, 997 So.2d 349 (Fla. 2008) court held pre-injury waiver executed by parent on behalf of minor child could not be enforced against child s estate when child was killed as a result of participating in commercial activity. Meyer v. Naperville Manner, Inc., 634 NE2d 411 (Ill. 1994) court held parental pre-injury waiver unenforceable in case involving minor child injured after falling off horse at horseback riding school. Rosen v. BJ s Wholesale Club, Inc. 51 A2d 100 (Md. App. 2012) court held

5 Texas Utah parent may not waive child s future negligence claim against commercial enterprise. Paz v. Life Time Fitness, Inc., 757 F. Supp. 2d 658 (S.D. Tex. 2010) court followed majority rule and held parent s release of commercial enterprise from liability for child s injuries is not enforceable. Hawkins v. Peart, 37 P3d 1062 (Utah 2001) court held parent does not have authority to release child s horseback riding injury claim against a commercial defendant. Washington Scott v. Pacific West Mountain Resort, 834 P2d 6 (Wash. 1992) court held enforcement of waiver agreement signed by parent on behalf of minor child participating in ski school is contrary to public policy. West Virginia Johnson v. New River Scenic Whitewater Tours, Inc., 313 F. Supp. 2d 621 (S.D. W. Va. 2004) court held parent could not waive liability on behalf of minor child. Some courts have held, even in cases involving not-for-profits, that a parental waiver is unenforceable. In Galloway v. State of Iowa, 790 NW2d 252 (Iowa 2010), Iowa s highest court, in ruling that parental pre-injury waivers are unenforceable, did not limit its holding to waivers involving commercial entities. In Galloway, 14-year-old Taneia Galloway was hit by a car while she was on an educational field trip. Prior to the incident, her mother had signed a Field Trip Permission form and a Release and Medical Authorization form. Together these documents purported to relieve the Classic Upward Bound Program, the University of Northern Iowa, the State of Iowa, and numerous related defendants of any tort liability arising out of the field trip. Taneia Galloway filed a lawsuit through her mother against the various parties named in the waiver, including the State of Iowa. The state moved for summary judgment, arguing Galloway s mother waived her daughter s claims. The state further argued that the waiver was valid because public policy gives deference to parental child rearing choices, including the decision to release a child s claim for injuries caused by negligent third parties. The Iowa Supreme Court initially acknowledged that Iowa courts typically enforce exculpatory agreements and that parents are granted deference in child rearing decisions. The court, however, pointed out that parental authority is restricted by the child s best interests. Drawing a comparison, the court noted that Iowa law forbids a parent from waiving child support in return for the other parent s relinquishment of visitation rights because it s not in the child s best interest. The court recognized that limitations must be placed on a parent s right to enter into legally enforceable transactions that impact a child s financial and property interests because children need to be protected against poor parental decisions. Turning to the facts, the court ruled that public policy prevents parents from waiving a minor s tort claim before an injury occurs. The court reasoned that a parent has no authority without court approval to settle a minor child s personal injury claim after an injury has occurred so it makes little sense to allow a parent to waive a claim before the injury occurs. The court also noted that, unlike an adult who voluntarily releases his own claims, a child may not understand that she has forfeited a legal right in exchange for participating in a desired activity. In addition, while a cautious adult could protect himself after executing a waiver, it is unlikely that a child could assess and avoid the risks created by the activity. Likewise, parents usually do not participate in the child s activity and have no opportunity to protect the child from harm. The state countered that recreational, cultural, and educational opportunities for youths will cease to exist because the organizations sponsoring them will be unable or unwilling to purchase insurance or endure the risks of civil liability. The court, however, rejected this theory, labeling it

6 speculative and overstated. Finding no evidence that opportunities for recreational, cultural, and educational activities for youths were significantly compromised in jurisdictions that struck down parental pre-injury liability waivers, the court warned that the strong public policy favoring the protection of children s legal rights must prevail over speculative fears about their continuing access to activities. Some courts have relied more on contract principles in finding a parental waiver unenforceable. Woodman v. Kera LLC, 785 NW2d 1 (Mich. 2010), involved a five-year-old who broke his leg on inflatable play equipment during his birthday party at an indoor play facility. Prior to the injury, the plaintiff s father signed a parental pre-injury waiver and the trial court concluded that the waiver precluded the plaintiff s suit. The Michigan Supreme Court, in finding the waiver uneforceable, based its decision largely on common law contract principles. The court recognized that the well-established Michigan common law rule is that a minor lacks capacity to contract and that it is undisputed that if five-year-old Trent had signed the waiver, defendant could not enforce the waiver against him unless Trent confirmed it after he reached the age of majority. The court added that while legal guardians of children are responsible for their care and custody, there is ample authority that legal guardians, including parents, lack authority to bind a child to a contract unless it deals with necessaries. Given the existence of these well established legal principles, the court concluded that the only way it could enforce the waiver would be to modify the common law. The court, however, was unwilling to take this extreme measure and, as a result, it invalidated the defendant s waiver. In Mavreshko v. Resorts USA, 2005 U.S. Dist. LEXIS (M.D. Pa. 2005), a federal district court in Pennsylvania held a waiver unenforceable on contract principles. In this case, a 13-year-old boy suffered brain damage in a snow tubing accident. The boy and his mother had signed a waiver and the issue was whether the waiver was enforceable. The court first held that a minor s contracts, other than for necessaries, can be disaffirmed by the minor. So the boy had a right to disaffirm the contract and did so. The court then addressed the issue of the mother s signature as a waiver of the boy s rights and held that parents do not have the authority to release claims or potential claims of a minor child merely because of the parental relationship. STATUTORY LAW Some states have statutes that address the issue of parental pre-injury liability waivers. Colorado s legislature enacted C.R.S in response to Cooper v. Aspen Skiing Company, 48 P3d 1229 (Colo. 2002), a Colorado Supreme Court decision that held a parental waiver unenforceable. This statute specifically states that the supreme court s decision was not adopted by the legislature, and reflects neither the legislature s intent nor the state s public policy. The statute permits parents to release or waive their child s prospective claim for negligence. Parents, however, cannot waive tort claims arising from acts or omissions that are willful or wanton, reckless, or grossly negligent. The statute is grounded in public policy that encourages youth activities and recognizes the fundamental right of parents to make child rearing decisions. Alaska Stat permits a parent to release a child s prospective negligence claim against a provider of sports or recreational activities. Like Colorado s statute, claims based on recklessness or intentional conduct cannot be waived. In response to Kirton v. Fields, discussed above, Florida s legislature adopted Fla. Stat (3). This statute allows parents or guardians of minor children to waive a child s tort claim against commercial activity providers, but the waiver is limited to damages caused by an inherent risk in the activity. It does not apply to a provider s negligence outside of those inherent risks. In response to Woodman v. Kera LLC, discussed above, Michigan s legislature adopted MCL

7 that allows a parent or guardian to release a person or entity from liability for personal injury sustained by a minor participating in a recreational activity sponsored by a nongovernmental, nonprofit organization. Like Florida s statute, the waiver only applies to the inherent risks of the activity. CONCLUSION Cases involving parental pre-injury waivers fall into two categories, those that involve commercial providers and those that involve public or not-for-profit entities. In the absence of an applicable statute, when the defendant is a commercial enterprise, most courts have held that a parental pre-injury liability waiver is unenforceable. When the provider is a not-for-profit, courts have sometimes upheld a parent s pre-injury waiver, at least in part, to avoid discouraging the activities provided by these not-for-profits and their volunteers.