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Mother had signed exculpatory clause when plaintiff was 7 years old
Mother had signed exculpatory clause when plaintiff was 7 years old
A man has no recourse for the head injury he sustained while jumping on inflatable amusement equipment when he was 7 years old, because his mother then signed an exculpatory clause releasing the equipment company from “any and all claims.”
He lost at Hennepin County District Court on summary judgment. The Court of Appeals affirmed on July 19 in Justice v. Marvel, L.L.C., a unanimous opinion written by Judge Matthew E. Johnson.
By the next day, attorneys for plaintiff Carter Justice had decided to seek Supreme Court review. The problem with the decision is that it “encourages business to rely on liability waivers instead of taking commonsense measures to protect kids,” said plaintiff’s attorney, Patrick Michenfelder of St. Michael.
Parents rely on businesses to take those reasonable steps, such as putting safety mats under the play area, he said. “We’re not asking for a sea change,” Michenfelder said, “we’re just asking for reasonable steps.”
The court got it right, said defense attorney Patrick Nilan of Minneapolis.
“In Minnesota, parents have always done what’s best for their children,” he said. “[The law] lets kids be kids.” Children’s leisure and sports activities are possible because parents know all reasonable precautions will be taken, he said.
“This was an accident,” Nilan said. “It was not a case of gross negligence or recklessness or an intentional act.”
Justice’s lawyers argued that a parent does not have the authority to agree to a pre-injury exculpatory clause on behalf of a minor child, and that the minor child is not bound by the contract when he becomes an adult.
Neither party cited any Minnesota caselaw on point. A District Court judge said that a parent has a fundamental right to make decisions about the child. The Court of Appeals concurred, citing authorities going back to Blackstone in 1769. Johnson, writing for the Court of Appeals, says:
“Several Minnesota statutes recognize by implication that a parent generally is authorized to enter into agreements with third parties on behalf of a minor child.”
But the court also cited Minn. Stat. § 184B.20, passed in 2010, which regulates inflatable amusement equipment. It says that:
“A waiver of liability signed by or on behalf of a minor for injuries arising out of the negligence of the owner … is void.” [Emphasis by court.]
In 2013, Minn. Stat. § 604.055 was enacted. It prohibits exculpatory clauses that purport to release claims of greater-than-ordinary negligence in consumer activities, including recreational activities.
Johnson said those laws clearly demonstrate the parent’s authority to enter into an exculpatory clause and no other law restrains that authority.
Line in the sand
But Mahesha Subbaraman, a Minneapolis attorney and another member of the plaintiff’s team, said when that law was passed in 2010, the legislature drew a line in the sand and said “these [waivers] are not enforceable anymore.” But the court’s retroactivity analysis undid that, he said. (See below.)
The court also turned back the argument comparing the case to a situation where a minor child independently enters a contract and may avoid that contract upon becoming an adult. The rationale for the doctrine is the minor’s inability to act in his or her best interests.
Writes Judge Johnson:
“But that rationale simply does not apply if an adult parent signed an exculpatory clause on behalf of a minor child. An adult parent is presumed to be competent to make decisions on behalf of a minor child and to act in the child’s best interests.”
The distinction doesn’t make sense to plaintiff Justice’s attorneys. “This is a classic contract of adhesion,” Subbaraman said. “Parents expect the business to use common sense, and don’t expect to be handed a waiver in 3-point font.”
The court rejected plaintiff’s argument that a parent should not be able to sign an exculpatory clause on behalf of a minor child before the child is injured, because the facts are dissimilar. The plaintiff had also argued a parent cannot settle a lawsuit on behalf of a minor child after an injury without court approval. That, too, was rejected.
The lawsuit requirements guard against a parent’s possible motivation to use the settlement proceeds for an improper purpose, the court ruled. If the child has not been injured, there is no immediate prospect of a settlement that is contrary to a child’s best interests, the court said.
But the child was injured and there was an outcome not in his best interest, Michenfelder said.
Statute not retroactive
The court then turned to §184B.20, but declined to apply it because it had no clear retroactive effect. It rejected Justice’s argument that the application of the statute would be a prospective application, not a retroactive application. But the court said it would affect rights and obligations that existed before the law was passed.
It also said that the existence of vested rights may defeat the retroactive application of a statute. But the law is not being applied retroactively and therefore the doctrine is irrelevant, Johnson said.
The legislature simply did not make the statute retroactive and could have done so, Nilan said.
Not in the public interest
Justice’s attorneys also argued, unsuccessfully, that the exculpatory clause was unenforceable as contrary to public policy.
The factors in determining whether such a policy is void are a disparity of bargaining power and whether the service at issue is an essential or public service, the court said. The court was unconvinced that the service in question was essential or public, saying the plaintiff simply could not have attended the party.
Although §184B.20 now regulates inflatable recreational devices, to rely on that for a public-policy analysis would be to apply the statute retroactively, Johnson wrote.
The court continued that the release of “any and all claims” is over-broad, because it could cover intentional, willful or wanton acts and thus could be unenforceable.
The court said that the clause is enforceable to the extent that the plaintiff asserts an ordinary negligence claim, but unenforceable in cases of greater-than-ordinary negligence. But the plaintiff made the claim of greater-than-ordinary negligence for the first time on appeal and thereby forfeited it, Johnson wrote.
Justice’s mother and stepfather signed a later agreement, after he was injured, and in connection with a payment of $1,500 for medical bills. The parents also agreed to sign a complete release in six months if the child had no medical complications, but did not.
The plaintiff argued that the post-injury agreement abrogates the exculpatory clause because the post-injury agreement is specifically related to his head injury, his mother and step-father agreed to release claims arising from the head injury only if certain conditions were present, and the conditions stated in the post injury agreement were not present.
The respondent, Marvell, L.L.C., contended that the post-injury agreement did not modify the exculpatory clause because the agreement does not refer to the clause and because it was entered into by Justice’s mother and stepfather on their own behalf—not on behalf of their child.
The court agreed with the respondent, noting that it did not refer to the pre-injury exculpatory clause and that the mother and stepfather did not sign the later release. Writes Johnson:
“The absence of a second release does not in any way alter the release contained in the exculpatory clause that was signed by [plaintiff’s] mother on the day of [his] injury.”