The Supreme Court of Oregon has reversed an appeals court and found that an anticipatory release signed by a skier, who suffered an injury on the slopes because of a ski area operator’s negligence, is inapplicable because “the release violates public policy and is unconscionable.”
By way of background, the plaintiff purchased a season pass on September 29, 2005 from the defendant for use at the defendant’s ski area. Upon purchasing the season pass, the plaintiff executed a written “release and indemnity agreement” that the defendant required of all its patrons. That document provided, in pertinent part:
“In consideration of the use of a Mt. Bachelor pass and/or Mt. Bachelor’s premises, I/we agree to release and indemnify Mt. Bachelor, Inc., its officers and directors, owners, agents, landowners, affiliated companies, and employees (hereinafter `Mt. Bachelor, Inc.’) from any and all claims for property damage, injury, or death which I/we may suffer or for which I/we may be liable to others, in any way connected with skiing, snowboarding, or snow-riding. This release and indemnity agreement shall apply to any claim even if caused by negligence. The only claims not released are those based upon intentional misconduct. …
“The undersigned(s) have carefully read and understand this agreement and all of its terms on both sides of this document. This includes, but is not limited to, the duties of skiers, snowboarders, or snowriders. The undersigned(s) understand that this document is an agreement of release and indemnity which will prevent the undersigned(s) or the undersigned’s’ estate from recovering damages from Mt. Bachelor, Inc. in the event of death or injury to person or property. The undersigned(s), nevertheless, enter into this agreement freely and voluntarily and agree it is binding on the undersigned(s) and the undersigned’s’ heirs and legal representatives.
“By my/our signature(s) below, I/we agree that this release and indemnity agreement will remain in full force and effect and I will be bound by its terms throughout this season and all subsequent seasons for which I/we renew this season pass.”
On November 18, 2005, the plaintiff used the pass to purchase a ticket. The language on the ticket stated:
“Read this release agreement
“In consideration for each lift ride, the ticket user releases and agrees to hold harmless and indemnify Mt. Bachelor, Inc., and its employees and agents from all claims for property damage, injury or death even if caused by negligence. The only claims not released are those based upon intentional misconduct.”
In addition, the following sign was posted at each of defendant’s ski lift terminals:
“YOUR TICKET IS A RELEASE
“The back of your ticket contains a release of all claims against Mt. Bachelor, Inc. and its employees or agents. Read the back of your ticket before you ride any lifts or use any of the facilities of Mt. Bachelor, Inc. If you purchase a ticket from someone else, you must provide this ticket release information to that person or persons.
“Skiers and lift passengers who use tickets at this resort release and agree to hold harmless and indemnify Mt. Bachelor, Inc., its employees and agents from all claims for property damage, injury or death which he/she may suffer or for which he/she may be liable to others, arising out of the use of Mt. Bachelor’s premises, whether such claims are for negligence or any other theory of recovery, except for intentional misconduct.
“If you do not agree to be bound by the terms and conditions of the sale of your ticket, please do not purchase the ticket or use the facilities at Mt. Bachelor.
“Presentation of this ticket to gain access to the premises and facilities of this area is an acknowledgment of your agreement to the terms and conditions outlined above.”
On February 16, 2006, while snowboarding over a human-made jump in the defendant’s “air chamber” terrain park, the plaintiff sustained serious injuries resulting in his permanent paralysis. Approximately four months later, the plaintiff notified the defendant of his injuries under Oregon state law (ORS 30.980(1)). Within two years after he was injured, the plaintiff sued, alleging negligence on the defendant’s part in designing, constructing, maintaining, and inspecting the jump on which the plaintiff was injured. The defendant answered, in part, by invoking the affirmative defense of release, pointing to the above-quoted documents.
Both sides moved for summary judgment. The trial court agreed with the defendant that “the release conspicuously and unambiguously disclaimed its future liability for negligence, and that the release was neither unconscionable nor contrary to public policy under Oregon law, because ‘skiers and snowboarders voluntarily choose to ski and snowboard and ski resorts do not provide essential public services.’” The Court of Appeals affirmed.
The plaintiff appealed to the state’s highest court, leading to the following analysis: “(P)ermitting the defendant to exculpate itself from its own negligence would be unconscionable. … (I)mportant procedural factors supporting that conclusion include the substantial disparity in the parties’ bargaining power in the particular circumstances of this consumer transaction, and the fact that the release was offered to the plaintiff and the defendant’s other customers on a take-it-or-leave-it basis.
“There also are indications that the release is substantively unfair and oppressive. First, a harsh and inequitable result would follow if the defendant were immunized from negligence liability, in light of (1) the defendant’s superior ability to guard against the risk of harm to its patrons arising from its own negligence in designing, creating, and maintaining its runs, slopes, jumps, and other facilities; and (2) the defendant’s superior ability to absorb and spread the costs associated with insuring against those risks. Second, because the defendant’s business premises are open to the general public virtually without restriction, large numbers of skiers and snowboarders regularly avail themselves of its facilities, and those patrons are subject to risks of harm from conditions on the premises of the defendant’s creation, the safety of those patrons is a matter of broad societal concern. The public interest, therefore, is affected by the performance of the defendant’s private duties toward them under business premises liability law.”
The court went on to look at the value of deterring negligent conduct.
“Although that policy of deterrence has implications in any case involving the enforceability of an anticipatory release of negligence liability, here, that policy bolsters the other considerations that weigh against enforcement of the release,” it wrote. “As the parties readily agree, the activities at issue in this case involve considerable risks to life and limb. Skiers and snowboarders have important legal inducements to exercise reasonable care for their own safety by virtue of their statutory assumption of the inherent risks of skiing. By contrast, without potential exposure to liability for their own negligence, ski area operators would lack a commensurate legal incentive to avoid creating unreasonable risks of harm to their business invitees. See Alabama Great Southern Railroad Co. v. Sumter Plywood Corp., 359 So 2d 1140, 1145 (Ala 1978) (human experience shows that exculpatory agreements induce a lack of care). Where, as here, members of the public are invited to participate without restriction in risky activities on defendant’s business premises (and many do), and where the risks of harm posed by operator negligence are appreciable, such an imbalance in legal incentives is not conducive to the public interest.
“Because the factors favoring enforcement of the release are outweighed by the countervailing considerations that we have identified, we conclude that enforcement of the release at issue in this case would be unconscionable.”
The decision was not without its critics.
“This case not only opened up lawsuits against ski areas, but turned any recreation provider into a target,” wrote attorney James H. Moss, who specializes in recreation law. “In just two weeks since the decision came down several high-dollar lawsuits have been filed in Oregon. See Mt. Hood Meadows snowboarder, who claimed a teen slammed into her, and is suing the teen’s parents for $955,000 as well as another one where a fallen tree causes Portland mountain bike racer to crash, leading to a fractured neck.
“By stating that any provider was subject to the public policy exception to releases, the court effectively found that anyone injured by a recreation provider could have their releases voided.”
Attorneys of Record: (for plaintiff) Myles A. Bagley, Al Bagley, and Lauren Bagley.
Bagley v. Mt. Bachelor, Inc., dba Mt. Bachelor Ski and Summer Resort; Oregon Supreme Court; 2014 Ore. LEXIS 994; 12/18/14
