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Moore v Hartley Motors, Inc. et al (09/14/2001) sp-5469
Moore v Hartley Motors, Inc. et al (09/14/2001) sp-5469
Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
GAYLE W. MOORE, )
) Supreme Court No. S-9336
Appellant, )
) Superior Court No.
v. ) 3PA-95-505 CI
)
HARTLEY MOTORS, INC.; ATV ) O P I N I O N
SAFETY INSTITUTE; SPECIALTY )
VEHICLE INSTITUTE OF AMERICA, ) [No. 5469 - September 14, 2001]
a corporation incorporated in )
the District of Columbia; and )
JIM CROAK, )
)
Appellees. )
______________________________)
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Palmer,
Beverly W. Cutler, Judge.
Appearances: Thomas R. Wickwire, Fairbanks,
for Appellant. John B. Thorsness and Kimberlee A. Colbo, Hughes
Thorsness Powell Huddleston & Bauman, LLC, Anchorage, for Appellee
Hartley Motors, Inc. L. G. Berry, Robertson, Monagle & Eastaugh,
Anchorage, for Appellees ATV Safety Institute, Specialty Vehicle
Institute of America, and Jim Croak.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, and Bryner, Justices. [Carpeneti,
Justice, not participating.]
FABE, Chief Justice.
I. INTRODUCTION
Gayle Moore was injured during an all-terrain vehicle
(ATV) safety class when she drove her ATV over a rock and the
vehicle rolled over. Before participating in the class, Moore
signed a release of liability. After her injury, however, she sued
for damages the safety class instructor, the organizations that
developed and offered the class, and the owner of the property on
which the class took place. She alleged that the release was not
valid because she received no consideration, the release was
against public policy, and the course was inherently unsafe. The
superior court granted summary judgment to the defendants. Because
there is a factual dispute regarding whether the layout of the
course was unnecessarily dangerous, we reverse and remand for trial
on that issue.
II. FACTS AND PROCEEDINGS
Gayle Moore and her husband bought a Suzuki four-wheel
ATV in May 1993 from Suzuki, Arctic Cat Motor Sports. At the time
of the sale, the salesperson offered the Moores a $50 rebate upon
completion of an ATV rider safety class. On October 23, 1993, the
Moores attended an ATV rider safety class held on the property of
Hartley Motors, Inc. James Croak instructed the class using the
curriculum of the ATV Safety Institute. Before starting
instruction, Croak requested that all participants sign a consent
form and release. Moore signed the consent form and release.
The driving portion of the class took place on a course
marked with cones on unpaved ground. During the class, Moore drove
her ATV through high grass beyond a cone marking the course. Her
vehicle rolled up on a rock protruding from the ground in the high
grass. Moore was thrown from her vehicle, suffering injuries as a
result.
Moore brought suit in July 1995 against Hartley Motors,
the dealer that sold the Moores their ATV, ATV Safety Institute,
and Jim Croak. [Fn. 1] She alleged that the defendants negligently
failed to provide a safe ATV rider training course and location,
and negligently concealed the fact that the course was unsafe.
In 1996 the defendants [Fn. 2] sought summary judgment
based on the release signed by Moore before the class. In
opposition to summary judgment, Moore presented a transcript of a
telephone conversation between an investigator hired by her
attorney and Michael Swan, a former ATV Safety Institute
instructor. In this telephone conversation, Swan indicated that he
had chosen not to teach an ATV rider course at the Hartley Motors
location because he found the location inappropriate.
Superior Court Judge Beverly W. Cutler initially denied
the motion for summary judgment. She concluded that while the
release was valid as a matter of law, genuine issues of material
fact existed regarding the defendants' knowledge of the suitability
of the course site and whether they informed Moore of its
suitability before she signed the release. In denying summary
judgment, the superior court relied upon a theory of material
nondisclosure by the defendants. The court found that the
allegations presented in the telephone conversation with Swan could
be supported by admissible evidence at trial.
In 1999 ATV Safety Institute, Specialty Vehicle Institute
of America, and Croak (collectively ATVSI) sought reconsideration
of the 1997 summary judgment denial because Michael Swan had died
and therefore could not testify at trial. The superior court
denied the motion for reconsideration but granted Hartley Motors's
motion in limine to exclude hearsay statements by or attributed to
Swan.
ATVSI then filed a motion for summary judgment and
Hartley Motors filed a renewed motion for summary judgment based on
the release Moore had signed. The superior court granted summary
judgment to the defendants. The superior court entered final
judgment for $32,817.56 fees and costs to Hartley Motors, and
$21,049.12 fees and costs to ATVSI. Moore appeals.
III. DISCUSSION
A. Standard of Review
This court reviews grants of summary judgment de novo.
[Fn. 3] We will affirm a summary judgment if there are no genuine
issues of material fact and if the moving party is entitled to
judgment as a matter of law. [Fn. 4] When making this
determination, we draw all reasonable inferences in favor of the
non-moving party. [Fn. 5] "We make no attempt to weigh the
evidence or evaluate the credibility of witnesses, and we assume
that all facts set forth in the nonmoving party's affidavits are
true and capable of proof." [Fn. 6]
B. The Superior Court Did Not Err in Finding that the
Release Was Valid.
The superior court determined in 1997 that "the release
itself is valid as a matter of law against negligence claims
brought by [Moore]." Moore asserts that the trial court erred in
treating the release as valid because (1) there was no
consideration for the release and (2) the release should have been
declared void as against public policy.
1. There was consideration for the release.
Moore argues that she did not receive any consideration
in return for her release. She contends that the $50 rebate
promised by the salesperson upon completion of the course [Fn. 7]
was to have been the consideration for her release of liability.
Because Moore did not complete the course, she did not receive the
$50 rebate. [Fn. 8] She asserts that since she did not receive any
consideration for the release, it was not effective to protect the
defendants from liability.
Moore misconstrues the role of consideration by equating
inducement with consideration. Here ATVSI provided consideration
for the release, not by offering a $50 rebate, but by offering
participation in the class. Thus, even if the $50 rebate induced
Moore to take the class, the only reasonable inference from the
facts presented is that Moore exchanged the release of liability
for participation in the program. Whether Moore considered the $50
rebate her inducement is immaterial to the sufficiency of
consideration. [Fn. 9] The trial court did not err in rejecting
Moore's claim that the release was invalid for failure of
consideration.
2. The release did not violate public policy.
Moore argues that the release should "be set aside as
unconscionable and contrary to public policy." An otherwise valid
release is ineffective when releasing a defendant from liability
would violate public policy. [Fn. 10] Moore argues that public
policy considerations should invalidate the release she signed.
In Municipality of Anchorage v. Locker, we evaluated
whether an exculpatory release should be invalidated as against
public policy. [Fn. 11] In Locker, we concluded that a limited
liability clause in a contract for an advertisement in the yellow
pages was unconscionable and void as against public policy. [Fn.
12] We relied upon Tunkl v. Regents of the University of
California [Fn. 13] in identifying the factors for review in
invalidating an exculpatory provision on public policy grounds,
noting that such a provision is likely invalid when
[i]t concerns a business of a type generally
thought suitable for public regulation. 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. 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. 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. In
exercising a superior bargaining power the party confronts the
public with a standardized adhesion contract of exculpation whereby
a purchaser may pay additional reasonable fees and obtain
protection against negligence. 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.[ [Fn. 14]]
Of particular relevance to this case is the type of service
performed and whether the party seeking exculpation has a decisive
advantage in bargaining strength because of the essential nature of
the service. [Fn. 15] Here, the ATV safety course, although
perhaps providing a desirable opportunity for an ATV driver, is not
an essential service, and therefore the class providers did not
have a "decisive advantage of bargaining strength" in requiring the
release for participation in the class. [Fn. 16] Moore had a
choice whether to take the class or not, and chose to sign the
release in order to participate. The release in this circumstance
does not present a violation of public policy.
Other courts have upheld exculpatory releases for
activities similar to ATV riding where the activities themselves
were not regulated by statute. These releases precluded liability
for injuries sustained while parachute jumping, [Fn. 17] riding a
dirt bike motorcycle in a motorcycle-park facility, [Fn. 18] and
scuba diving as a part of a scuba diving course. [Fn. 19] The
Alaska legislature does not regulate ATV riding. By contrast, the
legislature has acted to regulate the ski industry, and as part of
this regulation has precluded ski facility operators from obtaining
waivers of liability for negligence. [Fn. 20] Importantly, the
Alaska Ski Safety Act of 1994 [Fn. 21] defines the duties of a ski
operator [Fn. 22] and prevents actions against ski operators for
injuries resulting from the inherent danger and risk of skiing.
[Fn. 23] The legislature has not chosen to regulate ATV course
operators in a similar way.
Moore also contends that because a consent decree issued
in a consumer products safety lawsuit requires ATV manufacturers to
carry liability insurance covering participants in training
courses, [Fn. 24] it is therefore against public policy for an ATV
safety program to require participants to waive and release any
injury claims. Moore cites no authority to support this
interpretation of the consent decree, and we have discovered no
reported decisions that have addressed this issue. We decline to
invalidate an otherwise valid release between participants and
providers of ATV safety courses on this basis.
C. A Genuine Issue of Material Fact Exists as to Whether the
Course Layout Was Inherently Dangerous.
The trial court's summary judgment analysis focused on
alleged misrepresentations that could have invalidated the release.
As with any contract, a release of liability is only valid to the
extent that it reflects a "conspicuous and unequivocally expressed"
intent to release from liability. [Fn. 25] The trial court granted
summary judgment after determining that no genuine issue of
material fact existed as to whether ATVSI or Hartley Motors knew
that the course was allegedly unsafe.
Even if there was no genuine issue of material fact
regarding a misrepresentation, the trial court erred in failing to
consider the scope of the release signed by Moore. [Fn. 26] Moore
agreed to release the ATV Safety Institute and all other
organizations and individuals affiliated with the ATV safety class
from liability, loss, and damages "including but not limited to all
bodily injuries and property damage arising out of participation in
the ATV RiderCourse." But the release does not discuss or even
mention liability for general negligence. Its opening sentences
refer only to unavoidable and inherent risks of ATV riding, and
nothing in its ensuing language suggests an intent to release ATVSI
or Hartley Motors from liability for acts of negligence unrelated
to those inherent risks. Based on this language, we conclude that
Moore released ATVSI and Hartley Motors only from liability arising
from the inherent risks of ATV riding and ordinary negligence
associated with those inherent risks. [Fn. 27] As we noted in
Kissick v. Schmierer, an exculpatory release can be enforced if
"the intent to release a party from liability for future
negligence" is "conspicuously and unequivocally expressed." [Fn.
28] However, underlying the ATV course release signed by Moore was
an implied and reasonable presumption that the course is not
unreasonably dangerous.
Moore claims that she was injured when she fell off her
ATV after riding over a rock obscured by tall grass. We assume the
truth of this assertion for purposes of reviewing the superior
court's summary judgment order. Moore asserts that the course on
which the class operated was set up in such a way that she had to
ride into the grass and that this posed an unnecessary danger.
The allegedly improper course layout may be actionable if
the course posed a risk beyond ordinary negligence related to the
inherent risks of off-road ATV riding assumed by the release. [Fn.
29] As we have explained in the context of skiing, "[i]f a given
danger could be eliminated or mitigated through the exercise of
reasonable care, it is not a necessary danger" and is therefore not
an inherent risk of the sport. [Fn. 30] We have described an
"unreasonable risk" as one for which "the likelihood and gravity of
the harm threatened outweighed the utility of the . . . conduct and
the burden on the [defendant] for removing the danger." [Fn. 31]
If the course was designed or maintained in such a manner that it
increased the likelihood of a rider encountering a hidden rock,
then the course layout may have presented an unnecessary danger;
holding an ATV safety class on an unnecessarily dangerous course is
beyond the ordinary negligence released by the waiver. Holding a
safety class on an unreasonably risky course may give rise to
liability even if encountering rocks is generally an inherent risk
of ATV riding. Moreover, the fact that the course was geared
towards novice ATV riders may also affect the level of care
required of ATVSI and Hartley Motors to reduce unnecessary dangers
and unreasonable risk. [Fn. 32]
Whether the injury resulted from an unnecessarily
dangerous course or a course placed perilously close to an obscured
obstacle are questions of fact. Here, Moore presented facts that
could support a finding that the ATV safety course was laid out in
an unnecessarily dangerous manner that was not obvious to novice
ATV riders and therefore not within the scope of the release. Thus,
it was error to grant summary judgment.
IV. CONCLUSION
Moore agreed to release the defendants from liability for
injuries sustained as a result of participation in the ATV riding
and safety class. The trial court erred in granting summary
judgment because genuine issues of material fact existed regarding
whether the injury resulted from unreasonable dangers not within
the scope of the release. Therefore, we REVERSE the grant of
summary judgment in favor of the defendants and REMAND the case to
the trial court for further proceedings consistent with this
opinion.
FOOTNOTES
Footnote 1:
Specialty Vehicle Institute of America was added as a
defendant in the Second Amended Complaint in October 1995.
Footnote 2:
The ATV dealer was dismissed as a defendant in 1997.
Footnote 3:
See Ganz v. Alaska Airlines, Inc., 963 P.2d 1015, 1017 (Alaska
1998).
Footnote 4:
See Parson v. Marathon Oil Co., 960 P.2d 615, 618 (Alaska
1998).
Footnote 5:
See id.
Footnote 6:
Samaniego v. City of Kodiak, 2 P.3d 78, 83 (Alaska 2000).
Footnote 7:
Moore has not presented evidence that the parties to this case
promised to provide the $50 rebate.
Footnote 8:
Moore also asserts that the release was not valid because the
instructor returned the signed release to her after the injury. She
claims that by returning the slip of paper to her, Croak rejected
the release, and therefore the release does not bind Moore. The
physical location of the signed consent form -- in ATVSI's
possession or Moore's -- has no effect on the bargained-for
exchange that occurred before Moore began participation in the
class.
Footnote 9:
A comment to the Restatement (Second) of Contracts states:
Even in the typical commercial bargain, the
promisor may have more than one motive, and the person furnishing
the consideration need not inquire into the promisor's motives.
Unless both parties know that the purported consideration is mere
pretense, it is immaterial that the promisor's desire for the
consideration is incidental to other objectives and even that the
other party knows this to be so.
Restatement (Second) of Contracts sec. 81 cmt. b (1979).
Footnote 10:
See Municipality of Anchorage v. Locker, 723 P.2d 1261, 1264-
67 (Alaska 1986).
Footnote 11:
Id.
Footnote 12:
Id. at 1264-65.
Footnote 13:
383 P.2d 441 (Cal. 1963).
Footnote 14:
Locker, 723 P.2d at 1265 (quoting Tunkl, 383 P.2d at 445-46).
Footnote 15:
See id.
Footnote 16:
Id. at 1265.
Footnote 17:
See Boucher v. Riner, 514 A.2d 485 (Md. App. 1986).
Footnote 18:
See Kurashige v. Indian Dunes, Inc., 200 Cal. App. 3d 606
(Cal. App. 1988).
Footnote 19:
See Mann v. Wetter, 785 P.2d 1064, 1066 (Or. App. 1990).
Footnote 20:
See AS 05.45.120.
Footnote 21:
See AS 05.45.010-.210.
Footnote 22:
See AS 05.45.040-.070.
Footnote 23:
See AS 05.45.010.
Footnote 24:
The United States government brought suit under the Consumer
Product Safety Act, 15 U.S.C. sec. 2061 (1981), against the
manufacturers of ATVs for "relief as may be necessary to protect
the public from the risk of an imminently hazardous consumer
product." The case settled and the court issued a consent decree
requiring manufacturers to market ATVs within specified guidelines,
"offer to all interested persons a nationwide hands-on training
program," and offer incentives to consumers to take the classes.
Footnote 25:
Kissick v. Schmierer, 816 P.2d 188, 191 (Alaska 1991).
Footnote 26:
The release signed by Moore reads as follows:
IMPORTANT INFORMATION. YOU MUST READ AND SIGN
THIS CONSENT FORM AND RELEASE: The Consumer Product Safety
Commission ("CPSC") reports that over 1,186 people, including many
children, have died in accidents associated with ATVs since March,
1986. You should also be aware that 70cc to 90cc ATVs should be
used only by persons aged 16 and older. Having been advised of the
above, the undersigned agrees to release the ATV Safety Institute,
the Specialty Vehicle Institute of America, its members, Trustees,
employees, agents, representatives and all other organizations
affiliated with the ATV RiderCourse, from any and all liability,
loss, damage claim or cause of action, known or unknown, including
but not limited to all bodily injuries and property damage arising
out of participation in the ATV RiderCourse.
Footnote 27:
The inherent risks of an activity such as ATV riding are those
risks that are obvious and necessary to the sport. These inherent
risks, by the very nature of being "inherent," are beyond the
control of instructors teaching the activity, the landowner on
whose land the activity is conducted, or an organization conducting
a program involving the activity.
Footnote 28:
816 P.2d at 191.
Footnote 29:
See Scott v. Pacific West Mountain Resort, 834 P.2d 6, 10
(Wash. 1992) (noting that an exculpatory clause should not be
upheld where "the negligent act falls greatly below the standard
established by law for protection of others").
Footnote 30:
Hiibschman ex rel. Welch v. City of Valdez, 821 P.2d 1354,
1360 n.12 (Alaska 1991) (quoting Assumption of Risk After Sunday v.
Stratton Corp.: The Vermont Sports Liability Statute and Injured
Skiers, 3 V. L. Rev. 129, 141-42 (1978)).
Footnote 31:
State v. Abbott, 498 P.2d 712, 725 (Alaska 1972).
Footnote 32:
See, e.g., Hiibschman, 821 P.2d at 1360 (citing as evidence of
ski operator negligence evidence that a ski jump that caused injury
was on a beginner's slope, and that an expert witness stated that
there should not have been any jumps on a beginner's slope,
especially if it was not clearly marked as only being for expert
skiers); Scott, 834 P.2d at 15 (reversing summary judgment where
"some of the evidence would support a conclusion that the race
course was laid out in an unnecessarily dangerous manner that was
not obvious to a young novice ski-racing student").
