Hawkins v. Peart
Utah Supreme Court
37 P.3d 1062
October 30, 2001
Summary of Opinion
Plaintiff Hawkins, a child, was injured while riding on a horse provided by
defendant Peart. Defendant claimed exemption from liability because of a release
from liability form signed by plaintiff’s mother. The defendant also sought to
enforce an agreement in which the plaintiff’s mother promised to indemnify
(reimburse) defendant for any judgment entered against them in favor of the
plaintiff. The trial court ruled that the release form was invalid because a
parent cannot release liability for a child, but upheld the indemnification
agreement.
In this opinion, the Utah Supreme Court says that the release is invalid
because a parent cannot release liability to a child. However, it also
invalidates the indemnity agreement on public policy grounds because it would
tend to create a conflict of interest between the parent and child.
Text of Opinion
Defendant Navajo Trails required plaintiff Jessica Hawkins's mother to sign a
release form prior to allowing Hawkins to ride one of its horses. The release
form contained a waiver of liability and an indemnity provision. The district
court invalidated the waiver provision on public policy grounds, but upheld the
indemnity provision. Hawkins appeals the district court's decision upholding the
indemnity clause, and Navajo Trails cross-appeals the court's invalidation of
the waiver provision. We conclude that both the waiver provision and the
indemnity provision are invalid. Thus, we affirm the district court's ruling as
to the release provision, but reverse as to the indemnity provision.
BACKGROUND
In July 1997, eleven-year-old Hawkins went to Duck Creek, Utah, for a family
reunion. As part of the reunion, members of the family arranged for Navajo
Trails to provide horses and guides for a trail ride. As a condition of its
service, Navajo Trails required Hawkins's mother to sign a "Release Form." In
pertinent part, that form stated as follows:
Riding and handling horses can be DANGEROUS. This form must be completed
and signed before you can ride.... By signing this form, you agree to ASSUME
THE RISK of any injury, death, or loss, or damage which you or your child
... may suffer.... In consideration for the rendering of trail riding ...
service by Navajo Trails ... [t]he undersigned on behalf of himself or for
any person for whom he or she is a parent or legal guardian, does hereby
indemnify (reimburse), release, and forever hold harmless, Navajo Trails ...
[for] any claims, demands, and actions or causes of action on account of
death or injury or loss or damage which may occur from any cause, without
regard to negligence, other than the gross negligence or willful misconduct
of Navajo Trails.... If the undersigned is a parent or guardian, he or she
further agrees to indemnify (reimburse) Navajo Trails or such persons for
any damages paid by or assessed against Navajo Trails ... as a result of
injury to or death of a child....
Hawkins's mother signed this form. [FN1]
FN1. Additionally, the form apparently contained spaces for the parent or
guardian to list children going on the trip. Hawkins's brief asserts that
Hawkins's mother "intentionally omitted the names of her children because
she did not want the language in the Release Form to cover any of them." The
district court based its decision on policy grounds and did not consider
this allegation. It has not been addressed further by either party on
appeal.
During the trail ride, Hawkins's horse was spooked and threw her. Hawkins was
injured. She filed suit against Navajo Trails, alleging that it had provided an
insufficient number of guides, that its guides were not adequately trained, and
that its guides had failed to carry out properly their duties during the ride.
In response, Navajo Trails denied that it was negligent and additionally
defended on the ground that the "Release Form" precluded Hawkins's suit. Both
parties moved for summary judgment on the issues of the legal effect and
enforceability of the Release Form. The district court ruled that the indemnity
provision was enforceable between Hawkins's mother and Navajo Trails but that
the release of Hawkins's future claims for negligence was unenforceable as a
matter of public policy. Hawkins appealed the indemnity ruling, and Navajo
Trails cross-appealed the ruling as to the release.
ANALYSIS
We review the lower court's contractual interpretation of the release form
for correctness, affording the district court no deference. See Aquagen Int'l,
Inc. v. Calrae Trust, 972 P.2d 411, 413 (Utah 1998).
In assessing the validity of the release, the district court referred to Russ
v. Woodside, 905 P.2d 901, 905 (Utah Ct.App.1995). Russ described three general
circumstances in which parties may obtain contractual releases from liability
for negligent action: (1) where injuries have already occurred and one party
releases the other from liability for those injuries, (2) where one party agrees
to indemnify for liability for future injuries, and (3) where one party agrees
to release the other from liability for future injuries. See Russ, 905 P.2d at
904-05. The second and third categories require a clear and unequivocal
expression of the intent to indemnify or release according to Russ. See id.
The district court concluded that the contractual language of the indemnity
and the release provisions was clear and unequivocal as a matter of law.
Accordingly, it held that, because the indemnity provision constituted a
contract between an adult and a business, it was enforceable according to the
general rule permitting such agreements. However, with respect to the release,
the court held that the general rule permitting release of liability did not
apply where a parent signs the contract on behalf of a minor.
The court arrived at its decision by articulating a public policy for
refusing to recognize contracts releasing individuals or entities from liability
for future injuries to minors. In the absence of controlling statutes or case
law, the court consulted general statements of policy found in statutes
detailing the rights of minors and the responsibilities of guardians. The court
referred to sections 15-2-2, 75-5-103, and 75-5-209 of the Utah Code, and rule
17 of the Utah Rules of Civil Procedure. Those provisions pertain, respectively,
to a minor's ability to disaffirm contracts prior to attaining the age of
majority, the power of a parent to delegate fundamental care and supervision
responsibilities over a minor to another, the general powers of guardians of a
minor, and the necessity of guardians or guardians ad litem when minors appear
as parties to court proceedings. The court concluded that these provisions
indicated a general protective intent that, on balance, militated in favor of
precluding parents from contractually releasing others from liability for
injuring minors.
On appeal, Hawkins defends the district court's distinction between contracts
involving adults and contracts where a guardian releases another from liability
for harm to a minor. Alternatively, Hawkins argues that the general rule
permitting releases does not apply in this case. We will first address the
general rule and then discuss the district court's application of a public
policy exception to circumstances involving minors.
The rule regarding releases, to which the district court and Russ referred,
is stated as a general principle of the common law in 6A Arthur Linton Corbin,
Corbin on Contracts, § 1472, at 596-97 (1962):
It is generally held 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; but such an exemption is
always invalid if it applies to harm wilfully inflicted or caused by gross
or wanton negligence.
(Footnote omitted.) Thus, most courts allow release of liability for
prospective negligence, except where there is a strong public interest in the
services provided. But see Hiett v. Lake Barcroft Cmty. Ass'n, 244 Va. 191, 418
S.E.2d 894, 896-97 (Va.1992) (invalidating all pre-injury releases as violative
of public policy). Some courts have attempted to establish a more detailed list
of criteria for determining public policy limitations on releases. Many states
rely on the standards propounded in Tunkl v. Regents of the University of
California, 60 Cal.2d 92, 32 Cal.Rptr. 33, 383 P.2d 441, 445-46 (Cal.1963), or
Jones v. Dressel, 623 P.2d 370, 376 (Colo.1981). [FN3] See, e.g., Porubiansky v.
Emory Univ., 156 Ga.App. 602, 275 S.E.2d 163, 167-68 (Ga.Ct.App.1980) (adopting
Tunkl ); Olson v. Molzen, 558 S.W.2d 429, 431 (Tenn.1977) (same); Wagenblast v.
Odessa Sch. Dist. ., 110 Wash.2d 845, 758 P.2d 968, 971 (Wash.1988) (same);
Kyriazis v. Univ. of W. Va., 192 W.Va. 60, 450 S.E.2d 649, 654-55 (W.Va.1994)
(same); Milligan v. Big Valley Corp., 754 P.2d 1063, 1066 (Wyo.1988) (noting
earlier adoption of Jones ); cf. Dalury v. S K I, Ltd., 164 Vt. 329, 670 A.2d
795, 797-99 (Vt.1995) (noting existence of standards, but adopting ad hoc
totality of the circumstances approach).
FN3. Those standards are as follows:
[T]he attempted but invalid exemption involves a transaction which
exhibits some or all of the following characteristics. [1] It 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.
Tunkl v. Regents of Univ. of California, 60 Cal.2d 92, 32 Cal.Rptr. 33,
383 P.2d 441, 445-46 (Cal.1963) (footnotes omitted).
In determining whether an exculpatory agreement is valid, there are
four factors which a court must consider: (1) the existence of a duty to
the public; (2) the nature of the service performed; (3) whether the
contract was fairly entered into; and (4) whether the intention of the
parties is expressed in clear and unambiguous language.
Jones v. Dressel, 623 P.2d 370, 376 (Colo.1981). Jones additionally
referenced the Tunkl standard for determining "the existence of a duty to
the public." Id.
Tunkl and Jones set forth standards for determining whether the public
interest in the activity at issue warrants an exception to the general rule
allowing releases. However, we need not reach the question of whether to adopt
the Tunkl or Jones standard, or any other standard generally relating to the
public interest exception, because, in deciding the case before us, we rely on a
public policy exception specifically relating to releases of a minor's claims. A
clear majority of courts treating the issue have held that a parent may not
release a minor's prospective claim for negligence. See, e.g., Fedor v. Mauwehu
Council, Boy Scouts of Am., 21 Conn.Supp. 38, 143 A.2d 466, 467-68
(Conn.Super.Ct.1958); Meyer v. Naperville Manner, Inc., 262 Ill.App.3d 141, 199
Ill.Dec. 572, 634 N.E.2d 411, 414-15 (Ill.App.Ct.1994); Doyle v. Bowdoin Coll.,
403 A.2d 1206, 1208 n. 3 (Me.1979); Fitzgerald v. Newark Morning Ledger Co., 111
N.J.Super. 104, 267 A.2d 557, 558-59 (N.J.Super. Ct. Law Div.1970); Childress v.
Madison County, 777 S.W.2d 1, 6-7 (Tenn.Ct.App.1989); Munoz v. II Jaz Inc., 863
S.W.2d 207, 209-10 (Tex.App.1993); Scott v. Pac. W. Mountain Resort, 119 Wash.2d
484, 834 P.2d 6, 10-12 (Wash.1992). The rationale employed by these courts is
aptly summarized in the Washington Supreme Court's holding in Scott. As stated
by that case, "Courts often hold that in a postinjury setting a parent's
signature on a release is ineffective to bar a minor's claims against a
negligent party." Scott, 834 P.2d at 11; see also 59 Am.Jur.2d, Parent and Child
§ 40, at 183 (1987) (noting that, absent court appointment, parents have no
authority to release or compromise claims or causes of action belonging to
minors). Based on this premise, Scott reasoned that "[s]ince a parent generally
may not release a child's cause of action after injury, it makes little, if any,
sense to conclude a parent has authority to release a child's cause of action
prior to an injury." 834 P.2d at 11-12.
We agree. First, Utah law is consistent with Scott's underlying premise.
Navajo Trails has cited no source of law, and we are aware of none, granting
parents in Utah a general unilateral right to compromise or release a child's
existing causes of action without court approval or appointment to that effect.
To the contrary, Utah law provides various checks on parental authority to
ensure a child's interests are protected. Under the Uniform Probate Code, for
example, when a minor has a cause of action, the minor or another person
interested in the minor's welfare may petition for the appointment of a
conservator. See Utah Code Ann. § 75-5-404 (1993). Once appointed, a conservator
"may act without court authorization or confirmation" to "settle a claim by or
against the ... protected [minor] by compromise, arbitration, or otherwise." Id.
§ 75-5-424(3), (3)(s) (1993); see also id. § 75-5- 409(1) (1993) (allowing court
to authorize, direct, or ratify transactions to protect the minor's interests
when the situation does not require a full conservatorship). Significantly, a
parent may act as a minor's conservator, not as a matter of right, but only when
appointed by the court. See Utah Code Ann. § 75-5-410(1) (Supp.2000) (listing
parents seventh in prioritized list of those eligible for court appointment as a
conservator).
Moreover, the statutes and rules cited by the district court in this case are
also indicative of public policies favoring protection of minors with respect to
contractual obligations. Specifically, section 15-2-2 of the Utah Code provides
that minors may disaffirm contracts "before or within a reasonable time after
... majority," Utah Code Ann. § 15-2-2 (1999). Furthermore, rule 17(b) of the
Utah Rules of Civil Procedure provides that a "minor ... who is a party [to any
civil action] must appear either by a general guardian or by a guardian ad litem
appointed in the particular case by the court in which the action is pending."
Utah R. Civ. P. 17(b).
Having thus agreed with Scott's premise that a parent may not unilaterally
release a child's claims after a child's injury, we also agree with Scott's
conclusion that a parent does not have the authority to release a child's claims
before an injury. As in Scott, we see little reason to base the validity of a
parent's contractual release of a minor's claim on the timing of an injury.
Indeed, the law generally treats preinjury releases or indemnity provisions with
greater suspicion than postinjury releases. See Shell Oil Co. v. Brinkerhoff
Signal Drilling Co., 658 P.2d 1187, 1189 (Utah 1983). An 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. Compromise of an existing claim, however, relates to
negligence that has already taken place and is subject to measurable damages.
Such releases involve actual negotiations concerning ascertained rights and
liabilities. Thus, if anything, the policies relating to restrictions on a
parent's right to compromise an existing claim apply with even greater force in
the preinjury, exculpatory clause scenario. We therefore adopt the majority
posture on this question and affirm the district court.
Turning now to the indemnity question, we conclude that the trial court erred
in holding valid the indemnity provision in the form contract provided by Navajo
Trails. In general, the common law disfavors agreements that indemnify parties
against their own negligence because "one might be careless of another's life
and limb, if there is no penalty for carelessness." Hyde v. Chevron U.S.A., 697
F.2d 614, 632 (5th. Cir.1983). Because of this public safety concern, we
strictly construe indemnity agreements against negligence. See Union Pac. R.R.
v. Intermountain Farmers Ass'n, 568 P.2d 724, 726 (Utah 1977) (holding that
although the intent of the parties governs indemnity agreements against
negligence, "the presumption is against any such intention and it is not
achieved by inference from general language").
In rejecting parental indemnifications, a few courts have relied on the
strict standards of clarity required of indemnity provisions generally, thereby
avoiding the issue of whether public policy completely forbids agreements that
shift financial responsibility from the negligent party to the parents of an
injured minor. See, e.g., O'Connell v. Walt Disney World Co., 413 So.2d 444, 447
(Fla.Dist.Ct.App.1982) (finding it unnecessary to decide whether public policy
permits a parent to indemnify an amusement park against negligence in conducting
a horseback ride, since the contractual language did not clearly show an intent
to indemnify).
In the case at hand, however, it is undisputed that the indemnity agreement
is clear and unequivocal. We therefore must decide whether enforcement of the
agreement violates public policy in light of our newly announced rule voiding
parental waivers. We conclude that it does. Having now adopted a rule intended
to preserve a minor's right to recover damages caused by another's negligence,
we cannot uphold an agreement that shifts the source of compensation from the
negligent party to the minor's parent. Such an agreement creates an unacceptable
conflict of interest between a parent and a minor, as perceptively noted by the
New York Court of Appeals:
[W]e are extremely wary of a transaction that puts parent and child at
cross- purposes and ... tends to quiet the legitimate complaint of the minor
child. Generally, we may regard the parent's contract of indemnity ... as an
instrument that motivates him to discourage the proper prosecution of the
infant's claim.... The end result is either the outright thwarting of our
protective policy, or, should the infant ultimately elect to ignore the
settlement and to press his claim, disharmony within the family unit.
Whatever the outcome, the policy of the State suffers.
Valdimer v. Mount Vernon Hebrew Camps, Inc., 9 N.Y.2d 21, 210 N.Y.S.2d 520,
172 N.E.2d 283, 285 (N.Y.1961); see also Ohio Cas. Ins. Co. v. Mallison, 223 Or.
406, 354 P.2d 800, 802-06 (Or.1960) (noting that a child would be unlikely to
pursue claims if agreement required its parent to indemnify the defendant). In
short, an indemnification from negligence that specifically makes a parent the
ultimate source of compensation would likely result in inadequate compensation
for the minor or family discord.
In addition, the indemnity agreement at issue is inconsistent with a parent's
duty to a child. Specifically, where a parent has a duty to protect the best
interests of a child, an agreement to insure a third party against any
consequences for that third party's negligent behavior toward the child can only
serve to undermine the parent's fundamental obligations to the child. See Ohio
Cas. Ins. Co., 354 P.2d at 802 (voiding an indemnity provision in a settlement
agreement in part because a parent's duty to act "for the benefit of his child"
is "not fully discharged where the parent enters into a bargain which gives rise
to conflicting interests.").
Based on similar policy judgments, several other jurisdictions have
invalidated agreements that required parents to indemnify a party against
negligent acts that injure the parent's child. See generally Valdimer, 210
N.Y.S.2d 520, 172 N.E.2d at 285; Ohio Cas. Ins. Co., 354 P.2d at 804; Childress
v. Madison Cty., 777 S.W.2d 1, 7 (Tenn.Ct.App.1989). We, too, conclude that
public policy renders void the indemnity agreement between Navajo Trails and
Hawkins's mother. By shifting financial responsibility to a minor's parent, such
indemnity provisions would allow negligent parties to circumvent our newly
adopted rule voiding waivers signed on behalf of a minor. Although the indemnity
contract theoretically binds only Hawkins's mother, as a practical matter, it
could chill Hawkins's pursuit of her legal claims against Navajo Trails since
her mother, not Navajo Trails, would be the ultimate source of compensation.
We affirm the court's ruling with respect to the waiver of liability, but
reverse with respect to the indemnity provision. We remand for further
proceedings consistent with this opinion.
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