Defense Digest

Pre-Event Liability Waivers: What's Right For Your Amusement Business?

In the March 2006 issue of Marshall, Dennehey, Warner, Coleman & Goggin's Defense Digest, I highlighted the New Jersey Appellate Division case of Hojnowski vs. Vans Skate Park. This case involved the enforcement of a pre-event exculpatory release signed by the mother of a twelve-year-old patron. The two-part release contained a clause agreeing to submit the minor’s claim against the defendant to arbitration instead of a jury trial, as well as a limitation on the skate park's prospective tort liability. At the time I wrote the article for the March 2006 issue, the case had been appealed to the New Jersey Supreme Court.

On July 17, 2006, in a case of first impression in the New Jersey Supreme Court, the majority ruled that a parent may agree to bind a minor child to an arbitration hearing instead of a jury trial. The Court reasoned that this constitutes a choice of forum, rather than affecting the child's substantive rights. However, the Court ruled that a parent may not completely release a minor child's potential tort claim, describing this as the rule in the "overwhelming majority of other jurisdictions."

The question arises for our clients in other states: What is the state of the law with respect to this issue in the jurisdictions of Pennsylvania, Ohio, Florida and Delaware?

In Hojnowski, the New Jersey Supreme Court noted that "jurisdictions are not uniform on the question of waiver..[but the Court’s] research discloses that the only published decisions in which such agreements have been upheld are in connection with non-commercial ventures, such as volunteer-run or non-profit organizations."

Pennsylvania

In Apicella v. Valley Forge Military Acad. & Junior Coll., 630 F. Supp. 20 (E.D. Pa. 1985), the Eastern District of Pennsylvania found that under Pennsylvania law, parents do not possess the authority to release potential claims of a minor child merely because of the parental relationship. (See also Holland v. Marcy, 2002 PA Super 381 (2002)). In Simmons v. Parkette National Gymnastic Training Center, et al., 670 F. Supp. 140 (3d Cir. 1987), the Third Circuit Court of Appeals, applying Pennsylvania law, held that a parent’s signature on a pre-event release is not enforceable against the minor child. The Court noted that "the common law rule that minors…may disaffirm their contracts has as its basis the public policy concern that minors should not be bound by mistakes resulting from their immaturity or the overbearance of unscrupulous adults."

In Troshak v. Terminix Int'l Co., L.P., 1998 U.S. Dist. LEXIS 9890  (E.D. Pa. 1998), relying on the reasoning of the cases described above, the court held that under Pennsylvania law, a parent also cannot bind a minor child to an arbitration provision that requires the minor to waive the right to file a claim in a court of law. If a parent cannot prospectively release the potential claims of a minor child, then a parent does not have authority to bind a minor child to an arbitration provision, thus, waiving the right to litigate their claim in the court system.

Ohio

In Ohio, the courts have held that a parent may bind their minor child to a pre-event release when the activity involves volunteers and non-profit activities. The Ohio courts have not issued a decision as to pre-injury releases involving commercial ventures. A parent may bind their child to litigating their tort claim through arbitration.

In Zivich v. Mentor Soccer Club, Inc., 82 Ohio St. 3d 367 (1998), the Ohio Supreme Court held that parents have the authority to bind their minor children to exculpatory agreements in favor of volunteers and sponsors of non-profit sport activities where the cause of action sounds in negligence. This decision was based partly on public policy and the important role community recreational activities play in children’s development. The Court also relied on Pennsylvania statutes, which afford qualified immunity to unpaid athletic coaches and sponsors of athletic events, showing their intent to encourage the sponsorship of sports activities and protection of volunteers.

With respect to the issue of arbitration provisions, in Cross v. Carnes, 132 Ohio App. 3d 157 (1998), the Ohio Appellate Court held that a parent may bind their minor child to arbitration. The court reasoned that a "parent's consent and release to arbitration only specifies the forum for resolution of the child's claim; it does not extinguish the claim."

Florida

In Florida, pre-event liability releases signed by a parent on behalf of their minor child in the context of commercial ventures are unenforceable. However, this type of release is enforceable by defendants who are volunteer or non-profit entities. A parent may bind a child to litigate their tort claim through arbitration.

In the case of In re Royal Caribbean Cruises Ltd., 403 F. Supp. 2d 1168 (S.D. Fla. 2005), the federal court, applying Florida law, held that a release of liability signed on behalf of a minor child for an activity run by a for-profit business, outside of a school or community setting, is typically unenforceable against the minor. However, a pre-injury release on behalf of a minor is enforceable in the setting of community or school supported activities. Gonzalez v. City of Coral Gables, 871 So. 2d 1067, 1067 (Fla. Dist. Ct. App. 2004).

As to arbitration, a parent is permitted under Florida law to bind a minor child to arbitration, according to the court in Global Travel Mktg., Inc. v. Shea, 908 So. 2d 392, 403 (Fla. 2005). The court reasoned that there is a crucial distinction between an outright waiver of a minor's legal claims and a waiver of the forum in which the claims are presented. As opposed to a pre-event release of liability, a pre-injury agreement to arbitrate does not require a minor to forego any substantive rights.

Delaware

A review of Delaware case law has revealed no decisions on the issue of whether a parent can bind their minor children to a pre-event liability release or arbitration. However, given the trend in other jurisdictions, it is safer for a business owner to assume that the court would invalidate a pre-event release for a minor child. The issue of arbitration remains open.

Conclusion

Based on a review of case law in various jurisdictions, it is clear that pre-event liability releases signed on behalf of minors are disfavored. However, the majority of courts will bind a minor to arbitration when their parents choose this forum on their behalf. Arbitration is favored by the courts. This is likely why banks, credit card companies and other financial service institutions use arbitration as an alternative to litigation in the courts with their consumers. The use of arbitration can lead to reduced costs and cases decided by experienced attorneys rather than juries, who may be overwhelmingly sympathetic to injured children. Given the case law described above, business owners serving minor children should consider arbitration clauses as an alternative to, or in addition to, pre-event liability releases.

* Deirdre is an associate in our Cherry Hill, New Jersey, office. She can be reached at (856) 414-6035 or decollins@mdwcg.com.