MANN, Appellant, v. WETTER et al, Respondents.
(A8709-05598; CA A49693)
Court of Appeals of Oregon
January 17, 1990
Reconsideration denied March 14, 1990
100 Or App 184 | 785 P2d 1064
Argued and submitted May 17, resubmitted In Banc November 8, 1989, judgment for Wetter reversed and remanded; otherwise affirmed January 17, reconsideration denied March 14, petition for review denied April 3, 1990 (309 Or 645)
DEITS, J.
Buttler, J., dissenting in part.
Plaintiff, as personal representative of the estate of Bruce E. Virkler, brought this wrongful death action against defendants, alleging negligence in conducting a scuba diving instructional program. The trial court granted defendants’ motion for summary judgment, based on a release signed by Virkler. Plaintiff appeals. We reverse as to defendant Wetter.
Horizon Water Sports, Inc. (Horizon) operates a diving school and is a member of NASDS, a nationwide standardized scuba instruction program. Horizon employed Wetter as a NASDS certified diving instructor. Virkler enrolled in one of Horizon‘s diving instruction programs. He completed a Total Information Card form, supplied by NASDS. The form requires personal and medical information and includes a clause respecting liаbility. The clause includes a release that states in pertinent part:
“[T]he Undersigned does for him/herself, his/her heirs, executors, administrators and assigns hereby release, waive, discharge and relinquish any action or causes of action, aforesaid, which may hereafter arise for him/herself for his/her estate, and agrees that under no circumstances will he/she or his/her heirs, executors, administrators and assigns prosecute, present any claim for personal injury, property damage or wrongful death against N.A.S.D.S. or its member school, or any of its officers, agents, servаnts or employees for any of said causes of action, whether the same shall arise by the negligence of any of said persons, or otherwise. IT IS THE INTENTION OF THE ABOVE NAMED STUDENT BY THIS INSTRUMENT, TO EXEMPT AND RELIEVE N.A.S.D.S. AND ITS MEMBER SCHOOL FROM LIABILITY FOR PERSONAL INJURY, PROPERTY DAMAGE OR WRONGFUL DEATH CAUSED BY NEGLIGENCE.” (Emphasis supplied.)
After Virkler had completed six to eight weeks of classroom and pool instruction, he participated in а required open-water certification dive, which was conducted by Horizon and supervised by Wetter. He died during the dive.
Plaintiff asserts that the trial court erred in granting defendants’ motion for summary judgment. She first contends that the release should be held invalid as a matter of public policy because of the parties’ unequal bargaining power, particularly because decedent was asked to sign the release after
Although agreements to limit liability are not favored, neither are they automatically void. An agreement limiting liability is governed by principles of contract law and will be enforced in the absence of some consideration of public policy derived from the nature of the subject of the agreement or a determinаtion that the contract was adhesionary. K-Lines v. Roberts Motor Co., 273 Or 242, 248-254, 541 P2d 1378 (1975). The Supreme Court has stated:
“There is nothing inherently bad about a contract provision which exempts one of the parties from liability. The parties are free to contract as they please, unless to permit them to do so would contravene the publiс interest.” Irish & Schwartz Stores v. First National Bank, 220 Or 362, 375, 349 P2d 814 (1960).
Here, there are no public policy considerations that prevent a diving school from limiting liability for its own negligence. The diving school does not provide an essential public service, as was the case in Real Good Food v. First National Bank, 276 Or 1057, 557 P2d 654 (1976), where the court held that a bank could not limit its liability for the negligence of its own employes.1 The economic advantage, if
Plaintiff also argues that the trial court erred when it granted summary judgment for Wetter, because, as a matter of law, the language of the release did not include him. Wetter contends that the language of the release clearly did include him.
As a general rule, the construction of a contract is a question of law for the court. The exception to that rule is that, if the language in a contract is ambiguous, evidence may be admitted as to the intent of the parties, and the determination of the parties’ intent then is a question of fact. Timberline Equip. v. St. Paul Fire & Mar. Ins., 281 Or 639, 643, 576 P2d 1244 (1978). However, whether the language of a contract is ambiguous is a question of law for the court. A contract provision is ambiguous if it is capable of more than one sensible and reasonable interpretation; it is unambiguous if its meaning is clear enough to preclude doubt by a reasonable person. Deerfield Commodities v. Nerco, Inc., 72 Or App 305, 317, 696 P2d 1096, rev den 299 Or 314 (1985).
The disputed language in the relеase agreement provides that the release applies to actions “against N.A.S.D.S. or its member school or any of its officers, agents, servants or employees.” The reference to “its officers, agents, servants or
Plaintiff also contends that the summary judgment in favor of Wetter should not have been granted, because there was a material question of fact whether Wetter was an officer, agent, servant or employe of NASDS. We agree that, depending on the construction of the language of the release agreement, that may be a material question of fact. Defendant presented evidence that Wetter was a nonvoting member of NASDS. Although it may not necessarily follow that, because of that, he may be an officer, agent, servant or employe of NASDS, plaintiff is entitled to present evidence concerning Wetter‘s status with NASDS.
Judgment for respondent Wetter reversed and remanded; otherwise affirmed.
BUTTLER, J., dissenting in part.
I concur in the disposition as to Wetter. However, I would also reverse and remand as to him and Horizon, because I believe that there is genuine issue of material fact as to when the agreement exempting either or both of them from liability for negligence was signed.
Although there are no Oregon cases directly in point, there are cases dealing with agreements to exempt a bailee from liability. A review of those cases leads me to conclude that a provision totally exempting a bailee from liability is not valid in Oregon, although a limitation on liability may be. In Pilson v. Tip-Top Auto Co., 67 Or 528, 136 P 642 (1913), the defendant, the bailee of the plaintiff‘s automobile, asserted that it had been аgreed by the plaintiff and the defendant that the defendant assumed no liability whatever for the automobile‘s safety, preservation or redelivery, except for its own wilful and intentional misconduct. The court, holding that the defendant could be held liable for its ordinary negligence, stated:
“It is thе better rule that a bailee for hire cannot by contract so limit his responsibility to the bailor as not to be liable
for his own negligence or the negligence of his agents and servants * * *.” 67 Or at 535. (Citations omitted.)
That language was quoted with approval in Simms v. Sullivan, 100 Or 487, 493, 198 P 240 (1921).
In Voyt v. Bekins Moving & Storage, 169 Or 30, 119 P2d 586, 127 P2d 360 (1941), the court held that, although a bailee may not exempt himself from liability for his own negligence, he may limit his liability (for example, to $10 per 100 pounds), if such an agreement was “fairly and honestly made as the basis of the defendant‘s charges and responsibility.” 169 Or at 52. The court concluded that no such agreement had been fairly and honestly made, because the bill of lading containing the limitation was not sent to the plaintiff until after her goods had been turned over to the defendant and the storage charges paid.
Irish & Swartz Stores v. First Nat‘l Bk., supra, was thought to be a leading case on the subject, until it was, essentially, overruled by Real Good Food v. First National Bank, supra. Both cases involved a night depository agreement with the defendant bаnk in which it was stated that the night depository was provided without compensation as a convenience to, and at the risk of, the depositor and that the bank would not be responsible for any loss. In Irish & Swartz, the court referred to the language quoted above from Pilson v. Tip-Top Auto Co., supra, and then stated:
“We do not think that the foregoing statement was intended as the pronouncement of а universal rule applicable to every bailment irrespective of its character.” 220 Or at 375.
The court went on to say that the parties are free to contract as they please, unless to permit them to do so would contravene the public interest. The court distinguished between a bailee who performs services for which the public has a substantial need and those who do not. It went on to say, however, that it was not necessary to decide into which category the business of furnishing a night depository falls, because of the “peculiar charaсter of the bailment bargained for in the present case,” which warranted the recognition of an enforceable exculpatory clause. 220 Or at 377.
In Real Good Food v. First National Bank, supra, the
From that cursory review, it appears that, with respect to bailments, at least, a total exemption from liability for negligence would be invalid, although a limitation of liability may be valid if it is fairly and honestly made at the time of the bailment, unless, perhaps, the bailee performs services for which the public has a substantial need.
I perceive no reason why those rules should not apply to the agreement in this case. The clause does not provide total immunity; rather, it limits the exemption from liability to negligence claims. However, I would hold that, in order for such a provision to be enforceable in a given case, it must have been “fairly and honestly made” at the time when the contract for services was made. Voyt v. Bekins Moving & Storage, supra. Here, there is evidence that plaintiff had paid for the scuba diving course in full and, apparently, had rented the scuba diving equipment from defendant and that it was not until some time later that he was presented with the agreement exempting defendant from liability. If those facts are found, the contraсt does not come within the requirement of Voyt. In other words, there would have been no consideration for the agreement, because, on the facts that we have before us, a jury could find that defendant had already agreed to provide the scuba diving lessons and there is no evidence that defendant offered to refund the amounts paid by plaintiff if plaintiff did not wish to sign the agreement exempting it from liability.1 There are, therefore, genuine issues of material fact,
Accordingly, I would reverse and remand as to both defendants.
Notes
“Where the defendant is a common carrier, an innkeeper, a public warehouseman, a public utility, or is otherwise charged with a duty of public service, and the agreement to assume the risk relates to the defendant‘s performance of any part of that duty, it is well settled that it will not be given effect. Having undertaken the duty to the public, which includes the obligation of reasonable care, such defendants arе not free to rid themselves of their public obligation by contract, or by any other agreement. * * *”
It then concludes that: “Banks, like common carriers and utility companies, perform an important public service * * *.” 276 Or at 1061. This case does not involve a business which performs an essentiаl public service. Other jurisdictions that have considered the issue have held that businesses that provide recreational activities are not providing essential public services. See Madison v. Superior Court, 203 Cal App 3d 589, 250 Cal Rptr 299 (1988) (scuba diving); Jones v. Dressel, 623 P2d 370 (Colo 1981) (flight school); Blide v. Rainier Mountaineering, Inc., 30 Wash App 571, 636 P2d 492 (1982) (mountain climbing); Hewitt v. Miller, 11 Wash App 72, 521 P2d 244 (1974) (scuba diving); Milligan v. Big Valley Corp, 754 P2d 1063 (Wyo 1988) (ski racing at resort). The majority is correct in stating that plaintiff frames her аrgument in terms of decedent‘s having unequal bargaining power at the time he was asked to sign the release. It disposes of that argument by stating that there was no unequal bargaining power, because decedent could have walked away from the program. 100 Or App at 188. That is no answer; in fact, it demonstrates the inequality of bargaining power at that time: To avoid signing the release, decedent had to forfeit the money he had paid, and by signing it, he received nothing in addition to what he already had, i.e., there was no consideration for his signing. Therefore, it is not fair to say that the question is not raised.