Good News With Release Agreements But Not Parental Releases
 

Published: 12/01/2003

Farmers and ranchers have become increasingly creative in generating revenue. Many ranchers in the mountains are profiting from deer and elk hunting, while eastern Colorado farmers are gaining financially from goose and pheasant hunting on their land. As with any activity where landowners profit from visitors on their property, liability release agreements should be considered in these circumstances.

The good news is that Colorado courts have consistently enforced liability release agreements involving adults. The not so good news is that the validity of parental releases has been called into question by a recent Colorado Supreme Court decision. This article discusses the enforceability of liability release agreements in general and the consequences of the Supreme Court's recent decision voiding a parental release.

The Good News About Release Agreements
Time and time again, Colorado courts are enforcing release agreements in the recreational and agricultural context. This trend continued in an October 2002 decision concluding that release language in a mountain bike rental agreement was enforceable.

In Mincin v. Vail Holdings, Inc., the plaintiff purchased a bike rental coupon at the base of Vail Mountain to be redeemed at the bike rental area atop the mountain. At the bike rental area, the plaintiff received and signed a bike rental agreement that included release language. That language clearly and unambiguously released the resort from all injuries suffered by plaintiff when riding the bike. The plaintiff thereafter sustained serious injuries, including paraplegia, when he rode off a mountain trail on the rented mountain bike and ran into an unmarked, man-made drainage ditch.

On appeal, the plaintiff argued that because he paid for the bike at the bottom of the mountain but did not sign the bike rental agreement until he received the bike at the top, the release was an impermissible modification to the original contract that could be voided at will. The Tenth Circuit Court of Appeals disagreed. Colorado law does require additional consideration for a contract modification. However, because the two events were separated by only a matter of minutes, the court considered them to be part of the same transaction. Accordingly, the plaintiff's release of the resort was enforceable.

Release agreements have also benefitted those directly involved in agriculture. In the 1998 case of B&B Livery, Inc. v. Riehl, the plaintiff was injured when she was thrown from a horse while participating in a ride organized by B&B. Prior to the ride, the plaintiff had signed a release agreement in which she acknowledged that there are dangers inherent in horseback riding and released B&B from liability for any injuries.

The trial court entered summary judgment in favor of B&B, after which the plaintiff appealed. The Colorado Supreme Court found that the terms of the release agreement were clear and unambiguous and, consequently, held in favor of B&B.

In its analysis, the Supreme Court first recognized that liability release agreements have long been disfavored. "They stand at the crossroads of two competing principles: freedom of contract and responsibility for damages caused by one's negligent acts." Those agreements, however, are enforceable so long as one party is not at such obvious disadvantage in bargaining power that the effect of the contract is to put them at the mercy of the other.

Since B&B's situation involved horseback riding, the Supreme Court also reviewed Colorado s liability exemption statute pertaining to equine activities, C.R.S. § 13-21-119. Pursuant to that statute, an equine professional is not liable for an injury to a participant resulting from the inherent risks of equine activities, subject to certain exceptions.

B&B s liability waiver agreement contained the mandatory warning required by the statute, in conjunction with a broader clause limiting liability "in the event of any injury or damage of any nature (or perhaps even death)." The Supreme Court held that the insertion of a broader waiver clause did not make the release agreement ambiguous. The release agreement "was written in simple and clear terms, it was not inordinately long and complicated," and the plaintiff indicated that she understood that she was granting B&B a release when signing the agreement. As such, the judgment in favor of B&B was affirmed.

Colorado courts have also enforced release agreements in the context of rafting, snowmobiling, skydiving, and ski equipment rentals. Consistent enforcement of these agreements is good news for landowners and producers who can utilize release agreements.

The Not-So-Good News About Parental Releases
Release agreements and other contracts signed by minors under 18 years of age are generally not enforceable. The question arises whether a parent's signing of a release agreement on the child's behalf is valid and binding. In an October 2002 decision, the Colorado Supreme Court in Cooper v. Aspen Skiing Company has cast doubt on the validity of a parental release.

As background, many landowners require hunters on their property to sign a liability release agreement. In Colorado, youth as young as 14 years old can obtain a hunting license. When the hunter is a minor, some landowners are requesting that a parental release be signed. Typically, these releases contain one or both of the following components:

(1) a statement that the parent is knowingly allowing the child to participate in the activity and that the parent, on behalf of the child, releases the landowner for any claims arising out of the child's participation, including claims based upon the negligence of the landowner or landowner's representatives; and

(2) a covenant by the parent and/or child not to sue for any claims that might arise from the child's participation in the activities.

Unfortunately, in the wake of Aspen Skiing Company, the continued validity of these components of a release is questionable. Cooper v. Aspen Skiing Company involved a 17-year-old competitive skier (the minor) who was a member of the Aspen Valley Ski Club (ski club). The minor and his mother signed a form entitled "Aspen Valley Ski Club, Inc. Acknowledgment and Assumption of Risk and Release." The release contained two major components: first, it relieved the ski club from any liability for injuries that the minor might suffer arising out of the negligence or carelessness of any representative of the ski club; and second, it required the parent to indemnify the ski club for any damages resulting from any claims arising out of the minor's participation in the ski club.

During the season, while training on a competitive, high-speed alpine racecourse designed by one of the coaches, the minor fell and collided with a tree, sustaining severe injuries. Ultimately, the minor brought a lawsuit against the ski club for those injuries. For its defense, the club argued, in part, that the minor's claims were barred by the release that his parent had signed.

The Colorado Supreme Court first considered whether it violated the public policy of the State of Colorado for a parent, on behalf of a child, to contractually release his children's future claims for injuries caused by another's negligence. In evaluating the validity of such waivers, the Supreme Court noted that the State of Colorado does not allow a child's parent to release a child's cause of action after an injury. Instead, recognizing the inherent conflict between parents and children under those circumstances, the state has required that a conservator be appointed to make decisions on behalf of the child. Recognizing that the same analysis should apply between pre-injury releases as between post-injury releases, the Supreme Court determined that it made no sense to allow a parent to release such claims in a pre-injury context. It concluded:

A minor should be afforded protection not only from his own improvident decision to release his possible prospective claims for injury based on another's negligence for injury based on another's negligence, but also from unwise decisions made on his behalf by parents who are routinely asked to release their child's claims for liability.

Under the circumstances, the Court held that the release itself was a violation of public policy and was, therefore, not enforceable.

Despite the ruling in Aspen Skiing Company, landowners should still consider the use of parental releases when youths are involved in hunting and other activities on your land. Indeed, the Supreme Court in Aspen Skiing Company noted that its decision did not address the effect of parental releases when a youth was participating in activities whose inherent danger could not be eliminated by reasonable care. As hunting has historically been recognized as an inherently dangerous activity, a parental release for hunting activities may still be enforceable. Further, even if the legal effect of parental releases has been reduced in light of the Aspen Skiing Company decision, some who sign these releases still feel morally bound regardless of the legal effect. Obviously, this is an opportune time for agricultural producers to consider if and how to secure releases when hunting and other activities are taking place on their land.

Should you have any questions regarding liability releases, please call Susan Strebel Sperber or Justin Cumming.

Susan Strebel Sperber is an RJ&L partner. Her practice emphasizes labor and employment law, real estate, and commercial and corporate litigation.

Justin Cumming is an RJ&L partner and serves as a Trustee for the Colorado Cattlemen's Foundation and the Cattlemen's Endowment Trust. He is also a Trustee for the Colorado FFA Foundation, a member of the National Western Stock Show Association and the Junior Livestock Auction for the Stock Show, and past chair of the Agricultural Law Section of the Colorado Bar Association. Justin's practice emphasizes agricultural law, including federal farm program appeals, real estate, and will and trust litigation as well as other litigation involving producers and agribusinesses.