Releases for Gross Negligence In the Context of Sports or Recreational Programs or Services are Void In California

By Michael Reiter, Attorney at Law

Most people have been asked to sign releases at various times, particularly for participation of their children in youth activities.  Are they valid?  They can be in many cases.  But in certain cases, they may be void if there is a public policy reason or statute.  For example, Civil Code section 1668 prohibits contracts which “have for their object, directly or indirectly, to exempt anyone from responsibility for his own fraud, or willful injury to the person or property of another, or violation of law, whether willful or negligent, are against the policy of the law.”  Further, case law in California has prohibited releases of future gross negligence as being void against public policy.  City of Santa Barbara v. Superior Court (2007) 41 Cal.4th  747, 758.

There is an entire inquiry into whether a release is valid, which I won’t discuss here today.  Suffice it to say, you should consult with a personal injury attorney even if there is a release, because it is a technical question.  Most, if not all, personal injury attorneys provide a free consultation in personal injury cases.

In the City of San Barbara case, mentioned above, the mother of a developmentally disabled 14 year-old signed a release purporting to release the City of Santa Barbara and its employees from liability for “any negligent act” related to the child’s participation in a summer camp, run by the City, for developmentally disabled children.  The child drowned, and the parents filed suit.

We conclude . . . that an agreement made in the context of sports or recreational programs or services, purporting to release liability for future gross negligence, generally is unenforceable as a matter of public policy. Applying that general rule in the case now before us, we hold that the agreement, to the extent it purports to release liability for future gross negligence, violates public policy and is unenforceable.

My Torts Professor, Kenneth Manaster, drummed in our heads that “gross negligence” was not a term that we should bandy about, and of course he said it in 1995 or 1996, eleven years before City of Santa Barbara. There is a sort of “folk law” idea of what gross negligence is, perhaps informed by the law of other, non-California states.  In the City of Santa Barbara case, the California Supreme Court distinguishes between ordinary negligence and gross negligence:

We begin by defining the terms that underlie the issue presented. “Ordinary negligence”—an unintentional tort—consists of a failure to exercise the degree of care in a given situation that a reasonable person under  similar circumstances would employ to protect others from harm. (See, e.g., Donnelly v. Southern Pacific Co. (1941) 18 Cal.2d 863, 869, 118 P.2d 465 (Donnelly ).)
 “Gross negligence” long has been defined in California and other jurisdictions as either a “want of even scant care” or “an extreme departure from the ordinary standard of conduct.” (Eastburn v. Regional Fire Protection Authority (2003) 31 Cal.4th 1175, 1185–1186, 7 Cal.Rptr.3d 552, 80 P.3d 656 (Eastburn ), and cases cited; accord, Colich & Sons v. Pacific Bell (1988) 198 Cal.App.3d 1225, 1240, 244 Cal.Rptr. 714 (Colich ); Kearl v. Board of Medical Quality Assurance (1986) 189 Cal.App.3d 1040, 1052–1053, 236 Cal.Rptr. 526; see also, e.g., Prosser & Keeton, The Law  of Torts (5th ed.1984) § 34, pp. 211–212 (Prosser and Keeton); 57A Am.Jur.2d (2004) Negligence, § 227, p. 296.)  City of Santa Barbara v. Superior Court, 41 Cal. 4th 747, 753-54, 161 P.3d 1095, 1099 (2007).
The procedural posture of the City of Santa Barbara was somewhat unusual.  The City moved for Summary Judgment, lost, and appealed immediately.  The case was set for trial, and then the City settled before the trial started for $2,000,000.

The information you obtain at this blog is not, nor is it intended to be, legal advice. No attorney-client relationship is established by reading or commenting on this blog. You should consult an attorney for advice regarding your individual situation.

Michael Reiter, Attorney at Law

A: 300 E. State St., Suite 517
Redlands, CA 92373-5235
T: (909) 296-6708

E: michael@michaelreiterlaw.com

Waiver of California Civil Code section 1542 and Unknown Claims in Personal Injury Litigation

By Michael Reiter, Attorney at Law

In California, a release is often the end of a dispute or lawsuit.  Commonly, you will see language waving California Civil Code section 1542.  California Civil Code section 1542 reads:

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

Waiving rights under California Civil Code section 1542 is so routine, many attorneys mistakenly use the pre-2005 version of the section (which added “or her” in three places).  Releases are among the most copied documents amongst lawyers.  The problem is that some copy verbiage that does not necessarily apply in every situation (for example the Insurance Code verbiage where there is no insurance carrier is involved).

In a case where there was no express California Civil Code section 1542 waiver, the court still found that the release waived all claims:

Plaintiff testified he understood he was releasing claims arising under all statutes the agreement referred to, even those he did not understand. This knowledge is sufficient to withstand the provisions of Civil Code section 1542. Nothing in that statute requires that it be designated in the release or that a party specifically waive its provisions. While it might have been more comprehensive to have a reference to Civil Code section 1542 in the release, “ ‘To be effective, a release need not achieve perfection….’ [Citation.]” (Skrbina v. Fleming Companies, supra, 45 Cal.App.4th at p. 1368, 53 Cal.Rptr.2d 481.) Thus, as to defamation and the overtime claim, the release is enforceable.  Perez v. Uline, Inc. (2007) 157 Cal. App. 4th 953, 959,
Even when the release recites a waiver of California Civil Code section 1542, that may not be enough to actually waive the rights and release the tortfeasor:
Furthermore, mere recital, as in the release signed by plaintiffs, that the protection of Civil Code, section 1542 is waived, or that the release covers unknown claims or unknown parties is not controlling. Whether the releaser intended to discharge such claims or parties is ultimately a question of fact. Leaf v. City of San Mateo (1980) 104 Cal. App. 3d 398, 411, 163 Cal. Rptr.
That does not mean that the obligations are not discharged at the time of signing.  Some cases find that mistake or fraud require the release’s rescission.  Some cases find that the waiver is valid, based on the facts of the situation:
Review of the circumstances confirms our interpretation that the release was designed to extinguish all claims extant among the parties. First, Winet was represented by counsel and was aware at the time he entered into the release of possible malpractice claims against Price relating to certain services Price had rendered to him.  With this knowledge and the advice of counsel concerning the language of (and the import of waiving) section 1542, Winet expressly assumed the risk of unknown claims. Second, it is significant that the parties were able to, and did, fashion language memorializing their agreement to preserve identified claims from the operation of the release when such was their intention, specifically, the Canoga Storage Partners, Ltd. malpractice claim exclusion. Finally, Winet was represented by his own counsel, who explained to Winet the import of the release in general and of the waiver of section 1542 in particular. Under these circumstances we may not give credence to a claim that a party did not intend clear and direct language to be effective. (Bodle v. Bodle (1978) 76 Cal.App.3d 758, 764, 143 Cal.Rptr. 115 [“Where a formal contract has been prepared by persons learned in the law, the words should be given their ordinary legal import.”].)  Winet v. Price (1992) 4 Cal.App.4th 1159, 1168.
The moral of the story is that claimants and their attorneys should very carefully review any release before signing.  If specific causes of action or claims need to be preserved (for example, insurance bad faith), they should be expressly removed from the release.   The release should not be boilerplate that does not apply to the situation, and should be narrowly tailored to the facts of the situation.  The  should be satisfied with the deal before signing the release, because there may be no opportunity to undo the deal after the release is signed.

The information you obtain at this blog is not, nor is it intended to be, legal advice. No attorney-client relationship is established by reading or commenting on this blog. You should consult an attorney for advice regarding your individual situation.