B & B Livery, Inc. v. Riehl

• Citation: 960 P.2d 134
• Decision Date: 22 June 1998
• Docket Number: No. 97SC391,97SC391
• Parties: 98 CJ C.A.R. 3203 B & B LIVERY, INC., Petitioner, v. Kathy RIEHL, Respondent.
• Court: Supreme Court of Colorado

Page 134

960 P.2d 134

98 CJ C.A.R. 3203

B & B LIVERY, INC., Petitioner, v. Kathy RIEHL, Respondent.

No. 97SC391.

Supreme Court of Colorado En Banc.

June 22, 1998.

White & Steele, P.C., John Lebsack, John P. Craver, Clair Diaz, Denver, for Petitioner.

Davis & Ceriani, P.C., Bruce E. Rohde, John W. Himmelmann, Denver, for Respondent.

Justice SCOTT delivered the Opinion of the Court.

We granted certiorari in Riehl v. B & B Livery, Inc., 944 P.2d 642 (Colo.App.1997), to determine whether a release agreement read in conjunction with a mandatory warning as provided in section 13-21-119, 5 C.R.S. (1997), is ambiguous under the test established in Heil Valley Ranch v. Simkin, 784 P.2d 781 (Colo.1989). ¹ Respondent Kathy Riehl initiated proceedings in the Arapahoe County District Court (trial court) seeking damages for injuries suffered while riding a horse rented from petitioner B & B Livery, Inc. (B & B). The trial court granted summary judgment to B & B. On appeal, the court of appeals reversed, concluding that the release agreement that respondent Kathy Riehl had signed, which released B & B from liability, was ambiguous. See B & B Livery, 944 P.2d at 644. Because we conclude that the release agreement is not ambiguous, we reverse the judgment of the court of appeals.

I.

Kathy Riehl suffered injuries when she was thrown from a horse while participating on a ride organized by B & B. Prior to beginning her horse ride, Riehl executed an exculpatory agreement ("release agreement"), which provided:

I, understand the potential dangers that I could incur in mounting a horse and in riding on said horse. Understanding those risks I do hereby advise and represent and warrant to B & B Livery, Inc., that I do hereby release that Company, its officers, directors, shareholders, employees and anyone else directly or indirectly connected with that Company from any liability in the event of any injury or damage of any nature (or perhaps even death) to me or anyone else caused by my electing to mount and then ride a horse owned or operated by B & B Livery, Inc.

....

I have executed this release willingly and after having read or been advised of the warning posted by B & B Livery, Inc., which warning states as follows: Under Colorado Law, an equine professional is not liable for an injury to or the death of a participant in equine activities resulting from the inherent risks of equine activities pursuant to section 13-21-119 Colorado Revised Statutes.

Riehl filed a complaint in the Arapahoe County District Court, alleging that: (1) B & B failed to determine or account for her riding ability level; (2) B & B supplied Riehl with faulty gear or equipment for the ride; (3) B & B's conduct was willful and wanton or grossly negligent. B & B successfully moved for summary judgment on the ground that Riehl's claims were precluded by the release agreement, and Riehl appealed.

The court of appeals reversed and remanded, reasoning that the trial court erred in granting summary judgment based on its conclusion that Riehl had voluntarily signed a release agreement that released B & B from Section 13-21-119, 5 C.R.S. (1997), as further explained below, provides that an equine professional is not liable for an injury or death of a participant resulting from the inherent risks of equine activities. The release agreement provided, however, that B & B would not be liable for any injury or death. The court of appeals explained, therefore, that there was an ambiguity as to whether the release agreement:

liability for any injury Riehl might incur from riding a horse supplied by B & B. The court of appeals held that under Jones v. Dressel, 623 P.2d 370 (Colo.1981), the release agreement--the language of the agreement taken in conjunction with the incorporated statutory terms--was ambiguous. ²

was intended to exculpate defendant from liability for all negligent acts, including acts contrary to § 13-21-119, and not foreseeable, or, rather, whether exculpation was intended to extend only to those acts that result in injuries arising from the inherent risks of equine activities that are reasonably foreseeable and consistent with the public policy of the state as expressed in the statute.

B & B Livery, 944 P.2d at 644.

Chief Judge Sternberg dissented, finding no ambiguity in the release agreement. In his dissenting opinion, Judge Sternberg relied upon Heil Valley Ranch v. Simkin, 784 P.2d 781 (Colo.1989). In Heil Valley Ranch, we held that "the inquiry should be whether the intent of the parties was to extinguish liability and whether this intent was clearly and unambiguously expressed." Id. at 781. The dissent concluded that Heil Valley Ranch controlled and required a contrary result because in the present case, the parties simply intended that B & B be absolved of liability for a broad range of conduct.

II.

A.

Generally, exculpatory agreements have long been disfavored. See, Heil Valley Ranch, 784 P.2d at 783. "They stand at the crossroads of two competing principles: freedom of contract and responsibility for damages caused by one's own negligent acts." Id. at 784. Exculpatory agreements are not necessarily void, however, as long as one party is not "at such obvious disadvantage in bargaining power that the effect of the contract is to put him at the mercy of the other's negligence." Id. (quoting W. Keeton et al., Prosser and Keeton on the Law of Torts § 68, at 482 (5th ed.1984)). The determination of the sufficiency and validity of an exculpatory agreement is a question of law for the court to determine. See Jones, 623 P.2d at 375. 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. See id. In this case, the parties agree that only the fourth factor is at issue.

Interpretation of a written contract is a question of law for the court. See Colard v. American Family Mut. Ins. Co., 709 P.2d 11 (Colo.App.1985). Terms used in a contract are ambiguous when they are susceptible to more than one reasonable interpretation. See Browder v. U.S. Fidelity & Guar. Co., 893 P.2d 132, 133 (Colo.1995); see also 2A N. Singer, Sutherland Statutory Construction § 45.02 (5th ed.1992) (ambiguity exists when a statute is capable of being understood by reasonably well-informed persons in two or more different senses). If there is no ambiguity, a contract will be enforced according to the express provision of the agreement. See GTM Invs. v. Depot, Inc., 694 P.2d 379 (Colo.App.1984).

Because this case involves equine activities, the following overview of the statute governing equine activities is instructive. In 1989, section 13-21-119, 5 C.R.S. (1997), "Equine activities--llama activities-- legislative The general assembly recognizes that persons who participate in equine activities or llama activities may incur injuries as a result of the risks involved in such activities. The general assembly also finds that the state and its citizens derive numerous economic and personal benefits from such activities. It is, therefore, the intent of the general assembly to encourage equine activities and llama activities by limiting the civil liability of those involved in such activities.

declaration--exemption from civil liability," was enacted by the General Assembly. The statute stated as its purpose that:

(Emphasis added.)

Section 13-21-119(3) provides that "an equine professional ... shall not be liable for an injury to or the death of a participant resulting from the inherent risks of equine activities ... except as provided in subsection (4) ...." ³ "Inherent risk" in relevant part means "those dangers or conditions which are an integral part of equine activities [such as] ... (I) The propensity of the animal to behave in ways that may result in injury, harm or death to persons on or around them." Section 13-21-119(4) essentially provides, among other things, that:

[n]othing in subsection (3) of this section shall prevent or limit the liability of ... an equine professional ... if the ... equine professional ...:

(I)(A) Provided the equipment or tack, and knew or should have known that the equipment or tack was faulty, and such equipment or tack was faulty to the extent that it did cause the injury; or

(B) Provided the animal and failed to make reasonable and prudent efforts to determine the ability of the participant to engage safely in the equine activity ... and determine the ability of the participant to safely manage the particular animal based on the participant's representations of his [or her] ability;

....

(III) Commits an act or omission that constitutes willful or wanton disregard for the safety of the participant, and that act or omission caused the injury.[ ⁴

Finally, section 13-21-119(5) mandates every written contract entered into by an equine professional "for the providing of professional services, instruction, or the rental of equipment or tack or an equine to a participant," must contain the following warning notice:

WARNING

Under Colorado Law, an equine professional is not liable for an injury to or the death of a participant in equine activities resulting from the inherent risks of equine activities, pursuant to section 13-21-119, Colorado Revised Statutes.

(Emphasis added.) Accordingly, section 13-21-119 provides that every release agreement between an equine professional and a participant include the warning that the equine professional is not liable for "inherent risks" resulting from an equine activity.

The placement of the statutorily mandated warning in the agreement, however, does not limit an equine professional's liability for negligent acts committed by an equine professional that results in injury or harm to the participant, as explained above....