Dalury v. S-K-I, Ltd.

• Decision Date: 08 September 1995
• Docket Number: LTD,S-K-,No. 94-236,94-236
• Citation: 164 Vt. 329,670 A.2d 795
• Parties: Robert G. DALURY and Karen L. Dalury v., and Killington, Ltd
• Court: Vermont Supreme Court

Page 795

670 A.2d 795

164 Vt. 329

Robert G. DALURY and Karen L. Dalury v. S-K-I, LTD., and Killington, Ltd.

No. 94-236.

Supreme Court of Vermont

Sept. 8, 1995.

Motion for Reargument Denied Oct. 31, 1995.

James W. Swift and Beth Robinson of Langrock Sperry & Wool, Middlebury, for plaintiffs-appellants.

Allan R. Keyes and John J. Zawistoski of Ryan Smith & Carbine, Ltd., Rutland, for defendants-appellees.

Before ALLEN, C.J., and GIBSON, DOOLEY, MORSE and JOHNSON, JJ.

JOHNSON, Justice.

We reverse the trial court's grant of summary judgment for defendants S-K-I, Ltd. and Killington, Ltd. in a case involving an injury to a skier at a resort operated by defendants. We hold that the exculpatory agreements which defendants require skiers to sign, releasing defendants from all liability resulting from negligence, are void as contrary to public policy.

While skiing at Killington Ski Area, plaintiff Robert Dalury sustained serious injuries when he collided with a metal pole that formed part of the control maze for a ski lift line. Before the season started, Dalury had purchased a midweek season pass and signed a form releasing the ski area from liability. The relevant portion reads:

RELEASE FROM LIABILITY AND CONDITIONS OF USE

1. I accept and understand that Alpine Skiing is a hazardous sport with many dangers and risks and that injuries are a common and ordinary occurrence of the sport. As a condition of being permitted to use the ski area premises, I freely accept and voluntarily assume the risks of injury or property damage and release Killington Ltd., its employees and agents from any and all liability for personal injury or property damage resulting from negligence, conditions of the premises, operations of the ski area, actions or omissions of employees or agents of the ski area or from my participation in skiing at the area, accepting myself the full responsibility for any and all such damage or injury of any kind which may result.

Plaintiff also signed a photo identification card that contained this same language.

Dalury and his wife filed a complaint against defendants, alleging negligent design, construction, and replacement of the maze pole. Defendants moved for summary judgment, arguing that the release of liability barred the negligence action. The trial court, without specifically addressing plaintiffs' contention that the release was contrary to public policy, found that the language of the release clearly absolved defendants of liability for their own negligence.

The trial court based its decision on Douglass v. Skiing Standards, Inc., 142 Vt. 634, 637, 459 A.2d 97, 99 (1983), in which we held that an exculpatory agreement was sufficient to bar a negligence action by a professional freestyle skier who was injured in a skiing competition, and two subsequent decisions of the United States District Court for the District of Vermont. See Estate of Geller v. Mount Snow Ltd., No. 89-66, slip op. at 5-6 (D.Vt. May 21, 1991) (summary judgment granted where plaintiff recreational skier signed release on back of ski pass); Barenthein v. Killington, Ltd., No. 86-33, slip op. at 7 (D.Vt. June 17, 1987) (summary judgment granted where plaintiff signed equipment rental agreement which contained a release). The trial court did not view the distinction between professional and recreational skiing as significant, and granted summary judgment on the ground that the release was clear and unambiguous.

On appeal, plaintiffs contend that the release was ambiguous as to whose liability was waived and that it is unenforceable as a matter of law because it violates public policy. We agree with defendants that the release was quite clear in its terms. Because we hold the agreement is unenforceable, we proceed to a discussion of the public policy that supports our holding.

I.

This is a case of first impression in Vermont. ¹ While we have recognized the existence of a public policy exception to the validity of exculpatory agreements, see Lamoille Grain Co. v. St. Johnsbury & L.C.R.R., 135 Vt. 5, 7, 369 A.2d 1389, 1390 (1976) (public policy forbids a railroad from limiting its duty of care to the public, but this rule does not extend to the railroad's private contractual undertakings), in most of our cases, enforceability has turned on whether the language of the agreement was sufficiently clear to reflect the parties' intent. See Fairchild Square Co. v. Green Mountain Bagel Bakery, Inc., 163 Vt. 433, ----, 658 A.2d 31, 33-34 (1995) (lease clearly contemplated landlord's purchase of fire insurance, releasing tenant from liability for negligence); Colgan v. Agway, Inc., 150 Vt. 373, 376-78, 553 A.2d 143, 146 (1988) (broad exculpatory language at end of limited warranty clause insufficient to release defendant for negligent design); Douglass, 142 Vt. at 637, 459 A.2d at 99 (agreement in entirety sufficiently clear to show experienced, professional freestyle skier intended to hold ski area harmless); Lamoille Grain Co., 135 Vt. at 8, 369 A.2d at 1390 (language of contract sufficiently clear to show parties' intent to hold railroad harmless for its own negligence).

Even well-drafted exculpatory agreements, however, may be void because they violate public policy. Restatement (Second) of Torts § 496B comment e (1965). According to the Restatement, an exculpatory agreement should be upheld if it is (1) freely and fairly made, (2) between parties who are in an equal bargaining position, and (3) there is no social interest with which it interferes. § 496B comment b. The critical issue here concerns the social interests that are affected.

Courts and commentators have struggled to develop a useful formula for analyzing the public policy issue. The formula has been the "subject of great debate" during "the whole course of the common law," and it had proven impossible to articulate a precise definition because the "social forces that have led to such characterization are volatile and dynamic." Tunkl v. Regents of Univ. of Cal., 60 Cal.2d 92, 383 P.2d 441, 444, 32 Cal.Rptr. 33, 36 (1963).

The leading judicial formula for determining whether an exculpatory agreement violates public policy was set forth by Justice Tobriner of the California Supreme Court. Id. at 444-46, 32 Cal.Rptr. at 36-38. An agreement is invalid if it exhibits some or all of the following characteristics:

[1.] It concerns a business of a type generally thought suitable for public regulation. [2.] The party seeking exculpation is engaged in performing a service of great importance to the public, which is often a matter of practical necessity for some members of the public. [3.] The party holds [it]self out as willing to perform this service for any member of the public who seeks it, or at least for any member coming within certain established standards. [4.] As a result of the essential nature of the service, in the economic setting of the transaction, the party invoking exculpation possesses a decisive advantage of bargaining strength against any member of the public who seeks [the party's] services. [5.] In exercising a superior bargaining power the party confronts the public with a standardized adhesion contract of exculpation, and makes no provision whereby a purchaser may pay additional reasonable fees and obtain protection against negligence. [6.] Finally, as a result of the transaction, the person or property of the purchaser is placed under the control of the seller, subject to the risk of carelessness by the seller or [the seller's] agents.

Id. at 445-46, 32 Cal.Rptr. at 37-38 (footnotes omitted). Applying these factors, the court concluded that a release from liability for future negligence imposed as a condition for admission to a charitable research hospital was invalid. Id. at 449, 32 Cal.Rptr. at 41. Numerous courts have adopted and applied the Tunkl factors. See Wagenblast v. Odessa Sch. Dist. No. 105-157-166J, 110 Wash.2d 845, 758 P.2d 968, 971-73 (1988) (release for school district's interscholastic athletics violated public policy); Kyriazis v. University of W. Va., 192 W.Va. 60, 450 S.E.2d 649, 654-55 (1994) (release for state university-sponsored club rugby was invalid because "[w]hen a state university provides recreational activities to its students, it fulfills its educational mission, and performs a public service").

Other courts have incorporated the Tunkl factors into their decisions. The Colorado Supreme Court has developed a four-part inquiry to analyze the validity of exculpatory agreements: (1) 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. Jones v. Dressel, 623 P.2d 370, 376 (Colo.1981). In the Jones case, the court concluded, based on the Tunkl factors, that no duty to the public was involved in air service for a parachute jump, because that sort of service does not affect the public interest. Id. at 376-77. Using a similar formula, the Wyoming Supreme Court concluded that a ski resort's sponsorship of an Ironman Decathlon competition did not invoke the public interest. Milligan v. Big Valley Corp., 754 P.2d 1063, 1066-67 (Wyo.1988).

On the other hand, the Virginia Supreme Court recently concluded, in the context of a "Teflon Man Triathlon" competition, that a preinjury release from liability for negligence is void as against public policy because it is simply wrong to put one party to a contract at the mercy of the other's negligence. Hiett v. Lake Barcroft Community Ass'n, 244 Va. 191, 418 S.E.2d 894, 897 (1992). The court stated: " '[T]o hold that it was competent for one party to put the other parties to the contract at the mercy of its own misconduct ... can never be lawfully done where an enlightened system of jurisprudence prevails. Public policy forbids it, and contracts against public policy are void.' " Id. 418 S.E.2d at 896 (quoting ...