Degliomini v. ESM Prods., Inc.

• Decision Date: 22 June 2021
• Docket Number: No. 5 EAP 2020,J-69-2020,5 EAP 2020
• Parties: ANTHONY DEGLIOMINI AND KAREN DEGLIOMINI, Appellants v. ESM PRODUCTIONS, INC. AND CITY OF PHILADELPHIA, Appellees
• Court: Pennsylvania Supreme Court

ANTHONY DEGLIOMINI AND KAREN DEGLIOMINI, Appellants v. ESM PRODUCTIONS, INC. AND CITY OF PHILADELPHIA, Appellees

J-69-2020

No. 5 EAP 2020

SUPREME COURT OF PENNSYLVANIA EASTERN DISTRICT

ARGUED: September 15, 2020

June 22, 2021

BAER, C.J., SAYLOR, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY, JJ.

Appeal from the Order of Commonwealth Court dated 06/25/2019 at No. 1573 CD 2018, reversing the 10/24/2018 Order of the Court of Common Pleas, Philadelphia County, Civil Division at No. 01601 April Term, 2016.

OPINION

JUSTICE DOUGHERTY

We granted discretionary review to consider the validity of an exculpatory release signed by a participant in a charity bike ride that purports to immunize the City of Philadelphia from liability for breaching its duty to repair and maintain public streets. We hold such a release is unenforceable because it violates public policy, and we therefore reverse.

I. Factual and Procedural Background

Appellant Anthony Degliomini participated in the May 2015 Philadelphia Phillies Charity Bike Ride (Bike Ride), a twenty-mile ride along a designated route through the streets of South and Center City Philadelphia. During the Bike Ride, Degliomini crashed when he rode into an unmarked and un-barricaded sinkhole on Pattison Avenue in South Philadelphia, which measured sixteen square feet in area and six inches deep. As a result of the crash, Degliomini suffered severe and extensive injuries, including spinal cord injuries leading to incomplete quadriplegia,¹ and multiple bone fractures which required surgical procedures and extensive and ongoing medical treatment. Complaint at ¶¶3-4. Degliomini and his wife, Karen Degliomini (appellants), filed a negligence action against the City of Philadelphia (the City), event planner ESM Productions, and several other defendants.²

The parties litigated pre-trial motions seeking, inter alia, to dismiss appellants' claims against the City due to governmental immunity pursuant to the Political Subdivision Tort Claims Act, 42 Pa.C.S. §§8541-8564 (Tort Claims Act), and to bar appellants' claims of negligence on the basis of the 2015 Phillies Charities Bike Ride Release (the Release), an exculpatory contract prepared by ESM Productions and signed by Mr. Degliomini. The Release states, in relevant part:

I know that participating in an organized bike ride such as the 2015 Phillies Charities Bike Ride is a potentially hazardous activity. I should not enter and bike unless I am medically able and properly trained. I understand that bicycle helmets must be worn at all times while participating in the event and I agree to comply with this rule. I further understand and agree that consumption of alcoholic beverages while operating a bicycle is a violation of the law and strictly prohibited. I know that there will be traffic on the course route and I assume the risk of biking in traffic. I also assume any and all other risks associated with participating in the event, including but not limited to falls; contact with other participants; the effects of the weather; the condition of the roads; and unsafe actions by other riders, drivers, or non-participants. I consent to emergency medicalcare and transportation in the event of injury, as medical professionals deem appropriate.

All such risks being known and appreciated by me, and in consideration of the acceptance of my entry fee, I hereby, for myself, my heirs, executors, administrators and anyone else who might claim on my behalf, promise not to sue and I release and discharge The Phillies, Phillies Charities, Inc., any and all sponsors of the event, the City of Philadelphia, Philadelphia Authority for Industrial Development, Philadelphia Industrial Development Corporation, ESM Productions, and each of their respective affiliates, owners, partners, successors and assigns and each of their respective officers, employees, agents, and anyone acting for or on their behalf, and all volunteers (collectively, the "Releasees"), from any and all claims of liability for death, personal injury, other adverse health consequence, theft or loss of property or property damage of any kind or nature whatsoever arising out of, or in the course of, my participation in the event even if caused by the negligence of any of the Releasees. This Release extends to all claims of every kind or nature whatsoever.

* * *

I, intending to be legally bound, represent that I am at least eighteen years old; either I am registering to enter this event for myself or as a parent or guardian of a minor who is at least thirteen years old; I have carefully read and voluntarily agree to this Release on behalf of myself and, if applicable, the minor who is being registered to participate, and I understand its full legal effect.

Trial Court Exhibit D-4. Appellants responded the City was not entitled to statutory immunity because an exception for dangerous conditions on City-owned streets applied;³the City breached its duty to maintain and repair City streets as provided in Philadelphia's Home Rule Charter;⁴ the Release should not apply to bar their claims because the sinkhole existed well before the Bike Ride and therefore the City's negligence occurred before the Release was ever signed; and the Release was unenforceable because it violates public policy by improperly immunizing the City from any consequence of breaching its duty of public safety imposed by the Home Rule Charter.

The trial court rejected the City's argument that the negligence action was barred by the Release, and the matter proceeded to a jury trial. Appellants presented civil engineering and roadway management expert testimony from Richard Balgowan, a forensic engineer and certified public works manager, who stated the sinkhole existed in October 2014, approximately eight months prior to the Bike Ride. See N.T. 2/27/2018 at 26, 45-47. Appellants' evidence further demonstrated the City had knowledge of the sinkhole as it had previously applied patching material to fill it months prior to the BikeRide, but did not block the area or complete the repair to the subterranean void causing the pavement to sink. See id. at 30-35 (expert testimony discussing different texture and color of material in sinkhole indicated someone from streets department attempted to temporarily fill the sinkhole but did not complete a standard repair). The jury concluded the City was negligent and awarded $3,086,833.19 in damages to Mr. Degliomini and $100,000 to Mrs. Degliomini for her loss of consortium.⁵

The parties filed post-trial motions. Appellants sought and were awarded delay damages; the City moved for judgment notwithstanding the verdict (JNOV) based on the Release, which was denied. The trial court explained the Tort Claims Act specifically imposes an exception to immunity when the City has actual or constructive notice of a dangerous condition of the streets, and, under the Home Rule Charter, the City has a mandatory duty to maintain and repair City streets, which was breached and caused damages to appellants. Degliomini v. Philadelphia Phillies, 2018 WL 11243021 at *2-4. Specifically, relying on appellants' unrebutted expert evidence that the City placed patch material in an attempt to fill the sinkhole without repairing the underground void that created the sinkhole, the trial court determined the City's actions in negligently undertaking to repair the sinkhole resulted in a non-waivable "catalyst for liability" which existed months prior to preparations for the Bike Ride. Id. at *3 (internal quotations and citation omitted). The court thereby concluded the Release was not valid as it violated public policy by exculpating the City from liability for conduct that breaches its exclusive duty to the public set forth in the Home Rule Charter. See id. at *6-8, quoting Chepkevich v. Hidden Valley Resort, L.P., 2 A.3d 1174, 1189 (Pa. 2010) ("It is generally accepted that an exculpatory clause is valid where three conditions are met. First,the clause must not contravene public policy."). The trial court entered judgment on the verdict which was molded to include delay damages, and a reduction to reflect the statutory cap.⁶ The City filed an appeal.

A three-judge panel of the Commonwealth Court reversed. Degliomini v. ESM Prods., Inc., No. 1573 C.D. 2018, 2019 WL 2587696 (Pa. Cmwlth., June 25, 2019) (unpublished memorandum). Though the panel agreed the dispositive issue regarding the validity of the Release was whether it contravenes public policy, it also observed Pennsylvania courts have consistently upheld exculpatory releases pertaining to recreational activities as non-violative of public policy, and therefore valid and enforceable. See id. at *3 (collecting cases). Rather than considering Section 5-500 of the Philadelphia Home Rule Charter as establishing a mandatory duty, the panel regarded it instead as an "organizational section" mandating the creation of the Department of Streets to perform certain functions, but providing no standard of care or guidelines for how the Department must accomplish its road repair duties; thus, the panel reasoned the City's street maintenance obligation under the Charter was no different than any common law duty of reasonable care, which can be waived via a valid release. Id. at *4. The panel relied on its decisions in Vinikoor v. Pedal Pa., Inc., 974 A.2d 1233, 1240 (Pa. Cmwlth. 2009) (release precluded recovery against self-inflicted injuries caused by known risks on road during bike race and did not violate public policy), and Scott v. Altoona Bicycle Club, No. 1426 C.D. 2009, 2010 WL 9512709 at *4-5 (Pa. Cmwlth., July 16, 2010) (unpublished memorandum) (exculpatory agreement between bike race participant and municipality was a private agreement and did not violate public policy), toconclude: the Release was a private agreement between appellant Degliomini and various entities including the City; appellant was under no obligation to sign the Release or participate in the Bike Ride; and the Bike...