Heil Valley Ranch, Inc. v. Simkin

• Decision Date: 18 December 1989
• Docket Number: No. 88SC418,88SC418
• Citation: 784 P.2d 781
• Parties: HEIL VALLEY RANCH, INC., a Colorado corporation, Petitioner, v. Roane SIMKIN, Respondent.
• Court: Colorado Supreme Court

Page 781

784 P.2d 781

HEIL VALLEY RANCH, INC., a Colorado corporation, Petitioner, v. Roane SIMKIN, Respondent.

No. 88SC418.

Supreme Court of Colorado En Banc.

Dec. 18, 1989.

Rehearing Denied Jan. 16, 1990.

Hall & Evans, David R. Brougham and Malcolm S. Mead, Denver, for petitioner.

George T. Ashen and M. Paula Ashen, Denver, for respondent.

Justice ERICKSON delivered the Opinion of the Court.

We granted certiorari to decide whether a release or exculpatory agreement purporting to waive "any claim [plaintiff] might state against the [defendant] as a result of physical injury incurred" while horseback riding is clear and unambiguous under Jones v. Dressel, 623 P.2d 370, 376-78 (Colo.1981). The court of appeals held that the agreement in this case, which did not use the word "negligence" in its exculpatory provision, was void because it was ambiguous. Simkin v. Heil Valley Ranch, Inc., 765 P.2d 582, 584-85 (Colo.App.1988). We conclude that a valid release or exculpatory agreement need not invariably contain the word "negligence," and that under the facts and circumstances of this case the agreement was sufficiently clear and unambiguous to be given effect. Accordingly, we reverse the court of appeals and remand with directions to reinstate the judgment of the district court in favor of the defendant Heil Valley Ranch, Inc. (Heil Valley).

I.

On the morning of July 17, 1983, plaintiff Roane Simkin arrived at the Heil Valley Ranch in Boulder County to go horseback riding with a group of friends. ¹ Before any of the participants in the ride were allowed to mount their rented horse they were required to come into the ranch's office and sign the following purported release of liability:

This is a Release of Liability

Please Read Before Signing

UPON MY ACCEPTANCE OF HORSE AND EQUIPMENT, I ACKNOWLEDGE THAT THE USE, HANDLING AND RIDING OF A HORSE INVOLVES A RISK OF PHYSICAL INJURY TO ANY INDIVIDUAL UNDERTAKING SUCH ACTIVITIES; AND THAT A HORSE, IRRESPECTIVE OF ITS TRAINING AND USUAL PAST BEHAVIOR AND CHARACTERISTICS, MAY ACT OR REACT UNPREDICTABLY AT TIMES BASED UPON INSTINCT OR FRIGHT WHICH, LIKEWISE, IS AN INHERENT RISK ASSUMED BY A HORSEBACK RIDER. THE UNDERSIGNED EXPRESSLY ASSUMES SUCH RISK AND WAIVES ANY CLAIM HE SHE MIGHT STATE AGAINST THE STABLES AS A RESULT OF PHYSICAL INJURY INCURRED IN SAID ACTIVITIES. ² EXCEPT TO THE EXTENT SUCH CLAIM MIGHT BE BASED UPON THE SOLE AND EXCLUSIVE NEGLIGENCE OF THE STABLES THE UNDERSIGNED FURTHER AGREES TO HOLD THE STABLES HARMLESS FOR PHYSICAL INJURY TO OTHERS, OR FOR PROPERTY DAMAGE, WHICH RESULTS FROM RIDERS USE OF STABLES HORSE IN VIOLATION OF ANY STABLES' RULES OR THE TERMS AND CONDITIONS OF THIS AGREEMENT.

THIS AGREEMENT SHALL BE EFFECTIVE AND BINDING UPON THE PARTIES HERETO FOR THE DATE INDICATED. THE PARTIES HERETO ACKNOWLEDGE HAVING READ AND UNDERSTOOD THIS AGREEMENT.

At a hearing, Heil Valley presented evidence that before Simkin mounted her horse, she signed the agreement in the office. In his deposition, John Hillman, a Heil Valley employee, testified that Uncle Bud, another employee, told the first woman who wanted to ride Bill that the horse needed a good rider, and she said she would wait for the next horse. Simkin said "that's the horse for me." Uncle Bud asked Simkin if she "knew how to ride good because [Bill] is spirited," and Simkin replied that "she worked on a dude ranch."

After Simkin mounted Bill, Hillman heard the horse walking backward and he "turned around and saw [Simkin], and saw that she had the reins tight, and I yelled at her to loosen up on the reins, and she didn't listen to me." Bill then reared up and fell backwards onto Simkin, injuring her severely.

Simkin sued Heil Valley for negligence ³ and breach of warranty. ⁴ Heil Valley pleaded the release as an affirmative defense, and moved for summary judgment. On August 2, 1985, the district court issued a partial summary judgment, ⁵ holding that the release was a valid exculpatory agreement under Jones v. Dressel, 623 P.2d 370, 376-78 (Colo.1981). In particular, the court held that the language of the exculpatory portion of the release was clear and unambiguous and thus shielded Heil Valley from claims based on negligence and breach of warranty. ⁶

On appeal, the court of appeals reversed, finding that the release was not clear and unambiguous under Jones v. Dressel. Simkin v. Heil Valley Ranch, Inc., 765 P.2d 582, 584-85 (Colo.App.1988). Judge Babcock dissented, concluding that the language in the agreement adequately reflected Simkin's intent to release Heil Valley for liability for her injury. Id. at 585.

II.

Agreements attempting to exculpate a party from that party's own negligence have long been disfavored. See Jones v. Walt Disney World Co., 409 F.Supp. 526, 528 (W.D.N.Y.1976); Harris v. Walker, 119 Ill.2d 542, 547-49, 116 Ill.Dec. 702, 704, 519 N.E.2d 917, 919 (1988); see generally Annotation, Validity of contractual provision by one other than carrier or employer for exemption from liability, or indemnification, for consequences of own negligence, 175 A.L.R. 8, 18 (1948). They stand at the crossroads of two competing principles: freedom of contract and responsibility for damages caused by one's own negligent acts. Harris v. Walker, 119 Ill.2d at 549, 116 Ill.Dec. at 704, 519 N.E.2d at 919.

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." W. Keeton, D. Dobbs, R. Keeton, & D. Owen, Prosser and Keeton on the Law of Torts § 68, at 482 (5th ed. 1984) [hereinafter Prosser ]. Thus, exculpatory agreements between employer and employee, and between common carriers or public utilities and members of the public are generally held invalid. Id. at 482-83; see also Restatement (Second) of Torts § 496B comments f & g (1965). ⁷ Such a contract is not implicated here.

Jones v. Dressel set forth the test for determining the validity of an exculpatory agreement:

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.

623 P.2d at 376. Only the fourth factor is an issue here. "The determination of the sufficiency and validity of an exculpatory agreement is a question of law for the court to determine." Id. Partial summary judgment on the validity of the instant agreement was therefore appropriate.

In Jones v. Dressel, the agreement that we upheld specifically included the word "negligence." Id. at 378. We therefore were not required to decide whether an exculpatory agreement, in order to bar an action based on negligence, must always use the term "negligence" or words of similar import. Courts in other jurisdictions, although uniformly agreeing that exculpatory agreements must be strictly construed against the drafter, are split on whether "negligence" must be specifically mentioned, ⁸ or whether more inclusive and general terms may be employed. ⁹ The court of appeals majority relied on the first line of cases to find the release invalid, in which the term "negligence" or similar words are always required. In dissent, Judge Babcock believed that "use of the talismanic terms 'negligence' and 'breach of warranty' was unnecessary to render the release effective." Simkin, 765 P.2d at 585 (Babcock, J., dissenting).

We agree that use of the specific terms "negligence" and "breach of warranty" are not invariably required for an exculpatory agreement to shield a party from claims based on negligence and breach of warranty. The inquiry should be whether the intent of the parties was to extinguish liability and whether this intent was clearly and unambiguously expressed. Schutkowski v. Carey, 725 P.2d 1057, 1061 (Wyo.1986). In the present case, the agreement was written in simple and clear terms that were free from legal jargon. It was not inordinately long or complicated. When the agreement was read to Simkin at her deposition, she indicated that she understood it.

In addition, the first sentence of the release specifically addressed a risk that adequately described the circumstances of Simkin's injury. The record also supports the conclusion that Simkin was not a novice rider, but was instead one with some experience. ¹⁰ The risk that a horse could rear and injure her was reasonably foreseeable to someone with her experience.

In Harris v. Walker, 119 Ill.2d 542, 116 Ill.Dec. 702, 519 N.E.2d 917 (1988), the court held that a rider who fell off his rented horse when it became spooked could not sue the defendant stables for their negligence because of a release plaintiff signed. The release did not use the word "negligence," but said that "your signature shall release [defendant] and employees of any liabilities you may incur while on the premises or for any injury which may result from horseback riding." Id. at 549, 116 Ill.Dec. at 704, 519 N.E.2d at 919. The Illinois Supreme Court stated that "when the parties adopt broad language in a release, it is reasonable to interpret the intended coverage to be as broad as the risks that are obvious to experienced participants." Id. at 549, 116 Ill.Dec. at 705, 519 N.E.2d at 920.

Under the circumstances of this case, it is reasonable to interpret the broad language in the release to cover claims based on negligence or breach of warranty. It is difficult to imagine any claim that Simkin could have asserted against Heil Valley that would not have been based, at bottom, on negligence. It is unreasonable to interpret the agreement in a way that provides virtually no protection to Heil Valley, and renders the release essentially meaningless. We therefore hold that the district court properly found that the...