Rosen v. BJ's Wholesale Club, Inc.

• Decision Date: 30 August 2012
• Docket Number: No. 2861,Sept. Term, 2009.,2861
• Citation: 51 A.3d 100,206 Md.App. 708
• Parties: Russell ROSEN, Individually, etc., et al. v. BJ'S WHOLESALE CLUB, INC.
• Court: Court of Special Appeals of Maryland

206 Md.App. 708

51 A.3d 100

Russell ROSEN, Individually, etc., et al.

v.BJ'S WHOLESALE CLUB, INC.

No. 2861, Sept. Term, 2009.

Court of Special Appeals of Maryland.

Aug. 30, 2012.

Denis C. Mitchell (Ari S. Casper, Kerrie C. Dent, Stein, Mitchell & Muse, LLP, on the brief) Washington, D.C., for appellant.

Christopher R. Dunn (DeCaro, Doran, Siciliano, Gallagher & DeBalasis, LLP, on the brief) Bowie, MD, for appellee.

Panel: KRAUSER, C.J., WOODWARD and KEHOE, JJ.

KRAUSER, C.J.

BJ's Wholesale Club, Inc., appellee, is a self-described “ membership warehouse club.” Among other things, it purports to offer its members “brand-name” products at relatively low prices.¹ To be a member, an interested party must pay an annual membership fee.

BJ's Wholesale provides a play center for the children of its members while its members shop. But, before a member's child may have access to the play center, the member must execute a release agreement. The agreement, in addition to setting forth rules for the use of the club, ostensibly releases BJ's Wholesale from “any and all claims and causes of action” arising from the use of the play center by a member's child and requires a member to “indemnify, defend and hold harmless” BJ's Wholesale from any such claims or causes of action.

As a member of BJ's Wholesale, Russell Rosen executed one of BJ's release agreements in July 2005. A little more than fifteen months later, on October 22, 2006, Mr. Rosen's wife, Beily Rosen, entrusted the Rosens' five-year-old son, Ephraim, to the play center, upon entering BJ's to shop. While playing there, Ephraim fell head first from “an elevated plastic play apparatus,” suffering a serious brain injury.

The Rosens thereafter brought a negligence action, on behalf of Ephraim and themselves, in the Circuit Court for Baltimore County, against BJ's Wholesale. In turn, BJ's filed a counterclaim against the Rosens, alleging breach of the release agreement Mr. Rosen had signed, and later a motion for summary judgment invoking the same agreement. The circuit court granted summary judgment in favor of BJ's Wholesale, concluding that the release agreement was valid and enforceable. Claiming that it is neither, the Rosens noted this appeal.

Because we hold that a parent may not waive by agreement a minor child's future claim in negligence against what we shall refer to as a “commercial enterprise”—that is, a for-profit, commercial entity that principally serves private interests ²—we reverse the judgment below. We further hold that the release's indemnification clause is also unenforceable, because implementation of that clause under the circumstances of this case would obviate the very public policy considerations that underlie our conclusion that the exculpatory clause of the release agreement is both invalid and unenforceable.

Background

BJ's Wholesale, a Fortune 500 corporation, operates a chain of “membership-only” warehouse stores in the eastern United States. Russell and Beily Rosen were members and shopped at the BJ's store in Owings Mills, Maryland. As a courtesy to its members, BJ's offers, at its stores, a free, supervised children's play center, which BJ's calls the “Incredible Kid's Club.” But a member's children may not use the play center, unless the member signs a release, containing exculpatory and indemnification clauses, as well as rules that must be followed to use the play center. The rules speak to address such things as the minimum and maximum ages of a child using the center, the maximum length of time a child may remain at the play center on a single visit, the responsibility of parents to pick up their children and to answer the store's paging promptly, a prohibition against sick children using the play center, and so on.

At the bottom of the single-page document, in bold print, but what appears to be eight-point type, are exculpatory and indemnification provisions which are the subject of this appeal.³ There, the document states:

I hereby acknowledge that the participation in BJ's Incredible Kid's Club (the “Play Center”) is a benefit offered to me as a part of my BJ's Wholesale Club membership. I further acknowledge that I have read, understood and I voluntarily agree to abide by all of the rules appearing above and/or rules as posted in the Play Center and registration area. In consideration for this service, I, individually and on behalf of my child, do hereby waive, release and forever discharge BJ's Wholesale Club, Inc., its subsidiaries and affiliates and their respective agents, employees, officers, directors, shareholders, successors and assigns from any and all claims and causes of action of any kind or nature which are in any way related, directly or indirectly, to the use of Play Center which I may have or that hereafter may accrue including any such claims or causes of action caused in whole or in part by the negligence of BJ's Wholesale Club, Inc., its subsidiaries and affiliates, and their respective agents, employees, officers, directors, successors and assigns. I understand that my child is here at my own risk and expense and agree that neither I nor my child will bring any claim or cause of action of any kind or nature against BJ's Wholesale Club, Inc., its subsidiaries and affiliates and their respective agents, employees, officers, directors, successors and assigns. I further agree to indemnify, defend and hold harmless BJ's Wholesale Club, Inc., its subsidiaries and affiliates and their respective agents, employees, officers, directors, successors and assigns from any claims or causes of action of any kind arising from my or my child's use of the Play Center. By placing my signature below, I acknowledge and agree that I have read this agreement, understood all of the terms and conditions contained herein, and that this agreement will be in full force and effect during each of my or my child's visit [sic] to the Play Center. This agreement shall remain in full force and effect at all times whether my child is dropped off at the Play Center by me or any one else.

On July 17, 2005, Russell Rosen signed this agreement. About fifteen months later, Beily Rosen took her five-year-old son Ephraim to the BJ's Wholesale store in Owings Mills, Maryland. Upon entering the store, she dropped Ephraim off at the play center. While Mrs. Rosen was shopping in BJ's, Ephraim climbed onto “an elevated plastic play apparatus known as Harry the Hippo” at the play center and then fell approximately thirty-eight inches before striking his head on the floor below. Although “most of” the concrete floor of the play center was covered with thick foam padding, Ephraim landed on a section of floor, which was covered by only a thin layer of carpet. Landing head first, he sustained life threatening injuries.

Ephraim was promptly transported to Sinai Hospital in Baltimore, where a CT ⁴ scan revealed that he had suffered a large, acute epidural hematoma in the right temporal lobe of his brain. He was then transported to Johns Hopkins Hospital, where he underwent a craniectomy⁵ to relieve the fluid buildup in his brain.

Ultimately, Russell and Beily Rosen, individually and as parents and next friends of Ephraim, brought a negligence action in the Baltimore County circuit court against BJ's Wholesale, prompting BJ's Wholesale to file in response a counterclaim, alleging breach of the release agreement signed by Mr. Rosen. When BJ's later moved for summary judgment, invoking that agreement, the circuit court granted the motion. In so doing, it observed that, under Maryland law, exculpatory agreements executed by adults on their own behalf are enforceable and that there has been no articulation of public policy enforcement of such an agreement executed by a parent of a minor child. From that judgment, the Rosens noted this appeal.

Discussion

This appeal presents a legal question of first impression in Maryland, that is, whether a release of liability, presented by a “commercial enterprise,” as previously defined, and executed by a parent, on behalf of a minor child and before the child has sustained any injury, is enforceable. The Rosens contend that it is not, as a matter of public policy. The same is true, they maintain, as to the indemnification clause of the release agreement, since to rule otherwise would, according to the Rosens, obviate the very public policy that renders the exculpatory clause of the same agreement unenforceable.

The Rosens' starting point is the settled proposition that, although “[i]n the absence of legislation to the contrary, exculpatory clauses are generally valid,” “[t]here are circumstances ... under which the public interest will not permit an exculpatory clause in a contract[.]” Wolf v. Ford, 335 Md. 525, 531, 644 A.2d 522 (1994). The Wolf Court enumerated three public policy exceptions to the general rule favoring enforceability of exculpatory agreements: (1) “a party will not be permitted to excuse its liability for intentional harms or for the more extreme forms of negligence, i.e., reckless, wanton, or gross”; (2) “the contract cannot be the product of grossly unequal bargaining power”; and (3) “public policy will not permit exculpatory agreements in transactionsaffecting the public interest.” Id. at 531–32, 644 A.2d 522.

The “ultimate determination of what constitutes the public interest,” the Court of Appeals has said, “must be made considering the totality of the circumstances of any given case against the backdrop of current societal expectations.” Id. at 535, 644 A.2d 522. Such a backdrop may be found, the Rosens claim, in the Maryland Code ⁶ and in Maryland common law,⁷which, they point out, reflect a substantial public interest in protecting children and their rights to seek redress for negligence, when that negligence results in injury to them. We agree and add that the public interest in favor of protecting the claims of children carries additional weight where the tortfeasor is a ...