Thompson v. Hi Tech Motor Sports, Inc.

¶ 1. After injuring herself during a test drive on one of defendant’s motorcycles, plaintiff sued defendant for negligence. The trial court granted plaintiff partial summary judgment, concluding that the release plaintiff signed was contrary to public policy and therefore void as a matter of law. On interlocutory appeal, we conclude that the waiver is not void for public policy as a matter of law, but that the exculpatory clause does not release defendant for claims caused by its own negligence, and remand.

¶ 2. The following facts are undisputed for purposes of summary judgment. In May 2003, plaintiff went to defendant’s motorcycle dealership to test drive a motorcycle. Plaintiff spoke with a salesperson and indicated that although she was a relatively new rider, she had a valid motorcycle driver’s license and had experience riding a motorcycle with a 200cc engine. After further discussion with the salesperson, plaintiff signed a single-page release.1 Then, as part of a group, plaintiff took a promotional test *221ride on a 750cc motorcycle. During the test ride, as plaintiff was turning, she downshifted, but was unable to control the bike, and she hit a guardrail, injuring herself.

¶ 3. Plaintiff filed a suit for damages in superior court, claiming that defendant’s agents were negligent in encouraging her to ride a bike that they knew or should have known was too big for plaintiff and that she could not operate safely. Defendant filed a motion for summary judgment, claiming that the release plaintiff signed discharged it as a matter of law from any liability for her injuries. Plaintiff filed a cross-motion for partial summary judgment, arguing that the release was contrary to public policy. The trial court resolved both motions on the same day in single-line orders. First, the court denied defendant’s motion, concluding that there were “factual disputes concerning the representations made by the defendant’s salesman.” Second, the court granted plaintiff’s motion for partial summary judgment, concluding simply that “defendant’s release was void for being contrary to public policy.” The trial court granted defendant permission to appeal, and this Court accepted review of the question of whether the release is void as contrary to public policy.

¶ 4. On appeal, we review summary judgment using the same standard as the trial court. Gallipo v. City of Rutland, 2005 VT 83, ¶ 13, 178 Vt. 244, 882 A.2d 1177. Under that familiar standard, summary judgment is appropriate if there are no issues of material fact and a party is entitled to judgment as a matter of law. V.R.C.P. 56(c)(3); Gallipo, 2005 VT 83, ¶ 13. “In determining whether a genuine issue of fact exists, the nonmoving party receives the benefit of all reasonable doubts and inferences.” Samplid Enters., Inc. v. First Vt. Bank, 165 Vt. 22, 25, 676 A.2d 774, 776 (1996).

¶ 5. Plaintiff’s motion for partial summary judgment was based on two grounds: (1) the release was ambiguous and thus did not waive actions for defendant’s negligence; and (2) the release was contrary to public policy, which encourages motorcycle safety. The trial court granted plaintiff’s motion without discussion, so it is unclear which argument the court found compelling. On appeal, defendant addresses both of plaintiff’s original claims and argues *222that summary judgment was incorrect because the release (1) is unambiguous and includes suits based in negligence, and (2) does not interfere with any societal interest in motorcycle safety because societal expectations place responsibility for safe driving on the operator.

I.

¶ 6. First, we consider whether the release is void as contrary to public policy. As we have explained in the past, evaluating whether a release from liability contravenes public policy does not follow a strict formula because “no single formula will reach the relevant public policy issues in every factual context.” Dalury v. S-K-I, Ltd., 164 Vt. 329, 333, 670 A.2d 795, 798 (1995). Rather, we consider the totality of the circumstances and societal expectations to determine whether sufficient public interest exists to void a release. Id. at 334, 670 A.2d at 798. Although the public interest cannot be determined through a formulaic approach, some relevant characteristics of a public interest are the nature of the parties’ relationship, including whether the party granting exculpation is in a position of dependency, and the type of service provided by the party seeking exculpation, including whether the service is laden with public interest. See Restatement (Third) of Torts: Apportionment of Liab. § 2 cmt. e (2000); see also Tunkl v. Regents of Univ. of Cal., 383 P.2d 441, 445-46 (Cal. 1963) (listing characteristics of contracts that affect a public interest).

¶ 7. Although we recognize the great public need for motorcycle safety, we conclude that the waiver of liability in this case for injuries occurring on test drives does not contravene public policy. We are so persuaded given the nature of the service that defendant provides, the lack of control defendant exercises over those test-driving its vehicles, and the absence of legislative policy to regulate or control dealerships.

¶ 8. We agree with defendant that this case is distinguishable from Dalury v. S-K-I, Ltd., wherein we concluded that a ski resort could not exculpate itself from negligence liability through a release. 164 Vt. at 335, 670 A.2d at 799. In Dalury, a skier sued a ski area where he fell and was injured, claiming that the premises was negligently designed. We concluded that the release was void because it contravened a strong tradition of public policy that placed the responsibility for proper maintenance of grounds *223on those who own and control the property. Id. We reasoned that “if defendants were permitted to obtain broad waivers of their liability, an important incentive for ski areas to manage risk would be removed, with the public bearing the cost of the resulting injuries.” Id. We concluded that “[i]t is illogical, in these circumstances, to undermine the public policy underlying business invitee law and allow skiers to bear risks they have no ability or right to control.” Id.

¶ 9. The same concerns, which prompted our decision in Dalury, are not present here because whereas public policy places the burden of maintaining safe premises on a landowner, public policy concerning motorcycle safety places the burden of safe driving on the operator of the motorcycle. In Dalury, we emphasized that the defendant ski area had the unique opportunity and means “to foresee and control hazards” on its premises, thus it was logical for the ski area to bear the risk of a negligently designed or maintained ski area. In contrast, dealerships, like defendant, do not have the opportunity or means to control a prospective customer’s driving capability. Id. Persons, who choose to take defendant’s motorcycles out for a test ride, have the ability to undertake precautions to avoid hazards associated with operation, unlike skiers who “are not in a position to discover and correct risks of harm” on a ski hill. Id.

¶ 10. The dissent finds Dalury applicable, based on its conclusion that “[t]he property in this case may consist of motorcycles rather than ski trails, but the principles are no less applicable.” Post, ¶ 25. This assertion ignores the fact that our decision in Dalury depended in large part on “[t]he major public policy implications . . . underlying the law of premises liability.” 164 Vt. at 334, 670 A.2d at 799. Dalury emphasized the duty of care a business owner has “to make sure that its premises are in safe and suitable condition for its customers.” Id. (quotation omitted). The dissent’s attempt to equate motorcycles to ski hills fails because the strong public policy of premises liability in Dalury has no parallel in the area of motorcycle test riding. Another critical distinction is that there is no claim here that the product offered by defendant was in any way defective. The motorcycle operated well; it was driver error that caused the accident.

¶ 11. Furthermore, we conclude that in undertaking to retail motorcycles by providing test drives, defendant is neither “performing a service of great importance to the public, which is often *224a matter of practical necessity for some members of the public,” nor holding itself “out as willing to perform this service for any member of the public who seeks it.” Tunkl, 383 P.2d at 445. Motorcycle dealerships do not provide a public service, which is a necessity for some members of the public. See Jones v. Dressel, 623 P.2d 370, 377 (Colo. 1981) (concluding that flight service for parachute jumping was not a matter of public interest); Mann v. Wetter, 785 P.2d 1064, 1066-67 (Or. Ct. App. 1989) (holding that diving school did not provide an essential public service); Blide v. Rainier Mountaineering, Inc., 636 P.2d 492, 493 (Wash. Ct. App. 1981) (holding that mountaineering does not implicate the public interest). In addition, unlike the ski area in Dalury that advertised to and invited all members of the general public, even those with no experience, defendant made no representation that it was making its motorcycles available to all members of the public or that it was providing training in the proper use of motorcycles. Defendant allowed only those persons who attested in a signed release that they were properly licensed with a motorcycle endorsement and had sufficient relevant experience and training to take defendant’s bikes for a test ride.

¶ 12. In reply, plaintiff argues that if the release is upheld, this will (1) provide a disincentive for dealers to conduct test rides safely; and (2) contravene legislative intent to promote motorcycle safety. We are not persuaded. First, rather than encouraging all persons to drive their vehicles, including those with no experience, defendant requires prospective drivers to attest, in the release, that they have “prior experience with operation” of the relevant vehicle, have a valid license with the relevant endorsement, have examined the vehicle and are familiar with the vehicle’s operation. Furthermore, as explained above, during the test drive the prospective buyer, not the dealer, has control of the motorcycle. It is logical to place the incentive for safe driving on the party who has actual control of the vehicle.

¶ 13. Second, there is no existing public policy, as evidenced through legislative enactment, which strives to promote motorcycle safety through regulation either of motorcycle dealerships in general or their test-drive practices in particular. Although motorcycle safety is an important public concern and motorcycle use is highly regulated, the motorcycle-safety statutes focus on the driver’s responsibilities to be properly trained, to follow correct driving techniques and to wear appropriate equipment. See 23 *225V.S.A. §§ 617 (requiring applicants for a motorcycle license to obtain a special motorcycle endorsement through an examination and skills test), 733 (authorizing the Department of Motor Vehicles to establish standards for motorcycle training programs), 1114 (listing proper riding positions), 1115 (listing methods of proper driving), 1256 (requiring riders to wear a helmet). Given this focus, we conclude that public policy, in general and as expressed through statute, does not prevent a motorcycle dealership from limiting its liability for injuries sustained during a test ride. See Moore v. Hartley Motors, Inc., 36 P.3d 628, 632 (Alaska 2001) (concluding that the release plaintiff signed to participate in an ATV safety class was not void for public policy in part because the legislature chose not to regulate ATV course operators in the same way as other industries); Jones, 623 P.2d at 377 (concluding that exculpatory contract the plaintiff signed before participating in a parachute jump was not void for public policy where commercial carrier safety regulations did not apply because it was a commercial flight); Mann, 785 P.2d at 1066 (holding that there were no public policy considerations to prevent a diving school from limiting liability for its own negligence).

¶ 14. Plaintiff also contends that case law supports her position, citing Fortson v. McClellan, 508 S.E.2d 549 (N.C. Ct. App. 1998). In Fortson, the North Carolina Court of Appeals concluded that a waiver signed in conjunction with a motorcycle safety course was void for public policy, explaining:

Important public safety interests are present both in the instruction and use of motorcycles because both those receiving instruction in the proper use of motorcycles and the general traveling population are at risk from negligent training in the use of motorcycles. Trainees, unfamiliar with motorcycles, are particularly vulnerable to hazards associated with improper or negligent training.

Id. at 552. We find the present case readily distinguishable because Fortson focuses on the strong legislative policy of providing proper instruction during a motorcycle-safety class. As the court explained in Fortson, once the defendant “entered into the business of instructing the public in motorcycle safety, the defendant [could not], by contract, dispense with the duty to instruct with reasonable safety.” Id. at 554. Even if we accepted that motorcycle instructors could not exculpate themselves from neg*226ligence liability, cf. Petersen v. Sorensen, 118 Wash. App. 1027, 2003 WL 22040908, at *5 (2003) (holding that motorcycle training course is not a matter of public necessity and release does not violate public policy), this situation is much different, and the policy concerns relevant in Fortson do not apply here. Defendant did not undertake to instruct plaintiff in proper motorcycle operation. In fact, defendant’s release specified that plaintiff was already aware of how to safely operate a motorcycle. Allowing plaintiff to take a motorcycle for a test ride, after she attested that she had the relevant experience and training, does not implicate a public interest sufficient to void the release on public policy grounds.

¶ 15. The dissent advocates for adoption of a general rule that exculpatory agreements in the consumer context are always contrary to public policy. In support, the dissent cites the inherent disparity in bargaining power in consumer transactions, basic tort principles placing loss on the responsible party and a need to provide predictability in our decisions. We decline to adopt such a broad rule. The tort principles the dissent relies upon are not the only legal principles involved in this case. As another court observed, “[pjreinjury releases from liability for one’s negligence pit two bedrock legal concepts against one another: the right to order one’s relationship with another by contract and the obligation to answer in damages when one injures another by breaching a duty of care.” Rothstein v. Snowbird Corp., 2007 UT 96, ¶ 6, 175 P.3d 560. While we agree that consistency is important, we are not convinced that “freedom to contract should always yield to the right to recover damages on the basis of another’s fault.” Berry v. Greater Park City Co., 2007 UT 87, ¶ 11, 171 P.3d 442. We reaffirm our rule that public policy issues are fact-dependent and “must be made considering the totality of the circumstances of any given case against the backdrop of current societal expectations.” Dalury, 164 Vt. at 334, 670 A.2d at 798 (quotation omitted). Disparity in bargaining power is a factor to be considered in this equation, but it is one element and this fact alone is not determinative, especially when the provided service is not essential in nature. See Tunkl, 383 P.2d at 445.

II.

¶ 16. Having concluded that the release is not void on its face for public policy reasons, we consider the scope of the release to *227determine if it covers actions for defendant’s ordinary negligence. See Moore, 36 P.3d at 633 (concluding that although release did not violate public policy, the scope of the release did not include liability for general negligence). Plaintiff concedes that she read and signed defendant’s release, which states, in relevant part:

The undersigned waives any claim that he/she may have now or in the future against Land-Air, its employees, agents, officers, directors and shareholders for injury to him/her self as a result of his/her operation or the operation by some other person of a motorized vehicle owned by or under the control of Land-Air.

(Emphasis added.) Although the release does not include the word negligence, defendant contends that the release unambiguously includes “any claim,” and consequently applies to negligence claims as a matter of law. We disagree.

¶ 17. As with other contract provisions, we interpret those limiting tort liability based on the language of the writing, and where that language is clear, we must implement the intent and understanding of the parties. Colgan v. Agway, Inc., 150 Vt. 373, 375, 553 A.2d 143, 145 (1988). At the same time, we have cautioned that contractual exclusions of negligence liability are traditionally disfavored, and thus their interpretation requires more exacting judicial scrutiny. Id. In applying this heightened judicial scrutiny, we strictly construe an exculpatory agreement against the party relying on it. Id. We have explained that “[t]he most effective way for parties to express an intention to release one party from liability flowing from that party’s own negligence is to provide explicitly that claims based in negligence are included in the release.” Id. at 376, 553 A.2d at 146. Although this language is not essential, in its absence there must be words that convey a similar intent. See Douglass v. Skiing Standards, Inc., 142 Vt. 634, 637, 459 A.2d 97, 98 (1983) (concluding as a matter of law that the waiver the plaintiff signed to enter a skiing competition released the defendants from liability for negligence even though the agreement did not use the word “negligence”).2

*228¶ 18. In Colgan v. Agway, Inc., we concluded that a waiver in the parties’ construction contract did not cover claims for the builder’s negligence. 150 Vt. at 375, 553 A.2d at 145. Our decision was grounded on the wording and organization of the parties’ contract. The exculpatory language the defendant relied on was embedded in a paragraph entitled “One Year Limited Warranty,” and focused solely on liability for workmanship and materials. Id. at 377, 553 A.2d at 146. In addition, although the contract used particular language in other areas to describe the parties’ respective obligations, the contract did not employ the word negligence. We concluded that “[g]iven the manner in which the remainder of the contract is drafted, it defies both logic and common sense that the parties would intend to release the seller from all liability arising out of defective design of the structure by tacking broad exculpatory language to the end of a limited warranty clause.” Id.

¶ 19. Just as the organization of the parties’ contract in Colgan persuaded us that it did not cover negligence claims, we conclude that this release does not exculpate defendant from liability arising out of its own negligence. Defendant correctly notes that the release contains broad language purporting to release any claim. The question is whether this general clause is specific enough to release defendant from liability, given that when a party wishes to exculpate itself from negligence liability “a greater degree of clarity is necessary to make the exculpatory clause effective than would be required for other types of contract provisions.” Id. at 375, 553 A.2d at 145. The opening paragraph of the release recites that operating a motorcycle is inherently dangerous and that operation may result in injury. The release then waives “any claim” resulting from the operation. Based on this language, we conclude that the release waived claims for injuries resulting from dangers inherent to riding a motorcycle, *229not for those resulting from defendant’s negligence. Although plaintiff waived claims for injuries resulting from dangers inherent in riding a motorcycle, the release did not cover claims for injury resulting from defendant’s alleged negligent representations to plaintiff. See Sirek v. Fairfield Snowbowl, Inc., 800 P.2d 1291, 1295 (Ariz. Ct. App. 1990) (concluding that language in a release for ski rental alerted renter to “the dangers inherent in skiing,” but did not alert renter that she was also releasing ski area for “its own negligence in selecting appropriate skis or properly setting the bindings”); Turnbough v. Ladner, 754 So. 2d 467, 469 (Miss. 2000) (holding that release that participant in scuba diving class signed waived claims associated with risks inherent in sport, but did not waive right to recover for instructor’s failure to follow accepted safety standards).

¶20. This interpretation is supported by the Alaska Supreme Court’s decision in Moore v. Hartley Motors Inc., 36 P.3d at 633, which involved a similarly worded release. In Moore, the plaintiff signed a release before beginning an ATV instruction class. After noting that the release did not contain the word negligence, the court observed that the release’s “opening sentences refer only to unavoidable and inherent risks of ATV riding, and nothing in its ensuing language suggests an intent to release [the defendants] from liability for acts of negligence unrelated to those inherent risks.” 36 P.3d at 633. The court concluded that the plaintiff released the defendants “only from liability arising from the inherent risks of ATV riding and ordinary negligence associated with those inherent risks.” Id.; see Powell v. Am. Health Fitness Ctr. of Fort Wayne, Inc., 694 N.E.2d 757, 761 (Ind. Ct. App. 1998) (holding that exculpatory clause in release plaintiff signed as part of a health club membership agreement was not specific enough to release club from negligence liability); O’Connell v. Walt Disney World Co., 413 So. 2d 444, 447 (Fla. Dist. Ct. App. 1982) (finding release not specific enough to bar recovery for injuries from amusement park’s negligence during a horseback ride). But see Boehm v. Cody Country Chamber of Commerce, 748 P.2d 704, 711-12 (Wyo. 1987) (holding that release unambiguously released defendants from negligence liability, even though the release did not include the word negligence because there was “no other rational purpose for which” the exculpatory language could have been intended). Similarly, we conclude that plaintiff released defendant from liability associated with the inherent dangers of *230riding a motorcycle but did not release defendant from injuries caused by its own negligence.

Remanded for further proceedings consistent with this opinion.