The Court of Special Appeals ruled this week that an exculpatory agreement created by a "commercial enterprise" executed by adults on behalf of a minor child are void and unenforceable as a matter of public policy.
Our Annapolis Maryland injury attorneys have years of experience representing those who have suffered catastrophic personal injuries caused by the negligence of others.
In Rosen v. BJ's Wholesale Club, No. 2861 September Term, 2009, the Court of Special Appeals overturned a Baltimore Circuit Court's finding that a pre-injury release agreement signed by a parent on behalf of her five-year old child fully released BJ's for all liability as a result of injuries suffered by the five-year old on a supervised play center at BJ's Warehouse.
When the family joined BJ's in July 2005, the father executed a release agreement involving the use of an indoor playground at BJ's called the "Incredible Kid's Club." The Club was a supervised drop-off point where members dropped off their children, while the adults shopped. Members' children were not permitted to use the play center unless the family signed a release containing exculpatory and indemnification clauses. The agreement read as follows:
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 October 22, 2006, the child's mother left the child supervised at the play center. While playing, the child fell and suffered a serious brain injury when he fell and struck an unpadded cement floor.
The Circuit Court granted BJ's Wholesales' Motion for Summary Judgment, concluding the agreement was valid and enforceable. As stated above, however, the Court of Special Appeals reversed. The Court of Special Appeals held for the first time in Maryland that an exculpatory/indemnification agreement executed by a parent on behalf of a minor child with a "commercial enterprise" violates public policy considerations. The Court defined a "commercial enterprise" as a for-profit entity that serves private interests.
The Court reasoned that public policy interests reflect a substantial public interest in protecting children and their rights to seek redress for negligence, when the negligence results in injury to them.
Finding no Maryland case that previously addressed the issue, the Court relied on other state courts' decisions to find that most other states held such agreements are invalid and unenforceable, especially in cases involving a "commercial enterprise."
The Court of Special Appeals cited with approval the New Jersey Supreme Court that held that commercial enterprises are better able to bear the cost associated with injuries than the children or their families and they can spread the cost of insurance among their consumers.
Observing that two Courts have also invalidated pre-injury releases executed by a parent on behalf of minor children in cases involving governmental agencies, the Court declined to extend its holding to governmental agencies until a case arises in the future.
The policy rationale that the Court of Special Appeals found most compelling is the State has a paternal interest in caring for those, such as minors, who cannot care for themselves.
In dicta, the Court anticipates that its holding will provide incentives for "commercial enterprises" to take reasonable safety precautions in the operation and maintenance of their facilities and to obtain adequate insurance to cover risk of physical injuries to minor patrons.
In addition to ruling the exculpatory clause unenforceable against the child, the Court also held the indemnifaction clause unenforceable against his parents. This was because the Court found that the indemnification clause excused BJ's "from any and all claims and causes of action of any kind." This, the Court held was overreaching, because such an indemnification clause cannot excuse a party from "intentional harms or for the most extreme forms of negligence, i.e., reckless, wanton, or gross." Wolf v. Ford, 335 Md. 525, 531 (1994). Additionally, the Court found that the same public policy grounds also made the clause unenforceable against his parents.
If you or a loved one has suffered a catastrophic injury due to another's negligence, contact the Brassel, Alexander & Rice for a free consultation.