Opinion
No. CIV 11-393 JP/RHS
07-24-2012
DARLENE BURRELL, Plaintiff, v. HARLEY DAVIDSON MOTOR COMPANY, INC., a foreign corporation organized in Texas and doing business in New Mexico; MOTORSPORTS OF ALBUQUERQUE, LLC, a foreign limited liability company organized in Florida and doing business in New Mexico; MOTORCYCLE SAFETY FOUNDATION, INC., a foreign nonprofit corporation doing business in New Mexico; FRANK ALLEN; and JEFFREY PIPER, Defendants.
MEMORANDUM OPINION AND ORDER
Defendants, Harley-Davidson Motor Company, Inc., Motorsports of Albuquerque, LLC, Motorcycle Safety Foundation, Inc., Frank Allen, and Jeffrey Piper, filed a Motion for Summary Judgment. Defendants seek summary judgment in favor of all Defendants "on the basis that Plaintiff signed a valid and enforceable liability release for personal injury that does not violate any New Mexico public policy." Motion for Summary Judgment at 1. Plaintiff Darlene Burrell does not dispute that she signed liability releases, but Plaintiff argues that the documents are invalid and unenforceable because they violate public policy and because they are vague and ambiguous. Response at 1. On July 19, 2012, the Court held a pretrial conference on the record and permitted the parties to make arguments related to the Motion for Summary Judgment. Attorney Jesse Quackenbush represented Plaintiff, and attorneys Paul Yarbrough and Christopher Ryan represented Defendants. The Court has considered the record in this case, the parties' arguments, and the relevant law, and the Court concludes that Defendants' Motion for Summary Judgment should be denied because enforcing the liability releases that Plaintiff signed would violate New Mexico public policy.
On May 31, 2012, Defendants filed DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AND MEMORANDUM IN SUPPORT (Doc. No. 108) (Motion for Summary Judgment). On June 25, 2012, Plaintiff filed PLAINTIFF'S RESPONSE IN OPPOSITION TO DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AND MEMORANDUM IN SUPPORT (Doc. No. 124) (Response). On July 16, 2012, Defendants filed DEFENDANTS' REPLY IN SUPPORT OF THEIR MOTION FOR SUMMARY JUDGMENT (Doc. No. 139) (Reply).
BACKGROUND
Plaintiffs' allegations are provided for context and are taken from Plaintiff's SECOND AMENDED COMPLAINT FOR PERSONAL INJURIES AND MONEY DAMAGES (Doc. No. 52) (Amended Complaint), filed December 8, 2011.
Plaintiff visited Thunderbird Harley-Davidson/Buell at 5000 Alameda Boulevard in Albuquerque, New Mexico, for the purpose of purchasing a motorcycle. Amended Complaint ¶ 15. Plaintiff was fitted by Harley-Davidson employee Burns Forsythe. Id. ¶ 16. Mr. Forsythe concluded that the smallest showroom motorcycles, including the 499 cc Buell Blast, were too big for Plaintiff and commented to Harley-Davidson salesperson Leanne Early that "there wasn't a single bike in the store [he] would sell [Plaintiff] because [Plaintiff] was too small." Id. (first alteration in original). At the time, Plaintiff was 4'9" tall and weighed approximately 190 pounds. Id. ¶ 15.
Nonetheless, Leanne Early talked Plaintiff into signing up for a "New Rider" course offered through the "Riders Edge© Academy of Motorcycling." Id. ¶¶ 15, 17. Plaintiff hoped to obtain the training and experience necessary to get a New Mexico motorcycle licence. Id. ¶ 17.
On January 22, 2011, Plaintiff began the road training portion of the New Riders course, which took place at a parking lot a few miles from the dealership. Id. ¶ 19. All students, including Plaintiff, were provided 499 cc Buell Blast motorcycles to use during the road training. Id. Shortly after instruction began, Plaintiff fell off the motorcycle, injuring tendons in her left ankle and upper right thigh. Id. Several people witnessed Plaintiff's fall, including Plaintiff's instructors Jeffrey Piper and Frank Allen, salesperson Leanne Early, and a road course inspector employed by Defendant Motorcycle Safety Foundation, Inc. Id.
Despite this first accident, Plaintiff returned on January 23, 2011, for the second day of road training. Id. ¶ 20. Plaintiff lost control of her motorcycle and ran into a concrete light pole. Id. Plaintiff's clothes became entangled in chains that marked the road course boundaries. Id. The motorcycle came to rest on top of Plaintiff, and she was trapped beneath it by the chains. Id. The exhaust pipe from the motorcycle burned Plaintiff's left leg. Id. Someone eventually located scissors, cut Plaintiff's clothing free, and lifted the motorcycle off of Plaintiff. Id. Plaintiff was transported via ambulance to the emergency room and treated for third degree burns and spinal sprains. Id. ¶ 21. Over the next six months, Plaintiff suffered excruciating pain as she attempted to recover from her injuries. Id.
Plaintiff argues that Defendants were negligent and reckless, in that they (1) gave her a motorcycle that they knew was too large and powerful for her; (2) allowed an unreasonably dangerous condition to exist on the training course; (3) failed to warn Plaintiff of the danger created by the chain, motorcycle, and training range; (4) failed to inspect the training range; (5) failed to train and supervise employees charged with maintaining, repairing, and inspecting the range; (6) concealed from Plaintiff their knowledge of the increased risk of harm and death associated with novice riders using the Buell Blast motorcycle; (7) failed to adequately supervise or train the New Riders course instructors; (8) failed to follow the self-prescribed guidelines for range construction; and (9) allowed Plaintiff to continue taking the course after her obvious difficulties with the motorcycle and her first accident. Id. ¶ 39. Plaintiff contends that Defendants should be held jointly, severally, and vicariously liable for negligence. Id. ¶ 43. Plaintiff seeks damages for pain and suffering, mental anguish, physical impairment, disfigurement, medical costs, lost wages, reduced earning capacity, and loss of enjoyment of life, as well as punitive damages. Id. ¶¶ 41-42. B. The Liability Releases at Issue
On January 20, 2012, Plaintiff signed and dated two contracts: (1) the Riders Edge© Release and Waiver ("Release and Waiver"), and (2) the Riders Edge© Acknowledgments and Assumption of Risk ("Acknowledgment and Assumption of Risk"). Doc. Nos. 108-2 and 108-3. Defendant Jeffrey Piper, who was one of Plaintiff's course instructors, presented the liability releases to Plaintiff in connection with Plaintiff's participation in the class. See Doc. No. 108-4, at 2. In his deposition, Mr. Piper testified that he tells course participants to read the liability releases carefully and to sign them, and that he allows participants extra time to read the documents if needed. Id.
For purposes of this Memorandum Opinion and Order, the Court will refer to these contracts, collectively, as "liability releases."
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The Release and Waiver provides, in part,
I hereby RELEASE AND FOREVER DISCHARGE (i) Harley-Davidson Motor Company, Inc., Harley-Davidson, Inc. Buell Motorcycle Company, LLC, each of their respective parent, subsidiary, and affiliated companies, those governmental agencies and other organizations affiliated with the Class, including but not limited to the Motorcycle Safety Foundation and its members, and all of their respective officers, directors, employees and agents; (ii) all authorized dealers of Harley-Davidson Motor Company or Buell Motorcycle Company who are sponsoring or conducting the Class and all of their respective officers, directors, employees and agents; and (iii) all Class Instructors and all Class Participants (hereinafter all referred to as "Released Parties") from ANY AND ALL CLAIMS, DEMANDS, RIGHTS, CAUSES OF ACTION AND LOSSES (collectively, "CLAIMS") OF ANY KIND WHATSOEVER THAT I OR ANY OF MY HEIRS AND ASSIGNS NOW HAVE OR LATER MAY HAVE AGAINST ANY RELEASED PARTYDoc. No. 108-2.
IN ANY WAY RESULTING FROM, OR ARISING OUT OF OR IN CONNECTION WITH MY PARTICIPATION IN THE CLASS, REGARDLESS OF WHETHER SUCH CLAIMS RELATE TO THE DESIGN, MANUFACTURE, REPAIR, OPERATION OR MAINTENANCE OF ANY MOTORCYCLES USED IN THE CLASS OR THE CONDITIONS, RULES, QUALIFICATIONS, INSTRUCTIONS OR PROCEDURES UNDER WHICH THE CLASS IS CONDUCTED, OR ANY OTHER CAUSE OR MATTER.
I acknowledge and understand that this Release EXTENDS TO AND RELEASES AND DISCHARGES ANY AND ALL CLAIMS I or any of my Heirs and Assigns have or may have against the Released Parties arising out of my participation in the Class, including without limitation all such claims resulting from the NEGLIGENCE of any Released Party (including but not limited to claims of negligent instruction), or arising from STRICT PRODUCTS LIABILITY, or resulting from any BREACH OF ANY EXPRESS OR IMPLIED WARRANTY by any Released Party, and regardless of whether such Claims now exist or hereafter arise or are known or unknown, contingent or absolute, liquidated or unliquidated or foreseen or unforeseen, or arise by operation of law or otherwise.
I acknowledge and understand that by my signing this Release I and my Heirs and Assigns AGREE NOT TO SUE any or all of the Released Parties for any injury, damage or death to myself, my property, any other person or such other person's property resulting from, or arising out of or in connection with, my participation in the class.
The Acknowledgment and Assumption of Risk provides, in part,
I fully understand and acknowledge that operating, and learning to operate, a motorcycle are activities that have their own unique risks, and that serious injury or death could result from participating in the Class through no fault of my own. I understand that these risks may be caused by the negligence or fault of the Class Instructor(s) or sponsors, or the negligence or fault of me, other Class participants or other persons, or may arise from the repair, maintenance or operation of the motorcycles used in the Class, weather conditions during the time the Class is conducted, or other causes, whether foreseeable or unforeseeable. I am voluntarily participating in the Class. I EXPRESSLY AGREE TO ASSUME THE ENTIRE RISK OF ANY ACCIDENTS, PROPERTY DAMAGE, OR PERSONAL INJURY INCLUDING PERMANENT DISABILITY, PARALYSIS AND DEATH, THAT I MIGHT SUFFER AS A RESULT OF MY LEARNING TO OPERATE OR OPERATING A MOTORCYCLE AND OTHERWISE PARTICIPATING IN THE CLASS.Doc. No. 108-3.
In her deposition, Plaintiff testified that she did not read either of the liability releases before signing them. See Doc. No. 108-1, at 15-16. In an affidavit, Plaintiff further explained that all course participants, including herself, signed and returned the liability releases within a few minutes after the releases were distributed by Mr. Piper, and it appeared to Plaintiff that none of the participants actually read the releases. Doc. No. 124-1, ¶ 4. Mr. Piper continued with his classroom instruction while the participants signed the liability releases. Id. Plaintiff also asserts that she "was never offered any type of insurance protection at any time during the course to protect [her]self against the negligence of the trainers or course operators." Id. ¶ 6.
According to David Smith, the State Coordinator and Program Manager for the New Mexico Motorcycle Safety Program, in New Mexico the "only providers of motorcycle safety training are three Harley-Davidson dealerships and the State, New Mexico Motorcycle Safety Program." Doc. No. 124-2, at page 1. And "[a]ll motorcycle safety programs in New Mexico use release forms similar to those used in the Rider's Edge program." Doc. No. 108-5, ¶ 7.
Leanne Early, who teaches Riders Edge© classes at Thunderbird Harley-Davidson, testified in her deposition that the Riders Edge© course is open to any member of the general public who is over the age of thirteen, appears physically able to ride a motorcycle, and is able to ride a bicycle. Doc. No. 124-3, at 5. But although almost anyone would be permitted to enroll in the Riders Edge© course, a student who refused to sign the liability releases would not be permitted to continue participating in the course. Id. at 3. Early testified that it would be unacceptable for a student to cross out or modify any language in the liability releases. Id. Early opined that Harley-Davidson would not allow a student to participate in the class if the student had tried to alter or modify the language in a liability release. Id. at 4. Early also testified that class participants are expected to follow the trainers' instructions while on the road training course, must use Harley-Davidson's written materials during the classroom portion of the class, must use Buell Blast motorcycles provided by Harley-Davidson, and must complete the road training component of the class within the flag-marked boundaries of Harley-Davidson's range course. Doc. No. 124-3, at 6.
DISCUSSION
A. Summary Judgment Standard
Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "The movant bears the initial burden" to show the absence of a genuine dispute of material fact. Libertarian Party of N.M. v. Herrera, 506 F.3d 1303, 1309 (10th Cir. 2007) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). "If the movant meets this initial burden, the burden then shifts to the nonmovant" to show the presence of a genuine dispute, id., one that "can be resolved only by a finder of fact because [it] may reasonably be resolved in favor of either party," Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). The nonmovant may not rest upon mere allegations and denials in the pleadings, but must set forth specific facts showing that there is a genuine issue for trial. See id. at 248-49; see also Ford v. Pryor, 552 F.3d 1174, 1177-78 (10th Cir. 2008) (providing that the nonmovant "must present more than a scintilla of evidence"). B. New Mexico Law on Liability Releases: Berlangieri v. Running Elk Corporation
Although liability releases are not per se invalid in New Mexico, their validity is strictly limited by public policy considerations. See Berlangieri v. Running Elk Corp., 2003-NMSC-024, ¶ 27, 134 N.M. 341, 76 P.3d 1098 (holding "that liability releases for personal injury may be enforced in limited circumstances").
In Berlangieri, the plaintiff sued a recreational resort in Chama, New Mexico, to recover for damages he sustained while horseback riding at the resort. In the complaint, the plaintiff alleged that the lodge's "employees failed to properly install the tack on the horse and . . . either knew or should have known that the tack was faulty or improperly installed." Id. ¶ 8. Before getting on the horse, the plaintiff signed a liability waiver that provided in part:
In consideration of being permitted to participate in the above mentioned activities and otherwise use the lands of THE LODGE AT CHAMA, I agree:Id. ¶ 4. The district court "held that the release was enforceable, because there was no relevant exception to the general rule that releases of liability for negligence are enforceable." Id. ¶ 9. A majority of the Court of Appeals reversed, holding that "'the societal interests furthered by the law of negligence' dictate that releases of liability for negligence should never be enforceable when a risk of 'serious physical injury or death to the releasor' is at stake." Id. ¶ 10 (quoting Berlangieri, 2002-NMCA-060, ¶ 12, 132 N.M. 332, 48 P.3d 70). Judge Sutin dissented, arguing that it would be wiser to consider liability releases on a case-by-case basis. Id. ¶ 11.
To use due care while engaging in the above mentioned activities on the lands of THE LODGE AT CHAMA, including, but not limited to, each and every risk resulting from negligent acts or omissions of any other person or persons, including employees and agents of THE LODGE AT CHAMA. I further agree to exculpate and relieve THE LODGE AT CHAMA and its employees, representatives and agents, from all liability for any loss, damage, or injury, whether to person or property which I may suffer while engaging in activities and/or using the lands of THE LODGE AT CHAMA all whether or not resulting from the negligent act or omission of another person or persons.
The Supreme Court upheld the result from the Court of Appeals but on different grounds. The Supreme Court began its discussion by explaining that "[j]urisdictions that disallow the use of liability releases for personal injury usually do so as a matter of statutory enactment, rather than common law." Id. ¶ 13. The Court noted that "[c]ourts are generally less well-equipped to address complex policy issues than legislatures." Id. ¶ 15. Accordingly, the Supreme Court adopted the approach taken by the overwhelming majority of jurisdictions and held that "agreements that exculpate one party from liability for negligence will be enforced unless they are violative of law or contrary to some rule of public policy." Id. ¶ 17 (quotation marks and citation omitted).
Having concluded that liability releases are not per se invalid in New Mexico, the Supreme Court adopted a two-step inquiry for determining whether a liability release is enforceable. See id. ¶¶ 28-39. First, a court should "look to the specific language of the release to determine whether it is sufficiently clear and unambiguous that it would inform the person signing it of its meaning." Id. ¶ 29. Second, if the release is sufficiently clear, a court should consider "whether the release is affected with a public interest such that it is unenforceable as contrary to public policy." Id. ¶ 38.
To survive the first inquiry, liability releases "must be written to be understood by those without legal training, but they also must contain sufficient legal terminology to survive a legal challenge." Id. ¶ 29. To strike this balance, "drafters of these agreements should err on the side of using clear terms, understandable by the general public, rather than legal terminology." Id. ¶ 31. Additionally, the exculpatory language should be conspicuous enough for a reasonable person to have noticed it. Id. ¶ 36.
The Supreme Court found that the release at issue contained mostly "unintelligible and unhelpful language" but concluded that the release was clear enough because the very last sentence of the release conveyed the idea that the guest was agreeing not to hold the lodge responsible for the defendant's own negligence. Id. ¶ 34. The Supreme Court explained that, at its core, the release stated, "I . . . relieve THE LODGE . . . from all liability for . . . injury . . . resulting from the negligent act . . . of another . . . ." Id. ¶ 35. Additionally, the exculpatory language was conspicuously placed within a short document. Id. ¶ 36.
If a release is sufficiently clear and unambiguous to survive the first inquiry, a court should next consider "whether the release is affected with a public interest such that it is unenforceable as contrary to public policy." Id. ¶ 38. To help courts determine whether a release is contrary to public policy, the Supreme Court adopted for guidance a non-exclusive list of factors from the case of Tunkl v. Regents of University of California, 383 P.2d 441, 445-46 (Cal. 1963):
[T]he attempted but invalid exemption involves a transaction which exhibits some or all of the following characteristics. [1] It concerns a business of a type generally thought suitable for public regulation. [2] The party seeking exculpation is engaged in performing a service of great importance to the public, which is often a matter of practical necessity for some members of the public.[3] The party holds himself [or herself] out as willing to perform this service for any member of the public who seeks it, or at least for any member coming within certain established standards. [4] As a result of the essential nature of the service, in the economic setting of the transaction, the party invoking exculpation possesses a decisive advantage ofId. ¶ 39 (quotation marks, citation, and footnotes omitted). The Court explained that the Tunkl factors are not a balancing test—"[i]t would be possible that only one of these factors would be applicable, but that factor would be significant enough to make the release unenforceable." Id. And "it would be a rare case when a release exhibited all of these factors at once." Id.
bargaining strength against any member of the public who seeks his [or her] services. [5] In exercising a superior bargaining power the party confronts the public with a standardized adhesion contract of exculpation, and makes no provision whereby a purchaser may pay additional reasonable fees and obtain protection against negligence. [6] Finally, as a result of the transaction, the person or property of the purchaser is placed under the control of the seller, subject to the risk of carelessness by the seller or his [or her] agents.
Applying the Tunkl factors to the facts in Berlangieri, the Supreme Court concluded that the liability release was unenforceable because it violated public policy. Id. ¶¶ 50-52. Four factors weighed in favor of invalidating the liability release. The first factor, suitability for public regulation, weighed heavily in the Court's conclusion. The Court explained that the Legislature had chosen to regulate horseback riding by passing the Equine Liability Act, NMSA 1978, § 42-13-4 (1993). See id. ¶¶ 40, 50. The Court found the language of the Equine Liability Act to be somewhat ambiguous, but concluded that under the Act equine operators may be held liable for their own negligence but cannot be held liable for injuries resulting from horse behavior. Id. ¶ 43. Thus, the Court found that the "suitability for public regulation" factor weighed in favor of invalidating the release. Id. ¶ 50. The third factor, "willing to perform this service for any member of the public," weighed in favor of invalidating the release because the Lodge was open to the public and did not require patrons to meet criteria such as being experienced horseback riders before purchasing the defendant's services. Id. The fifth factor, an adhesion contract with "no provision whereby a purchaser may pay additional reasonable fees and obtain protection against negligence," weighed in favor of invalidating the liability release because the defendant did not offer the plaintiff any expanded insurance coverage. Id. Finally, the sixth factor also weighed in favor of invalidating the release because, "as a result of the release," the plaintiff "was 'subject to the risk of carelessness'" by the defendant's employees, considering that the plaintiff "was a novice rider who could not independently verify that his saddle was mounted properly." Id.
The Supreme Court concluded that the second and fourth factors weighed in favor of enforcing the release. Id. ¶ 51. The second factor, "service of great importance to the public," weighed in favor of enforcing the release because unlike some services, such as utility services, horseback riding is not a service of "practical necessity" to the public. Id. And the fourth factor, superior bargaining power, weighed in favor of enforcing the liability release, because the plaintiff was not "forced" to participate in a recreational enterprise with the defendant. Id. Nonetheless, the Supreme Court held that the liability release violated New Mexico public policy and was therefore invalid. Id. ¶ 1. C. Application of Berlangieri to the Liability Releases in this Case
1. The Liability Releases Are Sufficiently Clear and Unambiguous.
Under Berlangieri, to determine whether the liability releases in this case are enforceable the Court should first consider whether the language of the liability releases is "sufficiently clear and unambiguous that it would inform the person signing it of its meaning." 2003-NMSC-024, ¶ 29.
Defendants argue that the liability releases Plaintiff signed unambiguously state that Plaintiff was releasing Defendants from liability and assuming the risk that she might be injured through her own negligence or the negligence of others. Motion for Summary Judgment at 9. Defendants contend that "AGREE NOT TO SUE" is plain, understandable language, and that a reasonable person would notice the language because it is written in boldface capital letters. Id. at 10. Additionally, Defendants ask the Court to do what the Supreme Court did in Berlangieri and pare down the language to its essentials: "I hereby RELEASE AND FOREVER DISCHARGE [the Defendants] from ANY AND ALL CLAIMS . . . OF ANY KIND WHATSOEVER . . . IN ANY WAY RESULTING FROM . . . MY PARTICIPATION IN THE CLASS[.]" Id. at 10-11. Defendants point out that this sentence is followed by a boldface, capital letter reference to "NEGLIGENCE." Likewise, in Defendants' view, the Acknowledgment and Assumption of the Risk states the exculpatory language in boldface capital letters and is written in plain, simple language. Id. at 11.
Defendants also argue that Plaintiff's decision not to read the liability releases does not render the releases enforceable. Id. at 12 (citing Morstad v. Atchison, T. & S.F. Ry., 23 N.M. 663, 670, 170 P. 886, 889 (N.M. 1918) ("Ordinarily it is the duty of every person to read a contract before he signs the same, if he can read, and it is as much his duty to have the same read and explained to him before he executes it, if he cannot read or understand it. If he fails in this regard, he will ordinarily be estopped to deny his contract."); see also Smith v. Price's Creameries, Div. of Creamland Dairies, Inc., 98 N.M. 541, 545, 650 P.2d 825, 829 (N.M. 1982) ("Generally, a party who executes and enters into a written contract with another is presumed to know the terms of the agreement, and to have agreed to each of its provisions in the absence of fraud, misrepresentation or other wrongful act of the contracting party.").
Plaintiff argues that the liability releases are invalid on their face because (1) the liability releases do not mention all Defendants named in this case; specifically, the releases do not name Defendant Motorsports of Albuquerque, LLC, or the individual Defendants, Allen and Piper, who are not Harley Davidson employees; and (2) the liability releases did not provide an adequate explanation of the specific risks associated with the course, including that Plaintiff would have to use a motorcycle that was too big for her, that the motorcycle was 100 pounds heavier and twice as powerful as motorcycles used in other novice training classes, and that the motorcycle had not been properly field tested for use as a training motorcycle. Response at 9. Plaintiff also argues, without citation to authority, that the Court should not enforce the liability releases because Plaintiff was not given sufficient time to review them. Id. at 10.
In the Reply, Defendants argue that the liability releases adequately identify all Defendants, that the liability releases adequately describe the risks involved, and that Plaintiff's decision not to read the forms is no defense. See Doc. No. 139.
The Court begins by noting that the Release and Waiver is a clearly labeled, one-page document with small print, inordinately long sentences, and abundant legal jargon. The Acknowledgment and Assumption of Risk is also a one-page document with small print, but compared to the Release and Waiver, the Acknowledgment and Assumption of Risk is relatively straight-forward and written in plain English.
Despite the fact that the releases, especially the Release and Waiver, could have been drafted in clearer language, the Court concludes that the liability releases were clear enough to put a reasonable person on notice that the person was releasing Defendants from their own negligence. The most critical terms in the documents are made conspicuous with boldface capital letters. And contrary to Plaintiff's assertion, the language in the Release and Waiver is sufficiently broad to cover all named Defendants to this suit. See Doc. No. 108-2 (referring to all companies affiliated with Harley-Davidson Motor Company and all Class Instructors); see also Hansen v. Ford Motor Co., 120 N.M. 203, 211, 900 P.2d 952, 960 (N.M. 1995) ("We hold that a general release raises a rebuttable presumption that only those persons specifically designated by name or by some other specific identifying terminology are discharged." (emphasis added)). Additionally, although the Acknowledgment and Assumption of the Risk did not, and could not, describe in specific detail each and every possible risk, such as the risks specific to Plaintiff in this case, the release did mention that the risks included "ACCIDENTS, PROPERTY DAMAGE, OR PERSONAL INJURY INCLUDING PERMANENT DISABILITY, PARALYSIS AND DEATH."
Finally, there is evidence in the record demonstrating that Plaintiff could have taken the liability releases home and read them on her own time, and Plaintiff does not allege that any fraud or misrepresentation prevented her from learning the contents of the releases. Jeffrey Piper testified in his deposition that he gives students extra time to read the documents and that students may take the documents home overnight. See Doc. No. 108-4, at 2. Plaintiff herself testified that she could have chosen to take the time to read the documents. Doc. No. 108-1, at 17. Under these circumstances, the Court will not invalidate the releases merely because Plaintiff failed to read them. The Court concludes that the liability releases are sufficiently clear and unambiguous to be enforceable, and that Plaintiff's failure to read the documents does not render them unenforceable.
2. The Liability Releases Are Contrary to New Mexico Public Policy.
Because the language of the liability releases is sufficiently clear and unambiguous, the Court should next consider whether the liability releases are "unenforceable as contrary to public policy," using the nonexclusive Tunkl factors as guidance. See Berlangieri, 2003-NMSC-024, ¶¶ 38-39.
(a) Motorcycle Training is a Business of a Type Generally Thought
Suitable for Public Regulation.
Under the first factor, the Court should consider whether the liability releases "concern a business of a type generally thought suitable for public regulation." Berlangieri, 2003-NMSC-024, ¶ 39 (quotation marks and citation omitted). Both parties recognize in their briefing that the New Mexico Legislature has enacted NMSA 1978, § 66-10-10 (1993), which "created in the state treasury the 'motorcycle training fund" that "shall be used to provide a statewide system of motorcycle training and driver awareness and education[.]" § 66-10-10(A)-(B). The statute provides that "[f]irst-time applicants for a motorcycle license . . . may be required to complete a motorcycle driver education program" and tasks the New Mexico Traffic Safety Bureau with adopting "rules and regulations . . . for the administration of a statewide motorcycle driver education program." § 66-10-10(C)-(D).
The New Mexico Traffic Safety Bureau has promulgated regulations under § 66-10-10, which set minimum and uniform standards and procedures for the operation of the New Mexico Motorcycle Training Program. See 18.20.10 NMAC. The regulations provide that motorcycle training courses must be offered by either the State Highway and Transportation Department or its designee. 18.20.10.8(A) NMAC. Additionally, motorcycle training courses must use a curriculum and standards approved by the Motorcycle Safety Foundation. 18.20.10.8(C)(6) NMAC.
Defendants argue that enforcing the liability releases would not offend any public policy because New Mexico public policy encourages motorcycle safety training. Motion for Summary Judgment at 13-14. Plaintiff argues that the Riders Edge© course is a business that is suitable for public regulation, as demonstrated by the fact that New Mexico has chosen to regulate motorcycle training. Response at 11-12.
The Court agrees with Plaintiff. The New Mexico Legislature has chosen to regulate motorcycle training in New Mexico, and accordingly, the liability releases at issue in this case concern "a business of a type generally thought suitable for public regulation." Berlangieri, 2003-NMSC-024, ¶ 39 (quotation marks and citation omitted). Accordingly, the first Tunkl factor weighs in favor of finding the liability releases invalid.
(b) Although Motorcycle Training Is a Service of Importance to the Public, It Is Not a Matter of Practical Necessity.
Under the second Tunkl factor, the Court should consider whether "[t]he party seeking exculpation is engaged in performing a service of great importance to the public, which is often a matter of practical necessity for some members of the public." Id. Defendants argue that motorcycle driver training is neither a service of great importance to the public nor a practical necessity for some members of the public. Motion for Summary Judgment at 14 (citing Berlangieri, 2003-NMSC-024, ¶ 51 ("[R]ecreational horseback riding has not been shown to be a service of 'practical necessity to the public, such as a utility service."). Defendants explain that an adult motorcycle owner is not required to take a motorcycle safety test to get a motorcycle license. Id. (citing NMSA 1978, § 66-5-14(A), (C)). Plaintiff responds that motorcycle training is a service of great public importance, as demonstrated by the fact that it is regulated by the State of New Mexico. Response at 12.
The Court concludes that the second Tunkl factor does not weigh heavily in the public policy analysis in this case. Motorcycle safety training is a service of importance to the general public because proper training will increase highway safety for the motoring public at large. Additionally, for a beginning motorcycle rider, motorcycle training could be considered a practical necessity. On the other hand, unlike utility services, which are a practical necessity for all members of the public, motorcycle riding, like recreational horseback riding, does not need to be provided for all members of the public. Thus, the Court concludes that this factor does not weigh heavily in favor of upholding or invalidating the liability releases.
(c) The Riders Edge© Course Was Offered to All Members of the General Public Who Could Meet Certain Minimum Standards.
Under the third Tunkl factor, the Court should consider whether the party seeking exculpation held itself "out as willing to perform this service for any member of the public who seeks it, or at least for any member coming within certain established standards." Berlangieri, 2003-NMSC-024, ¶ 39 (quotation marks and citation omitted).
Defendants argue that because the second Tunkl factor does not apply, neither do factors three and four, because factors three and four refer back to the "service of great importance" discussed in factor two. Motion for Summary Judgment at 14-15. The Court finds Defendants' argument contrary to the Supreme Court's analysis in Berlangieri, in which the Court concluded that factor two weighed in favor of upholding the release, but that factor three weighed in favor of invalidating the release. Berlangieri, 2003-NMSC-024, ¶¶ 50-51. To the extent that the third factor may apply, Defendant concedes that Riders Edge© will enroll in its course any member of the public willing to pay the fee and meet the physical and equipment requirements listed in the acknowledgments. Motion for Summary Judgment at 15.
Plaintiff argues that the deposition testimony of Riders Edge© instructors Leanne Early and Jeffrey Piper demonstrate that Defendants will offer the Riders Edge© course to any and all members of the public who sign up, are willing to pay, and can ride a bicycle. See Deposition of Leanne Early (Doc. No. 124-3, at 5) (explaining that any member of the general public can sign up for the class as long as the person is over thirteen years of age, can ride a bicycle, and appears physically capable of riding a motorcycle).
As in Berlangieri, the Court concludes that the third factor weighs in favor of finding the liability releases unenforceable because the Riders Edge© Course is open to all members of the general public who meet minimal standards, including first-time motorcycle riders.
(d) Defendants Possess a Decisive Advantage in Bargaining Strength over Plaintiff.
Under the fourth factor, the Court should consider whether, "[a]s a result of the essential nature of the service, in the economic setting of the transaction, the party invoking exculpation possesses a decisive advantage of bargaining strength against any member of the public who seeks his [or her] services." Berlangieri, 2003-NMSC-024, ¶ 39 (quotation marks and citation omitted).
Defendants argue that they did not have superior bargaining power over Plaintiff because Plaintiff could have taken other motorcycle training classes in New Mexico. If Plaintiff didn't like the terms of the liability releases, Plaintiff should have opted to take a different course. Motion for Summary Judgment at 15.
Plaintiff argues that, as shown by 18.20.10 NMAC, Defendant Motorcycle Safety Foundation has a virtual monopoly on motorcycle instruction in New Mexico. All courses in the state offer curricula and standards approved by the Motorcycle Safety Foundation, and all instructors must be certified by the Motorcycle Safety Foundation. Response at 13. In Plaintiff's view, the Motorcycle Safety Foundation has all the bargaining power because, in order to obtain motorcycle training in New Mexico, a student must take a class established by the Motorcycle Safety Foundation and must sign a waiver and release in order to participate.
The Court concludes that the fourth factor weighs in favor of finding the liability releases unenforceable. Defendants' own brief states that all motorcycle training courses in New Mexico require similar or identical liability waivers. See Motion for Summary Judgment at 14 ("Motorcycle safety programs across New Mexico uniformly use releases similar or identical to the Release and Acknowledgements [sic] at issue here."). As David Smith testified in his deposition, "the only providers of motorcycle safety training are three Harley-Davidson dealerships and the State, New Mexico Motorcycle Safety Program." Doc. No. 124-2, at 1. And "[a]ll motorcycle safety programs in New Mexico use release forms similar to those used in the Rider's Edge program." Doc. No. 108-5, ¶ 7. The Court concludes that Defendants had superior bargaining power because a person cannot take a motorcycle training class in New Mexico without signing a liability waiver similar or identical to those at issue in this case.
(e) The Liability Releases Are Contracts of Adhesion that Did Not Provide an Option for Additional Insurance against Negligence.
Under the fifth factor, the Court should consider whether, "[i]n exercising a superior bargaining power the party confronts the public with a standardized adhesion contract of exculpation, and makes no provision whereby a purchaser may pay additional reasonable fees and obtain protection against negligence." Berlangieri, 2003-NMSC-024, ¶ 39 (quotation marks and citation omitted).
Defendants concede that its liability releases are "standard forms" but argue that the fifth factor is "large inapplicable." Motion for Summary Judgment at 15. In Defendants' view, they did not have superior bargaining power because Plaintiff was free to go elsewhere for her motorcycle training. Id. Additionally, Defendants contend that "the notion that Plaintiff would have sought to pay additional fees to obtain protection against negligence is purely hypothetical" because Plaintiff chose not to read the forms. Id.
Plaintiff argues that the liability releases are "take it or leave it propositions." Response at 13. In her deposition, Riders Edge© instructor Leanne Early testified that all students must sign the waivers to take the class, and that students are not allowed to change the language of the waivers or cross out any lines. Doc. No. 124-3, at 3. Additionally, Plaintiff stated in a sworn affidavit that Defendants did not offer liability insurance in connection with the class, and Defendants have offered no evidence to rebut Plaintiff's assertion. See Response at 13; Doc. No. 124-1, ¶ 6.
The Court concludes that the fifth factor weighs in favor of finding the liability releases unenforceable because the liability releases were contracts of adhesion, offered on a take-it-or-leave-it basis. See Rivera v. Am. Gen. Fin. Servs. Inc., 2011-NMSC-033, ¶ 44, 150 N.M. 398, 259 P.3d 803 ("An adhesion contract is a standardized contract offered by a transacting party with superior bargaining strength to a weaker party on a take-it-or-leave-it basis, without opportunity for bargaining." (quotation marks and citation omitted)). As Defendants concede, all students are required to sign the liability releases as a condition of participating in the class. Motion for Summary Judgment at 15. And a student may not bargain or change any of the terms of the contract. See Doc. No. 124-3, at 3-4. Finally, Defendants failed to offer additional insurance against negligence for a reasonable fee.
(f) Plaintiff was Subject to the Risk of Defendants' Carelessness.
Under the sixth factor, the Court should consider whether, "as a result of the transaction, the person or property of the purchaser is placed under the control of the seller, subject to the risk of carelessness by the seller or his [or her] agents." Berlangieri, 2003-NMSC-024, ¶ 39 (quotation marks and citation omitted).
Defendants argue that Plaintiff voluntarily entered into the contracts and that liability releases are routinely required of students who take motorcycle safety classes in New Mexico. Motion for Summary Judgment at 16. Defendants ask the Court to uphold the liability releases to encourage private businesses to undertake the risky business of teaching motorcycle safety classes. Id. Defendants cite cases from other jurisdictions to support Defendants' position that liability releases of this type are routinely upheld. Id.
Plaintiff argues that she was "100% under the control of Defendants while she was operating Defendants' motorcycles on Defendants' training range, under the supervision of Defendants' instructors." Response at 14. Plaintiff was required to use the motorcycles provided by Defendants and to comply with the range rules and regulations. Id. Plaintiff argues that by taking Defendants' class as a first-time motorcycle rider she was subject to the risk of Defendants' carelessness. Id.
The Court concludes that the sixth Tunkl factor weighs in favor of finding the liability release unenforceable. Like the novice horseback rider in Berlangieri who could not independently verify that his saddle was mounted properly on the horse, Plaintiff started the motorcycle training course without knowing how to operate a motorcycle. 2003-NMSC-024, ¶ 50.
3. Conclusion: Defendants' Motion for Summary Judgment Will Be Denied.
The Court will deny Defendants' Motion for Summary Judgment. The parties agree that the Court should apply the New Mexico Supreme Court's two-part inquiry, articulated in Berlangieri: (1) whether the language of the released is clear and unambiguous enough to inform a reasonable person of its meaning, id. ¶ 29, and (2) whether the release is unenforceable as contrary to public policy, id. ¶ 38. In this case, the Court concludes that the liability releases survive the first inquiry because the releases are sufficiently clear and unambiguous. In particular, the liability releases conspicuously state the excupatory terms in boldface capital letters. However, the Court concludes that the liability releases are unenforceable as a matter of public policy. The New Mexico Supreme Court has explained that, in New Mexico, liability releases are enforceable only in limited circumstances. In Berlangieri, the Supreme Court found that four of the six Tunkl factors weighed in favor of finding the release invalid on public policy grounds, and the Supreme Court concluded that the release was invalid. In this case, the Court concludes that five out of six Tunkl factors weigh in favor of finding the releases invalid. Accordingly, Defendants' Motion for Summary Judgment will be denied.
IT IS ORDERED THAT: DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AND MEMORANDUM IN SUPPORT (Doc. No. 108) is DENIED.
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UNITED STATES DISTRICT COURT JUDGE