Divers, Sign Your Life Away: Part II

In last month’s issue we covered the common provisions in a dive release and its effectiveness in protecting the dive operator from negligence claims. This concluding portion of my dive release article discusses some other dive release provisions which protect dive operators, and a few provisions which courts in the U.S. usually will not enforce.

If the Release Doesn’t Get You, Other Provisions May

Some releases contain a “choice of forum” clause and a “choice of laws clause” (e.g., Peter Hughes’ and Mike Ball’s online releases contain both). The “choice of forum” clause (such as in Hughes’ releases, which sends litigants to the courts in places such as Indonesia, the Maldives and Belize) will, if enforced, result in a U.S. court dismissing the lawsuit and leaving the injured diver or his heirs to journey to the designated court - often one distant and/or foreign. The prospect of finding a foreign attorney who can communicate in English, is trustworthy and will charge a reasonable legal fee, will discourage most litigants from pursuing their claims (note that most countries don’t allow the contingency fee arrangement, which fuels almost all U.S. personal injury/wrongful death suits).

Courts within the U.S. will generally enforce a release’s “forum selection” clause so long as it is fair to the suing party. Thus, if the designated forum is where the dive accident occurred, and the chosen court offers the diver some chance of litigating his claim, the court in which the diver chooses to sue will dismiss the case and leave him to refile his case in the designated court. A forum selection clause is useful to an operator who does enough business in, or has sufficient contacts with, a state within the U.S. to give that state’s local or federal courts power (jurisdiction) over the operators. Such an operator, if he inserts a “forum selection” clause in his release, can force the plaintiffs to sue in a court that the operator thinks is more convenient and friendly to himself. Thus, a New York state court dismissed a New York resident’s lawsuit arising out of a dive injury in Bonaire, leaving the diver to sue under the release’s forum selection clause in a Bonaire court. The injury occurred where the forum selection court was located and where most of the witnesses resided.

Courts likewise will usually enforce a “choice of laws” clause if: 1) the chosen state’s or foreign country’s laws have a substantial relationship to the parties or their transaction, or have some other reasonable basis; 2) the law chosen is not contrary to some fundamental policy of a state with a greater interest in the matter’s determination than the chosen state or foreign country; and 3) the applicable law would be that of the state with the greater interest absent the choice-of-laws clause.

Another speed bump a diver may encounter on his trip to court is a “time to sue” clause. Dive releases occasionally provide that the injured diver or his heirs must file suit within a certain time (e.g., Peter Hughes’ and the Aggressor Fleet’s releases specify one year). These time-to-sue provisions are usually shorter than what the otherwise applicable statute of limitations provides (e.g., California’s and Hawaii’s statutes allow two years for a personal injury and wrongful death suit based on negligence, New York two for wrongful death, three for personal injury; if maritime law applies, three years for either claim).

If enforced, time-to-sue clauses give the dive operator some certainty on when he and his insurer can close the books on a potential claim. A choice -of-laws clause won’t necessarily provide such certainty, since a court may decide the chosen law does not extend to when a suit must be filed.

Courts generally will enforce a time-to-sue provision shorter than the applicable statute of limitations period so long as the provision violates no statute and is reasonable. “Reasonable” basically means giving the plaintiff sufficient time to investigate his claim and to file suit. Note that a federal statute prohibits a “time for suit” clause less than one year for certain seagoing vessels (and a companion statute prohibits a release of liability for negligence). But this statute will not affect most dive boats since the statute does not apply to vessels leaving and returning to the same port and is aimed at cruise liners.

When a Dive Release Provision Won’t Fly

A dive release may not bar liability for gross negligence, willful misconduct or violation of law. While it is the rare dive release that explicitly states it releases “gross negligence” (versus just “negligence”), at least one reported case held that a PADI release’s reference to “negligence” protected the defendant dive instructors and PADI International against a claim of gross negligence. However, a recent California Supreme Court decision may well end any chance a dive operator will ever again escape liability through a release if guilty of gross negligence.

In July 2007, the California Supreme Court issued City of Santa Barbara v. Superior Court (available online). It involved a wrongful death suit by the parents of a developmentally disabled 14-year-old girl who drowned in a city swimming pool. The issue before the court was whether the city’s release extended beyond ordinary negligence (failure to use the same care as a reasonable person would under similar circumstances) to include gross negligence (the lack of even scant care). In an exhaustive analysis, the court found that most U.S. courts will not extend a release - however worded - to cover gross negligence. It refused to extend the City of Santa Barbara’s release to gross negligence, fearing a contrary ruling would lessen the incentive to safely operate recreational activities. For the same reason, courts will not enforce releases of more aggravated misconduct, like willful negligence (conduct so unreasonable and dangerous that the foreseeable harm is highly probable) and violations of law.

Courts outside California likely will be influenced by the City of Santa Barbara opinion given the respect generally accorded California’s Supreme Court in shaping tort law. It remains an open question whether this opinion will make it more difficult for a dive operator or other recreational activity provider to win summary judgment since – as the opinion itself concedes – it is generally a question of fact whether the conduct in question constitutes ordinary versus gross negligence.

It is also worth mentioning here the use of a “severability” clause. Where a release contains an invalid provision, there is a risk that this provision will infect the rest of the release, making the entire release invalid. To help avoid this risk, releases often contain a clause along the lines of “If any provision of this Release is held invalid, it is agreed the remaining terms shall remain in full force and effect.” A severability provision indicates that the parties to a release have agreed that a court may if it chooses cut out an illegal provision (e.g., release of liability for willful misconduct, gross negligence or violation of law) and enforce the release’s remaining provisions.

A release will not extend to liability stemming from a defective product. Dive shops and dive operators that sell or lease dive equipment are considered in the product’s chain of distribution. That generally makes them potentially liable on a product liability claim along with the manufacturer and distributor of a defective diving-specific product. Thus, a dive release will occasionally list product liability as one of the released claims.

U.S. courts will not extend a recreational activity release to a product liability claim stemming from an injury or a defective product. The reason is public policy - the manufacturer and downstream distributors are better situated than the consumer to recognize and remedy the defect as well as pay for any resulting harm. Luckily, dive product defects are rare.

Minors Get a Free Pass

A majority of U.S. courts will not enforce a release of a minor’s claim, regardless if the parent signs the release on the minor’s behalf. (California and a few other states will enforce it.) However, despite this majority rule, that same form will release that parent’s claims based on the child’s injuries, at least where it is clear the parent has signed the release on his own behalf, not just on the minor’s. Parents sometimes join in the minor’s suit, claiming reimbursement for medical expenses they paid on the minor’s behalf, damages for the value of any services the minor performed and - in those states allowing this - damages for loss of the child’s companionship.

Diver, It All Comes Down to You

As Michael Ange observes in his book Diver Down, the majority of dive accidents are due to diver error. Yes, occasionally dive operators may play a role in a dive mishap, but it rarely stems from gross negligence, violations of law or product defects. Most dive lawsuits boil down to a claim of ordinary negligence. It is just such claims which dive releases are geared to extinguish. All the more reason then why divers need to take responsibility for their own safety, for there is rarely a pot of gold at the end of the litigational rainbow.

Larry Schnabel is a member of the California State Bar and is Of Counsel to the law firm Lewis Brisbois Bisgaard & Smith LLP, headquartered in Los Angeles. He is also a NAUI certified divemaster.