HOJNOWSKI EX REL. HOJNOWSKI v. Vans Skate Park

Justice LaVECCHIA,

concurring in part and dissenting in part.

I am in full agreement -with that portion of the majority’s decision that affirms enforcement of the parties’ agreement to subject their dispute to arbitration. I part company from my colleagues, however, in so far as they have chosen to invalidate the waiver of liability that the parties to this appeal executed as a condition of the minor Andrew’s use of defendant’s property to skateboard. In that respect, I am in substantial agreement with the Appellate Division dissent that was penned by Judge Fisher. Essentially, because a waiver of rights of the type entered into by these parties generally would be enforceable as against an adult, I see no reason why this Court should prevent a parent from ratifying such a waiver on behalf of a child, provided that a court or arbitrator determines that the release is reasonable.

*347 Although the majority declines to express any view on whether the waiver would be invalid if enforced against an adult, it is noteworthy that the waiver does not appear to involve any of the grounds that New Jersey courts have heretofore invoked to invalidate an exculpatory waiver. For example, the waiver does not exempt defendant from liability for a “future intentional tort or willful act or gross negligence.” Kuzmiak v. Brookchester, Inc., 33 N.J.Super. 575, 580 , 111 A.2d 425 (App.Div.1955). Nor does the waiver seek a release from any statutorily imposed duty. McCarthy v. NASCAR, Inc., 48 N.J. 539, 542 , 226 A.2d 713 (1967). Furthermore, although the majority notes that “[ejxculpatory agreements have long been disfavored in the law,” that proposition has been invoked not to invalidate a waiver, as the Court does here, but rather to explain that such waivers should be narrowly construed:

Contracts of this nature are not favored by the law. They are strictly construed against the party relying on them and clear and explicit language in the contract is required to absolve a person from such a liability.

[McCarthy v. NASCAR, Inc., 87 N.J.Super. 442, 450 , 209 A.2d 668 (Law Div.1965), aff'd, 90 N.J.Super. 574 , 218 A.2d 871 (App.Div.1966), aff'd, 48 N.J. 539 , 226 A.2d 713 (1967).]

See also Gershon v. Regency Diving Ctr., Inc., 368 N.J.Super. 237, 247 , 845 A.2d 720 (App.Div.2004) (stating more recently that because “the law does not favor exculpatory agreements,” “[a]ny doubts or ambiguities as to the scope of the exculpatory language must be resolved against the drafter”).

The fact that exculpatory waivers receive narrow construction from courts does not render such waivers unenforceable. Previously, we have stated that “[wjhere [exculpatory agreements] do not adversely affect the public interest, exculpatory clauses in private agreements are generally sustained.” Mayfair Fabrics v. Henley, 48 N.J. 483, 487 , 226 A.2d 602 (1967). Such clauses most commonly are used and enforced in a “commercial context,” Chem. Bank, N.A. v. Bailey, 296 N.J.Super. 515, 527 , 687 A.2d 316 (App.Div.), certif. denied, 150 N.J. 28 , 695 A.2d 671 (1997), and generally are valid and enforceable against individuals so long as the particular exculpatory clause does not involve a matter of *348 public interest. McCarthy v. NASCAR, Inc., 48 N.J. 539, 543 , 226 A.2d 713 (1967) (citing Boyd v. Smith, 372 Pa. 306 , 94 A.2d 44, 46 (1953)). Many states also look to the notion of “public interest,” or other related concepts, when determining whether to uphold the validity of an exculpatory waiver. The California Supreme Court’s decision in Tunkl v. Regents of the University of California, 60 Cal.2d 92 , 32 Cal.Rptr. 33 , 383 P.2d 441, 445-46 (1963), provides arguably the most widely accepted test applied to exculpatory agreements. Tunkl set forth six factors, one of which is 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. at 33, 383 P.2d at 445 .

In my view, recreational activities such as skateboarding do not implicate the “public interest.” 1 The majority apparently does not assert otherwise, lodging no objection to the content of the waiver. Rather, the majority focuses on the fact that defendant is attempting to enforce this particular waiver of rights against a minor.

Invoking the “best interests” of children under the parens patriae doctrine, the majority holds that the waiver is invalid as *349 against public policy, and analogizes the instant situation to the requirement under Rule 4:44 that parental settlement of a minor’s post-injury claims receive judicial approval. There is an important difference between the present pre-injury waiver and the circumstances Rule 4:44 seeks to address. “Our rules for friendly settlements, R. 4:44-1 et seq., are intended to minimize or prevent conflicts of interest from occurring and to assure the reasonableness of settlements.” Zukerman v. Piper Pools, 232 N.J.Super. 74, 90 , 556 A.2d 775 (App.Div.1989). See also Colfer v. Royal Globe Ins. Co., 214 N.J.Super. 374, 377 , 519 A.2d 893 (App.Div. 1986) (noting that “[t]he purpose of the rule is not only to guard a minor against an improvident compromise but also to secure the minor against dissipation of the proceeds.”). Because the preinjury setting does not involve the specter of a potential monetary settlement that looms over post-injury settlements, conflicts are of little concern in the pre-injury setting. See Sharon v. City of Newton, 437 Mass. 99 , 769 N.E.2d 738 , 747 n. 10 (2002); Zivich v. Mentor Soccer Club, Inc., 82 Ohio St.3d 367 , 696 N.E.2d 201, 206 (1998); Angeline Purdy, Note, Scott v. Pacific West Mountain Resort: Erroneously Invalidating Parental Releases of a Minor’s Future Claim, 68 Wash. L.Rev. 457 (1993).

Assuming, nonetheless, that a pre-injury contractual setting is similar to a post-injury setting, that does not support the conclusion that all waivers entered into on behalf of minors are unenforceable, a conclusion that simply goes too far. Rule 4:44 does not bar parental settlements. Rather, the rule requires judicial scrutiny “to ensure the reasonableness of settlements.” Zukerman, supra, 232 N.J.Super. at 90 , 556 A.2d 775 . If Rule 4:44 provides an appropriate analogy, then the standard of reasonableness that applies to post-injury settlements should apply to the review of pre-injury waivers.

I acknowledge that as a general rule, minors can, before they reach the age of majority, disaffirm contracts into which they enter. Mechanics Fin. Co. v. Paolino, 29 N.J.Super. 449, 453 , 102 A.2d 784 (App.Div.1954) (stating that “[i]t is generally true that an *350 infant may avoid his contract.”); Boyce v. Doyle, 113 N.J.Super. 240, 241 , 273 A.2d 408 (Law Div.1971) (stating that “[t]here can be no doubt but that contracts not of necessity may be voided by an infant either before or a reasonable time after he obtains his majority.”); Restatement (Second) of Contracts §§ 12, 14 (1981); 7 Corbin on Contracts § 27.2 (Perillo rev.2002); 5 Williston on Contracts § 9.5 (Lord ed., 4th ed.1993). That general rule is not altered by a parent’s signing of the contract on behalf of a minor. See 42 Am.Jur.2d Infants § 46 (2000) (stating that “[a]s a general rule, an infant’s right to avoid his contract is not defeated by the fact that the contract was made by the infant and his or her parent, was made with the approval of his or her parent [or] was approved and ratified by his or her guardian”); Del Bosco v. U.S. Ski Ass’n, 839 F.Supp. 1470 , 1474 n. 2 (D.Colo.1993) (noting that “[c]ourts that have decided the issue have determined that the signature of a parent does not validate an infant’s contract.”).

However, contracts entered into by minors can be enforceable if the contract is approved by a court. Indeed, as noted, Rule 4:44 allows settlement agreements involving minors to be enforced so long as a reviewing court determines that the agreement is “reasonable.” Zukerman, supra, 232 N.J.Super. at 90 , 556 A.2d 775 . Beyond the settlement context, other states have enacted statutory schemes that bar minors from disaffirming certain contracts that have received judicial approval. See, e.g., Cal. Fam. Code § 6750-53 (2006) (covering entertainers and athletes); Cal. Lab.Code § 1700.37 (2006) (covering contracts between a minor and a talent agency); N.Y. Arts & Cult. Affr. Law § 35.03 (2006) (covering entertainers and athletes).

Although our Legislature has not yet enacted similar legislation, freedom of contract principles lead me to the conclusion that a pre-tort waiver entered into by a minor, or ratified by a parent on behalf of a minor, should be enforceable when a reviewing court or arbitrator determines that the waiver was reasonable and not based on unequal bargaining positions. See Simmons v. Parkette Nat’l Gymnastic Training Ctr., 670 F.Supp. 140, 144 (E.D.Pa. *351 1987) (invalidating minor’s pre-injury waiver and relying, in part, on the fact that “there was no court involvement in the transaction”). If the reasonableness of the waiver is approved, then a minor should be barred from disaffirming the contract, an approach that is consistent with Rule 4:44. It differs somewhat from Rule 4:44 in that I would allow a trial court to review the “reasonableness” of a pre-tort waiver when a defendant, post-injury, raises the waiver as a defense to a suit brought by an injured party. 2

Post-injury review of pre-injury waivers eliminates the certainty that is provided by Rule 4:44 or, for example, the process established by statute in California and New York, all of which mandate that courts review contracts at the time they are executed. Potential defendants may, however, wish to bear the risk of such uncertainty given the benefits of any waiver ultimately upheld as reasonable. Absent action by the Legislature, I would permit court or arbitrator review and approval, as described, to validate a minor’s contract in respect of the type of pre-injury- liability waivers presented herein. In so stating, I offer no judgment about what forms of liability defendant purported to waive by this exculpatory release. I would have allowed the arbitrator to sort out the reasonableness and the reach of the waiver executed by the parties.

Accordingly, I would affirm in part, reverse in part, and remand the matter for further proceedings.

Justice RIVERA-SOTO joins in this opinion.

*352 For affirmance—Chief Justice PORITZ and Justices LONG, ZAZZALI, ALBIN and WALLACE—5.

For affirmance in part/reversal in part/remandment—Justices LaVECCHIA and RIVERA-SOTO—2.

That conclusion is in accord with the majority of jurisdictions that have addressed the subject; they have concluded that recreational activities do not implicate the public interest. See, e.g. Chauvlier v. Booth Creek Ski Holdings, Inc., 109 Wash.App. 334 , 35 P.3d 383, 388 (2001) (stating that "skiing is not a 'service of great importance to the public,’ much less a service of ‘practical necessity.' ”). Courts have upheld liability waivers in the context of the following recreational activities: automobile racing, being a spectator at an automobile race, scuba diving, horseback riding, roller skating, skydiving, mountain biking, recreational sumo wrestling, weightlifting at a fitness center, motorcycle racing, go-cart racing, bicycling, and ski racing. Hanks v. Powder Ridge Rest. Corp., 276 Conn. 314 , 885 A.2d 734, 752-53 (2005) (Norcott, J., dissenting) (collecting cases). On the other hand, a minority of states have found that snow-tubing and skiing activities do implicate the public interest. See Hanks, supra, 276 Conn. 314 , 885 A.2d 734 (majority opinion); Spencer v. Killington, Ltd., 167 Vt. 137 , 702 A.2d 35 (1997); Dalury v. S-K-I, Ltd., 164 Vt. 329 , 670 A.2d 795 (1995). I find those cases unpersuasive. To find that recreational activities implicate the "public interest," would strip that term of meaningful content.

Under Rule 4:44 litigants must obtain court approval at the time of entry into the settlement agreement. Requiring judicial approval at the time that a minor enters into a pre-injury waiver would be impractical and inefficient. Review would have to be limited to situations when an injury actually occurs. The reviewing court, of course, would have to view the "reasonableness” of the waiver as of the time that the waiver was executed.