Utah Appellate Update
The following are the cases contained in the Utah Advance Reports that are relevant to the insurance industry.
A. Berry v. Greater Park City Company, 2007 UT 87 : Utah Supreme Court Allows Use of Pre-Injury Release to Bar Negligence Claims
Significance of decision: The court upheld existing law generally permitting the use of pre-injury releases for ordinary negligence claims and outlined the level and type of proof necessary to seek dismissal of gross negligence claims by way of summary judgment.
A skier was injured while competing in a ski race hosted by the defendant ski resort. Prior to participating in the race, the skier had signed a Release of Liability and Indemnity Agreement. The plaintiff sued the ski resort, alleging claims of ordinary negligence, gross negligence, and strict liability. The district court dismissed each of those claims on summary judgment.
On appeal, the Utah Supreme Court first considered whether the preinjury release was enforceable as to the claims of ordinary negligence. The court found that such releases were enforceable so long as they were not contrary to the public interest. The court then set forth six characteristics to weigh in determining whether an exculpatory provision should be invalidated for a particular activity. The characteristics to consider are whether: (1) the activity concerns a business generally thought to be suitable for public regulation; (2) the party seeking exculpation performs a service of great importance to the public; (3) the party holds itself out as willing to perform the service for any qualified member of the public; (4) the service being offered is essential to the point of giving the party seeking exculpation a decisive advantage of bargaining strength; (5) in exercising its superior bargaining power, the party offers the public a standardized contract of adhesion; and (6) as a result of the transaction, the participant is placed under the control of the party seeking exculpation. In applying those guidelines to the facts at hand, the court answered most of the above questions in the negative. As such, it found that the release was enforceable with regard to the allegations of ordinary negligence.
However, the court held that the district court had improperly dismissed the gross negligence claim. The court noted that none of the parties had directed the court to the appropriate standard of care with regard to the design and construction of skiercross courses. The court then stated that “[i]dentification of the proper standard of care is a necessary precondition to assessing the degree to which conduct deviates . . . from the standard of care – the core test in any claim of gross negligence.” Without evidence of that standard of care, the gross negligence claim should not have been dismissed.
Finally, the court upheld the dismissal of the strict liability claim, noting that individuals who voluntarily participate in an activity are excluded from seeking damages based on strict liability.
B. Rothstein v. Snowbird Corporation, 2007 UT 96 : Utah Supreme Court Disallows Use of Pre-Injury Releases at Ski Resorts
Significance of decision: Despite the decision in Berry v. Greater Park City Company, the court essentially disallows all pre-injury releases used by ski resorts. This does not affect the use of pre-injury releases in other areas.
Mr. Rothstein had a season pass to Snowbird as well as a separate membership that allowed him to bypass ski lift lines. Both the season pass and the membership required that Mr. Rothstein sign releases of liability, which he did. Mr. Rothstein was later injured when he ran into a retaining wall on a ski run. Mr. Rothstein sued claiming the retaining wall was not sufficiently marked so that it could be seen by skiers.
The trial court dismissed Mr. Rothstein’s claims based on the two releases he had signed. Mr. Rothstein appealed claiming both releases violated public policy.
On appeal, the Utah Supreme Court analyzed the statutory construct applicable to ski resorts. The court focused on the statutory language that gave immunity to ski resorts for liability arising out of inherent risks of skiing. However, the court noted that the expressed legislative reason for that immunity was to allow ski resorts to more easily and affordably obtain insurance. As such, the divided court reasoned it was the intent of the statute to permit other liability claims to be brought against ski resorts – otherwise such insurance would not be necessary.
The court summarized its reasoning as follows:
The premise underlying legislative action to make insurance accessible to ski area operators is that once the Act made liability insurance affordable, ski areas would buy it to blunt the economic effects brought on by standing accountable for their negligent acts. The bargain struck by the Act is both simple and obvious from its public policy provision: ski area operators would be freed from liability for inherent risks of skiing so that they could continue to shoulder responsibility for noninherent risks by purchasing insurance. By extracting a preinjury release from Mr. Rothstein for liability due to their negligent acts, Snowbird breached this public policy bargain.
The 3-2 decision includes a strong dissent by Justice Wilkins which was joined by Justice Durrant.
C. Matheson v. Marbec Investments, LLC, 2007 UT App 363 : Court of Appeals Outlines Premises Liability Duties of Subsequent Purchaser of Real Property
Significance of decision: Where a subsequent purchaser of real property does not create a pre-existing dangerous condition, it is not liable for the condition unless it has notice and an opportunity to repair the condition. The court outlined the duties to inspect and maintain that apply to subsequent purchasers.
A father was injured when a stair gave way while he was helping his son move out of an apartment. The father and his wife filed suit against the defendant, the owner of the apartment complex. The owner of the complex did not construct the apartments or the stairs, but had purchased them from a prior owner. The trial court dismissed the plaintiffs’ claims on summary judgment, finding that the defendant had not created the defective condition and had no actual or constructive notice that there was a problem with the stairs.
On appeal, the plaintiffs conceded that the owner did not have actual notice of the defect. However, the plaintiffs argued that the owner had constructive notice because it had a duty to inquire into the safety of the stairs. Nevertheless the Utah Court of Appeals upheld the trial court’s dismissal, finding that the defendant had complied with its duty to inspect the stairs. In so doing, the court noted that a principal of the owner, who also served as a licensed general contractor, had performed physical inspections of the complex and stairs on several occasions. Furthermore, the defendant had hired an appraiser to inspect the complex, including the stairs.
The plaintiffs argued that a more thorough inspection should have been required in this instance because owner was in the business of buying properties and its principal was a licensed contractor. However, the plaintiffs failed to establish that the principal had actual experience constructing stairs, and therefore there was no evidence that a higher duty should have been imposed on the defendant “than that of an ordinary prudent purchaser.”
D. Carbaugh v. Asbestos Corp. Ltd., 2007 UT 65 : Court Premits Out-Of-State Doctors to Examine Litigants as Part of Expert Witness Services
Significance of decision: The court outlined when and how medical doctors from other states may conduct pretestimony medical exams even though they are not licensed to practice medicine in Utah, if such exams are ultimately to be used as part of expert witness testimony in litigation.
A California doctor came to Utah and conducted clinics to determine if certain individuals had been exposed to asbestos. Some of these individuals filed suit and listed the California doctor as their expert witness. The defendants moved for summary judgment, arguing that the California doctor’s lack of Utah credentials rendered him unqualified to testify as a medical expert. The trial court agreed, finding that the doctor violated the Utah Medical Practice Act.
The Utah Supreme Court reversed the trial court. The court stated that the Utah Medical Practice Act allows doctors who are licensed to practice in other states to conduct “pretestimony medical evaluations in preparation for their forthcoming testimony as expert witnesses.” Id. at ¶ 9. The act specifically allows an exception for “an individual providing expert testimony in a legal proceeding.” U.C.A. § 58-67-305. The court found that this exception applies not only when the witness is in the witness chair but also covers the pretestimony medical evaluations.
E. Ellis v. Estate of Ellis, 2007 UT 77 : Utah Supreme Court Abrogates Interspousal Immunity Doctrine
Significance of decision: The court clarified that the doctrine of interspousal immunity has been abrogated in Utah.
In this case a wife filed suit against her deceased husband’s estate for personal injuries she suffered in a car accident that occurred as a result of her husband’s negligence. The trial court found that the wife’s claim was barred by the common law doctrine of interspousal immunity. Also, the trial court ruled that lay affidavits regarding the wife’s mental incompetence were inadmissible to toll the statute of limitations.
The Utah Supreme Court reversed the trial court on both these issues. First, the court reiterated that the common-law doctrine of interspousal immunity has been abrogated with respect to all claims. The court reviewed the history of interspousal immunity act in Utah, which the court describes as “tortuous.” After reviewing the various acts and case law, the court states that “we conclude that interspousal immunity has been abrogated in Utah with respect to all claim [meaning both negligent and intentional torts].” Id. at ¶ 24. The court further found that the justifications for interspousal immunity, such as martial discord and collusion, were meritless.
Second, the court found that the trial court erred in its decision that lay affidavits were insufficient to establish a genuine issue of material fact as to the plaintiff’s mental incompetency. The court found that lay affidavits are sufficient to create a genuine issue of material fact as to mental competency so as to toll the statute of limitations under U.C.A. Section 78-12-36.
F. Newman v. White Water Whirlpool, 2007 UT App 303 : Utah Supreme Court Raises Questions About "Going and Coming" Doctrine
Significance of decision: The court explained that the “going and coming rule” ordinarily involves fact questions surrounding whether the employer was gaining some independent benefit from the employee’s travel beyond the employee simply going to or coming from work.
In this case, the plaintiff was injured by a White Water employee. White Water was granted summary judgment on its argument that the employee was commuting to work and was not in the course and scope of his employment at the time of the accident.
The Utah Court of Appeals first notes that scope of employment questions are inherently fact bound. The court stated that to determine whether an employee is within the course and scope of his employment there is a three part test. First, an employee’s conduct must be of the general kind the employee is employed to perform. Second, the employee’s conduct must occur within the hours of the employee’s work and the ordinary spatial boundaries of the employment. Third, the employee’s conduct must be motivated, at least in part, by the purpose of serving the employer’s interest. The court also stated that there is a general rule that an employee is generally not in the scope of his employment for purposes of third party negligence claims when he is traveling to and from work.
The court found that it was inappropriate for the trial court to grant summary judgment because a trier of fact could have determined that the employee was in the course and scope of his employment based on the type of work that he did. The employee’s regular duties included hauling materials to job sites, performing installations, and returning unused materials to the employer’s warehouse. The employee was traveling to the warehouse with tools and materials from the previous day’s work. Therefore, the court stated that reasonable minds might differ as to whether the employee was working and reversed the summary judgment.
Summaries provided by Andrew D. Wright
