Michigan Supreme Court Holds Releases Signed by Parents Are Unenforceable

This article by Alexander “Sandie” Pendleton sums up some key issues involved in the recent Woodman v. Kera (2010) case in which the Michigan Supreme Court held parental waivers to be unenforceable. A five-year-old was injured in an inflatable bounce area at a birthday party. Mr. Pendleton is with Kohner, Mann & Kailas, S.C. in Milwaukee.

The Michigan Supreme Court on June 18, 2010 issued its long-awaited decision in Woodman v. Kera, holding that under Michigan law waiver-of-liability forms signed by parents on behalf of minors are unenforceable.

Key to the court’s decision was the holding that under the common law in Michigan a minor lacks the capacity to enter into a pre-injury waiver, and that the minor’s parents also lack the legal capacity to bind their child to such a contract.

The decision affirms a 2008 decision of the Michigan Court of Appeals, which held that virtually all waiver-of-liability agreements signed by parents on behalf of their children are unenforceable (the very narrow exception being if the parent had first obtained a court’s permission to sign the waiver of liability).

The seven-justice Michigan Supreme Court issued an unusually splintered decision in the case, with five of the seven justices writing separately.  (A copy of the full decision is available here).  The lead opinion (the holding of which was joined by four other justices) was written by Justice Robert Young, Jr., who is normally characterized as a member of the court’s conservative wing.  Key to Justice Young’s decision is his view that, while there may be good reasons why the common law should be changed so as to permit parents (and guardians) to enter into waiver agreements on behalf of their minor children (or wards), such arguments are better presented to and resolved by the legislature, than by the courts.

Because of the decision of the court, it is likely that the Michigan legislature will proceed to consider a 2010 bill to at least partially reverse the effects of the court of appeals’ decision. Michigan House Bill 4970, if passed, would allow the parent or guardian of a minor child to provide a written release from liability before the child participated in a recreational sport run by a non-profit organization. Note, the proposed bill if passed in its current form would not provide protection to for-profit businesses that want to rely on parental waivers (that of course could change, as the bill winds its way through the legislative process).

The reasoning of the majority was vigorously opposed by two justices (Corrigan and Markman), who pointed out that no prior Michigan court decision had invalidated parental waivers.  To these two justices, the field was therefore an open one; to them, there were many good reasons why the Michigan Supreme Court (rather than the legislature) should “clarify” Michigan common law, so as to make it clear that the law in Michigan allows parents to enter into valid pre-injury waivers on behalf of their children.  In blunt judicial language, Justices Corrigan and Markman criticized the majority’s reasoning, and predicted dire consequences regarding youth sports and recreational opportunities in Michigan (increased litigation against recreational providers, increased costs, fewer volunteers, fewer civic organizations willing to become involved, and sharply diminished recreational opportunities for minors).

With five justices writing separately in the case, the decision is lengthy, and it is clear that there are several points in this area of the law about which the justices in the majority continue to disagree amongst themselves.  For example, one disagreement that is potentially important to businesses and organizations in Michigan that provide recreation opportunities to minors, is Justice Young’s comment in a footnote that even if a parent cannot bind his minor child to a contract, the parent can contract on the parent’s own behalf to indemnify the defendant for any losses arising from injuries the parent’s child suffers while participating in a recreational activity offered by the defendant.  (In this context “to indemnify” means that the parent would be required to reimburse a negligent recreational provider, for any damages that the defendant was held to be obligated to pay to an injured minor).  Other justices, however, disagreed with Justice Young’s comment.

It should be noted that the outcome in the Woodman case is contrary to the outcomes in cases in numerous other Midwest states in which courts have enforced parental waiver agreements (such as Wisconsin, Minnesota and North Dakota).

Based on the ultimate holding in Woodman, the implications for business, organizations and individuals in Michigan that want to rely on parental waiver agreements are challenging, if not stark.  Under the court’s holding in Woodman, those agreements are currently void and non-effective.  However, because the Michigan legislature is currently considering passing a bill that would reverse the effect of the holding of Woodman, business and organizations may want to consider (after conferring with counsel), at least for the time being, continuing to ask parents to sign such waiver agreements; this is because the bill ultimately passed by the legislature could contain some retroactive provision.  The status of parental indemnification agreements in Michigan is also currently unclear, so providers may want to also consider creating (or continuing to use) reasonable and well-drafted indemnification agreements.

The Woodman decision highlights the importance of having well-drafted agreements relating to recreational activities, as one of the issues discussed was that the business in this case—an established business that did nothing but provide recreational opportunities to kids—was using a waiver form agreement that, on close inspection, was drafted in a sloppy and ambiguous way.  As such, one lesson of Woodman is that carefully crafted and deployed agreement terms are essential, if a business, organization or individual wants to have any hope of convincing a court to enforce the terms of an agreement containing waiver-of-liability, indemnification or assumption of risk terms.

Given the Woodman decision, all organizations in Michigan that have been using registration or membership forms containing waivers (especially if the waiver relates to minors) should ensure that their forms have been reviewed by an attorney familiar with the law in this area. That same advice is also valid as to organizations operating in other states as well, especially in states that tend to take a strict approach to waivers (such as, for example, Wisconsin).

Photo credit: Brett Cotten