Circumstances of the Case

While their cruise ship was at St. Thomas, Katherine and Jamie Leach, along with about 20 other passengers, went on a day excursion operated by defendant Cruise Ship Excursions (CSE) aboard a 53-foot catamaran sailing from St. Thomas to St. John and back.

While boarding, the captain informed the passengers of the schedule and location of the life preservers.  While the boat was departing, the crew passed around to passengers a clip board which contained a purported waiver and release. On one side of the clip board was a document with the heading,:

“Release of Liability, Assumption of Risk, Waiver of Claims & Indemnification Agreement”.

“Notice – By signing this document you may be waiving certain legal rights, including the right to sue”.

Below that was the following language:

In consideration of being allowed to use the facilities and vessels and participate in fishing, snorkeling, boating, and other activities (collectively the “Activities”) provided by Cruise Ship Excursions, (collectively the “Host”), the Participant, and the Participant’s parent(s) or legal guardian(s) if the Participant is a minor, do hereby agree, to the fullest extent permitted by law, as follows:

1) TO WAIVE ALL CLAIMS that they have or may have against the Host arising out of the Participant’s participation in the Activities or the use of any equipment provided by the Host (“Equipment”), including while receiving instruction and/or training;

2) TO ASSUME ALL RISKS of participating in the Activities and using the Equipment, even those caused by the negligent acts or conduct of the Host, its owners, affiliates, operators, employees, agents, and or officers. The Participant and his/her parent(s) or legal guardian(s) understand that there are inherent risks of participating in the Activities and using the Equipment, which may be both foreseen and unforeseen and include serious physical injury and death;

3) TO RELEASE the Host, its owners, affiliates, operators, employees, agents, and officers from all liability for any loss, damage, injury, death, or expense that the Participant (or his/her next of kin) may suffer, arising out of his/her participation in the Activities and/or use of the Equipment, including while receiving instruction and/or training. The Participant and his/her parent(s) or legal guardian(s) specifically understand that they are releasing any and all claims that arise or may arise from any negligent acts or conduct of the Host, its owners, affiliates, operators, employees, agents, and/or officers, to the fullest extent permitted by law. However, nothing in this Agreement shall be construed as a release for conduct that is found to constitute gross negligence or intentional conduct; and

4) TO INDEMNIFY the Host, its owners, affiliates, operators, employees, agents, and/or officers, from all liability for any loss, damage, injury, death, or expense that the Participant (or his/her next of kin) may suffer, arising out of participation in the Activities and/or use of the Equipment, including while receiving instruction and/or training. (emphasis in original)

On the reverse side of the clip board was a page with several lines for passengers’ names and signatures. At the top of that page was the following language,

“I HAVE READ AND UNDERSTAND THIS AGREEMENT AND I AM AWARE THAT BY SIGNING THIS AGREEMENT I MAY BE WAIVING CERTAIN LEGAL RIGHTS, INCLUDING THE RIGHT TO SUE.”

Beneath that language were many lines for passengers’ signatures.

Both plaintiffs claim that when the clip board was passed to them, the signature side of the clipboard was facing up and they signed it. They and others claim they never saw the other side containing the waiver.

The Incident

After snorkeling and while returning to St. Thomas, the boat encountered an “unusually large wave” which caused the bow to dip. Katherine, who was standing at the bow of the vessel with her back to the water, was thrown forward onto the boat deck causing injuries significant enough that they had to cancel the rest of their trip and return home for medical care.

Claims and Defenses

Subsequently,  the Leaches have sued asserting that CSE operated its excursion in a negligent manner to include but not be limited to:

• allowing passengers not to be secured while the vessel was underway;
• not properly warning the customers, including the Plaintiff Katherine Leach, of dangers in not being secured while the vessel was underway;
• operating the vessel in rough seas with Plaintiff and other passengers at the bow, such that it hit a wave head on and caused the vessel to become unstable;
• not warning of the approaching wave; and
• operating the vessel in an improper manner.

CSE moved for summary judgment, relying on the waiver signed by the Leaches, asserting that the claim of negligence is barred by the agreement.

Plaintiffs claimed the waiver was unenforceable because: 1) Katherine Leach says she was told nothing about the clip board documents except that they should sign their names and date the form; 2) She asserts that she was not informed that the form was a  waiver; 3) She asserts that she did not read the waiver;  4) Both Leaches testified that they did not recall seeing the side of the clip board with the waiver text; 5) They state that the waiver was not sufficiently clear and unequivocal.

Enforceability of the Waiver

• The first factor was to determine the choice of law – admiralty law or Virgin Islands law. The court stated that the case does definitely ring in admiralty law, but the court found no uniform rule in maritime law regarding the enforceability of waivers. With no existing uniform law on the subject, the court was free to apply Virgin Islands law.
• Virgin Islands law provides that to be enforceable, the language of a waiver attempting to absolve a party for its own ordinary negligence must be clear, unambiguous, and unequivocal.

Conspicuous. The court  held that it was not clear that Plaintiffs knew what they were signing. The court added that the spaces for signatures stated “Participant’s Printed Name” and “Participant’s Signature”, which could lead the signer to believe the form was a sign-in sheet. Further, the court stated that a “person signing the form might not have been alerted to the fact that waiver and release clauses appeared on the reverse side of the clip board.” For those reasons, the court ruled the waiver was not conspicuous.

Unequivocal. Interestingly, the court noted that the statement at the top of the signature page stated “… I may be waiving certain legal rights, including the right to sue.” [Bold emphasis added.] It pointed out that the language indicated the possibility, not certainty, of not being able to sue. Thus, the court ruled that the language was not unequivocal.

For these reasons, the court ruled the waiver was not enforceable.

The Case for Gross Negligence

Plaintiffs did not make a claim for gross negligence. Under Virgin Islands law, the court stated that there is a very low threshold to determine whether a complaint states a claim. The party must only  provide a “short and plain statement showing that they are entitled to relief.” To pursue a claim of gross negligence, a plaintiff “must establish that: (1) the defendant owed plaintiff a legal duty of care; (2) the defendant breached that duty in such a way as to demonstrate a wanton, reckless indifference to the risk of injury to plaintiff; (3) and the defendant’s breach constituted the proximate cause of (4) damages to plaintiff.” Plaintiffs failed to put defendant on notice as to a claim of gross negligence, therefore, they had no claim beyond that of ordinary negligence.

Ruling

The court ruled the waiver to be unenforceable under Virgin Islands law. Accordingly, plaintiffs’ negligence claim against CSE was not barred and summary judgment on the negligence claim was denied the defendant. The case was returned for trial to determine if CSE was negligent.

Risk Management Take-away

Notice that the body of the waiver was clear, unambiguous, and unequivocal. It was probably adequate to protect CSE from liability from injuries resulting from their negligence. The failure was not due to the inadequacy of the waiver language, but to the facts 1) that its administration created a question as to whether the plaintiffs actually saw the waiver, and 2) the notice preceding the waiver also included “… you may be waiving …” which brought up the “unequivocal” issue.

• First, having the waiver in two sections where both sections are not readily apparent can have fatal effects on a waiver of liability.
• If there can be any doubt, verbally inform clients of the purpose of the document. If it involves multiple pages, inform them even if it appears obvious.
• Keep the signature area near/attached to the remainder of the document.

One other point worth noting was the time at which the waiver was administered. “While the boat was departing” seems a little late. Had Leach refused to sign the waiver, she  would still go on the trip and could have suffered the same injury. She might not have been allowed to snorkel, but CSE would have wound up in court, but without a waiver.

Photo Credit: Thanks to Ray in Manilla via Flickr.