e-Bulletin: City's Liability Waiver not Enforceable for Gross Negligence

    On July 16, 2007, the California Supreme Court issued an important decision regarding the scope of liability waivers.  In this case, a fourteen-year-old, developmentally disabled child drowned while participating in a city summer camp.  The child's mother had signed a release absolving the city of liability for its negligence.  The child's parents sued the city for wrongful death.  The city moved for summary judgment on the grounds that the liability waiver protected the city from the lawsuit.  The appellate court agreed that the waiver prevented a suit based on the city's ordinary negligence.  However, it declared that a waiver for the city's gross negligence was unenforceable as a matter of public policy.  The California Supreme Court agreed.

    The city argued that the legislature had impliedly approved of gross negligence waivers in this situation.  As support for its argument, the city pointed to a state statute that prohibited certain liability waivers.  The statute did not explicitly prohibit gross negligence waivers.  The city contrasted this statute with another that explicitly prohibited common carriers from enforcing gross negligence waivers.  The city argued that this divergent treatment implied that the legislature approved of waivers for recreation programs.  However, in a prior case, the court had exceeded the scope of the statute.  The court relied on this prior decision as precedent that the statute did not limit the court's ability to declare gross negligence waivers void on public policy grounds.

    Additionally, the city argued that prohibiting liability waivers would increase costs and reduce the number of recreation programs.  The court acknowledged the public interest in recreation programs.  To evaluate the city's claim, it examined the experience of states that already prohibited gross negligence waivers.  No empirical evidence was presented that recreation programs were affected in these states.  Accordingly, the court rejected this argument.

    The court defined gross negligence as "want of even scant care" or "an extreme departure from the ordinary standard of conduct."  (City of Santa Barbara v. Superior Court (July 16, 2007, S141643), p. 4.)  In this case, the city assigned an employee to watch the child throughout the day.  While the employee's report to her supervisor that the child suffered a seizure earlier in the day was not received, the employee remained with the child.  The employee looked away for fifteen seconds before being unable to spot the child in the pool.  It is important to note that the court did not find the city grossly negligent.  The court only decided enough facts existed to allow the child's parents to proceed with their claim.

    In light of this decision, cities may face increased litigation costs associated with suits arising out of recreation programs.  Prior to this decision, cities could dispose of liability claims by filing a summary judgment motion based on a liability waiver.  This allowed cities to avoid the expenses associated with proceeding with a full trial.  Now if sufficient facts exist to create a dispute as to whether the city was grossly negligent, the case will proceed to trial.  Even if the jury ultimately finds that the city is not grossly negligent, the city will still incur the added litigation expenses.  Ultimately, cities may experience increased litigation expenses, settlement costs and potential jury verdicts.

    For more details regarding the impact of this decision on the enforceability of liability waivers, please contact Best Best & Krieger's Municipal Law Practice Group.
______________________________________________________________

Disclaimer:  BB&K eBulletins are not intended as legal advice.  Additional facts or future developments may affect subjects contained herein.  Seek the advice of an attorney before acting or relying upon any information in this communication.  (c) 2007 Best Best & Krieger LLP