Myles A. Bagley and Ors v Mt Bachelor Inc and ors (2014) H&FLR 2015-4

Supreme Court of Oregon

18 December 2014

Coram: Court en banc

Appearing for the Plaintiff: Arthur C Johnson (of Johnson Johnson & Schaller) and Kathryn H. Clarke.
Appearing for the Defendant: Arthur C. Balyeat (of Balyeat & Eager)
Appearing for the Oregon Association of Defence Counsel (amicus curiae): Michael J. Estok (of Lindsay Hart)
Appearing for the Oregon Trial Lawyers Association (amicus curiae): Kristian Roggendorf (of Roggendorf Law)

Catchwords: Oregon – skiing – injuries – liability – release – waiver – public policy – unconscionability.

Facts: The plaintiff was an experienced snowboarder. On 29 September 2005 he purchased a season pass from the defendant for use at its ski area. Purchase of the pass involved signing an extensive prospective release of liability, of which he was reminded while on site by wording on his pass and by signs. On 19 February 2006 the plaintiff sustained very serious injuries while going over a snowboard jump, allegedly because it had been negligently designed, constructed and maintained by the defendant.

The plaintiff brought proceedings against the defendant in Deschutes County Circuit Court, which were summarily dismissed based on the release signed by the plaintiff: Bagley v Mt Bachelor Inc (2010) The Bulletin, 6 September 2013. The plaintiff’s appeal to the Court of Appeals was dismissed: Bagley v Mt Bachelor Inc, 258 Or. App. 390, 310 P.3d 692 (2013). The plaintiff further appealed to the Supreme Court.

Held: allowing the appeal, that –

1. (a) The Courts will not enforce contracts which are illegal. An agreement will be illegal if it is (inter alia) contrary to public policy as expressed in constitutional provisions, statute or case law, or if it is unconscionable.

Uhlmann v Kin Daw, 97 Or. 681, 193 P. 435 (1920); Delaney v Taco Time International Inc, 297 Or. 10, 681 P.2d 114 (1984), followed.

(b) Quaere whether the concepts of public policy and unconscionability are separable.

2. A contract may be unconscionable on procedural or substantive grounds.

(a) Procedural unconscionability considers whether there was oppression or surprise when the contract was formed.  Oppression will exist when there is such an inequality of bargaining power between the parties that there is no real opportunity to negotiate the terms of the contract and there is no meaningful choice.  Suprise occurs when the terms are hidden or obscured (for example, by being in fine print or ambiguously worded) from the perspective of the party claiming unconscionability

Vasquez-Lopez v Beneficial Oregon Inc, 210 Or. App. 553, 152 P.3d 940 (2007); Acorn v Household International Inc, 211 F. Supp. 2d 1160 (ND Cal., 2002), followed

(b) Substantive unconscionability considers whether the terms of the contract contravene public interest or public policy.  It will be necessary for the court to consider whether enforcing the release will cause a harsh or inequitable result, whether the party claiming the benefit of the release serves an important public function, and whether the release absolved the releasee from more than ordinary negligence.

Commerce & Industry Insurance v Orth, 254 Or. 226, 458 P.2d 926 (1969); Estey v MacKenzie Engineering Inc, 324 Or. 372, 927 P.2d 86 (1996); Real Good Food v First National Bank, 276 Or. 1057, 557 P.2d 654 (1976), followed

(c) The factors listed as relevant to unconscionability are not exclusive, and no single factor is critical.  The determination that a release breaches public policy or is unconscionable reflects the totality of the circumstances as well as any other factor (including societal expectations).

Judgment

The Court’s judgement is available here.