Olmo v. Atlantic City Parasail, LLC, et al., Civil No. 13-4923 (D.N.J. April 28, 2016)

A release of liability, waiver of claims, express assumption of risk and indemnity agreement may be enforceable under substantive admiralty law.

On April 28, 2016, the United States District Court for the District of New Jersey granted the defendant’s motion for summary judgment against the plaintiffs after finding that a release of liability, waiver of claims, assumption of risk and indemnity agreement executed by one of the plaintiffs was enforceable under substantive admiralty law. While vacationing in Atlantic City, the plaintiffs visited AC Parasail. Prior to boarding the parasailing boat, the plaintiff signed a waiver form entitled “Parasailing Release of Liability, Waiver of Claims, Express Assumption of Risk and Indemnity Agreement.” The plaintiff was subsequently injured while in the parasailing boat as it was traveling out of the inlet. The court explained that, under admiralty law, an enforceable exculpatory clause must be: (1) clear and unambiguous; (2) not inconsistent with public policy; and (3) not an adhesion contract. The court held that the language contained in the waiver signed by the plaintiff was clear and unambiguous and found that the plaintiff “had particular knowledge of the specific and precise hazards involved with parasailing and the related activities (including water transportation) and she agreed to release defendants from liability for personal injury she suffered due to AC Parasail’s negligence.” The court also held that, under admiralty law, exculpatory clauses waiving liability for negligence are consistent with public policy. However, the court noted that exculpatory clauses that disclaim liability for conduct beyond negligence or carelessness are inconsistent with public policy and, therefore, unenforceable. Lastly, as to the issue of whether the agreement was a contract of adhesion, the court held that “parasailing is a voluntary recreational activity” and that, “[p]rior to signing the liability waiver, [plaintiff] gathered information from AC Parasail’s employee in order to decide whether the family would participate in the activity.” Since the plaintiff freely agreed to participate in the activity, the liability waiver was not a contract of adhesion.

Case Law Alerts, 3rd Quarter, July 2016

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