Child Bound By Parents’ Arbitration Agreement with Amusement Park, Case #1
Today, we have two separate posts on two very similar cases.
The Headlees took their daughter, K.H. to an amusement part. This is the torts equivalent to “A guy walks into a bar.” To reduce any suspense about what I am about to narrate, I add that K.H. was played on “Wipeout” an attraction at the park involving a trampoline and bars that one has to leap over or duck under. What could possibly to wrong?
Well, I’m sure nothing. But, just in case, the venue had K.H.’s mother sign the following release:
I, the Parent/Guardian, on behalf of myself and that of the minor(s) identified above, as applicable, have read the above Assumption of Risk, Waiver of Liability, and Indemnification Agreement and fully understand and agree to its terms. I understand that I am giving up substantial rights, including my right to sue, by executing this Agreement. I further acknowledge that I am agreeing to indemnify Urban Air, as provided above, for all claims the referenced minor may have against Urban Air. Lastly, I acknowledge that I am signing this Agreement freely and voluntarily, and intend my signature to constitute a complete and unconditional release of Urban Air for all liability due to (1) ordinary negligence of Urban Air and those parties named herein and (2) to the inherent risks of the activity, to the greatest extent permitted by the laws of the state in which the Urban Air is located. By signing below, the Parent or Court-Appointed Legal Guardian agrees that they are also subject to all the terms of this document, as set forth above.
Kristin Headlee also signed an arbitration agreement.
You will be shocked to learn that K.H. was severely injured when she was hit by one of Wipeouts rotating bars. Her parents sued for negligence in state court. The venue, Chicago Urban Air (Urban Air), had the case transferred to federal court based on diversity and then filed a motion to compel arbitration in the U.S. District Court for the Northern District of Illinois. The issue in Headlee v. Chicago Urban Air, LLC was whether the arbitration agreement was binding as against K.H., a non-signatory and a minor. Surprisingly, this issue has never been addressed under Illinois law, and caselaw from other jurisdictions is sparse, everywhere other than this blog, it appears.
The Headlees first argued that the arbitration agreement was procured through procedurally unconscionable means. The court rejected that argument. Yes, it was offered on a take-it-or-leave-it-basis, but there was really nothing underhanded about the arbitration provision, other than the general insanity that our law allows the proprietors of venues that put people at risk to insulate themselves from liability for their own negligence. Urban Air had no duty to explain the provision to the Headlees. The duty to read applies.
The Headlees’ next argument was meatier. It argued that Kristin Headlee’s agreement to arbitrate does not bind her daughter, and it would violate public policy to deprive a minor of her right to a jury trial. A Pennsylvania court refused to enforce an arbitration agreement against a minor in similar circumstance in 1998, but New Jersey went the other way in 2006. The court found no need to wade into unsettled waters. K.H. was bound as a third-party beneficiary to her mother’s agreement to arbitrate. Because the issue was simply arbitration rather than a waiver of K.H.’s substantive rights, the court viewed the public policy considerations as less weighty in this context. The right to a jury trial is not a substantive right?
Finally, the Headlees claimed that K.H. disaffirmed the arbitration agreement. She may well have done so, but an infant’s right to disaffirm an agreement is a defense to contractual liability, not an argument against the formation of an arbitration agreement. The Headlees are free to raise the argument that K.H. disaffirmed the arbitration agreement with the arbiter.
The court granted Urban Air’s motion to compel. A second post on a similar case will follow later today.