Scuba Tragedy – Diver Drowns; Releases Enforceability to Protect Diver Association from Ordinary Negligence (HI)

by

Hambrock v. Smith (Hawaii)
(trial court disposition)

Plaintiff, her husband, and their children went on a recreational scuba diving excursion that departed from Hawaii.  During the excursion, plaintiff’s husband died by drowning.  Plaintiff brought a lawsuit against numerous defendants, including (1) the dive guide on the scuba excursion (“Smith”), (2) the co-captain of the dive vessel (“McCrea”), (3) a dive training organization and an association for diving instructors and dive centers in which both the Smith and McCrea were members (“PADI”), and (4) the corporate entity out of which the Smith and McCrea ran their scuba excursions (“HSS”).  The lawsuit alleged negligence (all defendants), gross negligence (all defendants), and vicarious liability on theories of apparent agency, agency by estoppel, and maritime joint venture (against PADI).

PADI filed a motion seeking summary judgment as to both the negligence claims and the vicarious liability claims against it (i.e., all claims except gross negligence) based on the liability releases signed by the plaintiff and her family prior to the scuba diving activities.  In addition to opposing PADI’s motion, the plaintiff also filed a motion for partial summary judgment of her own, challenging the enforceability of the releases.  In addressing the enforceability of the releases, the U.S. District Court for Hawaii reviewed both admiralty law and Hawaii state law.

With regard to admiralty law, plaintiff argued that the releases were invalid under 46 U.S.C. Section 30509 (Provisions limiting liability for personal injury or death)(formerly Section 183c).  The Court quoted former Section 183c:

“It shall be unlawful for the manager, agent, master, or owner of any vessel transporting passengers between ports of the United States or between any such port and a foreign port to insert in any rule, regulation, contract, or agreement any provision or limitation (1) purporting, in the event of loss of life or bodily injury arising from the negligence or fault of such owner or his servants, to relieve such owner, master, or agent from liability, or from liability beyond any stipulated amount, for such loss or injury, or (2) purporting in such event to lessen, weaken, or avoid the right of any claimant to a trial by court of competent jurisdiction on the question of liability for such loss or injury, or the measure of damages therefor.  All such provisions or limitations contained in any such rule, regulation, contract, or agreement are declared to be against public policy and shall be null and void and of no effect.”
The Court explained that it had previously applied the statutory language to invalidate a release for personal injuries in the context of a recreational scuba diving excursion.  PADI argued that admiralty law did not apply, but the Court disagreed.  As noted by the Court, the determination of whether admiralty law applies requires consideration of “(1) whether the tort occurred on navigable water, and (2) whether the incident has a ‘potentially disruptive impact on maritime commerce’ and the general character of the activity giving rise to the incident bears a ‘substantial relationship to traditional maritime activity.’”  The Court clarified that there was no dispute that the accident occurred in navigable waters.  Additionally, the Court concluded that the case did not solely relate to scuba diving.  It included “allegations that the Defendants’ resuscitation efforts, including their failure to use available ’emergency breathing oxygen and delivery systems’ on board the vessel, were negligent.”  Such allegations relating to “administration of first aid at sea” had been “found to be a traditional maritime activity.”
PADI also argued that even if admiralty law did apply, the terms of Section 183c did not apply to it because the statute’s provisions only applied to contracts with the “owners or agents of owners of vessels,” and PADI was neither.  It was undisputed that the McCrea and HSS were the owners of the vessel involved in the incident.  Moreover, plaintiff did not assert that PADI was an agent of either McCrea or HSS.  Therefore, the Court explained that “[i]n order to establish an agency relationship for purposes of Section 183c, Plaintiff must show that the principals (Defendants Smith and [HSS]) exercise ‘significant control’ over PADI’s activities, and that PADI is engaged in conducting the business of the principals.”  In the end, the Court found no evidence that PADI was an agent of either McCrea or HSS.  Therefore, Section 183c did not apply to invalidate the releases relative to PADI.
With regard to Hawaii state law, plaintiff argued that the releases violated Hawaii Revised Statutes Section 663-1.54, which provides:

“(a)  Any person who owns or operates a business providing recreational activities to the public, such as, without limitation, scuba or skin diving, sky diving, bicycle tours, and mountain climbing, shall exercise reasonable care to ensure the safety of patrons and the public, and shall be liable for damages resulting from negligent acts or omissions of the person which cause injury.

(b)  Notwithstanding subsection (a), owners and operators of recreational activities shall not be liable for damages for injuries to a patron resulting from inherent risks associated with the recreational activity if the patron participating in the recreational activity voluntarily signs a written release waiving the owner or operator’s liability for damages for injuries resulting from the inherent risks. No waiver shall be valid unless:

(1) The owner or operator first provides full disclosure of the inherent risks associated with the recreational activity; and

(2) The owner or operator takes reasonable steps to ensure that each patron is physically able to participate in the activity and is given the necessary instruction to participate in the activity safely.

(c)  The determination of whether a risk is inherent or not is for the trier of fact. As used in this section an “inherent risk”:

(1) Is a danger that a reasonable person would understand to be associated with the activity by the very nature of the activity engaged in;

(2) Is a danger that a reasonable person would understand to exist despite the owner or operator’s exercise of reasonable care to eliminate or minimize the danger, and is generally beyond the control of the owner or operator; and

(3) Does not result from the negligence, gross negligence, or wanton act or omission of the owner or operator.”

Therefore, as explained by the Court, the Hawaii statute “precludes any waiver of liability for negligence against the owner or operator of a business providing recreational activities, including scuba diving excursions, and only permits waivers for damages resulting from ‘inherent risks’ that have been fully disclosed to the customer.”  Additionally, under the statute, the determination of what constitutes an “inherent risk” is an issue for determination by the trier of fact, as opposed to an issue for determination on summary judgment.

PADI argued that the Hawaii statute did not invalidate the subject releases because PADI was not the “owner or operator” of “a business providing recreational activities to the public.”  Plaintiff did not contend that PADI operated a business in Hawaii under its own name, or that it had any employees in Hawaii.  However, plaintiff asserted that PADI “provides recreational activities to the public in Hawaii by virtue of the fact that local providers conduct PADI-developed and advertised diving programs.”  The Court disagreed, explaining:

“While it is true that PADI develops and markets training courses, certification programs, and introductory dive programs, PADI does not itself provide any of these services to the public. Rather, individual diving instructors and dive centers may become members of PADI and thereby use the PADI logos and trademarks and offer PADI-developed and approved diving courses and excursions.”

Moreover, the Court noted that PADI’s membership application provided that PADI had “no control over or involvement with [the member] facility’s day-to-day operations and activities and bears no responsibility for the same.”  As such, there was “simply no evidence that PADI itself is in the business of actually providing  (rather than developing and marketing) recreational diving excursions to the public,” and the Hawaii statute did not apply to limit the releases as to PADI.  The Court then proceeded to hold that the releases were not contrary to public policy, and that they effectively waived plaintiff’s claims against PADI for negligence and vicarious liability (leaving only a claim for gross negligence).

The Court also held that even without the protection of the releases, the plaintiff’s claims against PADI for vicarious liability based on apparent agency and maritime joint venture would have failed.  There was no evidence that PADI had actual or even apparent authority over the actions of the other defendants.  While the defendants did utilize PADI’s logos and trademarks, the Court noted that plaintiff “provided no evidence that she actually viewed and relied upon PADI’s online advertisements.”  As such, plaintiff could not rely upon any representations in PADI’s online advertisements as a basis of her claim of apparent authority.  Additionally, the Court was not convinced that any such reliance would have been in “good faith” or “reasonable” considering the content of the representations.  In terms of a “joint venture,” there was no evidence that PADI had the type of control, or had a profit-sharing relationship, with the other defendants, needed to find such a relationship.

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