Despite signed release, appeals court orders trial in suit against BJ’s

Parents cannot sign away their children’s right to recover for injuries they might sustain in a store’s play area, Maryland’s intermediate appellate court has held.

The decision by the Court of Special Appeals revives a couple’s $5 million lawsuit over the brain injury their 5-year-old son allegedly sustained at the Incredible Kid’s Club at the BJ’s Wholesale Club in Owings Mills in 2006.

Despite a “strong” presumption that “a parent acts in the best interests of his minor children, we nonetheless … hold that a parent may not legally bind his or her minor child to a pre-injury release of tort liability in favor of a commercial enterprise,” Chief Judge Peter B. Krauser wrote last week for the unanimous panel.

BJ’s attorney, Christopher R. Dunn, said he and his client will appeal this case to Maryland’s top court and may seek action by the legislature to prevent lawsuits in the future.

“This is ultimately going to have to be decided by the Court of Appeals,” said Dunn, of Decaro, Doran, Siciliano, Gallagher & DeBlasis LLP in Bowie.

“Although I have great respect for the Court of Special Appeals, I believe this is a matter for the legislature and not for the judiciary,” he added Tuesday. “Public policy is traditionally the province of the legislature.”

The parents’ attorney, Denis C. Mitchell, declined to comment Tuesday. Mitchell is with Stein, Mitchell & Muse LLP in Washington.

The Maryland Retailers Association plans to have its legislative affairs committee examine the decision with an eye toward urging the General Assembly to enact legislation deeming these liability waivers valid, said Patrick Donoho, MRA’s president.

“Anybody that has those kind of waivers … would want to read [the decision] and find out how it applies to them,” he said. “I’m not a lawyer, so I’m going to have to let people smarter than me figure this out.”

Conflict of interest

The 3-0 decision by the Court of Special Appeals overturned a ruling by a Baltimore County Circuit Court judge, who ended Russell and Beily Rosen’s lawsuit against Westborough, Mass.-based BJ’s without a trial.

Judge Thomas J. Bollinger Sr. cited a release Russell Rosen had signed in July 2005, in which he “forever” discharged BJ’s of any liability for injuries his son, Ephraim, might suffer.

Fifteen months later, in October 2006, Ephraim was back at the play center while his mother shopped. He fell more than three feet from a plastic hippopotamus, striking his head on the store’s hard floor, according to the lawsuit.

He was taken to Sinai Hospital in Baltimore, where he was diagnosed with a bruise to his brain. He was transferred to Johns Hopkins Hospital, where he underwent a craniectomy to relieve the fluid buildup.

The Rosens sued BJ’s Wholesale Club two years later. Bollinger granted the discounter’s motion for summary judgment on Dec. 9, 2009, and the family sought review by the Court of Special Appeals.

The Court of Special Appeals, remanding the case for trial last week, found no Maryland law or court decisions that addressed the validity of parents waiving their child’s right to sue a store if he or she becomes injured.

But Krauser cited a 2009 decision, In re Najasha B., in which the Court of Appeals said the state has an “interest in caring for those, such as minors, who cannot care for themselves and the child’s welfare is a consideration that is of transcendent importance when the child might” be at risk.

“Although this quote is drawn from a child-access case, the important public policy it proclaims is broad and certainly applies here, where adults may be jeopardizing the future welfare of their children by signing releases like the one at issue,” Krauser wrote. “Indeed, indemnification clauses in contracts executed by parents on behalf of their minor children create an unacceptable conflict of interest between a parent and child.”

In addition, permitting a company to evade liability toward a child “may remove an important incentive to act with reasonable care,” Krauser stated.

Commercial only

The court limited its decision to liability release forms by “commercial enterprises.”

Whether waivers in favor of government agencies and nonprofits are similarly invalid “must await a case involving such an entity or action by the General Assembly,” Krauser wrote.

Commercial enterprises, like BJ’s, make money by providing customer service and can spread the cost of insurance among their customers, he added.

“We anticipate that our holding will provide incentives for owners and operators of commercial facilities open to minor children to (1) take reasonable safety precautions in the operation and maintenance of their facilities; and (2) obtain adequate insurance to cover the risk of physical injury to their minor patrons, caused by the negligence of their employees and agents.”

WHAT THE COURT HELD

Case:

Rosen, et al. v. BJ’s Wholesale Club Inc., CSA No. 2861, Sept. Term 2009. Reported. Opinion by Krauser, C.J. Argued March 7, 2011. Filed Aug. 30, 2012.

Issue:

Is a release of liability presented by a “commercial enterprise” and signed by a parent on behalf of a child before he or she has suffered an injury enforceable?

Holding:

No; a parental release from liability for a potential injury would “remove an important incentive” for the commercial enterprise “to act with reasonable care.”

Counsel:

Denis C. Mitchell for appellants; Christopher R. Dunn for appellee.

RecordFax # 12-0830-00 (26 pages).