Lizzol et al v. Brothers Property Management Corporation et al
ORDER denying 32 plaintiffs' Motion to Amend or Alter Judgment re 30 Order. So Ordered by Judge Steven J. McAuliffe.(lat)
UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Case No. 15-cv-100-SM
Opinion No. 2017 DNH 183
Out Back Kayak, Inc. OBK;
and Martin Welch,
O R D E R
Plaintiffs have filed a motion to amend or alter the
judgment that was entered dismissing their negligence claims,
based on contractual waivers they signed.
See Fed. R. Civ. P.
The seriousness of plaintiffs’ injuries and the
negligent conduct described in the complaint understandably move
counsel to seek some way around the negligence waiver principles
established in McGrath v. SNH Development, Inc., 158 N.H. 540
But there is no avoiding them in this case.
Hampshire law applies and it is not ambiguous.
considered plaintiffs’ motion, the court is constrained to deny
This case turns on the enforceability of contractual
waivers of negligence claims that plaintiffs executed prior to
participating in a guided snowmobile tour.
During the tour
plaintiffs’ snowmobile crashed, causing them serious injuries.
Defendants moved for summary judgment, asserting that
plaintiffs’ claims - all of which sound in negligence - are
barred by the waivers they executed.
In opposing defendants’
motion, plaintiffs advanced five arguments:
(A) the Release does not apply to claims arising from
negligent instruction or guidance on the trails; (B)
the Release does not state with sufficient clarity
that OBK is a party to the contract; (C) the Release
is not enforceable against Jennifer Lizzol because she
did not properly sign the contract; (D) the Release is
unenforceable because it violates public policy; and
(E) the Release is invalid because plaintiffs were
fraudulently induced to sign.
Plaintiffs’ Objection to Summary Judgment (document no. 28-1) at
By prior order (document no. 30), the court addressed and
rejected each of plaintiffs’ arguments, concluding that: the
Release was sufficiently broad to cover defendants’ allegedly
negligent instruction and guidance, id. at 7-11; the Release
does apply to OBK, id. at 12-15; Jennifer Lizzol’s “failure to
initial certain paragraphs of the Release does not preclude its
enforcement” against her, id. at 15; the Release is not
unenforceable on grounds that it violates public policy, id. at
20-22; and “the plaintiffs have not sufficiently established
fraud in the inducement,” id. at 22.
Accordingly, the court
granted defendants’ motion for summary judgment.
In their motion to alter or amend judgment, plaintiffs
assert that the court misapprehended their argument that the
contractual waivers of negligence claims are unenforceable on
public policy grounds.
As a consequence, say plaintiffs, the
court erred as a matter of law in granting defendants’ motion
for summary judgment.
The court disagrees.
Standard of Review
As the court of appeals has repeatedly noted, Rule 59(e) is
“an extraordinary remedy which should be used sparingly.”
Palmer v. Champion Mortg., 465 F.3d 24, 30 (1st Cir. 2006)
A Rule 59(e) motion “does not provide a
vehicle for a party to undo its own procedural failures or to
introduce new evidence or advance arguments that could and
should have been presented to the district court prior to
Quality Cleaning Prods. R.C. v. SCA Tissue N. Am.,
LLC, 794 F.3d 200, 208 (1st Cir. 2015) (citations and internal
Consequently, this court may grant a
motion to amend judgment only “if the original judgment
evidenced a manifest error of law, if there is newly discovered
evidence, or in certain other narrow situations.”
Inc. v. Verizon New England, Inc., 489 F.3d 13, 25 (1st Cir.
2007) (citations omitted).
Here, as noted above, plaintiffs assert the court committed
a manifest error of law in construing New Hampshire law to
permit enforcement of their contractual waivers of negligence
Although it is not entirely clear that each of the
plaintiffs’ arguments advanced on reconsideration was fairly
presented in opposition to summary judgment, the court will
address them nonetheless.
While it may sometimes operate in ways that are harsh, and
differently from the rule in other states, New Hampshire’s law
on exculpatory contracts is clear: written contracts waiving
negligence claims are enforceable if those contracts do not
violate public policy, a reasonable person would understand the
impact of the waiver, and the asserted claims fall within the
contemplation of the parties when they executed the waiver.
McGrath, 158 N.H. at 542.
As the court previously held, all of
those conditions are met in this case and the waivers are
enforceable under McGrath.
Plaintiffs’ memoranda are difficult to follow but they seem
to be positing different theories of avoidance than those
pressed in their opposition to summary judgment.
reconsideration they seem to say that their instructor/guide
acted “recklessly” by providing inadequate instruction and
guidance on the snowmobile tour — riding well ahead of the
group, traveling at excessive speeds, and compelling them to
drive beyond their limited (novice) abilities in order to catch
up with him.
That is, plaintiffs characterize defendants’
failure to adequately instruct in proper snowmobile operation,
their failure to properly guide the tour, and their failure to
“make a good faith effort” to insure their safety as
“recklessness” amounting to “bad faith.”
Thus, say plaintiffs,
defendants breached the implied covenant of good faith and fair
dealing implied in every New Hampshire contract, so the
contract’s waiver of negligence provision should not be enforced
Plaintiffs also add that the contractual waivers
are unenforceable because defendants’ bad faith contract
performance contravenes public policy and enforcement of such
waivers would place public safety at risk.
Plaintiffs’ general argument suffers from two basic flaws.
First, even construing their complaint (as well as the evidence
presented in opposition to summary judgment), in the light most
favorable to them, it does not fairly describe conduct on the
part of defendants that rises to the level of “recklessness” at least not of the sort that might render the contractual
negligence waivers unenforceable.
And, second, even if
defendants had “recklessly” performed their obligations under
the parties’ contract, or even if they “failed to make a good
faith effort” to ensure plaintiffs’ safety, that fact would not,
under the circumstances of this case, constitute a breach of the
implied covenant of good faith and fair dealing.
Nor would it
give rise to a basis for invalidating their contractual releases
on public policy grounds.
Plaintiffs’ Assertions of “Recklessness”
Plaintiffs readily concede that their complaint does not
assert an intentional tort claim.
Nevertheless, they say both
the complaint and the evidence produced in opposition to summary
judgment reference facts from which it can plausibly be
concluded that their snowmobile instructor and guide acted
There is, however, considerable doubt about that,
because plaintiffs’ description of his conduct is fairly
Plaintiffs plead, directly or implicitly, a lack
of care, lack of appropriate attention, inadequate supervision,
inadequate instruction, driving too fast, and going too far
ahead and leaving the group behind on the trail — all hallmarks
of negligence claims, but falling short of describing conduct
consistent with New Hampshire’s use of the term “reckless.”
The New Hampshire Supreme Court generally refers favorably
to the Restatement of Torts and has done so with respect to its
description of “reckless” conduct:
Under the Restatement [(Second) of Torts], § 500, at
587 (1965), conduct is “reckless” if it “would lead a
reasonable man to realize, not only that his conduct
creates an unreasonable risk of physical harm to
another, but also that such a risk is substantially
greater than that which is necessary to make his
conduct negligent.” Id. The conduct “must involve an
easily perceptible danger of death or substantial
physical harm, and the probability that it will so
result must be substantially greater than is required
for ordinary negligence.” Id. comment a at 588.
Boulter v. Eli & Besse Cohen Found., 166 N.H. 414, 421 (2014).
Moreover, as the court noted in Thompson v. Forest, 136
N.H. 215, 220 (1992), a litigant’s characterization of conduct
as “wanton and reckless” is not particularly useful in
identifying the line separating negligence and intentional torts
because, “willful, wanton and reckless conduct may, or may not,
be the basis for a properly pleaded intentional tort.”
“Recklessness” as plaintiffs mean the term to be understood here
— equating to bad faith in contract performance — must, at a
minimum, describe conduct qualifying as an intentional tort
(i.e., more than negligence), that is, “where the known danger
ceases to be only a foreseeable risk which a reasonable person
would avoid, and becomes in the mind of the actor a substantial
Id. (quoting W.P. Keeton, et al., Prosser and
Keeton on the Law of Torts § 8 (5th ed. 1984)).
negligent acts could invalidate a contract provision meant to
waive claims for those very acts of negligence, thereby
rendering such contractual waivers meaningless - something
plainly inconsistent with established New Hampshire law.
Whether conduct amounting to “recklessness” in contract
performance will operate to negate waivers of negligence under
New Hampshire law remains to be seen.
But here, notwithstanding
the descriptive adjectives employed by plaintiffs, the facts and
allegations pled do not suggest that, in the mind of the
instructor/guide, there was “a substantial certainty” that
serious foreseeable harm would occur based on his conduct.
of course, plaintiffs do not allege the substantial certainty of
See Thompson, 136 N.H. at 220.
Even taken in the light most favorable to plaintiffs, the
facts pled and the evidence produced would not support a finding
that the guide’s conduct involved an unreasonable risk of
physical harm “substantially greater than is required for
ordinary negligence or that the risk was one involving an easily
perceptible danger of death or substantial physical harm.”
Boulter, 166 N.H. at 422.
That is, the record is not
susceptible to a construction that supports plaintiffs’
assertions of “reckless” conduct amounting to either an
intentional tort or a material breach of the parties’ contract.
Of course, it is possible that plaintiffs are using the
term “recklessness” to describe conduct that is something akin
to “grossly negligent,” but short of intentionally wrongful.
that is their claim, it too fails.
New Hampshire’s common law
does not recognize distinctions among varying degrees of
See, e.g., Barnes v. New Hampshire Karting Assn.,
128 N.H. 102, 108-09 (1986).
Consequently, if plaintiffs are
using the term “reckless” to mean a particularly egregious form
of negligence, their argument is unavailing.
DeCormier v. Harley-Davidson Motor Co. Group, 446 S.W.3d 668,
671 (Mo. 2014) (“While exculpatory agreements will be strictly
construed, this Court will enforce exculpatory agreements to
protect a party from liability for their own negligence.
DeCormier cannot avoid this rule by alleging Harley–Davidson and
Gateway were grossly negligent because Missouri courts do not
recognize degrees of negligence at common law.”) (citation
The United States District Court for the District of
California has addressed issues similar to those advanced by
plaintiffs and its reasoning is instructive.
In that case, as
Plaintiffs also argue that Defendants “in bad faith
breached the ‘waiver’ contract” and that Defendants’
“deliberate indifference, gross negligence, and
reckless conduct represent a failure of
consideration.” Both arguments fail. Plaintiffs
provide no explanations for how negligent or reckless
conduct which they allege occurred after they signed
the release affects consideration, and the Court can
see no connection. Nor do they identify how
Defendants breached the contract. If Plaintiffs mean
to say that Defendants’ negligence amounted to a
breach of the release contract, such an argument is
meritless. Negligence, and any injury which might
result, is precisely that for which the contract
R.H. v. Los Gatos Union School District, 33 F. Supp. 3d
1138, 1171 (N.D. Calif. 2014) (citations omitted).
is in this case.
It was not “reckless” or in “bad faith”
for defendants to have engaged in conduct expressly
permitted by plaintiffs’ releases.
Again, the Los Gatos
opinion is helpful:
[B]ehavior which is authorized is not wrongful
and, logically, cannot be the basis of a
[negligence] action. “In its most basic sense,
assumption of risk means that the plaintiff, in
advance, has given his express consent to relieve
the defendant of an obligation of conduct toward
him, and to take his chances of injury from a
known risk arising from what the defendant is to
do or leave undone . . . The result is that the
defendant is relieved of legal duty to the
plaintiff; and being under no duty, he cannot be
charged with negligence.” Prosser & Keeton,
Torts (5th ed.1984) § 68, at 480–481. By
contractually agreeing to assume all the risks of
participation on the Fisher wrestling team and by
expressly releasing Defendants from liability for
any injuries sustained in connection with
participation on the team, Plaintiffs consented
to certain acts or omissions by Defendants which
might otherwise have constituted negligence.
Id. at 1171 (emphasis in original).
Good Faith and Fair Dealing.
As noted above, plaintiffs also assert that, by acting
“recklessly,” defendants breached the implied covenant of good
faith and fair dealing.
Consequently, say plaintiffs’ their
contractual waivers are unenforceable.
But, even if plaintiffs’
complaint had adequately pled facts from which one could
reasonably conclude that their instructor/guide acted
“recklessly,” such conduct would not - at least under the
circumstances of this case - constitute a breach of the implied
covenant of good faith and fair dealing.
The covenant of good faith and fair dealing implied in
every New Hampshire contract is a doctrine that is often
misunderstood and routinely (improperly) invoked as a general
Under New Hampshire common law, “[t]he
various implied good-faith obligations fall into three general
categories: (1) contract formation; (2) termination of at-will
employment agreements; and (3) limitation of discretion in
J & M Lumber & Constr. Co. v.
Smyjunas, 161 N.H. 714, 724 (2011) (citation omitted).
somewhat unhelpfully, plaintiffs point to the generally
understood principle that there “is an implied covenant in every
contractual relationship that the parties will carry out their
obligations in good faith.”
Cloutier v. Great Atl. & Pac. Tea
Co., 121 N.H. 915, 920 (1981).
That is undeniable.
what is meant by “good faith” depends upon the context in which
it is invoked.
See generally Centronics Corp. v. Genicom Corp.,
132 N.H. 133, 140–41 (1989) (discussing the difficulty of
defining “good faith” in the context of each of the three
categories of contract cases in which it arises).
It is, therefore, important to understand precisely how,
according to plaintiffs, defendants breached the implied
covenant of good faith and fair dealing.
In this case,
plaintiffs invoke the third category of cases in which the
implied covenant of good faith is implicated: those situations
in which one party’s exercise of contractually-vested discretion
is subject to an implicit limitation in the performance of its
See Plaintiffs’ Memorandum at 5 (“The
present case relates to the third category: contractual
But, as the New Hampshire Supreme Court has
observed, that “third category is comparatively narrow.”
Livingston v. 18 Mile Point Drive, Ltd., 158 N.H. 619, 624
Nevertheless, the court noted that, “its broader
function is to prohibit behavior inconsistent with the parties’
agreed-upon common purpose and justified expectations, as well
as with common standards of decency, fairness and
Id. (citation and internal punctuation
In the context of this case, the implied covenant of
good faith and fair dealing serves to preclude one party from
exercising its contractually-vested discretion in a manner that
would “thwart a reasonable expectation of the other party, going
to the essence of the contract.”
Centronics, 132 N.H. at 141.
Critically, not every contract breach, however blatant or
extensive, constitutes a breach of the covenant of good faith
and fair dealing.
Plaintiffs’ complaint does not assert that no
instruction was given, or that no tour guidance was provided.
Instead, they assert that their tour guide “did not make a good
faith effort in carrying out his duties as an instructor and
Plaintiff’s Memorandum (document no. 32-1) at 4.
in turn, say plaintiffs, constitutes a breach of the covenant of
good faith and fair dealing.
It does not.
that their instructor failed to make a “good faith effort” to
uphold his obligations under the contract is not sufficient to
state a claim that he breached his obligations of good faith and
fair dealing by exercising contractually vested discretion in a
manner that thwarted a reasonable expectation of plaintiffs,
going to the essence of the contract.
the contract was straight forward.
Here, the “essence” of
snowmobile lessons and a guided snowmobile tour in exchange for
both a fee and a release of all negligence claims that might
arise from plaintiffs’ participation in that recreational
Fundamentally, plaintiffs’ argument misconstrues New
Hampshire’s law on good faith and fair dealing.
their suggestion, New Hampshire law does not impose a blanket
requirement upon every contracting party to make a “good faith
effort” to perform all of its contractually-assumed obligations.
Instead, as applied to contract performance, the implied
covenant of good faith and fair dealing serves as an implicit
limitation on one party’s contractually-vested discretion.
Centronics, 132 N.H. at 143 (“Despite the variety of their fact
patterns, these cases illustrate a common rule: under an
agreement that appears by word or silence to invest one party
with a degree of discretion in performance sufficient to deprive
another party of a substantial proportion of the agreement’s
value, the parties’ intent to be bound by an enforceable
contract raises an implied obligation of good faith to observe
reasonable limits in exercising that discretion, consistent with
the parties’ purpose or purposes in contracting.”) (emphasis
Consequently, in order to prevail on a claim that a
defendant violated the covenant of good faith and fair dealing
in its performance of a contract, a plaintiff must demonstrate
The contract allows or confers upon the defendant
a degree of discretion in the performance of its
obligations tantamount to a power to deprive the
plaintiff of a substantial proportion of the
agreement’s value; and
The defendant’s exercise of that discretion
exceeded the limits of reasonableness; and
The damages of which plaintiff complains were
caused by defendant’s abuse of discretion.
See Centronics, 132 N.H. at 144.
When plaintiffs’ burden is
appropriately phrased, it is plain that their claims against
defendants do not properly invoke the covenant of good faith and
The contract at issue simply did not vest
defendants with a degree of discretion sufficient to deprive
plaintiffs of a substantial portion of the value of the
Necessarily, then, defendants did not abuse that
Simply claiming, without more, that
defendants did not act in “good faith” in carrying out their
contractual obligations is insufficient to invoke the covenant
of good faith and fair dealing as it relates to contract
When they executed the contractual waivers of negligence
claims, plaintiffs necessarily understood that they were
assuming a risk of serious injury arising out of their
participation in the snowmobiling activity and that such risk
included injury that might be caused by defendants’ negligent
Their reasonable and justified expectations, then,
included an understanding that if they sustained injuries
because one or more defendants was negligent (as alleged in the
complaint), they had contractually waived all negligence claims
related to the activity, and could not recover damages.
Construing the contract as conditioning enforcement of the
negligence liability waivers on defendants’ non-negligent
performance of their contractual obligations would be
inconsistent with New Hampshire law.
And, plaintiffs cannot
plead around their waivers by alleging that defendants violated
the implied covenant of good faith and fair dealing by acting in
a “reckless” manner or by failing to make a “good faith effort”
to perform their duties under the contract.
III. Public Policy.
Finally, plaintiffs assert that their negligence waivers
should be deemed unenforceable because enforcing them would
contravene public policy and tend to imperil or interfere with
public welfare or safety.
See McGrath 158 N.H. at 543.
Enforcement of those waivers, say plaintiffs, would tend to
interfere with public safety because it would relieve defendants
from liability for the “reckless” and “bad faith” conduct that
led to their injuries.
rejected in McGrath.
But a similar argument was made and
There, the plaintiff, a snowboarder, was
struck by a snowmobile.
She argued that defendant’s operation
of the snowmobile both negligently and in contravention of
safety laws should negate her negligence waiver as being against
The Court rejected that argument:
Irrespective of the statute, the plaintiff has
voluntarily agreed not to hold the ski area, or its
employees, liable for injuries resulting from
negligence so that she may obtain a season ski pass.
Therefore, we conclude the agreements do not
contravene public policy as injurious to the interests
of the public, violative of a public statute or
interfering with the public welfare.
McGrath, 158 N.H. at 543.
Negligent instruction and supervision with respect to the
snowmobile tour in which plaintiffs participated no doubt posed
a risk to their personal safety.
But, again, the risk of injury
due to defendants’ potential negligence was the subject of the
It does not follow that a contractual waiver
of negligence claims with respect to recreational activity
contravenes public policy because negligent conduct in such an
environment puts the participants’ safety at risk.
But, say plaintiffs, it is not the mere exposure to risks
to their safety that contravenes public policy, but exposure to
those risks as animated by “reckless” and “bad faith” conduct.
The so-called “recklessness” and “bad faith” referenced here,
however, is at best negligence; it is not the equivalent of an
intentional tort, or an intentional or complete failure to
The waivers in this case do not contravene public
policy as plaintiffs argue the point.
Plaintiffs’ arguments are imaginative but, substantively,
they look like an impermissible appeal to alter well-established
Along those lines, plaintiffs seem to assert that
the common law of New Hampshire should not permit the waiver of
negligence claims when the negligent conduct at issue rises to
some level of “recklessness” or is the product of one party’s
failure to make a “good faith effort” to carry out its
Simply stated, that is not consistent with
existing New Hampshire law.
The claims described in the complaint all sound in
Negligence claims can be waived.
previously determined, plaintiffs waived their negligence claims
There are no intentional tort or other causes of action
asserted in the complaint and, as mentioned, New Hampshire law
does not draw distinctions among culpable degrees of negligence.
See Barnes, 128 N.H. at 108-09; Lee v. Chamberlain, 84 N.H. 182,
Finally, the grounds upon which plaintiffs seek to
invalidate their waivers are not consistent with applicable New
For the foregoing reasons, plaintiffs’ Motion to Amend or
Alter Judgment (document no. 32) is denied.
Steven J. McAuliffe
United States District Judge
September 6, 2017
Philip R. Waystack, Jr., Esq.
Sandra L. Cabrera, Esq.
Paul B. Kleinman, Esq.
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