It’s Halloween. Linda Blair, Rosemary, Buffy and fellow high school senior girlfriends are looking for something to do. Trick-or-treating is boring. The thought of staying home with parents is unbearable. With no particular plan in mind, the eighteen year olds, like all bored teenagers, head to the mall. As the girls leave Abercrombie and Fitch after a couple of hours and head to Cinnabon in the food court, the girls notice a haunted house (quaintly named “Lucifer’s Haunt of Scream’s and Dismemberment”). It’s in the space that Big Box, the anchor tenant vacated. Intrigued, each of the girls shells out $20, signs a one page form with small writing that they don’t pay much attention to and enter Lucifer’s. They are immediately accosted by all manner of ghouls. One particularly convincing, Texas chainsaw-wielding ghoul chases the girls through the darkness scaring the Lucifer out of them. Emerging from Lucifer’s crying and screaming, the girls notice that Buffy has a bloody nose from running into a wall. A week later, several of the girls still suffer from nightmares. They wonder if they can bring a lawsuit for extreme fear, mental anguish and emotional distress. Lucifer’s was simply too scary.
The owners of Lucifer’s Haunt of Screams would not find the threatened lawsuit very scary. The consent “form” signed by Blair and friends undoubtedly stated that they assumed the risks associated with entering the haunted house and released Lucifer. Even without such a release, the girls’ claims would have little bite. Although many jurisdictions, including Texas, abandoned assumption of the risk as a defense to negligence (unless there is an express or written consent), it would still affect the decision of who bore the most responsibility for the “injuries,” the girls or Lucifer’s. Simply put, if you enter a haunted house, you should not be too surprised if you become scared or frightened. An appeals court in an eerily similar case ruled:
The very nature of a Halloween haunted house is to frighten its patrons. In order to get the proper effect, haunted houses are dark and contain scary and/or shocking exhibits. Patrons in a Halloween haunted house are expected to be surprised, startled and scared by the exhibits but the operator does not have a duty to guard against patrons reacting in bizarre, frightened and unpredictable ways. Operators are duty bound to protect patrons only from unreasonably dangerous conditions, not from every conceivable danger.
The number of these cases that haunt our court system is shocking. Consider Cleanthi Peters who visited Universal Studios’ Halloween Horror night and sued for $15,000 alleging extreme fear, mental anguish and emotional distress claiming that the their haunted house was just too scary. Or the case of Jessica Launderville who sued the operator of the Realm of Terror after she tripped on a floor mat while being chased by a ghoulish fiend wielding a chainsaw.
But What About that Agreement They Signed: The Devils in the Details
If Linda, Rosemary, Buffy and gang can find someone to take their case, what about that one page form with the small writing that none of them paid much attention to? Does it affect their claims?
Like many Americans every day, when you purchase a computer, lease a car or even dare to enter Lucifer’s Haunt of Scream, you often sign a “form.” Often buried in all that fine print is what is referred to as an arbitration clause. That clause governs any disputes – from not liking the ghouls to claims the ghouls hurt you – which might arise under the “form.” In short, you have to go to arbitration if there is a dispute.
Arbitration – Is that the same thing as Mediation? No. There is a big difference. An arbitration clause commits both parties to binding arbitration if there is a dispute. Mediation, which will be addressed in a later blog article, is purely voluntary, is not conducted at the courthouse, and is not at all binding. Typically the arbitration clause is located near the end of the agreement, often above the signature line. It should contain what rules you must arbitrate under, where the arbitration is to be conducted, who the arbitration service provider is, how the arbitrator’s fees will be set and how you may contact them for more information or to file a dispute.
Arbitration – it’s not Litigation. Although it is binding, an arbitration clause does not permit you to go to court. It’s more informal. There are no specific rules of evidence like at the courthouse. The arbitrator can permit all sorts and forms of evidence, weighing it as she sees fit. An arbitrator can even curb irrelevant and repetitious testimony. The parties can, but do not have to be represented by an attorney. They can handle their own testimony, witnesses, evidence, experts and closing statements, including questioning and rebutting the other party’s testimony, their witnesses and evidence.
Arbitrators are not judges, and are not necessarily attorneys. Unlike courts where a judge is assigned to a case, arbitrators are selected by the parties for the specific cases, often because of their knowledge of the subject matter.
Arbitration – Confidential, Faster, Final and Binding. Unlike the courthouse, arbitration proceedings are not public record and may even be kept confidential. Arbitration is much faster than a lawsuit which can often take years to get to trial. Also, unlike a lawsuit that can be appealed, the decision of the arbitrator is final and unappealable. Often, because the conclusion is faster and unappealable, arbitration is generally less than the cost of formal courts.
Tilting the Scales in Your Favor. If you do have an agreement that calls for arbitration, read and carefully follow the procedures referenced in the agreement. Notify the business in writing that you have a dispute and that you wish to resolve it through arbitration, or contact the arbitration service provider referenced in the agreement. You might also consider calling your favorite lawyer.
Tilting the Scales to Manage Your Legal Risk. Unlike Linda, Rosemary, Buffy and gang if you have a chance to negotiate your agreement, there are several things to consider. First, do you even want an arbitration clause? What are the pro’s and con’s? Properly drafted, they do make sense for many businesses. They are not for everybody. It does make sense, however, to craft dispute management language in any significant contract. Some, like those businesses regulated by securities laws, require arbitration through a particular arbitration entity like FINRA – Financial Industry Regulatory Authority. The most common service providers in Texas are JAMS – Judicial Arbitration and Mediation Services, Inc., the American Arbitration Association and the Better Business Bureau.