Thursday, February 27, 2003
Appeals Court Rejects Exculpatory Clauses in Child Care Contracts
By ROBERT GREENE, Associate Editor
Child care providers may not contract away their duty to exercise ordinary care, this district’s Court of Appeal ruled yesterday.
In invalidating the exculpatory clause in the YMCA of Metropolitan Los Angeles daycare agreement, the court said releases of child care providers’ liability for their own negligence are void because they affect the public interest.
The ruling reinstates a damages lawsuit by the parents of four-year-old Gavin W. against the YMCA for permitting their son to become caught up in alleged inappropriate sexual behavior by another four-year-old.
The parents signed a daycare contract containing three separate clauses under which they released the YMCA from liability for any loss or damage, even if caused by the YMCA’s negligence, on the premises. The agreement was upheld by Los Angeles Superior Court Judge Howard Schwab, who dismissed the parents’ three negligence causes of action.
But Presiding Justice Dennis Perluss said the clause could not stand, given the state Supreme Court’s 1963 ruling in Tunkl v. Regents of University of California voiding exculpatory contracts involving the public interest.
“For the vast majority of working families affordable, quality child care services are an indispensable ingredient of every day life,” Perluss said. “Yet the demand in California for such services, particularly for children five years old and younger, far exceeds the supply. Under these circumstances contracts for child care services are necessarily ‘affected with a public interest.’ Accordingly, we hold a release of claims that purports to exculpate a child care provider from its own negligence is void as against public policy under Tunkl.”
A substantially similar YMCA of Metropolitan Los Angeles contract survived the Tunkl test in a 1997 opinion by Justice Reuben Ortega of Div. One. The release, Ortega wrote in the case of petitioner Mary Clark, did not violate public policy, but instead benefited the public by enabling the YMCA to provide low-cost recreational activities without forcing the organization to bear the often overwhelming costs of litigation.
But Clark was 73, and the program for which she signed the release provided her and other seniors a chance to socialize over a lunch for which they each paid $1.75. There may be a public interest in maintaining nutritious and inexpensive lunches for seniors, Ortega wrote, but that public interest would be harmed by invalidating the release form and spurring the YMCA to raise its prices to cover potential litigation or to end the program altogether.
A shortage of senior centers does not render the YMCA’s program an “essential activity” under Tunkl, the justice said.
“Those who frequent recreational activity centers such as the YMCA expose themselves to any number of risks inherent in entering those premises, and conditioning their participation upon signing the release does not deprive them of a meaningful choice,” Ortega said.
The YMCA release also was upheld in a 1993 case in which a swimmer slipped and fell on wet poolside tile and tried to sue. Justice Fred Woods of Div. Seven said Lemonia T. Randas could not prevail since she had signed the release and since swimming, like other sports, carries with it inherent risks. Woods quoted with approval from another district’s opinion that with a shrinking number of opportunities for recreation and sports, public interest weighs in favor of provider organizations being able to shift the burden of potential litigation.
But in yesterday’s opinion, joined by Woods and Justice Earl Johnson Jr., Perluss noted that child care services are “subject to comprehensive public regulation” and are “of vital importance to the public, and a matter of practical necessity for most working parents in California.”
He cited a 2001 study by the California Child Care Resources and Referral Network, which reported that 55 percent of children ages 13 and under live in families with two employed parents or an employed single head of household.
“For these 4,068,422 children and their parents, participation in a child care program is not something that can easily be declined if the provider attaches unsatisfactory conditions to the service contract,” Perluss wrote.
He also noted that any member of the public can use the YMCA child care program, and that the nature of child care gives the organization “a decisive advantage in bargaining strength” with respect to parents who seek to use its services, since in Los Angeles County “there are more than six times more children ages 0-13 with working parents than licensed child care spaces available.”
Like the relationship between a hospital and its patients, Perluss said, the relationship between a child care provider and the families who use and depend upon its services has all the characteristics of a contract affecting the public interest, as set forth in Tunkl.
“We are, of course, mindful that a child care provider who must bear the cost of its own negligence or insure against that risk may charge a slightly higher fee than one who can shift that cost to its clients,” Perluss said. “Imposing that cost on the child care provider, however, is fully consistent with the principle of assigning tort liability to the party who is in the best position to distribute losses over a group that should reasonably bear them.”
The case is Gavin w. v. YMCA of Metropolitan Los Angeles, B152821.
Copyright 2003, Metropolitan News Company