Monday, April 2, 2012

Mailbag: Suing a Ski Resort for Misrepresentations?



Thank you to a reader for reaching out to me with a question. Two quick notes - first, I will keep all questions anonymous and may paraphrase or rephrase your question for the sake of clarity or brevity. Second, please read the disclaimer at the bottom of the page. Any question I answer will be in the abstract and is not intended as specific legal advice.

QUESTION:

Dear Ski, Esq.

I was a season passholder at [redacted] resort this winter. Their website advertised a season from late November through early April. The mountain was open only from Christmas through the first week in March. I feel cheated. Is there anything I can do?

The answer after the jump.

ANSWER:
This is a very interesting question and one whose answer surprised me a little bit. I pulled a random sampling of season pass agreements from about a half dozen resorts across the country - East Coast, Midwest, Rockies, and West Coast. What I expected to find in the season pass agreement was a "no representations" paragraph or similar disclaimer.  If not in the agreement itself, I at least expected a disclaimer on the resort's website. Only Vail Resorts did, but even their disclaimer could have been more specific to address this particular concern and it certainly could have been made part of the season pass agreement itself.

You often see something similar on the back of your lift ticket, something along the lines of "X Resort makes no representation regarding snow quality. Skiing is an outdoor sport; conditions change rapidly. This lift ticket is not refundable under any circumstance." This would be an example of a "no representations" clause/disclaimer that applies for the duration of the lift ticket.

In the context of a season pass agreement, I expected to find a paragraph like, "X Resort makes no representations regarding the length of the season or the number of days the resort will operate this winter. Operations are dependent on a number of factors, including the weather."

Not one of the season pass agreements I reviewed contained anything resembling the language above. This is a major mistake for a resort. It opens the resort up to quite a few different potential claims - e.g. breach of contract, fraud, fraud in the inducement, negligent misrepresentation and violations of various consumer fraud statutes. Breach of contract or common law fraud claims are unlikely to succeed for a number of reasons, namely the indefinite nature of the promise made by the resort (if any) and the reasonableness of placing reliance on those claims given the sport's high susceptibility to weather-related issues. As a result, I'll focus on the consumer fraud claim because it is by far the most dangerous.

Many states have consumer protection statutes. My home state of New Jersey has one of the most powerful and pro-consumer statutes in the country - the NJ Consumer Fraud Act ("NJ CFA"). It is designed to protect consumers against all types of "unconscionable commercial practice(s)." It is broadly construed in favor of the consumer and covers the sale of both goods and services. The penalty for a violation of the NJ CFA is treble damages plus attorneys' fees. Most states have similar, if slightly less severe, consumer fraud statutes.

Now I'm going to make what is probably an over-generalization. Most resorts are not careful in the representations they make on their websites or in print. Marketing department folks are not lawyers and I sincerely doubt they have a copy of applicable consumer fraud statutes in front of them when they're making representations. As a result, many resorts make claims that are misrepresentations. In doing so, they can incur substantial liability. 

At this point (if you've read this far...), you're probably asking yourself, "So what? It's just a few bucks, so even trebled it's not that much money." That's where the truly nasty part of the statute comes into play - attorney's fees. In many states a plaintiff must demonstrate ascertainable loss to recover damages under a consumer fraud statute. However, in some states, the defendant is responsible for attorneys' fees, even if the breach is a technical violation of the statute. Technical violations can be as ridiculous using too small a font size. Because there's no risk to the plaintiff (whose attorney normally accepts the case on a contingent fee basis), there's no almost no downside for the plaintiff in filing a claim.

Now that said, just because you may have a colorable claim doesn't mean you should run to the courthouse. 2011-2012 witnessed an almost unprecedentedly poor season. Suing your favorite resort just puts them closer to going out of business. I'd recommend that if you think a resort is untruthful its marketing you either (1) don't believe their claims and base your decision on your firsthand experience and knowledge; or (2) patronize a different resort.

Thank you for your question. I hope to put together an article over the summer about how to read your season pass agreement.

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