Parental indemnification agreement; Woodman v Kera, LLC; Whether a contract violates public policy; Soaring Pine Capital Real Estate & Debt Fund II, LLC v Park St Group Realty Servs, LLC; MCL 700.5109

Noting it was bound by Woodman’s holding as to Michigan’s common law and public policy, the court concluded it was clear that the parental indemnification agreement at issue was “intended to limit a child’s ability to sue [defendant-]Auburnfly for injuries caused by Auburnfly’s negligence.” Thus, it rejected Auburnfly’s argument that the contract did not violate public policy. Third-party defendant-Knaack’s child, MK, was injured while participating at an event at Auburnfly’s adventure park. After this suit was filed, alleging negligence and other claims, “Auburnfly filed a third-party complaint against Knaack, seeking to enforce” a participant agreement she had signed and compel her to indemnify and hold it harmless for MK’s injuries. Knaack successfully moved for summary disposition. The Michigan Supreme Court held in Woodman “that ‘the Michigan common law rule is clear: a guardian, including a parent, cannot contractually bind his minor ward.’” Auburnfly argued the contract here bound it and the parent, not a minor child. “On its face, defendant is correct—MK is not explicitly a party to the contract, nor does [it] state that MK has waived any of her rights.” But in determining whether there is a public policy violation, the court considers “the ‘nature and substance’ of” a parental indemnification agreement in context. Children “require a representative party to sue on their behalf.” Here, as in many cases, this “is the child’s parent. Accordingly, by requiring the parent to indemnify the negligent party, the parent would bear the financial burden of any judgment obtained in litigation on the child’s behalf. Moreover, even if the child brought suit through a representative, the child’s material situation would almost certainly not be improved by winning the lawsuit, if the ultimate source of payment was the child’s parent. In the vast majority of cases, a parent or child in that position simply would not bring the litigation, which effectively results in the limitation of the child’s rights.” The court added that, “even if a parental indemnification agreement did not result in a de facto limitation or waiver of a child’s rights, such an agreement, if enforceable, would result in Auburnfly not being liable for injuries it negligently caused to children.” In MCL 700.5109, the Legislature has “provided a limited exception to the common law of Michigan by allowing preinjury liability waivers by parents on behalf of their children, but only for specific entities, and not for liability for damages caused by negligence.” Affirmed.