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 2006 Blog posts
 05-20-New M$F Agreement asks state programs to indemnify them against everything
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Female Junior Member
26 Posts

St. Louis, MO


VFR 750F
Peer Review: Blocked

Posted - 02/03/2011 :  1:59 PM                       Like
(Posted 05/20/06)

I just read the new M$F RERP Agreement and the cover letter it came in on or rather under. The letter is from Charlie Fernandez, M$F General Manager to State Coordinators. It immediately applies to all 175 RERP agreements signed since 2004 including all the California sites or else they cannot teach M$F curriculum as of July 1, 2006. Charlie informs the state coordinators that ALL prior agreements prior to that are up for grabs too: "...MSF will be contacting each of you [state coordinators] to coordinate the most effective way to bring the Sponsors in your respective state with older agreements to the current version."

Make no mistake M$F wants every state to be held to the provisions of this new agreement and will be contacting each program individually to get this to happen. But, as one state attorney's office has already pointed out, it's not an agreement at all - it's a contract and the provisions strip the state of all power over their own program. So my SMRO friends, the bull is now in the ring and it's time for you to fight it.

It's a "beaut of a letter" in the words of one rider educator - candy coated but threatening and duplicitous. In the cover letter, Fernandez writes, "In coming to the enclosed RERP, the MSF has worked with Ken Kiphart, Chairperson of the SMSA, and eight other state Administrators who represent a cross section of the many different types of state program operations and administrations." The implication is that they have signed off on the new RERP as being acceptable, a reasonable agreement with a vendor. And, by mentioning the input, it sounds like it was something done by committee or that these administrators were aware of each other's comments.

Neither is true. There was no committee, no consensus. Each person was approached separately for comment. No attempt was made by M$F to inform each what the others had said. And, in fact, M$F ignored the input when constructing the final version. In fact, a second document that did address some of the concerns that was fully a page shorter was distributed to the eight plus Kiphart but that was not the version sent out to the state programs with this cover letter. Instead, what was sent included the most objectionable parts of the initial document.

So objectionable that, legally, many state coordinators/administrators would imperil their state or universit(ies) and/or themselves if they do sign this document. We'll get to why but this is where SMRO activists must step up to the plate and make sure their state coordinator gets legal counsel before signing. So, first, I urge you to read the entire RERP agreement it's available through this url: http://www.msf usa.org/index_new.cfm?pagename=RiderCoach%20Info&content=4BBF006F A0CC 53D5 648E07163971B0F1&referer=MSTS . Then click on RERP Agreement (posted 05/15/06)

I am not a lawyer nor is this legal advice. This is nothing but a very strong plea that competent legal advice be sought by all rider education programs that use M$F curriculum before the new RERP is signed and that instructors and SMRO activists insist that legal advice be sought before the coordinator signs it.

So why is this Agreement problematic? The biggest objection, it seems, that some state program administrators have and that any lawyer would flag is that M$F is demanding that the state program "Indemnify, defend and hold harmless MSF, its member companies, representatives, officers, employees and agents from any and all loss, claims, damages, costs and expenses (including claims for MSF's own negligence) brought for or on account of injuries to or death of any person, or damage to any property, or any other loss or damage, arising from or relating to performance or non performance of Sponsor's responsibilities under this Agreement."

These are words we think we know but it's wise to look at the actual meaning particularly their legal use. The definition for indemnify is: to guarantee against any loss which another might suffer. The 'Lectric Law Lexicon gives this definition: "An agreement whereby one party agrees to secure another against an anticipated loss or damage." The legal definition for hold harmless is to promise to pay any costs or claims which may result from an agreement because one party (the one that's demanding the clause) is concerned that there might be unknown lawsuits or claims stemming from the situation, so they ask that the other party agrees to cover them. Iow, MSF is demanding that the Sponsor accepts responsibility for all damages and other liability that arise and relieve M$F any liability.

This is critically important: M$F wants the states/sponsors to pay all damages, all costs and the need for such financial protection has already been anticipated by asking for such provisions.

And let's be very clear here: including claims for M$F's own negligence!

MSF wants the Sponsors to assume all responsibility and exclude MSF from anything responsibility not even the curriculum itself and bear all costs for any claims that arise.

But it is asking this even though it develops the curriculum and training for instructors, set the standards for training, credential the instructors and programs, even though its employees train the chief instructors that go out and train the instructors, even though their employees set the standards and approve the ranges and everything else. Even though the state has no other option but to teach the M$F curriculum according to their standards and, as this Agreement goes on to insist any ability to modify it in any way, it's supposed to bear all the responsibility. It's all the state's fault if something goes wrong. And the instructors/site managers, of course.

Instructors have wondered for a long time if M$F would stand behind them in a lawsuit. Well, M$F has heard and answered your question. In a word: No. As this is written, you and your sponsor will be left twisting in the wind. Even if you do everything exactly as you were taught by M$F trained instructors, you will be liable. So instructors, for your own protection, it's also up to you to make sure your coordinator gets legal advice before signing this document. Those Sponsors operate out of colleges, etc. are advised to get their legal eagles to look over this document as well as the liability could go to them as well. But not M$F even for its own negligence.

In my best Infomercial voice, "But wait! That's not all!" MSF also promises to "Indemnify, defend and hold harmless Sponsor, its representatives, officers, employees and agents from any and all loss, claims, damages, costs," etc. "but only if such loss, claims, suits, actions, damages, costs or expenses solely result from or arise out of an allegation that MSF acted negligently in preparing or recommending MSF's curriculum materials." The emphasis in mine.

Gee wilikers, M$F will give indemnity to the states in something that they had nothing to do with and something that would be extremely easy to prove they had nothing to do with. Wow! How nice of the M$F. And, as you'll notice, it doesn't contradict the lack of responsibility for its own negligence as in the earlier paragraph. They are only indemnifying the Sponsors from allegations of negligence in preparing or recommending the curriculum materials. And, of course, they pick the one suit that would be the hardest to prove. So, out of all possible suits that could be brought M$F, it generously offers empty indemnity to the sponsors while demanding they take on enormous liability. Wow, Tim and Charlie, you've outdone yourselves.

SMRO activists, instructors and administrators need to know and understand this in particular: As more than one administrator has pointed out, their state laws do not allow any sort of indemnification of a provider. Your state program administrator needs to seek legal counsel before signing this document. Whether you are an instructor or an SMRO activist, you need to make sure that happens.

If a coordinator/administrator does sign such an agreement, I have been told, it's very likely that the state would easily show that the coordinator signed it illegally and all such suits would fall directly upon the shoulders of the coordinator him/herself. That should be enough for coordinators to cover their own assets but there are some out there that are so deeply mired in their own positive outcome bias that they may not do what they need to do to protect their state program or themselves.

The indemnification, defend and hold harmless clauses are a dangerous change in the new RERP, and instructors and SMRO activists need to contact their state coordinators and express their concerns and urge him or her to seek legal opinion(s).

But here's the thing and this goes back to the duplicitous candy coated language in the cover letter: M$F was informed that it was illegal for some states to sign a document that indemnifies M$F yet TPTB at M$F included it anyhow. And the letter makes it clear that all state programs will have to sign the new agreement. What happens - a Mexican stand off?

So what does this mean - that M$F will tell coordinators to simply cross out the offending language and sign it anyhow? But would that be legal? And, unless the legal representative for M$F signs the change, it's not legal anyhow. So that's another question the coordinators have to ask their legal advisers. But say there's different things in different states that wouldn't be acceptable that could mean that there's as many different agreements out there as there are providers. As one administrator pointed out, that's not wise either.

Is M$F so stupid that they think no one will notice such language and sign it because they haven't had any problem up until now? Well, with now five deaths (yes, five) in rider training can any state or provider trust that they won't be sued? And Tim is not a stupid man nor are M$F's lawyers nor are the manufacturers. They know what they are doing - does your state coordinator or administrator?

Or is M$F so arrogant that they think state coordinators are so gonad challenged they will simply bend over and sign all their rights away for all of their program and all of their instructors and the state's good money?

Or is M$F very, very smart and know that state programs cannot legally sign this and that then gives them the opportunity to go where they want to go anyway - to dealer based franchises?

But, like the cover letter says, M$F is going to divide and conquer and go after each state separately to get them to sign this. If a state or sponsor doesn't sign, it may well mean that they will not be allowed to continue under their old contract. Ergo, no state program. The pressure will be to sign - particularly, as I have pointed out before, this happens during the middle of rider training for all snowbelt states.

Administrators who have simply kept their heads down and hope to make it the next few years to retirement (and you'd be surprised at how many there are), or those who simply want to believe the best about M$F because nothing bad has happened to them (yet), or those who are afraid of what this can mean need instructors and SMRO activists to encourage to do what's best in the long term for the program and not succumb to such manipulation.

But it also means those wise state administrators who see the horns of the dilemma that are about to impale them will need the support of instructors and SMRO activists and regular motorcyclists to prevent the power grab by M$F.

So whether M$F is being arrogant or smart, it doesn't matter - it's bad for the state program at the least. The indemnity issue, though, is just one of the reasons why SMRO activists need to ensure that their state coordinator seeks legal advice - if not clearing it with the State Attorney General's office - before signing this agreement. Of course, some state attorney's have been manipulated by certain parties already so that also has to be watched by the SMROs.

But that's not all either, though the indemnification issue may be the most serious. I'll discuss some of the other issues in separate entries to follow.
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