Track-day operators breathe easier after ruling in lawsuit over Laguna Seca crash
by Mark Gardiner – REVZILLA Common Thread Blog
Seven years ago, Daniel Kim crashed at a track day at WeatherTech Raceway Laguna Seca and, waiver be damned, sued the track-day company, the track operator, and the County of Monterey, California. After a tortuous journey through the court system, a judge has finally ruled against Kim’s claim.
Some feared the lawsuit could threaten the viability of track days and my article in 2018 drew more than 700 reader comments, one of the highest levels of reader response in the history of Common Tread. So now that the judge has rejected Kim’s claims, is the story over and can California track-day operators finally breathe easy? Probably.
On one hand, I believe the 22-page Statement of Decision prepared by Judge Thomas W. Wills of the Monterey County Superior Court shows that he really grasped the finer points of the iconic Laguna Seca track, track-day operations, and the inherent and unavoidable risks of riding motorcycles at speed. On the other hand, the case won’t be formally closed for another month and there’s always the possibility of an appeal.
Daniel Kim’s crash and its aftermath
Kim was injured while participating in a Laguna Seca track day in March 2015. The event was put on by Keigwin’s at the Track, a respected West Coast track-day operator. (From here on, I’ll refer to the company as Keigwin’s, though the founder, Lance Keigwin, sold the business a few months before Kim’s crash and never had any personal liability exposure.) Kim sued Keigwin’s, the Sports Car Racing Association of Monterey Peninsula (SCRAMP), which managed the track at the time, and the County of Monterey, which owns the facility. You can read full details of the crash and the suit in my 2018 article.
News of Kim’s lawsuit struck fear into track-day providers. They thought that if he won his case, it would weaken waiver protections, drive up insurance costs, and make the entire business uneconomical. That “We’re all going to go out of business!” panic was an oversimplification that I’ll come back to. But Kim’s lawsuit was, in part, responsible for a 400 percent increase in Keigwin’s insurance — a problem that drove Keigwin’s out of business. (Luckily, most of the former Keigwin’s staff still run track days and classes for their former customers under a new business, Carter’s at the Track.)
Due diligence
Over the last few weeks, I’ve spoken to one of Daniel Kim’s two lawyers, co-counsel Sarah R. London of the San Francisco firm Lieff Cabraser. I left a message with lead counsel Deborah Chang of the Hermosa Beach firm Athea Trial Lawyers, but she did not respond in time for me to meet my deadline.
I spoke to defense lead counsel William Scott Kronenberg of the Oakland firm Kronenberg Law and two other lawyers involved in the defense. They were co-counsel, Andrew H. Swartz of the Monterey firm Swartz & Kennedy, and Stephen L. Hewitt of the Woodland Hills firm Hewitt & Raphael. Swartz has represented Laguna Seca for decades. Hewitt was involved in the case, first as a defense attorney and then as a consultant.
Over the years I’ve followed this story, I’ve become friends with Lance Keigwin, who was deposed at length by Kim’s lawyers and testified as an expert witness for the defense. From a liability perspective, he did not have skin in the game, but he remained emotionally involved. He was very happy when he contacted me after the judge’s decision.
As you’ll read, although the judge has issued a detailed decision, the case is not over. With that in mind, some of the lawyers I spoke to insisted that our conversations be off the record. The hot-button social media response to this case has already been raised in proceedings; at one point, Kim’s lawyers described him as a victim of cyber bullying. To avoid posting anything that might influence the outcome of the case, I will avoid quoting my recent conversations.
More ups and downs than the Corkscrew
Laguna Seca is famous for its ups and downs, but the path of Kim’s lawsuit through the courts has taken as many turns as the track.
By way of executive summary, Kim’s suit hinged on a sandbag, used for erosion control, placed in the dirt on the outside of the track. Kim claimed that hitting the sandbag caused him to crash, resulting in serious injuries. He claimed that the sandbag’s presence on the verge of the circuit constituted gross negligence.
When the case first went to trial in late 2017, Judge Wills dismissed SCRAMP and the County of Monterey by way of a lengthy, detailed summary judgment but allowed a case to be heard against Keigwin’s. That was based on a single line in Keigwin’s contract with SCRAMP. The line specified that Keigwin’s had a right (not a responsibility) to inspect the track before their event. Keigwin’s did not exercise that right. The judge felt that might open the company to liability.
Kim’s lawyers preferred the idea of three targets to just one. London successfully appealed that judgment, setting the stage for a new trial with all three defendants. (All three were insured by the same carrier, Naughton Insurance, which is a major player in the specialized field of motorsport insurance. Financially, Naughton has the most to lose, especially because at this point, neither SCRAMP nor Keigwin’s even exist.)
Believing that a jury would be unsympathetic to Kim, his lawyers wanted to waive his right to a jury trial in favor of a bench trial (meaning before the judge only). Hewitt, who had been hired by Naughton Insurance to defend its interest as regards Keigwin’s liability, insisted on a jury trial. Kim’s lawyer, Chang, agreed to drop Keigwin’s from the suit to get the bench trial she wanted. Ironically, the track-day operator went from being the only one of the three original defendants on trial to being the only one not on trial.
Some legal observers think opting for a bench trial was a strategic mistake by Kim’s legal team. Though they didn’t like the jury pool, Judge Wills’ 2017 ruling was a 20-page demolition of the plaintiff’s main arguments. Kim’s lawyers might have had more luck trying to convince a jury than change the judge’s mind.
Judge Wills bifurcated the case. First, there would be a bench trial to determine liability. If the judge decided that SCRAMP or the County of Monterey were liable, a second trial (presumably in front of jury) would determine the award for damages.
It all happened in a nearly empty courtroom. Over seven weeks, both sides presented detailed video reconstructions of the crash. Both sides brought expert witnesses. One expert told me that each side ran up costs in the low six figures; that’s not fees, but outside costs.
Kim’s attorneys argued:
- That the placement of the famous sandbag, a few feet off the racing surface, created an unacceptable hazard.
- That the track’s failure to remove the sandbags before the track day, or to even warn participants of them constituted gross negligence.
- That in the absence of an existing standard for track days, the only standard for track safety at any motorcycle event is the Fédération Internationale de Motocyclisme (FIM) standard that must be met if a track is to hold a World Championship event.
In our conversation, attorney London passionately argued that when track-day operators promote an event at “the world-famous Laguna Seca” — events that usually cost more to attend than track days at lesser known facilities — the implication is that riders are paying for a “world class” (read: FIM-standard) track.
Kim’s lawyers had to establish gross negligence because that’s essentially the only way around the waivers that Kim signed to enter the track. That is a high bar. Establishing it usually involves proving that a defendant knew of the risks and wantonly, if not willfully, ignored them.
For its part, the defense argued that hundreds of sandbags are deployed around the course to control erosion during winter rains, and that their presence is essential to prevent grit and debris washing onto the track surface during events in the rainy season; the sandbags make riding on the track safer, not more dangerous.
They also argued that a reasonable person would realize that the hundreds of sandbags in plain sight could not possibly be removed and reinstalled for a track day. It takes a crew two weeks to install them at the beginning of the rainy season and another two weeks to remove them in spring. Kim certainly should have realized that. He had not only ridden hundreds of laps at Laguna Seca but had rented the track himself — twice — for private events during the winter season when sandbags were deployed.
The decision
Judge Wills’ 22-page decision, which was handed down on April 6, is a comprehensive, detailed, and point-by-point rejection of Kim’s argument.
On whether the sandbag itself was a hazard, Judge Wills wrote: “The Court specifically finds that the track surface — the paved asphalt portion on which it is intended that riders or drivers will travel — is unquestionably the foremost safety consideration for track safety, and that measures reasonably need to be taken alongside the track to prevent erosion debris from entering the track surface, even though such a measure might present some risk off the track to a rider or driver who leaves the track unintentionally.”
On whether the track should have removed the sandbag, the judge wrote: “It was reasonable for the Defendants not to employ FIM guidelines to rainy season track days at Laguna Seca Raceway.”
On whether a warning would have been effective, he wrote: “It is important not to lose sight of the fact that Plaintiff had lost control of his motorcycle when he departed the track. The efficacy of warnings presumes that the rider would be able to control the vehicle to take evasive action; that point had been passed when Plaintiff entered the corner too quickly.
As to whether FIM standards mattered at all, the decision states: “The Court is not persuaded that FIM standards or guidelines apply to events which are not FIM-sanctioned events, or that a different standard applies to tracks which hold track days and occasionally hold FIM-sanctioned events and those which do not.”
At one point in the trial, Kim’s lawyers argued that even if the sandbags had served a purpose in the rainy season, that season was over by March. That prompted the judge to note that it had rained three days in early March during the trial and two more days in late March while he was writing his decision.
Ouch, eh? Towards the end of the decision, Wills concludes, “There was neither gross nor ordinary negligence on the part of Defendants SCRAMP and County of Monterey.”
Double ouch. Not only did Kim’s team fail to establish gross negligence, they failed to establish even ordinary negligence — which, in any case, would have been covered by the waivers.
I don’t follow many stories for four years
When I first wrote about Daniel Kim and his lawsuit back in 2018, I spoke to track-day operators who told me that if a signed waiver no longer protected them from liability, they’d go out of business. London, Kim’s lawyer, told me that was not the case, and that the suit was always about gross negligence, which is never covered by any waiver.
But when I put that to another lawyer, he said that Kim’s suit, if successful, could lower the bar for gross negligence in the context of motorsport. That would result in increased insurance rates, which are already a major financial burden for companies that put on track days. It would also increase insurance costs for tracks themselves, which would be passed along in the form of higher rental fees. And it would increase costs for race sanctioning bodies, clubs, and promoters.
Based on reader response to my first story about the lawsuit, a lot of people — even ones with no skin in this game — took the threat to track days personally.
“I don’t want to see Kim get a nickel out of this,” one of my friends said. “It chaps my ass that he didn’t even attend the riders’ meeting or pay for the track day, and then he fell down and sued everyone.”
Where do we go from here?
On May 19, the parties will meet again for a status conference at the County of Monterey Superior Court. In the absence of objections from either party, Kim’s lawsuit would end then and there.
The judge might order Kim to pay the defendants’ costs. Were that to happen, a negotiation would probably ensue. The defendants might forego cost recovery in exchange for Kim agreeing to forego an appeal. Again, that would be the end of the lawsuit.
But Deborah Chang and Sarah London are fighters. I expect them to file objections. Given the unequivocal nature of the decision, I doubt the judge will be swayed. That leaves them with two options: They can file a motion for a new trial or appeal. Legal experts familiar with the case see little chance of success with either route. Even if Kim appeals, legal experts have told me that appellate courts typically show a lot of deference to lower courts’ findings of facts — and Judge Wills’ findings, as outlined in the recent decision, are damning.
In short, things look good for Laguna Seca, its insurer, and track-day operators in California. But it ain’t over til it’s over.
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