Ryan v. Sea Colony (Del. 2025): Delaware Supreme Court Clarifies that Defendants Must Plead—and Ultimately Prove—Agency Before Invoking Third-Party Liability Waivers

Introduction

Colleen Ryan, a participant in the “Warrior Beach Week” parade at Bethany Beach, tripped in a hole while walking from her car after being directed to park in a lot owned by Sea Colony Recreational Association, Inc. (“Sea Colony”). Prior to the event, Ryan had signed a broad liability waiver in favor of the event sponsor, Operation SEAs the Day, Inc. (“Seas the Day”), its “directors, officers, employees, volunteers and other agents.” When Ryan sued Sea Colony for negligence, the parking-lot owner immediately invoked the waiver, arguing it was covered as an agent of the sponsor. The Superior Court agreed and granted judgment on the pleadings. On appeal, the Delaware Supreme Court reversed, setting an important procedural precedent on: (1) the burden a defendant bears to establish agency at the pleading stage, and (2) the limited circumstances under which a non-signatory may avail itself of a participant’s liability waiver.

Summary of the Judgment

• The Supreme Court reversed the Superior Court’s grant of judgment on the pleadings to Sea Colony.
• The trial court erred in treating the existence of an agency relationship between Sea Colony and Seas the Day as the only reasonable inference from the pleadings.
• Agency is ordinarily a fact question; other plausible relationships (license, independent contractor, public parking) were not eliminated by the pleadings.
• Because agency was not established as a matter of law, the defendant’s waiver defense failed at the pleading stage.
• The matter was remanded for further factual development, including whether the waiver’s scope ultimately covers Sea Colony and Ryan’s injury.

Analysis

1. Precedents Cited and Their Influence

• Baldwin v. New Wood Resources LLC (2022) & Catlin Specialty Ins. Co. v. CBL & Assocs. – confirm that, on a motion for judgment on the pleadings, the non-moving party gets the same favorable inferences as on a Rule 12(b)(6) motion.
• West Coast Opportunity Fund v. Credit Suisse (2010) – establishes de novo appellate review when the trial court disposes of a case purely on legal grounds.
• Fisher v. Townsends, Inc. (1997) & WaveDivision Holdings, LLC v. Highland Capital (2012) – supply the Delaware test for agency: mutual consent, control, and undertaking to act on the principal’s behalf; used to show why agency could not be presumed here.
• Desert Equities, Inc. v. Morgan Stanley (1993) – quoted for the high standard governing judgment on the pleadings.
• Ravindran v. GLAS Trust Co. (2024) & Desktop Metal, Inc. v. Nano Dimension Ltd. (Ch. 2025) – cited for the proposition that a defendant bears the burden on affirmative defenses, including waivers.

2. Legal Reasoning of the Court

1. Pleading-Stage Standard. The Court reiterated that all well-pleaded facts must be viewed—and all reasonable inferences drawn—in favor of the plaintiff. An inference favoring the defendant may be possible, but if other reasonable inferences exist, judgment on the pleadings is improper.
2. Agency as a Fact Issue. Whether one entity is an “agent” of another turns on control and consent; it rarely lends itself to resolution solely from the face of a complaint and answer.
3. Burden on Affirmative Defense. A waiver is an affirmative defense. The defendant bears the burden to establish each element (existence, scope, coverage). Here Sea Colony failed to plead facts demonstrating that Seas the Day exercised sufficient control over Sea Colony’s premises or operations.
4. Alternative Reasonable Inferences. The pleadings permitted the view that: (a) Sea Colony merely licensed the lot, (b) the lot was open to the public, or (c) any direction to park came from someone other than Sea Colony. These alternatives foreclosed judgment for the defense at the pleading stage.

3. Potential Impact of the Decision

• Event & Recreational Waivers. Entities hoping to rely on broad participant waivers must now anticipate fact-intensive scrutiny if they are not expressly named in the document.
• Agency Allegations in Early Motions. Delaware trial courts will hesitate to accept bare-bones assertions of agency at the Rule 12(c) or Rule 12(b)(6) stages; discovery will often be required.
• Tort Litigation Against Venue Owners. Premises owners cannot safely assume that an event sponsor’s waiver automatically shields them. Insurance carriers and counsel will need to evaluate exposure more carefully.
• Pleading Practice. Defendants seeking early dismissal must plead (or incorporate by reference) concrete facts—contracts, control provisions, indemnity clauses—demonstrating agency.
• Drafting of Waivers. Sponsors may start to list every venue, landowner, or service provider by name, or include language expressly covering “owners of any property used in connection with the event.”

Complex Concepts Simplified

• Motion for Judgment on the Pleadings (Rule 12(c)): A request for the court to decide a case based solely on the pleadings (complaint and answer) without evidence. Granted only when no material fact is in dispute and the movant is entitled to judgment as a matter of law.
• Agency: A fiduciary relationship arising when one person (agent) agrees to act on behalf of and under the control of another (principal).
• Liability Waiver / Release: A contract in which a participant agrees not to sue certain parties for injuries arising out of an activity, even if those injuries result from negligence.
• Affirmative Defense: A fact or set of facts that, if true, defeats the plaintiff’s claim even if the complaint’s allegations are correct. Examples include statute of limitations, waiver, estoppel.
• Reasonable Inference: A conclusion a fact-finder may draw from evidence that logically and fairly flows from that evidence. At the pleading stage, inferences must favor the non-moving party.

Conclusion

The Delaware Supreme Court’s decision in Ryan v. Sea Colony reinforces the high bar facing defendants who seek early dismissal based on participant waivers when the defendant is not expressly named. Agency cannot be presumed from sparse pleadings; defendants must provide—or wait to develop—evidence showing the principal’s control and the agent’s consent. Practitioners should view the case as a procedural checkpoint: before moving for judgment on the pleadings, ask whether alternative inferences remain live. Substantively, the ruling nudges organizers, venue owners, and insurers toward clearer contractual allocation of risk, and ensures that injured parties receive the benefit of Delaware’s generous pleading standard.

© 2025 Commentary authored for educational purposes.