Pool's exculpatory clause held invalid

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“It would be unrealistic to require that an employee be authorized to ‘bargain’ about the terms of a release of liability, and it would be unrealistic that an owner always be present at the facility.” Hon. Patience D. Roggensack, Concurring

An exculpatory clause that does not give the signer an opportunity to bargain over its terms is contrary to public policy, the Wisconsin Supreme Court held on Jan. 19.

Swimwest Family Fitness Center is an instructional swimming facility in Madison, equipped with a lap pool open to both members and visitors. On May 3, 2001, Charis Wilson visited Swimwest as part of a physical therapy and rehabilitation program.

Wilson was assisted at the front desk by Swimwest employee Arika Kleinert, who informed Wilson that, because she was not a member, she was required to fill out a guest registration card and pay a fee before swimming.

The form was preprinted on a five and one-half inch by five and one-half inch card that also contained a standardized "Waiver Release Statement." This statement appeared below the "Guest Registration," which requested the visitor’s name, address, phone number, reason for visit, and interest in membership.

The entire card was printed in capital letters with the same size, font, and color. The waiver release statement printed on the card, following the registration information provided: "I AGREE TO ASSUME ALL LIABILITY FOR MYSELF WITHOUT REGARD TO FAULT, WHILE AT SWIMWEST FAMILY FITNESS CENTER. I FURTHER AGREE TO HOLD HARMLESS SWIMWEST FITNESS CENTER, OR ANY OF ITS EMPLOYEES FOR ANY CONDITIONS OR INJURY THAT MAY RESULT TO MYSELF WHILE AT THE SWIMWEST FITNESS CENTER. I HAVE READ THE FOREGOING AND UNDERSTAND ITS CONTENTS."

Wilson completed the form and signed at the bottom without asking Kleinert any questions. Wilson also informed the aquatic director of Swimwest that she did not require assistance getting into the water. A lifeguard was on duty, and Wilson was witnessed swimming the sidestroke up and down the length of the pool.

Soon after Wilson began swimming, an employee spotted Wilson lying motionless underwater near the bottom of the pool. CPR was administered, but Wilson died at the hospital the next day. Drowning was listed as the official cause of death on the coroner’s report.

“Regardless of whatever other activities the waiver may or may not cover, it is almost inconceivable that a reasonable person would not understand that, at a minimum, a waiver at an aquatic facility would cover the risk of drowning. What else would such a waiver cover?” Hon. Jon P. Wilcox, Dissenting

Benjamin Atkins, Wilson’s only child, filed a wrongful death action against Swimwest, alleging negligence, but Dane County Circuit Court Judge Michael N. Nowakowski granted summary judgment in favor of Swimwest, concluding that the form Wilson signed was sufficient to absolve Swimwest of any liability for Wilson’s death.

Atkins appealed, and the court of appeals certified the case to the Supreme Court, which reversed in a decision by Justice N. Patrick Crooks. Justice Patience D. Roggensack wrote a concurring opinion, and Justice Jon P. Wilcox dissented.

Public Policy

The court held that the exculpatory clause was invalid, noting that Wisconsin law disfavors such clauses, and that, while they are not invalid per se, they must be construed strictly against any party seeking to rely on one.

The court also noted that, while exculpatory clauses were generally analyzed on principles of contract law, recent cases emphasize public policy — Yauger v. Skiing Enters., Inc., 206 Wis.2d 76, 557 N.W.2d 60 (1996), and Richards v. Richards., 181 Wis.2d 1007, 513 N.W.2d 188 (1994).

In Yauger, the court held that a release drafted by a ski resort was void as against public policy, because it failed to expressly indicate the skiiers intent to release the resort from its own negligence. The court noted that the release did not use the word "negligence," found that the phrase, "inherent risks in skiing" was ambiguous.

In addition, the release did not fully communicate to Yauger its significance, because it served the dual purposes of a release of liability and an application for a season pass. Finally, the waiver was not conspicuous, but was one of five paragraphs on the form, and did not require a separate signature.

“The question is not whether swimming carries with it the risk of drowning, but rather whether Wilson, herself, likely contemplated that risk.” Hon. N. Patrick Crooks Wisconsin Supreme Court

In Richards, the court also held a release contrary to public policy. The release there was signed by the wife of a truck driver, releasing the employer from liability to her for "intentional, reckless, and negligent conduct." The court held that the contract was too broad and all-inclusive, and allowed little or no opportunity to negotiate.

Application

Applying the factors discussed in Yauger and Richards, the court concluded that Swimwest’s exculpatory clause violates public policy, as well, reasoning, "First, this exculpatory waiver, which uses the word ‘fault,’ is overly broad and all-inclusive. Sec
ond, the form, serving two functions and not requiring a separate signature for the exculpatory clause, thus not sufficiently highlighting that clause, does not provide the signer adequate notification of the waiver’s nature and significance. Third, there was little or no opportunity to bargain or negotiate in regard to the exculpatory language in question. Under this framework, the waiver in question is unenforceable as against public policy (cites omitted)."

Discussing the use of the word, "fault," in the waiver, the court found, "The waiver begins: ‘I AGREE TO ASSUME ALL LIABILITY FOR MYSELF WITHOUT REGARD TO FAULT.’ This language never makes clear what type of acts the word ‘fault’ encompasses. Although Swimwest alleges that negligence is synonymous with fault, we find that fault is susceptible to a broader interpretation. Fault is currently defined as ‘[a]n error or defect of judgment or of conduct; any deviation from prudence or duty resulting from inattention, incapacity, perversity, bad faith, or mismanagement.’ Black’s Law Dictionary 623 (7th ed. 1999). This definition is broad enough to cover a reckless or an intentional act. A waiver of liability for an intentional act would clearly place the exculpatory clause in violation of public policy."

The court advised, "If Swimwest wanted to make clear that the signer is releasing it from negligent acts, it could have included the word ‘negligence’ in the waiver. While this court has never specifically required exculpatory clauses to include the word ‘negligence,’ we have stated that ‘we consider that it would be very helpful for such contracts to set forth in clear and express terms that the party signing it is releasing others for their negligent acts…’ Dobratz, 161 Wis. 2d at 525."

The court also found the breadth of the exculpatory language makes it difficult to ascertain whether drowning was within Wilson’s and Swimwest’s contemplation in entering into the agreement, reasoning, "Wilson likely would not have contemplated drowning in a four-foot deep pool with a lifeguard on duty, when she signed the guest registration and waiver form. The question is not whether swimming carries with it the risk of drowning, but rather whether Wilson, herself, likely contemplated that risk."

The court also found fault that the waiver and guest registration were not separate documents, and thus failed to give adequate notice of the waiver’s significance. The court wrote, "The waiver in this case could have been a separate document, providing Wilson with more adequate notice of what she was signing. Also, a separate signature line could have been provided, but was not."

In addition, the court found the waiver was not conspicuous enough, even though it was in all capital letters: "The fact that the release statement is in capital letters is irrelevant since all of the words on the guest registration were also in capital letters. Furthermore, the only place to sign the form was at the very end. This supports the conclusion that the waiver was not distinguishable enough."

Finally, the court found that there was no opportunity for Wilson to bargain over the terms of the exculpatory clause, concluding this weighs in favor of holding the clause invalid: "Wilson was without an opportunity to negotiate in regard to the standard exculpatory language used in the form. She was forced to either sign the form or not swim at Swimwest. We hold, therefore, that such an exculpatory clause, where there is no opportunity to bargain in regard to its terms, presents another significant factor in the analysis of public policy."

Accordingly, the court reversed and remanded the case to the circuit court.

The Concurrence

Justice Roggensack concurred in the result, but wrote separately, for two reasons: "(1) because the court paints with too broad a brush when it strikes down the waiver due to its conclusion that Swimwest Family Fitness Center did not give Charis Wilson the opportunity to bargain on the terms of the release, without explaining that while the opportunity to bargain is desirable, it is not a separate component that may be dispositive of a waiver’s validity, and (2) because whether Wilson contemplated the possibility of her own death when she signed the waiver of liability is a question of fact that we should not decide on appeal."

Discussing the proper relevance of the opportunity to bargain, Roggensack wrote, "In Richards, we … identified a third consideration that may be examined when exculpatory contracts are reviewed: Whether the injured party has had an opportunity to bargain in regard to the breadth of the release. Id. at 1019. However, contrary to our discussion of the two components set out above, which previous cases had evaluated, we offered no citation to precedent that would establish that the lack of an opportunity to bargain is a component necessary to a valid exculpatory contract. Instead, we linked the lack of an opportunity to bargain to the component requiring releases to clearly state the circumstances and scope of injuries contemplated in order to inform the signer of the rights that he or she is waiving. Id. at 1019-20."

Roggensack found that the majority opinion incorrectly "adds the lack of an opportunity to bargain as a component of the public policy analysis, rather as reasoning used to determine whether the release was overly broad, as we employed it in Richards. It also implies that the lack of an opportunity to bargain could be sufficient to invalidate a release when it asserts, ‘The form itself must provide an opportunity to bargain.’ This is an unnecessary broadening of the law that heretofore has set the framework for the analysis of an exculpatory contract on public policy grounds."

Discussing the practical implications of such a holding, Roggensack observed, "the reception desk of a recreational facility is not always staffed by the owner of the facility, but rather, it may be staffed by an employee, as was the case here. It would be unrealistic to require that an employee be authorized to ‘bargain’ about the terms of a release of liability, and it would be unrealistic that an owner always be present at the facility. Additionally, what give and take has to occur in order that there be an actual opportunity to bargain? What if a potential swimmer does not want to waive any potential claims for liability, but the owner is able to afford insurance only for catastrophic injuries, does the owner have the right to say that the person cannot swim in his pool? Those are only a few of the questions that could arise. Accordingly, I would not employ the opportunity to bargain in any way other than in an attempt to determine if the language in the release described the circumstances for which potential liability claims were being waived."

The Dissent

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Justice Wilcox dissented from the entire decision. In addition to discussing the impossibility of the parties bargaining over the terms of the waiver, as did Roggensack, Wilcox found that the clause’s use of the word "fault" did not render the clause invalid, citing a lay dictionary definition of the term, rather than Black’s, and concluding, "a layperson would understand that the waiver applies to any negligent acts of Swimwest or its employees."

Discussing the majority opinion’s conclusion that Wilson would not have contemplated the injury that occurred, when signing the waiver, Wilcox wrote, "the majority somehow concludes that the decedent did not contemplate the risk of drowning. Regardless of whatever other activities the waiver may or may not cover, it is almost inconceivable that a reasonable person would not understand that, at a minimum, a waiver at an aquatic facility would cover the risk of drowning. What else would such a waiver cover if not the risk of drowning?"

Wilcox continued, "Must a business list in the waiver each and every conceivable form of negligence that may result in injury to a patron. The majority opinion would seem to so indicate. Listing the myriad of ways in which the proprietor or its agents could be negligent would be unduly burdensome to a business and would necessitate a waiver that is much more than one page in length. Such a waiver, in addition to being quite lengthy, would certainly not be easy to read or understand."

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David Ziemer can be reached by email.