Wisconsin decision has left the status of release law in Wisconsin in jeopardy. Decision also brought in new defenses to releases in the state

This decision worked hard to defeat not only this release, but all releases in Wisconsin, even though the dissent laid out great arguments why the majority’s decision was not based on any business principle. Even a concurring opinion thought the majority decision was too broad.

Atkins v. Swimwest Family Fitness Center, 2005 WI 4; 2005 Wisc. LEXIS 2

Date of the Decision: January 19, 2005

Plaintiff: Benjamin Atkins, a minor, as the only surviving child of Charis Wilson, deceased, by Alexander Kammer, guardian ad litem

Defendant: Swimwest Family Fitness Center a/k/a Swimwest School of Instruction, Inc., Karen Kittelson, and West Bend Mutual Insurance Company

Plaintiff Claims:

Defendant Defenses: Release

Holding: for the Plaintiff

In this decision, the Wisconsin Supreme Court set release law back in the state. The decision, Atkins v. Swimwest violated a release on numerous grounds that would not hold up in other states. In a decision that may invalidate all releases in Wisconsin, the Court ruled that a release used by a swim club in conjunction with the registration statement was invalid as against public policy.

The plaintiff was the only surviving heir of the deceased and a minor. Consequently, the plaintiff was represented by a guardian ad litem. This is a person appointed by the court to represent the minor. The guardian ad litem may or may not be an attorney.

The decedent went to the defendant’s swimming pool for physical therapy. She entered the pool that day and was observed swimming a sidestroke up and down the length of the pool. Soon thereafter she was observed at the bottom of the pool. She was rescued, and CPR was started. She was transported to a hospital where she died the next day.

The decedent was not a member of the swim club, so she was required to sign a guest registration/release form. The form was titled “Guest Registration.” The form was a five 1/2 inch by five 1/2 inch card with release language that the court characterized as standardized. The card also required written personal information. The waiver information was below the registration information. The waiver language was:

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.

The trial court dismissed the case based on the release. The appellate court certified the case to the Supreme Court of Wisconsin. Certified means they passed the case on up without a decision.

Summary of the case

The court first had a problem with the term fault. The term was described as overly broad. The court explained the term was not defined enough to indicate to the parties (the deceased) the exact legal claims that would be barred by the release. The court found the term fault could also cover intentional acts which the court specifically stated would violate public policy and consequently, void the release.

The court stated, “We have consistently held that “only if it is apparent that the parties, in light of all the circumstances, knowingly agreed to excuse the defendants from liability will the contract be enforceable.” From this, statement appears the court wants the specific possible risks to be enumerated; however, that is an impossible job for most recreational activities.

The Supreme Court then looked at the Public Policy issues. The court called the public policy test a balancing test. The court required a balancing of the needs of the parties to contract versus the needs of the community to protect its members. No other court has balanced the issue of a release for a recreational activity this way. No other decision has surmised that the needs of the community include protecting individual members from freedom to contract. The court did not even consider the issue that the purpose of swimming by the decedent was for medical care: her physical therapy which might have had some public policy basis.

The court examined the release’s language in a two-step process. “First, the waiver must clearly, unambiguously, and unmistakably inform the signer of what is being waived.  Second, the form, looked at in its entirety, must alert the signer to the nature and significance of what is being signed.” The court stated the release served two purposes: (1) as a sign-in sheet for the facility and (2) as a release and therefore, did not meet the test they created.

In another statement the court stated, there was nothing conspicuous about the release language in the form. While other courts across the nation have continuously berated release writers about hiding the release language, wanting them to make sure the language was not hidden. Here the court goes one step further and wants the release language to be quite apparent and pointed out to the reader.

In one of the wildest statements in a court decision, the Supreme Court of Wisconsin stated that the decedent did not contemplate drowning.

…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.

Although you might look at slipping on the wet deck or stubbing your toe as you entered the water, what other possible risks exist in swimming other than drowning?

The next major blow to releases in general was the bargaining argument. The court stated the release was void because there was no opportunity for the decedent to bargain over the release language.

We also conclude that there was no opportunity for Wilson to bargain over the exculpatory language in the guest registration and waiver form.

We held that an exculpatory clause would not be enforced when it is part of a standardized agreement that offers little or no opportunity to bargain.

The term bargain means the court wants possible signors of releases to be able to negotiate the exculpatory language out of the release. As argued by the dissent, (judge who disagrees with the majority opinion) this would require every firm to hire an attorney to negotiate each release with each patron. As a condition of insurance, most providers of recreational insurance and/or health club insurances are requiring that every participant sign a release. If a participant does not sign a release and the release is a policy condition, there will be no insurance available to defend a claim.

Even if you could purchase insurance without using a release, at what cost would not having a release be worth? Based on two cases that have occurred, the person who is injured is the person who did not sign the release. So the cost of not have a patron sign a release is equal to their possible claims. If you want to join the health club and sign a release the cost is $79.00 per month with a $100 membership fee. If you want to join without signing a release, the cost is $89.00 a month with a $5 million-dollar membership fee.

The failure bargain to remove the release language was a violation of public policy. How? The court does not enumerate, nor do the concurrence and the dissent provide much additional information; however, both the concurrence and the dissent recognize the fallacy of the bargain requirement.

In the one point of illumination, court summed up their decision in the last paragraph:

In summary, we conclude that the exculpatory language in Swimwest’s form is unenforceable, since it is contrary to public policy. The waiver of liability language is, first, overly broad and all-inclusive. The use of the word “fault” on the form did not make clear to Wilson that she was releasing others from intentional, as well as negligent, acts. Second, the form served two purposes, guest registration and waiver of liability for “fault,” and thus failed to highlight the waiver, making it uncertain whether Wilson was fully notified about the nature and significance of the document she signed. Finally, Wilson did not have any opportunity to bargain. If she had decided not to sign the guest registration and waiver form, she would not have been allowed to swim.  The lack of such opportunity is also contrary to public policy. Accordingly, we reverse and remand, concluding also that Atkins is entitled to pursue his wrongful death claim.

The dissent is a well-thought-out argument about what is good and bad about the release and what is very bad about the majority’s opinion; however, the dissent, a minority of one, has no real value.

So Now What?

The solution to this issue is to use the word negligence. Negligence has a specific legal definition and specifically/legally defines the parameter of the release. The only specific statement from the decision that could be considered directional in writing releases was the statement that the word release should have been used in the form.

Why not? Why risk having your release thrown out because you failed to put in one additional sentence.

The next problem was the release was part of a registration form. The court included this as a reason the release did not meet its public policy test. This problem would have been resolved if the release was on a separate sheet of paper and clearly marked with a heading and/or notice above the signature line that the document was a release.

The court then went on in this vein and stated the exculpatory language in the release should have been highlighted or been more visible to someone signing the release.

From this decision, in Wisconsin you must!

1.                  Your release must be on a separate and distinct piece of paper.

2.                You release must be identified and clearly state it is a release.

3.                The release must use the magic word “negligence” to be valid.

4.                You need to list all of the possible injuries or risks that can befall the signor of the release.

5.                 Your release must be read by the parties and there should be a notice in the release that the signor read, understood and signed the release with the intention to give up their right to sue for injuries or death.

If you can, you should see if you can provide:

6.                The opportunity for your patron to buy their way out of the release.

7.                 References to other competitors where a guest may be able to go to have a similar opportunity without signing a release.

8.                8.  Make sure your insurance is up to date and adequate for the value of your business and your risk.

Always in any business.

9.                Make sure your corporate records are up to date. If you are not incorporated or an LLC get incorporated now!

10.            10.         Look into separating assets from operations in separate corporations or LLC’s and divide your business into separate, smaller entities to protect the business.

11.              11. Look into asset protection planning for your personal assets.

What do you think? Leave a comment.

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By Recreation Law       Rec-law@recreation-law.com              James H. Moss               #Authorrank

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