PUBLISHED OPINION
Case No.: 94-2683
†Petition for
review filed
Complete Title
of Case:
MICHAEL YAUGER and
BRENDA YAUGER,
Plaintiffs-Appellants,†
v.
SKIING ENTERPRISES, INC.,
d/b/a HIDDEN VALLEY SKI AREA,
a Wisconsin corporation, and
INVESTORS INSURANCE COMPANY OF
AMERICA, a foreign corporation,
Defendants-Respondents.
Oral Argument: July 12, 1995
COURT COURT OF APPEALS OF WISCONSIN
Opinion Released: August 23, 1995
Opinion Filed: August
23, 1995
Source of APPEAL Appeal from a judgment
Full Name JUDGE COURT: Circuit
Lower Court. COUNTY: Manitowoc
(If
"Special", JUDGE: Allan J. Deehr
so indicate)
JUDGES: Anderson, P.J., Brown and Snyder, JJ.
Concurred:
Dissented:
Appellant
ATTORNEYSOn behalf of the plaintiffs-appellants, the cause was
submitted on the briefs of Gary L. Bendix and John M. Bruce of Savage,
Gregorski, Webster, Stangel & Bendix, S.C. of Manitowoc. There was oral argument by John M. Bruce.
Respondent
ATTORNEYSOn behalf of the defendants-respondents, there was a
brief and oral argument by Thomas B. Hartley of Guttormsen, Hartley
& Guttormsen of Kenosha.
COURT OF APPEALS DECISION DATED AND RELEASED August
23, 1995 |
NOTICE |
A party may file with the Supreme Court a petition to review an
adverse decision by the Court of Appeals.
See § 808.10 and Rule
809.62, Stats. |
This opinion is subject to further editing. If published, the official version will appear in the bound
volume of the Official Reports. |
No. 94-2683
STATE OF WISCONSIN IN
COURT OF APPEALS
MICHAEL
YAUGER and
BRENDA
YAUGER,
Plaintiffs-Appellants,
v.
SKIING
ENTERPRISES, INC.,
d/b/a
HIDDEN VALLEY SKI AREA,
a
Wisconsin corporation, and
INVESTORS
INSURANCE COMPANY OF
AMERICA,
a foreign corporation,
Defendants-Respondents.
APPEAL
from a judgment of the circuit court for Manitowoc County: ALLAN J. DEEHR,
Judge. Affirmed.
Before
Anderson, P.J., Brown and Snyder, JJ.
BROWN,
J. We
are asked to gauge whether the exculpatory contract in this case is void as
against public policy. Here, Brenda and
Michael Yauger brought a wrongful death action against Hidden Valley Ski Area
after their eleven-year-old daughter, Tara, was killed when she struck the concrete
base of a ski lift tower. The trial
court dismissed the claim finding that the Yaugers' contract with Hidden Valley
for a season pass contained a valid exculpatory clause. The Yaugers now reassert their challenge
that it is void.
The
following facts were taken from the appellate record consisting of the
pleadings, affidavits and depositions.
On October 8, 1992, Michael Yauger submitted an application for a family
season pass at Hidden Valley. This form
is reproduced at the end of the opinion.
The pass cost roughly $720.
Although only Michael signed the application, his wife and two daughters
(then ages ten and eight) were named on the form. Depositions reveal that Michael submitted the application in
person at the Hidden Valley Ski Shop.
The
Yauger family was familiar with Hidden Valley.
Michael had skied there approximately sixty times in the three seasons
prior to the accident, and Tara had skied there about fifty times prior to her
accident. The record also shows that
the Yauger family had a season pass at the resort the prior year.
On
March 7, 1993, Tara suffered her fatal accident. The exact facts surrounding her death are unsettled, but the
record currently suggests that she struck the side of a concrete base of a ski
lift tower. The Yaugers sued Hidden
Valley that October, claiming that this support was not adequately padded.
After
limited discovery, Hidden Valley and its insurer sought summary judgment on
grounds that the exculpatory release within the Yaugers' contract for a season
pass barred them from bringing this claim since it arose out of the “certain
inherent risks in skiing.” The Yaugers
responded that the clause was invalid as against public policy because it was
not knowingly entered into by each of the Yaugers, was ambiguous and overbroad
and also attempted to encompass protections provided under Wisconsin's
safe-place law.
The
trial court granted Hidden Valley's motion.
It focused its analysis on the phrase “certain inherent risks in skiing”
and reasoned that it covered the type of injury that killed Tara, namely, the
risk that a skier will collide with a stationary object. It also rejected the Yaugers' argument that
Brenda Yauger was not bound by the exculpatory clause, finding that her express
endorsement was not necessary since she received the benefit of the season
pass.
We
are reviewing a grant of summary judgment; thus, § 802.08(2), Stats., governs the analysis. See
Decade's Monthly Income and Appreciation Fund v. Whyte & Hirschboeck,
S.C., 164 Wis.2d 227, 230, 474 N.W.2d 766, 767 (Ct. App. 1991), aff'd,
173 Wis.2d 665, 495 N.W.2d 335 (1993).
Summary judgment is appropriate when there are no material issues of
fact and the moving party is entitled to judgment as a matter of law. Id. Moreover, this appeal concerns the interpretation of a contract
which appellate courts address de novo.
Id. at 230-31, 474 N.W.2d at 767. Therefore, to defeat Hidden Valley's motion
for summary judgment the Yaugers must show that material facts are in dispute,
or that the trial court erred in its analysis of the exculpatory clause. See id. at 230-31, 474
N.W.2d at 767.
We
first turn to the analysis of the season pass and its exculpatory clause. Wisconsin law does not favor these
agreements and courts therefore examine with care the facts of each case to
ascertain whether enforcement will contravene public policy. See Merten v. Nathan,
108 Wis.2d 205, 210-11, 321 N.W.2d 173, 176 (1982). The goal is to strike a balance between conflicting principles of
contract and tort law. See id.
at 211, 321 N.W.2d at 177. Freedom of
contract suggests that courts should abstain from interfering in people's
relationships and personal affairs. See
id. On the other hand,
tort law recognizes that those responsible for causing harm through negligence
should bear the cost of the harm and should not be allowed to circumvent this
duty through contract. See id.
at 211-12, 321 N.W.2d at 177.
A
review of the recent supreme court cases on this issue indicates that there are
two aspects to the question of whether an exculpatory contract violates public
policy. In Dobratz v. Thomson,
161 Wis.2d 502, 468 N.W.2d 654 (1991), the court cited with approval § 195
of the Restatement (Second) of Contracts
(1979), which sets out a series of situations in which an exculpatory contract
would violate public policy. Id.
at 515-16, 468 N.W.2d at 658-59 (citing Arnold v. Shawano County Agric.
Soc'y, 111 Wis.2d 203, 210-11,
330 N.W.2d 773, 777 (1983)). The first
element tests the effect of the exculpatory clause, e.g., does it exempt an
employer from suits by an employee. See
id.[1]
The
Yaugers' assertion that the exculpatory clause in Hidden Valley's season pass
application contravenes the safe-place statute, § 101.11, Stats., fits this line of
analysis. In further support of this
argument they cite Meyer v. Val-Lo-Will Farms, Inc., 14 Wis.2d
616, 111 N.W.2d 500 (1961), for the proposition that a for-profit winter sports
park was subject to the safe-place law.
In substance, they argue that the exculpatory clause violates public
policy because it seeks to relieve Hidden Valley of the duty imposed by the
statute. See Restatement (Second) of Contracts § 195(2)(c).[2] The trial court rejected this argument,
reasoning that the safe-place statute did not create a special cause of action,
but established a higher duty of care for what would ordinarily be addressed
through common law negligence.
While
we agree with the trial court's result, a different analysis is
appropriate. Moreover, we need not
decide the issue of whether the safe-place law imposed a special statutory duty
on Hidden Valley. We hold that even if
the statute does apply, a potential defendant may still bargain for an
exclusion.
As
noted above, the supreme court has endorsed § 195 of the Restatement (Second) of Contracts. See Merten, 108 Wis.2d
at 212-13, 321 N.W.2d at 177-78.[3] The official comment to this section,
however, suggests that the enumerated standards are not a litmus test for these
agreements; it states: “[t]he rigor of this rule may, however, be mitigated by
a fairly bargained for agreement to limit liability to a reasonable agreed
value in return for a lower rate.” Restatement (Second) of Contracts
§ 195 cmt. a.
The
process envisioned by the drafters of this comment aptly describes the
transaction between the Yaugers and Hidden Valley. The Yaugers wanted a discount on their skiing. The resort was a willing supplier, but
recognized that the increase in days skied would directly increase the risk of
an accident and the potential for a damages claim. Hidden Valley therefore sought a release from liability. Gauging the deal at the time when the
parties entered into the contract, we cannot say that the exchange was totally
unreasonable. The Yaugers obtained
their discount, but lost the right to bring a claim arising out of an accident
which may never have occurred. Here,
freedom of contract requires that we not delve deeper into the merits of this
agreement. See Merten, 108 Wis.2d at 211, 321 N.W.2d at
177.[4]
The
second prong of the public policy question entails examining the circumstances
surrounding the bargaining process. See
Dobratz, 161 Wis.2d at 516 n.2, 468 N.W.2d at 659. For example, in Richards v. Richards,
181 Wis.2d 1007, 1010, 513 N.W.2d 118, 119 (1994),[5]
the supreme court was asked to review an exculpatory contract signed by a
passenger in a commercial, long-haul truck.
The plaintiff was married to a driver employed by the defendant and was
asked to sign a “passenger authorization” before joining her husband on the
road. Id. at 1012, 513
N.W.2d at 119. Within the form was a
clause releasing the defendant from liability for any harm that might occur
during her travels. Id. Still, the wife brought suit after she and
her husband were involved in an accident.
The lower courts found that the release was valid and granted summary
judgment for the defendant. Id.
at 1010, 513 N.W.2d at 119.
After
its review of the contract, however, the supreme court found it to be void as
contrary to public policy. Id.
at 1011, 513 N.W.2d at 119. The
majority pointed to three aspects of the agreement, which together led to this
conclusion. First, the contract served
two purposes. The court emphasized that
the exculpatory clause was not distinguishable from other components of the
document. It reasoned that highlighting
the release provision would have provided greater protection for the signing
party. See id. at
1017, 513 N.W.2d at 122.
Next,
the court found that the contract was over-inclusive. It applied not only to the defendant, but also to all of its
affiliates. Moreover, it did not
delineate the nature of claims that would be excluded, such as those arising
from negligence but not from intentional acts.
Also, the time period through which the exclusion would apply was not
limited. The majority found that the
contract was lopsided in favor of the defendant and should therefore be
construed against the company. See
id. at 1017-18, 513 N.W.2d at 122.
Finally,
the court noted that the release was embodied in a standard form contract, and
the defendant did not inform the plaintiff of the purpose and effect of the
authorization. This suggested that there
was little or no opportunity to dicker about the terms. Id. at 1019, 513 N.W.2d at
123.
The
Yaugers cite Richards and raise a number of arguments, each
suggesting that they and Hidden Valley were not on equal footing when they
entered into this agreement. The many
issues they raise can be distilled into three central points. First, the Yaugers contend that the release
clause, which was a single term in the season pass application, was never
pointed out to Michael before he completed and signed the form. See Richards, 181 Wis.2d at
1019, 513 N.W.2d at 123. They further
assert that summary judgment was inappropriate because Hidden Valley presented
no evidence on this issue.
We
are not persuaded. This agreement was
signed in October, at least one month prior to the skiing season. There was no sense of urgency. Michael could have taken the form home for
further consideration. In addition, the
Yaugers had purchased a season pass for the prior year. Therefore, Michael had a source of knowledge
from which to draw comparisons. Compare
Eder v. Lake Geneva Raceway, 187 Wis.2d 596, 609, 523 N.W.2d 429,
433 (Ct. App. 1994)(noting that parties signing the release were not allowed
onto the racetrack grounds until they signed the release form).
Next,
the Yaugers assert that the language within the exculpatory clause is
ambiguous. It specifically addressed
“certain inherent risks in skiing.”
They question what constitutes these “inherent risks” and whether the
clause only applies to a “certain” number of these dangers. In addition, they note that Hidden Valley
did not provide any evidence which would identify these risks. The Yaugers also raise concerns that the
clause (which is composed of a single sentence) reads to limit Hidden Valley's
liability for any injury occurring on the premises. They stress that this could be reasonably interpreted as an
attempt to limit the resort's liability for any accident on the premises, such
as a slip and fall in the restaurant. See
Richards, 181 Wis.2d at 1017-18, 513 N.W.2d at 122.
The
trial court concluded that the terminology covered the obvious dangers in
skiing, viz, falling down or colliding with another skier or a fixed object,
and that the “any injury” language was limited to those harms arising out of
these risks. We agree.
Whether
a contract is ambiguous is a question of law.
Borchardt v. Wilk, 156 Wis.2d 420, 427, 456 N.W.2d 653,
656 (Ct. App. 1990). We test whether
the term is reasonable or fairly susceptible of more than one
construction. Id. A clause is not ambiguous, however, merely
because its language is general or broad.
See Wilke v. First Federal Savs. & Loan Ass'n,
108 Wis.2d 650, 654, 323 N.W.2d 179, 181 (Ct. App. 1982).
This
was a contract between Hidden Valley and a season pass holder. The contracting skier, therefore, could
reasonably be expected to have some knowledge about the sport. The Yaugers' interest in skiing is further
demonstrated by their willingness to commit over seven hundred dollars to
skiing that season.[6] The record also reveals that the Yaugers had
a similar pass at the resort the prior year.
We are thus hesitant to accept their arguments that such language would
lead to confusion among parties executing these agreements. The language is plain and simple. It aptly describes the risks that arise
whenever one's skis are in contact with the slope.[7]
Finally,
the Yaugers argue that the exculpatory clause should be held void because it
was “not clearly identified or distinguished.”
See Richards, 181 Wis.2d at 1017, 513 N.W.2d at
122.
The
trial court noted that although the exculpatory language was not highlighted,
there was no indication that it was disguised and therefore did not provide
grounds for rendering the agreement void.
Indeed, the clause is set out in a separate paragraph.
Any
break in text requires the reader to pause and thus provides a moment for
reflection.
The
face of the application does not otherwise suggest that Hidden Valley was
trying to trick season pass holders into signing away their rights. It was an application form. Not only did the applicants have to sign the
agreement, but they had to furnish information such as their address, age,
other family member names, etc. In sum,
the form and application process provided ample opportunity for Michael to
consider the terms of the agreement.
We
have addressed a variety of concerns about the exculpatory clause of the season
pass contract. Although no single point
is troublesome enough to render the clause void, Richards
suggests that courts may consider all these aspects together when making a
determination about the effects of public policy. See id. at 1011, 513 N.W.2d at 119. But even the totality of the circumstances
presented here does not warrant that this contract be set aside. The contracting process simply does not
raise any concern of overreaching by the party seeking to be released from
liability.[8]
We
now turn to the second issue presented.
Although we have found that the exculpatory clause serves as a bar to
the Yaugers' claim, Brenda nonetheless asserts that it should not run against
her individually since she did not expressly acknowledge these terms, nor did
she authorize her husband to execute a contract releasing these claims. In support of her argument, she draws an
analogy to Arnold v. Shawano County Agri. Soc'y, 111 Wis.2d 203,
214-15, 330 N.W.2d 773, 779 (1983), where the court held that a spouse's claim
for consortium rights is not defeated by a valid exculpatory contract running against
the deceased.
In
dismissing this claim the trial court distinguished Arnold,
stating:
In
this case the plaintiff Brenda Yauger did not sign the application, but the
application was made on her behalf and for her benefit, which is not the
factual situation in Arnold. And she is
specifically identified and money is specifically paid for her membership, for
her use, and the use of her daughter ¼.
Although
we agree in substance with the trial court's analysis, we feel it necessary to
elaborate further. We add that Brenda's
claim is barred by the exculpatory clause because it is so intertwined with
that of her husband, and thus it was reasonable for Hidden Valley to assume
that Michael was acting on her behalf when he executed the agreement.
The
Yaugers' claim has three components: loss of consortium, Tara's medical
expenses and the cost of her funeral. See
§ 895.04(4), Stats. The right to pursue a claim for these losses
accrues to Michael and Brenda as the “parents of the deceased.” See id. This is not a situation in which one
parent's recovery is limited or barred by his or her negligence. See § 895.04(7). This distinction recently was addressed
in Chang v. State Farm Mut. Auto.
Ins. Co., 182 Wis.2d 549, 561, 514 N.W.2d 399, 403 (1994), where the
court noted: “[t]he right to sue and recover damages under the wrongful death
statute must be distinguished from the ownership and allocation of the recovery
itself.”
Brenda
alleges that she never authorized her husband to enter into this exculpatory
clause (and bargain away her right to pursue a potential claim), nor was she
aware of its effects. Nevertheless, she
shared equally in the benefits that arose to her family, and the face of the
application form would suggest that all named parties are bound by its terms.
Although
there is little case law applying the principles of agency in transactions
between married persons and third parties, Smart v. Estate of Ford,
23 Wis.2d 60, 65-66, 126 N.W.2d 573, 576 (1964), summarized the Wisconsin rule
that third parties may reasonably believe that one spouse had authority to act
on behalf of the other. Here, we are
dealing with the Yaugers' joint interest in the companionship of their beloved
daughter. Michael completed the season
pass application on behalf of his whole family and paid the appropriate
sum. Absent any evidence that Brenda
informed Hidden Valley that she was not bound by this agreement, the Yaugers
should both be held by the terms of the application.
By
the Court.—Judgment affirmed.
AN
EXHIBIT HAS BEEN ATTACHED TO THIS OPINION.
THE EXHIBIT CAN BE OBTAINED UNDER SEPARATE COVER BY CONTACTING THE
WISCONSIN COURT OF APPEALS.
COURT OF APPEALS
OF WISCONSIN
ROOM 231, STATE
CAPITOL EAST
POST OFFICE BOX
1688
MADISON,
WISCONSIN 53701-1688
TELEPHONE: (608) 266-1880
FAX: (608) 267-0640
Marilyn L. Graves,
Clerk
Court of Appeals
[1] This two-prong
analysis was also discussed in Discount Fabric House v. Wisconsin
Telephone Co., 117 Wis.2d 587, 602, 345 N.W.2d 417, 424-25 (1984),
where the court faced a challenge to an exculpatory release that served to
cover any errors in telephone directory advertising. The court explained that the analysis of such contracts involves
an assessment of the “commercial reasonableness” of the terms (substantive) and
the relationship between the parties during negotiations (procedural). Id.
[2] The
applicability of the safe-place statute, § 101.11, Stats., in situations where frequenters challenge exculpatory
contracts was raised, but left unanswered, in Kellar v. Lloyd,
180 Wis.2d 162, 178-81, 509 N.W.2d 87, 93-94 (Ct. App. 1993).
[3] We recognize
that the exact status of Restatement
(Second) of Contracts § 195 (1979), is somewhat clouded. In Dobratz v. Thomson, 161
Wis.2d 502, 515-16, 468 N.W.2d 654, 658-59 (1991), the court expressly quoted
all the subsections after noting that it had originally “referred with
approval” to them in Arnold v. Shawano County Agric. Soc'y, 111
Wis.2d 203, 210-11, 330 N.W.2d 773, 777 (1983). When one examines the Arnold opinion, however, it
includes only a general reference to the Restatement. Indeed, the rule in § 195(2)(c), which
provides the basis for the Yaugers' argument, was not referred to in the
discussion. See Arnold,
111 Wis.2d at 210-11, 330 N.W.2d at 777.
Moreover, in the supreme court's most recent exploration of these
issues, the majority opinion made no reference to § 195, although it did
reaffirm its confidence in the Dobratz decision. Richards v. Richards, 181
Wis.2d 1007, 1014, 513 N.W.2d 118, 121 (1994).
We have located a federal district court case in which the various
subsections of § 195 were found to be a component of Wisconsin law and
formed the basis for voiding an exculpatory contract. See RepublicBank Dallas, N.A. v. First Wisconsin
Nat'l Bank, 636 F. Supp. 1470, 1473 (E.D. Wis. 1986) (voiding clause
exempting liability for harm arising out of reckless or intentional acts). We thus find that § 195 continues to be a valid component of Wisconsin common
law.
[4] Of course the
above analysis certainly does not summarize all the concerns of the bargaining
parties. The Yaugers and Hidden Valley
were also making allowances for the risk that there would be no snow that
season. The key to understanding our
analysis, however, is to recognize that courts rarely are able to do a better
job of writing contracts than the parties themselves.
[5] We discuss Richards
in detail because it represents the supreme court's most recent analysis of how
flaws in the specific terms of an agreement, or the circumstances of the
bargaining process, may serve as grounds for voiding an exculpatory
agreement. For other examples, see Merten
v. Nathan, 108 Wis.2d 205, 214-15, 321 N.W.2d 173, 178 (1982) (release
invalidated because defendant misrepresented a fact during the negotiation
process), and Eder v. Lake Geneva Raceway, 187 Wis.2d 596,
610-11, 523 N.W.2d 429, 434 (Ct. App. 1994) (release clause found to be
ambiguous).
[7] Very similar
language can be found in Wisconsin's recreational responsibility law. See § 895.525(3), Stats. (“A participant in a
recreational activity ... accepts the risks inherent in the recreational
activity ....”) (emphasis added).
Moreover, several states have adopted specific skier responsibility laws
which codify these terms. For example,
Colorado law provides, in part:
“Inherent dangers and risks of skiing” means those
dangers or conditions which are an integral part of the sport of skiing,
including changing weather
conditions; snow conditions as
they exist or may change, such as ice, hard
pack, powder, packed powder, wind pack, corn, crust, slush, cut-up snow,
and machine-made snow; surface or subsurface conditions such as
bare spots, forest growth, rocks,
stumps, streambeds, and trees, or other natural objects, and collisions with such natural objects; impact with lift towers, signs,
posts, fences or enclosures, hydrants, water pipes, other man-made structures
and their components; variations in
steepness or terrain, whether natural or as a result of slope design,
snowmaking or grooming operations, including but not limited to roads and
catwalks or other terrain modifications;
collisions with other
skiers; and the failure of skiers to
ski within their own abilities.
Colo. Rev. Stat. Ann. § 33‑44‑103(10) (West Supp. 1994) (emphasis added).
Further
discussion of these laws, and judicial efforts in providing interpretation, are
set forth in Arthur N. Frakt and Janna S. Rankin, Surveying the Slippery
Slope: The Questionable Value of Legislation to Limit Ski Area Liability,
28 Idaho L. Rev. 227 (1991-92).
[8] The Yaugers
raised one other challenge to the exculpatory clause relating to the contract
language. They assert that under Hortman
v. Otis Erecting Co., 108 Wis.2d 456, 463, 322 N.W.2d 482, 485-86 (Ct.
App. 1982), an agreement which indemnifies a party for its own negligence must
specifically include the term “negligence.”
As the defendants contend, however, this specific argument was not
presented to the trial court and is therefore waived on appeal. See, e.g., Bank One, Appleton, N.A. v.
Reynolds, 176 Wis.2d 218, 222, 500 N.W.2d 337, 339 (Ct. App. 1993).