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Back in September 2013, we posted an article entitled “Do Liability Waivers Really Work?” The article served as a primer and cautionary tale regarding the enforceability of common liability waivers. These are the agreements required by gyms, martial arts facilities, climbing gyms, trampoline parks, and similar businesses geared toward physical activity that can be inherently dangerous. We explained that the Wisconsin Supreme Court is not a fan of such agreements and discussed two relevant decisions.
Over the past three years, the Wisconsin Supreme Court has trended decidedly more conservative. As such, when the Court heard arguments in Roberts v. T.H.E. Insurance Company, 2016 WI 20, late last year, there was speculation that change was afoot and that the Supreme Court might reverse course and provide businesses and insurance companies writing commercial polices with some cover against prior pronouncements that “[t]he law does not favor exculpatory clauses.” No such luck for Wisconsin’s small businesses and the carriers who provide them with liability coverage.
The Roberts case involved both the issue of enforcement of an exculpatory clause (a/k/a liability waiver) and Wisconsin’s Recreational Immunity Statute, Wis. Stat. § 895.52. Patti Roberts was injured at a charity event sponsored by Green Valley Enterprises. The event was held at a shooting range owned by Beaver Dam Conservationists, LLC. Kerry and Jodi Hanson, owners of a hot air balloon, offered tethered hot air balloon rides to promote Green Valley’s event.
Patti Roberts and her family watched the balloon rides and then entered the line to take a ride. While in line for the ride, Patti Roberts was provided a Waiver of Liability Form that she was required to sign prior to riding. She signed the form, but she never returned it. It was found on the event grounds after she sustained her injuries.
The waiver stated, in part:
I expressly, willing, and voluntarily assume full responsibility for all risks of any and every kind involved with or arising from my participation in hot air balloon activities with Company whether during flight preparation, take-off, flight, landing, travel to or from the take-off or landing areas, or otherwise.
Without limiting the generality of the foregoing, I hereby irrevocably release Company, its employees, agents, representatives, contractors, subcontractors, successors, heirs, assigns, affiliates, and legal representatives (the “Released Parties”) from, and hold them harmless for, all claims, rights, demands or causes of action whether known or unknown, suspected or unsuspected, arising out of the ballooning activities….
While Patti Roberts was waiting in line, strong winds caused one of the balloon’s tether lines to snap. As a result, the untethered balloon moved toward the spectators and Patti Roberts was struck by the balloon’s basket and knocked to the ground. The circuit court granted summary judgment for the defendant, concluding that the defendant was entitled to recreational immunity and that the liability waiver was valid as a matter of law. The court of appeals affirmed, but did not address the liability waiver issue because its decision as to immunity disposed of the case.
The Wisconsin Supreme Court reversed the circuit court and court of appeals. The Court rejected the defendants’ claims they were entitled to recreational immunity and, thereafter, turned to the liability waiver. The Court articulated the test as follows: “Our analysis of an exculpatory contract begins with examining the facts and circumstances of the agreement to determine if it covers the activity at issue. If the contract covers the activity, we proceed to a public policy analysis, which remains the germane analysis for exculpatory clauses. We generally define public policy as that principle of law under which freedom of contract or private dealings is restricted by law for the good of the community.”
The Court held the waiver void as a matter of law, concluding it was overly broad and all-inclusive. A waiver cannot absolve a defendant from any injury to the plaintiff for any reason. Second, the release was a standard agreement printed on the company’s form, offering no opportunity to bargain or negotiate regarding the waiver.
In Roberts, the Wisconsin Supreme Court reaffirmed what we tell clients often: (1) do not assume a liability waiver will be enforced; (2) never use a boilerplate liability waiver; (3) carefully craft any waiver you intend to use for the activities involved; (4) do not allow your waivers to be overly broad or all encompassing; and (5) when possible, tailor each waiver to the specific event or individual.
Wisconsin businesses need to take the potential unenforceability of liability waivers with the seriousness the issue merits, underwriting departments need to appreciate their limited value in Wisconsin, and claim handling professionals need to carefully review liability waivers in light of Wisconsin law before routinely denying such claims.
If you have any questions regarding liability waivers, setting up customer contracts in Wisconsin, or handling personal injury claims involving a signed waiver, please contact Rich Schuster at [email protected].