Eder v. Lake Geneva Raceway, Inc.

• Citation: 523 N.W.2d 429,187 Wis.2d 596
• Decision Date: 21 September 1994
• Docket Number: No. 94-0535,94-0535
• Parties: Kristine Kaskowski EDER and Catherine Nyman Fields, Plaintiffs-Appellants, v. LAKE GENEVA RACEWAY, INC., and American Empire Insurance Company, Defendants-Respondents.
• Court: Court of Appeals of Wisconsin

Page 429

523 N.W.2d 429

187 Wis.2d 596

Kristine Kaskowski EDER and Catherine Nyman Fields Plaintiffs-Appellants, v. LAKE GENEVA RACEWAY, INC., and American Empire Insurance Company, Defendants-Respondents.

No. 94-0535.

Court of Appeals of Wisconsin.

Submitted on Briefs May 16, 1994.

Opinion Released Sept. 21, 1994.

Opinion Filed Sept. 21, 1994.

Before ANDERSON, P.J., and BROWN and SNYDER, JJ.

BROWN, Judge.

Kristine Kaskowski Eder and Catherine Nyman Fields's personal injury action was dismissed by summary judgment based upon a standard form exculpatory contract signed by each of them. The issue is whether the form is a valid exculpatory contract releasing their claims against Lake Geneva Raceway, Inc. and its insurer. We hold that under the facts of this case, the form is void as against public policy. Therefore, we reverse the trial court's granting of summary judgment for Raceway.

The following undisputed facts are taken from the pleadings, affidavits and interrogatories. Kaskowski and Nyman, along with their husbands, arranged to meet at Lake Geneva Raceway on August 24, 1990 to watch motorbike races. Neither Kaskowski nor Nyman had been there before.

As Kaskowski entered the parking lot to the raceway, her car was stopped and she was asked to pay an admission fee and to sign a form entitled Release and Waiver of Liability and Indemnity Agreement. Kaskowski was told that she must sign the form or she could not enter the raceway. Other spectators were waiting behind her. In her affidavit, Kaskowski stated that the form's Likewise, as Nyman entered the raceway, ¹ she stopped and paid an admission fee and was told that she must sign the release form or she could not enter. In her affidavit, Nyman stated that the print on the form was small and "other spectators were behind [her] trying to get in." In her answers to interrogatories, she stated that she asked the man taking the signatures, "What is this for? In case we get hurt?" Nyman never received an answer. She signed the form without reading it.

"print was so small it could not be read rapidly" and consequently she did not read the form before signing it. In her answers to interrogatories, she also stated, "They did not tell you what you were signing, only that it was for the track records."

The form purports that the signees release, waive, discharge and covenant not to sue the track owner and others from all liability "on account of injury to the person or property or resulting in death of the undersigned, whether caused by the negligence of the releasees or otherwise while the undersigned is in or upon the restricted area, and/or, competing, officiating in, observing, working for, or for any purpose participating in the event." The form defines restricted area "as including but not limited to the racing surface, pit areas, infield, burn out area, approach area, shut down area, and all walkways, concessions and other areas appurtenant to any area where any activity related to the event shall take place." At the bottom of the form are lines allowing for eighteen signatures. ²

After paying the admission fee and signing the release form, Kaskowski and Nyman entered the bleacher area. There were no signs identifying areas as restricted. Kaskowski and Nyman were injured during the race when one of the motorbikes left the racetrack and struck each of them. At the time they were injured, they were standing about twenty-five feet west of the racetrack in an area between the bleachers and the racetrack.

Kaskowski and Nyman brought an action against the Raceway sounding in negligence and safe-place statute violations. Raceway moved for summary judgment on the grounds that the exculpatory contract released it from any liability for Kaskowski's and Nyman's injuries. The trial court granted the motion holding that Raceway was entitled to judgment as a matter of law because the plaintiffs "should not be released from their signatures on the release because they failed to read it." The trial court also held that there was "[n]o evidence of acts or omissions to sustain the unsupported claim of 'negligence' on the part of the Defendants" and that there was "[n]o evidence of failure on the part of the Defendants to meet the requirements of the safe-place statute."

We review the trial court's grant of summary judgment de novo. See Weigel v. Grimmett, 173 Wis.2d 263, 267, 496 N.W.2d 206, 208 (Ct.App.1992). If the complaint states a claim and the answer joins the issue, we then must determine whether the depositions, answers to interrogatories, admissions on file and affidavits, if any, entitle a party to judgment as a matter of law. Id. Summary judgment must be entered if the evidentiary material shows "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Section 802.08(2), STATS.

Kaskowski and Nyman contend that Raceway was not entitled to judgment as a matter of law because the release form is void as against public policy. Citing the trial court holding, Raceway argues that Kaskowski and Nyman, by their failure to read the agreements, have waived any arguments that the terms of the agreement are unfair. We do not agree with Raceway or the trial court. The failure to read a contract does not by itself affect the contract's validity. State Farm Fire & Casualty Co. v. Home Wisconsin case law has set forth several principles relevant to the determination of the validity of an exculpatory contract, and we discuss those principles here. Although exculpatory contracts are not per se invalid, they are not favored by the law and are to be strictly construed against the party seeking to rely on them. Merten v. Nathan, 108 Wis.2d 205, 210-11, 321 N.W.2d 173, 176 (1982).

Ins. Co., 88 Wis.2d 124, 129, 276 N.W.2d 349, 351 (Ct.App.1979). Thus, Kaskowski's and Nyman's failure to read the agreement does [187 Wis.2d 605] not by itself entitle Raceway to judgment as a matter of law.

In determining whether an exculpatory contract contravenes public policy, courts must balance the principles of tort law and of contract law. Id. at 211, 214, 321 N.W.2d at 177, 178. Contract law is based on the principle of freedom of contract which protects the justifiable expectations of parties to an agreement, free from governmental interference. Id. at 211, 321 N.W.2d at 177. Tort law compensates individuals injured from the unreasonable conduct of another. Additionally, tort law, through the payment of damages, provides an incentive to prevent future harm. Id.

We conclude that the exculpatory contract here was not consistent with the principles of freedom of contract. Our supreme court stated in Merten, "Freedom of contract is premised on a bargain freely and voluntarily made through a process of bargaining which has integrity." Id. at 214, 321 N.W.2d at 178. We must carefully consider the terms of the agreement and the circumstances under which the parties entered the agreement to determine whether the contract expresses the intent of the parties with particularity. See Arnold v. Shawano County Agric. Soc'y, 111 Wis.2d 203, 211, 330 N.W.2d 773, 777 (1983), overruled on other grounds, Green Spring Farms v. Kersten, 136 Wis.2d 304, 316-17, 401 N.W.2d 816, 821 (1987); see also State Farm Fire & Casualty, 88 Wis.2d at 128, 276 N.W.2d at 350-51.

First, we consider the circumstances under which the parties entered the agreement. There are no facts showing that Raceway was willing to discuss the terms or intended to engage in a process whereby Kaskowski and Nyman could form the required intent to be bound to certain terms. The president of Raceway asserted in his affidavit that "[a]ll persons entering the restricted area are given adequate time to read the release." However, the undisputed facts do not support Raceway's conclusory allegation; the undisputed facts show that there was no meaningful opportunity for Kaskowski and Nyman to read the agreements before signing. Raceway secured the signatures of at least some of the entrants, including Kaskowski, while they were in their cars. We cannot believe Raceway intended that entrants would hold up the progression of cars into the racetrack in order to read the release. Furthermore, Raceway does not set forth any facts showing that patrons could step aside and read the agreements. Also, neither Kaskowski nor Nyman was given answers in response to their inquiries about the form; Raceway does not dispute this.

Raceway asks us to uphold the validity of its exculpatory agreement under the aegis of "freedom of contract." However, we cannot conclude, under the circumstances of this case, that there was a "bargain freely and voluntarily made through a process which has integrity." See Merten, 108 Wis.2d at 214, 321 N.W.2d at 178. As our supreme court stated in Richards v. Richards, 181 Wis.2d 1007, 1019, 513 N.W.2d 118, 123 (1994), "[T]he plaintiff's lack of an opportunity for discussing and negotiating the contract is significant when considered with the breadth of the release." Although negotiating the terms of the standardized contract used here might have been logistically unrealistic, we hold that, at a minimum, the plaintiffs should have had an opportunity to read and ask questions about the terms releasing liability. Therefore, we hold that Raceway was not entitled to judgment as a matter of law based on the exculpatory agreements.

Although we hold that the agreement is void as against public policy on the foregoing basis alone, we address the parties' other arguments for they provide additional reasons for our decision. Raceway also contends We agree that Trainor and Kellar are distinguishable. Exculpatory contracts are only enforceable as to "things within the contemplation of the parties at the time of execution of the release." Trainor, 147 Wis.2d at 114, 432 N.W.2d at 629-30 (quoted source omitted). We apply this same rule of law, regardless of...