Holzer v. Dakota Speedway, Inc., No. 21065.

• Court: Supreme Court of South Dakota
• Writing for the Court: GILBERTSON, Justice
• Citation: 610 N.W.2d 787,2000 SD 65
• Parties: Paul J. HOLZER and Marjorie J. Walters, Co-Guardians of the Person and Estate of Vernon Walter Holzer, Plaintiffs and Appellants, v. DAKOTA SPEEDWAY, INC., a South Dakota Corporation, and K & K Insurance Group, Inc., Defendants and Appellees.
• Docket Number: No. 21065.
• Decision Date: 17 May 2000

610 N.W.2d 787
2000 SD 65

Paul J. HOLZER and Marjorie J. Walters, Co-Guardians of the Person and Estate of Vernon Walter Holzer, Plaintiffs and Appellants,
v.
DAKOTA SPEEDWAY, INC., a South Dakota Corporation, and K & K Insurance Group, Inc., Defendants and Appellees

No. 21065.

Supreme Court of South Dakota.

Argued March 20, 2000.

Decided May 17, 2000.

610 N.W.2d 789

David R. Gienapp and William H. Dietrich of Arneson, Issenhuth & Gienapp, Madison, South Dakota, Attorneys for plaintiffs and appellants

Harlan A. Schmidt, Spearfish, South Dakota, Attorney for plaintiffs and appellants.

David J. Vickers and James E. McMahon of Boyce, Murphy, McDowell and Greenfield, Sioux Falls, South Dakota, Attorneys for appellee Dakota Speedway.

Thomas M. Frankman and Dana M. Van Beek of Davenport, Evans, Hurwitz and Smith, Sioux Falls, South Dakota, Attorneys for appellee K & K Insurance.

GILBERTSON, Justice

[¶ 1.] This case arose from a personal injury accident at the Lake County Speedway, when a race car's wheel detached, struck and injured Vernon Holzer¹ (Holzer). The circuit court granted both defendants, Dakota Speedway, Inc.² (Speedway) and K & K Insurance Group, Inc. (K & K) summary judgment based on a pre-accident release signed by Holzer. We affirm.

FACTS AND PROCEDURE

[¶ 2.] Speedway is located approximately three miles southwest of Madison, South Dakota. Its stock car races are open to the public. At the time of the accident, Speedway consisted of a grandstand, the racetrack itself, a pit area inside the racetrack, and a separate pit area outside the track. The racetrack was a 3/8 mile oval dirt track, on which stock cars raced in the standard counter-clockwise direction.

[¶ 3.] A pit is an area at a racetrack where tow vehicles, racecars and trailers are parked prior to racing and upon leaving the track. This area is also used for pre-race tune-ups, repairs and other operations. Frequently drivers, mechanics and other members of pit crews congregate there. The pit area in use on August 5, 1995 was an area south of, and outside of the southern edge of the track.

[¶ 4.] Holzer was serving as a member of Bruce Bortnem's pit crew on August 5, 1995, when an accident occurred during the ninth or tenth lap of the twelve-lap sportsmen's stock car feature race. The right wheel and tire broke away from a race car, became airborne, and flew over

610 N.W.2d 790

one hundred feet³ to where Holzer was standing inside the official pit area behind a wall consisting of concrete barricades.⁴ He received severe injuries to the head, face and shoulder, and has been in a comatose condition since the date of the accident. Arthur Nordstrom, technical advisor and inspector of late-model street stock cars and sportsmen stock cars at Speedway, stated in his affidavit that the wheel and tire came off because the bell assembly, which is part of the axle shaft, had fractured and broken off from the main portion of the axle shaft. Thus, parts of the bell, axle and brake were still attached to the tire and wheel when it broke loose and struck Holzer

[¶ 5.] Before entering the pit area of the racetrack on August 5, 1995, Holzer was requested by Speedway officials to sign a "Release and Waiver of Liability, Assumption of Risk and Indemnity Agreement."⁵

610 N.W.2d 791

All individuals wishing to enter the pit area were required to pay an entry fee and sign the release form. This document provided that the signees covenant not to sue the track owners, their insurers and others and release, waive, discharge them from all liability "for any and all loss or damage, and any claim or demands therefor on account of injury to the person or property or resulting in death of the undersigned arising out of or related to the events, whether caused by the negligence of the releasees or otherwise." This release was a condition to being allowed into any "restricted area," such as the pit, and applied to anyone competing, officiating, observing, working for, or participating in races at the speedway. The form defines restricted area as "any area requiring special authorization, credentials, or permission to enter or any area to which admission by the general public is restricted or prohibited." At the bottom of the form are lines allowing for eighteen signatures. Printed on each signature line in bold capitalized letters, is "I HAVE READ THIS RELEASE." Holzer signed this document literally on top of these capitalized words. He had previously signed the same agreement on June 14, 1995 and July 29, 1995

[¶ 6.] At the time of the accident, K & K, an underwriting agent for Transamerica Insurance Group, provided liability insurance coverage to Speedway. K & K had nothing to do with vehicle inspection. A Speedway official was responsible for inspecting racecars before each race for safety precautions.

[¶ 7.] On July 27, 1998, Holzer filed a complaint against Speedway and K & K in the Fourth Judicial Circuit, Lake County, South Dakota. The complaint alleged negligence and reckless disregard against Speedway for the life, safety and health of Holzer and negligent inspection and breach of duty to third parties against K & K. Both Speedway and K & K filed motions for summary judgment, which the trial court granted. Holzer now appeals raising several issues for our review, one of which is dispositive:

Do genuine issues of material fact exist as to whether the waiver and release signed by Holzer was valid and enforceable, thus relieving Speedway and its insurer, K & K from liability.

STANDARD OF REVIEW

[¶ 8.] Our standard of review for a circuit court's grant of a motion for summary judgment is well settled. As we recently stated in Kimball Investment Land, Ltd. v. Chmela:

Summary judgment is authorized "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law." SDCL 15-6-56(c). We will affirm only when there are no genuine issues of material fact and the legal questions have been correctly decided. Bego v. Gordon, 407 N.W.2d 801, 804 (S.D.1987). All reasonable inferences drawn from the facts must be viewed in favor of the non-moving party. Morgan v. Baldwin, 450 N.W.2d 783, 785 (S.D.1990). The burden is on the moving party to clearly show an absence of any genuine issue of

610 N.W.2d 792

material fact and an entitlement to judgment as a matter of law. Wilson v. Great N. Ry. Co., 83 S.D. 207, 212, 157 N.W.2d 19, 21 (1968).

2000 SD 6, ¶ 7, 604 N.W.2d 289, 292 (citing Mattson v. Rachetto, 1999 SD 51, ¶ 8, 591 N.W.2d 814, 816-17 (quoting Shuck v. Perkins County, 1998 SD 32, ¶ 6, 577 N.W.2d 584, 586)). "Summary judgment will be affirmed if there exists any basis which would support the trial court's ruling." Wolff v. SD Game, Fish and Parks Dept., 1996 SD 23, ¶ 32, 544 N.W.2d 531, 537 (citing St. Paul Fire & Marine Ins. v. Schilling, 520 N.W.2d 884, 886 (S.D.1994)) (emphasis added).

ANALYSIS AND DECISION

[¶ 9.] Do genuine issues of material fact exist as to whether the release signed by Holzer was valid and enforceable, thus relieving Speedway and its insurer, K & K from liability.

[¶ 10.] Holzer argues the release violates public policy and therefore is ineffective and unenforceable. He also contends granting the motion for summary judgment was improper because whether he knowingly and voluntarily signed the release is a question of fact for the jury. We disagree with both arguments.

[¶ 11.] A. Public Policy

[¶ 12.] A review of cases involving releases concerning recreational activity establishes two general trends: (1) anticipatory, pre-injury releases are much more likely to be deemed valid and enforceable when they are written on a separate document and not as part of separate written material and (2) the more inherently dangerous or risky the recreational activity, the more likely an anticipatory release will be held valid. Johnson v. Rapid City Softball Ass'n., 514 N.W.2d 693, 700 (S.D. 1994) (Wuest, J. concurring in result and concurring specially).

[¶ 13.] The document signed by Holzer was a separate document. As will be more fully developed, this concern is connected with claims of knowledge and voluntariness.

[¶ 14.] Since the time of the ancients, records exist of racing on foot and by animal. The 20th Century has enlarged the scope of racing competition to that of motor vehicles. The dangerousness of racing numerous automobiles at the fastest possible speeds is obvious. In such an instance, there is no such thing as an inherently safe auto race. The closer one is to the action the greater the risk of injury or death. Holzer's duties placed him at the edge of the track, close to the racing action.

[¶ 15.] We have recognized that releases such as the form Holzer signed are typical of those used in the racing industry. See Lee v. Beauchene, 337 N.W.2d 827, 828 (S.D.1983) (citing Andrea G. Nadel, Annotation, Liability for Injury or Death of Participant in Automobile or Horse Race at Public Track, 13 A.L.R.4th 623 (1982) [hereinafter Nadel]); see also Randy J. Sutton, Annotation, Validity, Construction, and Effect of Agreement Exempting Operator of Amusement Facility from Liability for Personal Injury or Death of Patron, 54 A.L.R. 5th 513 (1998)[hereinafter Sutton]. In Lee, the plaintiff stock car driver sustained injuries when his car struck a hole in the track and flipped, leaving him paralyzed from the waist down. Upon entering the racetrack before the accident, Lee was required to sign a release agreement. In affirming the circuit court's grant of summary judgment to the defendant speedway, we stated absent "a legislative directive, these releases have withstood attacks that they are contrary to public policy." Lee, 337 N.W.2d at 828 (citing Tope v. Waterford Hills Road Racing Corp., 81 Mich.App. 591, 265 N.W.2d 761 (1978)). In South...