WisBusiness: Supreme Court ruling could lead to insurance rate hike

By Brian E. Clark

Insurance rates for recreational businesses are likely to go up because of a ruling on Wednesday by the Wisconsin Supreme Court that found a liability waiver used by a Madison swimming pool was flawed, according to the attorney for the pool.

"This decision means there is no guarantee that any liability release will be enforced by the courts," said Sarah A. Zylstra. She defended the SwimWest Family Fitness Center in a wrongful death suit that stemmed from the 2001 drowning of Dr. Charis Wilson, an urgent care physician for Dean Medical Center.

John M. Riley, who represented Wilson’s minor son in the case, said he believes the high court made the correct decision and that businesses generally cannot be released from responsibility for negligence.

"A lifeguard left the pool and a drowning occurred," he said. "The pool is responsible. A business cannot insulate itself by having an exculpatory clause that relieves them from liability resulting from negligence."

Riley also said he did not think this case would cause insurance rates to rise for recreation or fitness centers that have swimming pools.

"Appellate courts have upheld liability waivers for activities like racing cars or motocross," he said. "But you can’t compare that with swimming at a pool with a lifeguard.

"Now, this case can go forward and be argued on its merits," he said.

Wilson, 47, was using the pool on May 3, 2001, to rehabilitate a injured knee. She was found at the bottom of the pool and died the next day.

Her only child, Benjamin Atkins, alleged in the lawsuit that the negligence of a lifeguard at SwimWest caused his mother’s death. However, Dane County

Circuit Judge Michael Nowakowski dismissed the suit because Wilson had filled out a guest registration form that gave Swimwest liability for injuries at the pool.

Atkins appealed, but the 4th District Court of Appeals said it could take the case because state courts have not created a clear test for the enforceability of broadly-worded liability waiver forms.

Zylstra said the high court ruled against SwimWest for three reasons: because the language in its liability waiver was too broad, because the release served as both a guest registration and a liability waiver and because Wilson had not opportunity to bargain over the release terms.

She said the court did not answer what she called the "$10,000 question."

"The court said releases are valid if they meet certain criteria,"
she said. "However, the court has never met a release it liked.”

Zylstra said both the availability and affordability of insurance for recreation business will be affected.

"Businesses get sued all the time," she said. "Some suits have merit, others don’t. Releases were an easy way to weed out lawsuits with having to spend money on attorneys.

"With these kinds of waivers in disfavor, businesses will face much higher litigation costs. Insurance companies also will be taking a harder look to figure out if they want to underwrite companies that risk or not."

Though Riley predicted SwimWest’s insurance company would now settle the case, Zylstra predicted it would go to trial.

"We don’t believe she drowned," Zylstra said. "We believe she died of medical reasons unrelated to the pool."

In addition, she said the fitness center would probably rewrite its liability release.