Court Opinion

ID: 9574296
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:03:58.960248+00
Date Added: 2024-06-11T12:44:20.515535
License: Public Domain

SHIRLEY S. ABRAHAMSON, J.
(dissenting). I dissent because I conclude, as did the court of appeals, that no rational basis exists for immunizing non-profit corporations that charge fees for recreational activity on their land from suit under the recreational immunity statute. I agree with the court of appeals that without a rational basis for treating fee-paying plaintiffs injured on the recreational land of a non-profit differently from fee-paying plaintiffs who are injured *892on such land belonging to anyone else, the statute violates the equal protection guarantees of the Fourteenth Amendment to the federal Constitution and Art. I, Sec. 1 of the Wisconsin Constitution.
I agree with the majority opinion that the classification at issue must be rationally related to the purpose of the recreational immunity statute. I also agree with the majority's articulation of the purpose of the statute: By granting immunity to landowners who derive no more than a minimal pecuniary benefit1 from the recreational use of their property, 1983 Act 418, sec. 1, the statute encourages landowners to open their land to the public for recreational use. The majority, however, fails to explain the rational relationship between the statutory purpose and the grant of immunity to non-profit, fee-charging landowners who derive significant pecuniary benefit from the recreational use of their property.
The majority opinion, the circuit court's decision, the dissenting opinion of the court of appeals, the YMCA, and the state struggle to articulate a rational basis for the classification. I glean three arguments from their writings. First, they seem to argue that,if non-profits need not purchase liability insurance, they can charge the public less for the opportunity to use their land. Lower charges, they contend, will enable more people to use the land, in keeping with the legislative policy of encouraging public use of recreational land.
Second, the proponents of the classification look to the "charitable" nature of non-profit activities as the legislature's basis for drawing the distinction between *893for-profit and non-profit organizations. Under their rationale, if non-profits that work with the "underprivileged" incur liability for activities on recreational land, they may be less likely to invest in recreational land and thus will make fewer facilities available to those they are supposed to serve. In addition, they argue that income derived from recreational lands can lend financial support to the other charitable activities of the non-profit landowner and the legislature intended to foster this goal.
Third, the proponents contend that because nonprofits are not organized to make a profit, they derive no more than a minimal pecuniary benefit from opening their land to the public, regardless of the fee charged. Immunizing non-profits from liability, they assert, is therefore in keeping with the legislative policy of immunizing those recreational landowners who do "not derive more than a minimal pecuniary benefit." 1983 Wis. Act. 418, sec. 1.
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I first examine the contention that freeing nonprofits from the cost of liability insurance potentially increases public use of recreational land. This argument may be true. However, it applies equally to for-profit corporations. Thus it cannot be used to explain the legislature's disparate treatment of non-profit and for-profit organizations in sec. 895.52.
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I next examine the proposition that the legislature meant to encourage the good works of non-profits by freeing them from the expense of buying liability insur-*894anee. This argument seems to resurrect the long-discredited doctrine of charitable immunity.2
Wisconsin courts grounded charitable immunity on the public policy that charities should be free from liability because they perform the "quasi-public function in ministering to the poor and sick without any pecuniary profit to themselves." Morrison v. Henke, 165 Wis. 166, 170, 160 N.W. 173 (1917). The court went on to differentiate non-profit and for-profit entities as follows:
Since the hospital derives no profit from its work and since it is founded for the sole purpose of conserving the health and life of all who may need its aid, and since it ministers to those who cannot pay as well as those who can, thus acting as a good Samaritan, justice and sound public policy alike dictate that it should be exempt from liability attaching to masters whose only aim is to engage in enterprises of profit or of self-interest.
Morrison, 165 Wis. at 170.
In the early 1960s, however, the doctrine of charitable immunity was abandoned by this court and has not been resurrected by the legislature. In Kojis v. Doctors Hospital, 12 Wis. 2d 367, 372, 107 N.W.2d 131 (1961), this court explained that hospitals "are now larger in size, better endowed, and on a more-sound economic basis. Insurance covering their liability is available and prudent management would dictate that such protection be purchased." Moreover, in Widell v. Holy Trinity Catholic Church, 19 Wis. 2d 648, 656, 121 N.W.2d 249 (1963), the court questioned the justifica*895tion of denying recovery to "the innocent sufferer of injuries" caused by the negligence of a charitable or religious institution in order to benefit the many. "When an institution owes a duty of care to another and ... no matter how lofty the purpose or motive, injures another . . . the breach of duty ought not to be excused on the grounds of the laudable purpose or the public benefit of the activity causing the injury." Widell, 19 Wis. 2d 648, 656 (1963).
The court abandoned charitable immunity more than 30 years ago partly because of the availability of liability insurance; today the court is asked to conclude that the legislature has resurrected the doctrine because of the cost of liability insurance.
The proponents ask this court to accept as the legislature's rational basis for the classification that in order to enjoy outdoor recreation, the "underprivileged" must forsake their right to be compensated for negligently inflicted injuries.
Recreational immunity is a creation of the legislature. If the proponents could point to a coherent legislative policy of protecting non-profits from liability for recreational activities, a rational basis might exist for the classification under the recreational immunity statute. No one has articulated, nor can I perceive, such a policy. While non-profits are immune from suit for activities on recreational land, they are not generally immune from suit for torts connected with recreational activity in a building. Section 895.52(1)(f), Stats 1991-92. Thus the YMCA could be liable for a tort growing out of indoor but not outdoor recreation. Indeed, non-profits can be liable for any tort except a tort arising from outdoor recreation. This inconsistency illustrates that there is no coherent legislative policy to *896protect non-profits from liability in torts connected with recreational activities.
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The proponents of the statute proffer a third argument in favor of the rationality of sec. 895.52's distinction between for-profits and non-profits who charge for use of recreational land. They assert that by definition a corporation organized as a non-profit derives no more than minimal pecuniary benefit from opening its land. However, this argument does not withstand analysis.
The essential characteristic of non-profit corporations is that they cannot distribute their profits or net earnings to their directors, officers or members. Jane C. Schlicht, Piercing the Non-Profit Corporate Veil, 66 Marq. L. Rev. 134, 136 (1982). However, this prohibition against distributing their earnings as dividends does not mean that non-profit corporations must operate in the red. On the contrary, there is nothing to prevent a non-profit from showing an excess of revenues over expenses on its annual operating statement, or building its net worth over time. In addition, a nonprofit corporation need not have a charitable purpose. With limited exceptions, corporations may be organized under Chapter 181 "for any lawful purpose whatever." Section 181.03, Stats. 1991—92.
As the court of appeals noted, the net worth of the YMCA of Metropolitan Milwaukee at the end of 1988 exceeded $28 million. In 1990, its total revenues exceeded $14 million and it realized a surplus of $110,041. The YMCA's 1990 annual report described camping as a "revenue growth leader." The pecuniary benefit that the YMCA derived from camping was enhanced, according to the report, by the organiza*897tion's "[e]xpense savings in . . . public liability insurance."
The purpose of the recreational immunity statute is to encourage landowners to open their land at little or no charge. Section 895.52(6)(a). Granting immunity to a non-profit that charges more than a minimal amount contravenes the statute's very purpose.
Tracy Szarzynski's mother paid $362 for two weeks of camping at Camp Minikani, yet the legislature denies recovery for an allegedly negligently inflicted injury because of the non-profit corporate structure of the owner of the camp.
It makes little sense to argue that the legislature intended a non-profit such as the YMCA to be immune from suit simply because its profits are not distributed as dividends, while a nearby farmer who charges campers on his land more than a minimal fee is liable in tort. As I have explained, I see no rational basis for this distinction. I agree with the court of appeals that absent such rational basis the statute is unconstitutional. Accordingly, I dissent.
I am authorized to state that Chief Justice Nathan S. HEFFERNAN and Justice WILLIAM A. BABLITCH join this dissent.

 The circuit court's rationale, quoted in the majority opinion at 888, relies on the profit being used for "charitable purposes."