Ski Areas Are Shaken By Ruling That Unnecessary Hazards Are Not Inherent Dangers Graven v. Vail, 94 SC 416 (Colo. Sup. Ct. 12/18/95)

In Graven v. Vail Associates, Inc. ___ P. 2d ___, 94 SC 416, 1995 WL 748057 (Colo. Sup. Ct. 12/18/95) the Colorado Supreme Court adopted a narrow construction of the inherent danger provisions of the Colorado Ski Act. C.R.S. 33-44-101 et seq. This precedent will allow some skiers, who are injured while skiing, to advance a claim for injuries against a ski area operator if the injury results not only from a ski area operator's breach of a specific duty set out in the Ski Act, but also from a danger or risk which is found to be not "integral" to the sport. The decision brings Colorado ski law into line with Montana, Utah, and Vermont - other thoughtful and responsible jurisdictions with substantial ski industries ( Mead v. M.S.B., Inc., 872 P.2d 782 (Mont. 1994); White v. Deseelhorst, 879 P. 2d 1371 (Utah 1994), Clover v. Snowbird Resort, 808 P. 2d 1037 (Utah 1991); Dalury v. S-K-I, Ltd., and Killington Ltd., ___ A. 2d ___, 94-236 (Vt. Sup. Ct. 9/8/95). Frant v. Haystack Group, Inc., 641 A. 2d 765 (Vt. 1994) Passero v. Killington, Ltd., 1994 WL 326793 (E.D. Pa 6/28/94).) Based upon past statistics, generated by the National Ski Area Associations, it is unlikely that the opinion will have any impact on liability insurance rates, or insurance availability. To the contrary, as competition for domestic skiers' dollar increases, the decision might have the beneficial effect, of bringing safety back into a positive focus. Liability breeds responsibility. Ski safety is becoming an increasing concern for skiers, many of whom make their destination decisions based partly upon their perception of ski area safety.

David Graven sued Vail Associates, Inc. for injuries he suffered when he fell down a steeply pitched ravine adjacent to the Lower Prima run at Vail. The accident occurred on April 2, 1992. Prima is an expert, double black diamond run. Well below Prima lies Lower Prima, an intermediate access trail on the back side of Golden Peak. Lower Prima is fed by Prima, as well as other beginner and intermediate trails. Long time Vail skiers might know that a steep ravine lies immediately off the left edge of Lower Prima. However, the ravine is unmarked and the left edge of Lower Prima is well exposed to sunlight, especially in the Spring. This has the effect of causing unstable and slushy snow.

The trial court entered summary judgment against Graven, holding that, as a matter of law, the ravine into which Graven fell was an "inherent danger" of skiing within the meaning of C.R.S. sect.33-44-103(3.5). Pursuant to sect. 33-44-107(2)(d), Vail had no duty to mark the ravine or warn skiiers of the existence of the danger. Thus, recovery was barred pursuant to C.R.S. sect.33-44-112. The Court of Appeals affirmed, despite noting that the statute had "a curious Catch-22' flavor." Graven v. Vail Associates, Inc., 888 P.2d 310 (Colo. App. 1994)(The statute requires ski areas to have signs to mark dangers, but dangerous or hazardous conditions are not required to be marked).

The Colorado Supreme Court reversed, and remanded for trial. The Court adopted a narrow construction of inherent dangers and risks. The Court held that "Skiing is a dangerous sport. Ordinary understanding tells us so, and the legislature has recognized that dangers inhere in the sport. . . . Not all dangers that may be encountered on the ski slopes, however are inherent and integral to the sport, and this determination cannot always be made as a matter of law." slip op. at 14 - 15. The Court relied first upon the explicit language of the Ski Act defining inherent dangers. Secondly, the Court relied upon the legislative history of the inherent danger amendments, enacted in 1990, to reach its determination that not every danger encountered on the slope is necessarily inherent and integral to the sport.

The Ski Act defines inherent dangers as: " Inherent dangers and risks of skiing' means those dangers or conditions which are an integral part of the sport of skiing . . . " sect. 33-44-103(3.5). The Court reasoned that the inherent dangers and risks set out in the statute were intended only to describe dangers which were an integral part of skiing.

The Court drew further support, for its narrow construction of the definition of inherent risks and dangers, from the statements made by legislators during hearings on the passage of the amendments. Senator Tollman Bishop, who sponsored the 1990 amendments, stated that the amendments were not intended to "reduce the responsibilities of the ski area operators." slip op. at 8, note. 3. The Court found Senator Bishop's statements about the Supreme Court's earlier ruling in Peer v. Aspen Skiing Co., 804 P. 2d 166 (Colo. 1991) to be important. Senator Bishop stated that even under the inherent danger amendments, a four-foot drop off such as that implicated in the Peer accident would still cause ski area operators to "give some indication of caution or of where these are considered as a danger beyond that of what would be considered inherent." slip. op. at 14 note. 5. Based upon the explicit language of the Ski Act and the legislative history, the Court concluded that Graven's case must proceed to trial. The Court reasoned:

In the present case, the plaintiff describes the terrain that precipitated his injuries as a steep ravine or precipice immediately next to the ski run. This description conjures up an image of a highly dangerous situation created by locating a ski run at the very edge of a steep drop off. If such a hazardous situation presents an inherent risk of skiing that need not be marked as a danger area, the ski area operator's duty to warn under section 33-44-107(2)(d) is essentially meaningless. Therefore, we do not construe section 33-44-103(3.5) to include such a situation within the inherent dangers and risks of skiing as a matter of law.

The configuration of the terrain where the accident occurred, however, is a matter of serious dispute. The affidavit of Lawrence Lane, filed on behalf of the defendant, paints quite a different picture from that presented by the plaintiff. Lanes describes the drop off as a "snow-covered transition" off the groomed portion of the ski run and of a type commonly existing in the Vail ski area. This description suggests a relatively innocuous slope that may well be part of the inherent dangers and risks of skiing. The record contains no photograph or other objective evidence that would assist in arriving at a correct understanding of the nature of the terrain where the accident occurred. As a consequence of the conflicting descriptions of the accident area and the necessity to resolve that conflict in order to determine whether the plaintiff's injuries resulted from the inherent dangers and risks of skiing, we hold that a genuine issue of material fact exists. Summary judgment was therefore inappropriate on this issue. -slip op. at 15-16.

Justice Erickson, wrote the dissent and was joined by Justices Vollack and Kourlis. The dissent reasoned that the intent of the General Assembly was to include accidents such as Graven's within the ambit of inherent dangers. Further "the evidence before the district court at the summary motion stage established that Graven suffered his injuries from statutorily articulated inherent risks of skiing." Graven v. Vail, Dissent, slip op. at 1 (94 SC 416).

The majority's ruling presents two immediate questions for attorneys and trial judges. First, which ski accidents are actionable ski cases under the Graven rule. Second, how are juries to be instructed in cases in which the cause of the accident is alleged to be a danger which is not "integral" to the sport, rather than a specific breach of a provision of the Ski Act.

Many lawyers recognized that the 1990 amendments to the Ski Act were subject to challenges, both as to their construction, and as to the constitutionality of the amendments. Therefore, the benchmarks for evaluating a case were twofold: first, whether the facts would form the basis for an actionable theory under the pre-1990 statute and decisions, notably Pizza v. Wolf Creek Ski Development Corp., 711 P.2d 671 (Colo. 1985); second, whether the facts and damages of the case merited a challenge to the constitutionality of the 1990 amendments to the Ski Act, or whether, as in Graven, the Court might be attracted to a narrow construction of the inherent danger provisions of the 1990 amendments. The first benchmark is still instructive, but not controlling. The second benchmark is still important, perhaps more so in view of the comments of the dissent in Graven, suggesting that frivolous lawsuits might proliferate after the decision. See, Graven v. Vail, Dissent at 9-10. The Supreme Court gave no explicit guidance for jury instructions, but it is clear that the concept of inherent dangers vs. unnecessary hazards must be given to the jury.

Brett Pizza was injured in an accident almost identical to that in Aspen Skiing Company v. Peer, 844 P.2d 166 (Colo. 1991). Pizza was skiing down Thumper at Wolf Creek. He skied over an unmarked transition, became airborne, landed on his neck and back, and was paralyzed as a result. The Supreme Court held that skiers with common law negligence claims could advance their cause, even under the regime set out in the 1979 version of the Ski Act, recognizing however that there was a presumption of non-liability which attached in favor of the ski area operator. The Court reasoned in the Pizza case that:

There is simply no indication in the statute when read as a whole, or in legislative history of the Ski Safety Act of 1979, ...which allows us to construe the presumption as requiring the skier to show anything more than evidence of the operator's negligence as outweighing the presumption that the skier was solely responsible. Rather, we construe the presumption as consistently as possible with common law principles of negligence. We therefore hold that, while the evidentiary presumption is not unconstitutionally vague, the skier has the burden of rebutting the presumption by presenting evidence of the ski area operator's negligence which outweighs the presumption of the skier's sole negligence. . . .Where the injury is related to a variation in the slope's terrain, the trial court was correct in instructing the jury that the ski area operator only owes a duty of reasonable care to the skier. Pizza v. Wolf Creek Ski Development Corp., 711 P.2d at 677, 684 (Colo. 1985)

Now under the Graven decision, a determination must be made, essentially in accord with the reasoning of the court in Clover v. Snowbird Resort, supra note 1. "[i]f an injury was caused by an unnecessary hazard that could have been eliminated by the use of ordinary care, such a hazard is not, in the ordinary sense of the term, an inherent risk of skiing and would fall outside" the ambit of inherent risks set out in the Utah's Inherent Risks of Skiing Act. Utah Code Ann. 78-27-51 -54; Clover v. Snowbird Resort, supra at 1047. In the words of one thoughtful trial judge who was confronted with the decision in Graven, while a motion to dismiss was pending:

Thus, the Colorado Supreme Court without labeling the determination of the "integral" part of skiing as a duty analysis, has added a new duty for ski area operators -- i.e. whether the ski area operator using reasonable care could have eliminated the "inherent danger or risk" of skiing, in determining whether the dangers and risks are integral. - ORDER Dovey et al. v. Victoria Breckenridge Corporation, 95 CV 1153 (Denver District Court, January 3, 1996)

For further guidance, other jurisdictions have decided that not all conditions encountered while skiing are inherent dangers or risks to the sport. In Mead v. M.S.B., Inc. supra, note 1, the Montana Supreme Court found that a rock outcropping on the edge of an open, expert trail, and which struck the plaintiff's knee, was not an inherent danger as a matter of law. In Frant v. Haystack Group, Inc., supra, note 1, the Vermont Supreme Court found that a 4" X 4" fence post supporting a rope lift maze was not a danger inherent in the sport, and that a jury should have been permitted to hear evidence of safer alternatives to the post such as "forgiving" plastic or padded posts to reduce the hazard. While the Utah Supreme Court has ruled that an unmarked catwalk is not an inherent danger as a matter of law, in the case of White v. Deseelhorst, supra, note 1. Corey White became paralyzed in an accident eerily alike to the cases of Brett Pizza and Les Peer. White came over an unmarked transition road cut into a slope, became airborne, rotated head over heels, and landed on his neck, becoming paralyzed.

Given the analysis of the Graven decision, lawyers now have persuasive authority with which to analyze the facts and circumstances of an accident, and thus be able to advise clients in an informed manner as to the merits of their case. An equally important issue, however, is the wisdom of the ruling, and its effect on the Colorado ski industry; especially in view of the industry's public outcry against the decision, and the threat that lobbyists will return to the hill at the next session with more draconian proposals to ensure ski area immunity. Should the General Assembly listen to the ski industry? Was the Supreme Court wrong in its decision? Clearly not. In fact, the decision was in accord with the best interests of the State, consistent with the will of the legislative intent and the explicit language of the act.

Moreover, it could be good for the industry. Annually, the National Ski Areas Association (NSAA) commissions an economic analysis of North American Ski Areas from the Business Research Division of the Graduate School of Business Administration at the University of Colorado, Boulder. The research is summarized in the recently published Economic Analysis of North American Ski Areas 1976-1993. There, liability insurance costs over 13 ski seasons is summarized. The report states: "[I]f one looks at liability insurance costs compared to either total revenue or gross operating revenues, the increase in insurance costs appears more reasonable. Liability insurance to total revenue increased from 3.1% to 4.3% and liability insurance to gross operating revenue increased from 2.5% to 3.2%." During 1990, when ski area operators lobbied the General Assembly for the inherent danger amendments the rate of increase in liability insurance rates was actually falling in comparison to the increase in their gross operating revenue. Furthermore, in a September 1988 article in Ski Area Management, the NSAA voiced complaints that increasing insurance costs were unrelated to increased claims, but instead resulted from predatory pricing strategies exercised by underwriters.

Since 1988 ski area operators have enjoyed progressively higher earnings and expansion, while enjoying wide availability of insurance at decreasing cost from numerous insurers who were competing for the ski areas' business in a highly competitive market. (See, Derouin, "Ski Area Insurance Programs" SKI AREA MANAGEMENT (Vol. 33, No. 5 September 1994) pp. 59 - 61.) The most recent NSAA Economic Analysis is for the 1993-1994 season. The facts indicate that ski areas, especially in Colorado, are extremely profitable. Operating profit for the reporting ski areas in the Central Rockies as a percentage of gross fixed assets was an impressive 17.4%. According to the author of the NSAA Economic Analysis, Professor Charles Goeldner, "In terms of dollars, the average ski resort in the Central Rockies is the most profitable of any region in the country." (Goeldner, "1993-1994 Economic Analysis" SKI AREA MANAGEMENT (Nov. 1995).) The economic analysis historically consolidates Colorado and New Mexico within the "Central Rockies" statistical group. Profitability of Colorado ski areas, on average, far exceeds the average profitability of the New Mexico areas. From this we can infer that the Colorado ski areas have profit margins even higher than the 17.4% GFA than the average generated with the inclusion of the New Mexico ski areas' financial statements in the 1993-1994 study. This comes as no surprise to the average skier who has seen ski tickets rise at twice the rate of the Consumer Price Index. ( The C.P.I. has averaged 2.5% since 1991. Lift tickets at Vail have increased from $38 in 1991 to $48 in 1995.)

These figures reflect that Colorado Ski Areas are a highly profitable big business. What the statistics do not accomplish is to dispel the persistent myth that the Colorado ski industry is operated by a friendly group of former athletes, soldiers, and local families, who deserve or are entitled to special treatment from the Colorado legislature. Colorado's largest ski areas are owned and controlled by interests outside of the state of Colorado. Ralston Purina, controls 2.5 million skier days at A-Basin, Keystone and Breckenridge. George Gillett, lost his interest in Vail Associates to an entity called Apollo Partners, Inc. The sale followed a lengthy and painful bankruptcy which caused hardship to many small businesses in the Eagle Valley. Investors Leon Black and Craig Cogut formed Apollo Partners following their careers at Drexel Burnham Lambert. Apollo Partners is a holding company for businesses, including Vail Associates, with a total estimated value of more than $8 billion.

Aspen Ski Corporation, which last season controlled about 1.4 million skier days at its four ski areas is presently owned by the family of Chicago billionaire Lester Crown. ( " [Marvin} Davis to sell his half of Aspen Skiing Company ...for undisclosed price" ROCKY MTN. NEWS (3/25/93) p. 25) . Another billionaire, Kankori Kanko, of Kankori Kanko Co. Ltd., from Sapporo City, Japan, paid a record $110 million for Steamboat Ski Area which sold 1,013,606 skier days last season. Apex Oil Company, of St. Louis controls, Copper Mountain, Inc. which in 1994-1995 served 770,973 skier days. Of the top ten resorts, only Crested Butte (485,840 skier days) is still owned by a Colorado family - Bo Callaway. ( Kankori recently paid $60 million for Heavenly Valley, which by sheer size is the largest ski area in the United States, however it has Heavenly Valley itself had very little real estate for future development to include in the sale."Steamboat's Owner Buys Largest Ski Area in U.S." ROCKY MTN. NEWS (11/3/90) p. 66.) Purgatory, 14th in sales with 382,839 skier days last year, is owned by the Duncan family of Denver. Chuck Lewis, founder of Copper Mountain, owns Lake Eldora Ski Area, just west of Boulder. Winter Park, is the fifth largest area (986,077). It is owned by the City and County of Denver and operated as a quasi agency of the City through the Winter Park Recreation Association. It is well recognized for a generally safety conscious ski patrol and for its outreach to the handicapped and disadvantaged. It has nevertheless been in a recent land/lease dispute with the City which has placed Winter Park Recreation Association in an uncomfortable position of allying itself with the Arlberg Club, an old and exclusive club with private land interests at the base of Winter Park, gained when its members cut the trails and developed the area for the City.

Wolf Creek is controlled by the New Mexico family of Kingsbury Pritcher. Silver Creek is owned by a South American airline magnate. Loveland Ski Area, is controlled by the Clear Creek Skiing Corporation, of which the Chester Upham family from Mineral Wells, Texas is the owner. In short, eight of the top ten resorts in the State are owned by out of state or foreign interests, while 15 out of all 23 open Colorado resorts are owned outright by foreign and out of state interests. A more telling statistic is that 76% of Colorado's entire 1994-1995 season (8,600,320 of the total 11,385,527 skier days for 1994-1995) was controlled by out of state or foreign interests. The upshot of these statistics is that Colorado's ski areas are profitable, they have readily available insurance which can be purchased from a highly competitive market. The owners of the ski areas are not a particularly needy lot. In balancing the interests of the industry versus the interests of skiers, the Colorado Supreme Court has taken a reasonable approach. Industry advocates argue that the associated employment of the ski industry is critical to the State. This is true. It is untrue, however, that the small businesses associated with skiing will be affected in any way by the Graven ruling. The recent downturn in employment at the areas, has been caused by the changing nature of the employment market ( Brooke, James "Foreigners Flock to Slopes to Work, Not Ski" NEW YORK TIMES (12/29/95) p. A8) - principally the decreasing number of people who are willing to take low paying jobs in a community with skyrocketing costs of living. The concerns of the ski areas are with a flat skier market, not profit margins, or the three cents on the ski area dollar which has been the historic cost of insurance.

In conclusion, the decision will not have a negative effect on the industry. Will it have a positive impact on the industry? Can Colorado ski areas position themselves competitively by advocating safe skiing? It would seem sensible. Skiers who wear helmets are being seen in greater numbers. Instructors are careful to explain skiers' responsibility to new skiers. For over five years, the Gilman corporation has made padding for manmade objects which is far more effective than the material in wide use in Colorado. Perhaps we will see more of it in the coming years. At some ski areas, small children are not permitted alone on ski lifts, recognizing that they do not have the skill, balance or judgment to safely ride a chair without a safety bar. The design, function, use, and installation of safety bars on chairs are undergoing improvements, in large part as a consequence of litigation on behalf of skiers injured in lift accidents.

Safety at ski areas is a serious matter for skiers, and skiers will want to ski where they believe ski area operators conduct themselves in a responsible manner. Ski safety can improve without diminishing the aesthetics and exhilaration of the mountain. As Justice Lohr wrote for the majority: "Skiing is a dangerous sport...[but] not all dangers that may be encountered on the ski slopes, however, are inherent and integral to the sport, and this determination cannot always be made as a matter of law." Justice Lohr should know, he was a Pitkin County (Aspen, Colorado) district court judge for 7 years (1972-1979) prior to appointment to the Colorado Supreme Court.