is an agreement to release one or more individuals or entities from liability resulting from any negligent act or omission or other wrongful conduct committed by that individual or entity. Dobratz v. Thomson, 161 Wis. 2d 502, 468 N.W.2d 654, 656 n.1 (Wis. 1991). Thus, the court must determine whether the exculpatory contract in this case is an enforceable agreement.
In order to address the issue of whether the release executed by Cadek is enforceable, thus barring him from maintaining the instant action, the court applies the law of Wisconsin. It is a well settled principle that the district court, exercising diversity jurisdiction over the parties and sitting in the State of Illinois, must apply Illinois' choice-of-law rules and statutes of limitations. Anabaldi v. Sunbeam Corp., 651 F. Supp. 1343, 1344 (N.D. Ill. 1987); see also Colonial Penn Life Ins. Co. v. Assured Enterprise, Ltd., 151 F.R.D. 91, 95 (N.D. Ill. 1993). Illinois applies the "most significant contacts" test to determine the applicable law in tort cases. Vantassell-Matin v. Nelson, 741 F. Supp. 698, 702 (N.D. Ill. 1990) (citing Ingersoll v. Klein, 46 Ill. 2d 42, 262 N.E.2d 593, 595 (1970)). The court finds, and the parties agree, under the most significant contacts test, the applicable law in the instant action is Wisconsin law.
Wisconsin courts have employed a two-step analytical approach in determining whether an exculpatory agreement is enforceable. See Hupf v. City of Appleton, 165 Wis. 2d 215, 477 N.W.2d 69, 73 (Wis. Ct. App. 1991); Trainor v. Aztalan Cycle Club, Inc., 147 Wis. 2d 107, 432 N.W.2d 626 (Wis. Ct. App. 1988). The first step of the analysis is to resolve whether the subject exculpatory clause is void and unenforceable on public policy grounds. Hupf, 477 N.W.2d at 73. If the exculpatory clause is not void on public policy grounds, the next step of inquiry is whether the terms of the agreement "clearly express the intent of the parties so that with the surrounding circumstances, it is clear the parties knowingly agreed to excuse one of them from otherwise responsible acts." Arnold v. Shawano County Agriculture Society, 111 Wis. 2d 203, 330 N.W.2d 773, 779 (1983).
Under Wisconsin law, exculpatory agreements are generally valid and enforceable. Arnold, 330 N.W.2d at 777. In the racing context, most jurisdictions routinely recognize and enforce exculpatory clauses. Hammer v. Road America, 614 F. Supp. 467, 470 (D.C. Wis. 1985); see also Trainor, 432 N.W.2d at 631 (collecting cases). Wisconsin law, however, does not favor exculpatory agreements because such agreements shield parties from their negligent and wrongful conduct. Arnold, 330 N.W.2d at 777. Therefore, Wisconsin courts closely scrutinize exculpatory agreements and construe them strictly against the party seeking enforcement. Id.
The first step of the analysis requires the court to examine the facts and the circumstances surrounding the case to determine whether those facts fall within one of the situations making the release contrary to public policy. Dobratz, 468 N.W.2d at 658. Section 195 of the Restatement (Second) of Contracts (1979), an authority relied on with approval by the Wisconsin courts, lists those situations in which exculpatory clauses are void on grounds of public policy:
(1) A term exempting a party from tort liability for harm caused intentionally or recklessly is unenforceable on grounds of public policy. (2) A term exempting a party from tort liability for harm caused negligently is unenforceable on grounds of public policy if (a) the term exempts an employer from liability to an employee for injury in the course of his employment; (b) the term exempts one charged with a duty of public service from liability to one to whom that duty is owed for compensation for breach of that duty, or (c) the other party is similarly a member of a class protected against the class to which the first party belongs. (3) A term exempting a seller of a product from his special tort liability for physical harm to a user or consumer is unenforceable on grounds of public policy unless the term is fairly bargained for and is consistent with the policy underlying that liability.