Saddle club looks to future after new lease, insurance requirements

By Willis Patenaude, Times-Register

A dispute over insurance that has dragged on since 2020 and recently discussed across multiple Elkader city council meetings might, for the near future be settled, but the scenario is not without disagreements over the interpretation of leases, Iowa Codes and the nature of insurance costs and how they impact local organizations.

The ordeal is rooted in 2009, when the Whistlin’ Bit Saddle Club (WBSC) entered into a perpetual lease agreement with the city of Elkader to lease the “certain lands near the horse barn and the race track,” which is owned by the city. Within the agreement are pertinent items, including the responsibilities of the WBSC, which was to maintain the fence, gate system and shelter area in “good condition,” and keep the area in “good repair,” otherwise it would be cause for termination.

The more important section has to deal with who would be responsible should something occur at the horse arena, like an accident, injury, or other event that caused harm. Contained in the lease signed in 2009 is what’s known as a “hold harmless,” “a clause in a legal contract that protects one party from being held liable for damages, bodily injury or financial loss caused by another party.” 

The purpose of the hold harmless portion is so the city of Elkader is not held responsible for any loss, costs, damages or expenses resulting from any accident or other occurrences causing or inflicting injury or damage. Basically, if something were to occur on the grounds of the horse arena, WBSC would be held liable under this agreement.

At least, that’s what the WBSC believed, until the city attorney, who works for Lynch Dallas, P.C. in Cedar Rapids, started reviewing the leases. This brought forth the issue of insurance back in 2020 and made it known the WBSC should carry liability insurance. It should be noted that, throughout its entire 76-year history, the WBSC has never had insurance and has, in fact, only ever purchased insurance for one event, something that was apparently unknown to the city. Elkader City Administrator Jennifer Cowsert simply stated, “I always assumed they had it.”

During the initial conversations regarding insurance coverage, the WBSC relied heavily on two factors, first that the lease doesn’t specifically require insurance. Per Iowa Code Chapter 673, which deals with domesticated animal activities and is cited in the original lease, the WBSC was required to post a warning sign which states, “Under Iowa law, a domesticated animal professional is not liable for damages suffered by, an injury to or the death of a participant resulting from the inherent risks of domesticated animal activities, pursuant to Iowa Code chapter 673. You are assuming inherent risks of participating in this domesticated animal activity.”

According to email exchanges provided by current WBSC Vice President Shawnna Larison, this was the basis of the WBSC argument against needing to carry liability insurance. At the time, Cindy Mueller stated,  “the saddle club does not carry liability insurance nor does it need it as per Iowa Code. The club does not own or rent horses/mules. The club does not charge to use the arena.” 

The email went on to explain the warning sign is posted and that is sufficient.

However, the city attorney did not concur with that interpretation of Chapter 673 and, in a statement provided by Larison, the attorney said, while there is agreement that 673 “provides significant protections,” they disagreed on the notion that “673 abrogates the need for the club to carry insurance” and, without insurance, any reference to hold harmless is “effectively meaningless.” 

How the attorney arrived at this interpretation remains unknown, as specific contact information was not provided and Cowsert said in an interview, “I doubt he’ll talk to you.” 

The WBSC was met by a similar response when they asked to speak with him and, according to the group, they were told “no, you can’t do that.” Larison added that the attorney not being local, but from Cedar Rapids, is operating under a “different mindset,” and applying bigger city templates to Elkader.

As Cowsert put it, “if someone makes a claim, you can’t hold them harmless if you don’t have anything to go back on, and what you go back on is insurance.” The hold harmless is “basically worthless,” which puts the “city at risk.” 

In Cowsert’s view of the situation, the lack of insurance also means the WBSC is not “upholding the current lease.”

“They signed it. We trusted that. They knew this was in there,” Cowsert said. “I don’t think it’s open to interpretation. I think it’s just that we’re enforcing it.”

Though the debate got underway in 2020, it finally came to a head during last year’s 75th anniversary event for the WBSC, when the group had to fill out special event forms which became required by the city in 2021. These clearly state that “entities holding special events on city property agree to a hold harmless statement and provide insurance,” as stated by Mayor Josh Pope in response to inquiries by Larison.

According to Larison and WBSC Secretary Tina Nieland, they were  always under the impression the city was responsible if something happened outside a club event and believed the posted warning sign “was enough.” When it became apparent that wouldn’t be the case, there was a general consensus among the “smattering of membership” in attendance at the club’s annual meeting in January that the club already had a lease, so why were they “having to reinvent the wheel?”

The main issue surrounding the insurance requirement, aside from needing to redo a lease members of the WBSC don’t see the need for, is the cost prohibitive nature of insurance. Larison estimated it would cost the club between $800 to $1,000 per year, an amount the club openly admitted it does not make a year in dues or other revenue streams. As a result, they will need to focus on fundraising efforts, donations and reaching out to the community.

The WBSC has spent the last several months “trying to find creative ways not to spend our entire treasury on insurance to an insurance company,” Larison said.

Among those efforts was seeking assistance from the city council, which has been supportive of the WBSC. It was declined because, as Cowsert mentioned, then the city would have to do that for anybody the city leased property to, which is a fiscally untenable situation.

However, council member Deb Schmidt  stated, “Not one other council member was in favor or could see the advantage with offering a portion to be paid by the city, but in turn wanted the lease agreement to be revised/rewritten or given up completely. I wasn’t in favor of them giving up the lease due to the club coming about as part of the history of the beginning of the Pony Hollow trail,” Schmidt said.

The WBSC also attempted to “umbrella” under other insurance policies, notably the city’s, but that idea was also dismissed when the city’s insurance company stated “there is really no way to cover the Whistlin’ Bit Saddle Club’s liability from their events” on the city’s policy. Undeterred, the club reached out to another local organization, hoping to again umbrella under their policy, but were told they were “irresponsible” for not having their own.

Nieland countered this assertion by insisting all that’s happening is organizations are just “making the insurance companies rich.” “Why are you paying for insurance? We pay insurance, and everybody that sets up a little event has to pay their own separate liability policy” rather than figure out a way to bring all the organizations and events under one policy to minimize the cost for everyone, because it would be a shared expense.

In the club’s view, this would make it “more efficient,” but on this issue they have made little headway. Instead, they encountered some resistance, leading Larison to wonder, “Why are we not working together as a community to promote activities in our community?”

Although Nieland maintained, during an interview, that the WBSC “did not want to change” the lease, in the absence of the ability to umbrella under another insurance policy and with the insurance requirement lingering and a lease renewal pending as a result, the WBSC held a board meeting July 2 to determine how it would move forward. Larison acknowledged that “looking for lower cost insurance, while working with the city, the chamber and Clayton County Conservation to look for options, has been all consuming.”

However, during the board meeting, the group reached a decision to fund the insurance for one year. This puts them in the next phase of working with the city to update the lease and look for ways to pay for insurance beyond this year. 

Larison readily admitted the club does “not have a solid plan” for that at the moment and is currently relying on individual and business donations to “offset some of the cost” this year, but much is still under discussion.

As for the lease, the WBSC wants to continue leasing the horse arena, because they see value in an organization that brought over 100 people to the community for last year’s annual ride, as well as the club’s historical attachment to and involvement with the creation of the Pony Hollow Trail. They also don’t want it to be removed or replaced. 

They simply want a place to promote horse related activities and, as such, according to Larison, are seeking a lease of at least three years, which Cowsert “assumed” would be the length but would have to check. The real issue for the WBSC remains the insurance cost, which they are actively trying to solve to ensure the WBSC always has a place, not just in Elkader’s past, but also its future.