A dispute over insurance coverage led the Wichita City Council to revoke Moonwalks for Fun's license to operate inflatables in the city.
The council voted 4-3 Tuesday to uphold the city staff's revocation of the license.
Council member Janet Miller said company owner Duane Zogleman found a way to "scam the system" by using another company's liability insurance to cover rides Moonwalks for Fun leased during a gap when it didn't have insurance of its own.
Zogleman countered that nothing in the city ordinance prevented him from doing that.
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Council member Michael O'Donnell, who voted against the revocation, said Moonwalks for Fun had only a paperwork problem and shouldn't be punished by losing its license.
Under city ordinance, Moonwalks for Fun is prohibited from applying for a new city license for two years.
"I have a clear conscience," Zogleman said after the hourlong hearing. "The public was never at risk. It's a real surprise the city wants to drive us out of business."
He said the majority of the company's inflatable business is conducted outside city limits and will not be affected.
Moonwalks for Fun owns equipment operated by Pure Entertainment, a facility Zogleman owns near Kellogg and Tyler. A 5-year-old boy died after a fall from an inflatable ride at Pure Entertainment on March 22, 2010.
Pure Entertainment will remain open, according to Zogleman's son, Jesse, who manages it. He said inflatables were only part of Pure Entertainment's business. The facility also is a venue for parties, banquets and other gatherings.
As a result of the child's death and concerns over equipment inspections, Moonwalks for Fun's license was suspended for 90 days last year. In early October, the company resumed operating inflatables at Pure Entertainment and renting them out around the city.
City officials learned in April that the company's liability insurance was canceled Nov. 3, and it didn't get a new policy with a different company until March 23.
Operating without insurance is a violation of the city code for inflatables, so the city revoked Moonwalks for Fun's license on April 29.
The business appealed and had been allowed to operate pending the appeal.
Zogleman told city staff he wasn't aware that his old insurance company had canceled his policy in November until the city told him on May 2.
On June 7, just before the council was to hold the appeal hearing, Zogleman told Kurt Schroeder, superintendent of the city's central inspection, that he leased inflatables from A Jumping Jungle for use in Wichita during the 4 1/2-month gap when Moonwalks for Fun didn't have insurance. At that time, A Jumping Jungle was licensed by the city and carried the necessary insurance for eight inflatables, Schroeder said.
Zogleman said he had a "gentleman's agreement" with Stephanie Meyer, who operates A Jumping Jungle, and there was no written contract. Schroeder said city staff and the Police Department tried repeatedly to contact Meyer to confirm the information but were unable to reach her.
"There's nothing in the ordinance that says we couldn't do that," Zogleman said of relying on A Jumping Jungle's insurance. "I had no problem of getting hold of (Meyer). If the city needed to get some documentation, they should get it from (A Jumping Jungle).
"I don't think I need to be responsible to do their work for them."
"Really?" Miller responded.
All of the inflatables operated by Moonwalks for Fun, whether at Pure Entertainment or rented to customers in Wichita for such things as parties, came from A Jumping Jungle, Zogleman said.
But after checking through a stack of invoices at Pure Entertainment, Schroeder said his staff found that Moonwalks for Fun rented one of its inflatables to Riverlawn Christian Church in Wichita on March 22 — the day before Moonwalks for Fun obtained liability insurance with a new company.
Zogleman disputed that. He said the invoice listed one of Moonwalks for Fun's inflatables, but the equipment used was supplied by A Jumping Jungle. He said the inflatable listed on the invoice was one of a dozen stolen from the company over the last three years, so it couldn't have been used by the church.
It was unclear why the stolen inflatable was listed on the invoice. Zogleman said it was "just an oversight" that the correct inflatable from A Jumping Jungle was not listed.
Council members' reactions
O'Donnell, whose district includes Pure Entertainment, said, "We're going to vote to kick a business out of town that did mess up on paperwork. They admit it. There are plenty of businesses, I'm sure, all across Wichita that occasionally run into issues like this.
"We need to signal that Wichita is open for business, and we're not shutting people out if they don't have their paperwork in order every day of the year."
Miller said calling it a paperwork issue was a misnomer at best.
"That a company operated for four months off someone else's insurance is unacceptable," she said. "It's a shell game."
O'Donnell said Moonwalks for fun was being singled out because of the child's death.
Miller said, "A legitimate company that experienced a tragedy like they had would go to every extreme to make sure every 'I' was dotted and 'T' crossed."
Zogleman said he had no problem with the idea of continuing business while using another company's insured inflatables.
"Moonwalks for Fun only provides safe and secure" entertainment, he said. "We use above industry standards" for safety.
Zogleman, who said his family has been operating inflatables since 1976, said he may consider legal action against the city.