Stelluti v. Casapenn Enterprises, LLC PDF

Preview

Summary

Spann Tort Law Case Brief...

Description

Stelluti v. Casapenn Enterprises, LLC New Jersey Supreme Court 1 A.3d 678 (2010)

Rule of Law In New Jersey, a valid health club contract of adhesion with a waiver and release of liability for injuries will be enforced so long as the club’s actions do not rise to the heightened standard of recklessness or intent to harm.

Facts Gina Stelluti (plaintiff) participated in her first spin class on the day she became a member of Powerhouse Gym (Powerhouse) (defendant). When the class instructor told the group to go from a seated cycling position to a standing cycling position, Stelluti’s spin bike handlebars became dislodged and she fell over the bike and sustained injuries to her back and neck and suffered a cracked tooth and bruises. When Stelluti completed the Powerhouse membership application she signed a waiver and release of liability for any injuries she sustained while exercising at the facility. Stelluti filed suit against Powerhouse, its owner and operator, Casapenn Enterprises, LLC, and others. The trial court granted Powerhouse’s motion for summary judgment and Stelluti appealed. The appellate division affirmed and the New Jersey Supreme Court granted certiorari to review.

Issue In New Jersey, will a valid health club contract of adhesion with a waiver and release of liability for injuries be enforced so long as the club’s actions do not rise to the heightened standard of recklessness or intent to harm?

Holding and Reasoning (LaVecchia, J.)

Yes. The Powerhouse membership agreement signed by Stelluti is a contract of adhesion. A contract of adhesion is often presented in a standardized template format on a take-it-or-leave-it basis without any opportunity to negotiate its terms. It is also referred to as an exculpatory agreement. In its opinion affirming summary judgment, the appellate division noted that an exculpatory agreement will be enforced if (1) the contract does not grow out of unequal bargaining power or is otherwise unconscionable; (2) it does not adversely affect the public interest; (3) the exculpated party is not under a legal duty to perform; or (4) it does not involve a public utility or common carrier. First, the agreement must not grow out of unequal bargaining power and must reflect that the party giving up her legal rights did so voluntarily, intelligently, and with full knowledge of the consequences. When signing a waiver of liability, the party is presumed to understand and assent to its terms unless fraud is suspected. Here, the agreement clearly spelled out that Stelluti was undertaking all fitness activities at her own risk and released the facility from any liability as a result of injuries she sustained. Stelluti presented no evidence that she did not read or understand the terms contained in the agreement. Further, Stelluti could have refused to sign the agreement and take her business elsewhere. Thus, it cannot be said that Stelluti had unequal bargaining power. Second, the court must examine whether the exculpatory agreement implicates matters of public interest. This factor is often blended with the third element, a party’s legal duty to perform. For example, exculpatory agreements that attempt to release liability for statutorily imposed duties in the public interest have been held invalid. If the issue is not governed by statute, the court considers common law duties of entities in weighing public interest concerns. In Crawn v. Campo, 136 N.J. 494 (1994), the court held that the standard of care pertaining to a recreational softball game must exceed mere negligence because of the inherent risk of injury that cannot be eliminated through the exercise of reasonable care. The standard articulated by the Crawn court was based on a heightened standard of recklessness or intent to harm. Id. at 503. There, the court recognized “…a commonsense distinction between excessively harmful conduct and the more routine rough-and-tumble of sports that should occur freely on the playing fields.” Id. at 508. The heightened standard was later extended to sports not involving physical contact. Although there is public interest in holding a health club to its general common law duty to maintain its premises in a condition safe from defects that is knows or could discover, it is not required to ensure the complete safety of its patrons who voluntarily assume some risk by engaging in strenuous physical activities that have a potential to result in injuries. To hold otherwise would chill the establishment of health clubs. However, health clubs may not turn a blind eye

to problems that arise with the equipment provided for patrons’ use. Had Powerhouse management or its employees been aware of a piece of defective exercise equipment and failed to remedy the problem it could not exculpate itself from such reckless or gross negligence. Finally, it is clear that Powerhouse is a private entity and not a utility or common carrier. The judgment of the appellate division is affirmed.

Dissent (Albin, J.) The court’s ruling undermines the common-law duty of care that every commercial operator owes to a person invited onto its premises....