The New Jersey Appellate Division recently held that an exculpatory clause within a fitness club’s membership agreement does not operate to absolve the club of all liability for personal injury on its premises. The case, Walters v. YMCA, 2014 N.J. Super. LEXIS 117 (App. Div. Aug. 11, 2014), was brought by a member of the defendant fitness club, who was injured when he slipped and fell on a worn out stair tread on his way to the fitness club’s indoor pool. The member sued, seeking to recover for the injuries he sustained as a result of the fall on the basis that the club was negligent in allowing the dangerous condition to exist on its premises. The club, in response, moved for summary judgment, relying on the “hold harmless” agreement found within the club’s membership agreement, which the member had signed as a prerequisite to joining the club. The trial court agreed with the club and granted summary judgment.

On appeal, the Court examined the membership agreement and the hold harmless provisions, finding that, if the hold harmless language applied literally, it would shield the club from virtually all civil liability. Citing precedent on exculpatory agreements, the Court reiterated that such an agreement is only enforceable if “(1) it does not adversely affect the public interest;” and “(2) the exculpated party is not under a legal duty to perform.”

Business owners in New Jersey, as the Court explains, have well-established duties of care to patrons who come upon the premises of their businesses. Thus, allowing the exculpatory clause in question to bar any claims by individuals injured on the club’s premises would eviscerate the common law duties of business owners to invitees. The Court rejected the club’s arguments to the contrary, including arguments that the pool was a “sponsored activity” under the exculpatory agreement and thus injuries occurring around the pool are covered by the agreement. The Court noted instead that the injury suffered by the member was not the result of using the club’s exercise equipment or even the pool, but was the type of injury for which general premises liability might attach. The Court also found that agreement to be a contract of adhesion, as the club required all members to sign it. Characterizing the agreement as a “one-sided contractual arrangement,” the Court found that any such contract which sought to protect the drafter against civil liability was unenforceable as it goes against public policy.

As an aside, the Appellate Division had harsh words for the appellant’s attorney, who failed to provide a complete statement of facts with citation to the appendix, and instead referred the Court generally to documents contained within the appendix. While stopping short of fining appellant’s counsel, which the Court noted it “seriously considered,” the Court chided such conduct as a violation of the rules and a sign of disrespect to the Court and to the profession of law itself. All attorneys practicing before the Appellate Division would be wise to take the Court’s language in this case under advisement.

The attorneys at Lieberman Blecher & Sinkevich P.C. will continue to closely follow developments in civil liability and appellate practice in New Jersey in order to ensure that our clients receive the most accurate and effective legal services possible.