Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

NJ Supreme Court Rules Fitness Centers Can’t Disclaim All Personal Injury Liability

Author: James F. McDonough

Date: August 29, 2014

Key Contacts

Back

In a precedential ruling, the Supreme Court of New Jersey recently held that a fitness center could not insulate itself through an exculpatory clause from the ordinary common law duty of care owed by all businesses to its invitees. The case involved a slip and fall inside a New Jersey YMCA.

Fitness Center-001

We also offer the comments of an industry expert, Jean Marie Potter, Chief Executive Officer of NFC Amenity Management in Asbury Park, New Jersey whose firm oversees over 80 health clubs and amenity fitness centers in five states. Her comments are presented in bold italics and preceded by her initials JMP.

The Facts of the Case

James Walters was injured when he slipped and fell, as he walked to the Newark YMCA’s indoor pool. In his negligence lawsuit, he alleged that the tread on the stair was worn, causing him to fall and severely injure his knee. The YMCA sought to dismiss the suit based on an exculpatory, or “hold harmless” provision, in his membership agreement. It stated:

I AGREE THAT THE YMWCA WILL NOT BE RESPONSIBLE FOR ANY PERSONAL INJURIES OR LOSSES SUSTAINED BY ME WHILE ON ANY YMWCA PREMISES OR AS A RESULT OF A YMWCA SPONSORED ACTIVITIES [SIC]. I FURTHER AGREE TO INDEMNIFY AND SAVE HARMLESS THE YMWCA FROM ANY CLAIMS OR DEMANDS ARISING OUT OF ANY SUCH INJURIES OR LOSSES.

The trial court dismissed the suit, relying primarily of Stelluti v. Casapenn Enterprises, in which the New Jersey Supreme Court enforced a similar exculpatory provision. The injury in Stelluti occurred while the plaintiff was riding a spin bike, which the court held was foreseeable as an inherent aspect of the nature of the business activity of health clubs.

In Walters v. YMCA, the issue before the court was slightly different because the plaintiff was injured on the facility’s stairs. On appeal, the New Jersey Supreme Court considered whether an exculpatory clause that insulates a physical fitness club, from liability “for any personal injuries or losses sustained by [a member] while on any [of the club’s] premises” was enforceable when the accident and resulting injuries sustained by the member were not caused by or related to an inherently risky physical fitness activity.

JMP: It is sensible bright-line test put forth by the court. Our insurance carrier does not assume the risk of insuring the health of our patrons while exercising. It will, however, insure the normal risks associated with premises liability.

The Court’s Decision

The Supreme Court of New Jersey ultimately concluded that the broad waiver was unenforceable. As highlighted by the court, the case did not arise from the risks unique to a fitness center, but was rather a “garden variety slip and fall case.” The inherently risky nature of defendant’s activities as a physical fitness club was immaterial to this accident, the court further noted.

In reaching its conclusion, the court relied on long-standing precedent, which holds that an exculpatory agreement “is enforceable only if: (1) it does not adversely affect the public interest; (2) the exculpated party is not under a legal duty to perform; (3) it does not involve a public utility or common carrier; or (4) the contract does not grow out of unequal bargaining power or is otherwise unconscionable.”

JMP: We manage many affinity clubs for associations and hotels in several states. Many condominium associations require that members execute a release to use their facilities or as part of becoming an owner-member. My business requires that I examine the lease to determine to what extent my company is responsible for repairs. Generally, if we are the operator, we are responsible for keeping the premises safe and notifying the facility owner of the need for repairs.

With regard to the first two factors, the court held that the exculpatory clause, “if applied literally, would eviscerate the common law duty of care owed by defendant to its invitees, regardless of the nature of the business activity involved. Such a prospect would be inimical to the public interest because it would transfer the redress of civil wrongs from the responsible tortfeasor to either the innocent injured party or to society at large, in the form of taxpayer-supported institutions.”

As to the fourth factor, the court concluded that the membership agreement must be declared unenforceable as a contract of adhesion. The justices specifically noted that the “defendant seeks to shield itself from all civil liability, based on a one-sided contractual arrangement that offers no countervailing or redeeming societal value.”

JMP: Allocation of responsibility and risk of liability is often difficult because many volunteer boards do not distinguish between an operator, a lessee and an owner. We suggest that the respective carriers allocate the risk via subrogation.

If you have questions about the court’s decision or would like to discuss how your business may be impacted, please contact me, James McDonough, or the Scarinci Hollenbeck Labor and Employment attorney with whom you work. 

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
Tariff Response Options for Small Businesses Facing Financial Distress post image

Tariff Response Options for Small Businesses Facing Financial Distress

The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]

Author: Brian D. Spector

Link to post with title - "Tariff Response Options for Small Businesses Facing Financial Distress"
Common Causes of Partnership Disputes and How to Resolve Them post image

Common Causes of Partnership Disputes and How to Resolve Them

Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]

Author: Christopher D. Warren

Link to post with title - "Common Causes of Partnership Disputes and How to Resolve Them"
President Trump's Termination of Member Gwynne Wilcox post image

President Trump's Termination of Member Gwynne Wilcox

On January 28, 2025, the Trump Administration terminated Gwynne Wilcox from her position as a Member of the National Labor Relations Board (NLRB or the Board). Gwynne Wilcox, a union side lawyer for Levy Ratner, was confirmed to the Board for an original term in 2021 and confirmed again for a successive five-year term expiring […]

Author: Matthew F. Mimnaugh

Link to post with title - "President Trump's Termination of Member Gwynne Wilcox"
How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide post image

How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide

Closing your business can be a difficult and challenging task. For corporations, the process includes formal approval of the dissolution, winding up operations, resolving tax liabilities, and filing all required paperwork. Whether you need to understand how to dissolve a corporation in New York or New Jersey, it’s imperative to take all of the proper […]

Author: Christopher D. Warren

Link to post with title - "How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!