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Guest Column - August 2010

Contracts

Muscling Up an Effective Contract

By David S. Blatteis, Esq. and Andrew D. Linden, Esq.



Court Report - An Update

After publishing the following story in the August Problem-Solver Guide Book that took a closer look at Stelluti v. Casapenn Enterprises LLC, there were some new developments in the case. The authors, David S. Blatteis, Esq., and Andrew D. Linden, Esq., would like to update you as follows:

The Supreme Court of New Jersey recently re-visited Stelluti v. Casapenn Enterprises, LLC to determine whether Powerhouse Gym's exculpatory agreement protected it from liability after a client was injured as a result of an indoor cycling bike malfunction. New Jersey's highest court, after considering whether the public interest would be adversely affected, affirmed the Appellate Division's ruling, finding that the club can insulate itself from liability for negligence with a properly drafted agreement. The Court likened a health club to other athletic facilities, such as ski areas and skating rinks, which are entitled to the protection of an exculpatory agreement. The Court further reasoned that gym patrons do assume some risk by engaging in strenuous activities that have the potential to result in injury. Like the Appellate Division's ruling (as discussed in the article), the Supreme Court's decision is favorable to gym owners. It does not, however, grant health clubs a license to abandon regular maintenance practices or permit a health center to act with 'willful blindness.'

If a court finds that you were grossly negligent, you are still on the hook, as no contract can protect you.


F

itness centers certainly need to have the best exercise equipment, classes and instructors in order to attract lifelong customers. But, they also need to make sure they are legally protected if fitness machines break down and cause injury to clients.

Take the decision in a case involving Gina Stelluti v. Casapenn Enterprises, LLC d/b/a Powerhouse Gym, 408 N.J. Super. 435 (App. Div. 2009). The outcome in this lawsuit, which was in favor of the defendant, emphasizes the importance of a well-drafted exculpatory agreement and proper business operations. An exculpatory agreement is a waiver or release within a document that limits or releases a business or individual from liability.

In this case, the plaintiff, Stelluti, visited the defendant, Powerhouse Gym, for the first time, signed the gym's membership agreement and made her way to an exercise room to participate in a Spinning class. When the plaintiff entered the room, she had informed the instructor that she had never taken an indoor cycling class before. The instructor assisted the plaintiff onto the stationary bike and advised the plaintiff to watch her throughout the class.

After beginning in a seated position, the instructor told the class to assume a standing position. As the plaintiff attempted to assume a standing position, the bike's handlebars suddenly detached, causing her to fall forward to the floor while her feet remained strapped into the bike's pedals. As a result, the plaintiff sustained injuries to her neck, back and mouth. The plaintiff sued the defendant fitness center, alleging that the defendant: failed to properly maintain and set up the bike; failed to properly instruct the plaintiff how to use the bike; did not exercise sufficient care; failed to provide proper and safe equipment; failed to provide proper safeguards and warnings; acted in a reckless manner by causing an unsafe condition and failed to provide adequate safeguards and warnings; and failed to adequately train its employees.

The defendant asked the court for judgment in its favor, contending that the exculpatory clause in the plaintiff's membership agreement protected it from liability. The exculpatory clause provided, among other things, that: members exercised at their own risk; members voluntarily participated in the use of the facilities and assumed all risks of injury; the waiver applied to a member's use of the defendant's equipment, the sudden and unforeseen malfunctioning of equipment, the defendant's supervision and instruction, and a member's slipping and falling on the defendant's premises; the member fully read and understood the agreement and waived all liability against the defendant; and the agreement released the defendant from negligence to the fullest extent permitted by law. The plaintiff stated that she had not read the exculpatory agreement before signing it and that the defendant's employees did not tell her she was signing a release.