Walters v. YMCA, Putting Some Limitations on Stelluti v. Casapenn

By Walter F. Kawalec, III, Esq.*

In 2010, the New Jersey Supreme Court issued its opinion in Stelluti v. Casapenn Enterprises, Inc., 1 A.3d 678 (N.J. 2010), in which the court examined the applicability of an exculpatory (i.e. hold harmless) provision in the context of a private health club membership. A club patron was injured when the handlebars on the spinning bike she was using collapsed. When she applied for membership in the club, the contract had included a broad exculpatory clause that purported to release the club and its employees from “any and all claims or causes of action” and purported to waive any right to bring legal action against the club for personal injury or property damage. The exculpatory provision also specifically stated it would include injuries occurring as a result of “the sudden and unforeseen malfunctioning of any equipment.”

Recognizing that the contract was one of adhesion, the Stelluti court applied the law applicable to determine the enforceability of such contracts and held that there had to be a balance between the common law duties of business owners and the assumption of the risk associated with “physical-exertion-involving discretionary activities,” such as those at a health and fitness club. The court concluded that the exculpatory clause was appropriate to relieve the club of liability for negligence under these circumstances, but not for recklessness or gross negligence.

One of the questions left unanswered in Stelluti concerned how broadly the exculpatory clause could be and still apply under the rationale employed by the Stelluti court. In a recently published decision, Walters v. YMCA, the Appellate Division tested those limits and narrowed the types of claims for which an exculpatory provision would apply in the context of health clubs.

In Walters, the plaintiff was a patron at a Newark YMCA. The plaintiff slipped and fell at the bottom of a set of steps leading to the facility’s swimming pool. The evidence demonstrated that each of the steps contained slip-resistant rubber, except for the bottom step. There, the rubber was cut off due to wear, and it was on that spot that the plaintiff slipped and was injured.

The agreement the plaintiff signed with the YMCA contained a very broad exculpatory provision which stated that the YMCA would not be responsible for any injury “sustained... while on any YMWCA premises or as a result of a YMWCA sponsored [activity].” The question then arose as to whether the broad assent to exculpatory clauses for negligence recognized by the Supreme Court in Stelluti applied to the specific facts in Walters in light of the fact that the patron’s injuries did not occur while using exercise equipment, but as a result of a condition of the property not directly related to its use as a fitness center.

The court first detailed the rationale in Stelluti, highlighting that a key to that decision was the “inherently risky nature” of the physical activity undertaken by Ms. Stelluti at the time she was injured. By contrast, in Walters, the plaintiff was not injured while using the pool or while engaging in any physically strenuous activities. Rather, the injury was one which could have occurred on any business premises, and the YMCA’s nature as a physical-fitness facility was irrelevant to the cause of the injury.

One of the arguments the YMCA made was to point out that the plaintiff was proceeding toward the pool at the time of the accident and the pool constituted an activity sponsored by the YMCA. As such, the YMCA proposed, the provision should have applied. However, the court emphasized that this fact was irrelevant because it did not go to the cause of the accident, which was the slipping on an inadequately protected stair tread, and not the utilization of the pool itself. It was the cause of the accident which, in the Watlers court’s mind, was the key fact.

The court recognized that the YMCA’s exculpatory language was so broad that, if applied literally, it would “eviscerate the common law duty of care owed to its invitees, regardless of the nature of the business activity involved.” That, the Appellate Division found, would be contrary to the public interest. It would relieve the business owner—the party who is most capable of discovering and ameliorating the negative effects of the condition of property—of the responsibility for the injury and place it on either the injured party or on society as a whole. Thus, the court held, the exculpatory provision could not be enforced and Stelluti was limited to injuries caused by or directly connected with the fitness equipment.

The outcomes of Walters and Stelluti cannot be completely harmonized. The policy arguments for imposing a common law duty of care in Walters could have equally applied to Stelluti, with the court’s concerns for the forseeability of injury in inherently risky activities, which was a key to the Stelluti decision, addressed by way of the assumption of the risk doctrine and related legal theories. Indeed, there appears to be at least much reason, from a policy standpoint, to impose a duty of care on the fitness facility to ensure that its exercise equipment is in good repair as there is to ensure its steps are also in good repair.

Nevertheless, as a consequence of Walters, as it pertains to exculpatory clauses in health club membership contracts, the law in New Jersey is two-tiered, depending first on the cause of the alleged accident and second on the extent of the culpability of the facility. First, if the cause of the accident has nothing to do with the physical activities that carry with them the inherent risk of injury but deal, instead, with the type of injury that could occur at any business property, then, under Walters, the exculpatory clause would likely be found to be unenforceable. However, if the matter is directly related to the inherently risky activities, then the provision would only be enforceable as against claims of negligence, and not gross negligence or recklessness.

Thus, in these types of cases, it is important to find out the nature of the injury as early as possible to determine whether an exculpatory clause in the contract would be controlling. An analysis should be done regarding causation and also on the severity of the potential conduct for which the fitness club could be held responsible, as those factors are key to determining whether the exculpatory clause will be enforceable.

*Walt is a shareholder in our Cherry Hill, New Jersey, office. He can be reached at 856.414.6024 or wfkawalec@mdwcg.com.

Defense Digest, Vol. 20, No. 4, December 2014

Defense Digest is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2014 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. This article may not be reprinted without the express written permission of our firm.