When does a waiver or release adversely affect your premises personal injury or slip-and-fall claim?

In recent years, New Jersey courts have addressed defenses to personal injury premises liability claims based upon the claimant's having signed a release of the business operator before the injury. In a five to two opinion the New Jersey Supreme Court majority articulated circumstances under which a court will enforce the release and thereby protect the business owner, and when the release is not enforceable, entitling the injured claimant to proceed against the business owner with the claim.

In Stelluti v. Casapenn Enterprises, LLC, 203 N.J. 286 (2010), the plaintiff filed a lawsuit against a fitness center and others based upon her claim that she was injured when the adjustable handlebars on a bicycle she was using in a spinning class dislodged and she fell forward while her feet remain strapped to the pedals. Before engaging in the spinning class, Stelluti signed, among other things, a waiver and release form, by which Stelluti purportedly waived claims against the fitness center and released it of liability for all injuries that may occur "as a result of, (a) your use of all amenities and equipment in the facility and your participation in any activity, class, program, personal training or instruction, (b) the sudden and unforeseen malfunctioning of any equipment, (c) our instruction, training, supervision, or dietary recommendations, and (d) your slipping and/or falling while in the club, or on the club premises, including adjacent sidewalks and parking areas."

The trial court granted the defendant's motion for summary judgment dismissing the Stelluti's case. Included among the judge's findings were that the exculpatory agreement was enforceable, the waiver Stelluti had signed was not unconscionable, and that the exculpatory language would be applied to cover claims of both negligence and gross negligence.

Plaintiff Stelluti appealed and the New Jersey Appellate Division affirmed the summary judgment order noting, however, that the exculpatory agreement insulated the fitness center from only ordinary negligence in the use of the exercise equipment at the facility, and that the agreement could not insulate defendant from "extreme conduct such as reckless, willful or wanton, or palpably unreasonable acts or omissions diminishing the safe condition of its equipment."

The New Jersey Supreme Court granted Stelluti's petition for certification finding an issue of general public importance concerning the enforceability of an exculpatory agreement executed in a commercial setting involving membership in an exercise facility. The Supreme Court affirmed the Appellate Division's finding that the agreement was an enforceable contract of adhesion. The court defined a contract of adhesion as one "presented on a take-it-or-leave-it basis, commonly in a standardized printed form, without opportunity for the adhering party to negotiate." The court held that the agreement was not void based on procedural unconscionability.

The New Jersey Supreme Court noted that the "common law imposes a duty of care on business owners to maintain a safe premises for their business invitees." The court wrote that the standard of care encompasses a duty "to guard against any dangerous conditions on the property that the owner either knows about or should have discovered." Thereafter, the court wrote that to balance properly the public policy interests in that case "one must consider the nature of the activity and the inherent risks involved." After recognizing the general common-law duty businesses owe to invitees, the court nevertheless stated that a business "need not ensure the safety of its patrons who voluntarily assume some risk by engaging in strenuous physical activities that have a potential to result in injuries, and thereby found enforceable against the plaintiff the release of the fitness center that the plaintiff had signed. Notably, the Supreme Court expressly did not address the validity of the fitness center's disclaimer of liability for injuries that occur on the club sidewalks or parking lot that are common to any commercial enterprise that has business invitees.

In another health club case four years later, the New Jersey Appellate Division addressed the specific issue the New Jersey Supreme Court had decided not to address in Stelluti. In Walters v. YMCA, 437 N. J. Super. 111 (App. Div. 2014), the Appellate Division addressed whether a fitness center or health club can insulate itself through an exculpatory clause from the ordinary common-law duty of care all businesses owe to their invitees. In Walters, the plaintiff alleged that he was injured when he slipped on steps leading from an indoor pool, maintaining that the stair treads on the stairs incorporated slip-resistant rubber on all stairs except the bottom stair where the rubber evidently was cut off due to wear creating "a non-slip resistant tread surface."

The trial court granted defendant's motion for summary judgment based upon plaintiff's having signed a membership agreement that contained an exculpatory and hold-harmless provision purporting to absolve the defendant "for any personal injuries or losses sustained by" the plaintiff while on the defendant's premises" or as a result of defendant's "sponsored activities." Upon examining the defendant's exculpatory clause, the Appellate Division found that to apply the clause literally "would eviscerate the common-law duty of care owed by defendant to his invitees, regardless of the nature of the business activity involved." In reversing the trial court's dismissal of plaintiff's case on summary judgment and remanding the case back to the trial court, the Appellate Division found that the defendant was seeking "to shield itself from civil liability, based on a one-sided contractual arrangement that offers no countervailing or redeeming societal value. Such a contract must be declared unenforceable as against public policy."

The Appellate Division in Walters specifically pointed out that the ultimate legal conclusion was based upon the facts of the Walters case alone, and stated that it does "not hold here that all business operators are precluded from contractually bargaining away their common-law duty owed to invitees to provide a reasonably safe environment for doing that which is in the scope of the invitation. Every case in which one party seeks to enforce contractually bargained-for exculpatory protection from a certain kind of liability must be examined and decided based on the particular circumstances of the case."

In 2016, two years after Walters, the Appellate Division again addressed the enforceability of an exculpatory clause in an agreement, but this time the defendant was not a health club. In Vitale v. Schering-Plough Corporation, 447 N. J. Super. 98 (App. Div. 2016), the Appellate Division upheld the trial court's denial of the defendant's motion for summary judgment of plaintiff's personal injury lawsuit against a third party.

Plaintiff worked as a security guard for a security services company, which contracted with the defendant. When he began his employment, plaintiff apparently signed the security services' disclaimer by which he purportedly waived and released any rights he may have to make a claim, file a lawsuit, or recover damages from or against a third party with which his employer contracted.

While in the normal course of his job duties on the premises of his employer's commercial client, plaintiff sustained injuries when he fell down a dark flight of stairs. After the trial court denied defendant's motion for summary judgment, a jury heard the case and awarded plaintiff damages for his injuries. Although the Appellate Division remanded the matter for a new trial on liability for other reasons, the Appellate Division affirmed the trial court's denial of the defendant's motion for summary judgment.

The Appellate Division distinguished the case from Stelluti, which involved an invitee's waiving her right to sue for premises liability directly with the business owner. Nevertheless, relying on Stelluti, the Appellate Division in Vitale held that to the extent the plaintiff waived his right to recover for reckless or intentional conduct the disclaimer was invalid against public policy. Disagreeing with decisions by the Supreme Court of Pennsylvania and the District of Columbia Court of Appeals, which enforced the waiver, the New Jersey Appellate Division held that New Jersey's history concerning joint employers, and the policy underpinning New Jersey's workers compensation statute, lead to the conclusion that the waiver, which creates a disincentive for defendant to maintain a safe workplace for contractors working on its premises, is unenforceable in this case.

A common element one can find in all of these cases is that while a business owner may experience difficulty insulating itself through an exculpatory clause from the ordinary common-law duty of care all business owners owe to their invitees, every case in which one party seeks to enforce contractually bargained-for exculpatory protection must be examined and decided based on the particular circumstances of that case.