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2007 Year-End Review: Waiver Law

A review of recent cases sheds light on the ever-changing legal landscape, and the importance of your fitness center's waiver agreement.

The past several years have yielded many changes in fitness facility waiver and release law. Populous states like California and New York often lead the way for changes in other states. Recent cases in these jurisdictions, as well as a surprising change in New Jersey, show that widespread changes are on the horizon across the U.S. Because of this, it is important that your fitness center's waiver agreement provides the most protection possible.

Recent changes in California

California has always been one of the most consistent states when it comes to validating fitness facility waiver and release agreements. Unfortunately, the court may have gone too far in 2002 when it decided Benedek v. PLC Santa Monica LLC.Mr. Benedek wanted to watch a suspended television set during his workout on an elliptical machine, but the television faced away from the elliptical machine. In order to watch the television during his workout, he reached up to rotate the television stand, which led to the television falling off the stand and landing on him.

Benedek filed a lawsuit against the fitness center, claiming it was responsible for his injuries because it negligently failed to secure the television to the suspended stand. The court emphasized, however, that the language of the waiver agreement was broad, and clearly included all injuries sustained by members using the facility, regardless of what they were doing at the time of the injury. The court concluded that any injury incurred inside the facility, regardless of how it occurred, was covered by the waiver.

Last year, the courts decided in Capri v. LA Fitness International LLC that waiver and release agreements are void if the injury was caused by a violation of any code or ordinance. In this case, the injured member slipped near the pool on a drain covered with algae. The court concluded that the accumulation of algae may have been a violation of California Health and Safety Code sections requiring public pools to be maintained in a "sanitary, healthful and safe" manner, and voided the waiver and release agreement.

It was unclear how this decision would impact health club cases, but, within six months, the Capri decision was already changing the legal landscape. A San Francisco case being handled at the time that the Capri decision was announced was affected. In that case, a member was injured when a pool handrail came out of the ground, causing her to lose her balance and fall. Prior to the Capri decision, the club's waiver agreement would have barred this claim. Following the Capri decision, however, the court concluded that the waiver did not bar the lawsuit, and the case eventually settled in the low six-figure range.

The California courts did not stop with Capri. In July of this year, the state Supreme Court ruled in City of Santa Barbara v. Superior Court ("Janeway") that sports-related waiver and release agreements did not bar a lawsuit based on gross negligence. The case involved the drowning death of a 14-year-old developmentally disabled girl. The court concluded that the acts of the employees involved may have surpassed acts of ordinary negligence and, therefore, the waiver did not stop the case from proceeding toward trial.

It remains to be seen how Janeway will affect litigation involving fitness centers, but the ruling will definitely apply to health club waivers. The issue is whether courts are willing to dismiss waivers every time a claim of gross negligence is made in a lawsuit.

Liability and waiver law in New York

The Legislature in New York adopted a statute that voids waiver agreements in the recreational context whenever the participant pays a fee to the facility owner. The stated purpose of the statute is to stop recreational facilities from exempting themselves from liability for negligence. When applied to fitness centers, the statute voids any waiver and release agreement obtained from a member who pays a membership fee. Unless you are operating a free facility, you are exposed to liability in New York.

Recent cases in New York have chipped away at this harsh result, but facilities still face giant hurdles when trying to protect themselves. In 2000, the courts upheld a recreational waiver agreement because the hockey player who was injured paid a fee to the league, not directly to the sports facility. This opened the door for fitness centers to try creative payment terms in an attempt to avoid the statute and reinstitute waiver agreement protection. It has not been determined how successful these creative payment plans will be at avoiding the statute.

In 2002, New York courts provided another possible way to avoid the statute. In Fusco v. Now & Zen Inc., the court concluded that fees could be paid for "instruction" without voiding waiver agreements, but fees for facility "use" were within the statute. Fitness facilities could now protect themselves by instituting waiver agreements for activities of an instructional nature. This new approach has not been tested, but provides another option for facilities looking to limit their liability.

The New York approach is obviously quite different than the California approach. New York started out voiding all waivers, but the courts have slowly opened doors that may allow fitness centers to avoid the harsh results. Conversely, California began as one of the best states when it came to upholding waiver agreements, but its courts have slowly backed away from this stance by rendering decisions that are starting to limit the effectiveness of waiver agreements.

New Jersey's interesting approach

New Jersey is generally a favorable state when it comes to enforcing waiver agreements. However, in 2004, the New Jersey Appellate Court limited the scope of waiver agreements in Pietroluongo v. Regency Diving Center Inc. The Pietroluongo case involved a death during a scuba diving outing. The decedent signed a waiver and release agreement when he signed up for the trip. The trip organizer tried to enforce the agreement when the decedent's heirs filed a wrongful death lawsuit. The court concluded that waiver agreements are only enforceable against the person who signs the agreement, and do not bar actions by heirs, even though wrongful death suits are based on the claims a decedent would have had if he/she survived.

This rule may not dramatically affect fitness centers, because incidents leading to death are rare in this setting. It is still important to note that the case changes the landscape in New Jersey, and requires additional waiver language to protect from this type of scenario. Under this new approach, a waiver agreement could protect a club from lawsuits where a member is severely injured or disabled, but the club will lose the protection as soon as the member dies. It's a result that requires special consideration when drafting waiver and release agreements.

Importance of your waiver agreement

Based on changes in waiver laws across the U.S., it's safe to anticipate that there will be many more alterations to the current rules in the upcoming years. As the issues being addressed in influential states like California and New York continue to result in new court opinions or updated legislation, other states will start to adopt some of these new approaches. It is impossible to know what the upcoming year will bring, but it is likely that the cases discussed above will start to affect waiver agreements in other states sooner rather than later because of the potential impact on the public.

When a change occurs in the rules governing waiver agreements, the ability of a fitness center to protect itself from liability changes too, making it imperative to stay informed about these changes and constantly review waiver agreements to make sure that they provide the most protection possible.

A case in Northern California last year provides an excellent warning about the importance of waiver agreements. The member injured his back when he slipped and fell in a shower - an incident that occurs often in fitness centers. In this instance, the member's wife started the membership, and he never signed the waiver agreement. This lack of a waiver agreement turned a case that should have been dismissed early into one that dragged on for well over a year and resulted in both a six-figure settlement and a six-figure legal bill. The facility's manager described the impact on her fitness center: "The club loses management/staff productivity time when a case like this surfaces. For staff who are passionate about what they do, it hits several emotional buttons. ... Staff who may have just had a periphery involvement will be brought in. Staff morale can be affected. The cost of money and time for litigation takes a toll on staff productivity."

There is no way to guarantee that your facility will not be sued. There is also no way to make sure a lawsuit will end quickly once it is filed. However, having a strongly worded and up-to-date waiver included in your membership packet is your best protection against a lawsuit after it is commenced; it is also the cheapest way to fend off potential lawsuits.

Any attorney considering filing a lawsuit against a fitness facility will ask his or her potential client whether a waiver was signed when the client joined the club. If your member produces a properly worded and executed waiver, many attorneys will decide to reject the case.

A waiver can also be used to educate an attorney who decides to file a lawsuit against your fitness center. Assuming there is a properly drafted and executed waiver, the first priority for an attorney when a health club case lands on his/her desk is to write a detailed letter to the plaintiff's counsel outlining the waiver agreement terms and the case law related to health club waivers. Many times, the attorney will choose to dismiss the action rather than pursue a case that may be barred by a waiver agreement. This approach can mean a legal bill of several hundred dollars versus tens of thousands, but it can only work if there is a valid waiver signed by the injured member.

If an attorney concludes that the case should continue despite the waiver, the document becomes the most important exhibit to a motion asking the court to dismiss the case. A motion based on a waiver agreement can, if granted, end a lawsuit within several months. This is in stark contrast to the several years many civil cases take to conclude if a jury trial is required.

Knowing how a properly drafted waiver agreement can affect a lawsuit, it is astounding that some fitness centers simply do not think that they are important. Many managers think this way because they have been told at one time or another that waivers do not necessarily protect a facility from lawsuits. Although there is no guarantee that a waiver will protect your fitness center, following the rules in your state for waiver agreements provides the only opportunity to contractually protect your facility from a potential lawsuit. The recent decisions in New York and California should be taken into account when preparing these agreements, because they may be influential in other states soon.

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