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Federal Court in Texas upholds clause in release requiring plaintiff to pay defendants costs of defending against plaintiff’s claims.

Fitness contract included a release which included a clause stating the signor would pay the fitness companies defense costs. Court awarded those costs for defending against claims, which were dismissed by the court; Even though the plaintiff was successful in retaining two claims against the defendant.

McClure, et al., v. Life Time Fitness, Inc., 2014 U.S. Dist. LEXIS 167483

State: Texas

Plaintiff: Chase McClure, Misha McClure

Defendant: Life Time Fitness, Inc.

Plaintiff Claims: negligence, gross negligence, common law and statutory premises liability, and negligent misrepresentation claims

Defendant Defenses: Release

Holding: For the Plaintiff and the Defendant

Year: 2014

This is an interesting case, obviously because it is outside the normal outdoor recreation arena and involves a fitness center with a day care. The plaintiff signed up for the defendant fitness center. She arrived one time with her two-year-old son and informed the defendant fitness center employee that it was his first there. She informed the plaintiff that she would place her son in with the younger children.

Later, the plaintiff was told that her son had been injured and that 911 had been called. The facts surrounding the injury are vague, other than the plaintiff arrived to see a defendant day care worker holding ice on the child’s ear. The child later received five stitches in his ear.

There were several issues concerning the service of process on the defendant and eventually a removal to the Federal Court who resolved the issues finding ineffective service against the defendant in the state court claims.

The defendant then moved for summary judgment based on release and its counterclaims against the plaintiff for breach of the Member Usage Agreement.

Analysis: making sense of the law based on these facts.

The court first tackled the release and how whether it was effective against the claims of the plaintiff. Under Texas law, a release must satisfy the Fair Notice requirement.

Fair notice requires (1) that a party seeking to enforce a release provision comply with the express negligence doctrine and (2) that the provision be conspicuous. The express negligence doctrine requires a party releasing potential claims against another party for its negligence to express that intent in conspicuous and unambiguous terms in the four corners of the agreement. Conspicuousness requires the releasing language to be written and formatted so that a reasonable person in the position of the person against whom the release is to operate would notice it.

The plaintiff admitted the release met the fair notice requirements but under Texas law, the release could not stop her gross negligence claims. The court agreed.

Texas cases holding that waivers of negligence claims do not give fair notice of an intent to waive gross negligence claims, and the cases holding that preinjury releases of gross negligence claims are contrary to public policy, this court holds that the Member Usage Agreement Ms. McClure signed did not release Life Time Fitness from liability for her gross negligence claims, including the premise’s liability claim based on the Recreational Use Statute, which requires proof of gross negligence.

The court also found that the release failed to release the defendant from the plaintiff’s premises liability claims based on the Texas Recreational Use statute. Premise’s liability claims are based on ownership of the land; although the release in question seemed to cover the issue? No reasoning was given by the court for this decision.

The release did bar the plaintiff’s claims for “for negligence, negligent misrepresentation, and common law premise’s liability.”

The court next went over the issues surrounding whether a release under Texas law would stop claims of minors. The court found Texas law does not allow a release signed by a parent to stop those claims. “A preinjury release executed by a minor child’s parent is not enforceable to release claims against a commercial enterprise for the minor child’s injuries.”

The next issue was whether there was enough evidence to support any claims of the plaintiff. Here was a case where the plaintiff was never able to determine how the child was injured. Consequently, the plaintiff could not prove or provide any evidence of any negligence claims.

The McClures have not identified any evidence of a misrepresentation Life Time Fitness made to the child on which he did or could have reasonably relied. Summary judgment is granted on the child’s negligent misrepresentation claim.

The defendant then asked for the remaining claims of the child to be dismissed because there was no evidence to support any allegations made by the child to support his claims.

Life Time Fitness also seeks summary judgment on the child’s remaining claims, contending that it breached no duty owed to him and that no condition at the childcare facility posed an un-reasonable risk of harm.

The only evidence to support this claim was the plaintiff stated that any employee of the defendant had told the plaintiff here son had been injured in the play area designated for older children. This was sufficient to support this claim at this time. “Although the record is scant, it is sufficient to withstand summary judgment as to the child’s claims other than for negligent misrepresentation.”

The court then ruled on the counterclaim of the defendant. It seems like the motion was not answered by the plaintiff. The defendant then argued was a failure to deny, and they should be granted a default judgment. However, the court did not come to that same conclusion. The court then looked at the clause in the contract.

The clause in the release was entitled “Life Time’s Fees and Costs.”

This clause stated that if Ms. McClure asserted a negligence claim against Life Time Fitness, she would pay “all reasonable fees (including attorney’s fees), costs, and expenses incurred by Life Time (“Life Time’s Fees and Costs”) to defend (1) the Negligence Claim(s) and (2) all other Claims based on the same facts as the Negligence Claim(s).” Ms. McClure argues that she did not breach the Member Usage Agreement because she asserted claims for gross negligence.

Although the plaintiff was successful in two of her five claims, the court felt that she had breached the release and sued, therefore, the claims that were dismissed were enough to trigger fees and costs clause.

Life Time Fitness is entitled to the damages provided for in the Member Usage Agreement: the fees it reasonably incurred in defending solely against Ms. McClure’s claims for negligence, negligent misrepresentation, and common-law premises liability.

The court was specific in its ruling that the fees and costs to be paid by the plaintiff and awarded to the defendant were only the costs the defendant incurred in defending the three claims that were dismissed by the court.

Summary judgment is granted to Life Time Fitness on Ms. McClure’s claims for negligence, negligent misrepresentation, and common law premises liability to invitees. Summary judgment is denied on Ms. McClure’s claims for gross negligence and for premises liability under the Recreational Use Statute. Summary judgment is granted on the minor child’s negligent misrepresentation claim and otherwise denied. Life Time Fitness’s motion for summary judgment on its counterclaim is granted only for reasonable fees incurred in defending against Ms. McClure’s negligence, negligent misrepresentation, and common law premises liability claims, and is otherwise denied.

So the plaintiff was left with a gross negligence claim and a premises liability claim. Her son’s claim for negligent misrepresentation also survived, but barely.

So Now What?

Do Not Rely on this decision to believe that you can recover attorney fees when defending yourself in court when a release has been signed by the plaintiff. This is only the third time I have seen a case like this and there are 25 times more decisions denying these claims.

Most of these claims are struck down because the language is poor, and the case is similar to this forcing a parent to decide whether they should risk suing on behalf of their injured child. Other than this case, courts have uniformly denied those claims.

The two other cases I have found dealt with a skydiving where the plaintiff’s allegations were at a minimum quite wild and the other the plaintiff was an attorney. In both cases, it seemed the court found enough to hit the plaintiff with fees because the court did not like them.

You do not see any of the rancor or scorn in this case. It is a factual review of the facts, the release and a simple decision. You signed the agreement promising to pay if this happened, therefore, you must pay.

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Author: Outdoor Recreation Insurance, Risk Management and Law

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By Recreation Law           Rec-law@recreation-law.com     James H. Moss

 

 

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