This is a confusing case concerning whether or not a person is an intendent contractor or employee, has the right to sue the employer and whether the insurance company for the employer must provide coverage because of the confusion

This is a long and complicated case because know one understood what was needed and no one read their insurance policy.

Atain Specialty Ins Co v Ne Mountain Guiding LLC D NJ 2020

State: New Jersey, US District Court for the District of New Jersey

Plaintiff: Atain Specialty Insurance Co.

Defendant: Northeast Mountain Guiding, LLC, et al.,

Plaintiff Claims: negligence

Defendant Defenses:

Holding: Mostly for the Plaintiff

Year: 2020

Summary

An employee or independent contractor was hurt, maybe working, and sued his employer over his injuries. The insurance company for the employer, mountain guiding company, denied coverage because he was not an employee and they did not provide coverage for independent contractors.

This case is still a mess, but the important part is make sure you are honest on your insurance applications and make sure you know what you are buying when you purchase a policy.

Facts

Vulpis is the founder and sole member of NMG, a limited liability company in the outdoor adventure and education industry Vulpis has significant training and experience, as well as multiple certifications, in the field in which NMG operates. Enberg provided administrative assistance to NMG, developed a search and rescue training for NMG to provide to clients, and served as a mountaineering guide for NMG. Manchester performed work for NMG as a Lead Backpacking Guide and Assistant Rock Guide.

Donald Pachner is the sole member of Pachner & Associates, LLC and Pachner Risk Management, LLC. Donald Pachner and Pachner & Associates, LLC possess insurance broker licenses under New Jersey law.

Vulpis retained Pachner to obtain general commercial liability insurance for NMG. As part of this process, Pachner and Vulpis worked together to fill out an application (the “Application”) for insurance. The Application required Vulpis to estimate NMG’s gross revenues for the coming year. On Pachner’s advice, Vulpis checked the “No” box when answering the Application’s question concerning whether NMG “hire[s] Concessionaires, Independent Contractors, or Subcontractors.” As part of the Application, Vulpis initialed next to a requirement NMG (1) obtain from all participants an Atain-approved waiver of liability form, and (2) maintain those forms for three years. In response to NMG’s Application, Atain issued an insurance quote (the “Quote”), which Vulpis reviewed with Pachner. Among other things, the Quote contains a summary of several of the terms the Policy would contain

Pachner procured insurance (the “Policy”) from Atain for NMG. The Policy limits coverage to “GUIDED MOUNTAINEERING INCLUDING TOP ROPE CLIMBING & RAPPELLING; GUIDED KAYAK TRIPS; GUIDED SNOWSHOEING; GUIDED HIKING/BACKPACKING INCLUDING CAMPING.” The Policy excludes coverage for injuries suffered “in the course of employment by or service to” NMG.

On November 21, 2015, Manchester suffered an injury (the “Injury”) while using certain equipment (the “Equipment”) to engage in a certain activity (the “Activity”). Much of the dispute in this case centers on the proper characterization of the Activity and the Equipment. The essence of the Activity is that the participant uses the Equipment to move between two points. The evidence conflicts concerning whether the Equipment is a “Tyrolean Traverse” or a “Clifftop Zipline.” Ziplines were derived from Tyrolean Traverses, but the differences are too fine for untrained individuals to differentiate between the two.

On November 21, 2015, three NMG guides—Christy DeMarco, Enberg, and Vulpis—went to Allamuchy State Park to test the Equipment NMG expected to offer in the future for its customers. Vulpis and the other three guides set up the Equipment. Manchester was present at the time, and engaged in the Activity by traveling on the Equipment. While engaged in the Activity, Manchester suffered the Injury.

Following his Injury, Manchester filed a state court negligence action against Vulpis, Enberg, and NMG. NMG made a claim for coverage with Pachner and Atain. When reporting the claim to Atain, Pachner described Manchester as an independent contractor for NMG.

Atain filed this coverage action against its Vulpis, Enberg, and NMG, and also joined Manchester as a defendant. Atain seeks declaratory judgments against Vulpis, Enberg, NMG, and Manchester, authorizing Atain to disclaim coverage Manchester’s Injury. Additionally, Atain seeks a declaratory judgment voiding the Policy under common law rescission principles and the New Jersey Insurance Fraud Prevention Act, N.J. Stat. Ann. § 17:33A-1 et seq.

Vulpis, Enberg, and NMG brought a third-party action against NMG’s insurance broker Pachner, alleging Pachner’s negligence caused any failure of coverage by Atain. Manchester brought a similar action against Pachner.

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

The is the second of two decisions so far in this case, and it is still on going. This decision is based on multiple motions to dismiss, and motions for summary judgment filed by everyone.

I’m not even going to cover every issue involved in this order, just a few to make some points.

Another issue is the language of mountaineering, rock climbing and guiding is not totally understood by the court, so in some cases the decisions are not made for that reason. That can be because the court was not made away of the issues or the attempt to educate the court failed on the part of the parties.

First Issue: The activity giving rise to the injury is not covered.

The first issue is whether the activity giving rise to the injury is one that is covered under the insurance policy. The injured employee/contractor was not on the trip to learn; he just tagged along. He had not paid to attend the training and was not required to be there.

Because the insurance policy is unclear as to how it is interpreting what occurred, and the court is unclear on what relationship employee/contractor had while on the trip, the court determined it could not decide the issues on a motion for summary judgement.

Second Issue: Worker’s comp exclusion

In every general liability policy, there is an exclusion, no coverage for claims that should be insured by worker’s compensation. In this case that exclusion was called Employer’s Liability Exclusion. Employees in all states must be covered by worker’s compensation for any injury they receive while on the job. Since this person was claiming, in some aspects of the case, to be an employee, the general liability insurance company based on this exclusion should not have to pay for the damages.

The court refused to rule on this saying several of the statements made by the injured employee/contractor indicate he was not an employee.

Manchester was a participant acting outside the scope of his NMG employment at the time of his Injury. Manchester testified he had come to participate in the Activity because he “thought it would be fun.” Vulpis testified similarly: Manchester “came just to travel along the Tyrolean traverse. He wanted to try it out.” Manchester testified he never informed NMG he would be attending the Activity and further testified NMG did not know he would be attending. Manchester did not consider himself an employee or representative of Vulpis or Enberg at the time of the Injury.

At the same time, the court found several issues that indicated the injured employee/contractor was an employee at the time of his injury.

Most importantly, Manchester acknowledged he performed work for NMG as a Lead Backpacking Guide and Assistant Rock Guide. Vulpis and Manchester both testified Manchester came to be at Allamuchy State Park on the date of his Injury because Vulpis posted an invitation to a Facebook group whose members consisted only of NMG guides and staff Enberg testified although Manchester was not involved in setting up the Equipment and mostly observed others do so, Manchester did help Enberg “pull tension once, so just pull on a rope for me.” Enberg also testified, “[A]s far as I know, we just there all volunteering and testing the system.”

Until a jury determines the legal classification for the injured plaintiff, what insurance coverage is available cannot be decided.

Issue three: recission of the policy

Recission of an insurance policy is a rarely seen legal argument. It is granted when there is proof of fraud when entering into the contract. When there is recission of a policy, the court places the parties back in the position they were before the policy was issued. The insured gets a full refund, and the insurance company does not have to pay a claim.

“In the field of insurance, rescission has long been recognized as an available and necessary remedy to combat fraudulent behavior by an insured” It is settled that a material factual misrepresentation made in an application for insurance may justify rescission [of the resulting insurance policy] if the insurer relied upon it to determine whether or not to issue the policy” Rescission voids the [insurance policy] ab initio, meaning that it is considered ‘null from the beginning’ and treated as if it does not exist for any purpose.”

Here the insurance company was requesting recission of the policy because of fraudulent misrepresentation.

Rescission of an insurance policy for fraudulent misrepresentation is appropriate if four conditions are satisfied: (1) the applicant must make an “untruthful” representation to the insurer, (2) the representation must be “material to the particular risk assumed by the insurer,” (3) the insurer must “actually and reasonably rel[y] upon [the representation] in the issuance of the policy,” and (4) if the “insurance application . . . calls for subjective information,” then “the insured [must] kn[o]w that the information was false when completing the application.”

Again, the court would not rule on this motion because recission takes more than a mere oversight or honest mistake. It must be based on a specific intentional act or acts to defraud the insurance company. Here the answers placed on the policy were done so with the help of the insurance agent. And the court was not sure the acts of the insured were intentional. The other issue was, did the insurance agent supply the answers or where the answers supplied by the insured.

Fourth Issue: Projected Revenues

Most insurance policies are issued based on the projected revenues of the company. In rare instances, some outdoor recreation policies are issued based on expected user days. User days are used when it is easy to verify the number of user’s days, as in a whitewater rafting company working on river controlled by a federal land management agency which is also tracking user days. User days are the number or days a client is on the river. A half day counts as a full user day.

So, an insurance policy application has a place for the applicant to enter an estimate of the projected revenues for the season or year. Your premium is based on that number. When you sign the application, in most cases, you are also agreeing to be audited to make sure the number you put on the application is what your sales or income is. In this case, those projections were lower than the prior year.

Atain argues the projected amount listed on the Application was substantially lower than NMG’s actual revenue for the year preceding the Application and disproportionately less than the revenue NMG actually received in the Policy year.

The court rejected this argument because the projection was based on several factors that made the insured believe that his income was going to be lower that year.

First, Vulpis was divorcing his spouse, which he believed would impact NMG’s ability to remain in business. Second, Vulpis had hired new guides, and expected revenues would be lower while his new guides gained experience. Third, “a chronic, life-threatening auto-immune disease” hospitalized Vulpis shortly before he filed the Application, and he was “not sure [he] would live through” the year, “much less have any revenues in NMG.” Even taking those factors into account, the revenue Vulpis projected on the Application was approximately equal to NMG’s annual revenue two years prior to the Application, and was slightly lower than the average of the revenue for the preceding three years. Taking these facts in the light most favorable to NMG, a reasonable fact-finder could determine NMG did not knowingly misrepresent its projected income.

Fifth Issue: use of independent contractors

The outfitter specifically stated on the insurance application that he did not use sub-contractors or independent contractors. Then after the accident it came to light that some people working for the outfitter might be independent contractors.

The court did not accept this motion because it was unclear what the people working for the outfitter were. Also, the outfitter had been told by the insurance agent to say no on the application about sub-contractors or independent contractors.

You had two conflicting issues that prevented the appellate court from deciding this issue. The first was further complicated because the court felt the insurance did not understand what an independent contractor was.

Sixth Issue: Knowing Misrepresentation

The insurance company argued that the policy should be rescinded because the outfitter made knowing misrepresentations, about whether or not he was hiring independent contractors or used only employees.

The court through this motion because it felt the outfitter really did not know the difference.

Given the issue’s complexity, the Court is not surprised Vulpis’s testimony suggests he had genuine difficulty distinguishing between employees and independent contractors. Vulpis’s testimony concerning his thinking at the time demonstrates his confusion. For instance, Vulpis described his guides as “1099 employees,” something of a misnomer. When completing the Application, Vulpis discussed how to answer the “independent contractor” question with Donald Pachner, whose less-than-illuminating explanation was to describe the meaning of independent contractor as a “gray area Even when answering interrogatories in this case—presumably with the assistance of counsel—Vulpis initially described his guides as independent contractors, then amended his answer to strike that characterization. The Application does not instruct the applicant on the meaning of “independent contractor,” nor does it suggest which (if any) of the legal tests an applicant should apply—missing an opportunity to dispel Vulpis’s confusion.

The court stated:

The variety of tests creates a “paradoxical truth that even when the same person performs the same acts at the same time in the same place under the same conditions,” the person “may be considered an employee for one purpose and an independent contractor for another.”

The court recognized the issue that whether or not a person working for you is an independent contractor or not is not only confusing and constantly litigated by the courts, not necessarily something a non-lawyer can understand.

Viewed in the light most favorable to non-movant NMG, a reasonable fact-finder could determine Vulpis merely failed to appreciate every nuance of the difference between employees and independent contractors when he wrote on the Application NMG did not use independent contractors or subcontractors. Such a misunderstanding would constitute an “honest mistake,” not a “lie” or a “willful” falsification.

Seventh Issue: Failure to Maintain Signed Liability Waivers

This next issue is a two-factor issue. If the employee/contractor signed a release, he was probably not an employee and was either a contractor or guest. A release was a factor required by the insurance company. If a release was signed it would stop the lawsuit by the injured employee/contractor. A release or liability waiver signed by all participants was a condition of coverage under the policy.

If there was no release signed, then the injured employee/contractor was probably an employee and covered by Worker’s Compensation. Either way, a signed release or no release provided an out for the insurance company.

New Jersey law permits an insurer to escape liability for its obligations under an insurance policy if the insured breaches a condition of coverage, but only if the insurance carrier suffers appreciable prejudice from the breach.

There is a two-factor test under New Jersey law the insurance company must meet to win on a coverage condition argument.

“[F]irst, ‘whether substantial rights have been irretrievably lost’ as a result of the insured’s breach, and second, ‘the likelihood of success of the insurer in defending against the accident victim’s claim’ had there been no breach.”

Since the insurance company wrote the policy, the insurance company has the burden of proving both factors of the test.

The motion for summary judgment was denied because the outfitter said that he misplaced the waiver. An even bigger reason for not granting the motion was:

Second, even if Atain cannot obtain Manchester’s waiver in time to rely on the waiver against Manchester in the underlying state court litigation, the absence of Manchester’s waiver will not necessarily reduce “the likelihood of success of the insurer in defending against the accident victim’s claim.”

The court is probably correct in this statement because the injured guide had signed several releases previously. There was just not one for the day of the accident.

NMG has provided Atain with Manchester’s signed acknowledgment of receipt of NMG’s employee handbook, which contains a waiver form. Moreover, while Vulpis acknowledged he could not locate the forms, Vulpis testified Manchester had previously signed a waiver (1) when Manchester initially became was a customer of NMG prior to serving as a guide, and (2) for the year 2015, when Manchester served as a guide. The only contrary evidence is Manchester did not sign a waiver on the day of the Injury. Atain points to no evidence contradicting Vulpis’s testimony concerning Manchester previously signing a waiver before the day of the Injury. Viewing the facts in the light most favorable to NMG, a genuine issue of material fact exists concerning whether NMG’s loss of Manchester’s waiver will appreciably prejudice Atain’s defense of Manchester’s underlying state court litigation.

At this point, the case is scheduled to proceed to trial.

So Now What?

1.    I’ve said dozens of times, every person on a trip has to be identified as either an employee or a participant. If the person is an employee, they have to be listed on the worker’s compensation insurance. Everyone else, paying customer, friend, independent contractor or your mother-in-law must sign a release.

2.    Independent contractors are a liability mess. Many companies attempt to use independent contractors because they believe it saves them state and federal taxes. It might. And it can be a good way to get a company started for the first several months. However, the issue of independent contractors has more traps than value.

There are no liability savings. As the outfitter or company, you are liable for any incident no matter if the person who caused the issues is an employee or independent contractor. If nothing else, you are liable for hiring an independent contractor who failed to do their job properly.

First contractors, especially in the outdoor industry, don’t have health insurance. So many, if injured, have no way to pay for their medical bills. Consequently, using independent contracts increases your chances of having a lawsuit, just like this one, because an independent contractor needs money to pay his or her medical bills and other bills when they can’t work.

On top of the other issues, proving someone is an independent contractor is very difficult. Many states have adopted the rule that says unless certain requirements are met, such a written contract, an independent contractor is an employee. An independent contractor has the right to show up at the job site at any time they want unless written differently in the contract. They should bring their own tools to work and have the freedom to make decisions. The only control the person hiring the contractor has over the independent contractor is to specify the job, the time frame, and how much they are going to pay for the job.

An even bigger issue for an employer is what is everyone else in the industry doing. If all of your competitors are using employees and not independent contractors, you face an insurmountable hurdle.

As the court stated:

Distinguishing independent contractors from employees is among the most contentiously litigated issues in courts today, arising in a host of different contexts, each with a different standard.

3.    UNDERSTAND your insurance application, do not lie on it. If there are issues or questions, then attach a supplemental letter to the broker or to the policy explaining the decisions or answers on the application.

4.    When you get your policy read it. You must know and understand all conditions of coverage. What must you do to make sure the policy covers you.

You also must know what you bought. Does the policy cover the activities that your company is doing? If in the summer you teach fishing at a pond and once in a while in the winter people ice skate on the same pond, you are more than a fishing guide and you better have coverage for ice skating.

What do you think? Leave a comment.

Who am I

Jim Moss

I’m an attorney specializing in the legal issues of the Outdoor Recreation Industry

I represent Manufactures, Outfitters, Guides, Reps, College & University’s, Camps, Youth Programs, Adventure Programs and Businesses

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Atain Specialty Ins. v. Ne. Mountain Guiding, LLC (D. N.J. 2020)

Atain Specialty Ins. v. Ne. Mountain Guiding, LLC (D. N.J. 2020)

ATAIN SPECIALTY INSURANCE CO. Plaintiff,
v.
NORTHEAST MOUNTAIN GUIDING, LLC, et al., Defendants.

Case No. 3:16-cv-05129-BRM-LHG

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

January 30, 2020

NOT FOR PUBLICATION

OPINION

MARTINOTTI, DISTRICT JUDGE

Before this Court are Motions for Summary Judgment (ECF Nos. 70 & 73) filed by Plaintiff Atain Specialty Insurance Co. (“Atain”) and Third-Party Defendants Donald Pachner, Pachner & Associates, LLC, and Pachner Risk Management (collectively, “Pachner”). Defendant Michael Manchester (“Manchester”) opposes both motions. (ECF No. 80.) Defendants Northeast Mountain Guiding, LLC (“NMG”), Joseph Vulpis (“Vulpis”), and Bryan Enberg (“Enberg”) also oppose both motions. (ECF No. 86.) Pachner supports part and opposes part of Atain’s motion. (ECF No. 81.) Atain opposes part of Pachner’s motion and takes no position as to the remainder. (ECF No. 85.)

Having reviewed the parties’ submissions filed in connection with the motions and having declined to hear oral argument pursuant to Federal Rule of Civil Procedure 78(b), for the reasons set forth below and for good cause having been shown, Atain’s motion is DENIED and Pachner’s motion is GRANTED IN PART and DENIED IN PART.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. Northeast Mountain Guiding and Its Guides

Vulpis is the founder and sole member of NMG, a limited liability company in the outdoor adventure and education industry. (ECF No. 86-14 ¶ 4.) Vulpis has significant training and experience, as well as multiple certifications, in the field in which NMG operates. (ECF No. 86-14 ¶¶ 5-7.) Enberg provided administrative assistance to NMG, developed a search and rescue training for NMG to provide to clients, and served as a mountaineering guide for NMG. (ECF No. 86-15 ¶ 3.) Manchester performed work for NMG as a Lead Backpacking Guide and Assistant Rock Guide. (ECF No. 70-8, at 16:6-20.)

B. Pachner Procures Insurance from Atain for Northeast Mountain Guiding

Donald Pachner is the sole member of Pachner & Associates, LLC and Pachner Risk Management, LLC. (ECF No. 73-3 ¶ 1.) Donald Pachner and Pachner & Associates, LLC possess insurance broker licenses under New Jersey law. (ECF No. 73-31, at 1-2.)

Vulpis retained Pachner to obtain general commercial liability insurance for NMG. (ECF No. 73-3 ¶ 7.) As part of this process, Pachner and Vulpis worked together to fill out an application (the “Application”) for insurance. (ECF No. 73-3 ¶¶ 8-10; ECF No. 73-33, at ATN000331-41.) The Application required Vulpis to estimate NMG’s gross revenues for the coming year. (ECF No. 73-33, at ATN000332.) On Pachner’s advice, Vulpis checked the “No” box when answering the Application’s question concerning whether NMG “hire[s] Concessionaires, Independent Contractors, or Subcontractors.” (ECF No. 73-33, at ATN 000334; ECF No. 73-12, at 221:11-222:11.) As part of the Application, Vulpis initialed next to a requirement NMG (1) obtain from all participants an Atain-approved waiver of liability form, and (2) maintain those forms for three years. (ECF No. 70-17, at ATN000339.) In response to NMG’s Application, Atain issued an insurance quote (the “Quote”), which Vulpis reviewed with Pachner. (ECF No. 72-1, at 233:24-234:23.) Among other things, the Quote contains a summary of several of the terms the Policy would contain. (ECF No. 73-37, at 2.)

Pachner procured insurance (the “Policy”) from Atain for NMG. (ECF No. 73-3 ¶ 12.) The Policy limits coverage to “GUIDED MOUNTAINEERING INCLUDING TOP ROPE CLIMBING & RAPPELLING; GUIDED KAYAK TRIPS; GUIDED SNOWSHOEING; GUIDED HIKING/BACKPACKING INCLUDING CAMPING.” (ECF No. 86-6, at Atain 47.) The Policy excludes coverage for injuries suffered “in the course of employment by or service to” NMG. (ECF No. 70-5, at ATN000402.)

C. Manchester’s Injury

On November 21, 2015, Manchester suffered an injury (the “Injury”) while using certain equipment (the “Equipment”) to engage in a certain activity (the “Activity”). Much of the dispute in this case centers on the proper characterization of the Activity and the Equipment. The essence of the Activity is that the participant uses the Equipment to move between two points. (ECF No. 73-12, at 16:2-7.) The evidence conflicts concerning whether the Equipment is a “Tyrolean Traverse” or a “Clifftop Zipline.” (ECF No. 86-14 ¶¶ 33-36; ECF No. 73-12, at 75:1-10, 186:6-191:4.) Ziplines were derived from Tyrolean Traverses, but the differences are too fine for untrained individuals to differentiate between the two. (ECF No. 73-12, at 58:5-7.)

On November 21, 2015, three NMG guides—Christy DeMarco, Enberg, and Vulpis—went to Allamuchy State Park to test the Equipment NMG expected to offer in the future for its customers. Vulpis and the other three guides set up the Equipment. (ECF No. 86-14 ¶ 46.) Manchester was present at the time, and engaged in the Activity by traveling on the Equipment. (ECF No. 86-14 ¶¶ 46-47.) While engaged in the Activity, Manchester suffered the Injury. (ECF No. 86-14 ¶ 47.)

D. Litigation

Following his Injury, Manchester filed a state court negligence action against Vulpis, Enberg, and NMG. (ECF No. 1 ¶ 12.) NMG made a claim for coverage with Pachner and Atain. (ECF No. 86-14 ¶ 51-52.) When reporting the claim to Atain, Pachner described Manchester as an independent contractor for NMG. (ECF No. 70-21, at 161:11-13.)

Atain filed this coverage action against its Vulpis, Enberg, and NMG, and also joined Manchester as a defendant. (ECF No. 1 ¶ 1-5.) Atain seeks declaratory judgments against Vulpis, Enberg, NMG, and Manchester, authorizing Atain to disclaim coverage Manchester’s Injury. (ECF No. 1 ¶¶ 31-51.) Additionally, Atain seeks a declaratory judgment voiding the Policy under common law rescission principles and the New Jersey Insurance Fraud Prevention Act, N.J. Stat. Ann. § 17:33A-1 et seq. (ECF No. 1 ¶¶ 52-65.)

Vulpis, Enberg, and NMG brought a third-party action against NMG’s insurance broker Pachner, alleging Pachner’s negligence caused any failure of coverage by Atain. (ECF No. 29 ¶¶ 28-34.) Manchester brought a similar action against Pachner. (ECF No. 28, at 3-7.)

II. LEGAL STANDARD

Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Farrell v. Planters Lifesavers Co., 206 F.3d 271, 278 (3d Cir. 2000). A factual dispute is genuine only if there is “a sufficient evidentiary basis on which a reasonable jury could find for the non-moving party,” and it is material only if it has the ability to “affect the outcome of the suit under governing law.” Kaucher v. Cnty. of Bucks, 455 F.3d 418, 423 (3d Cir. 2006); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment. See id. at 248. “In considering a motion for summary judgment, a district court may not make credibility determinations or engage in any weighing of the evidence; instead, the non-moving party’s evidence ‘is to be believed and all justifiable inferences are to be drawn in his favor.'” Marino v. Indus. Crating Co., 358 F.3d 241, 247 (3d Cir. 2004) (quoting Anderson, 477 U.S. at 255)); see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, (1986); Curley v. Klem, 298 F.3d 271, 276-77 (3d Cir. 2002). “Summary judgment may not be granted . . . if there is a disagreement over what inferences can be reasonably drawn from the facts even if the facts are undisputed.” Nathanson v. Med. Coll. of Pa., 926 F.2d 1368, 1380 (3rd Cir. 1991) (citing Gans v. Mundy, 762 F.2d 338, 340 (3d Cir.)); Ideal Dairy Farms, Inc. v. John Labatt, Ltd., 90 F.3d 737, 744 (3d Cir. 1996).

The party moving for summary judgment has the initial burden of showing the basis for its motion. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving party bears the burden of persuasion at trial, summary judgment is appropriate only if the evidence is not susceptible to different interpretations or inferences by the trier of fact. Hunt v. Cromartie, 526 U.S. 541, 553 (1999). On the other hand, if the burden of persuasion at trial would be on the non-moving party, the party moving for summary judgment may satisfy Rule 56’s burden of production by either (1) “submit[ting] affirmative evidence that negates an essential element of the non[-]moving party’s claim” or (2) demonstrating “that the nonmoving party’s evidence is insufficient to establish an essential element of the nonmoving party’s claim.” Celotex, 477 U.S. at 330 (Brennan, J., dissenting). Once the movant adequately supports its motion pursuant to Rule 56(c), the burden shifts to the non-moving party to “go beyond the pleadings and by her own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial.” Id. at 324; see also Matsushita, 475 U.S. at 586; Ridgewood Bd. of Ed. v. Stokley, 172 F.3d 238, 252 (3d Cir. 1999). In deciding the merits of a party’s motion for summary judgment, the court’s role is not to evaluate the evidence and decide the truth of the matter, but to determine whether there is a genuine issue for trial. Anderson, 477 U.S. at 249. Credibility determinations are the province of the factfinder. Big Apple BMW, Inc. v. BMW of N. Am., Inc., 974 F.2d 1358, 1363 (3d Cir. 1992).

There can be “no genuine issue as to any material fact,” however, if a party fails “to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Celotex, 477 U.S. at 322-23. “[A] complete failure of proof concerning an essential element of the non[-]moving party’s case necessarily renders all other facts immaterial.” Id. at 323; Katz v. Aetna Cas. & Sur. Co., 972 F.2d 53, 55 (3d Cir. 1992).

III. DECISION1

A. Coverage for “Guided Mountaineering”

Atain and Pachner both argue Manchester’s Injury is not covered under the Policy because the Policy covers only “guided mountaineering,” and Vulpis and Enberg both testified Manchester’s Injury did not occur during a “guided” activity. (ECF No. 72-1, at 221:4-10; ECF No. 70-7, at 115:19-116:6.) Conflicting evidence prevents the Court from granting summary judgment. First, Vulpis’s testimony was more nuanced than Atain and Pachner suggest. While Vulpis testified he would not consider the Activity to be “guided,” Vulpis did consider the Activity to be “part of guided mountaineering.” (ECF No. 72, at 115:22-116:2.) Second, Vulpis testified Manchester received training and instruction from both Vulpis and Enberg for the Activity immediately prior to Manchester’s Injury. (ECF No. 72, at 85:20-86:12.) A reasonable jury could conclude Vulpis’s and Enberg’s training and instruction “guided” Manchester, who had little previous experience with the Equipment. (ECF No. 72, at 28:7-10.)

The Court is unpersuaded by Atain’s and Pachner’s argument alleging Vulpis’s and Enberg’s testimonies demonstrate the parties’ “intent” the Policy not cover the Activity. “[W]hen interpreting an insurance contract, the basic rule is to determine the intention of the parties . . . .” Simonetti v. Selective Ins. Co., 859 A.2d 694, 698 (N.J. Super. Ct. App. Div. 2004). While the contractual language is the Court’s primary tool, the Court may consider evidence of the parties’ intention beyond the four corners of the contract when, as here, the language of the insurance contract is ambiguous. See, e.g., Welcome v. Just Apts., No. L-9821-01, 2008 WL 2696252, at *3-4 (N.J. App. Div. July 11, 2008).

Vulpis’s and Enberg’s testimonies are two such pieces of evidence, but not the only evidence, of NMG’s intent when agreeing to the Policy. Other evidence suggests NMG did intend the Policy to cover the Activity. For instance, Vulpis testified he considered the Activity to be “part of guided mountaineering.” (ECF No. 72, at 115:22-116:2.) Enberg testified he understood a “guided” activity to be an activity in which there is “a guide who is leading the activity.”2 (ECF No. 70-7, at 115:17-18.) According to Vulpis’s testimony, this is exactly what happened. Vulpis and Enberg lead the Activity, instructing Manchester before Manchester participated. (ECF No. 72, at 85:20-86:12.) Manchester did not have the requisite training to serve as a guide on the Activity. (ECF No. 86-14 ¶ 11.) In light of this conflicting evidence, a genuine issue of material fact exists concerning whether or not the parties intended for the Policy to cover the Activity. Accordingly, the Court cannot grant summary judgment on this ground.

B. Injury “In the Course of Employment . . . or Service”

Atain next argues the Court should grant it summary judgment because the Employer’s Liability Exclusion precludes coverage for Manchester’s Injury because Manchester was acting “in the course of employment by or service to” NMG. (ECF No. 70-5, at ATN000402.) Pachner3 seeks summary judgment against Atain on this claim, arguing the Employer’s Liability Exclusion does not apply. Neither party is entitled to summary judgment concerning the effect of the Employer’s Liability Exclusion because the evidence conflicts concerning whether Manchester was, in fact, acting in the course of his NMG employment.

Several facts weigh in favor of finding Manchester was a participant acting outside the scope of his NMG employment at the time of his Injury. Manchester testified he had come to participate in the Activity because he “thought it would be fun.” (ECF No. 70-8, at 61:25-62:1.) Vulpis testified similarly: Manchester “came just to travel along the Tyrolean traverse. He wanted to try it out.” (ECF No. 72, at 85:13-14.) Manchester testified he never informed NMG he would be attending the Activity and further testified NMG did not know he would be attending. (ECF No. 70-8, at 62:18-20, 68:5-7.) Manchester did not consider himself an employee or representative of Vulpis or Enberg at the time of the Injury. (ECF No. 70-8, at 20:10-19.)

However, other factors weigh in favor of finding Manchester was acting within the scope of his employment or service to NMG. Most importantly, Manchester acknowledged he performed work for NMG as a Lead Backpacking Guide and Assistant Rock Guide. (ECF No. 70-8, at 16:6-20.) Vulpis and Manchester both testified Manchester came to be at Allamuchy State Park on the date of his Injury because Vulpis posted an invitation to a Facebook group whose members consisted only of NMG guides and staff. (ECF No. 72, at 56:11-57:14; ECF No. 70-8, at 162:8-21.) Enberg testified although Manchester was not involved in setting up the Equipment and mostly observed others do so, Manchester did help Enberg “pull tension once, so just pull on a rope for me.” (ECF No. 70-7, at 95:23-96:8.) Enberg also testified, “[A]s far as I know, we just there all volunteering and testing the system.” (ECF No. 70-7, at 96:19-20.)

In short, the conflicting evidence creates a genuine issue of material fact. Accordingly, no party is entitled to summary judgment either for or against Atain’s claim concerning whether the Employer’s Liability Exclusion precludes coverage.

C. Rescission of the Policy

Atain also argues it is entitled to rescind the Policy in light of NMG’s material misrepresentations in the Application. Pachner argues the Court should grant summary judgment against Atain because Atain ratified the Policy despite knowing of the misrepresentations. The Court cannot grant summary judgment either for or against rescission because genuine issues of material fact remain (1) concerning whether NMG knowingly misrepresented any material facts, and (2) about the factual bases for rescission.

“In the field of insurance, rescission has long been recognized as an available and necessary remedy to combat fraudulent behavior by an insured.” Rutgers Cas. Ins. Co. v. LaCroix, 946 A.2d 1027, 1035 (N.J. 2008). “It is settled that a material factual misrepresentation made in an application for insurance may justify rescission [of the resulting insurance policy] if the insurer relied upon it to determine whether or not to issue the policy.” Citizens United Reciprocal Exch. v. Perez, 121 A.2d 374, 378 (N.J. 2015). “Rescission voids the [insurance policy] ab initio, meaning that it is considered ‘null from the beginning’ and treated as if it does not exist for any purpose.” First Am. Title Ins. Co. v. Lawson, 827 A.2d 230, 237 (N.J. 2003).

Rescission of an insurance policy for fraudulent misrepresentation is appropriate if four conditions are satisfied: (1) the applicant must make an “untruthful” representation to the insurer, (2) the representation must be “material to the particular risk assumed by the insurer,” (3) the insurer must “actually and reasonably rel[y] upon [the representation] in the issuance of the policy,” and (4) if the “insurance application . . . calls for subjective information,” then “the insured [must] kn[o]w that the information was false when completing the application.” Id.

Examples of subjective information include when an insurer asks an insured to indicate a belief about the status of his or her health, or when . . . an insurer asks whether an applicant is aware of any circumstances which may result in a claim being made against the firm[.] [A] subjective question will not constitute equitable fraud if the question is directed toward probing the knowledge of the applicant and determining the state of his mind and . . . the answer is a correct statement of the applicant’s knowledge and belief[.]

Id. (citations omitted).

A “mere oversight or honest mistake” will not support rescission. Rutgers, 945 A.2d at 1035 (quoting Longobardi v. Chubb Ins. Co. of N.J., 582 A.2d 1257, 1261 (N.J. 1990)). “The lie must be willful.” Longobardi, 582 A.2d at 1261. The insurer bears the burden of demonstrating the applicant “knew and believed” the information provided on the application was false and “knowingly misrepresented” the information provided to be true, but need not demonstrate the applicant “harbored an intent to defraud.” Mass. Mut. Life Ins. Co. v. Manzo, 584 A.2d 190, 195 (N.J. 1991).

1. Projected Revenues

First, Atain argues this Court should void the Policy because NMG materially misrepresented its projected revenues on its Application. The Court disagrees because the evidence, viewed in the light most favorable to non-movant NMG, precludes the Court from finding NMG knowingly4 misrepresented its projected revenues.5
Atain argues the projected amount listed on the Application was substantially lower than NMG’s actual revenue for the year preceding the Application and disproportionately less than the revenue NMG actually received in the Policy year. The Court declines to find these numerical discrepancies demonstrate a knowing misrepresentation. Vulpis testified several considerations left him doubtful NMG would succeed financially in the coming year when he filled out the Application for NMG. (ECF No. 86-14 ¶ 23.) First, Vulpis was divorcing his spouse, which he believed would impact NMG’s ability to remain in business. (ECF No. 86-14 ¶ 23.) Second, Vulpis had hired new guides, and expected revenues would be lower while his new guides gained experience.6 (ECF No. 86-14 ¶ 23.) Third, “a chronic, life-threatening auto-immune disease” hospitalized Vulpis shortly before he filed the Application, and he was “not sure [he] would live through” the year, “much less have any revenues in NMG.” (ECF No. 86-14 ¶ 23.) Even taking those factors into account, the revenue Vulpis projected on the Application was approximately equal to NMG’s annual revenue two years prior to the Application, and was slightly lower than the average of the revenue for the preceding three years. (ECF No. 86-14 ¶ 23.) Taking these facts in the light most favorable to NMG, a reasonable fact-finder could determine NMG did not knowingly misrepresent its projected income.

Atain also points to Vulpis’s testimony about how he projected NMG’s revenue by merely “guess[ing] what I thought we might do for the season” and answered “no” when asked if he did any math to figure out the projected revenue. (ECF No. 72-1, at 217:3-12.) Atain argues these answers demonstrate Vulpis did not make a good faith revenue projection. The Court disagrees. When read in context, a reasonable fact-finder could determine Vulpis attempted to accurately project NMG’s revenues. Immediately before testifying he “guessed,” Vulpis testified he “guestimated” the revenue figures, and further testified his projection considered revenues “from previous years of business.” (ECF No. 72-1, at 216:23, 217:13-14.) Combined with his more detailed testimony about how Vulpis considered his divorce, new hires, and his medical condition when projecting revenue on the Application, and viewed in the light most favorable to NMG, genuine issues of material fact exists concerning whether Vulpis failed to make a good faith attempt to project NMG’s revenue.

2. Independent Contractors

Atain argues it is entitled to summary judgment because a second, unrelated misrepresentation on the Application—Vulpis’s statement claiming NMG did not use subcontractors or independent contractors—warrants rescission of the Policy. Pachner7 argues the Court should grant summary judgment against Atain on this ground because NMG accurately represented it did not use independent contractors. Pachner also argues summary judgment is appropriate against any claim Pachner negligently (1) advised Vulpis to answer “no” to the question on the Application asking about NMG’s use of subcontractors or independent contractors or (2) misidentified Manchester as an independent contractor when communicating with Atain. The Court rejects all these arguments because the evidence creates genuine issues of material fact concerning whether NMG (1) knowingly misrepresented its use of independent contractors, and (2) used independent contractors at all.8

i. Knowing Misrepresentation

Distinguishing independent contractors from employees is among the most contentiously litigated issues in courts today, arising in a host of different contexts, each with a different standard.9 The variety of tests creates a “paradoxical truth that even when the same person performs the same acts at the same time in the same place under the same conditions,” the person “may be considered an employee for one purpose and an independent contractor for another.” EEOC v. Zippo Mfg. Co., 713 F.2d 32, 35-36 (3d Cir. 1983) (“paradoxical truth”); Hoag v. Brown, 935 A.2d 1218, 1228 (N.J. Super. Ct. App. Div. 2007) (“may be considered”).

Given the issue’s complexity, the Court is not surprised Vulpis’s testimony suggests he had genuine difficulty distinguishing between employees and independent contractors. Vulpis’s testimony concerning his thinking at the time demonstrates his confusion. For instance, Vulpis described his guides as “1099 employees,” something of a misnomer.10 (ECF No. 86-14 ¶ 17.) When completing the Application, Vulpis discussed how to answer the “independent contractor” question with Donald Pachner, whose less-than-illuminating explanation was to describe the meaning of independent contractor as a “gray area.” (ECF No. 72-1, at 221:19-222:17.) Even when answering interrogatories in this case—presumably with the assistance of counsel—Vulpis initially described his guides as independent contractors, then amended his answer to strike that characterization. (ECF No. 72, at 19:7-23:20.) The Application does not instruct the applicant on the meaning of “independent contractor,” nor does it suggest which (if any) of the legal tests an applicant should apply—missing an opportunity to dispel Vulpis’s confusion. (ECF No. 70-17, at ATN00034.)

Viewed in the light most favorable to non-movant NMG, a reasonable fact-finder could determine Vulpis merely failed to appreciate every nuance of the difference between employees and independent contractors when he wrote on the Application NMG did not use independent contractors or subcontractors. Such a misunderstanding would constitute an “honest mistake,” not a “lie” or a “willful” falsification. Rutgers, 945 A.2d at 1035; Longobardi, 582 A.2d at 1261. Drawing all inferences in non-movant NMG’s favor, a genuine issue of material fact remains concerning whether Vulpis knowingly misrepresented NMG’s use of independent contractors.

ii. Independent Contractors vs. Employees

While Atain is not entitled to summary judgment on its claim concerning Vulpis’s knowing misrepresentation of his use of independent contractors, neither is Pachner entitled to summary judgment against Atain on the same issue. Pachner argues Vulpis’s representation was accurate because NMG’s guides were not independent contractors. A host of evidence suggests the opposite. For instance, Vulpis deducted over $10,000 for “cost of contract labor” and “subcontractors” on the 2015 federal income tax form (and corresponding worksheet) covering NMG’s profit and loss. (ECF No. 70-19, at sch. C, line 11.11) Manchester testified NMG classified its guides as “subcontractors” in its accounting software. (ECF No. 70-7, at 54:12-20.) Manchester further testified Vulpis repeatedly used the term “independent contractor” to describe guides. (ECF No. 70-7, at 54:23-55:8.) Viewed in the light most favorable to non-movant Atain, this evidence creates a genuine issue of material fact concerning whether NMG’s guides were in fact independent contractors.

iii. Pachner’s Advice to Vulpis

Pachner also argues summary judgment is appropriate against any claim concerning Pachner’s negligent advice to Vulpis to answer “no” to the question on the Application asking about NMG’s use of subcontractors or independent contractors. However, as Pachner points out, Pachner’s negligence in this instance “is only relevant insofar [as] Atain is seeking to rescind the Policy based on [NMG’s] answer” concerning independent contractors or subcontractors. (ECF No. 73-2, at 19.) Because genuine issues of material fact exist concerning whether Atain may rescind the Policy on the basis of NMG’s use of independent contractors, see part III.C.2.i., supra, the same genuine issues of material fact necessarily exist concerning Pachner’s alleged negligent advice to Vulpis concerning this question. Accordingly, the Court cannot grant summary judgment on this ground.

iv. Pachner’s Misdentification of Manchester as a Contractor

Pachner asks the Court to grant summary judgment on any claim concerning Pachner’s negligent mislabeling of Manchester as an independent contractor when Pachner first reported Manchester’s Injury to Atain. The Court cannot grant summary judgment. As with Pachner’s advice to Vulpis, Pachner’s statement to Atain identifying Manchester as an independent contractor relates only to Atain’s claim for rescission of the Policy for NMG’s misrepresentation of its use of independent contractors. Because genuine issues of material fact exist concerning whether Atain may rescind the Policy on this basis, see part III.C.2.i., supra, the same genuine issues of material fact exist concerning Pachner’s characterization to Atain of Manchester as an independent contractor. Accordingly, the Court cannot grant summary judgment on this ground.

3. Training and Education Relating to “Search and Rescue” Operations

Atain also argues NMG committed a knowing misrepresentation when it failed to disclose its training and education programs concerning search and rescue operations. The Court declines to grant summary judgment on this claim, because Atain did not plead this claim in its complaint.

“Each and every claim for relief that a plaintiff seeks to press must be set forth in the Complaint.” Bravo v. Union Cty., Civ. No. 12-2848, 2013 WL 2285780, at *8 (D.N.J. May 23, 2013). Failure to do so has consequences. One consequence is that this Court may not “grant[] summary judgment on a claim that was never pleaded.” Day v. White, 764 F. App’x 164, 166 (3d Cir. 2019) (quoting Michelson v. Exxon Rsrch. & Eng’g Co., 808 F.2d 1005, 1009 (3d Cir. 1987)). “To the extent the plaintiff discovers new information giving rise to additional claims, the plaintiff must amend the Complaint to assert those claims and properly put the defendant on notice of them.” Bravo, 2013 WL 2285780, at *8; see also Tavarez v. Twp. of Egg Harbor, Civ. No. 09-6119, 2012 WL 13186197, at *4 (D.N.J. Aug. 3, 2012); Durham v. Vekios, Civ. No. 09-5376, 2011 WL 3667560, at *4 (D.N.J. Aug. 22, 2011).

Atain contends it “asserted a cause of action for rescission based upon material misrepresentation” in its complaint, which Atain argues is broad enough to cover any misrepresentation relating to NMG’s training and education programs concerning search and rescue. (ECF No. 93, at 29.) The Court disagrees because Atain’s “Material Misrepresentation” claim—Count Six12—alleges only a material misrepresented concerning NMG’s engagement in “Ropes/Challenge Course Facilitation.” (ECF No. 1 ¶¶ 52-59.) Count Six does not mention search and rescue, much less allege a material misrepresentation relating to NMG’s education and training concerning search and rescue operations.

Atain further argues it did not learn of the misrepresentation concerning search and rescue operations until well into the discovery period of this litigation. This fact does not excuse Atain from seeking to amend its complaint. If Atain learned late in the litigation it had an additional claim of which it was previously unaware, its appropriate course was to seek leave to amend its complaint to add the new claim. See Bravo, 2013 WL 2285780, at *8. Atain did not do so. Because Atain’s complaint does not plead any claim related to search and rescue operations, Atain may not obtain summary judgment on this unpleaded claim. See Day, 764 F. App’x at 166.

However, even if Atain did plead this claim, a genuine issue of material fact precludes summary judgment concerning whether NMG knowingly failed to disclose its education and training programs concerning search and rescue operations. The record contains evidence Vulpis and Enberg both believed these activities were no different than NMG’s other activities NMG had already disclosed on NMG’s initial Application. (ECF No. 86-14 ¶¶ 37-42; ECF No. 86-15 ¶¶ 3-6.) Viewed in the light most favorable to non-movant NMG, this evidence13 is sufficient to create a genuine issue of material fact.

4. Ratification of the Policy

Pachner14 argues the Court should grant summary judgment against Atain on its claim for rescission because Atain has ratified the Policy. The Court disagrees because (1) the Federal Rules of Civil Procedure prohibit this Court from construing the allegations in one claim as an admission against an alternative or inconsistent second claim, and (2) the evidence conflicts concerning whether Atain’s actions constitute ratification of the Policy.

i. Ratification by Lawsuit

First, Pachner argues Atain cannot file a lawsuit demanding both to disclaim coverage or, in the alternative, to rescind the Policy. Doing so, Pachner argues, constitutes ratification of the Policy and bars rescission. See Merchants Indem. Corp. v. Eggleston, 179 A.2d 505, 514 (N.J. 1962). Assuming without deciding New Jersey law treats an action to disclaim coverage as a ratification of the Policy and thus prohibits a claim for rescission, Pachner is still not entitled to summary judgment because “[t]he Federal Rules of Civil Procedure permit parties to file pleadings containing inconsistent factual and legal allegations.” W.V. Realty, Inc. v. N. Ins. Co., 334 F.3d 306, 316 (3d Cir. 2003).

“A party may state as many separate claims or defenses as it has, regardless of consistency.” Fed. R. Civ. P. 8(d)(3). For instance, a plaintiff may simultaneously plead claims for both breach of contract (which requires the existence of a contract) and unjust enrichment (which requires the non-existence of a contract). See Hughes v. TD Bank, N.A., 856 F. Supp. 2d 673, 680 n.4 (D.N.J. 2012); Dewey v. Volkswagen AG, 558 F. Supp. 2d 505, 528-29 (D.N.J. 2008); cf. Showalter v. Brubaker, 283 F. App’x 33, 36 (3d Cir. 2008) (permitting defendants in a civil rights action under 42 U.S.C. § 1983 to simultaneously plead both (1) they are entitled to governmental immunity and (2) their actions were wholly private and therefore not under color of state law).

Importantly, this allowance for inconsistent claims “has been interpreted to mean that a court ‘may not construe [a plaintiff’s] first claim as an admission against another alternative or inconsistent claim.'” Indep. Enters. v. Pitt. Water & Sewer Auth., 103 F.3d 1165, 1175 (3d Cir. 1997) (quoting Henry v. Daytop Village, 42 F.3d 89, 95 (2d Cir. 1994)). For instance, a claim for abuse of process does not implicitly concede the legitimacy of a prosecution so as to invalidate a simultaneous claim for malicious prosecution. See Evans v. City of Newark, Civ. No. 14-120, 2016 WL 2742862, at *5 n.7 (D.N.J. May 10, 2016).

Atain’s claims are subject to this rule. Assuming without deciding a claim to disclaim coverage and a claim to rescind the Policy are inconsistent under New Jersey law, the Federal Rules of Civil Procedure permit Atain to make both claims simultaneously. Accordingly, Atain’s claim for disclaimer of coverage does not constitute a ratification of the Policy.

ii. Ratification by Action

Second, Pachner argues Atain’s actions constitute ratification of the contract. Genuine issues of material fact preclude the issuance of summary judgment on this ground.

“[T]he remedy [of rescission] is discretionary and will not be granted where the claimant has not acted within a reasonable time or where there has been substantial performance.” Farris v. Cty. of Camden, 61 F. Supp. 2d 307, 336 (D.N.J. 1999) (quoting Notch View Assocs. v. Smith, 615 A.2d 676, 680 (N.J. Super. Ct. Law Div. 1992)); see also Rowen Petrol. Props., LLC v. Hollywood Tanning Sys., Inc., Civ. No. 08-4764, 2011 WL 6755838, at *10 (D.N.J. Dec. 23, 2011) (same). “[W]here a party ‘is cognizant of fraud or misrepresentation and fails to promptly rescind the . . . agreement or transaction, and instead engages in conduct which assumes the validity of the [agreement], then the agreement or transaction may be deemed ratified.'” Everest Nat’l Ins. Co. v. Sutton, Civ. No. 07-722, 2008 WL 3833586, at *8 (D.N.J. Aug. 13, 2008) (quoting Notch View, 615 A.2d at 685).

Pachner argues Atain received notice of its potential grounds for rescission on or before November 30, 2015, when Atain received an e-mail with a description of the events leading to Manchester’s Injury and a discussion of how Manchester was an “independent contractor” for NMG. (ECF No. 73-43, at Atain 73-75.) Assuming without deciding this e-mail put Atain on notice of its potential grounds for rescission,15 the evidence of ratification following this date is mixed, precluding summary judgment.

For instance, Atain issued a “Notice of Conditional Renewal” to NMG on January 6, 2016, “to advise that [Atain is] agreeable to renewing this policy subject to” new terms and conditions and a rate increase. (ECF No. 73-45, at 1.) This explicit statement suggests Atain treated the Policy as valid. However, this evidence of ratification is tempered by testimony from Atain’s former director of director of underwriting for recreational programs, Grace Cunningham, who noted Atain issued the conditional renewal “until [Atain] received more information about the claim.” (ECF No. 73-16, at 270:10-11.) Cunningham also testified, “We rescinded this,” after Atain learned more. (ECF No. 73-16, at 270:16-19.)

Other evidence is also ambiguous. Although, Atain appears to have kept the Policy premium16 rather than refund it to NMG, the normal course of rescission litigation appears to allow an insurer to maintain the premium while litigation is pending, and to refund the policy-holder after the litigation is successful. See, e.g., Liebling v. Garden State Indem., 767 A.2d 515, 465 n.1 (N.J. Super. Ct. App. Div. 2001). Additionally, Atain negotiated an explicit agreement with Vulpis, Enberg, and NMG to allow Atain to follow this procedure. (ECF No. 70-13, at ATN000051, ATN000068.) Under these circumstances, the Court cannot say Atain’s retention of the Policy premium necessarily demonstrates Atain ratified the Policy.

The record also contains contrary evidence suggesting Atain did not act to ratify the Policy, but instead acted with diligence concerning the possibility of rescinding the Policy. For example, Atain wrote a letter to NMG on February 23, 2016, in which it sought to reserve its right to rescind the Policy. (ECF No. 73-44, at 2.) Likewise, Atain negotiated and, on August 8, 2016, executed non-waiver agreements with Vulpis, Enberg, and NMG to protect Atain’s right to seek rescission of the Policy. (ECF No. 70-13, at ATN000049-53, ATN000066-70.) And, of course, Atain filed this action on August 23, 2016. (ECF No. 1, at 21.) Pachner points to deficiencies in Atain’s reservation-of-rights letter, but no matter the deficiencies, the letter, non-wavier agreement, and declaratory judgment action are not the acts of a company taking action to ratify the Policy. Cf. Annito v. Trump Marina Hotel Casino, No. L-5622-02, 2005 WL 4344137, at *8 (N.J. Super. Ct. App. Div. July 25, 2006) (“By paying his casino debts when he was sober, plaintiff ratified his prior promises to repay the loans, even if they were made while he was intoxicated and not competent to contract.”).

However, the most important evidence is missing. Pachner’s critical argument is Atain ratified the Policy by failing to act promptly after learning of the potential grounds for rescission as a result of the November 30, 2015 e-mail. (ECF No. 73-43, at Atain 73-75.) Pachner does not point to any evidence—other than the mere passage of time—showing Atain failed to follow-up on the e-mail or to investigate the potential grounds for rescission the e-mail raised. Coupled with the ambiguous or contrary evidence above, a genuine issue of material fact exists concerning whether Atain ratified the Policy. Accordingly, the Court cannot grant summary judgment against Atain on its claim for rescission.

D. Failure to Maintain Signed Liability Waivers

Atain’s final argument is NMG’s failure to comply with a coverage condition—namely, obtaining a signed waiver and release of liability from all participants in NMG’s activities, and maintaining the signed document for three years—relieves Atain from its obligation to cover NMG’s exposure to Manchester’s underlying litigation. The Court rejects this argument because a genuine issue of material fact exists concerning whether the loss of Manchester’s waiver form appreciably prejudices Atain’s defense of Manchester’s underlying state court litigation.

New Jersey law permits an insurer to escape liability for its obligations under an insurance policy if the insured breaches a condition of coverage, but only if the insurance carrier suffers appreciable prejudice from the breach. See, e.g., Gazis v. Miller, 847 A.2d 591, 595 (N.J. Super. Ct. App. Div. 2005). When determining the existence of appreciable prejudice, a court must consider two factors. “[F]irst, ‘whether substantial rights have been irretrievably lost’ as a result of the insured’s breach, and second, ‘the likelihood of success of the insurer in defending against the accident victim’s claim’ had there been no breach.” Hager v. Gonsalves, 942 A.2d 160, 164 (N.J. Super. Ct. App. Div. 2008) (quoting Sagendorf v. Selective Ins. Co. of Am., 679 A.2d 709, 715 (N.J. Super. Ct. App. Div. 1996)); see also Ohaus v. Continental Cas. Ins. Co., 679 A.2d 179, 185 (N.J. Super. Ct. App. Div. 1996).

The insurer bears the burden of demonstrating appreciable prejudice. See, e.g., Kenny v. N.J. Mfrs. Ins. Co., 746 A.2d 57, 59 (N.J. Super. Ct. App. Div. 2000). The existence of appreciable prejudice is generally a question for the finder-of-fact, and generally not appropriate for summary judgment. See, e.g., State Nat’l Ins. Co. v. Cty. of Camden, 10 F. Supp. 3d 568, 582-83 (D.N.J. 2014).

A genuine issue of material fact exists concerning whether the loss of Manchester’s misplaced waiver form will appreciably prejudice Atain. First, the record is not clear whether Manchester’s waiver form—and therefore, Atain’s ability to defend the underlying state court litigation using Manchester’s waiver—has been “irretrievably lost.” Hager, 942 A.2d at 164. Although NMG cannot locate the waiver at present, Atain points to no evidence NMG will be unable to locate the waiver in the future. In fact, NMG indicates it will willing to allow opposing counsel access to its physical files to conduct its own search for Manchester’s missing waiver. (ECF No. 86-2 ¶ 5.) Atain does not indicate it has accepted NMG’s offer.

Second, even if Atain cannot obtain Manchester’s waiver in time to rely on the waiver against Manchester in the underlying state court litigation, the absence of Manchester’s waiver will not necessarily reduce “the likelihood of success of the insurer in defending against the accident victim’s claim.” Hager, 942 A.2d at 164. NMG has provided Atain with Manchester’s signed acknowledgment of receipt (ECF No. 86-4, at 1) of NMG’s employee handbook, which contains a waiver form (ECF No. 86-3, at 22-24). Moreover, while Vulpis acknowledged he could not locate the forms, Vulpis testified Manchester had previously signed a waiver (1) when Manchester initially became was a customer of NMG prior to serving as a guide, and (2) for the year 2015, when Manchester served as a guide. (ECF No. 72, at 55:13-56:3, 87:1-6.) The only contrary evidence is Manchester did not sign a waiver on the day of the Injury. (ECF No. 72, at 99:18-100:4; ECF No. 70-8, at 161:23-162:1.) Atain points to no evidence contradicting Vulpis’s testimony concerning Manchester previously signing a waiver before the day of the Injury. Viewing the facts in the light most favorable to NMG, a genuine issue of material fact exists concerning whether NMG’s loss of Manchester’s waiver will appreciably prejudice Atain’s defense of Manchester’s underlying state court litigation.

E. Pachner’s Insurance Producer Licenses

Pachner argues it is entitled to summary judgment on any negligence claim relating to Pachner’s failure to maintain insurance producer licenses. No party opposes Pachner’s argument. Assuming without deciding Pachner owes a duty to its clients or third parties to maintain appropriate licenses as an insurance producer, the uncontested evidence demonstrates Pachner in fact possessed the requisite licenses at the time he assisted NMG with its search for insurance coverage. (ECF No. 73-31, at 1-2.) Therefore, there is no genuine dispute of material fact concerning Pachner’s licensure, and Pachner is entitled to summary judgment on this claim.

F. Pachner’s Explanation of the Policy to NMG

Pachner argues the Court should grant summary judgment against NMG’s claims relating to Pachner’s failure to explain mountaineering-related terms in the Policy or the Application. The Court declines to grant summary judgment because a genuine issue of material fact remains concerning whether Pachner fulfilled his obligations to NMG as a broker.17

An insurance broker’s obligations are “(1) to procure the insurance; (2) to secure a policy that is neither void nor materially deficient; and (3) to provide the coverage he or she undertook to supply.” President v. Jenkins, 853 A.2d 247, 569 (N.J. 2004). “[A]n insurance broker owes a duty to his principal to exercise diligence in obtaining coverage in the area his principal seeks to be protected.” Satec, Inc. v. Hanover Ins. Grp., 162 A.3d 311, 317 (N.J. Super. Ct. App. Div. 2017) (quoting Werrmann v. Aratusa, Ltd., 630 A.2d 302, 304 (N.J. Super. Ct. App. Div. 1993)). A broker’s failure to inform a client about critical facts related to the client’s pursuit of insurance can constitute a breach of the broker’s duty. See Brill v. Guardian Life Ins. Co. of Am., 666 A.2d 146, 157 (N.J. 1995).

1. Subjective vs. Objective Understanding of Policy Terms

Pachner is not entitled to summary judgment concerning whether Pachner failed to explain certain mountaineering-related terms. The report of NMG’s expert Frank Seigel explains Pachner breached an insurance broker’s duty because Pachner “should have been familiar with how Atain handled and considered ‘mountaineering’ and ‘guided mountaineering’ and whether or not those terms, in Atain’s eyes, included the assembly and use of a Tyrolean Traverse.” (ECF No. 80-4, at 13.) Pachner argues Atain’s subjective understanding of these contested terms is irrelevant because of “the general rule that the terms in an insurance policy should be interpreted in accordance with their plain and commonly-understood meaning,” not the subjective meaning of the insurer. Cypress Point Condo. Ass’n v. Adria Towers, LLC, 143 A.3d 273, 286 (N.J. 2016).

This argument does not entitle Pachner to summary judgment. Pachner is correct that courts must “first consider the plain meaning of the language at issue.” N.J. Transit Corp. v. Underwriters at Lloyd’s, London, ___ A.3d ___, 2019 WL 6109144, at *4 (N.J. Super. Ct. App. Div. Nov. 18, 2019). But the plain language analysis is only one part of the approach to the interpretation of insurance contracts. Courts’ “goal in interpreting [insurance] policies is to ‘discover the intention of the parties[,]’ by considering ‘the contractual terms, the surrounding circumstances, and the purpose of the contract.'” Id. at *5 (quoting Marchak v. Claridge Commons, Inc., 633 A.2d 531 (1993). Atain’s subjective understanding of these terms is relevant to “discover[ing] the intention of the parties.” Id.

2. Vulpis’s Reliance on Pachner’s Information

Pachner also argues none of the Pachner entities breached any duty to inform NMG about relevant Policy terms because Vulpis testified he did not rely on Pachner for information about these terms. Vulpis’s testimony does not entitle Pachner to summary judgment because Vulpis could not have relied on Pachner for information Pachner did not provide, but should have. Cf. Brill, 666 A.2d at 157.

3. Vulpis’s Greater Level of Expertise Compared to Pachner

Pachner further argues Vulpis, as an expert in the mountaineering field, had greater familiarity than Pachner with terms like “mountaineering” and equipment like a “Tyrolean Traverse.” Therefore, Pachner argues, NMG had no need for any explanation from an individual like Pachner with a lesser level of expertise than Vulpis. The Court cannot grant summary judgment on this ground. The fact an insured possesses greater knowledge and expertise in a field than the insured’s broker does not relieve the broker from “exercis[ing] diligence in obtaining coverage in the area his principal seeks to be protected.” Satec, 162 A.3d at 317.

4. Pachner’s and Vulpis’s Awareness of NMG’s Activities

Pachner next points out Vulpis informed Pachner NMG engaged in “mountaineering” activities and requested insurance for those activities (ECF No. 70-17, at ATN000336), but Vulpis never alerted Pachner that NMG engaged in the Activity. Pachner asks this Court for summary judgment because, the argument goes, Pachner could not reasonably have been expected to procure coverage for an Activity of which it had no knowledge. Pachner also argues summary judgment is appropriate because Vulpis was aware the Policy did not cover the Activity because the Activity was not a “mountaineering” activity. The same genuine issue of material fact—namely, the conflicting evidence concerning whether the Activity qualified as a “mountaineering” activity (ECF No. 72-1, at 253:19-24; ECF No. 70-20, at 18:8-13; ECF No. 70-8, at 20:20-21:4)—precludes the entry of summary judgment on both grounds.

G. Pachner’s Failure to Recommend Workers’ Compensation Insurance

Pachner asks the Court to grant summary judgment on NMG’s claim related to Pachner’s failure to procure workers’ compensation insurance, as required by law. The Court cannot grant summary on this basis because genuine issues of material fact exist concerning whether (1) Pachner attempted to procure workers’ compensation insurance for NMG and (2) workers’ compensation insurance would have protected either NMG or Manchester.

An insurance broker’s obligations are “(1) to procure the insurance; (2) to secure a policy that is neither void nor materially deficient; and (3) to provide the coverage he or she undertook to supply.” President v. Jenkins, 853 A.2d 247, 569 (N.J. 2004). “[A]n insurance broker owes a duty to his principal to exercise diligence in obtaining coverage in the area his principal seeks to be protected.” Satec, Inc. v. Hanover Ins. Grp., 162 A.3d 311, 317 (N.J. Super. Ct. App. Div. 2017) (quoting Werrmann v. Aratusa, Ltd., 630 A.2d 302, 304 (N.J. Super. Ct. App. Div. 1993)). When a client retains a broker to procure insurance, the broker must procure legally mandated workers’ compensation insurance. See Schustrin v. Globe Indem. Co. of N.Y., 130 A.2d 897, 898 (N.J. Super. Ct. App. Div. 1957) (noting the jury’s finding that broker was obligated to procure workers’ compensation insurance for client).

Pachner argues a broker owes no duty to recommend additional coverage for a client. This argument does not affect the Court’s analysis. Pachner correctly points out New Jersey law imposes “no duty [on an insurance broker] to advise an insured to consider higher amounts of homeowner’s insurance.” Carter Lincoln-Mercury, Inc., Leasing Div. v. EMAR Grp., 638 A.2d 1288, 1292 (N.J. 1994) (citing Wang v. Allstate Ins. Co., 592 A.2d 527, 532-33 (N.J. 1991)). Assuming without deciding this principle extends to workers’ compensation, the principle still does not apply here. NMG does not claim Pachner failed to advise NMG to consider the option of purchasing higher policy limits. Instead, the case concerns an alleged failure by a broker to obtain workers’ compensation insurance for a client who was legally mandated to obtain such insurance. (ECF No. 80-4, at 13-14.) Were the Court to adopt Pachner’s argument, then NMG would possess a legal obligation to obtain workers’ compensation insurance, see N.J. Stat. Ann. § 34:15-71 (requiring employers to obtain workers’ compensation insurance), but NMG’s insurance broker Pachner would have no legal obligation to procure the insurance for NMG. This is not the law in New Jersey. See Schustrin, 130 A.2d at 898.

The delineation of a broker’s duties does not end the Court’s inquiry, because a plaintiff must show more than the failure to procure workers’ compensation insurance before liability will attach. “To succeed in an action against an insurance broker, the plaintiff must prove that in addition to being negligent, the broker’s negligence was a proximate cause of the loss.” Harbor Commuter Serv., Inc. v. Frenkel & Co., 951 A.2d 198, 207 (N.J. Super. Ct. App. Div. 2008). Put another way, the plaintiff must “establish[] that its loss would not have occurred but for defendants’ negligence, or that defendants’ negligence constituted a substantial contributing factor to the loss.” Id.

Two genuine issues of material fact preclude summary judgment. First, the record contains conflicting evidence concerning whether Pachner in fact attempted to obtain workers’ compensation insurance for NMG. (ECF No. 73-3 ¶¶ 4-5; ECF No. 73-10, at 6; ECF No. 86-14 ¶ 18.) Taking the evidence in the light most favorable to non-movants NMG and Manchester while making all reasonable inferences in their favor, a reasonable jury could find Pachner did not attempt to obtain workers’ compensation insurance for NMG.

The second genuine issue of material fact concerns whether (1) Pachner’s failure to procure workers’ compensation insurance for NMG either contributed to NMG’s and Manchester’s loss or (2) their loss would not have occurred had NMG purchased workers’ compensation insurance. As discussed earlier, genuine issues of material fact remain concerning whether Manchester qualified as an employee or an independent contractor. See part III.B., supra. Given this uncertainty, the record does not conclusively demonstrate whether or not workers’ compensation insurance would have covered Manchester’s Injury. Viewing this uncertainty in the light most favorable to non-movants NMG and Manchester while making all reasonable inferences in their favor, a reasonable jury could find Pachner’s failure to procure workers’ compensation insurance for NMG either contributed to NMG’s and Manchester’s loss, or their loss would not have occurred but for Pachner’s failure. In light of the two genuine issues of material fact, the Court cannot grant summary judgment against NMG’s and Manchester’s claims related to Pachner’s failure to procure workers’ compensation insurance for NMG.

H. Pachner’s Failure to Provide a Copy of the Policy

Pachner requests summary judgment on any claim it negligently failed to provide NMG with a copy of the Policy. The Court cannot grant summary judgment in light of the conflicting evidence.

An insurance broker has a duty to provide its client with any policy it receives from the insurer within 10 days of receipt by the broker. See N.J. Admin Code § 11:17A-4.6. According to Pachner, when “Pachner & Associates received a copy of the Policy, we made it available to NMG through our web portal.” (ECF No. 73-3 ¶ 13.) Vulpis testified that he never received the Policy until after Manchester’s Injury. (ECF No. 72, at 112:16-25.) In light of the conflicting evidence, a genuine issue of material fact precludes summary judgment.

Pachner argues even if Pachner did not provide Vulpis with a copy of the Policy, Pachner’s failure did not proximately cause any of NMG’s damages because Vulpis received a copy of the Quote. (ECF No. 72-1, at 233:21-236:8.) A genuine issue of material fact also precludes summary judgment on this basis. “To succeed in an action against an insurance broker, the plaintiff must prove that in addition to being negligent, the broker’s negligence was a proximate cause of the loss.” Harbor Commuter Serv., Inc. v. Frenkel & Co., 951 A.2d 198, 207 (N.J. Super. Ct. App. Div. 2008). Put another way, the plaintiff must “establish[] that its loss would not have occurred but for defendants’ negligence, or that defendants’ negligence constituted a substantial contributing factor to the loss.” Id.

A genuine issue of material fact exists concerning whether Pachner’s failure to provide the Policy to NMG substantially contributed to NMG’s loss by depriving Vulpis of important Policy details that would have prompted Vulpis to make inquiries about, and adjustments to, NMG’s insurance. The Policy contains substantially more details about coverage than the Quote. For instance, while the Quote merely mentions the insurance “Excludes Injury to Employees, Leased Workers, Volunteers, and Independent Contractors,” the Policy actually defines several of these terms. (ECF No. 73-37, at 2; ECF No. 70-5, at ATN000373-76.) Unlike the Quote, the Policy spells out the exact terms of the exclusion for injury to employees or independent contractors. (ECF No. 70-5, at ATN000383.) Making all reasonable inferences in favor of non-movant NMG, a reasonable jury could find Vulpis would use the more detailed information in the Policy to inquire about his insurance and adjust it so as to explicitly cover incidents like the one in which Manchester suffered an Injury. Accordingly, the Court cannot grant summary judgment.

I. Pachner’s Duty to Manchester

Pachner asks this Court to grant summary judgment against Manchester because New Jersey law precludes Manchester from bringing an action against Pachner until Manchester obtains a judgment against NMG and the judgment is returned unsatisfied.18 The Court disagrees because Manchester is a foreseeable injured third-party to whom Pachner, a broker, owes a duty. See Carter Lincoln-Mercury, Inc., Leasing Div. v. EMAR Grp., 638 A.2d 1288, 1297-98 (N.J. 1994).

“[A]n insurance broker may owe a duty of care not only to the insured who pays the premium and with whom the broker contracts but to other parties found within the zone of harm emanating from the broker’s actions as well.” Id. at 1297. When a broker negligently fails to procure insurance that would cover the injuries of a third-party, the broker owes a duty to the third-party, making the third-party an appropriate plaintiff in a negligence action against the broker. See Impex Ag. Commodities Div. Impex Overseas Corp. v. Parness Trucking Corp., 576 F. Supp. 587, 591 (D.N.J. 1983) (applying New Jersey law). Pachner, as a broker, owes a duty to procure appropriate insurance not just to NMG, but also to Manchester—a foreseeable, injured third-party whose Injury NMG expected the Policy to cover. Because Pachner owes Manchester a duty, Manchester is therefore an appropriate plaintiff in a negligence action. Accordingly, summary judgment against Manchester on this basis is inappropriate. Pachner argues New Jersey is not a direct action state, meaning an injured third party may not bring an action directly against a tortfeasor’s insurance company in lieu of the tortfeasor. See Manukas v. Am. Ins. Co., 237 A.2d 898, 524 (N.J. Super. Ct. App. Div. 1968). But Pachner is not an insurance company against whom Manchester brings an action in lieu of the tortfeasor. Rather, Pachner is the tortfeasor. Manchester brings a negligence action against Pachner for Pachner’s negligent failure to obtain appropriate insurance for NMG that would cover Manchester’s Injury. Manchester does not bring an action against Pachner in the capacity of an insurer. Therefore, Pachner’s “direct action” argument is inapposite.

Pachner further argues New Jersey law imposes a bar against direct actions such as this one until the plaintiff obtains a judgment against the tortfeasor and is unable to execute on the judgment. See N.J. Stat. Ann. § 17:28-2. This argument does not entitle Pachner to summary judgment against Manchester for two reasons. First, as previously explained, Manchester has not brought a direct action against an insurer, because Pachner is the tortfeasor, not the tortfeasor’s insurer. Second, the statute’s language merely imposes a requirement on insurance contracts; it does not limit the circumstances under which a plaintiff may bring a tort action. See id. (“No policy of insurance . . . shall be issued or delivered in this state by any insurer authorized to do business in this state, unless [the policy allows the plaintiff to recover directly against the insurer if the tortfeasor is insolvent.]”). Because Manchester is not bringing an action for breach of an insurance contract, the statute has no application here.

Finally, Pachner argues Manchester cannot bring an action against Pachner until it has obtained a judgment against NMG. See Estate of Atanasoski v. Arcuri Agency, Inc., No. A-2291-17T4, 2019 WL 1986539, at *3-6 (N.J. Super. Ct. App. Div. May 6, 2019). Because an action by Manchester against NMG concerning Manchester’s Injury is pending in state court, the appropriate course for this Court would not be to grant summary judgment against Manchester (which would permanently extinguish Manchester’s right to recover against Pachner), but to await the outcome of the state court case before issuing any final judgment against Pachner in favor of Manchester.

J. Action Against Pachner Risk Management

Pachner argues, and the Court agrees, summary judgment is appropriate against Pachner Risk Management (“PRM”) because PRM had no relationship with Manchester, Enberg, Vulpis, or NMG, nor was PRM involved in procuring insurance for NMG. No party contests this argument, and the evidence supports it. Donald Pachner testified PRM has always been an inactive company and further testified PRM has never had anything to do with NMG. (ECF No. 73-11, at 126:14-127:5.) When asked whether “there was anything you came across that suggested [PRM] owed or breached any duty to [NMG],” NMG’s expert Frank Seigel testified he did not recall any reference to PRM in the file he reviewed. (ECF No. 73-15, at 180:8-23.) Because the undisputed evidence shows PRM had no connection to NMG, Vulpis, or the other parties in this case, the Court will grant summary judgment in favor of PRM.

K. Donald Pachner as Agent of His Disclosed Principal, Pachner & Associates

Pachner argues the Court should grant summary judgment in favor of Donald Pachner because he cannot be liable for the torts of his disclosed principal Pachner & Associates if Donald Pachner was merely serving as the agent of Pachner & Associates. See City of Millville v. Rock, 683 F. Supp. 2d 319, 326-28 (D.N.J. 2010). In light of New Jersey’s “participation theory” of principal-agent tort liability, the court disagrees.

Under New Jersey law, the “long-standing rule [is] that ‘[a]n agent who does an act otherwise a tort is not relieved from liability by the fact that he acted at the command of a principal or on account of the principal.'” Ballinger v. Del. River Port Auth., 800 A.2d 97, 110 (N.J. 2002) (quoting Restatement (Second) of Agency § 343 (1958)). New Jersey law refers to this as the “participation theory” of principal-agent tort liability.

[T]he essence of the participation theory is that a corporate officer can be held personally liable for a tort committed by the corporation when he or she is sufficiently involved in the commission of the tort. A predicate to liability is a finding that the corporation owed a duty of care to the victim, the duty was delegated to the officer and the officer breached the duty of care by his own conduct.

Saltiel v. GSI Consults., Inc., 788 A.2d 268, 272 (N.J. 2002); see also Reliance Ins. Co. v. The Lott Grp., 776-77 (N.J. Super. Ct. App. Div. 2004).

As the sole member of Pachner & Associates who served as the primary individual responsible for dealing with NMG during NMG’s effort to insure its activities, Donald Pachner meets these requirements. (ECF No. 73-3 ¶ 1; ECF No. 86-14 ¶ 16.) Accordingly, the Court may not grant summary judgment on this ground.

IV. CONCLUSION

For the reasons set forth above, Atain’s motion is DENIED and Pachner’s motion is GRANTED IN PART in favor of PRM on all claims and in favor of all Pachner parties on any claims relating to Pachner’s negligent failure to maintain appropriate licensure and DENIED IN PART in all other respects. An appropriate order will follow.

/s/ Brian R. Martinotti
HON. BRIAN R. MARTINOTTI
UNITED STATES DISTRICT JUDGE

Dated: January 30, 2020

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Footnotes:

1. The Court has jurisdiction pursuant to 28 U.S.C. § 1332.

2. Pachner also argues the Activity could not be “guided” as the Policy uses the term unless Vulpis or Enberg met the definition of “guide” in NMG’s Guide Handbook—”specially trained and experienced mountaineers, climbers, instructors, and outdoor professionals for hire.” (ECF No. 73-35, at 7.) The Court rejects this argument—which Pachner raises for the first time in a reply brief—because “arguments raised for first time in [a] reply brief will not be considered.” Washington v. Doran, 717 F. App’x 151, 155 (3d Cir. 2017).

Were the Court to consider Pachner’s argument on its merits, the argument would fail. First, Pachner offers no evidence the parties intended the Guide Handbook’s definition of “guide” to govern the Policy’s coverage for “guided” activities, nor any evidence the parties even considered the Guide Handbook’s definition at the time Atain issued the Policy. Second, even if the Guide Handbook’s definition did govern the Policy’s coverage for “guided” activities, Vulpis and Enberg meet the definition. Both Vulpis and Enberg possess special training, and were available for hire. (ECF No. 86-14 ¶¶ 4-7; ECF No. 86-15 ¶¶ 2-3.) The Guide Handbook’s definition does not require Manchester in fact have hired Vulpis or Enberg to guide Manchester on the day of the incident.

3. Manchester joins Pachner’s arguments. (ECF No. 80, at 19.) NMG, Vulpis, and Enberg also join Pachner’s arguments. (ECF No. 86, at 30.)

4. Because a genuine issue of material fact exists concerning whether NMG knowingly misrepresented its projected revenue, the Court need not decide (1) whether NMG’s projected revenue was material to the particular risk assumed by the Atain, nor (2) whether Atain’s remedy is limited to a retroactive increase in the Policy premium.

5. The Court declines to consider two of Atain’s arguments concerning whether NMG knowingly misrepresented its projected revenues. First, Atain argues—for the first time in its reply brief (ECF No. 93, at 25)—Vulpis improperly projected zero revenue from NMG’s Professional Services Division, which NMG had created shortly before applying for Atain’s insurance. Second, Atain argues—again, for the first time in its reply brief (ECF No. 93, at 25-26)—even if NMG’s revenue figures were reasonable at the time of the Application, NMG’s failure to update the figures as circumstances changed constitutes a knowing misrepresentation. The Court will not consider either argument because an argument raised for the first time in a reply brief is waived. See Haberle v. Borough of Nazareth, 936 F.3d 138, 141 n.3 (3d Cir. 2019).

Were the Court to consider Atain’s arguments on their merits, neither argument would prevail. With regard to revenue from NMG’s newly created Professional Services Division, the Court notes, “[m]ost new businesses fail. Pretty much all studies agree on that.” Thomas J. McIntyre, Note, Discriminatory Opportunism: Why Undertaking Self-Employment to Mitigate Damages Creates Unique Challenges, 45 Suffolk U. L. Rev. 549, 550 n.11 (2012) (quoting Scott A. Shane, The Illusions of Entrepreneurship 98 (2008)). That Vulpis projected no revenue from NMG’s new venture is unsurprising. In conjunction with the other evidence and viewed in the light most favorable to non-movant NMG, a reasonable fact-finder could still determine Vulpis did not knowingly misrepresent NMG’s projected revenue. With regard to NMG’s failure to update its revenue figures as its circumstances changed, the evidence viewed in a light most favorable to NMG does not rule out the possibility NMG’s failure to update its Application was a “mere oversight or honest mistake.” Rutgers, 945 A.2d at 1035 (quoting Longobardi, 582 A.2d at 1261).

6. Atain argues the existence of new hires indicates NMG’s business was growing, and is reason to expect a good faith estimate of NMG’s revenues would have been higher. While Atain’s argument is one permissible inference concerning this piece of evidence, the Court must draw all inferences concerning the new hires in favor of non-movant NMG.

7. Manchester joins Pachner’s arguments. (ECF No. 80, at 19.) NMG, Vulpis, and Enberg also join Pachner’s arguments. (ECF No. 86, at 30.)

8. Because these two genuine issues of material fact preclude summary judgment on these issues for both Atain and Pachner, the Court need not decide (1) whether principles of preclusion or estoppel require the Court to treat the guides as independent contractors for purposes of this litigation, nor (2) whether NMG’s representation concerning subcontractors and independent contractors was material to the particular risk assumed by Atain.

9. In the copyright context, a work is “made for hire” if the work’s author or creator is an “employee” under a non-exhaustive thirteen-factor test derived from the common law of agency. See Cmty. for Creative Non-Violence v. Reid (“CCNV”), 490 U.S. 730, 751 (1989). The Fair Labor Standards Act regulates the wages of individuals who meet a six-factor, totality-of-the-circumstances test focusing on the “economic reality” of the employer-employee relationship. See Verma v. 3001 Castor, Inc., 937 F.3d 221, 229-30 (3d Cir. 2019). The Americans with Disabilities Act covers businesses with a minimum number of “employees” as determined by a different six-factor, totality-of-the-circumstances test, focusing on the employer’s right to control the employee. See Clackamas Gastroenterology Assocs. v. Wells, 538 U.S. 440, 449-50 (2003). New Jersey’s Conscientious Employee Protection Act protects a person from retaliation against whistle-blowing if the person is an “employee” under the totality of the circumstances after analyzing a three-consideration, twelve-factor test analyzing both the employer’s right to control the employee and the economic realities of the employer-employee relationship. See D’Annunzio v. Prudential Ins. Co. of Am., 927 A.2d 113, 120-22 (N.J. 2007). When distinguishing employees from independent contractors in the context of federal employment taxes, the U.S. Tax Court, the Internal Revenue Service, and the Court of Federal Claims each use a different test. The Tax Court considers seven factors while the IRS considers twenty, and the Court of Federal Claims adopts the Reid test from copyright law. See Ewens & Miller, Inc. v. Comm’r, 117 T.C. 263, 270 (2001); Consol. Flooring Servs. v. United States, 38 Fed. Cl. 450, 455 (1997) (quoting CCNV, 490 U.S. at 751-52); Rev. Rul. 87-41, 1987-1 C.B. 296, 298-299). This is not an exhaustive list.

10. A business uses IRS Form W-2 to report payments to an employee, but uses IRS Form 1099 to report payments to a non-employee independent contractor. See Hopkins v. Duckett, Civ. No. 02-5589, 2006 WL 3373784, at *4 & n.2 (D.N.J. Nov. 21, 2006).

11. The Court reminds the parties of their obligation to redact social security numbers and tax identification numbers from filings, including copies of tax returns attached as exhibits. See Fed. R. Civ. P. 5.2(a). The parties shall coordinate with the assigned magistrate judge to bring all non-compliant filings into compliance with this rule.

12. Atain does not contend Count Seven, a claim under the New Jersey Insurance Fraud Prevention Act, N.J. Stat. Ann. § 17:33A-1 et seq., covers the claim for misrepresentation concerning the training and education programs for search and rescue operations. (ECF No. 93, at 28-33.)

13. The Court rejects Atain’s argument asking the Court to disregard Vulpis’s and Enberg’s declarations as “conclusory, self-serving affidavits . . . insufficient to withstand a motion for summary judgment.” Gonzalez v. Sec’y of Dep’t of Homeland Sec., 678 F.3d 254, 263 (3d Cir. 2012) (quoting Kirleis v. Dickie, McCamey & Chilcote, P.C., 560 F.3d 156, 161 (3d Cir. 2009)). Vulpis’s and Enberg’s declarations “detail[] the specific circumstances” surrounding NMG’s education and training programs concerning search and rescue operations, rendering the declarations far from conclusory. Kirleis, 560 F.3d at 161. Notwithstanding any arguable inconsistencies with his deposition testimony, Enberg’s declaration is not so unbelievable that “the [C]ourt, based on all of the evidence, can say with confidence that a rational trier of fact could not credit” Enberg’s declaration. United States v. 717 S. Woodward Street, 2 F.3d 529, 534 (3d Cir. 1993). Both Vulpis’s and Enberg’s declarations (like all declarations) are self-serving, but this is no reason to disregard them entirely. See Paladino v. Newsome, 885 F.3d 203, 209 (3d Cir. 2018). Accordingly, the Court must consider Vulpis’s and Enberg’s testimony, and their testimony creates a genuine issue of material fact precluding summary judgment.

14. Manchester joins Pachner’s arguments. (ECF No. 80, at 19.) NMG, Vulpis, and Enberg also join Pachner’s arguments. (ECF No. 86, at 30.)

15. Atain argues the relevant date is January 5, 2016, when NMG received a letter from Manchester’s attorneys providing a notice of claim. (ECF No. 85-5, at 2.)

16. The record is ambiguous on this point. When asked whether, after Manchester’s Injury, Atain retained NMG’s Policy premiums or returned them to NMG, Atain’s representative testified, “I don’t believe so. I don’t know for sure. I can’t verify.” (ECF No. 73-18, at 149:14-15.) For the purpose of Pachner’s motion, the Court assumes Atain did not refund the Policy premium to NMG in light of Atain’s argument claiming Atain may retain the premium without forfeiting Atain’s right to rescission. (ECF No. 85, at 13-14.)

17. As part of its argument, Pachner contends the testimony of Grace Cunningham is irrelevant because Cunningham was not designated as Atain’s organizational representative under Federal Rule of Civil Procedure 30(b)(6) and because she did not work at Atain at the time of her deposition. Accordingly, Pachner argues, the Court should disregard not only Cunningham’s testimony but other evidence relying on Cunningham’s testimony. The Court disagrees. Cunningham’s testimony is relevant to this case and the Court will consider it.

A person need not be an organizational representative under Rule 30(b)(6) nor still employed with a defendant to provide relevant testimony. Cf. Lacey v. Cessna Aircraft Co., 932 F.3d 170, 183 (3d Cir. 1991) (observing “many potentially relevant witnesses may no longer be employed by” a defendant company). Testimony is relevant to the extent “(a) it has any tendency to make a fact more or less probable than it would be without [her testimony]; and (b) the fact is of consequence in determining [this] action.” Fed. R. Evid. 401.

Pachner does not argue any particular item of Cunningham’s testimony fails to meet this definition. Instead, Pachner argues only the Court should wholesale disregard Cunningham’s entire testimony because none of it can be relevant if Atain no longer employs Cunningham. The Court cannot agree. As the director of underwriting for recreational programs at Atain when NMG contracted with Atain under the Policy, Cunningham was personally involved with Atain’s issuance of the Policy to NMG. (ECF No. 70-20, at 12:22-13:6, 32:19-23.) Given her position and personal involvement, the Court cannot say her testimony is entirely irrelevant. Accordingly, the Court considers both Cunningham’s testimony and other evidence relying on her testimony.

18. Pachner characterizes this argument by saying Manchester lacks “standing” to sue Pachner. (ECF No. 73-2, at 25-26; ECF No. 92, at 4-5.) The Court declines to adopt this phrasing, to avoid confusion with the doctrine of justiciability under Article III of the Constitution. See, e.g., Gill v. Whitford, 138 S. Ct. 1916, 1929 (2018). Pachner’s underlying argument concerns whether Manchester is an appropriate plaintiff—which, in a negligence action like this, is best analyzed in terms of whether Pachner owes a duty to Manchester.

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A Parent cannot sign away a minor’s right to sue in New Jersey, however, a parent can agree to arbitrate the minor’s claims.

Another trampoline park case where the plaintiffs are required to arbitrate their claim even though the release which included the arbitration clause was not enforceable in New Jersey.

Johnson v. Sky Zone Indoor Trampoline Park in Springfield (N.J. Super. App. Div. 2021)

State: New Jersey

Plaintiff: David Johnson, an infant by his guardian ad litem, Shalonda Johnson, and Shalonda Johnson, individually

Defendant: Sky Zone Indoor Trampoline Park in Springfield, Sky Zone, LLC, Sky Zone Franchise Group, LLC, and Go Ahead and Jump 4, LLC

Plaintiff Claims: negligence

Defendant Defenses: release required arbitration of the claims

Holding: For the defendants, claims must be arbitrated

Year: 2021

Summary

The New Jersey Supreme Court held Hojnowski v. Vans Skate Park, 187 N.J. 323 (2006), that a parent could not sign away a minor’s right to sue. See However, in Hojnowski the court stated a parent could agree to arbitrate a minor’s claims. This decision of the injuries received at a trampoline park held the same decision. When signing the release, the mother agreed to arbitration of any claims.

Facts

On July 14, 2018, ten-year-old David and his mother visited the Park. Before they were permitted entry, however, a Park employee apprised Johnson she was required to sign a “Participation Agreement, Release and Assumption of Risk” (the Agreement) on an electronic tablet. On August 15, 2018, plaintiffs again visited the Park and, while jumping on a trampoline, David seriously injured his leg. The appellate record did not include evidence of whether Johnson executed a second waiver.

The Agreement is presented to the patrons at a kiosk in the form of an electronic document. The patrons are expected to read it and acknowledge their consent to be bound by the terms contained therein by placing an electronic “checkmark” and entering certain personally identifying information. Defendants argue David’s mother placed an electronic checkmark where indicated, and thus acknowledged she understood and agreed “to arbitrate any dispute as set forth in this section” and waived “[her] right, and the right(s) of [her] minor child(ren) . . . to maintain a lawsuit against [defendants] . . . for any and all claims covered by this Agreement.”

The mother filed a lawsuit for herself and her son. The defendant argued the arbitration clause in the release should apply. That would remove the litigation from the state court system and have a neutral arbitrator decide the case. Normally arbitrators do not hand out damages to the extend a jury would. The court agreed, leading to this appeal.

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

The argument was quite simple. The plaintiff argued that since the New Jersey Supreme Court had decided that a parent could not sign away a minor’s right to sue, that the release, including the arbitration clause should be thrown out.

The plaintiff first argued there was no real notice because the plaintiff had checked a box on the electronic form and that was not enough notice required to alert the plaintiff that she was going to have to arbitrate any claim. The defense countered that the plaintiff has completed the form giving the defendant a lot of contact information.

In response, defense counsel argued Johnson did a great deal more than merely place a checkmark on a section of an electronic document. “We don’t just have the electronic signatures. We have her name, her address, her phone number, her date of birth . . . it’s not merely that you have [Janay’s] certification.

The plaintiff then argued the arbitration clause was ambiguous and unenforceable as a matter of law.

As a matter of public policy, our Supreme Court has upheld arbitration as a “favored means of dispute resolution.” Hojnowski, 187 N.J. at 342. The Court has consistently endorsed a “strong preference to enforce arbitration agreements, both at the state and federal level.” In determining whether a valid agreement to arbitrate exists, we will apply “state contract-law principles.” Hojnowski, 187 N.J. at 342. Guided by these principles, “[a]n arbitration agreement is valid only if the parties intended to arbitrate because parties are not required ‘to arbitrate when they have not agreed to do so.

The statement that the arbitration clause is only valid if the parties intended to arbitrate is good for arbitration clauses and contracts. The court also found the language requiring arbitration was not ambiguous or unenforceable.

Mutuality of assent is the hallmark of an enforceable contract. Thus, the initial inquiry is whether the parties actually and knowingly agreed to arbitrate their dispute. To reflect mutual assent to arbitrate, the terms of an arbitration provision must be “sufficiently clear to place a consumer on notice that he or she is waiving a constitutional or statutory right . . . .” “No particular form of words is necessary to accomplish a clear and unambiguous waiver of rights.” If, “at least in some general and sufficiently broad way,” the language of the clause conveys arbitration is a waiver of the right to bring suit in a judicial forum, the clause will be enforced.

The court went further to state:

The language in the arbitration clause states plaintiffs were “agreeing to arbitrate any dispute as set forth in this section” and were “waiving [their] right . . . to maintain a lawsuit.” It sets forth, “[b]y agreeing to arbitrate, [plaintiffs] understand that [they] will NOT have the right to have [their] claim[s] determined by a jury.” This language clearly and unambiguously puts plaintiffs on notice that they are waiving the right to a jury trial and the right to pursue their claims in a court of law. This part of the Agreement is therefore enforceable.

The plaintiff then argued that forcing her to sign an exculpatory contract of adhesion right before a birthday party was a violation of the doctrines of procedural and substantive unconscionability.

We next address plaintiffs’ arguments attacking the enforcement of the arbitration clause based on the doctrines of procedural and substantive unconscionability. In essence, plaintiffs argue requiring Johnson to read and sign an ambiguous contract of adhesion immediately before a birthday party left her with no other choice but to assent.

In New Jersey there is a four-part test to determine if an agreement is a contract of adhesion.

[I]n determining whether to enforce the terms of a contract of adhesion, [a court] look[s] not only to the take-it-or-leave-it nature or the standardized form of the document but also to [(1)] the subject matter of the contract, [(2)] the parties’ relative bargaining positions, [(3)] the degree of economic compulsion motivating the “adhering” party, and [(4)] the public interests affected by the contract.

The court’s response was they could not find anything in the agreement that rose to the level that the contract was a contract of adhesion under New Jersey law.

Although the case is not over, any damages will probably significantly reduce by requiring arbitration.

So Now What?

This is the second decision that is almost identical to this one. Can a release in New Jersey at a trampoline park require the parent to arbitrate the minor’s claim. See New Jersey does not allow a parent to sign away a minor’s right to sue so a binding arbitration agreement is a good idea, if it is written correctly. This decision does not mention the decision is Weed v. Sky NJ, LLC., 2018 N.J. Super. Unpub. LEXIS 410, 2018 WL 1004206 which is almost identical in the facts.

There are two ways to limit damages in a state that does not allow a parent to sign a release giving up a minor’s right to sue. Assumption of the risk agreements and the defense of assumption of the risk. Did the parent AND the minor knowingly and voluntarily enter into the risk that caused the injury. This is only valid if you can prove the minor knew or you provided the minor with the education or knowledge to knowingly and voluntarily assume the risk. Voluntary is the easy part proving the minor knew of the risk is difficult.

Arbitration then is the next defense in this ladder to reduce damages. Most states do not allow an arbitrator to award more than the basic damages. Punitive damages cannot be awarded by arbitrators. Also, arbitrators are not over come by emotion or other factors that would influence them into awarding large damages.

Before putting an arbitration clause in your agreement, you need to determine two things.

  1. Is arbitration better than the court system in your state. If your state supports the use of a release, a release gets you out of a case without any damages. Even though arbitration will generally not give the plaintiff large awards, they usually award something.
  2. Are there benefits to arbitration in your state that outweigh other means of resolving the dispute.

In those states that do not support a parent signing away a minor’s right to sue, arbitration is probably a good result. See States that allow a parent to sign away a minor’s right to sue.

What do you think? Leave a comment.

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Johnson v. Sky Zone Indoor Trampoline Park in Springfield (N.J. Super. App. Div. 2021)

Johnson v. Sky Zone Indoor Trampoline Park in Springfield (N.J. Super. App. Div. 2021)

DAVID JOHNSON, an infant by his guardian ad litem, SHALONDA JOHNSON, and SHALONDA JOHNSON, individually, Plaintiffs-Appellants,
v.
SKY ZONE INDOOR TRAMPOLINE PARK IN SPRINGFIELD, SKY ZONE, LLC, SKY ZONE FRANCHISE GROUP, LLC, and GO AHEAD AND JUMP 4, LLC, Defendants-Respondents.

No. A-2489-20

Superior Court of New Jersey, Appellate Division

December 6, 2021

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued November 10, 2021

On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-5446-20.

Edward M. Colligan argued the cause for appellants (Colligan & Colligan attorneys; Edward M. Colligan, on the brief).

Kelly A. Waters argued the cause for respondents (Wood Smith Henning & Berman, attorneys; Kelly A. Waters, of counsel and on the brief; Jill A. Mucerino and Sean P. Shoolbraid, on the brief).

Before Judges Fuentes, Gilson, and Gooden Brown.

PER CURIAM

David Johnson, a child under the age of eighteen, was injured while visiting a trampoline park owned and operated by Sky Zone, LLC, Sky Zone Franchise Group, LLC and Go Ahead and Jump 4, LLC (collectively, Park or defendants). Shalonda Johnson, individually and as guardian ad litem of her minor son (collectively, plaintiffs), [1] filed a civil action against defendants in the Superior Court, Law Division, in Union County, seeking compensatory damages. In lieu of filing a responsive pleading, defendants moved before the Law Division to enforce an arbitration clause contained in an electronic document Johnson signed as a condition of being permitted to enter the Park. After considering the arguments of counsel and the exhibits submitted, the Law Division judge assigned to the case granted defendants’ motion to enforce the arbitration clause and dismissed the case with prejudice in an order entered on March 24, 2021.

In this appeal, plaintiffs argue the arbitration clause contained in this electronic general liability release contract is unenforceable. After reviewing the record presented to the Law Division judge, we affirm the part of the order enforcing the arbitration clause, vacate the dismissal of plaintiffs’ complaint with prejudice, and remand for the court to stay judicial proceedings related to this case pending the outcome of the arbitration.[2]

I.

A.

On July 14, 2018, ten-year-old David and his mother visited the Park. Before they were permitted entry, however, a Park employee apprised Johnson she was required to sign a “Participation Agreement, Release and Assumption of Risk” (the Agreement) on an electronic tablet. On August 15, 2018, plaintiffs again visited the Park and, while jumping on a trampoline, David seriously injured his leg.[3] The appellate record did not include evidence of whether Johnson executed a second waiver.

The Agreement contains a general release provision “intended to release and provide other benefits, legal protections and consideration” to defendants. For example, it contains an “acknowledgement of potential injuries” provision, which places patrons on notice that “participating in trampoline and other activities is inherently and obviously dangerous.” The Agreement also includes a “voluntary assumption of risk acknowledgment” provision, which informs patrons that they “are participating voluntarily at [their] own risk” and could suffer “significant bodily injuries” or “die or become paralyzed, partially or fully, through their use of the Sky Zone facility and participation in Sky Zone activities.”

Finally, the Agreement contains a “release of liability” section, which requires patrons to “forever, irrevocably and unconditionally release, waive, relinquish, discharge from liability and covenant not to sue [Sky Zone]” for

any and all claims . . . of whatever kind or nature, in law, equity or otherwise, . . . related to or arising, directly or indirectly, from [their] access to and/or use of the Sky Zone [f]acility, . . . including, without limitation, any claim for negligence, failure to warn or other omission, . . . personal injury, . . . [or] bodily harm . . . .

The enforceability of these exculpatory provisions are not part of this appeal. We express no opinion as to whether these exculpatory provisions are enforceable under our State’s common law, as expressed by our Supreme Court in Stelluti v. Casapenn Enters., LLC, 203 N.J. 286 (2010), and Hojnowski v. Vans Skate Park, 187 N.J. 323 (2006).

The dispositive issue in this appeal concerns the enforceability of the section in the Agreement entitled, in part, “arbitration of disputes.” The Agreement is presented to the patrons at a kiosk in the form of an electronic document. The patrons are expected to read it and acknowledge their consent to be bound by the terms contained therein by placing an electronic “checkmark” and entering certain personally identifying information. Defendants argue David’s mother placed an electronic checkmark where indicated, and thus acknowledged she understood and agreed “to arbitrate any dispute as set forth in this section” and waived “[her] right, and the right(s) of [her] minor child(ren) . . . to maintain a lawsuit against [defendants] . . . for any and all claims covered by this Agreement.” This section also provides the following recitation of the rights plaintiffs agreed to waive as a precondition to enter the Park and participate in the activities available therein:

By agreeing to arbitrate, I understand that I will NOT have the right to have my claim determined by a jury, and the minor child(ren) above will NOT have the right to have claim(s) determined by a jury. Reciprocally, [the Sky Zone defendants] waive their right to maintain a lawsuit against [plaintiff] . . . for any and all claims covered by this [a]greement, and they will not have the right to have their claim(s) determined by a jury. ANY DISPUTE, CLAIM OR CONTROVERSY ARISING OUT OF OR RELATING TO MY OR THE CHILD’S ACCESS TO AND/OR USE OF THE SKY ZONE PREMISES AND/OR ITS EQUIPMENT, INCLUDING THE DETERMINATION OF THE SCOPE OR APPLICABILITY OF THIS AGREEMENT TO ARBITRATE, SHALL BE BROUGHT WITHIN ONE YEAR OF ITS ACCRUAL (i.e., the date of the alleged injury) FOR AN ADULT AND WITHIN THE APPLICABLE STATUTE OF LIMITATIONS FOR A MINOR AND BE DETERMINED BY ARBITRATION IN THE COUNTY OF THE SKY ZONE FACILITY . . . BEFORE ONE ARBITRATOR. THE ARBITRATION SHALL BE ADMINISTERED BY [JUDICIAL ARBITRATION AND MEDIATION SERVICES (JAMS)] PURSUANT TO ITS RULE 16.1 EXPEDITED ARBITRATION RULES AND PROCEDURES. JUDGMENT ON THE AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. THIS CLAUSE SHALL NOT PRECLUDE PARTIES FROM SEEKING PROVISIONAL REMEDIES IN AID OF ARBITRATION FROM A COURT OF APPROPRIATE JURISDICTION. This [a]greement shall be governed by, construed and interpreted in accordance with the laws of the State of New Jersey, without regard to choice of law principles. Notwithstanding the provision with respect to the applicable substantive law, any arbitration conducted pursuant to the terms of this [a]greement shall be governed by the Federal Arbitration Act (9 U.S.C., Sec. 1-16). I understand and acknowledge that the JAMS Arbitration Rules to which I agree are available online for my review at jamsadr.com, and include JAMS Comprehensive Arbitration Rules & Procedures; Rule 16.1 Expedited Procedures; and, Policy On Consumer Minimum Standards Of Procedural Fairness.

[(Emphasis in original).]

The Agreement also contained a merger and a severability clause, in which Johnson acknowledged: “I have had sufficient opportunity to read this entire document. I have read and understood and voluntarily agree to be bound by its terms.” The clause further provided:

This [a]greement constitutes and contains the entire agreement between [Sky Zone] and [plaintiffs] relating to the . . . use of the Sky Zone Facility. There are no other agreements, oral, written, or implied, with respect to such matters. . . . If any term or provision of this [agreement] shall be held illegal, unenforceable, or in conflict with any law governing this [agreement] the validity of the remaining portions shall not be affected thereby. B.

Plaintiffs filed their personal injury complaint against defendants on August 13, 2020. The Law Division entered default against defendants on December 28, 2020, for failure to file a timely responsive pleading. On January 8, 2021, defendants’ counsel notified plaintiffs’ counsel he intended to file a motion to dismiss the complaint in lieu of an answer pursuant to Rule 4:6-2(e), based on plaintiffs’ failure to state a claim upon which relief may be granted. The attorneys thereafter entered into a Consent Agreement, stating in relevant part:

This matter having come before the [c]ourt upon the Consent of the parties, whereby the parties consent, stipulate, and agree that the default entered against Defendants, SKY ZONE FRANCHISE GROUP, LLC and GO AHEAD AND JUMP 4, LLC, be vacated and the time for Defendant to Answer or Otherwise Plead be extended until January 30, 2021 . . . .

[(Strikethrough in original).]

Plaintiff’s counsel unilaterally struck “or Otherwise Plead” from the Consent Order. On February 2, 2021, the Law Division accepted the Consent Agreement and vacated the default. Defendants moved to dismiss the complaint and compel arbitration on January 30, 2021. Defendants’ motion came for oral argument before the Law Division on March 24, 2021. Plaintiffs’ counsel argued the arbitration clause presented to Johnson was unenforceable based on both the obscure, technical language used in the document, and by presenting it as part of an electronic document in a kiosk located outside the Park’s entrance. Plaintiff’s counsel also emphasized the circumstances under which Johnson allegedly waived her son’s constitutional right to a jury trial: “[M]y client went in July [2018] to be a guest at a birthday party. The . . . defense . . . alleges that she signed this Agreement at that time and at that time, they’re saying that she signed an agreement that was good forever.”

In response, defense counsel argued Johnson did a great deal more than merely place a checkmark on a section of an electronic document. “We don’t just have the electronic signatures. We have her name, her address, her phone number, her date of birth . . . it’s not merely that you have [Janay’s] certification. You have identifiers that Skyzone would not have gotten without the plaintiff.” The reference made by defense counsel to “Janay’s certification” relates to Michael Janay, the Managing Member of defendant Go Ahead and Jump 4, LLC., who averred:

As a matter of business practice, all patrons who enter the Park for the first time are required to electronically sign a Participant Agreement, Release and Assumption of Risk . . . at a kiosk, or online, as a pre-condition to entry. Patrons are not permitted entry into the Park unless a Participation Agreement has been executed on their behalf and there are signs throughout the Park indicating the same. . . . [A]ll patrons who enter the Park are required to provide a valid email address when electronically signing the Participation Agreement.

. . . [O]nce the Participation Agreement is electronically signed, a copy of the executed Participation Agreement is sent to the email address provided by the patron.

. . . .

Based on the information provided, a copy of this Participation Agreement was sent to Shalonda Johnson’s email following Shalonda Johnson’s execution of the Participation Agreement at the Park on July 14, 2018. As indicated, Shalonda Johnson listed her son David Johnson[, ] who is the Minor[-]Plaintiff, and another minor Kevin Johnson. On that basis, Shalonda Johnson, David Johnson, and Kevin Johnson were permitted entry into the Park on July 14, 2018.

After considering the arguments of counsel, the motion judge granted defendants’ motion on March 24, 2021. The judge explained the basis of his decision in a Statement of Reasons attached to the order.

II.

Against this factual backdrop, plaintiffs argue the arbitration agreement is ambiguous and unenforceable as a matter of law. We reject these arguments and affirm the part of the Law Division’s Order upholding the enforceability of the arbitration clause. Because the Law Division’s decision to enforce this arbitration provision is purely a question of law, our standard of review is de novo. Flanzman v. Jenny Craig, Inc., 244 N.J. 119, 131 (2020); see also Kernahan v. Home Warranty Adm’r of Fla., Inc., 236 N.J. 301, 316 (2019) (“Whether a contractual arbitration provision is enforceable is a question of law, and we need not defer to the interpretative analysis of the trial . . . court[] unless we find it persuasive.”).

As a matter of public policy, our Supreme Court has upheld arbitration as a “favored means of dispute resolution.” Hojnowski, 187 N.J. at 342. The Court has consistently endorsed a “strong preference to enforce arbitration agreements, both at the state and federal level.” Hirsch v. Amper Fin. Servs., LLC, 215 N.J. 174, 186 (2013). In determining whether a valid agreement to arbitrate exists, we will apply “state contract-law principles.” Hojnowski, 187 N.J. at 342. Guided by these principles, “[a]n arbitration agreement is valid only if the parties intended to arbitrate because parties are not required ‘to arbitrate when they have not agreed to do so.'” Kernahan, 236 N.J. at 317 (quoting Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468, 478 (1989)).

Mutuality of assent is the hallmark of an enforceable contract. Thus, the initial inquiry is whether the parties actually and knowingly agreed to arbitrate their dispute. To reflect mutual assent to arbitrate, the terms of an arbitration provision must be “sufficiently clear to place a consumer on notice that he or she is waiving a constitutional or statutory right . . . .” Atalese v. U.S. Legal Servs. Grp., L.P., 219 N.J. 430, 443 (2014). “No particular form of words is necessary to accomplish a clear and unambiguous waiver of rights.” Id. at 444. If, “at least in some general and sufficiently broad way,” the language of the clause conveys arbitration is a waiver of the right to bring suit in a judicial forum, the clause will be enforced. Id. at 447. “The key . . . is clarity.” Barr v. Bishop Rosen & Co., 442 N.J.Super. 599, 607 (App. Div. 2015).

Here, plaintiffs claim the arbitration clause is ambiguous and therefore unenforceable because it contains “void, inaccurate, misleading and ambiguous language . . . .” and “confusing lower[-]case passages and all upper[-]case bold passages.” Plaintiffs argue Hojnowski, 187 N.J. at 327, “prohibits a parent of a minor child from releasing the child’s potential tort claims arising out of the use of a commercial recreational facility.” According to plaintiffs, JAMS, the named forum in the arbitration provision, is “not permitted to conduct arbitration in New Jersey” and thus the agreement should fail. We disagree.

The language in the arbitration clause states plaintiffs were “agreeing to arbitrate any dispute as set forth in this section” and were “waiving [their] right . . . to maintain a lawsuit.” It sets forth, “[b]y agreeing to arbitrate, [plaintiffs] understand that [they] will NOT have the right to have [their] claim[s] determined by a jury.” This language clearly and unambiguously puts plaintiffs on notice that they are waiving the right to a jury trial and the right to pursue their claims in a court of law. This part of the Agreement is therefore enforceable. See Flanzman, 244 N.J. at 137-38 (citing Atalese, 219 N.J. at 444-45).

Plaintiffs’ reliance on Hojnowski is misplaced. Writing for a unanimous Court, then Justice Zazzali[4] made clear “permitting arbitration of a minor’s claims is consistent with New Jersey case law discussing the enforceability of arbitration agreements that affect the rights of children.” 187 N.J. at 343. Here, plaintiff’s mother signed the Agreement that included an arbitration clause.

The unavailability of JAMS does not render the arbitration clause unenforceable. Although the parties agree JAMS is not available to arbitrate this case, the Agreement contains a severability clause that states: “If any term or provision of this [agreement] shall be held illegal, unenforceable, or in conflict with any law governing this [agreement] the validity of the remaining portions shall not be affected thereby.” Severability clauses “are indicative of the parties’ intent that the agreement as a whole survives the excision of an unenforceable provision.” Arafa v. Health Express Corp., 243 N.J. 147, 169 n.2 (2020). As the Supreme Court explained in Flanzman:

No New Jersey statutory provision or prior decision has elevated the selection of an “arbitral institution” or the designation of a “general process for selecting an arbitration mechanism or setting” to the status of essential contract terms, without which an arbitration agreement must fail.

To the contrary, the [New Jersey Arbitration Act (NJAA)] makes clear that its default provision for the selection of an arbitrator may operate in the absence of contractual terms prescribing such procedures. See N.J.S.A. 2A:23B-11(a). The NJAA reflects the Legislature’s intent that the parties’ omission of an arbitrator or arbitral organization, or their failure to set forth the method by which they will choose an arbitrator in the event of a dispute, will not preclude the enforcement of their agreement. Ibid.

[244 N.J. at 139.]

The arbitration clause at issue here must be interpreted in accordance with New Jersey law and the Federal Arbitration Act (FAA). The FAA and the NJAA provide for a court-appointed arbitrator if the designated arbitrator is unavailable. Id. at 141. The arbitration clause enables the parties to seek from a court “provisional remedies in aid of arbitration.” The language in the Agreement does not show the parties intended to forego arbitration if JAMS is unavailable. The designation of JAMS was not integral to the enforcement of the arbitration clause. Thus, the unavailability of JAMS does not invalidate the arbitration clause.

We next address plaintiffs’ arguments attacking the enforcement of the arbitration clause based on the doctrines of procedural and substantive unconscionability. In essence, plaintiffs argue requiring Johnson to read and sign an ambiguous contract of adhesion immediately before a birthday party left her with no other choice but to assent. Our Supreme Court has described the factors that constitute the doctrines of procedural and substantive unconscionability:

The defense of unconscionability, specifically, calls for a fact-sensitive analysis in each case, even when a contract of adhesion is involved. [The] Court has recognized that contracts of adhesion necessarily involve indicia of procedural unconscionability. [The Court has] identified, therefore, four factors as deserving of attention when a court is asked to declare a contract of adhesion unenforceable.

[I]n determining whether to enforce the terms of a contract of adhesion, [a court] look[s] not only to the take-it-or-leave-it nature or the standardized form of the document but also to [(1)] the subject matter of the contract, [(2)] the parties’ relative bargaining positions, [(3)] the degree of economic compulsion motivating the “adhering” party, and [(4)] the public interests affected by the contract. [Delta Funding Corp. v. Harris, 189 N.J. 28, 39-40 (2006) (internal citations omitted) (quoting Rudbart v. N. Jersey Dist. Water Supply Comm’n, 127 N.J. 344, 356 (1992)).]

Here, plaintiffs merely recycle their arguments relying on the Agreement’s alleged ambiguity without applying or analyzing the factors established by the Court in Delta Funding. We discern no basis, in fact or in law, to conclude this arbitration provision is substantively unconscionable. Finally, plaintiffs’ allegations that defendants acted intentionally and recklessly have no basis in fact and are not worthy of further comment by this court. Plaintiffs’ remaining argument lack sufficient merit to warrant discussion in a written decision. R. 2:11-3(e)(1)(E).

The order of the Law Division upholding the enforceability of defendants’ arbitration clause is affirmed. However, we vacate the part of the order that dismisses plaintiffs’ complaint with prejudice and remand the matter to the Law Division to stay any judicial proceedings related to this case pending the outcome of the arbitration. GMAC, 205 N.J. at 584 n.7; N.J.S.A. 2A:23B-7(g).

Affirmed in part, reversed in part, and remanded consistent with this opinion. We do not retain jurisdiction. ———

Notes:

[1] In the interest of clarity, we will occasionally also refer to plaintiffs by their names; we will refer to the child by his first name and his mother by her last name. No disrespect is intended.

[2] Although an order entered by the Law Division compelling or denying arbitration is appealable to this court as of right, pursuant to Rule 2:2-3(a)(3), the trial court must stay any judicial proceeding pending the outcome of the arbitration. The court may also limit the stay to arbitrable claims if other claims are severable. GMAC v. Pittella, 205 N.J. 572, 584 n.7 (2011) (citing N.J.S.A. 2A:23B-7(g)).

[3] In a certification submitted to the motion judge, Johnson averred the injury damaged “the growth plate in my son’s leg . . . and his leg did not continue to grow properly. He has undergone surgery to shorten the opposite leg and may need additional treatment in the future.”

[4] In October 2006, Governor Jon Corzine appointed Justice Zazzali to succeed Deborah T. Poritz as Chief Justice. Chief Justice Zazzali served in this capacity until June 17, 2007, when he reached the mandatory retirement age for all members of the New Jersey Judiciary.

———


Hojnowski v. Vans Skate Park, 187 N.J. 323; 901 A.2d 381; 2006 N.J. LEXIS 1080

Hojnowski v. Vans Skate Park, 187 N.J. 323; 901 A.2d 381; 2006 N.J. LEXIS 1080

Andrew Hojnowski, a Minor, through his Parents and Guardians Ad Litem, Jerry Hojnowski and Anastasia Hojnowski and Jerry Hojnowski and Anastasia Hojnowski, in their own right, Plaintiffs-Respondents and Cross-Appellants, v. Vans Skate Park, Defendant-Appellant and Cross-Respondent, and Mccown Deleeuw Company, John Doe(s) Skate Park Owner (a fictitious name) and Jane Doe(s) Insurance Company (for med pay only), Defendants.

A-17/A-45 September Term 2005

SUPREME COURT OF NEW JERSEY

187 N.J. 323; 901 A.2d 381; 2006 N.J. LEXIS 1080

January 30, 2006, Argued

July 17, 2006, Decided

PRIOR HISTORY: [***1] On appeal from the Superior Court, Appellate Division, whose opinion is reported at 375 N.J. Super. 568, 868 A.2d 1087 (2005).

Hojnowski ex rel. Hojnowski v. Vans Skate Park, 375 N.J. Super. 568, 868 A.2d 1087, 2005 N.J. Super. LEXIS 79 (App.Div., 2005)

CASE SUMMARY:

PROCEDURAL POSTURE: Plaintiffs, a minor and his parents, sued defendant skate park for negligence. The park moved to compel arbitration; the trial court granted the park summary judgment and dismissed the suit. Plaintiffs appealed; the New Jersey Superior Court, Appellate Division, affirmed the grant of summary judgment but held that the waiver of liability contained in a pre-injury release signed by a parent was void. Plaintiffs sought further review.

OVERVIEW: Plaintiffs alleged the minor fractured his femur when an aggressive skateboarder, about whom his parents had complained to the park, forced him off a skateboard ramp. One parent had executed a release on the minor’s behalf that provided for mandatory arbitration of claims against the park and limited its liability. Plaintiffs moved to invalidate the release; the trial court did not rule on the validity of the limitation of liability, leaving this issue for the arbitrators to decide. The intermediate appellate court held that the arbitration provision was valid, that the trial court should have ruled on the validity of the liability waiver, and that it was invalid. The high court agreed. Under the parens patriae doctrine, the public policy of New Jersey prohibited a parent of a minor child from releasing the child’s potential tort claims arising out of the use of a commercial recreational facility. But under the public policy expressed in the New Jersey Arbitration Act, former N.J. Stat. Ann. §§ 2A:24-1 to -11, a parent’s agreement to arbitrate was enforceable against any tort claims asserted on the minor’s behalf, in the absence of fraud, duress, unconscionability, or ambiguity.

OUTCOME: The high court affirmed the judgment of the intermediate appellate court and referred the matter to the arbitrator for further proceedings.

CORE TERMS: arbitration, pre-injury, minor child, public policy, exculpatory, parental, settlement, bind, post-injury, tort claims, arbitration agreements, agreement to arbitrate, recreational, enforceable, arbitrator, arbitrate, arbitration provision, unenforceable, public interest, inherent risks, reasonableness, guardian, waive, commercial enterprise, recreational facility, best interests, cause of action, invalidate, implicate, patriae

SYLLABUS

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

Andrew Hojnowski, a minor v. Vans Skate Park, et als. (A-17/45-05)

Argued January 30, 2006 — Decided July 17, 2006

ZAZZALI, J., writing for the Court.

The issue before the Court is whether a parent can bind a minor child to either a pre-injury waiver of liability or an agreement to arbitrate.

In January 2003, twelve-year-old Andrew Hojnowski was injured while skateboarding at a facility operated by Vans, Inc. (Vans). On a previous visit to the facility, Andrew’s mother had executed a release on Andrew’s behalf, which was required in order for Andrew to enter the skate park. The exculpatory release contained a clause agreeing to submit any claims against Vans to arbitration, as well as provisions limiting Vans’ liability for injury.

[***2] In August 2003, Andrew, acting through his parents as guardians ad litem, and his parents, in their own right, filed suit against Vans. Their complaint alleges, among other things, negligent supervision and failure to warn, and negligent failure to provide a safe place. Vans responded by filing a demand for commercial arbitration with the American Arbitration Association. The Hojnowskis then moved to enjoin the arbitration and invalidate the pre-injury release signed by Andrew’s mother and Vans cross-moved for summary judgment. The trial court granted Vans’ motion, dismissing the Hojnowskis’ complaint without prejudice and ordering arbitration. The trial court did not rule on the validity of the liability release, finding the issue for the arbitrators to determine.

On appeal, the Appellate Division unanimously affirmed the trial court’s grant of summary judgment in respect of the validity of the arbitration provision. In addition, the panel found that because the issue presented a question of public policy, the trial court should have ruled on the validity of the waiver. The panel was divided in its resolution of that question. The majority determined that a pre-injury release [***3] of liability executed by a parent on behalf of a minor child violates public policy and is, therefore, unenforceable. The dissent argued that the court should have deferred to the parent’s decision to enter into the agreement and, hence, should have enforced the waiver.

Vans appealed to the Supreme Court as of right on the issue of the validity of the pre-injury release of liability. The Court granted certification on the question of whether a parent can bind a minor child to arbitration.

HELD: Although a parent may agree to bind a minor child to an arbitration provision, which in essence constitutes a choice of forum, a parent may not bind a minor child to a pre-injury release of a minor’s prospective tort claims resulting from the minor’s use of a commercial recreational facility.

1. Because exculpatory agreements can encourage a lack of care, courts closely scrutinize liability releases and invalidate them if they violate public policy. The relevant public policy implicated in this case is the protection of the best interests of the child under the parens patriae doctrine, which refers to the State’s capacity as provider of protection to those unable to care [***4] for themselves. In keeping with that doctrine, the Legislature and the courts have historically afforded considerable protections to claims of minor children. The most significant of those protections concerns the compromise or release of a minor’s post-injury claims, requiring the parent to obtain statutory or judicial approval to dispose of the minor’s existing cause of action. The purpose underlying the post-injury settlement rule also applies in the pre-injury context. (Pp. 9-15)

2. Business owners owe invitees a duty of reasonable or due care to provide a safe environment because it is the business owners who are in the best position to control the risk of harm. In this case, the risk of loss should fall on the party best suited to avert injury. The operator of a commercial recreational enterprise can inspect the premises for unsafe conditions, train staff in respect of the facility’s proper operation, and regulate the types of activities permitted to occur. The business operator can also obtain insurance and spread the costs of insurance among its customers. Children are not in a position to discover hazardous conditions or insure against risks. In addition, the expectation [***5] that a commercial facility will be reasonably safe is especially important where the patron’s are minors. To permit waivers of liability would remove a significant incentive for operators of these types of facilities that attract children to take reasonable steps to protect their safety. The overwhelming majority of jurisdictions are in accord with the decision to invalidate such waivers. (Pp. 15-19)

3. In view of the protections that New Jersey historically has afforded to a minor’s claims and the need to discourage negligent activity on the part of commercial enterprises attracting children, a parent’s execution of a pre-injury release of a minor’s future tort claims arising out of the use of a commercial recreational facility is unenforceable. (P.19)

4. Vans’ remaining contentions are unconvincing. Van’s argument that allowing a pre-injury release of a minor’s potential tort claim is no different than a parent’s decision never to bring suit on the child’s behalf ignores the tolling provisions enabling a minor to retain the right to sue for most personal injuries for two years after reaching the age of majority. Nor does the Court accept the argument that the parental release [***6] implicates the parent’s fundamental right to direct the upbringing of the child. Nor is the Court persuaded by the argument that such releases are necessary to ensure the continued validity of businesses offering sports activities to minors. Tort liability is not an unreasonable economic restraint on the ability of business owners to operate commercial recreational facilities. (Pp. 19-23)

5. Federal policy has favored the enforcement of arbitration agreements for many years. In New Jersey, arbitration is also a favored means of dispute resolution. An agreement to arbitrate generally will be valid under State law unless it violates public policy. Allowing a parent to bind a minor child to arbitrate future tort claims is not contrary to the Court’s duty as parens patriae to protect the best interests of the child. A pre-injury agreement to arbitrate does not require the minor to give up any substantive rights; rather, it specifies only the forum in which those rights are redressed. Furthermore, permitting arbitration of a minor’s claims is consistent with New Jersey case law discussing the enforceability of arbitration agreements that affect the rights of children. Case law [***7] from other jurisdictions reinforces this conclusion. (Pp. 23-31)

Judgment of the Appellate Division is AFFIRMED and the matter is referred to an arbitrator for further proceedings consistent with this opinion.

JUSTICE LaVECCHIA, concurring in part and dissenting in part, in which JUSTICE RIVERA-SOTO joins, is in full agreement with that portion of the majority’s decision that affirms the enforcement of the parties’ agreement to subject their dispute to arbitration. Justice LaVecchia dissents from the majority’s invalidation of the waiver of liability that the parties executed as a condition of the minor’s use of Van’s property to skateboard. Because the type of waiver entered into in this case generally would be enforceable as against an adult, there is no reason why this Court should prevent a parent from ratifying such a waiver on behalf of the minor, provided that a court or arbitrator determines that the release is reasonable.

COUNSEL: Richard C. Wischusen argued the cause for appellant and cross-respondent (Reilly, Supple & Wischusen, attorneys; Alex W. Raybould, on the briefs).

Robert A. Porter argued the cause for respondents and cross-appellants (Bafundo, [***8] Porter, Borbi & Clancy, attorneys).

David G. Evans submitted a brief on behalf of amicus curiae, Pacific Legal Foundation.

JUDGES: Justice ZAZZALI delivered the opinion of the Court. Justice LaVECCHIA, concurring in part and dissenting in part. Justice RIVERA-SOTO joins in this opinion. Chief Justice PORITZ and Justices LONG, ZAZZALI, ALBIN and WALLACE. Justices LaVECCHIA and RIVERA-SOTO. CHIEF JUSTICE PORITZ and JUSTICES LONG, ALBIN, and WALLACE join in JUSTICE ZAZZALI’s opinion. JUSTICE LaVECCHIA filed a separate opinion concurring in part and dissenting in part, in which JUSTICE RIVERA-SOTO joins.

OPINION BY: ZAZZALI

OPINION

[*327] [**383] Justice ZAZZALI delivered the opinion of the Court.

In this appeal, we must determine whether a parent can bind a minor child to either a pre-injury waiver of liability or an agreement to arbitrate. In January 2003, twelve-year old Andrew Hojnowski was injured while skateboarding at a skate park facility operated by defendant Vans, Inc. (Vans). On a previous visit to the facility, Andrew’s mother had executed a release on Andrew’s behalf. That release contained a clause agreeing to submit any claims against Vans to arbitration, as well as a provision limiting Vans’ liability. After Andrew and his parents (plaintiffs) brought suit seeking recovery for Andrew’s injuries, Vans filed for commercial arbitration. Plaintiffs then moved to enjoin arbitration and to invalidate the [***9] liability release signed by Andrew’s mother.

The trial court found that plaintiffs were bound by the arbitration provision and dismissed their complaint without prejudice. The court declined to rule on whether the liability release was valid, concluding that that issue should be determined by the arbitrator. On appeal, the Appellate Division unanimously voted to uphold the arbitration provision but divided on the validity of the liability release. The majority determined that a pre-injury release of liability executed by a parent on behalf of a minor child violates public policy and is therefore unenforceable. The dissent argued that the court should have deferred to the parent’s decision to enter into the agreement and enforced the waiver. We affirm the majority and hold that although a parent may agree to bind a minor child to an arbitration provision, which in essence constitutes a choice of forum, a parent may not bind a minor child to a pre-injury release of a minor’s prospective tort claims resulting from the minor’s use of a commercial recreational facility. Pursuant to our parens patriae duty to protect the best interests [*328] of the child, we will not enforce such a release [***10] in the context of this case.

I.

In January 2003, twelve-year old Andrew Hojnowski and his mother, Anastasia Hojnowski, visited a Vans Store in Moorestown, New Jersey. Defendant Vans operated the retail store that sold skateboards and related merchandise and maintained a recreational skateboard facility. To enter the skate park, Vans required Andrew’s mother to sign an exculpatory release. It appears that Andrew’s mother did not execute a release on the date in question but had executed a release in December 2002, which Vans had kept on file.

The release, entitled “RELEASE AND WAIVER OF LIABILTY AND JURY TRIAL WITH INDEMNITY (FOR ALL VANS SKATEPARKS, STORES AND FACILITIES (COLLECTIVELY, ‘PARKS’) IN NEW JERSEY),” begins by stating:

Please read this document. It affects Your legal rights against Vans, Inc. if you are injured. Do not sign this document unless you understand it. If You are a minor, Your parent or guardian is required to sign this legal document.

The document then provides, in relevant part:

2. Can You Make A Claim For Money If You Are Injured?

If you are injured and want to make a claim, you must file a demand before the American Arbitration [***11] Association (the “AAA”). . . . You agree that any dispute between You and Vans will be decided by the AAA. Vans, Inc. will pay all costs of the arbitration for You. . . .

[**384] 3. Vans Is Asking You To Give Up Legal Rights in Order to Enter This Park

Because using Vans’ Park, or even entering the Park as a spectator may increase your risk of harm, Vans is asking you to give up certain valuable legal rights. Here are the rights you are giving up when you sign this document:

(a) You give up your right to sue Vans in a court of law.

(b) You give up your right to a trial by jury.

(c) You give up the right to claim money from Vans if you are injured unless Vans intentionally failed to prevent or correct a hazard caused by unsafe equipment or devices.

(d) You give up the right to claim money from Vans if you wait more than one year from the injury in order to make a claim.

[*329] (e) You give up the right to claim money from Vans, Inc. if you are injured by another person.

(f) You give up the right to recover damages to punish or make an example of Vans, Inc.

4. Rights You Do Not Give Up

You do not give up the right:

(a) To have safe equipment, [***12] structures and devices at the Park for Your intended use.

(b) To claim compensation for Your injury from Vans, Inc. if you are hurt because the equipment, structures and devices at the Park are not safe for Your intended use.

. . . .

(e) To make a claim if Vans, Inc. or anyone working for Vans, Inc. intentionally hurts you.

5. Who Is Bound By This Document?

You are bound by this document. Anyone who has or can obtain Your rights is also bound by this document, such as Your family, relatives, guardians, executors or anyone responsible for You. . . .

6. Other Information Important For You To Know

You have the right to demand money if You believe Vans, Inc. intentionally caused You harm. If parts of this document are determined to be invalid, then that portion will be unenforceable and the remainder of the document will continue in full legal force and effect. . . .

Following those provisions, Andrew’s mother answered “Yes” to the question: “Do You understand that You are giving up rights by signing this document if You are hurt?” The document also informed customers that “[b]y signing this document You agree that Vans, Inc. may rely [***13] on Your answers.” Andrew’s mother signed the release on Andrew’s behalf in the space provided beneath that provision.

Plaintiffs claim that, during his use of Vans’ facility in January 2003, Andrew suffered a fractured femur when an aggressive skateboarder, about whom his parents had complained to Vans, forced him off a skateboard ramp. Consequently, in August 2003, Andrew, acting through his parents as guardians ad litem, and his parents, in their own right, filed suit against Vans. Their complaint alleges that Vans “negligently fail[ed] to supervise the activities at the skate park, negligently failed to control activities of aggressive skateboarders, negligently failed to warn Plaintiffs’ parents that [*330] the activities of aggressive skateboarders would not be monitored, and negligently failed to provide a safe place to skateboard.” Plaintiffs also filed suit against an unnamed corporate owner and insurance company. Vans responded by filing a demand for commercial arbitration with the American Arbitration Association. [**385] Plaintiffs then moved to enjoin the arbitration and to invalidate the pre-injury release signed by Andrew’s mother, and Vans cross-moved for summary judgment. The [***14] trial court granted Vans’ motion, dismissing plaintiffs’ complaint without prejudice and ordering arbitration. The trial court, however, did not rule on the validity of the liability release, finding that the issue is “for the arbitrators to determine.”

On appeal, the Appellate Division unanimously affirmed the trial court’s grant of summary judgment concerning the validity of the arbitration provision. Hojnowski v. Vans Skate Park, 375 N.J. Super. 568, 574-75, 868 A.2d 1087 (App.Div.2005). The panel held that “a parent can enter into an enforceable contract, binding on the parent’s minor child, that waives the right to trial by jury of the minor’s bodily injury claims and requires submission of ‘any dispute’ to arbitration.” Ibid. The panel also found that because the validity of a pre-injury liability waiver presents a question of public policy, the trial court should have ruled on the waiver’s validity and not referred that question to the arbitrator. Id. at 581-82, 868 A.2d 1087. The panel then divided on the resolution of that issue.

The majority concluded that, under the circumstances of this matter, a parent lacks the authority “to sign a pre-tort [***15] agreement limiting the liability of a tortfeasor to exclude negligent conduct” and therefore voided the release. Id. at 583, 868 A.2d 1087. The majority reasoned that “the judiciary must stand as guardians of the State’s children” and that

[w]ere [the court] to decide otherwise, [it] would be relieving an alleged wrongdoer from its traditional legal responsibility to provide compensation for injuries caused by its negligence and shifting the economic burden to families, public welfare agencies and private charities without any concomitant benefit to either an injured child or his parents.

[*331] [Id. at 590, 868 A.2d 1087.]

Judge Fisher dissented, arguing that the court should have enforced the liability waiver and deferred to a parent’s decision regarding such matters. Id. at 591-92, 868 A.2d 1087 (Fisher, J., concurring in part and dissenting in part). In his view, “in the absence of parental unfitness, courts should not overrule parental decisions but should instead defer to a parent’s own weighing of the benefits and risks when entering into agreements that relate to the activities of their children.” Id. at 592, 868 A.2d 1087 (Fisher, J., concurring [***16] in part and dissenting in part).

Vans appealed to this Court as of right on the issue of the validity of the pre-injury release of liability. R. 2:2-1(a)(2). We also permitted the Pacific Legal Foundation to submit a brief as amicus curiae on that issue and granted plaintiffs’ petition for certification on the question whether a parent can bind a minor child to arbitration. 1 185 N.J. 36, 878 A.2d 853 (2005).

1 On appeal, plaintiffs did not raise the issue of the enforceability of the arbitration provision or the pre-injury liability release against the parents in their own right. Accordingly, our analysis is limited to a determination of the enforceability of those provisions against the minor child. Because the issue is not before us, we neither express nor imply an opinion concerning whether a waiver-of-rights provision of the nature entered into by the parties would be enforceable as against an adult.

II.

We first address whether New Jersey’s public policy permits [***17] a parent to release a minor child’s potential tort claims arising out of the minor’s use of a commercial recreational facility. Plaintiffs argue that [**386] a parent may not waive a minor child’s right to sue for negligence. Relying on Fitzgerald v. Newark Morning Ledger Co., 111 N.J. Super. 104, 267 A.2d 557 (Law Div.1970), and numerous out-of-state decisions, plaintiffs claim that the vast majority of states have held that a parent’s attempt to waive a child’s prospective cause of action is void as a matter of public policy. Plaintiffs assert that public policy disfavors pre-injury waivers of liability [*332] because they encourage tortious conduct by absolving a commercial enterprise of its ordinary duty to exercise due care. Plaintiffs also maintain that because a parent is not permitted to settle a child’s post-injury tort claim without judicial approval, a parent should not be allowed to waive a child’s potential claim before an injury occurs.

Defendant recognizes that the enforcement of parental liability waivers has been “treated in varied fashions by different states.” However, defendant asserts that “[t]he more substantial and well-considered decisions favor enforcement [***18] of exculpatory agreements based on the fundamental right of parents to raise their children as they decide.” Defendant further contends that it is “erroneous” to equate pre-tort releases of liability with post-tort releases because “[t]he conflict of interest and potential for harm to befall a minor are far different in the context of a release of an accrued tort claim where settlement funds are present and may be misappropriated.” Finally, defendant claims that “[w]ithout enforceable [r]eleases many activities available to children may be forced to close due to liability concerns.”

A.

We begin our analysis of that issue by noting that there is ambiguity in the pre-injury release concerning whether the agreement extinguishes or merely limits plaintiffs’ ability to recover against defendant for negligence. For example, although paragraph 3(c) provides that plaintiffs have “give[n] up the right to claim money from [defendant] unless [defendant] intentionally failed to prevent or correct a hazard caused by unsafe equipment or devices,” paragraph 4(b) states that plaintiffs have not “give[n] up the right to claim compensation [if] the equipment, structures and devices [***19] at the Park are not safe for [their] intended use.” We need not determine the precise scope and meaning of those terms, however, because we hold that the public policy of New Jersey prohibits a parent of a minor child from releasing a minor child’s [*333] potential tort claims arising out of the use of a commercial recreational facility.

B.

[HN1] Exculpatory agreements have long been disfavored in the law because they encourage a lack of care. See, e.g., Gershon v. Regency Diving Ctr., 368 N.J. Super. 237, 247, 845 A.2d 720 (App.Div.2004); Ultimate Computer Servs., Inc. v. Biltmore Realty Co., 183 N.J. Super. 144, 151, 443 A.2d 723 (App.Div.), certif. denied, 91 N.J. 184, 450 A.2d 522 (1982). For that reason, courts closely scrutinize liability releases and invalidate them if they violate public policy. See, e.g., Lucier v. Williams, 366 N.J. Super. 485, 491, 841 A.2d 907 (App.Div.2004) (“[C]ourts have not hesitated to strike limited liability clauses that are unconscionable or in violation of public policy.”). It is well settled that to contract in advance to release tort liability resulting from intentional or reckless conduct [***20] violates public policy, Kuzmiak v. Brookchester, Inc., 33 N.J. Super. 575, 580, 111 A.2d 425 (App.Div.1955); Restatement (Second) of Contracts § 195 (1981), as does a contract that releases liability from a statutorily-imposed duty, [**387] McCarthy v. NASCAR, Inc., 48 N.J. 539, 542, 226 A.2d 713 (1967). Further, courts have found that exculpatory agreements for negligence claims violate public policy in a variety of settings, such as in residential leases, Cardona v. Eden Realty Co., 118 N.J. Super. 381, 384, 288 A.2d 34 (App.Div.), certif. denied, 60 N.J. 354, 289 A.2d 799 (1972), or in connection with rendering professional services, Lucier, supra, 366 N.J. Super. at 495, 841 A.2d 907; Erlich v. First National Bank, 208 N.J. Super. 264, 287, 505 A.2d 220 (Law Div.1984).

The relevant public policy implicated in this matter is the protection of the best interests of the child under the parens patriae doctrine. [HN2] Parens patriae refers to “the state in its capacity as provider of protection to those unable to care for themselves.” Black’s Law Dictionary 1144 (8th ed.2004). [***21] In keeping with that policy, the Legislature and the courts historically [*334] have afforded considerable protections to claims of minor children. The most significant of those protections concerns the compromise or release of a minor’s post-injury claims. Under Rule 4:44, after a minor has suffered a tortious injury, a minor’s parent or guardian may not dispose of a minor’s existing cause of action without statutory or judicial approval. See
Moscatello ex rel. Moscatello v. Univ. of Med. & Dentistry of N.J., 342 N.J. Super. 351, 361, 776 A.2d 874 (App.Div.), certif. denied, 170 N.J. 207, 785 A.2d 435 (2001); Riemer v. St. Clare’s Riverside Med. Ctr., 300 N.J. Super. 101, 110-11, 691 A.2d 1384 (App.Div.), certif. denied, 152 N.J. 188, 704 A.2d 18 (1997); Colfer v. Royal Globe Ins. Co., 214 N.J. Super. 374, 377, 519 A.2d 893 (App.Div.1986). That Rule applies regardless of whether suit has been filed on the minor’s behalf, see, e.g., Moscatello, supra, 342 N.J. Super. at 361, 776 A.2d 874, and its purpose is “to guard a minor against an improvident compromise [and] to secure the minor against dissipation of [***22] the proceeds,” Colfer, supra, 214 N.J. Super. at 377, 519 A.2d 893.

Although the Rule governing post-injury settlements is not dispositive of our treatment of pre-injury releases, we find that the purposes underlying the post-injury settlement rule also apply in the present context. First, children deserve as much protection from the improvident compromise of their rights before an injury occurs as Rule 4:44 affords them after the injury. Moreover, at the time a parent decides to release the potential tort claims of his or her child, the parent may not fully understand the consequences of that action and may not have even read the waiver before signing. As the Utah Supreme Court has noted:

These clauses are . . . routinely imposed in a unilateral manner without any genuine bargaining or opportunity to pay a fee for insurance. The party demanding adherence to an exculpatory clause simply evades the necessity of liability coverage and then shifts the full burden of risk of harm to the other party. Compromise of an existing claim, however, relates to negligence that has already taken place and is subject to measurable damages. Such releases involve actual negotiations [***23] concerning ascertained rights and liabilities. Thus, if anything, the policies relating to restrictions on a parent’s right to compromise an existing claim apply with even greater force in the preinjury, exculpatory clause scenario. [Hawkins v. Peart, 2001 UT 94, 37 P.3d 1062, 1066 (2001) (emphasis added).]

[*335] Further, in both the pre- and post-injury context, it is necessary to ensure that children retain the ability to seek compensation for an injury. When a parent signs a pre-injury release of liability and the child is later injured, the parent is [**388] left to provide for the child’s injuries while the negligent party suffers no liability. If a parent is unable to finance the child’s injuries, the child may be left with no resources to obtain much needed care or support. See
Cooper v. Aspen Skiing Co., 48 P.3d 1229, 1235 (Colo.2002) (“[T]o allow a parent to release a child’s possible future claims for injury caused by negligence may as a practical matter leave the minor in an unacceptably precarious position with no recourse, no parental support, and no method to support himself or care for his injury.” (footnote omitted)); Scott v. Pac. W. Mountain Resort, 119 Wn.2d 484, 834 P.2d 6, 12 (1992) [***24] (“[W]here parents are unwilling or unable to provide for a seriously injured child, the child would have no recourse against a negligent party to acquire resources needed for care.”).

Those concerns are even more acute in the context of commercial premises liability. [HN3] In New Jersey, “[b]usiness owners owe to invitees a duty of reasonable or due care to provide a safe environment for doing that which is in the scope of the invitation.” Nisivoccia v. Glass Gardens, Inc., 175 N.J. 559, 563, 818 A.2d 314 (2003). That is because business owners “are in the best position to control the risk of harm. Ownership or control of the premises, for example, enables a party to prevent the harm.” Kuzmicz v. Ivy Hill Park Apartments, Inc., 147 N.J. 510, 517, 688 A.2d 1018 (1997) (citations omitted). It follows that in this case the risk of loss should fall on the party best suited to avert injury. See
Hopkins v. Fox & Lazo Realtors, 132 N.J. 426, 447, 625 A.2d 1110 (1993) (recognizing “salutary effect of shifting the risk of loss . . . to those who should be able and are best able to bear them”). The operator of a commercial recreational enterprise [***25] can inspect the premises for unsafe conditions, train his or her employees with regard to the facility’s proper operation, and regulate the types of activities permitted to occur. Such an operator also can obtain [*336] insurance and spread the costs of insurance among its customers. Children, on the other hand, are not in a position to discover hazardous conditions or insure against risks. Moreover, the expectation that a commercial facility will be reasonably safe to do that which is within the scope of the invitation, see
Nisivoccia, supra, 175 N.J. at 563, 818 A.2d 314, is especially important where the facility’s patrons are minor children. If we were to permit waivers of liability, we would remove a significant incentive for operators of commercial enterprises that attract children to take reasonable precautions to protect their safety.

In finding that the exculpatory provision in this matter is invalid, we are in agreement not only with our own State’s case law, but also with the overwhelming majority of other jurisdictions. See, e.g., Fitzgerald, supra, 111 N.J. Super. at 108, 267 A.2d 557 (invalidating exculpatory agreement executed by parent on behalf of minor [***26] child that released defendant from liability to child for future injuries and required parent to indemnify defendant for any claims brought by minor); In re Royal Caribbean Cruises Ltd., 403 F. Supp. 2d 1168, 1172-73 (S.D.Fla.2005) (stating that where “a release of liability is signed on behalf of a minor child for an activity run by a for-profit business, outside of a school or community setting, the release is typically unenforceable against the minor”); Simmons v. Parkette Nat’l Gymnastic Training Ctr., 670 F. Supp. 140, 144 (E.D.Pa.1987) (concluding that parent’s execution of pre-injury release did not exculpate third party from potential claims of minor child); Apicella v. Valley Forge Military Acad. & Junior Coll., 630 F. Supp. 20, 24 (E.D.Pa.1985) (“Under Pennsylvania law, parents do not possess the authority to release . . . potential claims of a minor [**389] child merely because of the parental relationship.”); Cooper, supra, 48 P.3d at 1233-35 (holding that Colorado’s public policy prohibits parents from contractually releasing child’s future claims for injury caused by negligence); Meyer v. Naperville Manner, Inc., 262 Ill. App. 3d 141, 634 N.E.2d 411, 415, 199 Ill. Dec. 572 (1994) [***27] (concluding that because “parent’s waiver of liability was not authorized by any statute or judicial approval, it had no effect to bar the minor child’s (future) [*337] cause of action”); Santangelo v. City of New York, 66 A.D.2d 880, 411 N.Y.S.2d 666, 667 (1978) (holding that minor was not bound by exculpatory release executed by parent on minor’s behalf); Munoz v. II Jaz, Inc., 863 S.W.2d 207, 209-10 (Tex.Ct.App.1990) (concluding that allowing parent to waive child’s right to sue for personal injury “would be against the public policy to protect minor children”); Scott, supra, 834 P.2d at 12 (“To the extent a parent’s release of a third party’s liability for negligence purports to bar a child’s own cause of action, it violates public policy and is unenforceable.”); Hawkins, supra, 37 P.3d at 1065-66 (concluding that “a parent does not have the authority to release a child’s claims before an injury”); see also
Auto. Workers v. Johnson Controls, Inc., 499 U.S. 187, 213, 111 S. Ct. 1196, 1211, 113 L. Ed. 2d 158, 183 (1991) (White, J., concurring in part and concurring in the judgment) [***28] (stating that “the general rule is that parents cannot waive causes of action on behalf of their children”); Doyle v. Bowdoin Coll., 403 A.2d 1206, 1208 n.3 (Me.1979) (stating in dicta that parent cannot release child’s cause of action); Williams v. Patton, 821 S.W.2d 141, 147 n.8, 35 Tex. Sup. Ct. J. 65 (Tex.1991) (Doggett, J., concurring) (stating that parental releases of minor’s potential tort claims are “outrightly disfavored”).

Although we recognize that jurisdictions are not uniform on the question of waiver, our research discloses that the only published decisions in which such agreements have been upheld are in connection with non-commercial ventures, such as volunteer-run or non-profit organizations. See, e.g., Hohe v. San Diego Unified Sch. Dist., 224 Cal. App. 3d 1559, 274 Cal. Rptr. 647, 648-50 (1990) (upholding parental agreement releasing any claims of minor child resulting from child’s participation in school-sponsored event); Gonzalez v. City of Coral Gables, 871 So. 2d 1067, 1067 (Fla.Dist.Ct.App.2004) (upholding parental liability release in context of “community or school supported activities”); Zivich v. Mentor Soccer Club, Inc., 82 Ohio St. 3d 367, 1998 Ohio 389, 696 N.E.2d 201, 207 (1998) [***29] (holding that parent may bind minor child to provision releasing volunteers and sponsors of non-profit sports activity from liability for negligence); Sharon v. City of Newton, 437 Mass. 99, 769 [*338] N.E.2d 738, 741, 745 (2002) (concluding that parent had authority to bind minor child to exculpatory release as condition of child’s participation in public-school extracurricular sports activities). Without expressing an opinion on the validity of parental liability releases in such settings, it suffices to note that volunteer, community, and non-profit organizations involve different policy considerations than those associated with commercial enterprises. Such a distinction is buttressed by the fact that the Legislature has afforded civil immunity from negligence to certain volunteer athletic coaches, managers, officials, and sponsors of non-profit sports teams, see, e.g., N.J.S.A. 2A:62A-6 to -6.2, while not providing similar immunities from negligence in the commercial realm.

Accordingly, [HN4] in view of the protections that our State historically has afforded to a minor’s claims and the need to discourage negligent activity on the part [***30] of commercial enterprises attracting children, we hold that a parent’s execution of a pre-injury [**390] release of a minor’s future tort claims arising out of the use of a commercial recreational facility is unenforceable.

C.

In so holding, we find that defendant’s remaining contentions and those of the dissent below are unconvincing. First, we are not persuaded by the argument that we should allow for parental liability releases because a pre-injury release of a minor’s potential tort claims is no different than a parent’s decision not to bring suit on a minor’s behalf. That argument ignores the fact that, under the tolling provisions of N.J.S.A. 2A:14-21, a minor retains the right to sue for most personal injuries for two years after reaching the age of majority, N.J.S.A. 2A:14-2. One of the rationales behind the tolling provision is that a child should not “be penalized for the ignorance or neglect of his parents or guardian in failing to assert [his or her legal] rights.” O’Connor v. Altus, 67 N.J. 106, 131-32, 335 A.2d 545 (1975) (Pashman, J., concurring in part and dissenting in part). Consequently, although [***31] a parent may control a minor’s right to seek tort compensation [*339] until the age of majority–either by choosing not to sue or by neglecting to do so–a minor’s claim is not eliminated by the parent’s decision; it merely is delayed. Were we to uphold the challenged pre-injury release, however, we would permanently bar the minor’s tort claim, a far more draconian effect.

Nor do we accept the argument that a parental release of liability on behalf of a minor child implicates a parent’s fundamental right to direct the upbringing of his or her child. [HN5] Although parents undoubtedly have a fundamental liberty interest “in the care, custody, and control of their children,” Troxel v. Granville, 530 U.S. 57, 65, 120 S. Ct. 2054, 2060, 147 L. Ed. 2d 49, 56 (2000), the question whether a parent may release a minor’s future tort claims implicates wider public policy concerns and the parens patriae duty to protect the best interests of children. See
Cooper, supra, 48 P.3d at 1235 n.11 (concluding that parental release of child’s right to sue for negligence is “not of the same character and quality as those rights recognized as implicating parents’ fundamental [***32] liberty interest in the ‘care, custody and control’ of their children”). As the majority opinion below noted, “[w]ere it otherwise, existing restrictions on parental conduct in the context of litigation involving minors would long ago have been abrogated in New Jersey.” Hojnowski, supra, 375 N.J. Super. at 585, 868 A.2d 1087. Indeed, the post-injury settlement rule is but one example of such restrictions. Moreover, nothing in our analysis interferes with the constitutionally protected right of a parent “to permit or deny a child’s participation in any or all of the recreational activities that may be available.” Id. at 597, 868 A.2d 1087 (Fisher, J., concurring in part and dissenting in part).

We also reject defendant’s argument that enforcing parental releases of liability is necessary to ensure the continued viability of businesses offering sports activities to minors. We do not view tort liability as an unreasonable economic restraint on the ability of business owners to operate commercial recreational facilities. See
Scott, supra, 834 P.2d at 12 (finding “[n]o legally sound reason . . . for removing children’s athletics from the normal tort system”). [***33] [*340] Indeed, by invalidating pre-injury releases of liability executed by a parent on a minor’s behalf, we are not altering the landscape of common-law tort liability principles by which commercial enterprises typically must abide. Rather, we are preserving the traditional duties owed by business owners to their invitees. Further, as noted, because such facilities [**391] derive economic benefit from their operation, they are better able to assume the costs associated with proper maintenance and the prevention of injury than are the children to whom they cater.

Finally, the dissent below argued that invalidating parental releases of liability “is at odds with our Legislature’s willingness to render participants solely responsible for injuries resulting from the inherent risks of similar activities.” Hojnowski, supra, 375 N.J. Super. at 593, 868 A.2d 1087 (Fisher, J., concurring in part and dissenting in part). That argument refers to legislative acts in the areas of skiing, N.J.S.A. 5:13-1 to -11; roller skating, N.J.S.A. 5:14-1 to -7; and equestrian activities, N.J.S.A. 5:15-1 to -12, which place the [***34] responsibility for injuries resulting from “inherent risks” of the sport on the participant. However, those statutes do not absolve an operator of a facility from liability for its own negligence. Instead, the statutes apply only to inherent risks, which, by their very nature, are those “that cannot be removed through the exercise of due care if the sport is to be enjoyed.” Brett v. Great Am. Recreation, Inc., 144 N.J. 479, 499, 677 A.2d 705 (1996); see also
Pietruska v. Craigmeur Ski Area, 259 N.J. Super. 532, 537, 614 A.2d 639 (Law Div.1992) (finding that “[i]mproper operation of a ski lift is not an inherent risk of skiing since, with due care, it can be eliminated”). As such, inherent risks need not be the subject of waiver because “the general law of negligence has long recognized that a defendant has no duty with regard to such risks.” Brett, supra, 144 N.J. at 499, 677 A.2d 705; see also
Meistrich v. Casino Arena Attractions, Inc., 31 N.J. 44, 49, 155 A.2d 90 (1959) (stating that assumption of inherent risk “is an alternate expression for the proposition that defendant was not negligent”). Thus, a commercial enterprise [***35] is [*341] not liable for injuries sustained as a result of an activity’s inherent risks so long as that enterprise has acted in accordance with “the ordinary duty owed to business invitees, including exercise of care commensurate with the nature of the risk, foreseeability of injury, and fairness in the circumstances.” Rosania v. Carmona, 308 N.J. Super. 365, 374, 706 A.2d 191 (App.Div.), certif. denied, 154 N.J. 609, 713 A.2d 500 (1998).

III.

The second issue that we must decide is whether a parent can bind a minor child to an agreement to arbitrate future disputes arising out of a commercial recreation contract. Plaintiffs contend that “[although] arbitration is an approved alternative to a jury trial, an unsophisticated parent, about to have [his or her] child enter a recreational facility, should not be permitted to bind [his or her] child to a waiver of a trial by jury.” Defendant counters that this Court should enforce the parent’s agreement to submit the minor’s claims to arbitration because the Appellate Division previously upheld such an agreement in Allgor v. Travelers Insurance Co., 280 N.J. Super. 254, 654 A.2d 1375 (App.Div.1995). [***36] Defendant also argues that plaintiffs should be bound to arbitrate the present matter because public policy favors the arbitration of disputes. We agree and find that a parent’s agreement to arbitrate a minor’s potential tort claims is not contrary to public policy.

A.

[HN6] Federal policy has favored the enforcement of arbitration agreements for many years. In 1925, Congress enacted the Federal Arbitration Act (FAA), 9 U.S.C.A. §§ 1-16, to reverse then existing judicial hostility to arbitration agreements and “to place arbitration agreements upon [**392] the same footing as other contracts.” Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24, 111 S. Ct. 1647, 1651, 114 L. Ed. 2d 26, 36 (1991). To that end, § 2 of the FAA provides:

[HN7] [*342] A written provision in any . . . contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such a contract or transaction . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. [Emphasis added.]

[HN8] Although the FAA applies to both state [***37] and federal judicial proceedings, state contract-law principles generally govern a determination whether a valid agreement to arbitrate exists. See, e.g., First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944, 115 S. Ct. 1920, 1924, 131 L. Ed. 2d 985, 993 (1995) (“When deciding whether the parties agreed to arbitrate a certain matter (including arbitrability), courts generally . . . should apply ordinary state-law principles that govern the formation of contracts.”). However, “a state cannot subject an arbitration agreement to more burdensome requirements than those governing the formation of other contracts.” Leodori v. CIGNA Corp., 175 N.J. 293, 302, 814 A.2d 1098, cert. denied, 540 U.S. 938, 124 S. Ct. 74, 157 L. Ed. 2d 250 (2003).

[HN9] In New Jersey, arbitration also is a favored means of dispute resolution. See, e.g., Martindale v. Sandvik, Inc., 173 N.J. 76, 84-85, 800 A.2d 872 (2002); Garfinkel v. Morristown Obstetrics & Gynecology Assocs., 168 N.J. 124, 131, 773 A.2d 665 (2001); Marchak v. Claridge Commons Inc., 134 N.J. 275, 281, 633 A.2d 531 (1993). Our Legislature [***38] codified its endorsement of arbitration agreements in the Arbitration Act, N.J.S.A. 2A:24-1 to -11, which, like its federal counterpart, provides that agreements to arbitrate shall be valid save for “such grounds as exist at law or in equity for the revocation of a contract,” N.J.S.A. 2A:24-1. 2 In accordance with those principles, an agreement to arbitrate generally will be valid under state law unless it violates public policy. See, e.g., Marchak, supra, 134 N.J. at 281-82, 633 A.2d [*343] 531 (“Honoring an agreement to submit a matter to arbitration is consistent with the premise that, as long as the agreement does not violate public policy, parties may bargain freely.”); Faherty v. Faherty, 97 N.J. 99, 105, 477 A.2d 1257 (1984) (“A court generally will enforce an arbitration agreement unless it violates public policy.”).

2 N.J.S.A. 2A:24-1 to -11 was superseded by a modified version of the Arbitration Act, N.J.S.A. 2A:23B-1 to -32, effective January 1, 2003, and applicable to agreements entered into on or after that date, N.J.S.A. 2A:23B-3a. Because the arbitration agreement at issue in this appeal was executed prior to that date, this matter is governed by the former statute.

[***39] B.

In light of the strong public policy favoring the settlement of disputes through arbitration, we conclude that allowing a parent to bind a minor child to arbitrate future tort claims is not contrary to our duty as parens patriae to protect the best interests of the child. As opposed to a pre-injury release of liability, a pre-injury agreement to arbitrate does not require a minor to forego any substantive rights. Rather, such an agreement specifies only the forum in which those rights are vindicated. See, e.g., Global Travel Mktg., Inc. v. Shea, 908 So. 2d 392, 403 (Fla.2005) (stating that distinction between waiver of forum in which claim is presented and outright waiver of legal claim “is a crucial consideration in determining whether state’s interest in protecting children renders [**393] the waiver unenforceable”); Cross v. Carnes, 132 Ohio App. 3d 157, 724 N.E.2d 828, 836 (1998) (stating that “parent’s consent and release to arbitration only specifies the forum for resolution of the child’s claim; it does not extinguish the claim”). In that respect, our Appellate Division has observed that

[t]he ancient practice of [***40] arbitration “[i]n its broad sense, . . . is a substitution, by consent of the parties, of another tribunal for the tribunal provided by the ordinary processes of law. The object of arbitration is the final disposition, in a speedy, inexpensive, expeditious, and perhaps less formal manner, of the controversial differences between the parties.”

[Carpenter v. Bloomer, 54 N.J. Super. 157, 162, 148 A.2d 497 (App.Div.1959) (quoting E. Eng’g Co. v. City of Ocean City, 11 N.J. Misc. 508, 510-11, 167 A. 522 (Sup.Ct.1933)).]

Further, although this Court previously has not ruled on the issue, permitting arbitration of a minor’s claims is consistent with New Jersey case law discussing the enforceability of arbitration agreements that affect the rights of children. For example, in [*344] Allgor, supra, the Appellate Division concluded that a father’s contractual agreement to submit to arbitration disputes arising under his underinsured motorist policy also bound his minor son who filed a claim under that policy. 280 N.J. Super. at 262-65, 654 A.2d 1375. The court rejected the contention that “arbitration is not appropriate when the best interests [***41] of a child are at stake.” Id. at 261, 654 A.2d 1375. Our decision in Faherty also supports enforcement of the arbitration provision at issue. In that case, we held that public policy permits spouses to include provisions in their separation agreements for arbitration of child support disputes, subject only to heightened judicial review of the arbitrator’s award. Faherty, supra, 97 N.J. at 108-09, 477 A.2d 1257. We reasoned that

[w]e do not agree with those who fear that by allowing parents to agree to arbitrate child support, we are interfering with the judicial protection of the best interests of the child. We see no valid reason why the arbitration process should not be available in the area of child support; the advantages of arbitration in domestic disputes outweigh any disadvantages.

[Id. at 109, 477 A.2d 1257 (emphasis added).]

Finally, a review of case law from other jurisdictions reinforces our conclusion that a parent should be permitted to bind a minor child to arbitration. In Global Travel Marketing, supra, the Florida Supreme Court recently reversed a Florida Court of Appeals ruling, upon which plaintiffs relied, [***42] which held that parents lack authority to bind a minor child to arbitrate prospective claims arising out of a commercial travel contract for an African safari. 908 So. 2d at 394-95. In finding that such agreements are “not contrary to the public policy of protecting children,” id. at 405, the court recognized a “crucial” distinction between an outright waiver of a minor’s legal claims and a waiver of the forum in which the claims are presented, id. at 403.

The Ohio Court of Appeals reached a similar conclusion in Cross, supra, 724 N.E.2d 828. There, the producers of a television show sought to enforce an arbitration agreement signed by a parent on behalf of a child who sued the show for fraud and defamation after the show allegedly portrayed [*345] the child as a bully. Id. at 830-31. The court upheld that agreement and found that “a parent has the authority to bind his or her child to a resolution of the child’s claims [**394] through arbitration.” Id. at 836. The court reasoned that the Ohio Supreme Court previously had upheld a liability waiver executed by a parent on behalf of a minor participating in a recreational [***43] activity sponsored by a non-profit organization. Ibid. (citing Zivich, supra, 82 Ohio St.3d 367, 696 N.E.2d 201). In relying on Zivich, however, the court noted that

[a] parent’s consent and release to arbitration only specifies the forum for resolution of the child’s claim; it does not extinguish the claim. Logically, if a parent has the authority to bring and conduct a lawsuit on behalf of the child, he or she has the same authority to choose arbitration as the litigation forum.

[Ibid.]

See also
Doyle v. Giuliucci, 62 Cal. 2d 606, 401 P.2d 1, 3, 43 Cal. Rptr. 697 (1965) (stating that arbitration provision in contract for medical services signed by parent on minor’s behalf “is a reasonable restriction, for it does no more than specify a forum for the settlement of disputes”); accord
Leong v. Kaiser Found. Hosps., 71 Haw. 240, 788 P.2d 164, 169 (1990) (concurring with reasoning of Doyle and holding that minor was bound by arbitration provision in contract for medical services signed by father).

Although we recognize that certain cases from other jurisdictions have found a minor’s claims to be non-arbitrable, [***44] those cases are distinguishable because they were decided solely on the basis of the individual contracts at issue in those appeals. They did not directly rule on the larger issue presented by this appeal–whether a parent can bind a minor child to arbitrate future disputes. Fleetwood Enters. Inc. v. Gaskamp, 280 F.3d 1069, 1077, reh’g denied, 303 F.3d 570 (5th Cir.2002) (holding that minor children were not bound to arbitrate injuries suffered as result of formaldehyde inhalation because children were neither signatories to mobile-home sales contract signed by their parents nor third-party beneficiaries of that contract); Billieson v. City of New Orleans, 863 So. 2d 557, 562-63 (La.Ct.App.2003) (concluding that children’s claims for lead poisoning were not precluded by [*346] arbitration agreement between city housing authority and property management company because children were not third-party beneficiaries of agreement); see also
Lewis v. Cedu Educ. Servs., 135 Idaho 139, 15 P.3d 1147, 1152 (2000) (concluding that child was not bound to arbitrate based on language of contract and expressly declining to determine [***45] whether “minors should or should not be bound to arbitrate disputes arising out of contracts entered into on their behalf by their parents”); Accomazzo v. Cedu Educ. Servs., Inc., 135 Idaho 145, 15 P.3d 1153, 1156 (2000) (same). Therefore, [HN10] in the absence of any allegations relating to fraud, duress, or unconscionability in the signing of the contract or that the agreement to arbitrate was not written in clear and unambiguous terms, we conclude that a parent’s agreement to arbitrate is valid and enforceable against any tort claims asserted on a minor’s behalf.

IV.

We affirm the judgment of the Appellate Division and refer this matter to the arbitrator for further proceedings consistent with this opinion.

CHIEF JUSTICE PORITZ and JUSTICES LONG, ALBIN, and WALLACE join in JUSTICE ZAZZALI’s opinion. JUSTICE LaVECCHIA filed a separate opinion concurring in part and dissenting in part, in which JUSTICE RIVERA-SOTO joins.

CONCUR BY: LaVECCHIA (In Part)

DISSENT BY: LaVECCHIA (In Part)

DISSENT

Justice LaVECCHIA, concurring in part and dissenting in part.

I am in full agreement with that portion of the majority’s decision that affirms enforcement of the parties’ agreement to subject [***46] their dispute to arbitration. I part company from my colleagues, however, in so far as they have chosen to invalidate the [**395] waiver of liability that the parties to this appeal executed as a condition of the minor Andrew’s use of defendant’s property to skateboard. In that respect, I am in substantial agreement with the Appellate Division dissent that was penned by Judge Fisher. Essentially, because a waiver of rights of the type entered into by these parties generally would be enforceable as against an adult, I see no reason why this Court should prevent a parent from ratifying such a waiver on behalf of a child, provided that a court or arbitrator determines that the release is reasonable.

[*347] Although the majority declines to express any view on whether the waiver would be invalid if enforced against an adult, it is noteworthy that the waiver does not appear to involve any of the grounds that New Jersey courts have heretofore invoked to invalidate an exculpatory waiver. For example, the waiver does not exempt defendant from liability for a “future intentional tort or willful act or gross negligence.” Kuzmiak v. Brookchester, Inc., 33 N.J. Super. 575, 580, 111 A.2d 425 (App.Div.1955). [***47] Nor does the waiver seek a release from any statutorily imposed duty. McCarthy v. NASCAR, Inc., 48 N.J. 539, 542, 226 A.2d 713 (1967). Furthermore, although the majority notes that “[e]xculpatory agreements have long been disfavored in the law,” that proposition has been invoked not to invalidate a waiver, as the Court does here, but rather to explain that such waivers should be narrowly construed:

Contracts of this nature are not favored by the law. They are strictly construed against the party relying on them and clear and explicit language in the contract is required to absolve a person from such a liability.

[McCarthy v. NASCAR, Inc., 87 N.J. Super. 442, 450, 209 A.2d 668 (Law Div.1965), aff’d, 90 N.J. Super. 574, 218 A.2d 871 (App.Div.1966), aff’d, 48 N.J. 539, 226 A.2d 713 (1967).]

See also
Gershon v. Regency Diving Ctr., Inc., 368 N.J. Super. 237, 247, 845 A.2d 720 (App.Div.2004) (stating more recently that because “the law does not favor exculpatory agreements,” “[a]ny doubts or ambiguities as to the scope of the exculpatory language must be resolved against the drafter”).

The fact that exculpatory waivers receive [***48] narrow construction from courts does not render such waivers unenforceable. Previously, we have stated that “[w]here [exculpatory agreements] do not adversely affect the public interest, exculpatory clauses in private agreements are generally sustained.” Mayfair Fabrics v. Henley, 48 N.J. 483, 487, 226 A.2d 602 (1967). Such clauses most commonly are used and enforced in a “commercial context,” Chem. Bank, N.A. v. Bailey, 296 N.J. Super. 515, 527, 687 A.2d 316 (App.Div.), certif. denied, 150 N.J. 28, 695 A.2d 671 (1997), and generally are valid and enforceable against individuals so long as the particular exculpatory clause does not involve a matter of [*348] public interest. McCarthy v. NASCAR, Inc., 48 N.J. 539, 543, 226 A.2d 713 (1967) (citing Boyd v. Smith, 372 Pa. 306, 94 A.2d 44, 46 (1953)). Many states also look to the notion of “public interest,” or other related concepts, when determining whether to uphold the validity of an exculpatory waiver. The California Supreme Court’s decision in Tunkl v. Regents of the University of California, 60 Cal. 2d 92, 383 P.2d 441, 445-46, 32 Cal. Rptr. 33 (1963), [***49] provides arguably the most widely accepted test applied to exculpatory agreements. Tunkl set forth six factors, one of which is whether “[t]he party seeking exculpation is engaged in performing a service of great importance to the public, which is often a matter of practical necessity for some [**396] members of the public.” Id. at 33, 383 P.2d at 445.

In my view, recreational activities such as skateboarding do not implicate the “public interest.” 1 The majority apparently does not assert otherwise, lodging no objection to the content of the waiver. Rather, the majority focuses on the fact that defendant is attempting to enforce this particular waiver of rights against a minor.

1 That conclusion is in accord with the majority of jurisdictions that have addressed the subject; they have concluded that recreational activities do not implicate the public interest. See, e.g.
Chauvlier v. Booth Creek Ski Holdings, Inc., 109 Wn. App. 334, 35 P.3d 383, 388 (2001) (stating that “skiing is not a ‘service of great importance to the public,’ much less a service of ‘practical necessity.'”). Courts have upheld liability waivers in the context of the following recreational activities: automobile racing, being a spectator at an automobile race, scuba diving, horseback riding, roller skating, skydiving, mountain biking, recreational sumo wrestling, weightlifting at a fitness center, motorcycle racing, go-cart racing, bicycling, and ski racing. Hanks v. Powder Ridge Rest. Corp., 276 Conn. 314, 885 A.2d 734, 752-53 (2005) (Norcott, J., dissenting) (collecting cases). On the other hand, a minority of states have found that snow-tubing and skiing activities do implicate the public interest. See
Hanks, supra, 276 Conn. 314, 885 A.2d 734 (majority opinion); Spencer v. Killington, Ltd., 167 Vt. 137, 702 A.2d 35 (Vt. 1997); Dalury v. S-K-I, Ltd., 164 Vt. 329, 670 A.2d 795 (1995). I find those cases unpersuasive. To find that recreational activities implicate the “public interest,” would strip that term of meaningful content.

[***50] Invoking the “best interests” of children under the parens patriae doctrine, the majority holds that the waiver is invalid as [*349] against public policy, and analogizes the instant situation to the requirement under Rule 4:44 that parental settlement of a minor’s post-injury claims receive judicial approval. There is an important difference between the present pre-injury waiver and the circumstances Rule 4:44 seeks to address. “Our rules for friendly settlements, R. 4:44-1 et seq., are intended to minimize or prevent conflicts of interest from occurring and to assure the reasonableness of settlements.” Zukerman v. Piper Pools, 232 N.J. Super. 74, 90, 556 A.2d 775 (App.Div.1989). See also
Colfer v. Royal Globe Ins. Co., 214 N.J. Super. 374, 377, 519 A.2d 893 (App.Div.1986) (noting that “[t]he purpose of the rule is not only to guard a minor against an improvident compromise but also to secure the minor against dissipation of the proceeds.”). Because the pre-injury setting does not involve the specter of a potential monetary settlement that looms over post-injury settlements, conflicts are of little [***51] concern in the pre-injury setting. See
Sharon v. City of Newton, 437 Mass. 99, 769 N.E.2d 738, 747 n.10 (2002); Zivich v. Mentor Soccer Club, Inc., 82 Ohio St. 3d 367, 1998 Ohio 389, 696 N.E.2d 201, 206 (1998); Angeline Purdy, Note, Scott v. Pacific West Mountain Resort: Erroneously Invalidating Parental Releases of a Minor’s Future Claim, 68 Wash. L. Rev. 457 (1993).

Assuming, nonetheless, that a pre-injury contractual setting is similar to a post-injury setting, that does not support the conclusion that all waivers entered into on behalf of minors are unenforceable, a conclusion that simply goes too far. Rule 4:44 does not bar parental settlements. Rather, the rule requires judicial scrutiny “to ensure the reasonableness of settlements.” Zukerman, supra, 232 N.J. Super. at 90, 556 A.2d 775. If Rule 4:44 provides an appropriate analogy, then the standard of reasonableness that applies to post-injury settlements should apply to the review of pre-injury waivers.

I acknowledge that as a general rule, minors can, before they reach the age of majority, disaffirm contracts into which they enter. [**397] Mechanics Fin. Co. v. Paolino, 29 N.J. Super. 449, 453, 102 A.2d 784 (App.Div.1954) [***52] (stating that “[i]t is generally true that an [*350] infant may avoid his contract.”); Boyce v. Doyle, 113 N.J Super. 240, 241, 273 A.2d 408 (Law Div.1971) (stating that “[t]here can be no doubt but that contracts not of necessity may be voided by an infant either before or a reasonable time after he obtains his majority.”); Restatement (Second) of Contracts §§ 12, 14 (1981); 7 Corbin on Contracts § 27.2 (Perillo rev.2002); 5 Williston on Contracts § 9.5 (Lord ed., 4th ed.1993). That general rule is not altered by a parent’s signing of the contract on behalf of a minor. See 42 Am. Jur. 2d Infants § 46 (2000) (stating that “[a]s a general rule, an infant’s right to avoid his contract is not defeated by the fact that the contract was made by the infant and his or her parent, was made with the approval of his or her parent [or] was approved and ratified by his or her guardian”); Del Bosco v. U.S. Ski Ass’n, 839 F. Supp. 1470, 1474 n.2 (D.Colo.1993) (noting that “[c]ourts that have decided the issue have determined that the signature of a parent does not validate [***53] an infant’s contract.”).

However, contracts entered into by minors can be enforceable if the contract is approved by a court. Indeed, as noted, Rule 4:44 allows settlement agreements involving minors to be enforced so long as a reviewing court determines that the agreement is “reasonable.” Zukerman, supra, 232 N.J. Super. at 90, 556 A.2d 775. Beyond the settlement context, other states have enacted statutory schemes that bar minors from disaffirming certain contracts that have received judicial approval. See, e.g., Cal. Fam. Code § 6750-53 (2006) (covering entertainers and athletes); Cal. Lab. Code § 1700.37 (2006) (covering contracts between a minor and a talent agency); N.Y. Arts & Cult. Affr. Law § 35.03 (2006) (covering entertainers and athletes).

Although our Legislature has not yet enacted similar legislation, freedom of contract principles lead me to the conclusion that a pre-tort waiver entered into by a minor, or ratified by a parent on behalf of a minor, should be enforceable when a reviewing court or arbitrator determines that the waiver was reasonable and not [***54] based on unequal bargaining positions. See
Simmons v. Parkette Nat’l Gymnastic Training Ctr., 670 F. Supp. 140, 144 (E.D.Pa. [*351] 1987) (invalidating minor’s pre-injury waiver and relying, in part, on the fact that “there was no court involvement in the transaction”). If the reasonableness of the waiver is approved, then a minor should be barred from disaffirming the contract, an approach that is consistent with Rule 4:44. It differs somewhat from Rule 4:44 in that I would allow a trial court to review the “reasonableness” of a pre-tort waiver when a defendant, post-injury, raises the waiver as a defense to a suit brought by an injured party.
2

2 Under Rule 4:44 litigants must obtain court approval at the time of entry into the settlement agreement. Requiring judicial approval at the time that a minor enters into a pre-injury waiver would be impractical and inefficient. Review would have to be limited to situations when an injury actually occurs. The reviewing court, of course, would have to view the “reasonableness” of the waiver as of the time that the waiver was executed.

[***55] Post-injury review of pre-injury waivers eliminates the certainty that is provided by Rule 4:44 or, for example, the process established by statute in California and New York, all of which mandate that courts review contracts at the time they are executed. Potential defendants may, however, wish to bear the risk of such uncertainty given the benefits of any waiver ultimately upheld as reasonable. Absent action by the Legislature, I would permit court or arbitrator review and approval, as described, to validate a minor’s [**398] contract in respect of the type of pre-injury liability waivers presented herein. In so stating, I offer no judgment about what forms of liability defendant purported to waive by this exculpatory release. I would have allowed the arbitrator to sort out the reasonableness and the reach of the waiver executed by the parties.

Accordingly, I would affirm in part, reverse in part, and remand the matter for further proceedings.

Justice RIVERA-SOTO joins in this opinion. [*352]


New Jersey holds that if you signed the release, you are held to its terms even if you cannot read English.

There was a ton of issues that in many states might have voided the release, 8 pt font, missing initial and the plaintiff not understanding English were just a few of them.

Citation: Kang v. LA Fitness, 2016 U.S. Dist. LEXIS 179934, 2016 WL 7476354

State: New Jersey, United States District Court, D. New Jersey

Plaintiff: Soon Ja Kang

Defendant: LA Fitness, LA Fitness of South Plainfield, John Does 1-5, et al.

Plaintiff Claims: Negligence

Defendant Defenses: Release

Holding: for the Defendant

Year: 2016

Summary

If you sign the membership agreement containing a release in New Jersey, you are held to the terms of the release, even if you can’t speak or read English. Plaintiff could not read or speak English, signed LA Fitness membership agreement and could not sue after she was injured on a piece of equipment.

Facts

Fitness International, LLC d/b/a LA Fitness (incorrectly designated as LA Fitness of South Plainfield) (“LA Fitness”) operates a fitness facility located in Piscataway, NJ. See Final Pretrial Order Stipulation of Facts. On December 30, 2013, plaintiff Soon Ja Kang went to LA Fitness with her husband to sign up for membership.

On December 31, 2013, Kang was injured while working out on a chin/dip assist pull up machine at LA Fitness’s Piscataway location. She filed the instant action on September 29, 2014 in state court, and LA Fitness filed a notice of removal in this Court on November 14, 2014 on the basis of diversity jurisdiction. The complaint alleges that Kang was injured as a result of negligence on the part of LA Fitness. Id. Prior to completion of expert discovery, LA Fitness moved for summary judgment on the issue of whether the waiver and liability provision bars the instant action.

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

The court started its analysis by looking at the release and the injury the plaintiff suffered. The court found the injury fell within the confines of the release.

As her negligence claim for an injury allegedly sustained while using a piece of workout equipment at an LA Fitness facility clearly falls within the ambit of the liability waiver, the issue becomes whether the waiver itself is enforceable against Kang on the facts of this case.

The issue then became whether or not the release applied to someone who did not speak or read English. Releases in New Jersey are enforceable if:

…(1) it does not adversely affect the public interest; (2) the exculpated party is not under a legal duty to perform; (3) it does not involve a public utility or common carrier; or (4) the contract does not grow out of unequal bargaining power or is otherwise unconscionable.

The court throughout the third factor because the defendant was not a public utility or common carrier. The court then reviewed whether the exculpatory clause affected the public interest. The court found it did not.

[W]e are satisfied that, at least with respect to equipment being used at the club in the course of an exercise class or other athletic activity, the exculpatory agreement’s disclaimer of liability for ordinary negligence is reasonable and not offensive to public policy.

There seemed to be somewhat of a limit to the release based on the courts next comment about the reach of the release.

The Court agrees with the analysis in Stelluti and finds that the exculpatory clause here does not adversely affect the public interest, at least to the extent that it purports to exculpate LA Fitness with respect to acts or omissions amounting to ordinary negligence.

The plaintiff then argued the release violates the New Jersey Plain Language Act. N.J. Stat. Ann. § 56:12-2. The act requires a consumer contract to be “written in a simple, clear, understandable and easily readable way.”

The plaintiff then argued the act was violated because the print size (font) was 8 points, and the margins of the paper were .5″ “reflecting the intentions of the drafter to squeeze in additional words.”

Reviewing examples of bad language found in the act, the court determined the release did not violate the Plain Language Act.

Reviewing Kang’s membership agreement in light of the above guidelines, the Court finds that the waiver provision does not violate the New Jersey Plain Language Act. The waiver provision does not contain any cross references, nor does it contain any double negatives or exceptions to exceptions. It does not contain words with obsolete meanings, nor is it clouded by the use of Old English, Middle English, Latin or French phrases. And Kang does not argue-nor does the Court find-that the sentences of the waiver provision are set forth in a confusing or illogical order.

The next issue was there any legal duty to perform on the part of the defendant part 2 of the four requirements.

There were no state statutes or regulation’s setting standards for fitness facilities. The plaintiff argued that National Associations had created standards that applied to fitness facilities. However, the court could not find that to be valid. “However, there is no indication that these national standards apply with the force of law in New Jersey so as to constitute public policy of the state.”

The final argument was the release was unconscionable because of unequal bargaining power between the plaintiff and defendant.

Kang argues that the waiver was invalid for lack of mutual assent, based upon the following assertions: (1) Neither Kang nor her husband speaks English; (2) LA Fitness knew as much, as the Kangs’ daughter was present to translate; (3) an LA Fitness employee explained the contract duration and payment terms to the Kangs’ daughter, but did not explain the liability waiver to her; (4) only Kang’s husband was asked to initial next to the waiver provision in his membership agreement, but no one explained to him what he was initialing; and (5) no employee went over the waiver provision with Kang or her daughter.

The court did not agree with any of the plaintiffs’ arguments. And stated in clear language that the plaintiff’s inability to speak English did not stop her from becoming bound to the terms of the release.

As an initial matter, Kang’s inability to speak English does not bar her from becoming contractually bound. Notwithstanding the fact that her daughter was present to translate, New Jersey courts have unequivocally held that in the absence of fraud, one who signs an agreement is conclusively presumed to understand and assent to its terms and legal effect:

The court went on to explain that if you sign the agreement, you are bound to the terms of the agreement, whether or not you understood the agreement.

In the absence of fraud or imposition, when one fails to read a contract before signing it, the provisions are nevertheless binding, and the party is conclusively presumed to understand and assent to its terms and legal effect . . . . Even illiterate individuals have been held bound by a signed contract in the absence of misrepresentation. One who signs a document in those circumstances should know its contents or have it read (or otherwise have the contents made known) to him or her.

The final issue was the missing initial in the document. Because she had signed the agreement, the signature at the bottom of the agreement was all that was needed for the release to be valid.

Finally, the Court is not aware of, nor has Kang cited, any requirement that she must have initialed the waiver provision for that clause to be enforceable against her. While she did not initial the waiver provision, she did sign the membership agreement containing it. In the absence of fraud, that is enough to bind her to its terms.

The plaintiff then argued the release and fitness contract containing the release were unconscionable. The court summed up the plaintiffs’ unconscionable argument as an amalgamation of all of her other arguments. The court found the exculpatory clause did not offend public policy, and the other arguments for unconscionability did not change the release validity.

Kang was a layperson without any specialized knowledge of exculpatory contracts, and the Court gives her the benefit of the inference that LA Fitness did not explain the legal effect of the waiver provision to her. However, also like the defendant in Stelluti, Kang was not under any undue pressure to execute the agreement and she could have sought advice before signing. Indeed, her daughter was present to translate. As noted above, the fact that Kang does not speak English does have any legal effect on the contract’s enforceability. Thus, in accordance with Stelluti, the Court finds that although the LA Fitness membership agreement may have been offered on a “take-it-or-leave-it” basis, it is not void on the basis of unconscionability.

The motion for summary judgment of the defendant was granted the plaintiff’s claims dismissed.

So Now What?

New Jersey is another state that upholds the idea that if you sign a release, you are bound to the terms of the release no matter if you could understand the release, the type was too small; you did not read or speak English, or you just want out of the release.

At the same time, this list from my studies has only two states on it, California being the other state. See Balloon ride in California is not a common carrier, and the release signed by the plaintiff bars the plaintiff’s claims even though she did not read or speak English.

What do you think? Leave a comment.

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Kang v. LA Fitness, 2016 U.S. Dist. LEXIS 179934, 2016 WL 7476354

Kang v. LA Fitness, 2016 U.S. Dist. LEXIS 179934, 2016 WL 7476354

Soon Ja Kang Plaintiff,

LA Fitness, LA Fitness of South Plainfield, John Does 1-5, et al., Defendants.

Civil No. 2:14-cv-07147 (KSH) (CLW)

United States District Court, D. New Jersey

December 29, 2016

NOT FOR PUBLICATION

OPINION

Katharine S. Hayden, U.S.D.J.

Before the Court is defendants’ motion for summary judgment as to the validity and enforceability of an exculpatory clause in a fitness center membership agreement with plaintiff. For the reasons set forth below, the Court finds the liability waiver to be valid and enforceable and defendants’ motion is granted.

I. Background

Fitness International, LLC d/b/a LA Fitness (incorrectly designated as LA Fitness of South Plainfield) (“LA Fitness”) operates a fitness facility located in Piscataway, NJ. See Final Pretrial Order Stipulation of Facts (“SOF”) (D.E. 19), at ¶ 1. On December 30, 2013, plaintiff Soon Ja Kang went to LA Fitness with her husband to sign up for membership. Id. at ¶ 2. The membership agreement she signed states in relevant part:

IMPORTANT: RELEASE AND WAIVER OF LIABILITY AND INDEMNITY. You hereby acknowledge and agree that use by Member and/or Member’s minor children of LA Fitness’ facilities, services, equipment or premises, involves risks of injury to persons and property, including those described below, and Member assumes full responsibility for such risks. In consideration of Member and Member’s minor children being permitted to enter any facility of LA Fitness (a “Club”) for any purpose including, but not limited to, observation, use of facilities, services or equipment, or participation in any way, Member agrees to the following: Member hereby releases and holds LA Fitness, its directors, officers, employees, and agents harmless from all liability to Member, Member’s children and Member’s personal representatives, assigns, heirs, and next of kin for any loss or damage, and forever gives up any claim or demands therefore, on account of injury to Member’s person or property, including injury leading to the death of Member, whether caused by the active or passive negligence of LA Fitness or otherwise, to the fullest extent permitted by law, while Member or Member’s minor children are in, upon, or about LA Fitness’ premises or using any LA Fitness facilities, services or equipment. Member also hereby agrees to indemnify LA Fitness from any loss, liability, damage or cost LA Fitness may incur due to the presence of Member or Member’s children in, upon or about the LA Fitness premises or in any way observing or using any facilities or equipment of LA Fitness whether caused by the negligence of Member(s) or otherwise. You represent (a) that Member and Member’s minor children are in good physical condition and have no disability, illness, or other condition that could prevent Member(s) from exercising without injury or impairment of health, and (b) that Member has consulted a physician concerning an exercise program that will not risk injury to Member or impairment of Member’s health. Such risk of injury includes (but is not limited to): injuries arising from use by Member or others of exercise equipment and machines; injuries arising from participation by Member or others in supervised or unsupervised activities or programs at a Club; injuries and medical disorders arising from exercising at a Club such as heart attacks, strokes, heat stress, sprains, broken bones, and torn muscles and ligaments, among others; and accidental injuries occurring anywhere in Club dressing rooms, showers and other facilities. Member further expressly agrees that the foregoing release, waiver and indemnity agreement is intended to be as broad and inclusive as is permitted by the law of the State of New Jersey and that if any portion thereof is held invalid, it is agreed that the balance shall, notwithstanding, continue in full force and effect. Member has read this release and waiver of liability and indemnity clause, and agrees that no oral representations, statements or inducement apart from this Agreement has been made.

LA Fitness Moving Br., Exh. E (D.E. 22-7).

Kang and her husband do not read or understand English, but their daughter was present to translate for them when they signed up. See SOF, at ¶¶ 4-5. Kang signed a membership agreement. She did not initial next to the waiver and liability provision in her membership agreement; however, her husband was asked to initial next to the same provision in his membership agreement, and he did so. Id. at ¶ 6.

On December 31, 2013, Kang was injured while working out on a chin/dip assist pull up machine at LA Fitness’s Piscataway location. See SOF, at ¶¶ 2, 7. She filed the instant action on September 29, 2014 in state court, and LA Fitness filed a notice of removal in this Court on November 14, 2014 on the basis of diversity jurisdiction (D.E. 1). The complaint alleges that Kang was injured as a result of negligence on the part of LA Fitness. Id. Prior to completion of expert discovery, LA Fitness moved for summary judgment on the issue of whether the waiver and liability provision bars the instant action. The motion was fully briefed. (D.E. 22, 25, 26).

The Court makes its decision on the paper.

II. Discussion

A. Standard

Summary judgment is warranted where the moving party demonstrates that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a), (c). The parties have conducted discovery on the circumstances surrounding the formation of Kang’s membership agreement and, as set forth in the analysis below, all facts relevant to the enforceability of the waiver provision are essentially undisputed as set forth in the Final Pretrial Order Stipulation of Facts (D.E. 19). In determining whether the waiver provision is enforceable as a matter of law, the Court “view[s] the evidence in the light most favorable to [Kang] and draw[s] all justifiable, reasonable inferences in [her] favor.” Sgro v. Bloomberg L.P., 331 F.Appx. 932, 937 (3d Cir. 2009).

B. Analysis

Pursuant to the release and waiver of liability provision in her membership agreement, Kang released and held LA Fitness harmless for all injuries she might suffer “whether caused by the active or passive negligence of LA Fitness or otherwise, ” while she was “in, upon, or about LA Fitness’ premises or using any LA Fitness facilities, services or equipment.” LA Fitness Moving Br., Exh. E (D.E. 22-7). As her negligence claim for an injury allegedly sustained while using a piece of workout equipment at an LA Fitness facility clearly falls within the ambit of the liability waiver, the issue becomes whether the waiver itself is enforceable against Kang on the facts of this case.

In Stelluti v. Casapenn Enterprises, LLC, 408 N.J.Super. 435, 454 (App. Div. 2009), aff’d, 203 N.J. 286 (2010), the New Jersey Appellate Division addressed the enforceability of exculpatory releases in fitness center membership agreements:

Such a release is enforceable only if: (1) it does not adversely affect the public interest; (2) the exculpated party is not under a legal duty to perform; (3) it does not involve a public utility or common carrier; or (4) the contract does not grow out of unequal bargaining power or is otherwise unconscionable.

Id. The third factor is inapplicable here, because LA Fitness is not a public utility or common carrier. See Kang Opp. Br., at p. 6. The Court analyzes the remaining Stelluti factors in turn.

1. Does the Exculpatory Clause Adversely Affect the Public Interest?

LA Fitness argues that the exculpatory clause in this case does not adversely affect the public interest because it is “a facility that encourages New Jersey’s public policy promoting physical fitness.” LA Fitness Moving Br., at p. 6. Noting the important policy objective of promoting public health, the Stelutti court held:

[W]e are satisfied that, at least with respect to equipment being used at the club in the course of an exercise class or other athletic activity, the exculpatory agreement’s disclaimer of liability for ordinary negligence is reasonable and not offensive to public policy.

Stelluti, 408 N.J.Super. at 459. The Court agrees with the analysis in Stelluti and finds that the exculpatory clause here does not adversely affect the public interest, at least to the extent that it purports to exculpate LA Fitness with respect to acts or omissions amounting to ordinary negligence.

Kang argues that public policy promoting physical fitness “cannot counteract the other public policy reasons that are in place to protect against improper liability waivers.” Kang Opp. Br., at p. 7. To that end, she argues that the release in this case violates the New Jersey Plain Language Act, which states that “[a] consumer contract entered into on or after the effective date of this amendatory and supplementary act shall be written in a simple, clear, understandable and easily readable way.” N.J. Stat. Ann. § 56:12-2. Specifically, Kang argues that the small font size and margins in the contract are such that “[s]omeone who can read and understand English would be substantially confused by this agreement[.]” Kang Opp. Br., at p. 8.

To determine whether the waiver provision violates the Plain Language Act, the Court turns to the plain language of the act itself. Section 56:12-10 provides:

To insure that a consumer contract shall be simple, clear, understandable and easily readable, the following are examples of guidelines that a court . . . may consider in determining whether a consumer contract as a whole complies with this act:

(1) Cross references that are confusing;

(2) Sentences that are of greater length than necessary;

(3) Sentences that contain double negatives and exceptions to exceptions;

(4) Sentences and sections that are in a confusing or illogical order;

(5) The use of words with obsolete meanings or words that differ in their legal meaning from their common ordinary meaning;

(6) Frequent use of Old English and Middle English words and Latin and French phrases.

N.J. Stat. Ann. § 56:12-10. Section 56:12-10 further provides:

The following are examples of guidelines that a court . . . may consider in determining whether the consumer contract as a whole complies with this act:

(1) Sections shall be logically divided and captioned;

(2) A table of contents or alphabetical index shall be used for all contracts with more than 3, 000 words;

(3) Conditions and exceptions to the main promise of the agreement shall be given equal prominence with the main promise, and shall be in at least 10 point type.

Id. A Court has discretion as to how much consideration should be given to the above-listed statutory guidelines in finding a violation of the act. See Boddy v. Cigna Prop. & Cas. Companies, 334 N.J.Super. 649, 655 (App. Div. 2000).

Reviewing Kang’s membership agreement in light of the above guidelines, the Court finds that the waiver provision does not violate the New Jersey Plain Language Act. The waiver provision does not contain any cross references, nor does it contain any double negatives or exceptions to exceptions. It does not contain words with obsolete meanings, nor is it clouded by the use of Old English, Middle English, Latin or French phrases. And Kang does not argue-nor does the Court find-that the sentences of the waiver provision are set forth in a confusing or illogical order.

Instead, Kang argues that the waiver provision violates the Plain Language Act because “[t]he size of the font (print) is about size 8, whereas the standard size used in everyday documents is size 12[, ]” and because “[t]he margins on the sides of the pages are about 0.5 inch . . . reflecting the intentions of the drafter to squeeze in additional words.” Kang Opp. Br., at p. 8. However, applying the above guidelines, the Court does not find that the waiver provision in this case is any less prominent that the remainder of the agreement. See N.J. Stat. Ann. § 56:12-10b(3). To the contrary, the waiver and liability provision is the only clause in the membership agreement preceded by a title in all caps (“IMPORTANT: RELEASE AND WAIVER OF LIABILITY AND INDEMNITY”), and it is the only clause that is fully enclosed by a border, creating a visual separation between the waiver and the rest of the agreement.

The Court finds that the waiver provision in this case does not offend public policy under Stelluti and does not otherwise violate the New Jersey Plain Language Act.

2. Is LA Fitness Under a Legal Duty To Perform?

LA Fitness argues that its relationship with Kang does not create any duties prescribed by statute or regulation. See LA Fitness Moving Br., at pp. 6-8. New Jersey courts have found liability waivers to be invalid as against public policy where they conflict with legislatively imposed duties. For example, in Hy-Grade Oil Co. v. New Jersey Bank, 138 N.J.Super. 112, 118 (App. Div. 1975), the court found it against public policy for a bank to exculpate itself from liability or responsibility for negligence in the performance of its function as a night depository service, in part due to the “extensive statutory regulations covering every phase of the banking business[.]” Id. at 118. Similarly, in McCarthy v. Nat’l Ass’n for Stock Car Auto Racing, Inc., 48 N.J. 539, 543 (1967), the New Jersey Supreme Court held a liability waiver invalid as against public policy because it purported to contract away safety requirements prescribed by statute dealing with motor vehicle racing. See id. at 543 (“[t]he prescribed safety requirements may not be contracted away, for if they could be the salient protective purposes of the legislation would largely be nullified”).

Kang argues that “although there are no statutes specific to fitness centers, there are several national associations that have established standards that apply to the fitness industry[.]” Kang Opp. Br., at pp. 8-9. However, there is no indication that these national standards apply with the force of law in New Jersey so as to constitute public policy of the state. Kang further argues that the Stelluti court acknowledged the well-established duties of care that New Jersey business owners owe to patrons that enter their premises. See Kang Opp. Br., at p. 8. However, as noted above in Part B.1. supra, Stelluti expressly held that fitness center liability waivers such as the one at issue here do not violate public policy at least to the extent that they exculpate for ordinary negligence. Stelluti, 408 N.J.Super. at 459. The Court finds that LA Fitness is not under any legal duty that precludes its reliance on the liability waiver in this case.

3. Does the Contract Grow Out of Unequal Bargaining Power or is it Otherwise Unconscionable?

With respect to the final Stelluti factor, Kang argues that the waiver: (1) was not the product of mutual assent; and (2) is unconscionable as a term in a contract of adhesion. See Kang Opp. Br., at pp. 10-14. The Court addresses both arguments in turn.

a. Mutual Assent

Kang argues that the waiver was invalid for lack of mutual assent, based upon the following assertions: (1) Neither Kang nor her husband speaks English; (2) LA Fitness knew as much, as the Kangs’ daughter was present to translate; (3) an LA Fitness employee explained the contract duration and payment terms to the Kangs’ daughter, but did not explain the liability waiver to her; (4) only Kang’s husband was asked to initial next to the waiver provision in his membership agreement, but no one explained to him what he was initialing; and (5) no employee went over the waiver provision with Kang or her daughter. See Kang Opp. Br., at pp. 10-11. Accordingly, Kang argues that she did not “clearly, unequivocally, and decisively surrender[ ] her rights” as is required for a valid waiver. Id. at p. 11.

The Court finds these arguments unavailing. As an initial matter, Kang’s inability to speak English does not bar her from becoming contractually bound. Notwithstanding the fact that her daughter was present to translate, New Jersey courts have unequivocally held that in the absence of fraud, one who signs an agreement is conclusively presumed to understand and assent to its terms and legal effect:

In the absence of fraud or imposition, when one fails to read a contract before signing it, the provisions are nevertheless binding, and the party is conclusively presumed to understand and assent to its terms and legal effect . . . . Even illiterate individuals have been held bound by a signed contract in the absence of misrepresentation. One who signs a document in those circumstances should know its contents or have it read (or otherwise have the contents made known) to him or her.

Statewide Realty Co. v. Fid. Mgmt. & Research Co., 259 N.J.Super. 59, 73 (Law. Div. 1992) (internal citations and quotations omitted); see also Herrera v. Twp. of S. Orange Vill., 270 N.J.Super. 417, 423, 637 (App. Div. 1993) (enforcing release agreement in the absence of fraud, notwithstanding testimony by plaintiff that she did not understand the release because she could not read English).

Under the New Jersey case law cited above, absent allegations of fraud, deceit, or misrepresentation which Kang does not make here, she is conclusively presumed to have understood and assented to the membership agreement’s terms-including the waiver-and legal effect. See Stelluti v. Casapenn Enterprises, LLC, 203 N.J. 286, 305 (2010) (“Although Stelluti argues that she did not know what she was signing, she does not claim that she signed the waiver form as the result of fraud, deceit, or misrepresentation. Therefore, the trial court was well within reason to presume that she understood the terms of the agreement . . . and the finding to that effect is unassailable.”)

Nor does the fact that LA Fitness may not have explained the waiver to her or her daughter preclude enforcement. See Stelluti v. Casapenn Enterprises, LLC, 203 N.J. 286, 301- 02 (2010) (enforcing exculpatory clause while giving plaintiff benefit of inference that “Powerhouse may not have explained to Stelluti the legal effect of the contract that released Powerhouse from liability”).

Finally, the Court is not aware of, nor has Kang cited, any requirement that she must have initialed the waiver provision for that clause to be enforceable against her. While she did not initial the waiver provision, she did sign the membership agreement containing it. In the absence of fraud, that is enough to bind her to its terms. See Statewide, 259 N.J.Super. at 73.

b. Unconscionability

Kang also argues that even if the waiver is found to be enforceable, the Court should invalidate it as a contract of adhesion. “[T]he essential nature of a contract of adhesion is that it is presented on a take-it-or-leave-it basis, commonly in a standardized printed form, without the opportunity for the ‘adhering’ party to negotiate except perhaps on a few particulars.” Rudbart v. N. Jersey Dist. Water Supply Comm’n, 127 N.J. 344, 353, 605 A.2d 681, 685 (1992). Kang’s unconscionability argument is essentially an amalgamation of all of her arguments summarized above: that as someone who does not speak English she lacked the sophistication to understand the terms to which she was agreeing, LA Fitness knew that she was in no position to understand those terms, she did not initial next to the waiver provision, the waiver is one-sided and printed on a standard form agreement, and she was not in a position to negotiate the terms of the agreement. Kang Opp. Br., at pp. 12-14.

Notably, not all contracts of adhesion are unenforceable. In Stelluti, the New Jersey Supreme Court held:

Here, Powerhouse’s agreement was a standard pre-printed form presented to Stelluti and other prospective members on a typical ‘take-it-or-leave-it basis.’ No doubt, this agreement was one of adhesion. As for the relative bargaining positions of the parties, . . . we assume that Stelluti was a layperson without any specialized knowledge about contracts generally or exculpatory ones specifically. Giving her the benefit of all inferences from the record, including that Powerhouse may not have explained to Stelluti the legal effect of the contract that released Powerhouse from liability, we nevertheless do not regard her in a classic ‘position of unequal bargaining power’ such that the contract must be voided. As the Appellate Division decision noted, Stelluti could have taken her business to another fitness club, could have found another means of exercise aside from joining a private gym, or could have thought about it and even sought advice before signing up and using the facility’s equipment. No time limitation was imposed on her ability to review and consider whether to sign the agreement. In sum, although the terms of the agreement were presented ‘as is’ to Stelluti, rendering this a fairly typical adhesion contract in its procedural aspects, we hold that the agreement was not void based on any notion of procedural unconscionability.

Stelluti v. Casapenn Enterprises, LLC, 203 N.J. 286, 301-02 (2010).

Like the defendant in Stelluti, Kang was a layperson without any specialized knowledge of exculpatory contracts, and the Court gives her the benefit of the inference that LA Fitness did not explain the legal effect of the waiver provision to her. However, also like the defendant in Stelluti, Kang was not under any undue pressure to execute the agreement and she could have sought advice before signing. Indeed, her daughter was present to translate. As noted above, the fact that Kang does not speak English does have any legal effect on the contract’s enforceability. Thus, in accordance with Stelluti, the Court finds that although the LA Fitness membership agreement may have been offered on a “take-it-or-leave-it” basis, it is not void on the basis of unconscionability.

Because the exculpatory clause does not offend public policy, the Court finds it to be valid and enforceable. Accordingly, LA Fitness’s motion for summary judgment is granted.

III. Conclusion

For the foregoing reasons, defendants’ motion for summary judgment is granted, and the clerk of the court is direct to close this case. An accompanying Order will be filed.


Kang v. LA Fitness, 2016 U.S. Dist. LEXIS 179934, 2016 WL 7476354

Kang v. LA Fitness, 2016 U.S. Dist. LEXIS 179934, 2016 WL 7476354

Soon Ja Kang Plaintiff,

LA Fitness, LA Fitness of South Plainfield, John Does 1-5, et al., Defendants.

Civil No. 2:14-cv-07147 (KSH) (CLW)

United States District Court, D. New Jersey

December 29, 2016

NOT FOR PUBLICATION

OPINION

Katharine S. Hayden, U.S.D.J.

Before the Court is defendants’ motion for summary judgment as to the validity and enforceability of an exculpatory clause in a fitness center membership agreement with plaintiff. For the reasons set forth below, the Court finds the liability waiver to be valid and enforceable and defendants’ motion is granted.

I. Background

Fitness International, LLC d/b/a LA Fitness (incorrectly designated as LA Fitness of South Plainfield) (“LA Fitness”) operates a fitness facility located in Piscataway, NJ. See Final Pretrial Order Stipulation of Facts (“SOF”) (D.E. 19), at ¶ 1. On December 30, 2013, plaintiff Soon Ja Kang went to LA Fitness with her husband to sign up for membership. Id. at ¶ 2. The membership agreement she signed states in relevant part:

IMPORTANT: RELEASE AND WAIVER OF LIABILITY AND INDEMNITY. You hereby acknowledge and agree that use by Member and/or Member’s minor children of LA Fitness’ facilities, services, equipment or premises, involves risks of injury to persons and property, including those described below, and Member assumes full responsibility for such risks. In consideration of Member and Member’s minor children being permitted to enter any facility of LA Fitness (a “Club”) for any purpose including, but not limited to, observation, use of facilities, services or equipment, or participation in any way, Member agrees to the following: Member hereby releases and holds LA Fitness, its directors, officers, employees, and agents harmless from all liability to Member, Member’s children and Member’s personal representatives, assigns, heirs, and next of kin for any loss or damage, and forever gives up any claim or demands therefore, on account of injury to Member’s person or property, including injury leading to the death of Member, whether caused by the active or passive negligence of LA Fitness or otherwise, to the fullest extent permitted by law, while Member or Member’s minor children are in, upon, or about LA Fitness’ premises or using any LA Fitness facilities, services or equipment. Member also hereby agrees to indemnify LA Fitness from any loss, liability, damage or cost LA Fitness may incur due to the presence of Member or Member’s children in, upon or about the LA Fitness premises or in any way observing or using any facilities or equipment of LA Fitness whether caused by the negligence of Member(s) or otherwise. You represent (a) that Member and Member’s minor children are in good physical condition and have no disability, illness, or other condition that could prevent Member(s) from exercising without injury or impairment of health, and (b) that Member has consulted a physician concerning an exercise program that will not risk injury to Member or impairment of Member’s health. Such risk of injury includes (but is not limited to): injuries arising from use by Member or others of exercise equipment and machines; injuries arising from participation by Member or others in supervised or unsupervised activities or programs at a Club; injuries and medical disorders arising from exercising at a Club such as heart attacks, strokes, heat stress, sprains, broken bones, and torn muscles and ligaments, among others; and accidental injuries occurring anywhere in Club dressing rooms, showers and other facilities. Member further expressly agrees that the foregoing release, waiver and indemnity agreement is intended to be as broad and inclusive as is permitted by the law of the State of New Jersey and that if any portion thereof is held invalid, it is agreed that the balance shall, notwithstanding, continue in full force and effect. Member has read this release and waiver of liability and indemnity clause, and agrees that no oral representations, statements or inducement apart from this Agreement has been made.

LA Fitness Moving Br., Exh. E (D.E. 22-7).

Kang and her husband do not read or understand English, but their daughter was present to translate for them when they signed up. See SOF, at ¶¶ 4-5. Kang signed a membership agreement. She did not initial next to the waiver and liability provision in her membership agreement; however, her husband was asked to initial next to the same provision in his membership agreement, and he did so. Id. at ¶ 6.

On December 31, 2013, Kang was injured while working out on a chin/dip assist pull up machine at LA Fitness’s Piscataway location. See SOF, at ¶¶ 2, 7. She filed the instant action on September 29, 2014 in state court, and LA Fitness filed a notice of removal in this Court on November 14, 2014 on the basis of diversity jurisdiction (D.E. 1). The complaint alleges that Kang was injured as a result of negligence on the part of LA Fitness. Id. Prior to completion of expert discovery, LA Fitness moved for summary judgment on the issue of whether the waiver and liability provision bars the instant action. The motion was fully briefed. (D.E. 22, 25, 26).

The Court makes its decision on the paper.

II. Discussion

A. Standard

Summary judgment is warranted where the moving party demonstrates that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a), (c). The parties have conducted discovery on the circumstances surrounding the formation of Kang’s membership agreement and, as set forth in the analysis below, all facts relevant to the enforceability of the waiver provision are essentially undisputed as set forth in the Final Pretrial Order Stipulation of Facts (D.E. 19). In determining whether the waiver provision is enforceable as a matter of law, the Court “view[s] the evidence in the light most favorable to [Kang] and draw[s] all justifiable, reasonable inferences in [her] favor.” Sgro v. Bloomberg L.P., 331 F.Appx. 932, 937 (3d Cir. 2009).

B. Analysis

Pursuant to the release and waiver of liability provision in her membership agreement, Kang released and held LA Fitness harmless for all injuries she might suffer “whether caused by the active or passive negligence of LA Fitness or otherwise, ” while she was “in, upon, or about LA Fitness’ premises or using any LA Fitness facilities, services or equipment.” LA Fitness Moving Br., Exh. E (D.E. 22-7). As her negligence claim for an injury allegedly sustained while using a piece of workout equipment at an LA Fitness facility clearly falls within the ambit of the liability waiver, the issue becomes whether the waiver itself is enforceable against Kang on the facts of this case.

In Stelluti v. Casapenn Enterprises, LLC, 408 N.J.Super. 435, 454 (App. Div. 2009), aff’d, 203 N.J. 286 (2010), the New Jersey Appellate Division addressed the enforceability of exculpatory releases in fitness center membership agreements:

Such a release is enforceable only if: (1) it does not adversely affect the public interest; (2) the exculpated party is not under a legal duty to perform; (3) it does not involve a public utility or common carrier; or (4) the contract does not grow out of unequal bargaining power or is otherwise unconscionable.

Id. The third factor is inapplicable here, because LA Fitness is not a public utility or common carrier. See Kang Opp. Br., at p. 6. The Court analyzes the remaining Stelluti factors in turn.

1. Does the Exculpatory Clause Adversely Affect the Public Interest?

LA Fitness argues that the exculpatory clause in this case does not adversely affect the public interest because it is “a facility that encourages New Jersey’s public policy promoting physical fitness.” LA Fitness Moving Br., at p. 6. Noting the important policy objective of promoting public health, the Stelutti court held:

[W]e are satisfied that, at least with respect to equipment being used at the club in the course of an exercise class or other athletic activity, the exculpatory agreement’s disclaimer of liability for ordinary negligence is reasonable and not offensive to public policy.

Stelluti, 408 N.J.Super. at 459. The Court agrees with the analysis in Stelluti and finds that the exculpatory clause here does not adversely affect the public interest, at least to the extent that it purports to exculpate LA Fitness with respect to acts or omissions amounting to ordinary negligence.

Kang argues that public policy promoting physical fitness “cannot counteract the other public policy reasons that are in place to protect against improper liability waivers.” Kang Opp. Br., at p. 7. To that end, she argues that the release in this case violates the New Jersey Plain Language Act, which states that “[a] consumer contract entered into on or after the effective date of this amendatory and supplementary act shall be written in a simple, clear, understandable and easily readable way.” N.J. Stat. Ann. § 56:12-2. Specifically, Kang argues that the small font size and margins in the contract are such that “[s]omeone who can read and understand English would be substantially confused by this agreement[.]” Kang Opp. Br., at p. 8.

To determine whether the waiver provision violates the Plain Language Act, the Court turns to the plain language of the act itself. Section 56:12-10 provides:

To insure that a consumer contract shall be simple, clear, understandable and easily readable, the following are examples of guidelines that a court . . . may consider in determining whether a consumer contract as a whole complies with this act:

(1) Cross references that are confusing;

(2) Sentences that are of greater length than necessary;

(3) Sentences that contain double negatives and exceptions to exceptions;

(4) Sentences and sections that are in a confusing or illogical order;

(5) The use of words with obsolete meanings or words that differ in their legal meaning from their common ordinary meaning;

(6) Frequent use of Old English and Middle English words and Latin and French phrases.

N.J. Stat. Ann. § 56:12-10. Section 56:12-10 further provides:

The following are examples of guidelines that a court . . . may consider in determining whether the consumer contract as a whole complies with this act:

(1) Sections shall be logically divided and captioned;

(2) A table of contents or alphabetical index shall be used for all contracts with more than 3, 000 words;

(3) Conditions and exceptions to the main promise of the agreement shall be given equal prominence with the main promise, and shall be in at least 10 point type.

Id. A Court has discretion as to how much consideration should be given to the above-listed statutory guidelines in finding a violation of the act. See Boddy v. Cigna Prop. & Cas. Companies, 334 N.J.Super. 649, 655 (App. Div. 2000).

Reviewing Kang’s membership agreement in light of the above guidelines, the Court finds that the waiver provision does not violate the New Jersey Plain Language Act. The waiver provision does not contain any cross references, nor does it contain any double negatives or exceptions to exceptions. It does not contain words with obsolete meanings, nor is it clouded by the use of Old English, Middle English, Latin or French phrases. And Kang does not argue-nor does the Court find-that the sentences of the waiver provision are set forth in a confusing or illogical order.

Instead, Kang argues that the waiver provision violates the Plain Language Act because “[t]he size of the font (print) is about size 8, whereas the standard size used in everyday documents is size 12[, ]” and because “[t]he margins on the sides of the pages are about 0.5 inch . . . reflecting the intentions of the drafter to squeeze in additional words.” Kang Opp. Br., at p. 8. However, applying the above guidelines, the Court does not find that the waiver provision in this case is any less prominent that the remainder of the agreement. See N.J. Stat. Ann. § 56:12-10b(3). To the contrary, the waiver and liability provision is the only clause in the membership agreement preceded by a title in all caps (“IMPORTANT: RELEASE AND WAIVER OF LIABILITY AND INDEMNITY”), and it is the only clause that is fully enclosed by a border, creating a visual separation between the waiver and the rest of the agreement.

The Court finds that the waiver provision in this case does not offend public policy under Stelluti and does not otherwise violate the New Jersey Plain Language Act.

2. Is LA Fitness Under a Legal Duty To Perform?

LA Fitness argues that its relationship with Kang does not create any duties prescribed by statute or regulation. See LA Fitness Moving Br., at pp. 6-8. New Jersey courts have found liability waivers to be invalid as against public policy where they conflict with legislatively imposed duties. For example, in Hy-Grade Oil Co. v. New Jersey Bank, 138 N.J.Super. 112, 118 (App. Div. 1975), the court found it against public policy for a bank to exculpate itself from liability or responsibility for negligence in the performance of its function as a night depository service, in part due to the “extensive statutory regulations covering every phase of the banking business[.]” Id. at 118. Similarly, in McCarthy v. Nat’l Ass’n for Stock Car Auto Racing, Inc., 48 N.J. 539, 543 (1967), the New Jersey Supreme Court held a liability waiver invalid as against public policy because it purported to contract away safety requirements prescribed by statute dealing with motor vehicle racing. See id. at 543 (“[t]he prescribed safety requirements may not be contracted away, for if they could be the salient protective purposes of the legislation would largely be nullified”).

Kang argues that “although there are no statutes specific to fitness centers, there are several national associations that have established standards that apply to the fitness industry[.]” Kang Opp. Br., at pp. 8-9. However, there is no indication that these national standards apply with the force of law in New Jersey so as to constitute public policy of the state. Kang further argues that the Stelluti court acknowledged the well-established duties of care that New Jersey business owners owe to patrons that enter their premises. See Kang Opp. Br., at p. 8. However, as noted above in Part B.1. supra, Stelluti expressly held that fitness center liability waivers such as the one at issue here do not violate public policy at least to the extent that they exculpate for ordinary negligence. Stelluti, 408 N.J.Super. at 459. The Court finds that LA Fitness is not under any legal duty that precludes its reliance on the liability waiver in this case.

3. Does the Contract Grow Out of Unequal Bargaining Power or is it Otherwise Unconscionable?

With respect to the final Stelluti factor, Kang argues that the waiver: (1) was not the product of mutual assent; and (2) is unconscionable as a term in a contract of adhesion. See Kang Opp. Br., at pp. 10-14. The Court addresses both arguments in turn.

a. Mutual Assent

Kang argues that the waiver was invalid for lack of mutual assent, based upon the following assertions: (1) Neither Kang nor her husband speaks English; (2) LA Fitness knew as much, as the Kangs’ daughter was present to translate; (3) an LA Fitness employee explained the contract duration and payment terms to the Kangs’ daughter, but did not explain the liability waiver to her; (4) only Kang’s husband was asked to initial next to the waiver provision in his membership agreement, but no one explained to him what he was initialing; and (5) no employee went over the waiver provision with Kang or her daughter. See Kang Opp. Br., at pp. 10-11. Accordingly, Kang argues that she did not “clearly, unequivocally, and decisively surrender[ ] her rights” as is required for a valid waiver. Id. at p. 11.

The Court finds these arguments unavailing. As an initial matter, Kang’s inability to speak English does not bar her from becoming contractually bound. Notwithstanding the fact that her daughter was present to translate, New Jersey courts have unequivocally held that in the absence of fraud, one who signs an agreement is conclusively presumed to understand and assent to its terms and legal effect:

In the absence of fraud or imposition, when one fails to read a contract before signing it, the provisions are nevertheless binding, and the party is conclusively presumed to understand and assent to its terms and legal effect . . . . Even illiterate individuals have been held bound by a signed contract in the absence of misrepresentation. One who signs a document in those circumstances should know its contents or have it read (or otherwise have the contents made known) to him or her.

Statewide Realty Co. v. Fid. Mgmt. & Research Co., 259 N.J.Super. 59, 73 (Law. Div. 1992) (internal citations and quotations omitted); see also Herrera v. Twp. of S. Orange Vill., 270 N.J.Super. 417, 423, 637 (App. Div. 1993) (enforcing release agreement in the absence of fraud, notwithstanding testimony by plaintiff that she did not understand the release because she could not read English).

Under the New Jersey case law cited above, absent allegations of fraud, deceit, or misrepresentation which Kang does not make here, she is conclusively presumed to have understood and assented to the membership agreement’s terms-including the waiver-and legal effect. See Stelluti v. Casapenn Enterprises, LLC, 203 N.J. 286, 305 (2010) (“Although Stelluti argues that she did not know what she was signing, she does not claim that she signed the waiver form as the result of fraud, deceit, or misrepresentation. Therefore, the trial court was well within reason to presume that she understood the terms of the agreement . . . and the finding to that effect is unassailable.”)

Nor does the fact that LA Fitness may not have explained the waiver to her or her daughter preclude enforcement. See Stelluti v. Casapenn Enterprises, LLC, 203 N.J. 286, 301- 02 (2010) (enforcing exculpatory clause while giving plaintiff benefit of inference that “Powerhouse may not have explained to Stelluti the legal effect of the contract that released Powerhouse from liability”).

Finally, the Court is not aware of, nor has Kang cited, any requirement that she must have initialed the waiver provision for that clause to be enforceable against her. While she did not initial the waiver provision, she did sign the membership agreement containing it. In the absence of fraud, that is enough to bind her to its terms. See Statewide, 259 N.J.Super. at 73.

b. Unconscionability

Kang also argues that even if the waiver is found to be enforceable, the Court should invalidate it as a contract of adhesion. “[T]he essential nature of a contract of adhesion is that it is presented on a take-it-or-leave-it basis, commonly in a standardized printed form, without the opportunity for the ‘adhering’ party to negotiate except perhaps on a few particulars.” Rudbart v. N. Jersey Dist. Water Supply Comm’n, 127 N.J. 344, 353, 605 A.2d 681, 685 (1992). Kang’s unconscionability argument is essentially an amalgamation of all of her arguments summarized above: that as someone who does not speak English she lacked the sophistication to understand the terms to which she was agreeing, LA Fitness knew that she was in no position to understand those terms, she did not initial next to the waiver provision, the waiver is one-sided and printed on a standard form agreement, and she was not in a position to negotiate the terms of the agreement. Kang Opp. Br., at pp. 12-14.

Notably, not all contracts of adhesion are unenforceable. In Stelluti, the New Jersey Supreme Court held:

Here, Powerhouse’s agreement was a standard pre-printed form presented to Stelluti and other prospective members on a typical ‘take-it-or-leave-it basis.’ No doubt, this agreement was one of adhesion. As for the relative bargaining positions of the parties, . . . we assume that Stelluti was a layperson without any specialized knowledge about contracts generally or exculpatory ones specifically. Giving her the benefit of all inferences from the record, including that Powerhouse may not have explained to Stelluti the legal effect of the contract that released Powerhouse from liability, we nevertheless do not regard her in a classic ‘position of unequal bargaining power’ such that the contract must be voided. As the Appellate Division decision noted, Stelluti could have taken her business to another fitness club, could have found another means of exercise aside from joining a private gym, or could have thought about it and even sought advice before signing up and using the facility’s equipment. No time limitation was imposed on her ability to review and consider whether to sign the agreement. In sum, although the terms of the agreement were presented ‘as is’ to Stelluti, rendering this a fairly typical adhesion contract in its procedural aspects, we hold that the agreement was not void based on any notion of procedural unconscionability.

Stelluti v. Casapenn Enterprises, LLC, 203 N.J. 286, 301-02 (2010).

Like the defendant in Stelluti, Kang was a layperson without any specialized knowledge of exculpatory contracts, and the Court gives her the benefit of the inference that LA Fitness did not explain the legal effect of the waiver provision to her. However, also like the defendant in Stelluti, Kang was not under any undue pressure to execute the agreement and she could have sought advice before signing. Indeed, her daughter was present to translate. As noted above, the fact that Kang does not speak English does have any legal effect on the contract’s enforceability. Thus, in accordance with Stelluti, the Court finds that although the LA Fitness membership agreement may have been offered on a “take-it-or-leave-it” basis, it is not void on the basis of unconscionability.

Because the exculpatory clause does not offend public policy, the Court finds it to be valid and enforceable. Accordingly, LA Fitness’s motion for summary judgment is granted.

III. Conclusion

For the foregoing reasons, defendants’ motion for summary judgment is granted, and the clerk of the court is direct to close this case. An accompanying Order will be filed.


New Jersey does not allow a parent to sign away a minor’s right to sue so a binding arbitration agreement is a good idea, if it is written correctly.

The arbitration agreement in this case did not state how long the agreement was valid for, so the court held it was only valid for the day it was signed.

Citation: Weed v. Sky NJ, LLC., 2018 N.J. Super. Unpub. LEXIS 410, 2018 WL 1004206

State: New Jersey: Superior Court of New Jersey, Appellate Division

Plaintiff: Lorianne Weed and Scott Trefero as parents and natural guardians of A.M., a minor,

Defendant: Sky NJ, LLC a/k/a and/or d/b/a Skyzone Moorestown and/or a/k/a and/or d/b/a Skyzone and David R. Agger

Plaintiff Claims: Contract failed to compel arbitration

Defendant Defenses: Arbitration

Holding: For the Plaintiff

Year: 2018

Summary

When a parent cannot sign a release for a minor, because the states don’t enforce them, one option may be a binding arbitration agreement. Arbitration usually does not allow massive damages, is cheaper and quicker than going to trial.

However, your arbitration agreement, like a release, must be written in a way to make sure it is effective. This one was not, and the plaintiff can proceed to trial.

Facts

Plaintiff visited the trampoline facility in July 2016. Entrance to the park is conditioned on all participants signing a “Conditional Access Agreement, Pre-Injury Waiver of Liability, and Agreement to Indemnity, Waiver of Trial, and Agreement to Arbitrate” (the Agreement). Weed executed the agreement on behalf of her son in July 2016.

Plaintiff returned to the facility with a friend in November 2016, and was injured while using the trampolines during a “Glow” event, which plaintiff submits used different and less lighting than was present at his earlier visit. Plaintiff entered the facility in November with an agreement signed by his friend’s mother on behalf of both her daughter and A.M.[2] In an affidavit submitted by Weed in opposition to the motion, she stated that she was unaware that her son was going to the facility at the time of the November visit.

After Weed filed suit on behalf of her son, defendants moved to compel arbitration pursuant to the agreement. Defendants argued that the agreements contained “straightforward, clear, and unequivocal” language that a participant was waiving their right to present claims before a jury in exchange for conditional access to the facility. They asserted that the first agreement signed by Weed remained in effect at the time of plaintiff’s subsequent visit in November as there was no indication that it was only valid for the one day of entry in July. Finally, defendants contended that any dispute as to a term of the agreement should be resolved in arbitration.

Plaintiff opposed the motion, asserting that nothing in the first agreement alerted Weed that it would remain in effect for either a certain or an indefinite period of time. To the contrary, defendants’ policy of requiring a new agreement to be signed each time a participant entered the park belied its argument that a prior agreement remained valid for a period of time.

On May 19, 2017, Judge Joseph L. Marczyk conducted oral argument and denied the motion in an oral decision issued the same day. The judge determined that the first agreement did not apply to the November visit because it did not contain any language that it would remain valid and applicable to all future visits. Therefore, there was no notice to the signor of the agreement that it would be in effect beyond that specific day of entry, and no “meeting of the minds” that the waiver and agreement to arbitrate pertained to all claims for any future injury.

As for the second agreement, the judge found that there was no precedent to support defendants’ contention that an unrelated person could bind plaintiff to an arbitration clause. This appeal followed.

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

In a state where there are no defenses except assumption of the risk for claims by minor’s arbitration can be a good way to speed up the process and limit damages. Each state has laws that encourage arbitration and, in most cases, create limits on what an arbitration panel (the people hearing the case) can award in damages. In man states, arbitration judges cannot award punitive damages.

You need to check your state laws on what if any benefits arbitration provides.

However, if you can use a release, the release is the best way to go because it cuts off all damages. Many times, in arbitration damages are awarded, they are just less.

To determine which states do not allow a parent to sign away a minor’s right to sue see States that allow a parent to sign away a minor’s right to sue.

The best way of dealing with minor claims is the defense of assumption of the risk. However, this takes more time on the front end in making sure the minor participants understand the risk before embarking on the activity.

There were two issues before the appellate court: Whether the first agreement signed by the mother of the injured plaintiff extended beyond the day it was signed. The second issue was whether a second agreement signed by a friend, not a parent, legal guardian or someone acting under a power of attorney had any legal validity.

The first agreement was silent as to how long it was valid. There was no termination date, (which is a good thing) and nothing to indicate the agreement was good for a day or a lifetime. Because the contract was blank as to when the agreement was valid, the court ruled against the creator of the contract.

There is no evidence in the record before us to support defendants’ argument as the agreements are silent as to any period of validity. Defendants drafted these agreements and required a signature from all participants waiving certain claims and requiring submission to arbitration prior to permitting access to the facility. Any ambiguity in the contract must be construed against defendants.

When a contract is written any issues are held against the writer of the agreement. Here because the contract had no end date or did not say it was good forever, there was a gap in the agreement that was held against the defendant as the writer of the agreement.

So, the court ruled the agreement signed by the mother was only valid on the day it was signed and was not valid the second time when the minor came in and was injured.

The second argument made by the defendant was the friend who signed for the minor on the second visit signed an agreement that should be enforced and compel arbitration.

The court laughed that one out the door.

We further find that defendants’ argument regarding the November agreement lacks merit. The signor of that agreement was neither a parent, a legal guardian, nor the holder of a power of attorney needed to bind the minor plaintiff to the arbitration agreement. Defendants’ reliance on Hojnowski v. Vans Skate Park, is misplaced. While the Court found that a parent had the authority to waive their own child’s rights under an arbitration agreement in Hojnowski, there is no suggestion that such authority would extend to a non-legal guardian. Not only would such a holding bind the minor to an arbitration agreement, it would also serve to bind the minor’s parents, waiving their rights to bring a claim on behalf of their child. We decline to so hold.

So Now What?

New Jersey law is quite clear. A parent cannot sign away a minor’s right to sue, Hojnowski v. Vans Skate Park. Consequently, arbitration was probably the way to go. In this case, one little slip up made the arbitration agreement worthless.

The one flaw in using an arbitration agreement is you could use a release to stop the claims for a parent. So, you should write a release that stops the claims of the parents/legal guardians and compels arbitration of the minor’s claims. Those get tricky.

And as far as another adult signing for a minor who is not their child, that is always a problem. A parent can sign for a minor, to some extent, and a spouse can sign for another spouse in certain situations. An officer of a corporation or a manager of a limited liability company can sign for the corporation or company. The trustee can sign for a trust, and any partner can sign for a partnership. But only you can sign for you.

The issue that outdoor businesses see all day long is a volunteer youth leader take groups of kids to parks, amusement rides and climbing walls, etc. Neighbors take the neighborhood kids to the zoo, and friends grab their kids’ friends to take on vacation. Unless the adult has a power of attorney saying they have the right to enter agreements on behalf of the minor child, their signature only has value if they are a celebrity or sports personality.

What do you think? Leave a comment.

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Weed v. Sky NJ, LLC., 2018 N.J. Super. Unpub. LEXIS 410, 2018 WL 1004206

Weed v. Sky NJ, LLC., 2018 N.J. Super. Unpub. LEXIS 410, 2018 WL 1004206

Lorianne Weed and Scott Trefero as parents and natural guardians of A.M., a minor, Plaintiffs-Respondents, v. Sky NJ, LLC a/k/a and/or d/b/a Skyzone Moorestown and/or a/k/a and/or d/b/a Skyzone and David R. Agger, Defendants-Appellants.

No. A-4589-16T1

Superior Court of New Jersey, Appellate Division

February 22, 2018

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued January 18, 2018

On appeal from Superior Court of New Jersey, Law Division, Atlantic County, Docket No. L-2790-16.

Marco P. DiFlorio argued the cause for appellants (Salmon, Ricchezza, Singer & Turchi LLP, attorneys; Joseph A. Ricchezza and Marco P. DiFlorio, on the briefs).

Iddo Harel argued the cause for respondents (Ross Feller Casey, LLP, attorneys; Joel J. Feller and Iddo Harel, on the brief).

Before Judges Currier and Geiger.

PER CURIAM

Defendants Sky NJ, LLC a/k/a/ Sky Zone Moorestown and David Agger (defendants) appeal from the May 19, 2017 order denying their motion to compel arbitration in this personal injury suit brought by plaintiffs after A.M.[1] suffered severe injuries while jumping on a trampoline at defendants’ facility. After a review of the presented arguments in light of the record before us and applicable principles of law, we affirm.

Plaintiff visited the trampoline facility in July 2016. Entrance to the park is conditioned on all participants signing a “Conditional Access Agreement, Pre-Injury Waiver of Liability, and Agreement to Indemnity, Waiver of Trial, and Agreement to Arbitrate” (the Agreement). Weed executed the agreement on behalf of her son in July 2016.

Plaintiff returned to the facility with a friend in November 2016, and was injured while using the trampolines during a “Glow” event, which plaintiff submits used different and less lighting than was present at his earlier visit. Plaintiff entered the facility in November with an agreement signed by his friend’s mother on behalf of both her daughter and A.M.[2] In an affidavit submitted by Weed in opposition to the motion, she stated that she was unaware that her son was going to the facility at the time of the November visit.

Both agreements required the submission of all claims to binding arbitration and contained the following pertinent language:

I understand that this Agreement waives certain rights that I have in exchange for permission to gain access to the [l]ocation. I agree and acknowledge that the rights I am waiving in exchange for permission to gain access to the [l]ocation include but may not be limited to the following:

a. the right to sue [defendants] in a court of law;

b. the right to a trial by judge or jury;

c. the right to claim money from [defendants] for accidents causing injury within the scope of the risk assumed by myself;

d. the right to claim money from [defendants] for accidents causing injury unless [defendants] committed acts of gross negligence or willful and wanton misconduct; and

e. the right to file a claim against [defendants] if I wait more than one year from . . . the date of this Agreement.

Waiver of Trial, and Agreement to Arbitrate

IF I AM INJURED AND WANT TO MAKE A CLAIM AND/OR IF THERE ARE ANY DISPUTES REGARDING THIS AGREEMENT, I HEREBY WAIVE ANY RIGHT I HAVE TO A TRIAL IN A COURT OF LAW BEFORE A JUDGE AND JURY. I AGREE THAT SUCH DISPUTE SHALL BE BROUGHT WITHIN ONE YEAR OF THE DATE OF THIS AGREEMENT AND WILL BE DETERMINED BY BINDING ARBITRATION BEFORE ONE ARBITRATOR TO BE ADMINISTERED BY JAMS[3] PURSUANT TO ITS COMPREHENSIVE ARBITRATIONRULES AND PROCEDURES.I further agree that the arbitration will take place solely in the state of New Jersey and that the substantive law of New Jersey shall apply. I acknowledge that if I want to make a claim against [defendants], I must file a demand before JAMS. … To the extent that any claim I have against [defendants] has not been released or waived by this Agreement, I acknowledge that I have agreed that my sole remedy is to arbitrat[e] such claim, and that such claim may only be brought against [defendants] in accordance with the above Waiver of Trial and Agreement to Arbitrate.

After Weed filed suit on behalf of her son, defendants moved to compel arbitration pursuant to the agreement. Defendants argued that the agreements contained “straightforward, clear, and unequivocal” language that a participant was waiving their right to present claims before a jury in exchange for conditional access to the facility. They asserted that the first agreement signed by Weed remained in effect at the time of plaintiff’s subsequent visit in November as there was no indication that it was only valid for the one day of entry in July. Finally, defendants contended that any dispute as to a term of the agreement should be resolved in arbitration.

Plaintiff opposed the motion, asserting that nothing in the first agreement alerted Weed that it would remain in effect for either a certain or an indefinite period of time. To the contrary, defendants’ policy of requiring a new agreement to be signed each time a participant entered the park belied its argument that a prior agreement remained valid for a period of time.

On May 19, 2017, Judge Joseph L. Marczyk conducted oral argument and denied the motion in an oral decision issued the same day. The judge determined that the first agreement did not apply to the November visit because it did not contain any language that it would remain valid and applicable to all future visits. Therefore, there was no notice to the signor of the agreement that it would be in effect beyond that specific day of entry, and no “meeting of the minds” that the waiver and agreement to arbitrate pertained to all claims for any future injury.

As for the second agreement, the judge found that there was no precedent to support defendants’ contention that an unrelated person could bind plaintiff to an arbitration clause. This appeal followed.

“[O]rders compelling or denying arbitration are deemed final and appealable as of right as of the date entered.” GMAC v. Pittella, 205 N.J. 572, 587 (2011). We review the judge’s decision to compel arbitration de novo. Frumer v. Nat’1 Home Ins. Co., 420 N.J.Super. 7, 13 (App. Div. 2011). The question of whether an arbitration clause is enforceable is an issue of law, which we also review de novo. Atalese v. U.S. Legal Servs. Group, L.P., 219 N.J. 430, 445-46 (2014). We owe no deference to the trial court’s “interpretation of the law and the legal consequences that flow from established facts.” Manalapan Realty v. Twp. Comm., 140 N.J. 366, 378 (1995).

Defendants argue that the trial court erred when it determined that the first arbitration agreement signed by Weed four months before plaintiff’s injury was no longer binding on the parties at the time of plaintiff’s injury. We disagree.

While we are mindful that arbitration is a favored means of dispute resolution in New Jersey, the threshold issue before us is whether Weed’s signature on the July agreement would be binding on plaintiff for all subsequent visits. We apply well-established contract principles, and ascertain the parties’ intent from a consideration of all of the surrounding circumstances. James Talcott, Inc. v. H. Corenzwit & Co., 76 N.J. 305, 312 (1978). “An agreement must be construed in the context of the circumstances under which it was entered into and it must be accorded a rational meaning in keeping with the express general purpose.” Tessmar v. Grosner, 23 N.J. 193, 201 (1957).

It is undisputed that neither agreement contains any reference to a term of validity. The parties submitted conflicting affidavits in support of their respective positions. Weed stated there was nothing in the agreement she signed to apprise a participant that the agreement was in effect for longer than the day of entry. Defendants contend that plaintiff did not need a second agreement signed for the November visit as the initial agreement remained in effect.

There is no evidence in the record before us to support defendants’ argument as the agreements are silent as to any period of validity. Defendants drafted these agreements and required a signature from all participants waiving certain claims and requiring submission to arbitration prior to permitting access to the facility. Any ambiguity in the contract must be construed against defendants. See Moscowitz v. Middlesex Borough Bldq. & Luan Ass’n, 14 N.J.Super. 515, 522 (App. Div. 1951) (holding that where a contract is ambiguous, it will be construed against the drafting party). We are satisfied that Judge Marczyk’s ruling declining enforcement of the July agreement was supported by the credible evidence in the record.

We further find that defendants’ argument regarding the November agreement lacks merit. The signor of that agreement was neither a parent, a legal guardian, nor the holder of a power of attorney needed to bind the minor plaintiff to the arbitration agreement. Defendants’ reliance on Hojnowski v. Vans Skate Park, 187 N.J. 323, 346 (2006) is misplaced. While the Court found that a parent had the authority to waive their own child’s rights under an arbitration agreement in Hojnowski, there is no suggestion that such authority would extend to a non-legal guardian. Not only would such a holding bind the minor to an arbitration agreement, it would also serve to bind the minor’s parents, waiving their rights to bring a claim on behalf of their child. We decline to so hold. See Moore v. Woman to Woman Obstetrics & Gynecology, LLC, 416 N.J.Super. 30, 45 (App. Div. 2010) (holding there is no legal theory that would permit one spouse to bind another to an agreement waiving the right to trial without securing consent to the agreement).

As we have concluded the threshold issue that neither the July nor the November agreement is enforceable as to the minor plaintiff, we do not reach the issue of whether the arbitration provision contained within the agreement accords with our legal standards and case law. Judge Marczyk’s denial of defendants’ motion to compel arbitration was supported by the evidence in the record.

Affirmed.

Notes:

[1] Lorianne Weed is A.M.’s mother. Because A.M. is a minor, we use initials in respect of his privacy and we refer to him hereafter as plaintiff.

[2] The agreement required the adult to “certify that [she was] the parent or legal guardian of the child(ren) listed [on the agreement] or that [she had] been granted power of attorney to sign [the] Agreement on behalf of the parent or legal guardian of the child(ren) listed.” There were no proofs presented that the adult met any of these requirements.

[3] JAMS is an organization that provides alternative dispute resolution services, including mediation and arbitration.

 


Any angry injured guest or a creative attorney will try about anything to win. In this case, the New Jersey Consumer Fraud Act was used to bring a Pennsylvania Ski Area to court in New Jersey

The lawsuit failed, this time. However, the failure was due to  Pennsylvania law more than New Jersey law. The plaintiff argued it was a violation of the act to advertise to New Jersey residents to come skiing in Pennsylvania and now warn of the difficulty of suing for injury’s skiing.

Cole, et al., v. Camelback Mountain Ski Resort, et al., 2017 U.S. Dist. LEXIS 100183

State: Pennsylvania, United States District Court for the Middle District of Pennsylvania

Plaintiff: Gyl Cole, Ronald Cole, her husband

Defendant: Camelback Mountain Ski Resort

Plaintiff Claims: Violation of the New Jersey Consumer Fraud Act

Defendant Defenses: The statute did not apply

Holding: For the defendant 

Year: 2017 

Summary

In this case the plaintiff sued arguing, the New Jersey consumer Fraud Act was violated by the defendant ski area because it did not put a notice in its ad that was seen in New Jersey, that suing a Pennsylvania ski area was difficult, if not impossible, because of the Pennsylvania Skier’s Responsibility Act

However, there was nothing in the act that applied to advertising nor was there anything in the law requiring a defendant to inform the consumer about the law that might apply to any relationship between the guest and the ski area. 

Facts 

The plaintiff and her husband lived in Waretown New Jersey. They went skiing at defendant Camelback Mountain Ski Resort, which is located in Pennsylvania. Although not stated, allegedly they went skiing after reading an advertisement by Camelback.

While skiing on a black diamond run the plaintiff slammed into a six-inch metal pipe and sustained severe injuries.

The plaintiff sued, first in New Jersey state court. The case was transferred to the Federal District Court in New Jersey. How the case was transferred to the Pennsylvania Federal court that issued this opinion is not clear. 

The Pennsylvania Federal District Court dismissed the plaintiff’s complaint with the above captioned opinion.

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

The basis of the plaintiff’s complaint was that a ski area advertising in New Jersey needed to inform New Jersey residents that it was impossible to sue and win a lawsuit against a Pennsylvania ski area. Because the ads of the defendant ski area did not mention that fact, the plaintiffs claimed that the defendant had violated the New Jersey New Jersey Consumer Fraud Act.

All states have a Consumer Fraud Act. Each states act is different from any other state, but generally they were enacted to prevent scam artists from ripping people off. The New Jersey Act awards treble damages and attorney’s fees if a consumer could prove there was “(1) an unlawful practice, (2) an ascertainable loss, and (3) a causal relationship between the unlawful conduct and the ascertainable loss.…

Most state consumer fraud statutes include greater than simple damages as a penalty to keep fraudulent acts from happening. Many also include attorney fees and costs to encourage attorneys to take up these cases to defend the  consumer put fraudulent practices or business on notice or out of business.

Under the act, an unlawful practice was defined as: 

[t]he act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise or real estate . . .

An unlawful practice was defined as falling into one of three categories: “affirmative acts, knowing omissions, and regulation violations.” 

A failure to inform, the argument being made by the plaintiff, was an omission. You could sue based upon the omission if you could prove the defendant “(1) knowingly concealed (2) a material fact (3) with the intention that the consumer rely upon the concealment.” 

The underlying duty on the part of the defendant was a duty to disclose. If there was no duty to disclose, then there was no omission. The plaintiffs argued, the Pennsylvania Skier’s Responsibility Act prevented lawsuits against ski areas, or as the
plaintiff’s argued, indemnified ski areas from lawsuits. That information the plaintiff argued needed to be included in the ad, or it violated the New Jersey Act. 

The court then looked at Pennsylvania Supreme Courts interpretations of the Pennsylvania Skier’s Responsibility
Act
. Those decisions stated the act did not create new law, but kept in place long standing principles of the common law. Meaning that the act reinforced the common law assumption of the risk defense that preceded the Pennsylvania Skier’s Responsibility Act
.

The common law in which the Act preserves, the doctrine of voluntary assumption of risk, “has also been described as a ‘no-duty’ rule, i.e., as the principle that an owner or operator of a place of amusement has no duty to protect the user from any hazards inherent in the activity.” In Pennsylvania, “this ‘no-duty’ rule applies to the operators of ski resorts, so that ski resorts have no duty to protect skiers from risks that are ‘common, frequent, and expected,’ and thus ‘inherent’ to the sport of downhill skiing.

Since the act did not create new law, only codified the law, there was little if any requirement of a duty to inform anyone of the law.

Going back to the New Jersey New Jersey Consumer Fraud Act, nothing in the act nor had any court decision interpreting the act held a requirement to inform any consumer of any law. In fact, the law is based on the fact that all people know and understand the law. (A tenet of the law that I personally find confusing. You must know the law; however, to give legal advice you must go to law school. After law school, I know I don’t know all the laws!)

Consequently, there can be no duty to tell a consumer what the law states because they already know law. “…a finding that Plaintiffs’ claim was cognizable under the NJCFA would run counter to a well-known legal maxim: “[a]ll citizens are presumptively charged with knowledge of the law.”

There are exceptions to this rule, when a statute specifically requires some type of notice be given to the consumer, but that was not the case here. 

Finally, the court held that to find in favor of the plaintiffs would create a never-ending liability on businesses. In that part of the US, an ad could be seen by someone living in Pennsylvania, New Jersey and New York. No ad could fully inform consumers in all three states about the possible laws that might be in play in that particular ad. “Indeed, the number of relevant legal concept that a business “omitted” from its advertisement would only be limited by the creativity and imagination of the lawyers involved.”

The case was dismissed. 

So Now What?

I don’t think you can simply think that this case has no value. You need to take a look, or have your attorney look, at your own state consumer fraud statute. Placing disclaimers in ads would not be logical, but making sure you don’t cross the line and violate your state consumer fraud law can keep you from being sued for violation of the statute in your own state. And damages can skyrocket in many cases once they are trebled and attorney fees, costs and interest are added.

 Remember, Marketing makes Promises Risk Management has to pay for©

What do you think? Leave a comment. 

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Cole, et al., v. Camelback Mountain Ski Resort, et al., 2017 U.S. Dist. LEXIS 100183

Cole, et al., v. Camelback Mountain Ski Resort, et al., 2017 U.S. Dist. LEXIS 100183

Gyl Cole, et al., Plaintiffs, v. Camelback Mountain Ski Resort, et al., Defendants.

3:16-CV-1959

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

2017 U.S. Dist. LEXIS 100183

June 28, 2017, Decided

June 28, 2017, Filed

CORE TERMS: skiing, advertisement, omission, ski resort, consumer, immunity, consumer fraud, presumed to know, residents, quotation marks omitted, downhill, common law, cause of action, factual allegations, assumption of risk, unlawful practice, sport, business practice, ascertainable loss, material fact, merchandise, concealment, advertised, cognizable, actionable, misleading, snow, Skier’s Responsibility Act, tort liability, reasonable inference

COUNSEL: [*1] For GYL COLE, RONALD COLE, her husband, Plaintiffs: EDWARD F. BEZDECKI, LEAD ATTORNEY, TOMS RIVER, NJ.

For CAMELBACK MOUNTAIN SKI RESORT, Defendant: Samuel J. McNulty, LEAD ATTORNEY, Hueston, McNulty, PC, Florham Park, NJ.

JUDGES: Robert D. Mariani, United States District Judge.

OPINION BY: Robert D. Mariani

OPINION

MEMORANDUM OPINION

This matter presents the following question to the Court: Does a plaintiff state a cause of action for violation of the New Jersey Consumer Fraud Act when he or she alleges that a Pennsylvania ski resort advertised its business in New Jersey but failed to include any information in its advertisements regarding the protections from tort liability the business enjoyed under Pennsylvania law? For the reasons that follow, the Court finds that such a claim is not cognizable under the New Jersey Consumer Fraud Act.

I. Introduction and Procedural History

The above captioned matter was first removed from the Superior Court of New Jersey, (Doc. 1), and then transferred by the District Court for the District of New Jersey to this Court, (Docs. 10). Plaintiffs, Gyl and Ronald Cole, represented by counsel, bring a two count Complaint against Camelback Mountain Ski Resort (“Camelback”), and two John [*2] Doe maintenance companies, (Doc. 1-1), concerning injuries that Gyl Cole sustained while skiing at Defendant Camelback’s skiing facility. Plaintiffs, both residents of New Jersey, allege that Defendants are liable both for negligence (Count I), and for violation of the New Jersey Consumer Fraud Act, N.J. Stat. Ann. § 56:8-2, (Count II). Defendant Camelback now moves to dismiss Count II of Plaintiffs’ Complaint. (Doc. 20).

II. Factual Allegations

Plaintiffs’ Complaint alleges the following facts:

Plaintiffs, Gyl and Ronald Cole, are husband and wife and reside in Waretown, New Jersey. (Doc. 1-1). Camelback is a snow skiing resort facility located in Pennsylvania. (Id. at 14). According to Plaintiffs’ Complaint, Camelback advertises its business heavily in New Jersey through a variety of forms of media. (Id.). Camelback’s advertisements, however, contain no information that, under Pennsylvania law, skiing facilities enjoy “immunity” from liability for the injuries patrons sustain while skiing. (Id.). On March 15, 2014, presumably after viewing one of Camelback’s advertisements, Gyl and Ronald Cole went skiing at Camelback’s skiing facility. (Id. at ¶¶ 1 , 3-4). While skiing on one of the black diamond slopes, Gyl Cole [*3] slammed into a six inch metal pipe and sustained severe injuries. (Id. at ¶ 3).

III. Standard of Review

A complaint must be dismissed under Federal Rule of Civil Procedure 12(b)(6) if it does not allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 1974, 167 L. Ed. 2d 929 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009).

“While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitlement to relief’ requires more than labels and conclusions, and a formulaic recitation of a cause of action’s elements will not do.” Twombly, 550 U.S. at 555 (internal citations and alterations omitted). In other words, “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Id. A court “take[s] as true all the factual allegations in the Complaint and the reasonable inferences that can be drawn from those facts, but . . . disregard[s] legal conclusions and threadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” Ethypharm S.A. France v. Abbott Laboratories, 707 F.3d 223, 231 n.14 (3d Cir. 2013) (internal citations and quotation marks omitted).

Twombly and Iqbal [*4] require [a court] to take the following three steps to determine the sufficiency of a complaint: First, the court must take note of the elements a plaintiff must plead to state a claim. Second, the court should identify allegations that, because they are no more than conclusions, are not entitled to the assumption of truth. Finally, where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief.

Connelly v. Steel Valley Sch. Dist., 706 F.3d 209, 212 (3d Cir. 2013).

“[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged–but it has not show[n]–that the pleader is entitled to relief.” Iqbal, 556 U.S. at 679, 129 S. Ct. at 1950 (internal citations and quotation marks omitted). This “plausibility” determination will be a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id.

IV. Analysis

Count II of Plaintiffs’ Complaint alleges a violation of the New Jersey Consumer Fraud Act (“NJCFA”). (Doc. 1-1 at ¶¶ 13-22). The NJCFA was enacted to address “sharp practices and dealings in the marketing of merchandise1 and real estate whereby the consumer could be victimized by being lured [*5] into a purchase through fraudulent, deceptive or other similar kind of selling or advertising practices.” Daaleman v. Elizabethtown Gas Co., 77 N.J. 267, 390 A.2d 566, 569 (N.J. 1978). “The Act creates a private cause of action, but only for victims of consumer fraud who have suffered an ascertainable loss.” Weinberg v. Sprint Corp., 173 N.J. 233, 801 A.2d 281, 291 (N.J. 2002).

1 Under the NJCFA, the term “merchandise” is broadly defined to “include any objects, wares, goods, commodities, services or anything offered, directly or indirectly to the public for sale.” N.J. Stat. Ann. § 56:8-1

“A consumer who can prove (1) an unlawful practice, (2) an ascertainable loss, and (3) a causal relationship between the unlawful conduct and the ascertainable loss, is entitled to legal and/or equitable relief, treble damages, and reasonable attorneys’ fees.” Gonzalez v. Wilshire Credit Corp., 207 N.J. 557, 25 A.3d 1103, 1115 (N.J. 2011) (quotation marks omitted).

Unlawful practices include

[t]he act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise or real estate . . .

N.J. Stat. Ann. § 56:8-2. The New Jersey Supreme Court has specified that “[u]nlawful practices fall into three general categories: affirmative acts, knowing omissions, and regulation violations.” Cox v. Sears Roebuck & Co., 138 N.J. 2, 647 A.2d 454, 462 (N.J. 1994).

In the case at hand, Plaintiffs assert that the unlawful practice that Defendant Camelback allegedly engaged [*6] in was a failure to inform, i.e., an omission. (Doc. 1-1 at ¶ 14; Doc. 29 at 4). Under the NJCFA, an omission is actionable “where the defendant (1) knowingly concealed (2) a material fact (3) with the intention that the consumer rely upon the concealment.” Arcand v. Brother Int’l Corp., 673 F. Supp. 2d 282, 297 (D.N.J. 2009). “Implicit in the showing of an omission is the underlying duty on the part of the defendant to disclose what he concealed to induce the purchase.” Id.

Plaintiffs’ Complaint alleges that Defendant Camelback failed to include any information in its advertisements with respect to the protections from tort liability it enjoyed under Pennsylvania law. Specifically, Plaintiffs’ Complaint alleges the following:

Camelback knew that their [sic] advertising heavily in New Jersey induced New Jersey residents to attend Camelbacks [sic] site in Pennsylvania. Camelback knew that it had immunity granted to it through the legislation passed by the Pennsylvania Legislature but at no time did Camelback ever tell New Jersey residences [sic] that if they utilize the services of Camelback that they would be subject to the immunity clause granted to Camelback. Knowing full well that they [sic] had this immunity, Camelback elected not to notify any of [*7] the invitees to their [sic] site about the immunity.

(Doc. 1-1 at ¶ 14).2 Defendant Camelback argues that this is insufficient to state a claim under NJCFA. (Doc. 22 at 7). Plaintiffs respond that they have adequately pleaded that “Camelback knew and should have advised the skiing public [through its advertisements] . . . that if they utilize the services of Camelback that they would be subject to the immunity clause granted to Camelback by the Pennsylvania Legislature.” (Doc. 29 at 4).

2 Additionally, and somewhat confusingly, the Complaint also alleges that “Camelback misrepresented to the New Jersey residents at large through its media blitz that the New Jersey residences [sic] can use Camelback facilities for snow skiing.” (Doc. 1-1 at ¶ 17). This singular statement is in stark contrast with the rest of the Complaint which alleges that Plaintiffs, both residents of New Jersey, did in fact engage in snow skiing at Camelback.

The inaptly described “immunity clause” Plaintiffs refer to is no doubt the Pennsylvania Skier’s Responsibility Act, 42 Pa. C.S. § 7102(c). The Act states:

(c) Downhill skiing.–

(1) The General Assembly finds that the sport of downhill skiing is practiced by a large number of citizens of this Commonwealth and also attracts to this Commonwealth large numbers of nonresidents significantly contributing to the economy of this Commonwealth, It is recognized that as in some other sports, there are inherent risks in the sport of downhill skiing.

(2) The doctrine of voluntary assumption of risk as it applies to downhill skiing injuries and damages is not modified by [42 Pa. C.S. § 7102(a)-(a.1)]

42 Pa. C.S. § 7102, The Pennsylvania Supreme Court has made clear that “the Act did [*8] not create a new or special defense for the exclusive use of ski resorts, but instead kept in place longstanding principles of common law.” Chepkevich v. Hidden Valley Resort, L.P., 607 Pa. 1, 2 A.3d 1174, 1186 (Pa. 2010). The common law in which the Act preserves, the doctrine of voluntary assumption of risk, “has also been described as a ‘no-duty’ rule, i.e., as the principle that an owner or operator of a place of amusement has no duty to protect the user from any hazards inherent in the activity.” Id. In Pennsylvania, “this ‘no-duty’ rule applies to the operators of ski resorts, so that ski resorts have no duty to protect skiers from risks that are ‘common, frequent, and expected,’ and thus ‘inherent’ to the sport of downhill skiing.” Id.

Thus, the Court arrives at the question of whether Plaintiffs’ state a claim under the NJCFA when they allege that Defendant Camelback advertised its Pennsylvania skiing facility to New Jersey residents but failed to include a disclaimer with respect to the Pennsylvania Skier’s Responsibility Act or the common law doctrine of voluntary assumption of risk. As this is a question of New Jersey state law, this Court must turn to the decisions of that state’s courts for an answer. U.S. Underwriters Ins. Co. v. Liberty Mut. Ins. Co., 80 F.3d 90, 93 (3d Cir. 1996). The parties have not directed the Court to any [*9] New Jersey case–and the Court’s own research did not uncover any–that squarely addresses this issue. Nor have New Jersey courts apparently addressed the analogous issue of whether, under the NJCFA, advertisers are ever obliged to educate the public on the law applicable to their product absent other specific authority requiring such disclosures. Accordingly, it falls to this Court to predict how the highest tribunal in New Jersey would rule on the matter. Id. For the following reasons, this Court predicts that the New Jersey Supreme Court would find that such a claim is not cognizable under the NJCFA.

First, this is simply not the type of omission contemplated by the NJCFA. The Court is cognizant of the fact the NJCFA “is intended to be applied broadly in order to accomplish its remedial purpose, namely, to root out consumer fraud, and therefore to be liberally construed in favor of the consumer.” Gonzalez, 25 A.3d at 1115 (internal citations and quotation marks omitted). Additionally, the Court is aware that “[t]he statutory and regulatory scheme is . . . designed to promote the disclosure of relevant information to enable the consumer to make intelligent decisions in the selection of products and services.” Div. of Consumer Affairs v. Gen. Elec. Co., 244 N.J. Super. 349, 582 A.2d 831, 833 (N.J. Super. Ct. App. Div. 1990). [*10] Nevertheless, the NJCFA has limits. To qualify as an unlawful practice under the NJCFA, “[t]he practice must be misleading and outside the norm of a reasonable business practice.” Hughes v. TD Bank, N.A., 856 F. Supp. 2d 673, 680 (D.N.J. 2012); see also Miller v. Bank of Am. Home Loan Servicing, L.P., 439 N.J. Super. 540, 110 A.3d 137, 144 (N.J. Super. Ct. App. Div. 2015). Indeed, the “advertisement must have ‘the capacity to mislead the average consumer in order for it to be actionable. Adamson v. Ortho-McNeil Pharm., Inc., 463 F. Supp. 2d 496, 501 (D.N.J. 2006) (quoting Union Ink Co., Inc. v. AT&T Corp., 352 N.J. Super. 617, 801 A.2d 361, 379 (N.J. Super. Ct. App. Div. 2002)). Finally, the omission must concern a material fact. Arcand, 673 F. Supp. 2d at 297. The alleged omission in this case, however, is not one of fact, is not misleading, and does not fall outside the norm of reasonable business practices.

Plaintiffs’ allege that Defendant Camelback failed to provide information in its advertisements concerning the Pennsylvania Skier’s Responsibility Act and the common law doctrine of voluntary assumption of risk. Initially, as omissions of law, these allegations fall outside of the statutory language of the NJCFA. Additionally, the type or nature of legal defenses to liability which a business may assert in the event of a lawsuit is not information normally included in an advertisement, as both parties have equal access to that information. Consequently, Defendant Camelback’s alleged failure to include such information does not imply its nonexistence and is therefore not [*11] misleading nor outside of the norm of a reasonable business practice. As such, omissions of this type are not actionable under the NJCFA.

Second, a finding that Plaintiffs’ claim was cognizable under the NJCFA would run counter to a well-known legal maxim: “[a]ll citizens are presumptively charged with knowledge of the law.” Atkins v. Parker, 472 U.S. 115, 130, 105 S. Ct. 2520, 86 L. Ed. 2d 81 (1985); see also Gilmore v. Taylor, 508 U.S. 333, 360, 113 S. Ct. 2112, 124 L. Ed. 2d 306 (1993) (“[A] citizen . . . is presumed to know the law . . . .”); Anela v. City of Wildwood, 790 F.2d 1063, 1067 (3d Cir. 1986) (“Private citizens are presumed to know the law . . . .”); State v. Moran, 202 N.J. 311, 997 A.2d 210, 216 (N.J. 2010) (“Every person is presumed to know the law.”); Maeker v. Ross, 219 N.J. 565, 99 A.3d 795, 802 (N.J. 2014) (“[E]veryone is presumed to know the law . . . .”); Widmer v. Mahwah Twp., 151 N.J. Super. 79, 376 A.2d 567, 569 (N.J. Super. Ct. App. Div. 1977) (“[T]he principle is well established that every person is conclusively presumed to know the law, statutory and otherwise.”); cf. Commonwealth v. McBryde, 2006 PA Super 289, 909 A.2d 835, 838 (Pa. Super. Ct. 2006) (“[E]veryone is presumed to know the law; an out-of-state driver is not absolved from following the laws of this Commonwealth or any other state in which he or she chooses to drive.”). Thus, as a matter of law, Defendant Camelback’s advertisement did not have the capacity to mislead because the law presumes that Plaintiffs–and everyone else for that matter–already knew the information Defendant Camelback allegedly omitted. Stated otherwise, the law should not obligate Defendant Camelback to inform its prospective customers of what they [*12] already know.3

3 The Court, however, may have come to a different conclusion had Plaintiffs alleged that Defendant Camelback made an affirmative misrepresentation of the law in its advertisements. Nevertheless, such a situation is not presently before this Court.

Finally, if this Court were to come to the opposite conclusion, businesses would have almost unending liability. For example, a Pennsylvania retailor may be liable under the NJCFA if it advertised its clothing outlet to New Jersey residents but failed to include a disclaimer stating that a customer injured at the store by an employee’s negligence may have his or her recovery reduced if the shopper was also negligent. See 42 Pa. C.S. § 7102(a) (“[A]ny damages sustained by the plaintiff shall be diminished in proportion to the amount of negligence attributed to the plaintiff.”). Or a marketer of a curling iron may be liable under the NJCFA for failing to disclose to consumers that, even if they are injured due to a design flaw in the product, the users may not be able to recover for their injuries if “there was no reasonable alternative design” for the curling iron at the time of manufacturing. See Cavanaugh v. Skil Corp., 164 N.J. 1, 751 A.2d 518, 520 (N.J. 2000) (quotation marks omitted); see also N.J. Stat. Ann. § 2A:58C-3(a)(1). Indeed, the number of relevant legal concept that a business “omitted” from its advertisement would only be limited by the creativity and imagination of the lawyers involved.

V. Conclusion

For the reasons outlined above, this Court will grant Defendant Camelback Mountain [*13] Ski Resort’s Motion to Dismiss Plaintiffs’ claim for violation of the New Jersey Consumer Fraud Act, (Doc. 20). A separate Order follows.

/s/ Robert D. Mariani

Robert D. Mariani

United States District Judge

ORDER

AND NOW. THIS 29th DAY OF JUNE, 2017, upon consideration of Defendant Camelback Mountain Ski Resort’s partial Motion to Dismiss, (Doc.20), IT IS HEREBY ORDERED THAT the Motion is GRANTED. Count II of Plaintiffs’ Complaint, (Doc. 1-1), is DISMISSED WITH PREJUDICE.

/s/ Robert D. Mariani

Robert D. Mariani

United States District Court Judge


Is it a negligent act to open a car door into a bike lane when a cyclist is in the lane in New Jersey?

At the same time, if the defendant photographed the scene, measured the distance his car was from the curb or how wide his door was, the plaintiff might not have succeeded in her claims.

Gwinner, v. Michael Matt, et al., 2012 U.S. Dist. LEXIS 108827

State: New Jersey, United States District Court for the District of New Jersey

Plaintiff: Sheila Gwinner and Horst Gwinner

Defendant: Michael Matt, et al.

Plaintiff Claims: failing to observe [her] bicycle on the bicycle path” and “failing to keep a reasonable lookout for other vehicles lawfully on the road

Defendant Defenses: Plaintiff cannot prover her claims that the defendant opened his car door into the bikeway

Holding: For the Plaintiff, sent back for trial

Year: 2012

This is sort of an odd case for me, but after spending a week with the bicycle community at Interbike it seemed appropriate. This case looks at the legal issues when a driver of a car after parking opens his door into a bicycle lane injuring a cyclist.

In this case, the defendant was from Pennsylvania visiting his parents at a tourist town in New Jersey. The Plaintiff was also from Pennsylvania riding her bike in the bike lane in the same town in New Jersey.

Allegedly, the defendant parked his car and opened his car door into the bike lane where the plaintiff was riding and caused her injury.

The real issue was the plaintiff could not recall the accident and could not say with certainty that the defendant’s door was in the bike lane. However, she was in the bike lane, and she hit the defendant’s car door.

The case was filed in Federal Court because the accident occurred in New Jersey, where the lawsuit was occurred but the plaintiff was a resident of Pennsylvania.

The basis for this decision was a motion filed by the defendant to dismiss the case because the plaintiff’s lack of proof of whether the door opened in the bike lane. There was also substantial discussion about the application of New Jersey automobile law to the accident (a bicycle is a vehicle) and what damages would be applicable to this case. That part of the decision is not covered in this article.

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

The court started its analysis looking to the requirements to prove a negligence case under New Jersey law.

Under New Jersey law, for a plaintiff to establish a negligence claim she must show that the defendant “breached a duty of reasonable care, which constituted a proximate cause of the plaintiff’s injuries.” Furthermore, “negligence must be proved and will never be presumed, indeed there is a presumption against it, and the burden of proving negligence is on the plaintiff.”

As in all states, the plaintiff must prove, and has the burden of proving that the defendant owed the plaintiff a duty of care, which he breached causing her injuries. In this case, the allegation of the Plaintiff was the duty was not to open a car door into the bike lane.

To establish a duty of care in New Jersey requires the passing of a two-part test. “The question of whether a duty to exercise reasonable care to avoid the risk of harm to another exists is one of fairness and policy that implicates many factors.”

The first part is whether the accident was foreseeable.  The second test in New Jersey is whether the application of the duty would be fair and be supported by public policy.

The defendant knew about the bike lanes and was a resident of the city; he also knew about the bike lanes on that particular road. And whenever a bike is in close proximity to a car, there is an obvious risk of harm to the cyclist.

As a result, where bicycles and motor vehicles are in close proximity, the risk of harm presented by obstructing or entering into the bike lane, or, more generally a bicyclist’s lane of travel, was clearly foreseeable to Mr. Matt at the time of the accident.

The fairness and policy considerations were easy and obvious.

…both were using vehicles on the limited roadway space of a public thoroughfare. Imposing a duty of care on Mr. Matt in terms of obstructing or otherwise interfering with a bicyclist’s lane of travel is fair as a matter of public policy. The City of Avalon has created bike lanes presumably to promote bicycling generally and as an attempt to attract visitors. The explicit purpose of a bike lane is to minimize the risks inherent in roadways that accommodate automobiles, bicycles, and pedestrians by providing bicyclists an exclusive lane of travel. Finally, imposing a duty of care in terms of keeping a proper lookout before crossing, entering into, or otherwise obstructing a bicyclists’ lane of travel does not unduly burden motorists. At most, this duty requires a driver to ensure his automobile is parked fully in the parking lane and to check his review mirrors, or otherwise look out for bicyclists, prior to opening his car door and exiting his vehicle.

The bike lanes were built to make cycling safer, and the bike lanes were put in by the city. It is fair to assume that there was an expectation of safety while riding the bike lanes and since the bike lanes were created by the city, there was obviously no violation of public policy.

In conclusion, the possibility of a collision between a cyclist and a car or car door on roadways shared by cyclists and motorists, is foreseeable. Moreover, the public interest in promoting bicycle safety and the minimal burden placed on motorists to exercise reasonable care can lead only to the conclusion that Mr. Matt owed Ms. Gwinner a duty of care when parking and exiting his vehicle along Dune Drive.

The next issue the court looked at was whether the plaintiff could prove the defendant breached a duty to her. Because she could not remember whether or not the car door was in the bike lane, the defendant argued the door was not in the lane, and it did not breach a duty to the plaintiff.

The evidence in the record pertaining to Plaintiff’s negligence claim is scant. There were no witnesses to the accident, aside from Mr. Matt and Ms. Gwinner. Neither Mr. Matt nor Ms. Gwinner took photographs or made measurements of the accident scene; more specifically, there are no photographs 4 or measurements relating to the distance of Mr. Matt’s passenger-side tires from the curb or how far Mr. Matt’s car door extended when opened on the day of the incident. Finally, though both parties independently visited the Avalon Police Station after the accident, no police report was produced.

However, the pleadings and deposition testimony of the plaintiff were enough to make a case that should be heard by a jury.

However, Ms. Gwinner’s deposition testimony describing the accident is sufficient to demonstrate the existence of a question of material fact, which should be decided by a jury. She states, “Is all I know I was [sic] riding my bike. And the poor man was as startled as I was. The door started opening and I just went into it.” When Ms. Gwinner’s description of the accident is considered along with her testimony that she was riding her bike within the bike lane when she collided with Mr. Matt’s car door a fact finder could reasonably infer Mr. Matt’s car door must have entered the bike lane and caused the collision, and choose to believe Ms. Gwinner’s account of the accident rather than Mr. Matt’s.

Although there was not specific proof the car door was in the bike lane, the jury could reach a conclusion by a preponderance of the evidence that car door was in the bike lane.

As such, the case was sent back for trial.

The decision continues on the application of New Jersey automobile and insurance law to the case and whether there were any limits on the damages available for the plaintiff.

So Now What?

Here the plaintiff or the defendant could have photographed the scene, measured the door, the car to the curb, and the width of the bike lane and ended this case. If you have the opportunity, after the victim(s) have been taken care of document the accident.

At the same time, when both victims filed complaints at the police department, the police did nothing. Don’t wait and go to the police department, call 911 and have them show up.

These facts will also lead to a big argument on the actual damages the plaintiff suffered. If she was able to go to the police department rather than going to the hospital, she must not have been injured as much as she might claim. 

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Gwinner, v. Michael Matt, et al., 2012 U.S. Dist. LEXIS 108827

Gwinner, v. Michael Matt, et al., 2012 U.S. Dist. LEXIS 108827

Sheila Gwinner and Horst Gwinner, Plaintiffs, v. Michael Matt, et al., Defendants.

Civil No. 10-3001 (JBS/AMD)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

2012 U.S. Dist. LEXIS 108827

August 2, 2012, Decided

August 3, 2012, Filed

COUNSEL: [*1] Appearances: Thomas Sacchetta, Esq., SACCHETTA & BALDINO, Marlton, NJ, Attorney for Plaintiffs.

Barbara J. Davis, Esq., Jessica D. Wachstein, Esq., MARSHALL, DENNEHY, MARSHALL, COLEMMAN & GOGGIN, Cherry Hill, NJ, Attorneys for the Defendants.

JUDGES: HONORABLE JEROME B. SIMANDLE, Chief United States District Judge.

OPINION BY: JEROME B. SIMANDLE

OPINION

SIMANDLE, Chief Judge:

I. INTRODUCTION

This matter involving the alleged negligence of a motorist opening his car door on a roadway with a designated bike lane is before the Court on Defendant’s motion for summary judgment pursuant to Fed. R. Civ. P. 56(a). [Docket Item 17.] The principal issue to be determined is whether a dispute of fact exists that Defendant breached a duty of care owed to Plaintiff when she collided with his car door as he was exiting his vehicle. As will be explained at length below, the Court finds Plaintiff’s negligence claim raises a question of material fact to be decided by a jury. Plaintiff has also raised a dispute of fact that her alleged injuries are permanent and causally related to the accident for purposes of the limitation-on-lawsuit threshold of the New Jersey Automobile Insurance Cost Reduction Act, so Defendant’s motion will be [*2] denied.

II. BACKGROUND

Plaintiff, Sheila Gwinner, filed this lawsuit against Defendant, Michael Matt, based on an accident that occurred in June 2008, when Ms. Gwinner collided with Mr. Matt’s car door while she was bicycling on Dune Drive in Avalon, New Jersey. Ms. Gwinner alleges Mr. Matt negligently opened his car door into the bike lane where she was traveling, striking her and causing her to suffer serious personal injuries.

On June 14, 2010, Plaintiff commenced a civil action against Defendant in the United States District Court for the District of New Jersey based on diversity jurisdiction under 28 U.S.C. § 1332(d). 1 [Docket Item 1.] According to Ms. Gwinner’s Complaint, Mr. Matt’s negligence consisted of, in part, “failing to observe [her] bicycle on the bicycle path” and “failing to keep a reasonable lookout for other vehicles lawfully on the road.” Compl. at ¶ 12. Ms. Gwinner then claims that, as a result of Mr. Matt’s negligence, she suffered “severe and painful injuries,” which required medical treatment, restricted her personal and work activities, and resulted in permanent injuries. Id. at ¶ 13.

1 Both Plaintiffs are citizens of Pennsylvania, and Defendant is a citizen of [*3] New Jersey. Compl. at ¶ 1.

On the morning of June 15, 2008 Mr. Matt parked his vehicle in front of his father’s house, in the parking lane along Dune Drive. Matt Dep., Ex. F at 17:23-24. At this location, Dune Drive is a four-lane roadway, two lanes north and two lanes south, with a bike lane and a parking lane. Id. at 19:4-7. When Mr. Matt opened his door, he “heard a loud bang,” and then observed a “young lady [] on the ground with her bicycle in front of the car to the left a little bit.” Id. at 28:5-8. Ms. Gwinner was traveling at fifteen miles per hour along Dune Drive on the morning of the accident, and she did not observe Mr. Matt’s vehicle prior to the collision. Gwinner Dep., Ex. H at 34:5-10. Additionally, Ms. Gwinner testified that, when the accident occurred, she was riding within the bike lane (id. at 34:20-21); however, she did not observe and does not know whether Mr. Matt’s car door actually extended into the bike lane. Id. at 40:7-13.

Ms. Gwinner carries automobile insurance provided by Progressive Insurance, an insurance company authorized to conduct business in the State of New Jersey. She alleges that as a result of the accident, she suffered “traumatic multi level [*4] disc herniation/protrusion/radiculopathy, traumatic right knee fracture/contusion/anterior horn tear, and traumatic right hand/thumb tendonitis with radial/median nerve neuritis and joint inflammation.” Compl. at ¶ 13. 2 Plaintiff claims that these injuries demonstrate a “permanent injury” as set forth in the New Jersey Automobile Insurance Cost Reduction Act (“AICRA”) at N.J. Stat. Ann. § 39:6A-8(a) and that she has produced sufficient objective medical evidence to support her claim. Pl.’s Opp’n Br. at 4.

2 Plaintiff includes a medical report in support of this allegation. Pl. Ex. D.

In the present motion, Defendant argues that he is entitled to summary judgment because Plaintiff has failed to “establish proof a negligence claim as a matter of law.” Def.’s Br. in Supp. Summ. J. at 2. Specifically, Defendant argues Plaintiff has failed to establish the alleged breach of duty, as she “produced no evidence that Mr. Matt’s car door extended into the bike lane.” Id. at 3. Defendant also argues that Plaintiff is barred from pursuing noneconomic damages 3 because she has failed to produce objective medical evidence demonstrating she suffered permanent injuries, as a result the accident in question, [*5] to her neck, right knee, and right wrist. Id. at 15-16.

3 “Noneconomic damages” are defined by statute as “pain, suffering and inconvenience.” N.J. Stat. Ann. § 39:6A-2(i). By contrast, “economic loss” is defined as “uncompensated loss of income or property, or other uncompensated expenses, including, but not limited to, medical expenses.” Id. at § 39:6A-2(k). The Court notes that Plaintiff appears to claim only noneconomic losses. Additionally, Defendant requests dismissal of Plaintiff’s claim in its entirety, not just dismissal of Plaintiff’s claim for noneconomic losses. Plaintiff does not refute this by presenting economic losses and arguing that, should the Court find in Defendant’s favor, her claims for economic losses must survive. Therefore, dismissal is the result of finding for Defendant.

For the following reasons, the Court finds Plaintiff has sufficiently raised a question of material fact regarding her breach of duty claim; Defendant’s motion is denied on this issue. Additionally, the Court finds Plaintiff has provided sufficient objective medical evidence from which a reasonable jury could conclude that she suffered permanent injuries as a result of the accident; therefore, [*6] Plaintiff has met AICRA’s limitation-on-lawsuit threshold, and Defendant’s motion is denied.

III. DISCUSSION

A. Standard of Review

[HN1] Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A fact is “material” only if it might affect the outcome of the suit under the applicable rule of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). Summary judgment will not be denied based on mere allegations or denials in the pleadings; instead, some evidence must be produced to support a material fact. Fed. R. Civ. P. 56(c)(1)(A); United States v. Premises Known as 717 S. Woodward Street, Allentown, Pa., 2 F.3d 529, 533 (3d Cir. 1993). However, the Court will view any evidence in favor of the nonmoving party and extend any reasonable favorable inferences to be drawn from that evidence to that party. Hunt v. Cromartie, 526 U.S. 541, 552, 119 S. Ct. 1545, 143 L. Ed. 2d 731 (1999). Where the nonmoving party bears the burden of persuasion at trial, the moving party may be entitled to summary judgment merely by showing that there is an absence of evidence to support an essential element of [*7] the nonmoving party’s case. Fed. R. Civ. P. 56(c)(1)(B); Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986).

B. Summary Judgment as to Plaintiff’s Negligence Claim

[HN2] Under New Jersey law, for a plaintiff to establish a negligence claim she must show that the defendant “breached a duty of reasonable care, which constituted a proximate cause of the plaintiff’s injuries.” Brown v. Racquet Club of Bricktown, 95 N.J. 280, 288, 471 A.2d 25, 29 (1984). Furthermore, ” [HN3] negligence must be proved and will never be presumed, [] indeed there is a presumption against it, and [] the burden of proving negligence is on the plaintiff.” Buckelew v. Grossbard, 87 N.J. 512, 525, 435 A.2d 1150 (1981) (citing Hansen v. Eagle-Picher Lead Co., 8 N.J. 133, 139, 84 A.2d 281 (1951)).

Plaintiff claims Defendant acted negligently when he opened his car door “into the bike lane where [she] was operating her bicycle.” Pl.’s Opp’n Br. 2. She also alleges she suffered injuries as a result of Defendant’s negligence. Id.

Defendant argues Plaintiff has failed to present a valid negligence claim because she has not alleged a breach of duty that was the proximate cause of her injuries. Def.’s Br. in Supp. Summ. J. 2. Defendant [*8] argues Plaintiff has not produced evidence showing his car door entered into or obstructed the bike lane. Id. at 3. Defendant also claims the evidence shows Ms. Gwinner was solely responsible for her injuries because she was riding her bicycle outside of the bike lane when she collided with his car door. Id. To support this claim, Defendant argues that after the accident, he fully opened his door to see if it extended into the bike lane, which, he claims, it did not. Id. at 1.

1. Duty of Care

Neither party has addressed the existence of a duty of care in the instant case. Because the existence of a duty is essential to all negligence claims, however, the Court must tackle the issue.

[HN4] “The question of whether a duty to exercise reasonable care to avoid the risk of harm to another exists is one of fairness and policy that implicates many factors.” Carvalho v. Toll Bros. and Developers, 143 N.J. 565, 573, 675 A.2d 209, 212. (citing Dunphy v. Gregor, 136 N.J. 99, 110, 642 A.2d 372 (1994)). Foreseeability is the first factor considered, as it is “the predicate for the duty to exercise reasonable care.” Id. at 573. While foreseeability is needed to determine whether a duty of care exists, it [*9] is not the only factor. Id. at 572. Courts also consider fairness and policy factors such as “the relationship of the parties, the nature of the attendant risk, the opportunity and ability to exercise care, and the public interest in the proposed solution.” Id. at 573 (quoting Hopkins v. Fox & Lazo Realtors, 132 N.J. 426, 439, 625 A.2d 1110. (1993)).

The Court will first address foreseeability. Mr. Matt was a resident of Avalon, who was aware of the existence of the bike lane along Dune Drive, and who had used the Dune Drive bike lane prior to the accident in question. Matt Dep., Ex. F at 9:20; 20:16-19, 22-23; 21:1-2. Mr. Matt was also aware that the Dune Drive bike lane was regularly used during the summer months, Avalon’s tourist season. Id. at 46:3-7. The risk of harm posed by a collision between a cyclist and an automobile, or automobile door, is obvious. As a result, where bicycles and motor vehicles are in close proximity, the risk of harm presented by obstructing or entering into the bike lane, or, more generally a bicyclist’s lane of travel, was clearly foreseeable to Mr. Matt at the time of the accident.

” [HN5] Once the foreseeability of an injured party is established, . . . considerations [*10] of fairness and policy govern whether the imposition of a duty is warranted.” Carvalho at 573, 675 A.2d at 212 (quoting Carter Lincoln Mercury, Inc. v. EMAR Group, Inc., 135 N.J. 182, 194-95, 638 A.2d 1288 (1994)). In Carvalho, a construction worker was killed when trench walls collapsed on him. Id. at 571-572, 675 A.2d at 212. In a suit against the site engineer, the New Jersey Supreme Court, after determining the risk of harm was foreseeable, held that imposing a duty of care on the engineer was warranted because there was a contractual relationship between the parties; the engineer was responsible for monitoring work progress, which implicated worksite safety; the engineer had control to change work conditions; and the engineer had actual knowledge of the dangerous condition because other trench walls had collapsed at the site. Id. at 575-578, 675 A.2d at 214-15.

Here, Mr. Matt and Ms. Gwinner had no prior existing relationship. In fact, their first actual encounter occurred after Ms. Gwinner had already collided with Mr. Matt’s car door. Matt Dep., Ex. F at 28:4-15; Gwinner Dep., Ex. H at 37:4-10. Additionally, Mr. Matt had never previously been involved in an automobile accident [*11] involving a bicyclist. Ex. F at 46:12-16. But their relationship was a functional one: both were using vehicles on the limited roadway space of a public thoroughfare. Imposing a duty of care on Mr. Matt in terms of obstructing or otherwise interfering with a bicyclist’s lane of travel is fair as a matter of public policy. The City of Avalon has created bike lanes presumably to promote bicycling generally and as an attempt to attract visitors. The explicit purpose of a bike lane is to minimize the risks inherent in roadways that accommodate automobiles, bicycles, and pedestrians by providing bicyclists an exclusive lane of travel. Finally, imposing a duty of care in terms of keeping a proper lookout before crossing, entering into, or otherwise obstructing a bicyclists’ lane of travel does not unduly burden motorists. At most, this duty requires a driver to ensure his automobile is parked fully in the parking lane and to check his review mirrors, or otherwise look out for bicyclists, prior to opening his car door and exiting his vehicle.

In conclusion, the possibility of a collision between a cyclist and a car or car door on roadways shared by cyclists and motorists, is foreseeable. Moreover, [*12] the public interest in promoting bicycle safety and the minimal burden placed on motorists to exercise reasonable care can lead only to the conclusion that Mr. Matt owed Ms. Gwinner a duty of care when parking and exiting his vehicle along Dune Drive.

2. Breach of Duty

[HN6] Because breach of duty is an essential element of a negligence claim, facts relating to a defendant’s breach are material to the success of the claim. In the instant case, the material fact regarding breach of duty is whether Defendant Matt’s car door entered into the bike lane, causing the collision. Because Ms. Gwinner has the burden of proving negligence at trial, Mr. Matt would be “entitled to summary judgment merely by showing that there is an absence of evidence” supporting Ms. Gwinner’s negligence claim. Celotex Corp. at 325. The Court finds Plaintiff has minimally succeeded in providing evidence to support her claim that Defendant breached a duty of care.

Ms. Gwinner alleges Mr. Matt breached the duty by negligently opening his car door into the bike lane, causing her to collide with the door and suffer injuries. Mr. Matt claims Ms. Gwinner has failed to produce evidence his car door entered the bike lane. Mr. [*13] Matt also claims the evidence in the record shows that Ms. Gwinner was actually the sole cause of the collision and her injuries because his car door did not extend into the bike lane, so, he infers, Ms. Gwinner must have been riding her bicycle in the parallel parking lane at the time of the accident.

The evidence in the record pertaining to Plaintiff’s negligence claim is scant. There were no witnesses to the accident, aside from Mr. Matt and Ms. Gwinner. Matt Dep., Ex. F at 35:5-7; Gwinner Dep., Ex. H at 44:14-15. Neither Mr. Matt nor Ms. Gwinner took photographs or made measurements of the accident scene; more specifically, there are no photographs 4 or measurements relating to the distance of Mr. Matt’s passenger side tires from the curb or how far Mr. Matt’s car door extended when opened on the day of the incident. Matt Dep., Ex. F at 37:22-24, 38:1-2; Gwinner Dep., Ex. H at 47:1-5. Finally, though both parties independently visited the Avalon Police Station after the accident, no police report was produced. Matt Dep., Ex. F at 43:19-22, 44:1-3; Gwinner Dep., Ex. H at 70:13-15, 71:18-21.

4 There is photographic evidence of Dune Drive at the accident site as of February 2011. While [*14] the photographs tell us little about the actual scene of the accident in June 2008, they do confirm that a Honda Accord parked close enough to the curb in the parking lane can fully open its driver side door without the door entering into the bike lane. However, the photographer used a Honda Accord to make this demonstration. Ex. G. On the day of the accident, Mr. Matt was driving a Cadillac CTS. Ex. F at 23:5-6. Car width and door length vary from make to make and model to model; as a result, the Court notes that Defendant’s photographs are of limited value on the relevant question of whether Mr. Matt’s Cadillac could similarly park in the parking lane and fully open his car door without obstructing the bike lane. The demonstrative Honda exhibit’s materiality also depends upon how close to the curb Defendant’s vehicle was parked at the time of the accident.

Ms. Gwinner’s recitation of what she remembers from the date of the accident is also meager. Though she claims to have been riding in the bike lane along the right side of the lane, at no time before, during or after the accident did she observe Mr. Matt’s car door extending into the bike lane. 5 Gwinner Dep., Ex. H at 34:8-10, [*15] 40:7-10, 19-23. Additionally, she did not observe and does not know how close to the curb Mr. Matt parked his car. Id. at 48:2-5.

5 During her deposition, Ms. Gwinner participated in the following exchange with Defense attorney Barbara J. Davis:

Q: But did you see at all how far the car door extended out?

A: No, I didn’t.

Q: As you sit here today, do you know if the car door extended out into the bike lane, Mr. Matt’s car door?

A: I don’t.

However, Ms. Gwinner’s deposition testimony describing the accident is sufficient to demonstrate the existence of a question of material fact, which should be decided by a jury. She states, “Is all I know I was [sic] riding my bike. And the poor man was as startled as I was. The door started opening and I just went into it.” Id. at 34:6-10. When Ms. Gwinner’s description of the accident is considered along with her testimony that she was riding her bike within the bike lane when she collided with Mr. Matt’s car door (id. at 36:15-17), a fact finder could reasonably infer Mr. Matt’s car door must have entered the bike lane and caused the collision, and choose to believe Ms. Gwinner’s account of the accident rather than Mr. Matt’s.

Because all reasonable inferences [*16] must be given to the nonmovant, the Court finds Ms. Gwinner has raised a genuine issue of material fact as to whether Mr. Matt breached a duty of care by negligently opening his car door into a bicyclist’s lane of travel, or otherwise failing to reasonably look out for bicyclists before exiting his vehicle. Therefore, Mr. Matt has failed to meet the summary judgment standard set forth under Fed. R. Civ. P. 56(c)(1)(B) and Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986) and his motion will be denied as to Plaintiff’s negligence claim.

C. Summary Judgment as to Plaintiff’s Inability to Satisfy AICRA’s Limitation-on-Lawsuit Threshold

1. The Applicability of the New Jersey’s “Deemer Statute” and AICRA

Because Ms. Gwinner is insured by Progressive Insurance, an insurance company authorized to conduct business in the State of New Jersey, Defendant argues, and Plaintiff does not dispute, Plaintiff is subject to New Jersey’s “Deemer Statute” and the “limitation-on-lawsuit threshold” set forth in AICRA.

[HN7] The Deemer Statute, N.J. Stat. Ann. § 17:28-1.4, “requires insurers authorized to transact automobile insurance business in New Jersey to provide coverage to out-of-state residents consistent [*17] with New Jersey law ‘whenever the automobile or motor vehicle insured under the policy is used or operated in this State.'” Zabilowicz v. Kelsey, 200 N.J. 507, 513-514, 984 A.2d 872, 875-876 (2009). The Deemer Statute also requires affected insurance companies “to provide personal injury protection [(“PIP”)] benefits pursuant to N.J. Stat. Ann. [§] 39:6A-4.” Id. at 514, 984 A.2d at 876. “In short, the Deemer Statute furnishes the covered out-of-state driver with New Jersey’s statutory no-fault PIP and other benefits and, in exchange, deems that driver to have selected the limitation-on-lawsuit option of [N.J. Stat. Ann. §] 39:6A-8(a).” Id. Because Plaintiff conceded to Defendant’s assertion that Plaintiff is subject to the limitation-on-lawsuit threshold via the Deemer Statute, even though Plaintiff was riding her bicycle rather than driving an automobile at the time the accident, the Court assumes that the Deemer Statute applies to the facts of this case.

AICRA represents an effort by the New Jersey’s Legislature to curb rising auto insurance costs by limiting the opportunities for accident victims to sue for noneconomic damages. This effort began with New Jersey’s implementation of [*18] a no-fault insurance scheme in 1972 when New Jersey passed the New Jersey Automobile Reparation Act and has since undergone numerous revisions, in a process described as “tortured,” which need not be recounted here. See, e.g., Branca v. Matthews, 317 F. Supp. 2d 533, 537-539 (D.N.J. 2004). The New Jersey Legislature passed AICRA in 1998 with three distinct goals “containing [insurance premium] costs, rooting out fraud within the system, and ensuring a fair rate of return for insurers.” DiProspero v. Penn, 183 N.J. 477, 488, 874 A.2d 1039, 1046 (2005).

2. The Limitation-on-Lawsuit Threshold

[HN8] To contain automobile insurance costs, AICRA established the limitation-on-lawsuit threshold, which “bars recovery for pain and suffering unless the plaintiff suffers an injury that results in (1) death; (2) dismemberment; (3) significant disfigurement or significant scarring; (4) displaced fractures; (5) loss of fetus; or (6) permanent injury within a reasonable degree of medical probability ….” Id. (quoting N.J. Stat. Ann. § 39:6A-8(a))(internal quotation marks omitted).

[HN9] An insured bound by the limitation-on-lawsuit threshold is barred from suing for noneconomic damages unless her injuries fall [*19] within AICRA’s six categories. Johnson v. Scaccetti, 192 N.J. 256, 261, 927 A.2d 1269, 1273 (2007). In the summary judgment context, a plaintiff can proceed to trial if she demonstrates that her alleged injuries, if proven, fall into one of the six threshold categories. Davidson v. Slater, 189 N.J. 166, 187, 914 A.2d 282, 295 (2007) (citing Oswin v. Shaw, 129 N.J. 290, 294, 609 A.2d 415, 417 (1992)). A plaintiff must also prove that the alleged statutory injury was caused by the accident in question or “risk dismissal on summary judgment if the defendant can show that no reasonable fact-finder could conclude that the defendant’s negligence caused plaintiff’s alleged … injury.” Id. at 188, 914 A.2d at 295. However, where, as here, a plaintiff alleges she suffered more than one injury as a result of the accident in question, the plaintiff need only establish one of her injuries meets the limitation-on-lawsuit threshold for the jury to consider all of the injuries when calculating noneconomic damages. Johnson at 279, 927 A.2d at 1282.

3. Permanent Injury

[HN10] AICRA defines “permanent injury” as “[w]hen the body part or organ, or both, has not healed to function normally and will not heal to [*20] function normally with further medical treatment.” N.J. Stat. Ann. 39:6A-8(a). Additionally, in adopting AICRA, the New Jersey Legislature explicitly adopted a threshold requirement, the objective medical evidence standard, established by the New Jersey Supreme Court in Oswin v. Shaw, 129 N.J. 290, 609 A.2d 415 (1992). DiProspero v. Penn, 183 N.J. 477, 495, 874 A.2d 1039, 1050 (2005). A plaintiff’s alleged limitation-on-lawsuit injury “must be based on and refer to objective medical evidence.” Id. (emphasis removed).

Plaintiff claims her neck, right wrist, and right knee injuries are permanent injuries within the meaning of AICRA. See supra pp. 4-5. Additionally, Ms. Gwinner claims the medical report created by Dr. James F. Bonner, her physical therapy physician (Pl.’s Opp’n Br., Ex. D), “sets forth his opinion within a reasonable degree of certainty as to the permanency of [her] injuries and their relatedness to the accident”; as such, she has satisfied the limitation-on-lawsuit threshold. Pl.’s Opp’n Br. 4.

Mr. Matt argues that Ms. Gwinner has failed to produce objective medical evidence demonstrating she suffered permanent injuries, as a result the accident in question, to her neck, [*21] right knee, and right wrist. Def.’s Br. in Supp. Summ. J. at 11. First, Defendant claims Dr. Bonner’s report shows that Ms. Gwinner had a pre-existing cervical injury and that the report fails to present evidence showing Ms. Gwinner’s cervical condition is causally connected to the accident. Id. at 11-12. Second, Defendant argues Plaintiff’s alleged knee injuries fail to meet the threshold because there is evidence of pre-existing injuries and surgeries, a failure to connect the injuries to the accident, and Plaintiff “has testified she has full use of her right knee and is not restricted in any of her physical activities.” Id. 12-14. Finally, Defendant claims Plaintiff has not presented objective medical evidence of a permanent injury to her right wrist because the medical reports show that she had been treated for right wrist problems prior to the accident and that the reports alleging a right wrist injury after the accident are based on Ms. Gwinner’s subjective complaints and not objective medical testing. Id. at 14-15.

Because Ms. Gwinner need only demonstrate that one of her injuries, if proven, is permanent under AICRA’s definition, the Court will evaluate each alleged injury [*22] individually. First, however, the Court will address Defendant’s broader assertion that Plaintiff’s claim should be dismissed because she did not provide a comparative analysis distinguishing the injuries allegedly caused by the accident from other, preexisting injuries, as required by Davidson v. Slater, 189 N.J. 166, 914 A.2d 282 (2007). In Davidson, The New Jersey Supreme Court did not create a blanket rule. Instead, it held,

When a plaintiff alleges aggravation of preexisting injuries as the animating theory of the claim, then plaintiff must produce comparative evidence to move forward with the causation element of that tort action. When a plaintiff does not plead aggravation of preexisting injuries, a comparative analysis is not required to make that demonstration.

189 N.J. at 179, 914 A.2d at 284. The New Jersey Supreme Court then cautioned plaintiffs with preexisting injuries not required to provide such a report, stating, ” [HN11] [T]he plaintiff who does not prepare for comparative medical evidence is at risk of failing to raise a jury-worthy factual issue about whether the subject accident caused the injuries.” Davidson, at 188, 914 A.2d at 295.

As was the case in Davidson, Plaintiff [*23] Gwinner has not explicitly alleged that her injuries were aggravations of preexisting injuries. 6 The only medical report provided by Ms. Gwinner to support her claim that she suffered permanent injuries as a result of the accident, however, makes no mention of new injuries. Pl. Ex. D. Instead, the one-page report prepared in 2009 by Dr. Bonner states Ms. Gwinner had previous injuries or previously received medical treatment to the alleged injured areas and that she suffered “advanced impairment … as a direct result of her 6/15/08 trauma.” Id. Moreover, the report specifically mentions Plaintiff’s “old knee problem” and concludes the accident caused “a higher pain/dysfunction level.” Id. While this report might appear to indicate all of Plaintiff’s alleged injuries are exacerbations, Dr. Bonner produced a more detailed report on July 1, 2008, on which the 2009 report partially relies. 7 Reviewing the medical reports referenced in Dr. Bonner’s report reveals some of the injuries described are in fact new injuries.

6 Plaintiff did not allege her injuries were either new or exacerbations of previous injuries and conditions; she was silent on this issue. Compl. at ¶ 13. However, Plaintiff’s [*24] allegations regarding her injuries appear to be direct quotes from Dr. Bonner’s 2009 report. See supra. p. 4. and note 2.

7 In addition to his July 1, 2008 report, Dr. Bonner also referenced a July 9, 2008 report created by Dr. Philip S. Yussen of Mainline Open MRI (Def. Ex. I). Both reports discuss new injuries Ms. Gwinner suffered as a result of the accident. See infra pp. 23-26.

When considering Ms. Gwinner’s complaint and supporting evidentiary documents, it is clear some of her alleged injuries are aggravations of previously existing injuries and medical conditions. But because she has not alleged aggravation injuries in her Complaint, she is not required to provide a comparative report to support the causation element of her tort claim. The New Jersey Supreme Court’s warning in Davidson, however, is pertinent to the instant case because the lack of a comparative analysis has clouded the Court’s effort to properly evaluate whether Plaintiff provided sufficient evidence of causation. Nevertheless, the surplus of medical reports provided has allowed the Court to satisfactorily investigate which alleged injuries are sufficiently supported by evidence of causation and which are not.

a. [*25] Cervical Injury

Though Ms. Gwinner claims to have suffered permanent injury in the form of traumatic multi level disc herniation, protrusion, and radiculopathy, there is no evidence suggesting the alleged injuries are permanent. First, Ms. Gwinner had an MRI done in 2007, prior to the accident, because she was experiencing pain in her neck dating back to 2000. Gwinner Dep., Ex. H 13:15-21, 14:15-23. At the request of Dr. Bonner, Ms. Gwinner received another MRI in July 2008. The report written by Dr. Philip S. Yussen states, “Current examination demonstrates the cervical vertebral bodies to maintain normal stature. There is partial straightening of the cervical lordosis, which may be related to patient positioning, muscle spasm, or even a chronic finding given that this was evident on the previous MRI study as well.” Def. Ex. O (emphasis added). The report goes on to conclude,

There has not been a significant change in the MRI appearance of the cervical spine as compared to the previous MRI study of 8/9/07. The previously noted fatty marrow island at C7 and small low signal presumed development focus at C5 right of midline are again noted, and are stable. No new osseous abnormalities [*26] are seen referable to the cervical vertebrae as compared to the previous study.

Id. Dr. Yussen’s report can only be read to state that the condition of Ms. Gwinner’s neck has not changed, let alone deteriorated, as a result of the accident.

Additionally, Defendant’s medical expert, Dr. Brian K. Zell examined Ms. Gwinner in May of 2011, two years after the medical report provided by Plaintiff, and produced a report (Def. Ex. N). According to Dr. Zell, Ms. Gwinner suffered from a preexisting degenerative disease of the cervical spine, and “[t]he automobile accident in question is not considered a responsible event for the progression of preexisting degenerative changes in the cervical spine.” Def. Ex. N. at 17. Ms. Gwinner has not offered any evidence to rebut these findings. As a result, Plaintiff’s cervical injury cannot serve as a basis for her noneconomic claims. See Kauffman v. McCann, Civ. No. 05-3687, 2007 U.S. Dist. LEXIS 23514, 2007 WL 1038696 at *4 (D.N.J. March 29, 2007) (” [HN12] Because it is plaintiff’s burden at trial to show Defendant caused her permanent injuries within the meaning of AICRA, Plaintiff may not merely rest on her pleadings once Defendant has come forward with evidence tending to show that Plaintiff [*27] is not suffering permanent injury.”). Plaintiff has offered no evidence raising a dispute of fact that, since at least 2008, she has suffered from any spinal injury caused by the 2008 accident.

b. Right Knee Injury

Plaintiff also claims her “traumatic right knee fracture/contusion/anterior horn tear” constitutes a permanent injury under AICRA. The evidence in the record is very close as to whether Ms. Gwinner’s right knee injuries are permanent; however, there is insufficient evidence demonstrating the injuries are causally related to the accident.

Ms. Gwinner underwent medial meniscus surgery to her right knee in 1999. Gwinner Dep., Ex. H 8:23-24, 9:1-4. After the accident, Ms. Gwinner was first evaluated Dr. Bonner on July 1, 2008. Regarding Ms. Gwinner’s right knee, Dr. Bonner wrote, “Her past medical history is remarkable for a medical meniscetomy seven years ago for which she recovered had not had problems involving the right knee.” Def. Ex. K. Dr. Bonner then concluded that, “as a direct result of the accident,” Ms. Gwinner suffered a “contusion to the distal one third of the medial subcutaneous surface of the tibia.” Id. Thus, Dr. Bonner’s initial evaluation attributed only a contusion [*28] to the accident in question.

Eight days later, Ms. Gwinner received an MRI and evaluation at Main Line MRI. In a report dated July 9, 2008, Dr. Philip S. Yussen also noted symptoms consistent with “mild strain or subtle contusion.” Def. Ex. I. Dr. Yussen further noted that the MRI revealed there were no tears to the posterior cruciate ligament, anterior cruciate ligament, or medial collateral ligament. Id. Additionally, “no lateral meniscal tear or significant degenerative signal change” was apparent. Id. Finally, while Dr. Yussen’s examination did reveal “free edge blunting of the posterior horn region” as well as some “small” tears in the medial meniscus region, he was unable to determine the cause of these injuries. Id. He stated, “Given the provided history, the appearance may in part be related to previous partial meniscus tear.” Id.

An orthopaedic surgeon, Dr. Marc S. Zimmerman, then evaluated Ms. Gwinner’s right knee. In a report dated July 28, 2008, Dr. Zimmerman stated, “[Ms. Gwinner’s] right knee gives out on her. She denies popping and clicking. She does not think it is swollen at this time.” Def. Ex. J at 1. Dr. Zimmerman described his evaluation of Ms. Gwinner’s right knee [*29] as follows:

Evaluation of the right knee reveals no swelling or effusion. She has full range of motion without pain. There is minimal tenderness over the lateral joint line with no tenderness over the medial joint line. On the McMurray’s test on internal rotation, there is a click appreciated over the lateral joint line. There is a negative Lachman’s test. There is no varus/vulgus laxity.

Id. at 2. Dr. Zimmerman found there “appear[ed] to be a tear in the posterior horn of the medial meniscus,” but concluded the possible tear was “most likely related to the previous surgery and injury.” Id. As with the two previous evaluations, Dr. Zimmerman noted a bone contusion “at the lateral plateau in the anterolateral aspect.” Id.

In conclusion, because Plaintiff has failed to provide a comparative analysis detailing her previous right knee injuries and then distinguishing any preexisting conditions from the injuries she allegedly suffered as a result of the accident in question, the Court is only able to find causation with regards to the bone contusion. This injury was consistently reported in all three medical evaluations conducted in 2008 and was the only injury explicitly connected to the [*30] accident. However, this injury cannot be considered permanent. Plaintiff’s medical report was prepared on December 16, 2009. Regarding Ms. Gwinner’s right knee, the report merely states, “She also injured her right knee.” It then concludes Ms. Gwinner suffered “traumatic right knee fracture/contusion/anterior horn tear.” Defendant’s medical expert, Dr. Zell, examined Ms. Gwinner’s right knee approximately one-and-a-half years later in May 2011. This represents the most recent evaluation of Ms. Gwinner’s right knee. Dr. Zell noted that the MRI taken by Main Line MRI in 2008 revealed a contusion, but concluded that as of May 2011, the right knee “is entirely within normal limits … [and] further intervention with respect to the patient’s right knee as a consequence of the bicycle versus automobile collision is not warranted.” Def. Ex. N. at 17.

Again, Plaintiff has not offered any evidence to rebut the evidence offered by Defendant showing Plaintiff’s right knee is within normal limits and does not require further treatment. Moreover, Plaintiff offers no additional evidence permitting the reasonable inference that the right knee contusion is permanent. Therefore, it is insufficient to [*31] support a claim for noneconomic damages under AICRA.

c. Right Wrist Injury

Ms. Gwinner alleges that, as a result of the accident, she suffered traumatic right hand/thumb tendonitis with radial/median nerve neuritis and joint inflammation. After reviewing the many doctors’ reports discussing Ms. Gwinner’s right wrist, the Court finds Ms. Gwinner has successfully demonstrated that, if proven, these injuries constitute a causally related permanent injury with the meaning of AICRA.

Dr. Bonner was the first medical professional to evaluate Ms. Gwinner’s wrist after the June 2008 accident. On July 1, 2008, Dr. Bonner wrote that Ms. Gwinner reports “numbness in the right thumb, index finger, and long finger primarily on the tip.” Def. Ex. K. Dr. Bonner then noted Ms. Gwinner had been previously treated for numbness in her right hand and that she stopped treatment in November 2007, prior to the accident. Id. Relevant to causation, this report stated, the “condition had resolved until following this accident.” Id. Dr. Bonner also found “positive phalen’s 8 and tinel’s sign 9 [sic] at the right wrist with tenderness over the … carpal metacarpal joint of the thumb.” Id. The report concludes that [*32] “as a direct result” of the accident in question Ms. Gwinner’s right wrist is indicative of “[p]ost traumatic sprain of the carpal/metacarpal joint of the right thumb with carpal tunnel syndrome being evident.” Id.

8 Dorland’s Illustrated Medical Dictionary 1714 (Elsevier Saunders 32nd ed. 2012) defines “Phalen sign” as the “appearance of numbness or paresthesias within 30 to 60 seconds during the Phalen test, a positive sign for carpal tunnel syndrome.” A Phalen sign is detected by performing a Phalen test, which is a “[a] test for carpal tunnel syndrome. The patient flexes the wrist for 1 minute. Carpal tunnel syndrome is confirmed if the patient experiences a tingling that radiates into the thumb, index finger and the middle and lateral half of the ring finger.” Volume 4 M-PQ, J.E. Schmidt, M.D., Attorney’s Dictionary of Medicine P-208 (Matthew Bender). In light of these definitions, the Court interprets positive Phalen sign to represent that carpal tunnel syndrome was detected.

9 Dorland’s Illustrated Medical Dictionary 1716 (Elsevier Saunders 32nd ed. 2012) defines “Tinel sign” as “a tingling sensation in the distal end of a limb when percussion is made over the site of a divided [*33] nerve. It indicates a partial lesion or the beginning regeneration of the nerve.” The Court thus interprets Positive Tinel sign to indicate possible presence of a lesion(s) in the tested area.

Dr. Zimmerman also evaluated Ms. Gwinner’s right wrist during her July 28, 2008 visit because she reported “some numbness and tingling in the thumb and second finger of her right hand.” Def. Ex. J. Dr. Zimmerman’s report sheds light on the issues of previous existing injuries and causation. He states that while Ms. Gwinner’s past medical history includes numbness and tingling in her right hand, that condition “had resolved but is now present again . . . since the most recent accident.” Id. Moreover, an EMG was performed on Ms. Gwinner in 2007, and “she was told there was no permanent damage.” 10

10 It should be noted, however, that Dr. Zimmerman determined there were “negative Tinel’s and negative Phalen’s signs.” Def. Ex. J.

In December of 2008, Ms. Gwinner visited Dr. William H. Kirkpatrick of Hand Surgical Associates. Def. Ex. L. In his report, Dr. Kirkpatrick similarly noted, “[Ms. Gwinner] had approximately six months of tingling in the thumb, index and long fingers before her bike accident [*34] for which she was treated by a chiropractor” but that the symptoms resolved prior to the June 2008 collision. Id. Dr. Kirkpatrick saw no swelling in the right wrist, full active range of motion, and no tenderness. However, the report found positive Tinel signs “over the superficial radial nerve several centimeters proximal to the wrist” and ultimately diagnosed Ms. Gwinner with right “superficial radial nerve neuritis, probably right median neuritis, and right thumb joint CMC joint inflammation.” Id. This report also noted that Ms. Gwinner’s right wrist injuries were her “primary concern.” Id.

The Court finds the reports of Dr. Bonner, Dr. Zimmerman and Dr. Kirkpatrick sufficient to demonstrate that while Ms. Gwinner had experienced some numbness and tingling prior to the June 2008, that condition had ceased and was deemed nonpermanent prior to the accident. Because both Dr. Bonner and Dr. Zimmerman’s reports noted positive Phalen and Tinel signs, among other injuries, a reasonable fact finder could determine that any injuries found in Ms. Gwinner’s right wrist in these post-accident reports are causally connected to the June 2008 collision. Therefore, Ms. Gwinner has sufficiently demonstrated [*35] causation.

Dr. Bonner’s December 16, 2009 report and Dr. Zell’s May 31, 2011 report are relevant to the Court’s inquiry into the permanency of Ms. Gwinner’s alleged right wrist injuries. Dr. Bonner’s 2009 report described Ms. Gwinner’s injuries as “traumatic right hand/thumb tendonitis with radial/median nerve neuritis and joint inflammation.” Pl. Ex. D. The report stated these injuries have resulted in “permanent restriction to no impact forces to those affected areas.” Id.

Again, the Defendant’s medical expert, Dr. Zell, was the last doctor to evaluate Ms. Gwinner’s right wrist. As of May 2011, Ms. Gwinner’s still complained of tightness and numbness in her right wrist. Def. Ex. N. at 5. Dr. Zell found, “The bicycle versus automobile collision in question has a chronological association with ongoing complaints referable to the median nerve at the right wrist.” Id. And while he found “the absence of a Tinel at the carpal tunnel on the right side,” Dr. Zell did not entirely rule out carpal tunnel syndrome, concluding, “If this patient does in fact have a carpal tunnel syndrome, it is subclinical.” Id.

There is substantially more evidence regarding Ms. Gwinner’s alleged right wrist injury. [*36] While some of the medical reports seem to contradict each other, particularly in regard to Phalen and Tinel signs, all reasonable inferences must be given to the nonmovant. Thus, the Court finds Plaintiff has provided evidence sufficient for a reasonable fact finder to determine her right wrist injuries are permanent and causally connected to the June 2008 accident.

Defendant’s final argument in support of his motion for summary judgment is that Ms. Gwinner’s deposition testimony indicates “she does not have any physical restrictions or limitations.” Def.’s Br. in Supp. Summ. J. at 15. Defendant claims Ms. Gwinner experiences no restrictions in her ability to “perform all of her household chores, go[] skiing, and … ride her bike approximately 50 miles.” Id. While Ms. Gwinner did state she did not miss any time from work as a result of the accident (Gwinner Dep., Ex. H 7:12-14) and she is able to conduct her life somewhat normally, Defendant has not provided a full picture of Ms. Gwinner’s statements. Regarding her ability to perform household chores, Ms. Gwinner participated in the following exchange:

Q: Are you able to do all your household chores?

A: I can do almost everything I that [*37] want. It’s–I’m losing dexterity in this hand because of numbness.

Q: Indicating your right hand?

A: Yes. Like I have good strength it in to go like this.

Q: To make a fist?

A: To make a fist. And if you put your hand, I can break your fingers with my strength, but it dwindles, it doesn’t stay.

Gwinner Dep., Ex. H 66:18-24, 67:1-6. And while Ms. Gwinner stated that she is able to ride her bike, she also stated that when she is finished her hands are numb. Id. at 67:23-24. When viewing Ms. Gwinner’s statements in their entirety, it appears they are supportive of the proposition that the injuries suffered to her wrist are permanent within the meaning of AICRA, especially because, as of the deposition date, May 16, 2011, Ms. Gwinner’s right wrist had not healed to function normally.

In conclusion, the Court finds Ms. Gwinner has provided evidence sufficient to demonstrate injuries suffered to her right wrist were permanent and caused by the accident in question. Because Plaintiff need only demonstrate one of her injuries, if proven, satisfies AICRA’s limitation-on-lawsuit threshold, and she has done so, the Court will allow all of her noneconomic claims to go to a jury.

CONCLUSION

For the reasons [*38] set forth above, Defendant’s motion for summary judgment shall be denied. The accompanying Order will be entered, and the case will be scheduled for trial.

August 2, 2012

DATE

/s/ Jerome B. Simandle

JEROME B. SIMANDLE

Chief U.S. District Judge


New Jersey decision explains the reasoning why ski areas owe the highest degree of care to people riding chairlifts.

Chair lifts are to be operated under the common carrier standard of care by ski areas in New Jersey.

D’Amico, v. Great American Recreation, Inc., 265 N.J. Super. 496; 627 A.2d 1164; 1992 N.J. Super. LEXIS 499

State: New Jersey

Plaintiff: Kathleen A. D’Amico and Allen N. D’Amico

Defendant: Great American Recreation, Inc.

Plaintiff Claims: negligent in its operation and supervision of the ski lift

Defendant Defenses:

Holding: for the plaintiff

Year: 1992

The facts don’t lend themselves to what you would normally think as a chairlift accident. However, the decision explains in easy detail why the court requires the operator of a chairlift to operate it at the highest degree of care for the riders.

The plaintiff was in line to ride the chairlift. When she was next to board, another skier, skied into the path of the chair. The intervening skier hit the chair the plaintiff was to ride making the chair swing and hitting the plaintiff. The plaintiff suffered injuries from being hit by the chair.

The plaintiff and her husband sued. Prior to trial, the plaintiff moved for a motion in limine determining the standard of care of a ski area to riders of a chairlift. This decision is the result of that motion.

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

The court looked at decisions from all the other states where the question had been answered. What is the duty of care owed by an operator of a chair lift to a passenger.

At the time of this decision, most other states that had looked into the issue had determined that the standard of care was that of a common carrier. A common carrier is required to exercise the highest degree of care to is passengers.

A passenger of a common carrier places himself in the care of that common carrier. A passenger is unable to use his own faculties in order to prevent or avoid accidents and is forced to rely on the common carrier to ensure that accidents are avoided.  The carrier has this responsibility because they exercise control of the equipment used in the transportation of the passenger. Only the carrier can ensure that the equipment is in proper working order and is being operated correctly.

Just like a passenger on a train who has no opportunity to ensure that the locomotive is operating properly, a skier cannot determine whether a ski lift is operating properly.  When skiers board a ski lift, they are entrusting their care in the hands of another.  Once they have committed themselves to riding that chair up the mountain, they are powerless to control their own safety.  The chair lifts the skier off the ground as she sits down.  The chair is suspended off the ground at considerable distance.  The skier has no ability to stop the cable from moving.  Furthermore, a skier can’t exit the chair once it has begun  its ascent.  Because of the skier’s helplessness, ski lift operators should be held to the highest standard of care.

The defendant argued it was not a common carrier because it did not hold itself out to the public as a transportation carrier. Also, the transportation provided by the chairlift was incidental to the sport of skiing. However, the court did not buy that argument.

However, skiers come to ski areas to ski. If ski areas did not provide transportation up a mountain, it would be impossible for skiers to ski down the mountain. Transportation of skiers up the mountain is one of the primary functions of a ski area operator.  It is the reason skiers purchase “lift tickets”.

The ski area also argued that the plaintiff was not on the lift when she was injured. However, the court did not agree with this argument either.

The fact that this plaintiff was not physically on the lift when she was injured does not help defendant. The duty of care of a common carrier includes providing a safe means of ingress and egress for its passengers.

The court summed up its analysis.

Based upon the applicable well-reasoned decisions from other jurisdictions and the analysis set forth above, this court holds that ski area operators are common carriers in the operation of ski lifts. It is, of course, within the power of the Legislature to follow the examples of New York and New Hampshire and amend existing law to exclude ski lift operators from common carrier liability.  Great American Recreation will be held to the standard of care applicable to other types of common carriers in the operation of its Vernon Valley chairlift. This standard has been de-scribed as the highest possible care consistent with the nature of the undertaking involved.

So Now What?

There were still defenses available to the defendant ski area. The first is the intervening skier. The actions that lead to the injury of the plaintiff were not caused by the ski area but by a third party who intervened, was between the actions of the ski area and the injury to the plaintiff.

However, in New Jersey, from the moment a skier gets on the loading ramp until the skier leaves, the ski area is held to the highest degree of care to riders of its lifts, that of a common carrier.

Don’t know how this applies to lift lines?

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D’Amico, v. Great American Recreation, Inc., 265 N.J. Super. 496; 627 A.2d 1164; 1992 N.J. Super. LEXIS 499

D’Amico, v. Great American Recreation, Inc., 265 N.J. Super. 496; 627 A.2d 1164; 1992 N.J. Super. LEXIS 499

Kathleen A. D’Amico and Allen N. D’Amico, her husband, Plaintiffs, v. Great American Recreation, Inc., a Corporation of the State of New Jersey, Defendant

DOCKET No. W-029746-88

Superior Court of New Jersey, Law Division, Sussex County

265 N.J. Super. 496; 627 A.2d 1164; 1992 N.J. Super. LEXIS 499

December 24, 1992, Decided

SUBSEQUENT HISTORY: [***1] Approved for Publication June 9, 1993.

CASE SUMMARY:

COUNSEL: Craig L. Klafter for plaintiffs (Hanlon, Lavigne, Herzfeld & Rubin, attorneys).

Samuel A. DeGonge for defendant (Samuel A. DeGonge, attorneys).

JUDGES: RUSSELL, J.S.C.

OPINION BY: RUSSELL

OPINION

[***2] [*497] [**1165] On February 27, 1987, plaintiff was injured while attempting to board a ski lift at defendant’s ski resort, Vernon Valley. Functionally, [*498] chairlifts consist of a series of metal and wooden chairs which are suspended from a wire cable. They are spaced evenly apart along the cable which rests on wheels attached to tall steel towers. At the bottom and top of the mountain, there is a large wheel which reverses the direction of the cable to enable the chairs to go up and down the mountain. The skier skis to a waiting area to board the lift. As the chair comes closer, the skier sits down onto the chair and is picked up off the snow and transported up the mountain. A safety bar across the front of the chair is lowered into place to prevent the skier from falling out of the chair.

Plaintiff was in the boarding area of the ski lift when the accident occurred. As she was waiting for the chair, an unidentified skier skied into the path of the chair. He struck the chair intended to transport plaintiff up the mountain. As a result, the chair began to swing and struck plaintiff causing serious injury. Plaintiff alleged, inter alia, that defendant ski area was negligent in its operation and supervision of the ski lift. Plaintiff moved in limine for an order declaring defendant to be a common carrier in the operation of the ski lift.

This issue has not been addressed by any reported decisions in New Jersey. Plaintiff seeks to have this court adopt the reasoning of the Third District Court of Appeals of California in Squaw Valley Ski Corp. v. Superior Court, 2 Cal.App.4th 1499, 3 Cal.Rptr.2d 897, (1992) that a ski area is a common carrier in the operation of its ski lifts and the highest standard of care applies

There are two New Jersey statutes which regulate ski areas, N.J.S.A. 5:13-1 et seq. (hereinafter “Ski Act”) and N.J.S.A. 34:4A-1 et seq. (hereinafter “Ski Lift Safety Act”). Neither act resolves the issue presently before this court. The Ski Act imposes duties on ski area operators and skiers involving the act of [***3] skiing. The Ski Lift Safety Act authorizes the adoption of standards for the construction, operation and inspection of ski lifts.

Plaintiff asserts that the New Jersey Ski Lift Safety Act of 1975 was modeled after a similar statute in New Hampshire originally [*499] enacted in 1957. Plaintiff derives this assertion from the similarity between the statements of purpose of the two acts. N.J.S.A. 34:4A-2 and N.H.R.S.A. 225-1:1. However, the definition of a ski area operator is significantly different in that a provision of the New Hampshire statute was added in 1965 to specifically provide that ski area operators shall not be deemed to be common carriers. Plaintiff argues that since the New Jersey Legislature was relying largely on the New Hampshire statute when it adopted the Ski Lift Safety Act, the absence of a comparable provision excluding common carrier liability evidences an intent to impose such liability.

There is nothing in the legislative history of the Ski Act or the Ski Lift Safety Act which indicates such an intent. However, the similarity between the New Hampshire and New Jersey statutes indicates that the Legislature was aware of the New Hampshire law [***4] and presumably they were also aware of the 1967 New York law which also specifically excludes ski lift operators from common carrier liability. N.Y.Trans.Law Sec. 2(6).

[HN1] It is a long-standing tenet of statutory construction that the legislature will not be said to change the common law without clear statutory language. See State v. Dalglish, 86 N.J. 503, 432 A.2d 74 (1981). Furthermore, [HN2] N.J.S.A. 34:4A-4 specifically provides that the Ski Lift Safety Act shall not “reduce or diminish the standard of care imposed upon passenger tramway operators under existing law.”

New Jersey case law provides little assistance in this matter; however, a number of other courts have grappled with this issue. In 1959, the Appellate Division of the New York Supreme Court decided Grauer v. New York, 9 A.D.2d 829, 192 N.Y.S.2d 647 (1959). The court held that the state of New York would be deemed to be a common carrier in the operation of a chair lift at a state park. The court noted that in [**1166] the operation of the chair lift, “(a) fee was charged for transportation and the public was invited [***5] to use the service.” Id. 192 N.Y.S.2d at 649. This holding by the New York Court was later overturned by the Legislature in 1967 [*500] when it amended New York’s transportation law. See N.Y.Trans. Law Sec. 2(6).

In Fisher v. Mt. Mansfield Co., 283 F.2d 533 (2nd Cir.1960), the court upheld the trial judge’s ruling that the standard of care of a common carrier applied to a Vermont ski lift operator. In Summit County Development Corp. v. Bagnoli, 166 Colo. 27, 441 P.2d 658 (1968), the trial judge instructed the jury that the ski area operator owed plaintiff the highest degree of care because it was a common carrier in the operation of its ski lifts. The Colorado Supreme Court upheld this decision.

In Allen v. New Hampshire, 110 N.H. 42, 260 A.2d 454 (1969), the court applied the standard of care of a common carrier to a ski lift operator. New Hampshire later changed its law through legislative action. N.H.R.S.A. Sec. 225-A:1. See Bolduc v. Herbert Schneider Corp., 117 N.H. 566, 374 A.2d 1187 (1977).

[***6] In one case, Pessl v. Bridger Bowl, 164 Mont. 389, 524 P.2d 1101 (1974), the court did not apply the common carrier standard to a ski lift operator because of specific state legislation preventing such application. See Mont.Code Ann. Sec. 69-6615 (1947).

Grauer, Fisher, Bagnoli, Allen and Pessl were all decided before the New Jersey Legislature adopted the Ski Lift Safety Act in 1975. As such, the Legislature must be said to have been aware of the trend of courts addressing this issue to hold ski lift operators to the standard of care of common carriers. See Guzman v. City of Perth Amboy, 214 N.J.Super. 167, 518 A.2d 758 (App.Div.1980).

This trend was continued in the recent, well reasoned decision of Squaw Valley Ski Corp. v. Superior Court, 2 Cal.App.4th 1499, 3 Cal.Rptr.2d 897 (1992). The court defined [HN3] a common carrier as “any entity which holds itself out to the public generally and indifferently to transport goods or persons from place to place for profit” and held that a ski lift operator fit within [***7] this definition. Id. at 1508, 3 Cal.Rptr.2d 897.

[*501] The defendant in the Squaw Valley case and the defendant in the case sub judice both argued that a ski lift operator is not a common carrier because ski lift riders are required to possess special equipment and skills in order to use the lift, hence, a ski lift is not offered for use indiscriminately to the general public. This court agrees with the conclusion of the Squaw Valley Court that defendant’s argument must fail. [HN4] A common carrier does not lose its status as such merely because the nature of its services is specialized. All members of the general public who possess the necessary equipment and expertise may avail themselves of the Vernon Valley chair lift.

The rationale behind requiring common carriers to exercise the highest degree of care furthers its application here. A passenger of a common carrier places himself in the care of that common carrier. A passenger is unable to use his own faculties in order to prevent or avoid accidents and is forced to rely on the common carrier to ensure that accidents are avoided. The carrier has this responsibility [***8] because they exercise control of the equipment used in the transportation of the passenger. Only the carrier can ensure that the equipment is in proper working order and is being operated correctly.

Just like a passenger on a train who has no opportunity to ensure that the locomotive is operating properly, a skier cannot determine whether a ski lift is operating properly. When skiers board a ski lift, they are entrusting their care in the hands of another. Once they have committed themselves to riding that chair up the mountain, they are powerless to control their own safety. The chair lifts the skier off the ground as she sits down. The chair is suspended off the ground at considerable distance. The skier has no ability to stop the cable from moving. Furthermore, a skier can’t exit the chair once it has begun [**1167] its ascent. Because of the skier’s helplessness, ski lift operators should be held to the highest standard of care.

Defendant argues that it should not be deemed to be a common carrier because “(i)t does not hold itself out to the public for [*502] compensation for the transportation of persons.” Great American Recreation asserts that the transportation of skiers [***9] up the mountain is only “incidental” to its business. Ski areas provide customers with many services including snow making, trail grooming and maintenance, lessons, parking, equipment rentals and restaurant facilities. However, skiers come to ski areas to ski. If ski areas did not provide transportation up a mountain, it would be impossible for skiers to ski down the mountain. Transportation of skiers up the mountain is one of the primary functions of a ski area operator. It is the reason skiers purchase “lift tickets”.

Defendant also argues that holding ski lift area operators to the standard of care of a common carrier would necessitate holding operators of elevators, escalators and other people movers to the standard of care of common carriers. However, many states have imposed this standard of care on operators of these devices. See, e.g., Kaminsky v. Arthur Rubloff & Co., 72 Ill.App.2d 68, 218 N.E.2d 860 (1906) (elevator); Norman v. Thomas Emery’s Sons, Inc., 7 Ohio App.2d 41, 218 N.E.2d 480 (1942) (elevator); [***10] Vandagriff v. J.C. Penney Co., 228 Cal.App.2d 579, 39 Cal.Rptr. 671 (1964). But see Tolman v. Wieboldt Stores, Inc., 38 Ill.2d 519, 233 N.E.2d 33 (1968) (holding that escalators are not common carriers). The reported New Jersey decisions involving elevators or escalators do not address the issue of whether to hold the operators to the standard of care of a common carrier. See Pisano v. S. Klein on the Square, 78 N.J.Super. 375, 188 A.2d 622 (1963); Dombrowska v. Kresge-Newark, Inc., 75 N.J.Super. 271, 183 A.2d 111 (App.Div.1962).

The fact that this plaintiff was not physically on the lift when she was injured does not help defendant. [HN5] The duty of care of a common carrier includes providing a safe means of ingress and egress for its passengers. See Buchner v. Erie Railroad Co., 17 N.J. 283, 111 A.2d 257 (1955).

Based upon the applicable well-reasoned decisions from other jurisdictions and the analysis set forth above, [HN6] this court holds that ski area operators are common carriers in the operation of ski [*503] lifts. It is, of course, within the [***11] power of the Legislature to follow the examples of New York and New Hampshire and amend existing law to exclude ski lift operators from common carrier liability. Great American Recreation will be held to the standard of care applicable to other types of common carriers in the operation of its Vernon Valley chairlift. This standard has been described as the highest possible care consistent with the nature of the undertaking involved. Harpell v. Public Serv. Coord. Transp., 20 N.J. 309, 120 A.2d 43 (1956). See Model Jury Charges 5.31.


Tobogganing is added to the NJ Skier Safety Act, yet in this case, it allows the ski area to be sued.

However, the courts in this case seemed to want the plaintiff’s to win no matter what.

Brett, v. Great American Recreation, Inc., et al., 279 N.J. Super. 306; 652 A.2d 774; 1995 N.J. Super. LEXIS 53

State: New Jersey, Superior Court of New Jersey, Appellate Division

Plaintiff: Patrick Brett and Elisa Ramundo

Defendant: Great American Recreation, Inc. et al.

Plaintiff Claims: Negligence

Defendant Defenses: (1) defendant owed no duty to plaintiffs under either the common law or the Statute because they were trespassers at the time of the accident, and (2) even if plaintiffs were not barred from recovery as trespassers, the facts of this case do not render defendant liable under the terms of the Statute.

Holding: For the plaintiff’s

Year: 1995

This is an old decision; however, it explains how a statute created to and passed to protect an activity, can be used to hold the operators of the activity liable.

There are numerous claims, cross claims, third party claims and claimants. Several parties were dismissed prior to trial. Basically, everyone who was brought into the lawsuit also made claims against the people bringing them in and anyone else that could have any liability.

Thirteen college friends intended to spend the weekend in a condo owned by the uncle of one of the thirteen. The condo was sitting next to the Great Gorge North ski area. Between the ski area and the condos was a vacant strip of land. The land is owned by two condo associations, including one of the plaintiffs were staying in.

During the day, the vacant strip of land is used by the ski area as a bunny hill. When the ski hill is closed the lights are turned off.  However, the lights are turned back on later in the night for the groomers to operate.

One of the party of 13 found in the condo a toboggan. After the lights were turned back on, several of the thirteen went tobogganing on the bunny hill. They were not alone tobogganing; other people were tobogganing, sledding and using the hill after it had closed but with the lights on.

Different people in the group used the toboggan at different times; taking turns because the toboggan could only hold six at a time. On the third run, the toboggan was launched higher up the hill.

The toboggan went down the bunny hill across a fifty to sixty foot flat section of land, over a flattened snow fence then over the edge of a 20’ embankment landing in the parking lot below. One of the six was able to fall off the toboggan before it went over the embankment. The five remaining riders were seriously injured landing in the parking lot and hitting a light pole.

Security guards were employed by the defendant condo association. Part of their duties included keeping people off the bunny hill. However, this night the security guards were shorthanded, and hill was not checked. The plaintiff’s even argued that the defendants were negligent because they failed to eject people on the bunny hill.

Stonehill employed security personnel to police the entire condominium area, including the Bunny Buster trail. That policing included keeping trespassers off the trail at night, but the security force was short-handed that night and failed to police the trail. Defendant’s attorney argued in his summation that Stonehill was negligent because it failed to have its security force eject after-hours trespassers.

The case proceeded to trial, and the plaintiffs were awarded $2,475,000 among the five of them. The damages were apportioned under comparative negligence as: plaintiffs 22%, defendant 54% and Stonehill 24% (one of the condo associations).

The defendants appealed.

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

The court first pointed out that even if the plaintiffs were found to be trespassers that did not mean, under New Jersey law that no duty was owed to the trespassers. If the land contained a dangerous instrumentality, then a duty is owed to a trespasser to warn them of the danger.

Traditionally, a landowner owed no duty to a trespasser other than to refrain from acts willfully injurious.” The Court held, however, that even traditionally there was a higher standard of care due a trespasser “when the property owned by the landowner can be classified as a dangerous instrumentality.” Here, the design of the Bunny Buster trail rendered it unexpectedly dangerous.

In this case, the court concluded that next to a bunny hill, an embankment is a dangerous instrumentality. The court’s opinion of the situation is pretty clear in the next discussion when the embankment is called a fatal trap.

Here, on one side of that relationship are young people attracted to a condominium because of its proximity to snow trails and who, not unexpectedly, used defendant’s adjacent lighted trail to toboggan after skiing hours. On the other side of the relationship is the operator of the trail, which, as designed, was a near-fatal trap to those using the trail to toboggan.

New Jersey has a Skier Safety Act. The court found that the New Jersey Skier Safety Act applied to this case.

To determine whether it applies to the exclusion of common-law principles, one must look at two sections of the Statute: N.J.S.A. 5:13-4, which lists the duties of skiers, 1 and N.J.S.A. 5:13-5, which describes the risks that a skier is deemed to have assumed. If a factfinder finds that a skier was injured because he or she had violated one or more of those statutory duties or is deemed by the Statute to have assumed one or more of the stated risks of skiing, the Statute applies.

Once it is determined the act applies, the court, or jury, determines if the injuries of the plaintiff were caused by the ski operators violation of the act. If so the plaintiff recovers.

If the factfinder finds that the injuries were not proximately caused by the ski operator’s violation of any of its statutory responsibilities, the Statute bars the injured skier from recovering compensation from the operator. If the factfinder finds that the injuries were proximately caused by the ski operator’s violation of one or more of its statutory responsibilities, the skier is entitled to recover under principles of comparative negligence.

The court also found the plaintiff’s violated one statute of the New Jersey Skier Safety Act. The plaintiff’s failed to maintain control of their toboggan and did not know their abilities.

Here it is obvious that plaintiffs violated at least one of the statutory duties and therefore the Statute applies.  [HN7] N.J.S.A. 5:13-4d provides:

A skier shall be the sole judge of his ability to negotiate any trail, slope, or uphill track and shall not attempt to ski or otherwise traverse any trail, slope or other area which is beyond the skier’s ability to negotiate.

The court also found the plaintiff’s assumed the risk because they still went down the slope. However, this assumption of the risk, the court found was not a complete bar, but only proved the plaintiffs contributed to their injuries. Which is contrary to how the assumption of risk provision reads and is somewhat contrary to earlier statements in the case?

It is important to note that these statutory violations and risk assumptions do not affect the percentage of a skier’s comparative negligence. That determination is left to the factfinder if it finds that the skier contributed to his or her own injuries by violating one or more of the skier’s responsibilities. The skiers’ statutory violations and risk assumptions initially serve merely to invoke application of the Statute.

This interpretation of the statute effectively render’s the inherent risk section of the statute void. An inherent risk is a risk that is part of the activity. In inherent risk is something that cannot be removed from the activity without rendering the activity moot. You cannot sue for an injury you receive from an inherent risk of the activity, allegedly. Skier Safety Acts are written to broaden the risks that are inherent and to make them, if assumed an absolute bar to a claim, in most states.

However, in New Jersey, this is not the case.

It is important to note that these statutory violations and risk assumptions do not affect the percentage of a skier’s comparative negligence. That determination is left to the factfinder if it finds that the skier contributed to his or her own injuries by violating one or more of the skier’s responsibilities. The skiers’ statutory violations and risk assumptions initially serve merely to invoke application of the Statute.

The case took a somewhat amusing turn. The court reviewed the plaintiff’s claim that a stronger fence should have been built and that the defendants were liable because they had not built a fence strong enough to keep the plaintiff’s from going over the embankment. Aren’t the injuries going to be different when a toboggan going fast enough to over an embankment hits a fence, but still severe?

The argument then went back to the New Jersey Skier Safety Act. The act differentiates between manmade hazards and natural ones. The statute defines a ski area as real property “…”utilized for skiing, operating toboggans, sleds, or similar vehicles during the skiing season.”

However, the court simply stated, “Being borne off an embankment after reaching the bottom of a trail is not an inherent risk of tobogganing.”

Then the court looked at the hazard and determined the act required removal of a hazard. If the hazard could not be removed, then the plaintiff’s had to be warned of the hazard.

Where physical removal of a hazard is not possible, reasonable warnings of the hazard may constitute its practicable removal. The Statute impliedly contemplates that an operator at least has a duty to post suitable warnings of danger. It will be recalled that N.J.S.A. 5:13-5 expressly charges skiers with the reciprocal duty “to heed all posted warnings.”

The decision then went back to the duty owed to trespassers. The defendants argued the New Jersey Skier Safety Act does not apply to trespassers. However, the court stated that even if the plaintiffs were trespassers a high duty was owed with or without the New Jersey Skier Safety Act.

We already suggested that even at common law, defendant may owe plaintiffs a duty of reasonable care because their presence on the lighted trail was reasonably foreseeable, the risk of grave injury was great and the duty of care was not delegable.

The court then summed out the analysis it was making to allow a recovery by the plaintiffs.

Plaintiffs were not merely “in” the ski area; they were “utilizing the ski area for recreational purposes such as . . . operating toboggans.” They were therefore skiers entitled to recover under principles of comparative negligence if defendant violated any of its limited statutory responsibilities.

The statutory responsibility was the failure to remove the embankment or post a warning about it.

A major issue at trial was whether defendant violated any of its statutory responsibilities. The focus was on the meaning of  [HN10] N.J.S.A. 5:13-3, which provides in relevant part:

a. It shall be the responsibility of the operator to the extent practicable, to:

* * * *

(3) Remove as soon as practicable obvious, man-made hazards.

The appellate court upheld the jury’s decision and award at trial.

So Now What?

In New Jersey, you must make your property safe for all users of the property, even if they are doing so without our permission. If you cannot remove the hazard, you must post a warning of the hazard, if the hazard is considered ultra-hazardous.

Simply put, risk management is not controlling what people are expected to do at your program or business. Risk Management is looking at all aspects of the operation and finding ways that people can be hurt doing things other than what they came for.

The Zip Line may be perfect but is someone can mistake an anchor for a zip line you will be sued. See Federal court voids release in Vermont based on Vermont’s unique view of release law. Someone uses the equipment incorrectly, and the court is going to hold you to the fire. See Sometimes you get screwed; here Petzl was shafted by the court.

However, a person can use a piece of equipment, try a ride, climb up or down; they will do it wrong, be hurt and sue.

Risk Management is looking at things from every point of view, for every age group, for every activity, if you don’t think those people, those age groups or that activity can be done.

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Brett, v. Great American Recreation, Inc., et al., 279 N.J. Super. 306; 652 A.2d 774; 1995 N.J. Super. LEXIS 53

Brett, v. Great American Recreation, Inc., et al., 279 N.J. Super. 306; 652 A.2d 774; 1995 N.J. Super. LEXIS 53

Patrick Brett and Elisa Ramundo, Plaintiffs-Respondents, v. Great American Recreation, Inc., Defendant-Appellant, and Stonehill Property Owners Association, Inc., Hotel Section Condominium Council, Inc., Defendants/Third-Party-Plaintiffs, and Rudolph Maurizzi, Defendant/Third-Party-Plaintiff/Respondent, v. Denise Mcdade, Nancy Morgan, Third-Party-Defendants. Karen Furman, Plaintiff-Respondent, v. Great American Recreation, Inc., Defendant-Appellant, and Stonehill Property Owners Association Inc., Hotel Section Condominium Council, Inc., Defendants/Third-Party-Plaintiffs, v. Rudolph Maurizzi, Third-Party-Defendant/Respondent. Donald Pisarcik, Plaintiff-Respondent, v. Great American Recreation, Inc., Defendant-Appellant, and Stone Hill Property Owners Association Inc., Hotel Section Condominium Council, Inc., Defendants, and Rudolph Maurizzi, Defendant-Respondent. Megan Russell, Plaintiff-Respondent, v. Great American Recreation, Inc., Defendant-Appellant, and Stone Hill Property Owners Association Inc., Hotel Section Condominium Council, Inc., Defendants/Third-Party-Plaintiffs, and Rudolph Maurizzi, Lisa Carmelitano, Third-Party-Defendants/Respondents, and Karen Furman, Third-Party-Defendant.

A-4010-92T3

SUPERIOR COURT OF NEW JERSEY, APPELLATE DIVISION

279 N.J. Super. 306; 652 A.2d 774; 1995 N.J. Super. LEXIS 53

November 29, 1994, Argued

February 8, 1995, Decided

SUBSEQUENT HISTORY: [***1] Approved for Publication February 8, 1995. As Amended.

Certification granted Brett v. Great Am. Recreation, 141 N.J. 97, 660 A.2d 1196, 1995 N.J. LEXIS 379 (1995)

Affirmed by Brett v. Great Am. Rec., 144 N.J. 479, 677 A.2d 705, 1996 N.J. LEXIS 787 (1996)

PRIOR HISTORY: On appeal from Superior Court of New Jersey, Law Division, Union County.

COUNSEL: Samuel A. DeGonge argued the cause for appellant Great American Recreation, Inc. (Samuel J. McNulty, on the brief).

Philip G. Auerbach argued the cause for respondents Patrick Brett, Elisa Ramundo, Karen Furman and Donald Pisarcik (Auerbach & Cox, attorneys; Mr. Auerbach, on the brief).

John P. Doran argued the cause for respondent Megan Russell.

Anthony P. Pasquarelli argued the cause for respondent Rudolph Maurizzi (Methfessel & Werbel, attorneys; Jared E. Stolz, of counsel and on the brief).

Kevin J. Decoursey argued the cause for respondent Lisa Carmelitano (O’Toole & Couch, attorneys; Michael Della Rovere, on the brief).

JUDGES: Before Judges BRODY, LONG and ARNOLD M. STEIN. The opinion of the Court was delivered by BRODY, P.J.A.D.

OPINION BY: Warren Brody

OPINION

[*310] [**776] The opinion of the Court was delivered by

BRODY, P.J.A.D.

Plaintiffs in this consolidated personal injury action are five of thirteen college friends, then twenty and twenty-one years old, who had planned to be together for a winter weekend at a condominium in Vernon Township. The owner of the condominium, third-party defendant Rudolph Maurizzi, is the uncle of third-party defendant [***2] Lisa Carmelitano, one of the group. He allowed the group to use his condominium, which is one of many such buildings built along the slope of Great Gorge North on either side of a vacant strip of land. During the winter, the vacant strip, which is about a thousand feet long, is the Bunny Buster ski trail. Defendants Stonehill Property Owners Association, Inc. and Hotel [*311] Section Condominium Council, Inc. (Stonehill) own the land that contains the condominiums and the Bunny Buster trail. Defendant Great American Recreation, Inc. (defendant) operates the trail as a business under the terms of an easement from Stonehill.

Members of the group arrived on Friday at different times. Early arrivals spent part of the day skiing along various trails in the area. When they finished skiing, some of those returning to the condominium used or crossed the Bunny Buster trail even though defendant had turned off the lights on the trail because by then it had closed for the day. Between ten and eleven o’clock that night, after everyone in the group had arrived at the condominium, defendant turned on the Bunny Buster trail lights to enable its employees to groom the trail for the next day. Grooming [***3] is accomplished by using motor vehicles to pull heavy rollers over the trail to tamp down the snow.

Earlier that day, one member of the group discovered a toboggan that Maurizzi had stored in his condominium with other snow equipment. After the lights were turned on, the group decided to slide down part of the trail on the toboggan. There was evidence that other people at the time were using the trail for sledding and tobogganing. The toboggan could hold no more than six people so members of the group took turns riding it. The first two runs were uneventful.

[**777] The third run, with six on board, was a disaster. Starting from a point a bit higher than where the first two runs had begun, the toboggan slid down the trail, across a fifty- to sixty-foot flat expanse of snow at the base of the trail, over a flattened snow fence, and then over the edge of a twenty-foot dirt embankment to a parking lot below. One of the six fell off the toboggan before it dropped over the edge, thereby escaping injury. The other five, the plaintiffs, were seriously injured as their bodies hit the embankment, the parking lot and a parking-lot light pole. There was evidence that, at the time of the rescue operation, [***4] other people, not associated with plaintiffs’ group, who were tobogganing [*312] escaped injury by tumbling off their toboggan just before it dropped over the edge.

Claims against all third-party defendants were dismissed on their motions for partial summary judgment. Plaintiffs settled with Stonehill before trial. The jury found that under the New Jersey Ski Statute (Statute), N.J.S.A. 5:13-1 et seq., plaintiffs as a group, defendant and Stonehill were all negligent. The jury apportioned the negligence as follows: plaintiffs 22%, defendant 54% and Stonehill 24%. The jury found that fair and adequate total compensation to all plaintiffs would be $ 2,475,000.

Defendant’s main arguments are: (1) defendant owed no duty to plaintiffs under either the common law or the Statute because they were trespassers at the time of the accident, and (2) even if plaintiffs were not barred from recovery as trespassers, the facts of this case do not render defendant liable under the terms of the Statute. Defendant raised these issues when it moved, unsuccessfully, for involuntary dismissal upon the conclusion of plaintiffs’ presentation of evidence, R. 4:37-2(b), and for judgment at the close [***5] of all evidence, R. 4:40-1. For reasons that follow, we conclude that defendant is liable under the Statute and that the Statute does not bar the claims of trespassers.

Before discussing those issues, we note that, contrary to defendant’s contention, although plaintiffs were trespassers at the time of the accident their claims would not necessarily be barred at common law. ” [HN1] Traditionally, a landowner owed no duty to a trespasser other than to refrain from acts willfully injurious.” Renz v. Penn Cent. Corp., 87 N.J. 437, 461, 435 A.2d 540 (1981). The Court held, however, that even traditionally there was a higher standard of care due a trespasser “when the property owned by the landowner can be classified as a dangerous instrumentality.” Id. at 462, 435 A.2d 540. Here, the design of the Bunny Buster trail rendered it unexpectedly dangerous. As this accident demonstrated, tobogganers who reached the bottom of the trail would be carried by momentum over the edge of a twenty-foot embankment resulting in serious injury.

[*313] The Court in Hopkins v. Fox & Lazo Realtors, 132 N.J. 426, 625 A.2d 1110 (1993), [***6] signaled its movement away from the rigid common-law distinctions among the standards of care due trespassers, licensees and invitees. There the Court held that a real estate broker owed a duty of reasonable care to a prospective home buyer who was injured when she failed to notice a step and fell while viewing the premises. She was there to attend an “open house” conducted by the broker. In imposing a duty of care on the broker, thereby departing from the common-law requirement that only the property owner had such a duty, the Court said:

The inquiry should be not what common law classification or amalgam of classifications most closely characterizes the relationship of the parties, but . . . whether in light of the actual relationship between the parties under all of the surrounding circumstances the imposition on the broker of a general duty to exercise reasonable care in preventing foreseeable harm to its open-house customers is fair and just. That approach is itself rooted in the philosophy of the common law.

[Id. at 438, 625 A.2d 1110]

Here, on one side of that relationship are young people attracted to a condominium because of its proximity [***7] to snow trails and who, not unexpectedly, used defendant’s adjacent lighted trail to toboggan after skiing hours. On the other side of the relationship is the operator of the trail, which, as designed, [**778] was a near-fatal trap to those using the trail to toboggan. Without having to decide the question, we suggest that even if the Ski Statute did not apply, the operator would have a common-law duty to take reasonable measures to warn such trespassers of that latent danger.

Indeed, such an obligation was recognized by defendant in its cross-claim against Stonehill. Stonehill employed security personnel to police the entire condominium area, including the Bunny Buster trail. That policing included keeping trespassers off the trail at night, but the security force was short-handed that night and failed to police the trail. Defendant’s attorney argued in his summation that Stonehill was negligent because it failed to have its security force eject after-hours trespassers. We add that [HN2] the duty of an owner or occupier of land to warn of such a serious [*314] danger may not be delegable. Hopkins, supra, at 441, 625 A.2d 1110 (citing Sanna v. National Sponge Co., 209 N.J.Super. 60, 506 A.2d 1258 (App.Div.1986)). [***8]

The Legislature enacted the Ski Statute in 1979 in response to a decision by the Vermont Supreme Court that deprived operators of ski areas of the absolute defense of assumption of risk. Sunday v. Stratton Corp., 136 Vt. 293, 390 A.2d 398 (1978), held that in adopting comparative negligence by statute the legislature of that state intended to replace the absolute defense of assumption of risk with the defense of plaintiff’s comparative negligence. Our Legislature was thus moved to consider whether its adoption of the doctrine of comparative negligence in 1973 left ski area operators unfairly vulnerable to personal injury actions caused by accidents that are an inherent risk of skiing and related sports such as toboganning. See generally Reisman v. Great Am. Recreation, 266 N.J.Super. 87, 92-95, 628 A.2d 801 (App.Div.), certif. denied, 134 N.J. 560, 636 A.2d 519 (1993).

[HN3] Actions against a ski operator for personal injuries sustained by a skier on its ski slope are governed by common-law negligence principles unless the Ski Statute applies. Reisman, supra,266 N.J. Super. at 97, 628 A.2d 801. [***9] The Statute, however, has wide application.

To determine whether it applies to the exclusion of common-law principles, one must look at two sections of the Statute: N.J.S.A. 5:13-4, which lists the duties of skiers, 1 and N.J.S.A. 5:13-5, which describes the risks that a skier is deemed to have assumed. If a factfinder finds that a skier was injured because he or she had violated one or more of those statutory duties or is deemed by the Statute to have assumed one or more of the stated risks of skiing, the Statute applies. The common law, and not the Statute, was applied in Reisman because there the skier’s injury [*315] was the result of neither the violation of a statutory duty nor the assumption of a statutory risk. He was injured while properly proceeding slowly down a beginner’s slope when a drunken skier knocked him to the ground.

1 [HN4] N.J.S.A. 5:13-2c defines “skier” to include “a person utilizing the ski area for recreational purposes such as . . . operating toboggans.”

[HN5] Once it is determined that the [***10] Statute applies, one must look at N.J.S.A. 5:13-3, which lists the responsibilities of the ski operator. 2 If the factfinder finds that the injuries were not proximately caused by the ski operator’s violation of any of its statutory responsibilities, the Statute bars the injured skier from recovering compensation from the operator. If the factfinder finds that the injuries were proximately caused by the ski operator’s violation of one or more of its statutory responsibilities, the skier is entitled to recover under principles of comparative negligence. N.J.S.A. 5:13-6.

2 [HN6] N.J.S.A. 5:13-2a defines “operator” to include “a person . . . who . . . manages . . . the operation of an area where individuals come to . . . operate . . . toboggans.”

Here it is obvious that plaintiffs violated at least one of the statutory duties and therefore the Statute applies. [HN7] N.J.S.A. 5:13-4d provides:

A skier shall be the sole judge of his ability to negotiate any trail, slope, or uphill track and shall not attempt to ski or otherwise [***11] traverse any trail, slope or other [**779] area which is beyond the skier’s ability to negotiate.

Plaintiffs were not able to negotiate the Bunny Buster trail. It is also obvious that plaintiffs are deemed to have assumed at least one statutory risk. [HN8] N.J.S.A. 5:13-5 provides in part:

Each skier is assumed to know the range of his ability, and it shall be the duty of each skier to conduct himself within the limits of such ability, to maintain control of his speed and course at all times while skiing, to heed all posted warnings and to refrain from acting in a manner which may cause or contribute to the injury of himself or others.

Given that assumption, plaintiffs acted in a manner that contributed to their own injury.

It is important to note that these [HN9] statutory violations and risk assumptions do not affect the percentage of a skier’s comparative [*316] negligence. That determination is left to the factfinder if it finds that the skier contributed to his or her own injuries by violating one or more of the skier’s responsibilities. The skiers’ statutory violations and risk assumptions initially serve merely to invoke application of the Statute.

A major issue at trial was whether [***12] defendant violated any of its statutory responsibilities. The focus was on the meaning of [HN10] N.J.S.A. 5:13-3, which provides in relevant part:

a. It shall be the responsibility of the operator to the extent practicable, to:

* * * *

(3) Remove as soon as practicable obvious, man-made hazards.

Much of the confusion in arguing the liability issue at trial was caused by the next subsection of the Statute, which expressly excuses an operator from certain specific responsibilities to skiers. In that regard, [HN11] N.J.S.A. 5:13-3 provides in relevant part:

b. No operator shall be responsible to any skier or other person because of its failure to comply with any provisions of subsection 3.a. if such failure was caused by:

* * * *

(3) Subject to the provisions of subsection 3.a.(3), the location of man-made facilities and equipment necessary for the ordinary operation of the ski area, such as . . . fencing of any type. . . .

Plaintiffs argued that the man-made hazard for which defendant was responsible was fencing. At first they seemed to suggest that the snow fence was a direct cause of the accident because it constituted a ramp that “launched” the toboggan down the embankment. Defendant [***13] responded by claiming the benefit of subsection -3b(3), which relieved it of any responsibility for the “location” of “fencing” “necessary for the ordinary operation of the ski area.”

As plaintiffs developed their case with expert testimony, however, it became apparent that they were not claiming that the flimsy snow fence was a cause of the accident, but rather that a cause of the accident was defendant’s failure to erect a more resistant fence that would restrain a toboggan and its passengers from [*317] going over the edge of the embankment. Aside from whether such a fence would effectively reduce injury or be “practicable” (a requirement of section -3a), defendant argued that the absence of a stronger fence was still related to the location of fencing and therefore not actionable because of subsection -3b(3).

The trial judge rejected defendant’s argument when he denied its motions. He interpreted “man-made hazards” comprehensively to include the design of the trail, which directed toboggans, known to be difficult if not impossible to control, over the edge of the twenty-foot embankment and down to the parking lot and light pole. As he understood the Legislature’s intent, the requirement [***14] that operators “remove . . . man-made hazards” was broad enough to include warning people not to use the trail for tobogganing. The judge instructed the jury that “remove” not only means “to . . . uproot” but also means “to eliminate or reduce or obviate.” This left the jury free to decide whether the hazard of falling over the edge of the embankment could be removed by warnings. We agree with the trial judge.

[**780] [HN12] An obvious man-made hazard, as contemplated in N.J.S.A. 5:13-3a(3), is a man-made danger, obvious to an operator, that is not an inherent risk of using a “ski area.” A ski area is defined in part by N.J.S.A. 5:13-2b as real property “utilized for skiing, operating toboggans, sleds, or similar vehicles during the skiing season.” Being borne off an embankment after reaching the bottom of a trail is not an inherent risk of tobogganing.

Where physical removal of a hazard is not possible, reasonable warnings of the hazard may constitute its practicable removal. The Statute impliedly contemplates that an operator at least has a duty to post suitable warnings of danger. It will be recalled that N.J.S.A. 5:13-5 expressly charges skiers with the reciprocal duty “to heed [***15] all posted warnings.”

Defendant argues alternatively that even if plaintiffs may recover under the Ski Statute, the Statute does not apply to trespassers. We already suggested that even at common law, [*318] defendant may owe plaintiffs a duty of reasonable care because their presence on the lighted trail was reasonably foreseeable, the risk of grave injury was great and the duty of care was not delegable. We find nothing in the statute that suggests that the Legislature meant to supplant the common law in that respect. The Statute does not exempt trespassers from the definition of skiers to whom operators have a limited responsibility. We quote the [HN13] N.J.S.A. 5:13-2c definition in full:

“Skier” means a person utilizing the ski area for recreational purposes such as skiing or operating toboggans, sleds or similar vehicles, and including anyone accompanying the person. Skier also includes any person in such ski area who is an invitee, whether or not said person pays consideration.

[Emphasis added.]

Plaintiffs were not merely “in” the ski area; they were “utilizing the ski area for recreational purposes such as . . . operating toboggans.” They were therefore skiers entitled to recover [***16] under principles of comparative negligence if defendant violated any of its limited statutory responsibilities.

Our understanding of the Legislature’s intent is fortified by a change in the Assembly bill before it became the Statute. The bill originally contained a section that read:

No operator shall be liable to any person who is a trespasser, which shall include, but not be limited to, persons using the facilities who fail, when required to do so, to pay lift fees or other fees required in connection with the use of these facilities. The operator shall be liable to skiers and others only as specified in this section.

[A. 1650, 198th Leg., 1st Sess. § 3(c) (1978).]

That provision was deleted before the Statute was adopted. The Statement accompanying the final version of the bill stated in part, “The complete removal of liability on the part of a ski area operator to trespassers would be eliminated.” Assembly Judiciary, Law, Public Safety and Defense Committee Statement to Assembly No. 1650 (November 20, 1978).

The two remaining arguments that we will briefly address are that the motion judge erroneously granted partial summary judgments to Maurizzi and to Carmelitano. [***17] The motions were properly granted.

[*319] There was no evidence presented in opposition to Maurizzi’s motion that he authorized plaintiffs to use his toboggan, which he had stored in his home. There was no evidence that a toboggan is so inherently dangerous that Maurizzi should have secured it from use by adults. There was no evidence that Maurizzi knew that using the toboggan on the Bunny Buster trail would be especially dangerous.

As to Carmelitano, although there was evidence, presented in opposition to her motion, that some members of the group drank beer at the condominium before the accident, there was no evidence that Carmelitano served the beer, much less that she served it to anyone who was visibly intoxicated. Indeed, there was no evidence that beer-drinking was a cause of the accident. See Gustavson v. Gaynor, 206 N.J.Super. 540, 503 A.2d 340 (App.Div.1985), certif. denied, 103 N.J. 476, 511 A.2d 655 (1986).

[**781] We are satisfied from a careful reading of this record that the remaining issues that defendant has raised in its brief are clearly without merit and therefore require no discussion. R. 2:11-3(e)(1)(E).

[***18] Affirmed.


New Jersey does not support fee shifting provisions (indemnification clauses) in releases in a sky diving case.

Plaintiff’s claims were dismissed because the plaintiff failed to present enough evidence to support any elements of his claim for his injuries skydiving.

Dare v. Freefall Adventures, Inc., 349 N.J. Super. 205; 793 A.2d 125; 2002 N.J. Super. LEXIS 155

State: New Jersey, Superior Court of New Jersey, Appellate Division

Plaintiff: Joseph Dare and Patricia Dare

Defendant: Freefall Adventures, Inc., John Ed-Dowes, Warren Acron and Eric Keith Johnson, Defendants-Respondents.

Plaintiff Claims:

Defendant Defenses:

Holding:

Year: 2002

The plaintiff was injured when he attempted to avoid colliding with another sky diver. The co-participant had left the airplane first and was lower than the plaintiff; therefore, the co-participant had the right of way.

The plaintiff had been jumping from this site with the defendant for two years, which totaled 137 jumps, including every week the six months before the accident.

Prior to jumping the plaintiff signed a release. The release was five pages long and included an indemnity agreement. The plaintiff also signed a release for Cross Keys Airport, Inc.

The plaintiff sued his co-participant sky diver, as well as the jump facility for his injuries.

The plaintiff denied that it was the cause of his injury; however, he had made arrangements to have his wife photograph him during the jump. In order to allow his wife the opportunity to photograph him, he had to steer through buildings towards the concession trailer where his wife was located.

The defendants filed a motion for summary judgment, which was granted because the plaintiff failed to establish a prima facie case of negligence.

Prima facie, Latin for first look, which legally means the plaintiff, could not establish any facts or sufficient facts to support its claims. A plaintiff must show enough to the court to establish the very basics supporting the elements in its claim.

The defendant had argued that based on the release it should be awarded its attorney fees and costs also; however, the trial court did not grant this motion.

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

The court first looked at the standard of care between participants in a sporting event.

…the duty of care applicable to participants in informal recreational sports is to avoid the infliction of injury caused by reckless or intentional conduct.” The Court’s determination was grounded on two policy considerations; the promotion of vigorous participation in athletic activities, and the avoidance of a flood of litigation generated by voluntary participation in games and sports.

The reckless standard is a greater standard than the negligence standard. That means the acts of the co-participant to be liable for the injuries of another participant must be beyond negligent acts.

The applicability of the heightened standard of care for causes of action for personal injuries occurring in recreational sports should not depend on which sport is involved and whether it is commonly perceived as a “contact” or “noncontact” sport. The recklessness or intentional conduct standard of care articulated in Crawn was not meant to be applied in a crabbed fashion. That standard represented the enunciation of a more modern approach to our common law in actions for personal injuries that generally occur during recreational sporting activities.

Another reason for the application of the reckless standard rather than the negligence standard is the concern that the lower standard would create a flood of lawsuits for any sporting injury.

Recklessness under New Jersey law “entails highly unreasonable conduct, involving “an extreme departure from ordinary care, in a situation where a high degree of danger is apparent.”

“The standard is objective and may be proven by showing that a defendant ‘proceeded in disregard of a high and excessive degree of danger either known to him [or her] or apparent to a reasonable person in his [or her] position.'”. “Recklessness, unlike negligence, requires a conscious choice of a course of action, with knowledge or a reason to know that it will create serious danger to others.”

The court also felt that a failure on the part of the plaintiff to provide expert testimony as to what standard of care was for skydiving doomed the plaintiff’s claims.

   skydiving requires the training and licensing of participants. According to the record, it involves knowledge and conduct peculiar to the activity, including an understanding of wind direction and velocity, proper diver spacing, control of descent, and avoidance of ground hazards.

The appellate court upheld the trial courts dismissal of the plaintiff’s claims against the other co-participant sky diver. The court then looked at the plaintiffs’ claims against the defendant sky diving operation. The court found that the recklessness standard did not apply to the facility.

Consequently, the question here was whether, under the ordinary duty owed to business invitees, considering the nature of the risks associated with skydiving and the foreseeability of injury, plaintiff’s risk of injury was materially increased beyond those reasonably anticipated by skydiving participants as a result of the manner by which Freefall operated its facility. Plaintiffs failed to demonstrate such a material increase in risk.

For the plaintiff to make a claim against the defendant facility, he would have to prove that facility materially increased the risks over that of a normal sky-diving facility. Again, the plaintiff failed to prove that or provide enough evidence to proceed with his claims.

There was absolutely no evidence presented that Freefall failed to supervise the divers on the day of plaintiff’s accident. The record established that the loading of the aircraft, its operation, and the jumps themselves, were uneventful. Nothing suggests that Freefall personnel knew or should have known that plaintiff, or any other diver, was in peril because of the conduct of other participants. Moreover, Freefall had no way of controlling plaintiff’s, Johnson’s, or any other jumper’s maneuvering of their parachute canopies during the descent. Both plaintiff and Johnson were trained and licensed sky-divers. It is undisputed that once airborne, it was their duty alone to proceed with due care.

Plaintiff also claimed the landing zone of the defendant facility was not in accordance with regulatory minimums; however, he never stated what those minimums were or how the defendant’s facility failed to meet those minimums.

The appellate court upheld the dismissal of the plaintiff’s claims.

We conclude that the recklessness standard applied to Johnson and the ordinary negligence standard applied to Freefall, and, based on the evidentiary material submitted, summary judgment was properly granted to all defendants.

The court then looked at the indemnification provisions in the release which the court called “fee shifting provisions.”

The court looked at how other states had handled fee shifting provisions in sky-diving cases. New Jersey had not looked at the issue in skydiving, but had examined the issue in other cases, which had found the provisions were void.

The court reiterated that the plaintiff’s claim had been dismissed based on the plaintiff’s failure to present a prima facie case, not based on the release. The fee shifting provisions were part of the release. Under New Jersey law, “that sound judicial administration is best advanced if litigants bear their own counsel fees.” Even when fee shifting provisions are allowed, they will be strictly construed.

Essentially, the fee-shifting clause in Freefall’s release/waiver may be construed as an indemnification agreement, whereby plaintiff has agreed to pay counsel fees incurred by Freefall in defending plaintiffs’ suit, even if the cause of plaintiff’s injuries was Freefall’s own negligence. Such agreements, of course, must also be strictly construed against the indemnitee.

Reviewing construction law and finding no recreational case law where a fee shifting provision had been upheld the court determined the provisions were void as a violation of public policy.

Against this backdrop, we conclude that the fee-shifting provision in Freefall’s agreement is void as against public policy. It obviously runs counter to our strong policy disfavoring fee shifting of attorneys’ fees.

The deterrent effect of enforcing such a fee-shifting agreement offends our strong policy favoring an injured party’s right to seek compensation when it is alleged that the injury was caused by the tortious conduct of another.

The court also justified its decision by saying that because skydiving was regulated boy by the FAA and the New Jersey Department of Transportation it would be wrong to allow recovery of attorney fees by the defendant when the plaintiff argued the regulations had been violated, Even though the plaintiff’s arguments had no proof.

The defendant also attempted to argue the plaintiff’s complaint was frivolous which under a New Jersey statute would have allowed the defendant to recover their attorney fees defending a frivolous claim. However, the court found there were enough bases in the plaintiff’s complaint that it did not meet the frivolous claim threshold.

So Now What?

As stated in several other cases, indemnification clauses, even when well written, as you might assume from a five-page release, rarely result in recovery of attorney fees.

This also shows that the length of the release is not a deterrent, whether the release is effective in some court. Some people balk at a release over one page. However, when stopping a multi-million dollar claim a few pieces of paper are not a big issue.

Have your release written so that it protects you and all possible co-defendants and maybe includes a well-written indemnification clause.

What do you think? Leave a comment.

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Dare v. Freefall Adventures, Inc., 349 N.J. Super. 205; 793 A.2d 125; 2002 N.J. Super. LEXIS 155

Dare v. Freefall Adventures, Inc., 349 N.J. Super. 205; 793 A.2d 125; 2002 N.J. Super. LEXIS 155

Joseph Dare and Patricia Dare, his Wife, Plaintiffs-Appellants, v. Freefall Adventures, Inc., John Ed-Dowes, Warren Acron and Eric Keith Johnson, Defendants-Respondents. Joseph Dare and Patricia Dare, his Wife, Plaintiffs-Respondents, v. Freefall Adventures, Inc., and John Eddowes, Defendants-Appellants, Warren Acorn and eric Keith Johnson, Defendants.

A-2629-00T1, A-2789-00T1

SUPERIOR COURT OF NEW JERSEY, APPELLATE DIVISION

349 N.J. Super. 205; 793 A.2d 125; 2002 N.J. Super. LEXIS 155

February 4, 2002, Argued

March 21, 2002, Decided

COUNSEL: Stephen Cristal, argued the cause for Joseph and Patricia Dare, appellants in A-2629-00T1 and respondents in A-2789-00T1 (Mark J. Molz, attorney; Mr. Cristal, on the brief).

Kelly Johnson, argued the cause for Freefall Adventures, Inc. and John Eddowes, respondents in A-2629-00T1 and appellants in A-2789-00T1 (Ms. Johnson, on the brief).

Vincent J. Pancari, argued the cause for respondent Eric K. Johnson in A-2629-00T1 (Kavesh, Pancari, Tedesco & Pancari, attorneys; Robert Pancari, on the brief).

JUDGES: Before Judges HAVEY, COBURN and WEISSBARD. The opinion of the court was delivered by HAVEY, P.J.A.D.

OPINION BY: HAVEY

OPINION

[**127] [*209] The opinion of the court was delivered by

[**128] HAVEY, P.J.A.D.

Plaintiff Joseph Dare was injured in a skydiving accident when he attempted to avoid colliding with defendant Eric Keith Johnson, a co-participant in the jump. 1 Prior to the jump, plaintiff signed a release/waiver agreement with the operator of the skydiving facility, defendant Freefall Adventures, Inc. (Freefall), under [*210] hich plaintiff released [***2] Freefall from any claims for injuries arising from Freefall’s negligence. The agreement further provided that, in the event plaintiff instituted a suit against Freefall, plaintiff agreed to pay Freefall’s counsel fees incurred in defending the suit. The trial court granted summary judgment in favor of all defendants dismissing plaintiffs’ personal injury action. The court concluded that plaintiffs failed to establish a prima facie case of negligence. 2 It also dismissed Freefall’s counterclaim in which it demanded counsel fees in accordance with the release/waiver agreement, as well as the Frivolous Claims Statute, N.J.S.A. 2A:15-59.1, and Rule 1:4-8.

1 Two appeals, A-2629-00T1, filed by plaintiffs, and A-2789-00T1, filed by defendants Freefall and John Eddowes, have been consolidated for purpose of this opinion.

2 Plaintiff Patricia Dare, Joseph’s wife, filed a per quod claim.

We conclude that the recklessness standard applied to Johnson and the ordinary negligence standard [***3] applied to Freefall, and, based on the evidentiary material submitted, see Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 666 A.2d 146 (1995), summary judgment was properly granted to all defendants. We further hold that the fee-shifting provision under the release/waiver agreement signed by plaintiff is void as against public policy, and that Freefall is not entitled to counsel fees under the Frivolous Claims Statute. We therefore affirm dismissal of Freefall’s counterclaim.

Considering the evidentiary material in a light most favorable to plaintiffs, id. at 523, 666 A.2d 146, these are the facts. On July 9, 1995, plaintiff Joseph Dare, a licensed and experienced skydiver, having jumped on 137 prior occasions, utilized the skydiving facilities operated by Freefall 3 in Williamstown, Gloucester County. Plaintiff had been using the Freefall facility for over two years and nearly every week for the six months preceding his accident.

3 Freefall refers also to defendant John Eddowes, part owner of Freefall, and defendant Warren Acorn who, according to plaintiffs’ complaint, was a Freefall employee.

[***4] Prior to his jump on July 9, 1995, plaintiff executed a five-page “Waiver of Rights, Release and Indemnity Agreement” which [*211] defined the risks of injury or death associated with skydiving.

Page 3 of the waiver provided:

1. I hereby RELEASE AND DISCHARGE . . . FREEFALL . . . from any and all liability, claims, demands or causes of action that I may hereinafter have for injuries and damages arising out of my participation in parachuting activities.

2. I further agree that I WILL NOT SUE OR MAKE CLAIM against [Freefall] for damages or other losses sustained as a result of my participation in parachuting activities. . . . I also agree to INDEMNIFY AND HOLD [Freefall] HARMLESS from all claims, judgments and costs, including attorneys’ fees, incurred in connection with any action brought as a result of my participation in parachuting activities. . . .

Page 4 provided:

2. EXEMPTION FROM LIABILITY. [Plaintiff] . . . releases [Freefall] [**129] . . . from any and all liability . . . arising out of any . . . injury to [plaintiff] . . . while participating in any of the activities contemplated by this AGREEMENT . . . whether such . . . injury results [***5] from the negligence of [Freefall] . . . .

3. COVENANT NOT TO SUE. [Plaintiff] agrees never to institute any suit or action at law or otherwise against [Freefall], its owners, officers, agents, employees, servants, or lessors . . . by reason of injury to [plaintiff] . . . arising from the activities contemplated by this AGREEMENT. . . .

[Emphasis added.]

A second “Agreement and Release,” signed by plaintiff, in favor of Cross Keys Airport, Inc. and Freefall stated:

5. REIMBURSEMENT FOR LEGAL FEES AND EXPENSES. The [plaintiff] expressly agrees and covenants to fully reimburse [Freefall] for all legal costs and reasonable counsel fees . . . paid by [Freefall], for the . . . defense of any and all actions or cause of action or claim or demand for damages whatsoever, which may hereafter arise or be instituted or recovered against [Freefall], by the [plaintiff] . . . regardless of any negligence on the part of [Freefall] . . . .

[Emphasis added.]

On the day of the jump, plaintiff was accompanied by defendant Eric Johnson, another licensed and experienced skydiver, in the airplane transporting the divers to the drop [***6] zone. Johnson jumped first, followed by plaintiff. Plaintiff claims that he was injured because he was required to make an emergency turn during his descent in order to avoid colliding with Johnson. In his certification, plaintiff states:

Defendant Johnson [was] skydiving in a reckless manner; he was far outside the [landing] pattern, he was too low to the ground over the airplane runway. It was reckless of him to be that close to the runway at that altitude. It is one of the [*212] most basic rules of skydiving that you cannot land on or near a runway. Defendant Johnson was essentially being a “hot-dog,” which is inappropriate.

Because Defendant Johnson was so far outside the [landing] pattern, he had to recklessly cut across wind back toward the drop zone, and in doing so was heading right into [plaintiff’s] path of travel. Had [plaintiff] not maneuvered, [they] would have collided. In trying to avoid the collision, [plaintiff] maneuvered quickly, which caused [plaintiff] to fall down to the ground.

In his deposition plaintiff stated that during his descent the closest he came to Johnson was between 150 and 175 feet. He further acknowledged that since Johnson jumped first, [***7] Johnson had the right of way. 4 Plaintiff also admitted that prior to the jump he had arranged with his wife to have her photograph him during his jump. According to defendants, this plan required plaintiff to steer his flight toward a concession trailer operated by his wife, which was surrounded by buildings and other dangerous obstacles. Defendants argue that plaintiff’s sudden diversion from this path was necessary to avoid striking the buildings near his wife’s trailer.

4 [HN1] The United States Parachute Association, Skydiver’s Information Manual § 4.19F (1995), provides:

Right-of-way: The lower person has the right of way, both in freefall and under canopy. The higher person should always yield to anyone below. It is important to avoid collisions at all costs.

[**130] [HN2] The New Jersey Department of Transportation regulates parachuting centers in order “to foster, control, supervise and regulate sport parachuting. . . .” N.J.A.C. 16:58-1.2. The pertinent rules require participants to meet various training and licensing [***8] standards before parachuting, and define the manner and place where a jumper should exit the aircraft. However, the regulations do not impose any express duties upon the operator of the skydiving facility or define the standard controlling a skydiver’s conduct during his descent. See N.J.A.C. 16:58-1.1 to -3.1. Also, the Federal Aviation Administration (FAA) has appointed the United States Parachuting Association (USPA) to oversee the sport of parachuting. The USPA promulgates rules which: (1) require licensing; (2) prohibit jumps into hazardous areas and the use of [*213] alcoholic beverages and drugs; and (3) establish standards regarding canopy control, maneuvering and landing. See Skydiver’s Information Manual, supra, at § 4.06C(1); § 4.19; § 4.20D and § 4.23. Otherwise, skydiving is a self-regulated industry.

I

In granting summary judgment in favor of Johnson, the trial court concluded that even under the negligence, rather than the recklessness, standard, see Crawn v. Campo, 136 N.J. 494, 643 A.2d 600 (1994), plaintiffs had failed to demonstrate a prima facie case. The court stated:

The facts basically are that this defendant, Johnson, exited the [***9] airplane prior to [plaintiff] exiting the airplane. At the time . . . just before the accident, the plaintiff indicates that the closest he got to Mr. Johnson was between 150 and 175 feet which is half a football field away. Everyone concedes that the person lowest–closest to the ground has the right-of-way. Clearly, [plaintiff] was altering his drop pattern to some extent. His observation was that he thought Johnson was closer to the runway than he should have been, but that does not appear to me to be any proximate cause at all.

I frankly don’t see how reasonable men could differ on this even giving all of the necessary inferences to the plaintiff for this particular motion. I think I am compelled to grant the summary judgment in favor of this defendant. Given the fact that there is no expert to give us any guidance with respect to any other standard of care, even applying a basic standard of care in a negligence matter, I just can’t see how [Johnson] could have contributed to this accident at all.

We are satisfied that plaintiffs had the burden of proving that Johnson’s conduct was reckless, rather than negligent. In Crawn, a case involving an injury during an informal [***10] softball game, the Court held that [HN3] “the duty of care applicable to participants in informal recreational sports is to avoid the infliction of injury caused by reckless or intentional conduct.” Id. at 497, 643 A.2d 600. The Court’s determination was grounded on two policy considerations; the promotion of vigorous participation in athletic activities, and the avoidance of a flood of litigation generated by voluntary participation in games and sports. Id. at 501, 643 A.2d 600. The Court added:

[HN4] Our conclusion that a recklessness standard is the appropriate one to apply in the sports context is founded on more than a concern for a court’s ability to discern [*214] adequately what constitutes reasonable conduct under the highly varied circumstances of informal sports activity. The heightened standard will more likely result in affixing liability for conduct that is clearly unreasonable and [**131] unacceptable from the perspective of those engaged in the sport yet leaving free from the supervision of the law the risk-laden conduct that is inherent in sports and more often than not assumed to be “part of the game.”

[Id. at 508, 643 A.2d 600 (emphasis added).]

Since Crawn, the recklessness [***11] standard of care has been applied to other informal sports activities. See, e.g., Obert v. Baratta, 321 N.J. Super. 356, 729 A.2d 50 (App.Div.1999) (applying recklessness standard when softball player sued teammate for injuries sustained as a result of teammate’s pursuit of fly ball during informal intra-office game); Calhanas v. South Amboy Roller Rink, 292 N.J. Super. 513, 679 A.2d 185 (App.Div.1996) (applying recklessness standard where roller skater suffered broken leg from collision with another skater). In Schick v. Ferolito, 167 N.J. 7, 767 A.2d 962 (2001), where a golfer was struck by an errant tee-shot, the Court expanded the Crawn holding to “all recreational sports,” whether perceived as “contact” or “noncontact” activities. Id. at 18, 767 A.2d 962. The Court observed that:

The applicability of the heightened standard of care for causes of action for personal injuries occurring in recreational sports should not depend on which sport is involved and whether it is commonly perceived as a “contact” or “noncontact” sport. The recklessness or intentional conduct standard of care articulated in Crawn was [***12] not meant to be applied in a crabbed fashion. That standard represented the enunciation of a more modern approach to our common law in actions for personal injuries that generally occur during recreational sporting activities.

[Id. at 18-19, 767 A.2d 962]

[HN5] Skydiving is a popular, “risk-laden” recreational sport. Crawn, supra, 136 N.J. at 508, 643 A.2d 600. Therefore, there is no basis in fact or law to conclude that the recklessness standard under Crawn is inapplicable. Moreover, Crawn’s policy underpinnings clearly apply. As in recreational softball games or golf, it would hardly promote “vigorous participation” in the activity if skydivers were exposed to lawsuits when their mere negligence during descent caused an injury to a co-participant. Further, application of the simple negligence standard may invite a floodgate of [*215] litigation generated by voluntary participation in the activity. Id.136 N.J. at 501, 643 A.2d 600.

Even considering plaintiffs’ proofs most indulgently, we conclude that plaintiffs fail to meet the recklessness standard. [HN6] Reckless behavior entails highly unreasonable conduct, involving “an extreme departure from ordinary care, in a situation where a high degree of danger [***13] is apparent.” Schick, supra, 167 N.J. at 19, 767 A.2d 962 (citing Prosser & Keeton on Torts § 34, at 214 (5th Ed.1984)). “The standard is objective and may be proven by showing that a defendant ‘proceeded in disregard of a high and excessive degree of danger either known to him [or her] or apparent to a reasonable person in his [or her] position.'” Ibid. “Recklessness, unlike negligence, requires a conscious choice of a course of action, with knowledge or a reason to know that it will create serious danger to others.” Schick, supra, 167 N.J. at 20, 767 A.2d 962.

It is undisputed that Johnson, who jumped first, had the right-of-way during the descent and, according to skydiving standards, plaintiff had a duty to yield if, as plaintiff claims, Johnson altered his course. In addition, plaintiff was never closer than 150 to 175 feet to Johnson during the descent. Plaintiffs fail to demonstrate how, considering such a distance, Johnson “‘proceeded in disregard of a [**132] high and excessive degree of danger'” to plaintiff. Id. 167 N.J. at 19, 767 A.2d 962.

Moreover, unlike the applicable standard of care governing an informal softball game, where expert testimony is not required, [***14] Crawn, supra, 136 N.J. at 508-09, 643 A.2d 600, skydiving requires the training and licensing of participants. According to the record, it involves knowledge and conduct peculiar to the activity, including an understanding of wind direction and velocity, proper diver spacing, control of descent, and avoidance of ground hazards. The trial court correctly determined that because of the complexities and variables involved in applying pertinent skydiving guidelines, expert testimony was necessary to establish what standard of care applied to Johnson, and how he deviated from that [*216] standard. See Butler v. Acme Markets, Inc., 89 N.J. 270, 283, 445 A.2d 1141 (1982) [HN7] (expert testimony is necessary when the subject matter “is so esoteric that jurors . . . cannot form a valid judgment as to whether the conduct of the party was reasonable”); see also Giantonnio v. Taccard, 291 N.J. Super. 31, 43-44, 676 A.2d 1110 (App.Div.1996) (holding that expert testimony was required to establish the standard of care in the safe conduct of a funeral procession). Plaintiffs presented no such expert testimony, despite the opportunity to do so. In the circumstances, summary judgment was properly granted in [***15] favor of Johnson.

II

Plaintiffs next argue that the trial court erred in granting summary judgment to Freefall, contending that fact issues exist as to whether Freefall maintained and operated a reasonably safe skydiving facility. Freefall contends that Crawn’s recklessness standard applies.

Plaintiffs submitted certifications stating that Freefall: (1) exercised no control over the “reckless” behavior of skydivers using the facility; (2) permitted the consumption of drugs and alcohol by skydivers; (3) did not conform to applicable skydiving standards of care; and (4) established a drop zone that was not in conformance with industry standards.

We first reject Freefall’s argument that the recklessness standard applies. The Crawn/Schick recklessness standard was imposed in the context of claims arising out of injuries caused by a co-participant in the sports activity. Here, the question is what duty of care is owed by the operator of a facility where the injury occurred. Since Crawn, we have addressed this distinction.

For example, in Underwood v. Atlantic City Racing Ass’n, 295 N.J. Super. 335, 685 A.2d 40 (App.Div.1996), certif. denied, [***16] 149 N.J. 140, 693 A.2d 110 (1997), we held that the Crawn standard did not apply where a jockey was injured during a race because plaintiff’s theory was that the accident occurred as a result of the [*217] negligent installation of lighting by the racetrack, a condition that was not “inherent in sports and . . . not assumed to be ‘part of the game.'” Id. at 343, 685 A.2d 40 (quoting Crawn, supra, 136 N.J. at 508, 643 A.2d 600).

Similarly, in Rosania v. Carmona, 308 N.J. Super. 365, 367, 706 A.2d 191 (App.Div.), certif. denied, 154 N.J. 609, 713 A.2d 500 (1998), we concluded that the recklessness standard did not apply where a karate (dojo) student was injured by an instructor, holding that:

in this commercial setting, the jury should have been charged that defendants owed a duty to patrons of the dojo not to increase the risks inherent in the sport of karate under the rules a reasonable student would have expected to be in effect at that dojo . . . . the jury [**133] should have been charged that the correct scope of duty owed by the expert instructor and the academy was one of due care . . . .

[Id. at 368, 706 A.2d 191 (emphasis added).]

Thus, the [***17] question for the jury was whether the risks inherent in the karate match between plaintiff and his instructor “were materially increased beyond those reasonably anticipated,” applying “the ordinary duty owed to business invitees. . . .” Id. at 374, 706 A.2d 191.

Finally, in Schneider v. Am. Hockey & Ice Skating Ctr., Inc., 342 N.J. Super. 527, 777 A.2d 380 (App.Div.), certif. denied, 170 N.J. 387, 788 A.2d 722 (2001), we held that the owner of a sports facility owed a “limited” duty to protect spectators from flying hockey pucks by providing secure seats for those spectators who request them, and also to screen any seats “that pose an unduly high risk of injury. . . .” Id. 342 N.J. Super. at 534, 777 A.2d 380. We concluded that imposition of this limited duty was “indirectly” supported by Crawn’s observation that [HN8] “‘the risk of injury is a common and inherent aspect of informal sports activity'” and “‘participants . . . assume the ordinary risks of those activities.'” Id. at 535, 777 A.2d 380 (quoting Crawn, supra, 136 N.J. at 500-01, 643 A.2d 600). We added:

[HN9] Although the operator of a sports facility is subject to a standard of care based on negligence rather than the recklessness [***18] standard applicable to participants in recreational sporting activities, McLaughlin [v. Rova Farms, Inc.], supra, 56 N.J. [288] at 303-04, 266 A.2d 284, it is appropriate in defining a sports facility [*218] operator’s duty of care to consider that any spectators choose to “assume the ordinary risks” of being struck by a flying ball or puck in order to obtain an unobstructed view of the playing field and that these are “common and inherent” risks of attending a baseball or hockey game. Crawn, supra, 136 N.J. at 500-01, 643 A.2d 600.

[Schneider, supra, 342 N.J. Super. at 535, 777 A.2d 380 (emphasis added).]

Consequently, the question here was whether, under the ordinary duty owed to business invitees, considering the nature of the risks associated with skydiving and the foreseeability of injury, Kuzmicz v. Ivy Hill Park Apartments, Inc., 147 N.J. 510, 515, 688 A.2d 1018 (1997), plaintiff’s risk of injury was materially increased beyond those reasonably anticipated by skydiving participants as a result of the manner by which Freefall operated its facility. Rosania, supra, 308 N.J. Super. at 374, 706 A.2d 191. Plaintiffs failed to demonstrate such a material increase [***19] in risk.

There was absolutely no evidence presented that Freefall failed to supervise the divers on the day of plaintiff’s accident. The record established that the loading of the aircraft, its operation, and the jumps themselves, were uneventful. Nothing suggests that Freefall personnel knew or should have known that plaintiff, or any other diver, was in peril because of the conduct of other participants. Moreover, Freefall had no way of controlling plaintiff’s, Johnson’s, or any other jumper’s maneuvering of their parachute canopies during the descent. Both plaintiff and Johnson were trained and licensed skydivers. It is undisputed that [HN10] once airborne, it was their duty alone to proceed with due care.

Further, no competent proof of drug abuse was presented; plaintiff conceded that he knew of no incident of drug use on the day in question. Also, John Eddowes, owner of Freefall, testified that his facility adhered to the industry’s “eight hour rule,” prohibiting consumption of alcohol within eight hours of a jump. Johnson [**134] testified that he complied with this rule, and there was no other evidence presented that Freefall personnel knew or should have known that Johnson or other jumpers [***20] had not complied with it. Although plaintiff stated that he smelled alcohol while on the aircraft, he was unable to say from whom the odor emanated. [*219] Moreover, there was no showing of how, even if alcohol had been consumed, that fact contributed to plaintiff’s accident. Tellingly, plaintiff opted to jump notwithstanding his alleged awareness of alcohol consumption.

Finally, plaintiffs claimed that Freefall’s drop zone was not in accordance with regulatory minimum size requirements. But no evidence, expert or otherwise, was presented to establish: (1) how, and to what degree, Freefall’s drop zone was not in compliance with industry standards; and (2) if the drop zone was substandard, how this deficiency was a proximate cause of plaintiff’s injury. Indeed, it is undisputed that Freefall’s facility was licensed and inspected by the Department of Transportation, and the facility was never cited for the size or condition of the drop zone. We conclude that summary judgment was properly granted in Freefall’s favor.

III

In its separate appeal, Freefall argues that the trial court erred in dismissing its counterclaim demanding counsel fees due it under the release/waiver signed by plaintiff. [***21] Alternatively, Freefall claims that counsel fees should have been awarded to it pursuant to the Frivolous Claims Statute, N.J.S.A. 2A:15-59.1, and the court rule governing frivolous actions. R. 1:4-8.

As noted, prior to his jump plaintiff signed an agreement releasing Freefall from any liability in the event plaintiff is injured, even if the injury was a result of Freefall’s own negligence. Moreover, the agreement had a fee-shifting provision, requiring plaintiff to pay Freefall’s counsel fees in the event plaintiff instituted suit seeking damages. The trial court found it unnecessary to address the enforceability of the release/waiver agreement, since, as it observed during Freefall’s motion for reconsideration, the sole “issue was whether or not [plaintiffs’] claim was frivolous.” In concluding that Freefall failed to make a viable claim under the Frivolous Claims Statute, the court underscored [*220] New Jersey’s public policy “to afford litigants an opportunity to have access to the courts.”

[HN11] In New Jersey, disclaimers or limitations of liability are not favored. Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358, 373, 161 A.2d 69 (1960). [***22] Nevertheless, courts in other jurisdictions have upheld exculpatory contracts signed by participants in skydiving or parachuting. See e.g., Allan v. Snow Summit, Inc., 51 Cal.App.4th 1358, 59 Cal. Rptr.2d 813 (Cal.App.1996); Paralift, Inc. v. Superior Court, 23 Cal.App.4th 748, 29 Cal. Rptr.2d 177 (Cal.App.1993); Hulsey v. Elsinore Parachute Ctr., 168 Cal. App. 3d 333, 214 Cal. Rptr. 194 (Cal.App.1985); Heil Valley Ranch, Inc. v. Simkin, 784 P.2d 781 (Colo.1989); Jones v. Dressel, 623 P.2d 370 (Colo.1981). Other cases hold that such releases are void as to a claim of gross negligence or willful or wanton conduct. See e.g., In re Pacific Adventures, Inc., 27 F. Supp. 2d 1223 (D.Haw.1998); Wheelock v. Sport Kites, Inc., 839 F. Supp. 730 (D.Haw.1993); Falkner v. Hinckley Parachute Ctr., Inc., 178 Ill. App. 3d 597, 533 N.E.2d 941, 127 Ill. Dec. 859 (1989).

Although New Jersey courts have not addressed release/waiver agreements in the context of skydiving, we have considered the effect of such agreements in other sporting activities. For example, we have observed [***23] that a release from liability for injuries arising from ski injuries in an application to become a member of a condominium [**135] association, may be void as against public policy because of its adhesive nature, and further because the release cannot relieve the owner of the ski resort from its statutory duty of care under N.J.S.A. 5:13-3a. Brough v. Hidden Valley, Inc., 312 N.J. Super. 139, 155, 711 A.2d 382 (App.Div.1998). But see McBride v. Minstar Inc., 283 N.J. Super. 471, 486, 662 A.2d 592 (LawDiv.1994), aff’d 283 N.J. Super. 422, 662 A.2d 567 (App.Div.) , certif. denied, 143 N.J. 319, 670 A.2d 1061 (1995) (upholding an exculpatory clause as part of an agreement to purchase ski equipment, because, in part, the release does not undermine a statutory duty of care or contravene public policy).

[*221] In McCarthy v. Nat. Ass’n for Stock Car Auto Racing, Inc., 87 N.J. Super. 442, 449-50, 209 A.2d 668 (LawDiv.1965), aff’d, 90 N.J. Super. 574, 218 A.2d 871 (App.Div.) , certif. granted, 47 N.J. 421, 221 A.2d 221 (1966), aff’d, 48 N.J. 539, 226 A.2d 713 (1967), the Law Division determined that [***24] a release in NASCAR’s favor was void because NASCAR’s obligation to inspect plaintiff’s vehicle was a “positive duty” imposed by New Jersey’s statutory law. See also Chemical Bank of New Jersey Nat. Ass’n v. Bailey, 296 N.J. Super. 515, 527, 687 A.2d 316 (App.Div.), certif. denied, 150 N.J. 28, 695 A.2d 671 (1997) (holding that while an exculpatory clause in a private contract may limit liability, courts will not enforce such a clause “if the party benefitting from exculpation is subject to a positive duty imposed by law or . . . if exculpation of the party would adversely affect the public interest”).

In this case, we need not decide whether, under the agreement signed by plaintiff, he waived his right to sue Freefall, since we have affirmed the summary judgment dismissing plaintiffs’ suit on substantive grounds. However, we must determine whether the contractual fee-shifting provision under the agreement is enforceable.

[HN12] “New Jersey has a strong policy disfavoring shifting of attorneys’ fees.” North Bergen Rex Transp., Inc. v. Trailer Leasing Co., 158 N.J. 561, 569, 730 A.2d 843 (1999). We adhere to the “American rule” that “‘the prevailing [***25] litigant is ordinarily not entitled to collect a reasonable attorneys’ fee from the loser.'” Rendine v. Pantzer, 141 N.J. 292, 322, 661 A.2d 1202 (1995) (quoting Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 247, 95 S.Ct. 1612, 1616, 44 L. Ed. 2d 141, 147 (1975)). Thus, our Supreme Court’s basic approach has been “‘that sound judicial administration is best advanced if litigants bear their own counsel fees.'” Satellite Gateway Communications, Inc. v. Musi Dining Car Co., Inc., 110 N.J. 280, 285, 540 A.2d 1267 (1988) (quoting State of New Jersey, Dep’t of Envtl. Prot. v. Ventron Corp., 94 N.J. 473, 504, 468 A.2d 150 (1983)).

[*222] Nevertheless, New Jersey law permits parties to a contract to shift liability for attorneys’ fees. See Cohen v. Fair Lawn Dairies, Inc., 86 N.J. Super. 206, 214-16, 206 A.2d 585 (App.Div.), certif. granted, 44 N.J. 412, 209 A.2d 145 aff’d, 44 N.J. 450, 210 A.2d 73 (1965). “However, even where attorney-fee shifting is controlled by contractual provisions, courts will strictly construe that provision in light of the general policy disfavoring the award of attorneys’ [***26] fees.” North Bergen Rex Transp., Inc., supra, 158 N.J. at 570, 730 A.2d 843. Notably, New Jersey cases which uphold enforcement of such fee-shifting provisions generally involve breach of agreements entered into in the commercial setting, such as leases, sale of goods, construction contracts and promissory notes. See Hatch v. T & L Assocs., 319 N.J. Super. 644, 648, 726 A.2d 308 (App.Div.1999) (promissory note); [**136] McGuire v. City of Jersey City, 125 N.J. 310, 327, 593 A.2d 309 (1991) (lease); Glenfed Fin. Corp. v. Penick Corp., 276 N.J. Super. 163, 182-83, 647 A.2d 852 (App.Div.1994) (loan agreement), certif. denied, 139 N.J. 442, 655 A.2d 444 (1995); Specialized Med. Sys., Inc. v. Lemmerling, 252 N.J. Super. 180, 185-86, 599 A.2d 578 (App.Div.1991) (sale of goods), certif. granted, 127 N.J. 565, 606 A.2d 375, app. dism. 142 N.J. 443, 663 A.2d 1352 (1992). Freefall has cited no New Jersey case holding that a fee-shifting provision as part of a waiver or release given in a sports activity is enforceable.

Essentially, the fee-shifting clause in Freefall’s release/waiver may be construed as an indemnification agreement, [***27] whereby plaintiff has agreed to pay counsel fees incurred by Freefall in defending plaintiffs’ suit, even if the cause of plaintiff’s injuries was Freefall’s own negligence. Such agreements, of course, must also be strictly construed against the indemnitee. Ramos v. Browning Ferris Indus. of So. Jersey, Inc., 103 N.J. 177, 191, 510 A.2d 1152 (1986). Nevertheless, we have held “that [HN13] ‘there is no essential public policy impediment to an indemnitor undertaking to indemnify the indemnitee in respect of the indemnitee’s own negligence.'” Leitao v. Damon G. Douglas Co., 301 N.J. Super. 187, 192, 693 A.2d 1209 (App.Div.), certif. denied, 151 N.J. 466, [*223] 700 A.2d 879 (1997) (quoting Doloughty v. Blanchard Constr. Co., 139 N.J. Super. 110, 116, 352 A.2d 613 (Law Div. 1976)). However, this public policy statement has generally been applied in the context of indemnification clauses under construction contracts. See Leitao, supra, 301 N.J. Super. at 192-93, 693 A.2d 1209, and cases cited therein. That principle is derived “from the judicial recognition that ordinarily the financial responsibility for the risk of injury during the course of a construction [***28] project is shifted in any event by the primary parties to their insurance carriers. . . .” Doloughty, supra, 139 N.J. Super. at 116, 352 A.2d 613.

Against this backdrop, we conclude that the fee-shifting provision in Freefall’s agreement is void as against public policy. It obviously runs counter to our strong policy disfavoring fee shifting of attorneys’ fees. Clearly, it discourages the average recreational participant from seeking the refuge of our courts for fear that he may face the retribution of a substantial legal fee if he does so. [HN14] It is one thing to hold a party to a fee-shifting provision in a contract negotiated in a commercial setting; it is another when an amateur sports participant is asked to agree to such a provision shortly before he engages in the activity. The deterrent effect of enforcing such a fee-shifting agreement offends our strong policy favoring an injured party’s right to seek compensation when it is alleged that the injury was caused by the tortious conduct of another.

Also significant is the fact that both the FAA and New Jersey’s Department of Transportation have recognized that skydiving is a high-risk sport. By regulating the activity, the agencies have [***29] made it a matter of public interest that skydiving facilities be licensed and that agency oversight is necessary to assure that the facilities be operated in a safe and compliant manner. To allow an operator to recoup its counsel fees when, as here, the injured party claims that the operator deviated from those regulations, obviously runs counter to that sound policy. See McCarthy, supra, 87 N.J. Super. at 448-49, 209 A.2d 668 [HN15] (although an immunity [*224] clause may be enforceable if it does not contravene public policy, “[t]he situation becomes entirely different in the eyes of the law when the legislation in question is, as here, [**137] legislation obviously intended for the protection of human life. In such event, public policy does not permit an individual to waive the protection which the statute is designed to afford him”).

IV

We reject Freefall’s argument that the trial court erred in denying its application for counsel fees under the Frivolous Claims Statute, N.J.S.A. 2A:15-59.1, and Rule 1:4-8. We cannot say that plaintiffs’ complaint was filed in bad faith or that plaintiffs knew or should have known that their complaint was without reasonable basis in law or [***30] equity, and could not be supported by a good faith argument under existing law. N.J.S.A. 2A:15-59.1b(1) and 59.1b(2). See also McKeown-Brand v. Trump Castle Hotel & Casino, 132 N.J. 546, 548-49, 626 A.2d 425 (1993). In our view, the validity of the release/waiver agreement signed by plaintiff was at least debatable. See McCarthy, supra, 87 N.J. Super. at 446-47, 209 A.2d 668. Furthermore, because the negligence, rather than recklessness, standard applied to Freefall, plaintiffs’ theory based on purported violations of industry standards, though not factually supported, cannot be deemed frivolous. Finally, although we agree with the trial court that ultimately expert testimony was necessary to establish a case against Freefall, that question was at least open to debate when plaintiffs filed their complaint. See Crawn, supra, 136 N.J. at 508-10, 643 A.2d 600 (holding that plaintiff was not required to produce expert testimony to establish tortious conduct of a co-participant in an informal softball game).

Affirmed.


Byrne, JR., v. Fords-Clara Barton Boys Baseball League, Inc., 236 N.J. Super. 185; 564 A.2d 1222; 1989 N.J. Super. LEXIS 357

Byrne, JR., v. Fords-Clara Barton Boys Baseball League, Inc., 236 N.J. Super. 185; 564 A.2d 1222; 1989 N.J. Super. LEXIS 357

George C. Byrne, JR., A Minor by his Guardian Ad Litem, Francine Byrne, and Francine Byrne, Individually, Plaintiffs-Appellants, v. Fords-Clara Barton Boys Baseball League, Inc., Defendant, and Dennis Bonk, Defendant-Respondent

No. A-4172-88T2

Superior Court of New Jersey, Appellate Division

236 N.J. Super. 185; 564 A.2d 1222; 1989 N.J. Super. LEXIS 357

September 19, 1989, Argued

October 4, 1989, Decided

COUNSEL: James J. Dunn argued the cause for appellants (Levinson, Axelrod, Wheaton & Grayzel, attorneys; Richard J. Levinson, of counsel; Richard J. Levinson and James J. Dunn, on the brief).

Salvatore P. DiFazio argued the cause for respondent (Golden, Rothschild, Spagnola & DiFazio, attorneys).

JUDGES: Pressler, Long and Landau. The opinion of the court was delivered by Pressler, P.J.A.D.

OPINION BY: PRESSLER

OPINION

[*186] [**1223] In evident response to the increasing cost of liability insurance and, in some instances the unavailability of liability insurance, for volunteer athletic coaches, managers and officials of nonprofit sports teams, 1 the Legislature, by L. 1986, c. 13, adopted N.J.S.A. 2A:62A-6, amended by L. 1988, c. 87, which affords those volunteers immunity from tort liability subject to the conditions and exceptions specified therein. This appeal from a summary judgment requires us to construe paragraph (c) of the Act, which conditions the availability of the immunity, to some degree at least, upon the volunteer’s participation in a safety and training program.

1 See, e.g., Legislative Summaries: Sports Law, 10 Seton Hall Legis. J. 332 (1987).

[***2] The facts relevant to the issue before us are not in dispute. In the spring of 1986, plaintiff George C. Byrne, Jr., then 11 years old, was enrolled in the Fords-Clara Barton Baseball League, Inc. The League, while not affiliated with Little League Baseball, Inc., is nevertheless similarly organized, structured and conducted, offering inter-team competitions for similarly aged youngsters. Defendant Dennis Bonk was the coach of the team to which the infant plaintiff was assigned. On May 13, 1986, the day after the effective date of N.J.S.A. 2A:62A-6, Bonk instructed plaintiff to “warm-up” the pitcher. [*187] Although plaintiff was wearing most of the catcher’s special protective gear, he was not, in violation of the League’s rules, wearing a catcher’s mask. During the warm-up, he was struck in the eye by a pitched ball, sustaining the injury which is the gravamen of this complaint. The complaint charged Bonk both with ordinary negligence and with “willful, wanton, reckless and gross” negligence.

Bonk’s motion for summary judgment dismissing the complaint as to him relied on N.J.S.A. 2A:53A-7 (charitable immunity) as well as on N.J.S.A. 2A:62A-6. The trial judge [***3] ruled that N.J.S.A. 2A:53A-7 was inapplicable to the claim against Bonk, as opposed to the League, because of its express exception of “agents or servants” from the immunity it affords. Bonk does not challenge that ruling on this appeal.

With respect to the applicability of N.J.S.A. 2A:62A-6, both plaintiff and this defendant relied on paragraph (c), which prior to its 1988 amendment provided in full as follows:

[HN1] Nothing in this section shall be deemed to grant immunity to any person causing damage by his willful, wanton, or grossly negligent act of commission or omission, nor to any coach, manager, or official who has not participated in a safety orientation and training program established by the league or team with which he is affiliated.

At least for purposes of the summary judgment motion, Bonk conceded that he had never participated in a safety orientation or training program, and the reason he had not was the League’s failure to have established one.

The issue then is whether paragraph (c), as originally adopted, required participation as a condition of immunity only if the league or team had established a safety and training program or if, to the contrary, the [***4] legislative intention was to mandate the establishment of a program as a quid pro quo, as it were, for the immunity, thus granting it only to those volunteers who had actually participated in such a program. [**1224] The trial court judge declined to read the statute as requiring the establishment of a safety and training program for volunteers, concluding therefore that a volunteer who had had no [*188] training in safety because there was no program for him to attend was fully entitled to the statutory immunity. Accordingly, it entered partial summary judgment dismissing the ordinary negligence claims against Bonk. 2 We granted plaintiff’s motion for leave to appeal and now reverse.

2 The trial judge did not rule on the wanton and gross negligence claims, concluding that questions of fact were involved, and defendant did not seek leave to cross-appeal from that determination. It is therefore not before us. See R. 2:5-6(b).

The direct legislative history is both sparse and inconclusive. The bill, A-2398, [***5] which was finally adopted as L. 1986, c. 13, had been first introduced and passed in the Assembly, whose version of paragraph (c) excepted only willful, wanton, or grossly negligent acts. The provision respecting safety and training programs was added by the Senate in its version of the bill, S-1678, which also added paragraphs (d), (e) and (f), all of which further limit and condition the immunity afforded by the Assembly bill. 3 The Statement accompanying the Senate version is not particularly helpful in construing its intention since, in explaining the addition to paragraph (c), it uses exactly the same verbiage as the statutory text.

3 Paragraph (d) makes the immunity inapplicable “to any person causing damage as the result of his negligent operation of a motor vehicle.” Paragraph (e) withholds the immunity from a person “permitting a sport competition or practice to be conducted without supervision.” Paragraph (f) makes clear the Act’s inapplicability to school coaches, managers, and officials.

[***6] We recognize that there is an ambiguity in the manner in which the operative clause of paragraph (c) was drawn. Normally that ambiguity would have required us to determine, without benefit of express legislative explication, whether the general legislative purpose to accord the immunity was meant to prevail over the safety concerns expressed by that paragraph or not. We need not, however, engage in that debate since the Legislature, by its 1988 amendment of paragraph (c), left no doubt that its original intent had been to condition the immunity [*189] upon the volunteer’s actual participation in an appropriate program. 4

4 The trial court apparently did not consider the effect of the 1988 amendment and its legislative history on this interpretation problem of the 1986 Act. Nor did either counsel bring the amendment to the attention of the trial court or this court.

By L. 1988, c. 87, the originally adopted single-section paragraph (c) was replaced by this two-section paragraph (c):

[HN2] (1) Nothing [***7] in this section shall be deemed to grant immunity to any person causing damage by his willful, wanton, or grossly negligent act of commission or omission, nor to any coach, manager, or official who has not participated in a safety orientation and training skills program which program shall include but not be limited to injury prevention and first aid procedures and general coaching concepts.

(2) A coach, manager, or official shall be deemed to have satisfied the requirements of this subsection if the safety orientation and skills training program attended by the person has met the minimum standards established by the Governor’s Council on Physical Fitness and Sports in consultation with the Bureau of Recreation within the Department of Community Affairs, in accordance with rules and regulations adopted pursuant to the “Administrative Procedure Act,” P.L.1968, c. 410 (C. 52:14B-1 et seq.).

The 1988 version does more than define, qualify, and standardize the prescribed safety program. In our view, the text of paragraph (c)(2), in its reference to a volunteer being “deemed to have satisfied the requirements of this subsection” (emphasis added), makes plain that actual program [***8] attendance is the unequivocal prerequisite for entitlement to the immunity. We are further persuaded that this was the legislative intention from the outset.

We base this conclusion first on public policy considerations. We do not believe that in initially prescribing participation in [**1225] a safety program, the Legislature meant to provide a disincentive to the establishment of such programs by charitably organized leagues and teams — and surely a disincentive is implicit in a scheme in which a coach or manager can obtain immunity against ordinary negligence by the simple expedient of the league’s failure to instruct him on matters of safety. Rather, we are convinced that the Legislature, responding to a perceived [*190] insurance crisis, concluded that all of the competing interests involved in the management of and participation in nonprofit athletic organizations could be most reasonably accommodated by encouraging the safety training of volunteer coaches and managers — not discouraging such training — and then protecting trained volunteers from ordinary negligence claims. Thus, the prior training was at the heart of the immunity concept. That being so, we are convinced [***9] that the Legislature never intended that the immunity would attach to an untrained volunteer simply because his league or team chose not to offer appropriate training.

Beyond that, we are also convinced that that construction of the original version of the statute has been expressly confirmed by the Senate Statement accompanying the 1988 amendment. That Statement starts with the observation that the amendment is intended to clarify the manner in which the volunteer coach, manager, or official can satisfy “the training program requirement of the ‘little league liability law,’ P.L.1986, c. 13. . . .” 5 Thus, the Legislature itself thereby described the program referred to in the original Act as mandated rather than optional. The conclusion is, therefore, ineluctable that [HN3] a volunteer coach who has not participated in a prescribed safety program, for whatever reason, is barred from reliance on the statutory immunity.

5 Although the Act by its terms is not limited to the Little League or even to youngsters participating in nonprofit athletic organizations, the Act has been referred to by the Little League nomenclature because it was that context in which it was initially adopted.

[***10] The partial summary judgment dismissing the ordinary negligence counts of the complaint against Dennis Bonk is reversed, and the matter is remanded to the trial court for further proceedings


Smith v. Kroesen, 9 F. Supp. 3d 439; 2014 U.S. Dist. LEXIS 39729

Smith v. Kroesen, 9 F. Supp. 3d 439; 2014 U.S. Dist. LEXIS 39729

Paul M., Plaintiff, v. John A. and Mark Cooley, et al., Defendants.

Civ. A. No. 10-5723 (NLH)(AMD)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

9 F. Supp. 3d 439; 2014 U.S. Dist. LEXIS 39729

March 25, 2014, Decided

March 25, 2014, Filed

PRIOR HISTORY: Smith v. Kroesen, 2013 U.S. Dist. LEXIS 167619 (D.N.J., Nov. 26, 2013)

COUNSEL: [**1] DOMINIC ROMAN DEPAMPHILIS, D’AMATO LAW FIRM PC, EGG HARBOR TOWNSHIP, NJ, On behalf of plaintiff.

CLARK B. LEUTZE, MARGOLIS EDELSTEIN, MOUNT LAUREL, NJ, On behalf of defendant Mark Cooley.

JUDGES: Noel L. Hillman, U.S.D.J.

OPINION BY: Noel L. Hillman

OPINION

[*440] HILLMAN, District Judge

Presently before the Court is the motion of defendant, Mark Cooley, for summary judgment in his favor on the claims of plaintiff, Paul Smith, that defendant is liable for injuries plaintiff sustained while playing in a rugby match. For the reasons expressed below, defendant’s motion will be granted.

BACKGROUND

On April 10, 2010, plaintiff Paul Smith, a member of the Jersey Shore Sharks rugby team, was playing in a rugby match against Old Gaelic Rugby Football Club, which was coached by defendant Mark Cooley. A rugby match is comprised of two, 40-minute halves, and it is typical to have 70 pile-ups of players and over 100 collisions with other players. During the first half of the match that day, plaintiff and a player from Old Gaelic got into a “ruck,” which is described to the Court as an on-the-field argument.1 The two players rolled on the ground, and plaintiff gave the Old Gaelic player a short jab to the ribs. Although the play had moved [**2] to the other end of the field, another Old Gaelic player, defendant John Kroesen, saw the ruck and, according to plaintiff, came from behind and intentionally kicked him in the face. Plaintiff sustained a left orbital fracture and a nasal fracture, for which plaintiff underwent surgery.

1 In rugby, a “ruck” also refers to efforts by opposing teams huddled over a dropped ball to kick it to a teammate to gain possession.

Plaintiff filed suit against Kroesen claiming that Kroesen’s conduct was intentional assault and battery, or at a minimum, grossly negligent. Plaintiff then filed an amended complaint,2 adding Cooley as a defendant, claiming that Cooley was grossly negligent in his coaching of the Old Gaelic team, and is responsible for plaintiff’s injuries caused by Kroesen.3 Kroesen did not answer plaintiff’s complaint, and the clerk has entered default against him. Plaintiff and Cooley went to arbitration to resolve plaintiff’s claims against Cooley, but following the arbitrator’s decision, plaintiff sought a trial de novo. Cooley has now filed for summary judgment on plaintiff’s claims against him. Plaintiff has opposed Cooley’s motion.

2 The Court granted plaintiff’s unopposed motion [**3] to file an amended complaint. (See Docket No. 8, Nov. 11, 2011.)

3 Plaintiff also added as defendants the Old Gaelic Rugby Football Club, the Eastern Pennsylvania Rugby Union (“EPRU”), and the Mid-Atlantic Rugby Football Union (“MARFU”), which oversees EPRU. On October 31, 2012, plaintiff dismissed by consent his claims against MARFU. Old Gaelic and EPRU were never served with the amended complaint, and plaintiff has abandoned his claims against them. (Pl. Attorney Cert. ¶ 9, Docket No. 38-1.)

DISCUSSION

A. Subject Matter Jurisdiction

This Court may exercise subject matter jurisdiction over the action pursuant to 28 U.S.C. § 1332 because there is complete diversity of citizenship between the parties and the amount in controversy exceeds $75,000.4 The citizenship of the [*441] parties is as follows: plaintiff is a citizen of New Jersey; defendant Kroesen is a citizen of Pennsylvania; defendant Mark Cooley is a citizen of Pennsylvania; defendant Old Gaelic Rugby Football Club, Inc. is a corporation incorporated in the Commonwealth of Pennsylvania with its principal place of business at 712 Bower Road, Shermans Dale, Pennsylvania; defendant Eastern Pennsylvania Rugby Union, Inc. (“EPRU”) is a corporation [**4] incorporated in the Commonwealth of Pennsylvania with its principal place of business at 2107 Fidelity Building, Philadelphia, Pennsylvania 19103; and Mid-Atlantic Rugby Football Union, Inc. is a Delaware corporation with its principal place of business at 800 King Street, Wilmington, Delaware.

4 On November 26, 2013, the Court issued an Order to Show Cause directing plaintiff to provide a certification properly stating the citizenship of the parties before the case could proceed, as the citizenship of the parties was not properly pleaded in the original or amended complaints. (See Docket No. 36.) Plaintiff complied with the Court’s Order, and the citizenship of the parties has now been properly averred. (See Pl. Attorney Cert., Docket No. 38-1.)

B. Standard for Summary Judgment

Summary judgment is appropriate where the Court is satisfied that the materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations, admissions, or interrogatory answers, demonstrate that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 330, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986); [**5] Fed. R. Civ. P. 56(a).

An issue is “genuine” if it is supported by evidence such that a reasonable jury could return a verdict in the nonmoving party’s favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). A fact is “material” if, under the governing substantive law, a dispute about the fact might affect the outcome of the suit. Id. In considering a motion for summary judgment, a district court may not make credibility determinations or engage in any weighing of the evidence; instead, the non-moving party’s evidence “is to be believed and all justifiable inferences are to be drawn in his favor.” Marino v. Industrial Crating Co., 358 F.3d 241, 247 (3d Cir. 2004) (quoting Anderson, 477 U.S. at 255).

Initially, the moving party has the burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). Once the moving party has met this burden, the nonmoving party must identify, by affidavits or otherwise, specific facts showing that there is a genuine issue for trial. Id. Thus, to withstand a properly supported motion for summary judgment, the nonmoving party must identify specific facts and affirmative evidence that [**6] contradict those offered by the moving party. Anderson, 477 U.S. at 256-57. A party opposing summary judgment must do more than just rest upon mere allegations, general denials, or vague statements. Saldana v. Kmart Corp., 260 F.3d 228, 232, 43 V.I. 361 (3d Cir. 2001).

C. Analysis

Cooley has moved for summary judgment in his favor on several bases. One basis is that he is immune from liability for plaintiff’s injuries under N.J.S.A. 2A:62A-6 and 42 U.S.C. § 14501 et seq., both of which afford immunity to volunteer athletic coaches for damages incurred by a player during an organized sports competition. Cooley also argues that plaintiff’s claims against him are barred by plaintiff’s assumption of the risk of injury in the very physical game of rugby, as well as by the annual rugby participation agreement, which includes a provision that by agreeing to play in the league, plaintiff releases all other members and coaches from liability for any damages suffered by plaintiff [*442] through his participation in the league. In addition to these outright bars to plaintiff’s claims against Cooley, Cooley also argues that no facts demonstrate that Cooley was negligent in his coaching duties rendering him liable for [**7] plaintiff’s injuries.

Plaintiff has opposed Cooley’s motion as to the application of N.J.S.A. 2A:62A-6 and 42 U.S.C. § 14501 et seq., his assumption of risk, and the release from liability in the participation agreement. With regard to the volunteer immunity statutes, plaintiff argues that N.J.S.A. 2A:62A-6 does not apply to Cooley because he never completed a safety orientation and training skills program as required by N.J.S.A. 2A:62A-6(c)(2),5 and because Cooley was “grossly negligent,” which conduct is excluded from immunity by N.J.S.A. 2A:62A-6(c)(1). Plaintiff also argues that Cooley cannot avail himself of 42 U.S.C. § 14501 at this point because he failed to plead it as an affirmative defense in his answer to plaintiff’s complaint, and because plaintiff was grossly negligent, which is also exempted from immunity under the federal volunteer immunity act.

5 Cooley represents that in order to serve as a coach for Old Gaelic he completed nationwide USA Rugby training, which included “injury prevention and first aid procedures and general coaching concepts,” as required by N.J.S.A. 2A:62A-6(c)(2). Plaintiff contends, however, that in order to satisfy N.J.S.A. 2A:62A-6(c)(2), plaintiff [**8] was required to take a safety orientation program specifically provided in New Jersey. As set forth below, we need not resolve this issue.

Plaintiff further rejects Cooley’s arguments that because he assumed the risk of being injured by knowingly playing in a contact sport, and because he signed a release from liability for damages resulting from participating in the contact sport, Cooley cannot be held liable for plaintiff’s damages. Plaintiff contends that because Cooley was grossly negligent in his coaching of Old Gaelic, plaintiff did not assume the risk of injury that was beyond the bounds of typical rugby play–namely, Kroesen’s kick to plaintiff’s face that resulted from Cooley’s poor coaching of Kroesen. Plaintiff also contends that the participation agreement releases do not apply to Cooley’s gross negligence.

Even accepting all of plaintiff’s arguments – that the volunteer immunity statutes do not apply, that he did not assume the risk of the injuries he suffered, and that the participation agreements do not bar his claims – plaintiff has failed to establish sufficient facts from which a jury could conclude that Cooley was grossly negligent in his coaching duties.

Under New Jersey [**9] law, in order to prove that a person acted negligently, the plaintiff must establish: (1) a duty of care owed to the plaintiff by the defendant; (2) that defendant breached that duty of care; and (3) that plaintiff’s injury was proximately caused by defendant’s breach. Boos v. Nichtberger, 2013 N.J. Super. Unpub. LEXIS 2455, 2013 WL 5566694, *4 (N.J. Super. App. Div. Oct. 10, 2013) (citing Endre v. Arnold, 300 N.J. Super. 136, 142, 692 A.2d 97 (App. Div. 1997)). The burden of proving a negligence claim rests with the plaintiff, and as part of that burden, it is vital that plaintiff establish that his injury was proximately caused by the unreasonable acts or omissions of the defendant. Id. (citing Camp v. Jiffy Lube No. 114, 309 N.J. Super. 305, 309-11, 706 A.2d 1193 (App. Div.), cert. denied, 156 N.J. 386, 718 A.2d 1215 (1998)) (other citation omitted).

With regard to a claim of gross negligence, “the difference between ‘gross’ and ‘ordinary’ negligence is one of degree rather than of quality.” Fernicola v. Pheasant Run at Barnegat, 2010 N.J. Super. Unpub. LEXIS 1614, 2010 WL 2794074, *2 (N.J. Super. Ct. App. Div. 2010) (quoting Oliver v. Kantor, 122 N.J.L. 528, 532, [*443] 6 A.2d 205 (Sup. Ct. 1939), aff’d o.b., 124 N.J.L. 131, 10 A.2d 732 (E. & A. 1940)). “Gross negligence refers to behavior which constitutes indifference to [**10] consequences.” Griffin v. Bayshore Medical Center, 2011 N.J. Super. Unpub. LEXIS 1165, 2011 WL 2349423, *5 (N.J. Super. Ct. App. Div. 2011) (citing Banks v. Korman Assocs., 218 N.J. Super. 370, 373, 527 A.2d 933 (App. Div. 1987)).

Cooley argues that plaintiff cannot provide any facts to establish that he caused Kroesen to kick plaintiff in the face during a rugby match. Cooley argues that there is no evidence to support that Cooley knew that Kroesen was prone to violence beyond what is typical during a rugby match, which is supported by the fact that Kroesen had never previously received a yellow card (for a small infraction resulting in a period of time out from a game) or a red card (for a serious infraction resulting in discharge from the game).6 Moreover, Cooley argues that plaintiff has not provided any evidence to suggest that Cooley failed in his duty as a coach by affirmatively encouraging Kroesen or any of his players to act violently during a rugby match, or by failing to appreciate a player’s violent tendencies.7

6 Plaintiff does not dispute that he had received three yellow cards in the past.

7 Cooley also counters plaintiff’s allegations that Kroesen intentionally kicked plaintiff in the face, because it is not clear whether [**11] Kroesen, who, according to Cooley and other players, was attempting to save his teammate from being punched by plaintiff, slipped while entering the fray. The dispute over the nature of Kroesen’s and plaintiff’s actions during the altercation is not material to the resolution of plaintiff’s claims against Cooley, however, because to decide Cooley’s motion for summary judgment, it must be accepted as true that Kroesen intentionally kicked plaintiff in the face.

In the context of arguing that Cooley is not entitled to immunity under N.J.S.A. 2A:62A-6(c)(1) because he was grossly negligent in his coaching duties, plaintiff argues that his negligence claim against Cooley is supported by his liability expert, Dr. Leonard K. Lucenko, who is qualified in federal and state courts as an expert in the field of physical education, recreation, coaching, and sports risk management and safety. According to Dr. Lucenko, Cooley deviated from reasonable coaching standards as follows:

1. The failure to exercise due care and foresight even though it was foreseeable that noncompliance with the Laws of the Game of Rugby created the environment for serious and permanent injury.

2. The failure to understand [**12] and appreciate well known coaching risk management principles, such as the nine legal duties of a coach.

3. The failure to properly teach and enforce the Laws of the Game of Rugby.

4. The failure to recognize the dangerous conditions created by the failure to comply with the Laws of the Game of Rugby.

5. The failure to instruct and train the players on what actions to take regarding fighting.

6. The failure to closely monitor and supervise Mr. Kroesen given his intensity as a player.

7. The failure to effectively and adequately address the intense play of Mr. Kroesen, which was resulting in injuries to other players.

8. The failure on the part of Mr. Cooley to understand he was bound by the USA Rugby Coaches’ Code of Conduct.

9. The failure to adopt and follow the principles outlined in the Code of Conduct.

(Pl. Opp. at 13, citing Ex. A.) Plaintiff argues that Dr. Lucenko’s conclusions [*444] present material disputed evidence as to whether Cooley was grossly negligent in his coaching duties, and therefore his claim against Cooley should be sent to a jury to decide.

Gross negligence requires substantial proof beyond simple negligence; it requires wanton or reckless disregard for the safety of others. [**13] Griffin v. Bayshore Medical Center, 2011 N.J. Super. Unpub. LEXIS 1165, 2011 WL 2349423, *5 (N.J. Super. Ct. App. Div. 2011) (citing In re Kerlin, 151 N.J. Super. 179, 185, 376 A.2d 939 (App. Div.1977)). Setting aside any expert qualification issues under Daubert,8 and accepting as true all of Dr. Lucenko’s findings that Cooley failed to properly instruct his players with regard to the propriety of fighting during a rugby match, the Court cannot find that plaintiff has provided sufficient disputed facts to send to a jury on the issue of proximate causation. None of Dr. Lucenko’s conclusions, nor any of the other evidence in the record, demonstrate that Cooley acted indifferently, willfully, or wantonly in his coaching of Kroesen such that he should be held legally responsible for the injuries plaintiff sustained when Kroesen kicked plaintiff in the face.

8 Federal Rule of Evidence 702, as amended in 2000 to incorporate the standards set forth in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S. Ct. 2786, 125 L. Ed. 2d 469 (1993), imposes an obligation upon a district court to ensure that expert testimony is not only relevant, but reliable. As the Third Circuit has made clear, “the reliability analysis [required by Daubert] applies to all aspects of an [**14] expert’s testimony: the methodology, the facts underlying the expert’s opinion, [and] the link between the facts and the conclusion.” ZF Meritor, LLC v. Eaton Corp., 696 F.3d 254, 291 (3d Cir. 2012) (citations omitted). To be admissible, expert testimony must concern subject matter beyond the average juror’s understanding, be sufficiently reliable, and be offered by a sufficiently qualified expert. DeHanes v. Rothman, 158 N.J. 90, 727 A.2d 8 (N.J. 1999).

As noted by the New Jersey courts, the question of the scope of duty among coaches and players is intertwined with considerations of public policy. Egerter v. Amato, 2006 N.J. Super. Unpub. LEXIS 3008, 2006 WL 551571, *3 (N.J. Super. Law Div. 2006) (citing Hopkins v. Fox and Lazo Realtors, 132 N.J. 426, 625 A.2d 1110 (N.J. 1993)). The “strong social policy to facilitate free and aggressive participation in athletic activity requires . . . leeway at least where no specific rule or statute has been violated. Otherwise courts and juries will become de facto athletic directors, second guessing actor’s conduct in reviewing generalized claims of negligence.” Id. (citations omitted). “The fact is that any athletic endeavor involves some degree of risk. Coaches are expected to absorb such risks, just like [**15] participants in informal games or athletes on a scholastic gridiron. . . . [J]udges are not athletic directors. They should not formulate standards of care which require them and juries to function as if they were.” Id. (citation omitted).9

9 It is interesting to note that Dr. Lucenko served as plaintiff’s expert in Egerter, where a track coach sued her 8th grade student for injuries she sustained when the student hit her with a shot put. Dr. Lucenko concluded in that case that plaintiff organized, supervised and conducted the practice session in an appropriate and professional manner, but that it was the instantaneous and negligent decision by the student to throw the shot before given the instruction to do so that led to the plaintiff’s severe and life altering injuries. Egerter v. Amato, 2006 N.J. Super. Unpub. LEXIS 3008, 2006 WL 551571, *1 (N.J. Super. Law Div. 2006). On defendant’s motion for summary judgment, the court found that the recklessness standard of negligence applied, and there was no evidence that the student acted recklessly.

In an earlier case proceeding under the same school of thought, and one that is similar to plaintiff’s case here against Cooley, a student in one high school filed suit [*445] against a [**16] soccer coach from another high school for injuries he sustained when an opposing player “undercut” him. Nydegger v. Don Bosco Preparatory High School, 202 N.J. Super. 535, 495 A.2d 485, 485 (N.J. Super. Ct. Law Div. 1985). The student’s allegations against the opposing team’s coach were that he taught his players to compete in an “aggressive and intense manner” and that winning the game is all important. In resolving the coach’s motion to dismiss, the court concluded, “[I]n the absence of an instruction by a coach to one of his players to commit a wrongful act or his instructing one in moves or procedures that would increase the risk of harm to opposing players, a coach is not responsible to a player on an opposing team who is injured.” Nydegger, 495 A.2d at 485. The court elaborated:

Interscholastic sports are not compulsory school programs. Students who participate do so voluntarily. Those who participate in a sport such as soccer expect that there will be physical contact as a result of 22 young men running around a field 50 by 100 yards. Physical contact is not prohibited by the rules of soccer. Injuries do result. Those who participate are trained to play hard and aggressive.

[N]o student or parent [**17] is blind to the realities of interscholastic athletics. The possibility of a serious injury exists regardless of the care exercised by schools and their personnel. Imposing liability upon schools and their coaches based on negligent or wrongful acts of players, committed during the course of play would have the practical effect of eventually eliminating interscholastic athletics. Interscholastic athletic activities have become an integral part of the intellectual, physical and social development of young people. No matter what the intentions or good purpose, a coach cannot insure or guarantee that each and every member of his team will not commit a foul or will not in the heat of the contest do an act beyond that which is acceptable.

A coach cannot be held responsible for the wrongful acts of his players unless he teaches them to do the wrongful act or instructs them to commit the act. There is absolutely no evidence in the record that would support such a finding. Teaching players to be intense and aggressive is an attribute. All sports and many adult activities require aggressiveness and intensity.

Id. at 486-87.

The rationale in Nydegger holds true in this case. Plaintiff voluntarily [**18] participated in an aggressive contact sport where it is common to engage in on-field “rucks.” Plaintiff was involved in a ruck that day, administering a “short jab in the ribs” to the other player, when Kroesen intervened and kicked plaintiff in the face. Absent evidence that Cooley directed Kroesen specifically, or his team in general, to inflict violence onto opposing team players as part of the game, Cooley cannot be held liable for plaintiff’s injuries. Additionally, any of Cooley’s alleged failings as a coach as articulated by Dr. Lucenko cannot serve as the basis for finding proximate causation because there cannot be any definitive conclusion that even if Cooley were the perfect coach, Kroesen would not have acted as he did. See, e.g., id., at 486 (“[A] coach cannot insure or guarantee that each and every member of his team will not commit a foul or will not in the heat of the contest do an act beyond that which is acceptable.”); Divia v. South Hunterdon Regional High School, 2005 WL 977028, *7 (N.J. Super. Ct. App. Div. 2005) (explaining that proximate cause is the efficient cause, the one which necessarily sets the other causes in operation; it is the act or omission, which [**19] directly brought about [*446] the happening complained of, and in the absence of which the happening complained of would not have occurred) (citing Verdicchio v. Ricca, 179 N.J. 1, 843 A.2d 1042, 1057 (N.J. 2004) (explaining that merely establishing that a defendant’s negligent conduct had some effect in producing the harm does not automatically satisfy the burden of proving it was a substantial factor)).

In sum, the evidence in the record, viewed most favorably to plaintiff, cannot support his claim that Cooley was grossly negligent in his coaching of Kroesen such that Cooley can be held liable for plaintiff’s injuries inflicted by Kroesen during the rugby match. Consequently, Cooley’s motion for summary judgment must be granted.10 An appropriate Order will be entered.

10 Plaintiff’s only remaining claim in this case is against Kroesen, upon whom the Clerk entered default at plaintiff’s request. (See 1/28/2011 Docket Entry.) As directed in the accompanying Order, plaintiff shall commence prosecution of his claim against Kroesen within 30 days, or this matter will be closed for lack of prosecution.

Date: March 25, 2014

At Camden, New Jersey

/s/ Noel L. Hillman

NOEL L. HILLMAN, U.S.D.J.

ORDER

For the reasons expressed [**20] in the Court’s Opinion filed today,

IT IS on this 25th day of March , 2014

ORDERED that defendant Mark Cooley’s motion for summary judgment [34] is GRANTED; and it is further

ORDERED that, within 30 days of the date of this Order, plaintiff shall commence prosecution of his claims against defendant John A. Kroesen. If plaintiff fails to do so, plaintiff’s case will be closed for lack of prosecution.

/s/ Noel L. Hillman

NOEL L. HILLMAN, U.S.D.J.


Every time someone comes to your business or every time they sign up again they should sign a release. This time it got rid of a major problem.

Dearnley v. Mountain Creek, 2012 N.J. Super. Unpub. LEXIS 527

Releases work for future injuries and for injuries that may have all ready occurred.

This is a case where as part of the employment at a ski area, the family of the employee was able to get season passes. A requirement for the season pass was to sign a release.

In this case, the plaintiff was injured skiing on a season pass issued to the family member of an employee. The plaintiff sued the ski resort for his injuries. After the lawsuit had commenced but before trial, the plaintiff got another season pass and signed another release. The second release language was sufficient to stop the lawsuit.

The release was called a post injury release now because it stopped a lawsuit after the injury. Normally, I discuss pre-injury releases. Pre-Injury releases are releases that are signed in case someone is injured in a negligent manner.

Summary of the case

After it was discovered the plaintiff had signed a second release, the defense moved to amend their answer and filed a motion for summary judgment. The trial court granted the motion to amend and add the defense of release and accord and satisfaction. The plaintiff appealed.

Release” is an affirmative defense. An affirmative defense is one that must be plead immediately in the answer of the defendant or the defense is waived. Release as a defense means that the parties have executed an agreement that releases the defendant from any claims.

Accord and Satisfaction” are also an affirmative defense. Accord and Satisfaction means the party have come to an agreement, an accord and resolved their differences to the satisfaction of all parties.

The plaintiff argued that the post injury release was unconscionable. The contract should not be enforced because of:

“….inadequacies, such as age, literacy, lack of sophistication, hidden or unduly complex contract terms, bargaining tactics, and the particular setting existing during the contract formation process.”

An unconscionable contract or a contract of adhesion is one that the terms were offered on a take or leave it basis the terms are unjust to the point the court cannot allow the contract to stand. The contract must be so bad as to shock the conscience of the court. However, the contract cannot just be bad to one party.

Here, there are several factors that would not make the contract unconscionable. The contract is not for a necessary service. The services could be received from the same party in other ways. (Instead of signing a release and getting a season pass, the plaintiff could have purchased daily lift tickets and not signed a release.) The services were available from other providers.

The court found there were no coercion, duress, fraud or “sharp practices” by the defendant. The agreement did not change the duty of care nor did it “incentivize negligence.” Each of the contracting parties gained or gave away something of value.

So Now What?

Here the defendant was lucky. The plaintiff unknowingly signed a release to get his season pass that had the language necessary to stop a claim that had already occurred. There are two important points to bring up from this case.

1        Make sure your release has language to top future claims and past claims.

2.      Every single time have every single-person sign a release. Get a new season pass, you sign the release again. Go rafting again, you sign the release. Buy another widget sign the release.

You just never know when a release from the future may stop a claim from the past.

What do you think? Leave a comment.

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