An Exculpatory Clause Isn’t Always Enforceable in a Personal Injury Lawsuit

By Scott M. Russ, Esq.

In Walters v. YMCA, the New Jersey Appellate Division reversed a trial court’s dismissal of a personal injury lawsuit premised upon a contractual waiver of liability.  Applying the seminal case of Stelluti v. Casapenn Enters, Inc., 203 N.J. 286 (2010) the trial court had granted the defendant’s Summary Judgment Motion based upon an exculpatory clause in the plaintiff’s membership agreement, signed as a condition of utilizing the defendant’s facility.  2014 N.J. Super LEXIS 117 (App. Div. August 11, 2014)

On appeal, the plaintiff, who was injured as a result of slipping on stairs leading to the pool, had argued that trial court’s enforcement of the exculpatory clause was erroneous in light of his allegations that the stairs were negligently maintained and as such, the ordinary common law duty of care, owed to all business invitees, had been breached.  In other words, the underlying accident was unrelated to any inherent risk associated with a health club activity and as such, the exculpatory clause should not apply to the underlying facts.  The Appellate Division agreed.

In reversing the trial court, the Appellate Division distinguished Stelluti, supra, finding the enforcement of an exculpatory clause applicable only in circumstances where the injury at issue was foreseeable as an integral part of the nature of a health club.  According to the Court, since the Stelluti decision did not address whether a health club could otherwise use an exculpatory clause protect itself from the ordinary common law duty of care, as present in the Walters case, its reasoning therefore could not be used to exonerate the defendant, YMCA in the case at hand.

Walters, supra represents a “chipping away” of the broad protections otherwise afforded New Jersey health clubs and other recreational facilities by use of exculpatory clauses.  It remains to be seen if Defendant YMCA will seek certiorari and if so, if the New Jersey Supreme Court will take the opportunity to clarify and/or limit its reasoning in Stelluti, supra.

Court Rejects Plaintiff’s Expert’s Assertions as “Inadmissible Net Opinion”

By Voris M. Tejada, Jr. Esq.

In Davis v. Brickman Landscaping, Sup. Ct. (Fernandez-Vina, J.) (27 pp.), two children lost their lives following a fire at a hotel.  The parents of the victims brought suit alleging that defendant fire sprinkler inspectors had negligently failed to inform the hotel owner about a flaw in the design of the hotel’s sprinkler system and the need for an additional sprinkler.  The issue before the court was whether plaintiffs’ expert adequately supported his asserted standard of care, or whether he offered an inadmissible net opinion.

Both plaintiffs and defendants obtained expert reports addressing the standard of care by which the performance of the defendants’ inspectors should be measured.  Defendants’ expert asserted that applicable provisions of the Uniform Fire Code (UFC) delineated the extent of care that defendants’ inspectors were required to exercise.  Because the UFC did not obligate the inspectors to evaluate the need for an additional sprinkler, nor to notify the hotel owner about any such need, defendants’ expert concluded that the inspectors had complied with the requisite standard of care.  In contrast, plaintiffs’ expert asserted that reasonable care obligates fire sprinkler inspectors to take additional precautions beyond those set forth in the UFC.  Plaintiffs’ expert thus concluded that defendants’ inspectors failed to exercise reasonable care when they neglected to notify the hotel owner of the need for an additional sprinkler.

The Court noted that New Jersey Rule of Evidence 403 provides that an expert’s testimony “may be based on facts or data derived from (1) the expert’s personal observations, or (2) evidence admitted at the trial, or (3) data relied upon by the expert which is not necessarily admissible in evidence but which is the type of data normally relied upon by experts forming opinions on the same subject.”  In contrast, an expert’s bare conclusions, unsupported by factual evidence, are inadmissible.  As such, “a trial court may not rely on expert testimony that lacks an appropriate factual foundation and fails to establish the existence of any standard about which the expert testified.”

Before examining the testimony given by plaintiffs’ expert, the court first noted that compliance with the UFC does not, as a matter of law, prevent a finding of negligence.  “[T]he customs of an industry are not conclusive on the issue of the proper standard of care; they are at most evidential of this standard.”

Plaintiffs’ expert opined that, despite their compliance with the UFC, defendants’ inspectors had a duty to satisfy a higher standard of care and report design flaws.  However, the Court found that the expert provided no objective support for this conclusion.  None of the sources relied upon by the expert addressed the role of sprinkler inspectors or supported his conclusion regarding what actions a reasonable inspector would have taken.  Instead, the expert relied upon nothing more than his personal opinion about what the inspectors should have done.  Because his opinion as to the applicable standard of care was a mere conclusion that lacked an appropriate factual foundation, the Court rejected plaintiffs’ expert’s assertions as an “inadmissible net opinion.”  Absent an expert opinion to support a standard of care beyond that prescribed in the UFC, plaintiffs were unable to satisfy their burden to establish the applicable standard of care and breach thereof, entitling defendants to judgment as a matter of law.

PIP Reimbursement Claims Barred as to Public Entities Regardless of Their Conduct

By Gina M. Zippilli, Esq.

In this personal injury protection (“PIP”) case, New Jersey Manufacturers Insurance Company (“NJM”) sought reimbursement of PIP benefits from a Fire Department and Firehouse (“the Firehouse”).  The basis of its claim was simple:  The Firehouse hosted an event whereupon an auxiliary firefighter was invited; he became intoxicated during the course of the evening; left the event; and caused a motor vehicle accident.  NJM insured the vehicle hit by the firefighter.  In the end, the New Jersey Superior Court, Appellate Division in NJM v. the Rutherford Volunteer Fire Department, 2014 N.J. Super. Unpub. Lexis 2559 (October 24, 2014) held that the Firehouse was immune from PIP Reimbursement suits under the Tort Claims Act (“TCA”)regardless of the conduct of the public entity.

The court’s analysis focused on two statutes: the New Jersey Automobile Reparation Reform Act (N.J.S.A. 39:6A-1 et seq.) governing PIP reimbursement actions, and the Tort Claims Act (N.J.S.A. 59:1-1 et seq.) governing public entity tort immunity.  Pursuant to N.J.S.A. 39:6A-9.1(a), an insurer paying PIP benefits to an insured has the right to recover those payments from “any tortfeasor” who was not required to maintain PIP benefits at the time of the accident.  The general rule of liability for public entities under the TCA, however, is that they are immune from suit unless a statutory provision permitting an action exists.  Clearly the Firehouse was not required to maintain PIP benefits.  Thus, the question was whether it could be considered “any tortfeasor” by which a claim could be asserted.

NJM argued that while public entities were normally immune from reimbursement actions, the conduct of the Firehouse, namely serving a visibly intoxicated individual, removed it from the protections of the TCA thereby allowing the claim to proceed.  In other words, NJM’s position was that public entities were immune only if their conduct fell within the confines of the TCA. The court disagreed and held that the TCA is strictly construed to permit lawsuits only where specifically delineated by statute.  Here, no such statute existed and the claim could not proceed.

School Board Found Not Liable for Fall on School Property

By Betsy G. Ramos, Esq.

Laurie Ortiz Guerrero sued defendant Toms River Regional Schools Board of Education due to a fall on an icy school walkway. Plaintiff argued that the exception to the immunity provisions in the Tort Claims Act, as set forth in the New Jersey Supreme Court in Bligen v. Jersey City Housing Authority applied to the facts. In Guerrero v. Toms River Regional Schools Board of Education, 2014 N.J. Super. Unpub. LEXIS 1971 (Aug. 8, 2014 App. Div.), the Appellate Division disagreed and affirmed the trial court’s dismissal of the lawsuit.

Plaintiff, while walking between classes, decided to go outside to avoid the crowded hallways. As plaintiff exited the building, she noticed that it was icy everywhere but she was unable to get back into the building. She fell on the ice, breaking her ankle and lower leg.

Plaintiff contended that the defendant’s employees were negligent in allowing the property to contain a dangerous condition at the time of her accident. Further, she contended the Bligen exception applied and, thus, the defendant could not claim immunity for snow removal activities.

Bligen had modified the well-established common law public entity immunity for snow removal activities as to a municipal landlord. In Bligen, a tenant fell on an icy driveway of a public housing authority. The court deemed a public housing authority to have the same standard of care to their tenants as did other commercial landlord and did not permit the common law snow removal activity to shield the conduct of the defendant housing authority.

Plaintiff argued that a public school should be subject to the same responsibility as a housing authority. Even though the school was a smaller, self-contained area, this argument ignored the underpinnings of Bligen, which related only to a municipal landlord’s common law tort liability. Without a clearly established landlord-tenant relationship, the courts have refused to classify a public entity as akin to a commercial landlord to fit it within the Bligen exception.

Hence, the Appellate Division refused to apply the Bligen exception and found that the defendant Board of Education remained immune from this suit based upon the common law snow removal immunity.

Third Circuit Court of Appeals Addresses Strenuous Standard for Harassment Claims Under Title VII

By Ralph R. Smith, Esq.

In Greer v. Mondelez Global, Inc., 2014 U.S. App. LEXIS 20529 (3rd Cir. 2014), the United States Court of Appeals for the Third Circuit affirmed a Summary Judgment Dismissal of an employee lawsuit alleging wrongful retaliation and workplace harassment premised upon allegations of race discrimination.  As part of its decision, the Third Circuit emphasized the difficult legal requirements that must be met under Title VII before a plaintiff can establish a workplace harassment claim of any kind.

The employee plaintiff in Greer claimed that a series of comments that happened over a five month period gave rise to a racially hostile work environment.  The plaintiff, who was black, was told by a pair of co-workers, amongst other things:  (1) that she probably voted for Obama; (2) that a hip-hop magazine found in the offices belonged to her; and (3) overheard a co-worker’s racially offensive joke.  The plaintiff complained about the racially-based comments to management, who eventually told the offending employees to stop their offensive conduct.

Shortly after being offered an opportunity to be considered for a workplace promotion, the plaintiff resigned and brought suit claiming racial retaliation and a racially hostile work environment under Title VII.  The District Court rejected plaintiff’s claims, and on appeal, the Third Circuit similarly found that none of plaintiff’s claims, most especially her allegations of workplace harassment, satisfied the necessary legal requirements.  After highlighting the standard for establishing workplace harassment, the appeals court noted that Title VII imposes a high threshold before workplace conduct can be considered severe, pervasive and regular enough to give rise to a hostile work environment.  In this case, the appeals court ultimately determined that the complained of conduct by plaintiff did not rise to the level of severity needed to establish a hostile workplace because the teasing and offhand comments made towards plaintiff did not discriminatorily change the terms and conditions of the plaintiff’s employment.

While harassment claims are often difficult to prove as illustrated by the Greer case, the safest preventative for such claims arising in your workplace is effective employee training and rigorous adherence to anti-harassment procedures so your employees do not become subject to the kind of workplace conduct that could breed such litigation.  With the beginning of the New Year just around the corner, employers are provided with an ideal opportunity to conduct updated training to reinforce the strong message that should be sent to all employees that wrongful discrimination and/or harassment will not be tolerated in your workplace.

Capehart Scatchard Attorneys Recognized as Super Lawyers in Business

Mt. Laurel, NJ – – Capehart Scatchard is pleased to announce that three shareholders have been honored by their peers and selected to appear in the 2014 Super Lawyers Business Edition publication. Super Lawyers Business Edition is an annual resource that serves as the go-to guide for 55,000 general counsel and executives in charge of making legal hiring decisions. The magazine features top firms of all sizes with a focus on the following business-related practice groups: Business and Transactions, Construction, Real Estate and Environmental, Employment, Intellectual Property, and Litigation. The Capehart Scatchard attorneys selected for inclusion are: Vincent Cieslik (Business Litigation), Nikitas Moustakas (Business/Corporate), and Betsy Ramos (Business Litigation).

Amy Barca and Alyse Goldstein Join Capehart Scatchard’s Workers’ Compensation Department

amy-barcaalyse-d-goldsteinMt. Laurel, NJ – – Capehart Scatchard is pleased to announce that Amy M. Barca, Esq. and Alyse D. Goldstein, Esq. have recently joined the Firm’s Workers’ Compensation Department in its Mt. Laurel office.

Ms. Barca, a Plymouth Meeting, PA resident, and Ms. Goldstein, a Cherry Hill resident, represent insurance carriers and employers in the defense of workers’ compensation claims at all stages of litigation.

Ms. Barca received her law degree from Drexel University Thomas R. Kline School of Law and her B.A. degree in History, maxima cum laude, from La Salle University.  She is admitted to practice law in New Jersey and Pennsylvania.

Ms. Goldstein received her law degree from Rutgers School of Law in Camden and her  B.A. degree in Political Science, magna cum laude, from Drexel University.  Upon law school graduation, Ms. Goldstein worked as a law clerk to the Honorable Timothy W. Chell, in the New Jersey Superior Court, Gloucester County Vicinage.  She is admitted to practice law in New Jersey and Pennsylvania.

N.J. Appellate Division Affirms Summary Judgment on Liability Waiver

On October 31, 2014, the New Jersey Appellate Division affirmed the Trial Court’s grant of Summary Judgment in the case of Steinberg v. Sahara Sam’s Oasis, et al.  In its 2-1 decision, the majority affirmed the 2013 dismissal of all injury claims against the owner of an indoor water park arising from an accident on a water ride because plaintiff had signed a Liability Waiver.

FACTS

A 44 year old psychologist sustained a serious spinal cord injury while riding a simulated surf machine called the FlowRider inside the indoor water park in Berlin, N.J.  The FlowRider’s design uses high powered water jets to create a continuous water flow up an inclined membrane to simulate an ocean wave.  Riders are given the option of riding a “boogie board” on their stomach or standing up like a surfer.  Most riders ride the wave on their stomach.  Riders standing on the board usually “wipe out” for the first few times until they learn to balance on the rushing water flow.  Prior to entering the ride, all riders of the FlowRider are required to sign a liability waiver which acknowledges the physical risks of riding the FlowRider and releasing Sahara Sam’s from all liability.  Plaintiff was recorded on closed circuit security video reading and signing the two-page document prior to riding the FlowRider and being given a special wrist band indicating he had signed the waiver before riding the FlowRider.

Plaintiff opted to ride the FlowRider standing up his first time.  He was shown on video being instructed by the attendants on how to position his feet and balance while the board was on the dry deck and the use of a tether rope.  Plaintiff stood on the board while the attendant slowly pushed the board into the water flow.  Plaintiff held one end of a tether rope for balance but moments after the attendant released the end of the board, plaintiff pitched forward from his standing position and landed on the top of his head in the shallow water flow.

Plaintiff fractured several cervical vertebrae and bruised his spinal cord.  He underwent emergency spinal fusion and was rendered was an incomplete quadriplegic until he was rehabilitated to the point where he could walk without any assistance.

PROCEDURAL HISTORY

The plaintiff filed suit in N.J. Superior Court Camden County against the owner and operator of the water park, the inventor of the FlowRider, the builder who installed the ride, as well as several component manufacturers.  The other defendants settled with plaintiff at mediation.  Sahara Sams Oasis, represented by Christopher J. Hoare, Esq. and Laura M. Danks, Esq. of Capehart Scatchard filed a motion for summary judgment based on N.J. Supreme Court decision in Stelluti v. Casapenn Enterprises, 1 A.3d 678, 203 N.J. 286 (2010).  The trial court granted Sahara Sams’ motion for summary judgment finding that the facts in the FlowRider case were on all fours with the Stelluti decision.  Plaintiff appealed.

In Stelluti, a patron of a health club injured herself during a spinning class after signing a membership application which contained liability waiver language.   The N.J. Supreme Court applied general contract principles to liability waivers and held that under New Jersey law, release of liability contracts signed by adult patrons who voluntarily use recreational and fitness facilities are generally enforceable.  The exceptions to the applicability of such waivers are: (1) contracts of adhesion, (2) contract which violate  public policy, or (3) where there is evidence of willful or gross negligence.  New Jersey is unique among many states such as California and New York, both of which disfavor liability waivers as against public policy.

THE APPELLATE DECISION IN STEINBERG

In his appeal, Steinberg argued that Stelluti should not apply to the Steinberg accident because Sahara Sams’ employees had not given adequate verbal instructions to the plaintiff prior to his ride and that this constituted gross negligence.  Plaintiff also cited a later edition of the FlowRider operators’ manual that had been published by the manufacturer after the date of installation of the ride at Sahara Sams which contained an additional warning sign that was not in place on the day of the accident.  The N.J. Appellate Division held no exceptional circumstances existed and that waiver signed by plaintiff was enforceable.   In a 29 page opinion, the majority  analyzed the language of the waiver signed by Mr. Steinberg, the video of waiver signing, the conduct of Sahara Sams’ employees, and the numerous warning signs and messages around the FlowRider.  The panel noted that the New Jersey Department of Community Affairs, which licenses all amusement park rides in the state, had reviewed and approved the FlowRider’s design, manual, and warning signage shortly before the accident.  The panel found no evidence of gross negligence on the part of Sahara Sams or its employees.   The majority also rejected Steinberg’s claims that the FlowRider lacked additional signage and rider instructions recommended by the inventor and manufacturer of the ride in subsequent editions of the Operations Manual for the FlowRider.  The panel noted that riding the FlowRider was not required and that as an adult, plaintiff knew the risks of serious physical injury and voluntarily released Sahara Sams from liability.

A lone dissenting opinion held that factual issues as to gross negligence were present in the case and would have reversed the trial court’s grant of summary judgment and remanded the case for trial.

Sahara Sam’s was insured by First Mercury Insurance and defended by the Christopher J. Hoare, Esq. and Laura M. Danks, Esq. of  Capehart Scatchard at the trial level and on appeal.  Laura Danks, Esq. argued the case for Sahara Sams.  The Plaintiff was represented by the law firm of Saltz Mongelluzzi at the trial level and Fox Rothschild on the appellate brief.

For a full copy of the appellate opinion or more information, please contact Christopher J. Hoare, Esq. at choare@capehart.com.