By Doyice Cotten
Jenna Sauro, a New Jersey resident, filed a class action lawsuit against L.A. Fitness International, LLC. (Sauro v. L.A. Fitness International, Inc., 2013 U.S. Dist. LEXIS 58144). She made many allegations including that the contract violated three New Jersey statutes. One of the claims made by the plaintiff included the allegation that the waiver attempted to waive liability for intentional conduct, recklessness, and gross negligence.
This claim arose from language in the waiver:
Member hereby releases and holds L.A. Fitness, its directors, officers, employees, and agents harmless from all liability to Member, Member’s children and Member’s personal representatives . . . 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 L.A. Fitness or otherwise, to the fullest extent permitted by law, while Member or Member’s minor children are in, upon, or about L.A. Fitness premises or using any L.A. Fitness facilities, services or equipment.[Emphasis added.]
In addition, plaintiff claims the waiver indemnifies the company for more than simply negligence:
Member also hereby agrees to indemnify L.A. Fitness from any loss, liability, damage or cost L.A. Fitness may incur due to the presence of Member or Member’s children in, upon or about the L.A. Fitness premises or in any way observing or using any facilities or equipment of L.A. Fitness whether caused by the negligence of Member(s) or otherwise. [Emphasis added.]
The paragraph concludes with the statement that the waiver and indemnity provisions are as inclusive as permitted under New Jersey law, and, if terms of the Agreement are held to be invalid, the rest of the Agreement will remain enforceable
The plaintiff maintained that the language “or otherwise” broadened the language to intend that liability for intentional conduct, recklessness, and gross negligence be waived. The court noted that the waiver never explicitly states that members waive rights to sue for intentional, reckless or grossly negligent conduct. It pointed out, however, that the language was open-ended and could permit that interpretation. The court added that the indemnification language purports to release Defendant from liability for acts “caused by active or passive negligence of L.A. Fitness or otherwise, to the fullest extent permitted by law . . . .” It stated that this language is similarly open-ended. It added that the insertion of “’or otherwise’ certainly permits the interpretation that the provision covers conduct other than negligence.”
Other Factors and the Ruling
The court related that the waiver provision is “tempered and bounded” by language that limits the member’s release of liability to any limitations provided by state law. The waiver provision included language that releases L.A. Fitness from liability “for any loss or damage . . . to the fullest extent by law;” plus, elsewhere the waiver states that the agreement is “as broad and inclusive as is permitted by the law of the State of New Jersey . . . .” [Emphasis added.]
The court noted that the waiver expressly acknowledges the possibility that these specific provisions of the agreement may be “held invalid” by courts. These phrases clearly signal that the waiver is not absolute and is only as comprehensive as is permitted by law. The court then stated that
A consumer of ordinary intelligence, without any special knowledge of law, likely would assume that Defendant could be sued in court and held liable for Defendant’s own wrongdoing, particularly if the injury resulted from conduct that the law labels intentional, reckless or grossly negligent…. If the law permits recovery, notwithstanding the agreement, then members did not waive their rights.
The Court defined its task not to determine whether the waiver is enforceable as written; instead, its task was to determine whether it has the capacity to mislead consumers or contains false statements that induce consumers to sign up for memberships. It stated that after reading the waiver, a consumer might be more likely to reject membership than to be induced to sign up as a result of the alleged misrepresentations. The Court held that the waiver is not deceptive and not misleading.
Risk Management Notes
- In writing a waiver, avoid open-ended language such as “or otherwise.”
- Claims in this case related to the state Consumer Fraud Act, the Truth-in-Consumer Contract, and the Warranty and Notice Act. Check these acts in your state to determine if your waiver or actions are in violation.
Photo Credit: Thanks to Mike Mozart at Flickr.