Health Club Case Sheds Light on Puerto Rico Waiver Law

By Doyice Cotten

2849545766_2b560d9b65-1Kelvin Lugo lost part of his index finger while returning a dumbbell to the rack as another dumbbell shifted and rolled onto his finger.  He sued alleging negligence on the part of Health Club of America (HCA). Among the defenses offered by HCA was the fact that Lugo had signed the following waiver intended to release the club from liability:

Millenium Fitness Management Urges all members to Obtain a physical examination From their physicians prior to the use of any exercise equipment or attendance in any exercise class . In recognition of the possible dangers connected With Any physical activity , member ( s ) hereby knowingly and voluntarily waive ( s ) any cause of action of any kind whatsoever, as the result of Arising Such activity from any liability Which May or Could accrue to Millenium Fitness Management, its officers , agents,  employees, instructors or Assigns (bold added).

The trial court granted summary judgment based on the waiver and Lugo appealed to the Puerto Rico Court of Appeals. Lugo appealed claiming the waiver was ambiguous and against public policy because the Department of Recreation and Sports Regulation 7329 requires gyms to have a $500,000 liability insurance policy for injury to individuals. Lugo argued that if waivers at gyms were enforceable, why would the insurance rule be necessary?

The appellate court determined that it needed to address two questions: 1) What was the intention of the parties when Lugo signed the membership agreement containing the waiver of liability? and 2) What effect, if any, does Regulation 7329 have on the enforcement of the waiver?

In addressing the first question, the court summarized Puerto Rico waiver law as follows:

  • 1- Adhesion contracts are those in which the conditions set forth therein, are the work of one of the parties, so that the other party does not play any role in the formation of any contract.
  • 2- The Puerto Rico Supreme Court has consistently recognized that while adhesion contracts are allowed in this jurisdiction, the interpretation of its provisions will be favorable to the party that did not write the contract.
  • 3- Adhesion contracts will not be considered invalid merely because it written by one of the parties. The primary function of a court in interpreting such contracts is to determine if the clause is ambiguous.  If there is no ambiguity, the contract shall be construed according to its terms. The court must then assess the reasonableness of the agreement.
  • 4- The enforcement of a waiver of liability is not favored in Puerto Rico. Such contracts are closely examined because they insulate one contractor from liability for future damage to the other contractor.
  • 5- Although our Civil Code provides for freedom of contract, it also states that the contracting parties will not be contrary to law, morals or public order (Article 1207 of the Civil Code , 31 LPRA Section 3372). Section 4 of the code provides the general principle of law that the right to contract is waived if the waiver is contrary to law, against the public interest or public order, or is detrimental to third parties.
  • 6- The Civil Code provides that the waiver must be clear, strict, and unambiguous. This requirement is stronger when the agreement exonerates a person for their future negligent acts.
  • 7- As a generally accepted rule, our legal system provides that disclaimers are not favored by the law and must be strictly interpreted against the party who relies on them to escape responsibility; when possible, their interpretation must be contrary to the exemption from liability. To avoid liability for negligent acts, the language exonerating one from liability for negligent acts must be explicit; explicit reference must be made to the negligence of the relying service provider; or indicate such an intention in unequivocal terms.
  • 8- An important factor in determining the validity of a disclaimer clause is the bargaining power held by each of the contractors. When contractors are not equal, when one is unable to negotiate, and when one party is obliged to accept the relief from liability for negligence of the other party, the relief must be considered null. (Bold added).

The court pointed out that the waiver did not specify in sufficient detail that the waiver applied to negligent actions (see bullet #7). No mention was made of negligence. The court said that the documents offered as proof of what happened were not alone sufficient basis for reaching a definitive conclusion regarding the intent of the parties. Further, it found that the role of Regulation 7329 is unclear; the public policy of the Department of Recreation and Sport needs to be clarified; if the insurance requirement establishes a duty of ordinary care, then waivers in gyms would not protect against negligence. The court reversed the summary judgment ruling and returned the case to Superior Court.

AUTHOR’S NOTE:  This case was reported in Spanish and I have relied on Google Translate in reading and interpreting it.  The English translation is awkward and unclear in places—especially as it relates to the law.

Photo Credit: Thanks to WilsonB at http://www.flickr.com/photos/wilsonb/2849545766/sizes/m/in/photolist-5kNEFq-8rrNsY-4umgUS-apdN4e-apgwvj-apgwwE-apdN7n-apdMNF-apdMLX-apgwKq-apdMKB-8qGMu6-5THdP8-aeYgjj-9mVPVN-4Dup7d-58ksVj-6bxHWk-dHuCJ1-5THUTx-6EtwCd-5TNh3f-cpThmE-5TNg7C-fApwfp-5TNj7f-2T5euX-bDtRHN-aibSyG-5TNhvS-5TNiv1-7zQkX5-71aa6L-dh3sBW-8xzC7X-5PZbo5-8bYk6Q-8jfGhX-7QUSQu-4Xaunx-2PLJ1q-5fPfes-8dd2hH-8dd1UV-bWRa5L-bWR9Z3-bWR9XS-bWR9SA-bWR9P3-bWRa3U-bWR9Co/