Bounce Around The (Court)Room: Trampoline Park’s Arbitration Provision Deemed Unenforceable

by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Sky zone (pd)In the interest of full disclosure, I have taken my kids to the Sky Zone Trampoline Park near our home and we have always had a great time. For those who have never been, these types of places are full of trampolines, but not your parents' trampolines (assuming your parents had trampolines and your experience with them was slightly better than the children of Springfield). They are huge facilities where you can "free jump," play dodge ball on trampolines, use trampolines to dunk a basketball, jump off trampolines into foam pits, etc. As you might expect, before you are allowed to jump, you need to sign a waiver, usually electronically either before you get to the facility or when you get there. I have done this on behalf of myself and my kids and of course, being a lawyer, read each word carefully as my kids were excitedly asking me, on a seemingly endless loop, when we could start jumping. In a recent decision, Defina v. Go Ahead and Jump 1, LLC d/b/a Sky Zone Indoor Trampoline Park, the Appellate Division considered whether the arbitration provision contained in this waiver was enforceable. It ruled that it was not, which is perhaps not surprising given the recent trend in New Jersey courts regarding the enforceability of arbitration agreements. (I wrote about this trend here and here.)

In Defina, plaintiff was a minor who, through her parents, sued Sky Zone for injuries allegedly suffered at the facility. Before using the facility, plaintiff's father signed a "Participation Agreement, Release and Assumption of Risk." Among other things, the agreement required parties to release, discharge, and hold Sky Zone harmless for  any claims arising out of Sky Zone's "ordinary negligence." The waiver did not preclude lawsuits arising out of Sky Zone's alleged gross negligence or willful and wanton misconduct, but it did require that those claims be arbitrated pursuant to a separate arbitration provision, which provided:

If  there  are  any  disputes  regarding  this agreement,  I  on  behalf  of  myself  and/or  my child(ren)  hereby  waive  any  right  I  and/or my child(ren) may have to a trial and 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    pursuant    to    its    Comprehensive Arbitration  Rules  and  Procedures.  I  further agree  that  the  arbitration  will take  place solely  in  the  state  of  Texas  and  that  the substantive  law  of  Texas  shall  apply.

The arbitration provision also provided that anyone who ignored the provision and sued in court would be liable to Sky Zone for $5,000 in liquidated damages. Finally, the agreement also contained a provision, in bold type, which provided that, by signing the agreement, an individual "may be found by a court of law to have waived [his or her] right to maintain a lawsuit against [Sky Zone]."

Plaintiff's father signed the agreement on behalf of himself and two children, including plaintiff. Nonetheless, plaintiff sued Sky Zone after being injured "while participating in various activities in the facility, including 'Ultimate Dodgeball.'" Plaintiff alleged that Sky Zone "failed to provide adequate warnings and instructions regarding the dodgeball activity," was negligent and careless in "creating, advertising and promoting an ultra-hazardous and dangerous dodgeball game," failed to properly supervise the participants "thereby rendering the dodgeball game unsafe and ultra-hazardous," and acted in a willful and wanton manner in "creating and promoting an inherently dangerous game." Plaintiff also alleged that Sky Zone's use of the agreement violated New Jersey's Consumer Fraud Act and its Truth in Consumer Contract, Warranty, and Notice Act. (This last claim is becoming increasingly popular in New Jersey as I wrote about here.)

Defendant moved to compel arbitration. The trial court granted the motion, holding that plaintiff "validly agreed to arbitration on behalf of his minor child, and there was no evidence that he had been coerced into signing the Agreement." The trial court also noted that Sky Zone had chosen not to enforce the forum selection and the choice of law clauses in the arbitration provision and had instead agreed to arbitrate in New York or New Jersey and apply New Jersey law. It was, however, a mixed bag of a result for Sky Zone because the trial court also held that the agreement's "liquidated damage provision [] and the waiver clause limiting claims to conduct involving more than ordinary negligence were against public policy and not enforceable." Plaintiff appealed the trial court's decision regarding the enforceability of the arbitration provision.

The Appellate Division first observed that agreements by parents to arbitrate claims of minor children arising out of "commercial recreation" contracts are generally enforceable absent allegations of fraud, duress, or unconscionability or a showing that the arbitration provision was not written in clear and unambiguous terms. In Defina, plaintiff did not claim that the father was fraudulently induced into signing the agreement. Instead, plaintiff argued that the provision was unenforceable because it was ambiguous since it did not "inform the consumer he [was] giving up his right to bring a lawsuit in court and have the claim decided by a jury." The Appellate Division agreed.

Under Atalese v. U.S. Legal Servs. Group, L.P., an arbitration provision is unenforceable if it does not clearly and unambiguously explain that plaintiffs are waiving the right to seek relief in court and have their claims decided by a jury. In that case, the New Jersey Supreme Court did not require any "magic language" to be included in arbitration provisions but instead offered examples from other cases which showed that "without difficulty and in different ways, the point can be made that by choosing arbitration, one gives up the time honored right to sue." Therefore, the Supreme Court held in Atalese that, to be valid, an arbitration provision must "at least in some general and sufficiently broad way, [ ] explain that the plaintiff is giving up her right to bring her claims  in court or have a jury resolve the dispute."

In Defina, the Appellate Division held that the arbitration provision did not satisfy this standard. While the provision stated that plaintiff was waiving any right to a "trial," the Appellate Division held that there was no clear and unambiguous statement that plaintiff was waiving the right to sue in court to obtain relief. The Appellate Division further held: "Indeed, there is no reference in the clause to a court or a jury. The Agreement also does not explain how arbitration differs from a proceeding in a court of law." Therefore, the Appellate Division reversed the trial court and held that the arbitration provision was not enforceable. Fortunately, neither I nor my kids have ever been injured at Sky Zone, but if we had, under Defina, we could have sued in a New Jersey court instead of arbitrating in Texas.

One thought on “Bounce Around The (Court)Room: Trampoline Park’s Arbitration Provision Deemed Unenforceable

  1. Peter, from my research, it seems that most injuries at trampoline parks are from mis-use by the jumper. As you said, you’ve taken your kids to Sky Zone facilities before without incident.
    From my understanding there are safety officers at these locations, safety videos on constant loops etc. Dodgeball is a game we all played as a child and I never found it ‘ultra dangerous’.
    Outside of an equipment failure or gross negligence or even provoking by an employee, I struggle to see how the facility is able to be held responsible.


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