by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)
A few months ago, I wrote about the enforceability of an arbitration provision in a case involving a child who was injured at a trampoline park ("Bounce Around The (Court)Room: Trampoline Park's Arbitration Provision Deemed Unenforceable"). In that case, the trampoline park moved to compel arbitration, but the court denied the motion, holding that the waiver was unenforceable under the New Jersey Supreme Court's seminal decision in Atalese v. U.S. Legal Servs. Group, L.P, because there was no clear and unambiguous statement that plaintiff was waiving the right to sue in court to obtain relief. Today, the Appellate Division released its decision in Weed v. Sky NJ, LLC, which involved a similar issue at a similar trampoline park and in which, unfortunately for the trampoline park, the court arrived at the same conclusion (albeit for different reasons).
In Weed, plaintiff, a minor, went to a SkyZone trampoline park. Before being allowed to jump, her mother was required to sign a document with a title only a lawyer could love — "Conditional Access Agreement, Pre-Injury Waiver of Liability, and Agreement to Indemnity, Waiver of Trial, and Agreement to Arbitrate" (the "Agreement") Having apparently read my blog about the enforceability of these types of agreements at trampoline parks, the Agreement explained, in some detail, that, by signing the Agreement, the participant was waiving the right to sue in court, the right to trial by jury, etc. Plaintiff's mother signed it, and plaintiff's visit to the park on this occasion was apparently uneventful.
Not so when she returned several months later. On that visit, plaintiff was accompanied by a friend and her friend's mother. Both children were again required to sign the Agreement before being allowed to jump. Plaintiff's friend's mother signed on behalf of both children. Notably, the Agreement required that an adult signing on behalf of a child had to be the child's parent or legal guardian, or had to have been granted power of attorney to sign on behalf of the child. Plaintiff's friend's mother did not meet these requirements, but nonetheless signed the Agreement and plaintiff and her friend were allowed to enter. Plaintiff was injured during this visit to the park and sued.
In lieu of answering the complaint, the park moved to compel arbitration. It argued that the language in the arbitration provision was "straightforward, clear, and unambiguous" and was therefore enforceable. It further argued that the first Agreement, signed by plaintiff's mother, was enforceable even during plaintiff's second visit, or, in the alternative, that the second Agreement, signed by plaintiff's friend's mother, was enforceable. The trial court rejected both arguments, holding (1) that the first Agreement did not apply to the second visit because it did not contain any language indicating that it would be binding on all future visits, and (2) that there was no precedent to support the park's argument that "an unrelated person could bind plaintiff to an arbitration clause." The park appealed.
The Appellate Division affirmed the trial court's decision. While it was "mindful that arbitration is a favored means of dispute resolution in New Jersey, the threshold issue . . . [was] whether [plaintiff's] signature on the [first] agreement would be binding on plaintiff for all subsequent visits." The Appellate Division held that there was no evidence suggesting that this was the parties' intent when they entered into the Agreement. The Agreement itself was silent on the issue, and each side submitted "conflicting affidavits in support of their respective positions." Moreover, the park's policy was to require participants to sign a new Agreement each time they came to the park. Finally, to the extent there was any ambiguity in the provision, the Appellate Division held that it would be construed against the park, which drafted the Agreement. Based on this, the Appellate Division was "satisfied that [the trial court] ruling declining enforcement of the [first] agreement was supported by the credible evidence in the record."
The Appellate Division also held that the second Agreement was not binding on plaintiff because it was signed by her friend's mother, who 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." While the court acknowledged that the New Jersey Supreme Court's decision in Hojnowski v. Vans Skate Park, held that parents may waive their own children's rights under an arbitration agreement, "there is no suggestion that such authority would extend to a non-legal guardian." The Appellate Division further noted that holding otherwise would allow a non-legal guardian to bind both the plaintiff and the plaintiff's parents to an agreement none of them ever signed because it would preclude the parents from suing on behalf of their child. Accordingly, the Appellate Division affirmed the trial court's conclusion that the second Agreement was not enforceable against plaintiff.