It Was Not Fun To Stay (Swim) At The YMCA For This Plaintiff Or His Counsel

by: Peter J. Gallagher (@pjsgallagher)

A "garden variety slip and fall case" led to an instructive Appellate Division opinion on exculpatory clauses and the requirements of the New Jersey Court Rules governing appellate practice. The plaintiff prevailed on its appeal and had its lawsuit against defendant, which had been dismissed by the trial court, reinstated; but his counsel had to endure a scolding from the Appellate Division in the process.

In Walters v. YMCA, Plaintiff sued for injuries suffered after he slipped on the steps leading from an indoor pool at the YMCA in Newark, New Jersey. The YMCA did not deny that plaintiff slipped, but argued that plaintiff's claims were barred by a broad exculpatory clause in his membership agreement, which purported to hold the YMCA harmless for "any personal injuries or losses sustained . . . on any YMCA premises or as a result of a YMCA sponsored activit[y]." The trial court granted the motion and plaintiff appealed.

The Appellate Division reversed, holding that the exculpatory clause was "unenforceable as against public policy" because enforcing it would "eviscerate the common law duty of care owed by defendant to its invitees." The Appellate Division distinguished Walters from a prior decision, Stelluti v. Casapenn Enters., Inc., in which the New Jersey Supreme Court held that an exculpatory clause shielded a health club from injuries sustained by a plaintiff when the handlebars of her stationary bike dislodged and caused her to fall during a spinning class. In that case, the inherently risky nature of the plaintiff's physical activity was "the key consideration . . . to justify enforcing the exculpatory clause at issue." In Walters by contrast, the type of accident — slipping and falling while walking on stairs — "could have occurred in any business setting." Accordingly, the "inherently risky nature of defendant's activities as a physical fitness club was immaterial" to the Appellate Division's analysis.

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Handicapped Access: What Is A Condo Association’s Obligation To Its Members?

"Now more than ever, community associations, especially those managing age-restricted developments, must be familiar with the various statutory controls concerning handicapped accessibility. In a time when many are looking to cut costs, the last thing an association needs is to be assessed civil penalties after being found in violation of an anti-discrimination statute. Rather, an association must collectively understand its obligations, options and appropriate responses when crafting a response to a complaint of deficient handicapped access."

So begins an article, entitled Handicapped Access: What is an Association’s Obligation to its Members?, written by Steven P. Gouin in Community Trends magazine. Click on the link for more details on this important issue.

Chickens Continue Coming Home To Roost For Lenders And Mortgage Companies Involved In Foreclosure Crisis

by: Peter J. Gallagher and Steven P. Gouin

Our regular followers know that many of our pieces focus on the foreclosure industry, and with good reason, as over 2 million American homes are currently in foreclosure. Add to this troubling statistic the recent allegations of shoddy paperwork at many of the nation's largest mortgage companies and the law firms representing them, and you have the makings of a compelling story of a giant foreclosure-induced catastrophe. While homeowners have been feeling the pain from this crisis for years now, the catastrophe struck close to home recently for many of the banks and mortgage companies at the heart of the foreclosure crisis.

In an article entitled “Confidential Federal Audits Accuse Five Biggest Mortgage Firms Of Defrauding Taxpayers,” the Huffington Post is reporting that a recent federal audit conducted by the Department of Housing and Urban Development (HUD) revealed that five of the nation's largest foreclosure firms, including industry giants like CitiBank and Bank of America, are guilty of fraud under the Federal False Claims Act. Specifically, the audit concluded that the banks “filed for federal reimbursement on foreclosed homes that sold for less than the outstanding loan balance using defective and faulty documents.” According to the article, federal prosecutors are debating whether to use the audits as the basis for criminal and civil sanctions against the mortgage companies.

At the same time, the New York Times is reporting that New York Attorney General Eric Schneiderman has requested information and documents from three major banks – Goldman Sachs, Bank of America, and Morgan Stanley – about their mortgage-backed securities operations (“NY State Investigates Banks’ Role In Financial Crisis”). This suggests that Mr. Schneiderman may be launching an investigation into the banks' practices, which many believe led to billions in mortgage losses. One of the most interesting aspects of the article is the suggestion that, by requesting this information from the banks, Mr. Schneiderman is “operating independently of peers from other states who are negotiating a broad settlement with large banks over foreclosure practices.” The article notes that Mr. Schneiderman has been unwilling to join this proposed settlement because the banks are demanding that it include a clause whereby regulators agree not to conduct additional investigations into the banks’ activities during the mortgage crisis.