Exception To The Rule: Ambulance Service Providers Are “Learned Professionals” And Not Subject To New Jersey’s Consumer Fraud Act

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

Ambulance (pd)New Jersey's Consumer Fraud Act ("CFA") is generally recognized as one of the strongest consumer protection laws in the country. It prohibits "any unconscionable commercial practice, deception, fraud, false pretense, false promise or misrepresentation" that leads to an "ascertainable loss." But, certain "learned professionals" — doctors, lawyers, hospitals, etc. — are insulated from liability under the CFA. In Atlantic Ambulance Corporation v. Cullum, the Appellate Division added ambulance service providers to the list of "learned professionals" who are not subject to the CFA. 

In Atlantic Ambulance, defendants received services from plaintiff, an ambulance service provider. After they failed to pay the bills for those services, plaintiff sued. In response, defendants filed a counterclaim alleging that they were overbilled by plaintiff in violation of the CFA. Defendants sought to bring their counterclaim as a class action on behalf of themselves and all other similarly situated people who were allegedly overcharged during a six-year period.

After five years of discovery, defendants moved for class certification. The trial court denied the motion for a number of reasons, only one of which is relevant for this post. Plaintiff argued that defendants could not maintain a cause of action under the CFA because they did not pay their bills, therefore they had not suffered any "ascertainable loss." The trial court agreed, expressly rejecting defendants' argument that an excessive bill from plaintiff, by itself, was enough to prove an ascertainable loss. Defendants appealed. 

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Waiver In Gym Membership Agreement Not Too Broad And Not Barred By TCCWNA

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

Contract(pd)Gym memberships are notoriously difficult to cancel. As a result, there is a fair amount of litigation over the cancellation, or attempted cancellation, of gym memberships, many of which are class actions. A recent Appellate Division decision, Mellet v. Aquasid, LLC, was one such lawsuit. As an added bonus, the decision also involves the Truth in Consumer Contract, Warranty, and Notice Act (TCCWNA), a once relatively obscure statute that has recently become popular — or controversial depending on which side of a lawsuit you find yourself — and about which I have written here and here.

In Mellet, defendant was a health club. Plaintiffs were members of the health club. Plaintiffs attempted to cancel their memberships but their requests were declined and the health club continued to bill each of them. When plaintiffs failed to pay, defendant attempted to collect these unpaid fees — which included monthly dues, late fees, collection fees, and administrative fees –  from plaintiffs. In response, plaintiffs filed a putative class action, alleging that defendant's membership agreement and the fees it charged violated New Jersey law, including TCCWNA. The trial court denied plaintiffs' motion for class certification and plaintiffs appealed.

On appeal, plaintiffs raised a number of issues, but the most interesting one involved its claim that the broad waiver in the membership agreement violated TCCWNA. It provides, in part, that "[n]o seller . . . shall . . . enter into any written  consumer contract  . . . which includes any provision that violates any clearly established legal right of a consumer or responsibility of a seller . . . as established by State or Federal law at the time." Its purpose was to prevent deceptive practices in consumer contracts by prohibiting the use of illegal terms or warranties, but it has become a favorite of plaintiff's attorneys because consumers can sue under TCCWNA even if they have suffered no injury or loss, and because the statute allows successful plaintiffs to recover attorney's fees as part of their damages. 

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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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