Arbitration Provision Bounced Again, Even After Kindred Nursing Decision.

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

Arbitration (pd)As readers of this blog know, arbitration provisions in consumer contracts are difficult to enforce in New Jersey. (Click here or here for a refresher.) There was some belief that the U.S. Supreme Court's recent decision in Kindred Nursing Centers Ltd. P'ship v. Clark might change this, but it does not appear, at least not yet, that it has. In a recent case, Defina v. Go Ahead and Jump 1, LLC d/b/a Sky Zone Indoor Trampoline Park, the Appellate Division was asked to revisit, in light of Kindred Nursing, its prior decision refusing to enforce an arbitration provision in a contract between a trampoline park and one of its customers. The Appellate Division did so, but affirmed its prior decision, holding that Kindred Nursing did not require New Jersey courts to change the manner in which they approach arbitration provisions.

I wrote about Defina in its first go-around with the Appellate Division — Bounce Around The (Court)Room: Trampoline Park's Arbitration Provision Deemed Unenforceable. The underlying facts of the case are unfortunate. A child fractured his ankle while playing "Ultimate Dodgeball" at a trampoline park. Before entering the facility, the child's father signed a document entitled, "Participation Agreement, Release and Assumption of Risk." The document contained an 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.

Notwithstanding this provision, the child's parents sued the trampoline park in state court, alleging tort claims for simple negligence and gross negligence, and statutory claims for alleged violations of the Consumer Fraud Act and the Truth in Consumer Contract, Warranty and Notice Act. 

Continue reading “Arbitration Provision Bounced Again, Even After Kindred Nursing Decision.”

Court Bounces Trampoline Park’s Arbitration Provision

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

Sky zone (pd)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. 

Continue reading “Court Bounces Trampoline Park’s Arbitration Provision”

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]."

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