Read Before Signing: Court Finds Fact-Intensive Gross Negligence Claims Should Proceed to Jury, Where Deviation from Industry Standard and Evidence of Fraud is Present

In Jimenez, et al. v. 24 Hour Fitness, USA, Inc. (filed June 9, 2015, No. C071959), California’s Third Appellate District held that where fact-intensive gross negligence claims exist, especially with evidence of potential industry standard violations and fraud in obtaining release of liability, claims should proceed to a jury, not be decided as a matter of law.

Plaintiff Etelvina Jimenez fell backwards off a moving treadmill and sustained severe head injuries after hitting her head on an exercise machine placed less than four feet behind the treadmill at a 24 Hour Fitness (“24 Hour”) facility in Sacramento. Plaintiff and her husband filed suit against 24 Hour for negligence, premises liability and loss of consortium. The relevant facts centered around two events: (1) when Plaintiff joined the gym, she was required to sign a membership agreement. The agreement was in English, but Plaintiff could not read or speak English, and the Membership Manager who had Plaintiff sign the agreement did not speak Spanish. No translation was provided, but Plaintiff signed the agreement. The membership agreement contained a release of liability provision, which included a full liability release for 24 Hour. The agreement also contained a provision stating the signatory had read and acknowledged the release; and that (2) the distance directly behind the running belt of the treadmill on which Plaintiff fell to the closest piece of equipment was 3 feet 10 inches. The treadmill manufacturer’s safety instructions, however, included a minimum space requirement for treadmill user safety and proper maintenance of six feet directly behind the running belt.

24 Hour filed a motion for summary judgment asserting that Plaintiffs’ claims for negligence, premises liability and loss of consortium were barred by the signed release. Plaintiffs opposed the motion, arguing that (1) the release was invalid because 24 Hour was grossly negligent; and (2) 24 Hour obtained the release through fraud/misrepresentation. Finding in favor of 24 Hour, the trial court granted the motion for summary judgment, holding that Plaintiffs failed to present any evidence that the Membership Manager had made any affirmative misrepresentations that led to the signing of something other than what the agreement, on its face, purported to be. In addressing the gross negligence claim, the court found that, as a matter of law, a space of three to four feet as opposed to the recommended six-foot safety zone could not constitute gross negligence because it did not reflect an extreme departure from the ordinary standard of conduct. The court ruled that consequently, Plaintiffs failed to demonstrate a triable issue of material fact with regard to the enforceability of the release.

Plaintiffs appealed, arguing that the trial court erred in granting summary judgment in 24 Hour’s favor because: (1) the liability release was not enforceable against Plaintiffs’ claim of gross negligence; and (2) the release was not enforceable because it was obtained by fraud and misrepresentation.

The Court of Appeal agreed, reciting that a release cannot absolve a party from liability for gross negligence, which would violate public policy and be unenforceable, and defined gross negligence as an extreme departure from the ordinary standard of conduct. The Court identified the issue on appeal as whether the conduct of 24 Hour could be found to constitute gross negligence. 24 Hour countered that there was no industry standard with respect to placement of treadmills and therefore there could be no issue of fact as to whether they were grossly negligent in deviating from the manufacturer’s instructions. The Court of Appeal disagreed. Evidence of the six-foot safety zone in the manufacturer’s manual and assembly guide, and Plaintiffs’ expert’s opinion, at minimum, allowed for a jury to reasonably find that (1) an industry standard of six-feet exists, (2) 24 Hour did not provide this minimum safety clearance; and (3) the failure to provide the minimum safety zone was an extreme departure from the ordinary standard of care. Accordingly, the Court held that a triable issue of fact existed and summary judgment was not appropriate.

As for the fraud/misrepresentation claim, although 24 Hour argued it had no duty to translate or explain the agreement to Plaintiff, the Court of Appeal found there were triable issues of fact as to whether or not the failure of the Membership Manager to notify Plaintiff of the release provision constituted misrepresentation. On this basis, the Court held that a triable issue of fact existed as to the applicability of the release; summary judgment therefore was improper.

The decision illustrates the Court’s reticence to decide cases, as a matter of law, where facts exist that could create triable issues, especially where plaintiffs assert fact-intensive claims. The decision should also serve as a warning to companies that provide services: releases of liability should not be considered defenses as a matter of law. Where a Court is presented with evidence of gross negligence and/or misrepresentation, a finder of fact will be necessary to make the ultimate liability decisions.

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July 1, 2015