BRETT BAILEY v. DAVE PALLADINO, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0504-05T50504-05T5

BRETT BAILEY,

Plaintiff-Appellant,

v.

DAVE PALLADINO, and

INTERNATIONAL MARTIAL ARTS

TRAINING CENTER, INC.,

Defendants-Respondents.

__________________________________

 

Argued May 8, 2006 - Decided July 27, 2006

Before Judges Fall, C.L. Miniman and Newman.

On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-1162-04.

James Fitzgerald argued the cause for appellant (Friedman, Kates, Pearlman & Fitzgerald, attorneys; Mr. Fitzgerald, on the brief).

John A. Stone argued the cause for respondent Dave Palladino (Edwards & Caldwell, attorneys; Charles Shaw, of counsel and on the brief; Mr. Stone, also on the brief).

Jennifer L. Pustizzi argued the cause for respondent International Martial Arts Training Center, Inc. (Mintzer Sarowitz Zeris Ledva & Meyers, attorneys; Ms. Pustizzi, on the brief).

PER CURIAM

This is an appeal from the grant of summary judgment in favor of defendants on plaintiff Brett Bailey's ("Bailey") claims of negligence. The trial court found that Bailey had entered into an exculpatory agreement when he became a member of defendant International Martial Arts Training Center, Inc. ("IMA"); that the agreement was clear on its face; and that Bailey freely, voluntarily, and intentionally entered into the exculpatory agreement. The court found that there was no legal impediment to the enforceability of the exculpatory agreement and, as a consequence, entered summary judgment in favor of IMA and against Bailey.

The court also granted summary judgment in favor of David Palladino, another member of IMA, finding that Palladino was an intended beneficiary of the exculpatory agreement. The court also grounded the dismissal of Bailey's claim against Palladino on the doctrine of assumption of risk with respect to sporting activities.

We are not persuaded that the exculpatory agreement is clear on its face, and accordingly we reverse entry of judgment in favor of IMA, but we affirm entry of judgment in favor of Palladino pursuant to Crawn v. Campo, 136 N.J. 494 (1994).

I.

Summary judgment is designed to provide a prompt, businesslike and inexpensive method of resolving cases. Judson v. Peoples Bank & Trust Co. of Westfield, 17 N.J. 67, 73-74 (1954). In reviewing a ruling on a summary judgment motion, we apply the same standard as that governing the trial court. Antheunisse v. Tiffany & Co., 229 N.J. Super. 399, 402 (App. Div. 1988), certif. denied, 115 N.J. 59 (1989).

A moving party is entitled to summary judgment if there is no genuine issue as to any material fact in the record. R. 4:46-2. In deciding a summary judgment motion, the trial court must apply the standard articulated by the Supreme Court in Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520 (1995):

[A] determination whether there exists a "genuine issue" of material fact that precludes summary judgment requires the motion judge to consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational fact-finder to resolve the alleged disputed issue in favor of the non-moving party.

[Id. at 540.]

Thus, the trial court must assume that the opposing party's version of the facts is true, must give the opposing party the benefit of all favorable inferences, and must then ascertain "what reasonable conclusions a rational jury can draw from the evidence." Id. at 535.

II.

Bailey, wishing to enroll in a Brazilian Jiu Jitsu course, became a member of IMA, a fitness center located in Bergenfield, New Jersey. On February 25, 2000, Bailey signed two documents, one titled "Information Sheet" and another titled "Risk Agreement." The "Risk Agreement" was executed by Bailey and by Martin J. Ronquinn on behalf of IMA. That agreement provided in pertinent part as follows:

In consideration of gaining access to participate in activities associated with . . . INTERNATIONAL MARTIAL ARTS TRAINING CENTER . . ., I do hereby waive, release and forever discharge its instructors, officers, agents, employees, representatives, executors and all responsibilities or liability for injuries or damages resulting from my participation in any activities in said program.

That specific paragraph was initialed by Bailey. The agreement went on to provide:

Also, in consideration of the above factors, I acknowledge the existence of risk in connection with these activities, assume such risks and agree to accept the responsibilities for any injuries sustained by my participation in the course via the use of the facilities and/or its equipment. Most specifically, I acknowledge and accept responsibility for injuries arising out of those activities which involve risk in any of the following areas:

The use of facility equipment

The performance of fitness/martial art-related evaluations to assess functional capacity

The participation in group activities related to exercise and activity

Incidents that occur within the institution facility, locker rooms, dressing rooms, showers, and other areas associated at [IMA]

The words "Member/Guardian Signature" are contained in parentheses to the right of Bailey's signature.

The "Information Sheet" consisted primarily of Bailey's name, address, employment, and other relevant information he supplied to IMA. Below Bailey's signature and in small print the following paragraph appears:

I hereby understand that I am physically fit enough to participate in all Gym activities and I understand that strength and cardiovascular training are physically strenuous. I demonstrate that the personal information shown above is true and correct and that I understood and agreed that in consideration of membership in the Fitness International Training Center, Bergenfield Physical Therapy, neither Fitness International, Unlimited Arts, or International Martial Arts Training Center INC., its owners, its managers, personal trainers, employees, contractors, agents, servants and visitors shall be in any way liable to another employee, trial member, member, or visitor because of accident, negligence, injury, theft of property, or from any cause whatsoever. I understand and agree to that tuition, fees, merchandise and all monies are NONREFUNDABLE, and Non-transferable.

It is undisputed that Bailey read and signed both of these documents.

According to Bailey, two days after he signed these documents he was seriously injured during his second class. He attended those classes assuming they would be properly supervised to prevent injury. At the time of his injury, Bailey was twenty-four years of age and had no previous experience in martial arts.

During the class on the night of February 27, 2002, Bailey and Palladino, another student in the class, whom Bailey believed to be an instructor, grappled with each other. They both started out in a standing position. Palladino locked Bailey in a hold and began to throw him, causing Bailey's knee to snap.

Palladino had been training in Brazilian Jiu Jitsu at IMA for about one year prior to the incident. Before that, he had been training at the Renzo Gracie Academy in New York. He had a blue belt, which in Brazilian Jiu Jitsu indicates a significant degree of expertise. In addition, Palladino is six feet four inches tall and weighs 250 pounds. Palladino is a much bigger person than Bailey and he is very strong and muscular. Bailey's liability expert opines that Palladino should not have been grappling with Bailey without supervision. Additionally, grappling in a standing position is improper in Brazilian Jiu Jitsu and is more likely to cause injury according to the IMA instructor, Jamie Cruz.

Bailey was not given any instruction on how to react to the maneuver that Palladino practiced on him. According to Bailey's liability expert, Bailey should have been trained in falling techniques for three or four weeks before making contact with any other student. It is the expert's opinion that Bailey was not given adequate instruction and practice in the art of falling properly and that IMA was negligent and at fault for the injuries Bailey sustained.

In addition to the lack of proper training, Bailey and Palladino were not being supervised. At the time of the incident, the class instructor, Jamie Cruz, had already left the area where the students were training and gone downstairs. Had Cruz been at the scene, he should have instructed Palladino and Bailey not to grapple in a standing position.

Bailey sustained a complete tear of the anterior cruciate ligament and a posterolateral corner injury in his right knee. He was taken to a hospital and put on crutches and in a brace, and two months later he had surgery in an attempt to repair the injury he suffered on the evening of February 27, 2002. Thereafter, Bailey underwent physical therapy for four to five months and was out of work for six months. Bailey sustained a permanent injury to his leg and incurred medical expenses of approximately $50,000. Half of those expenses have not been paid and Bailey lost wages of about $15,000.

After completion of all discovery, the trial court ruled on summary judgment motions filed by both defendants. This appeal follows. Plaintiff raises the following issues:

I. PLAINTIFF DID NOT RELEASE DEFENDANT IMA FROM ITS NEGLIGENCE IN THE DOCUMENTS SIGNED BY PLAINTIFF.

II. THE COURT BELOW ERRED IN FINDING THAT PLAINTIFF GAVE UP HIS RIGHTS VOLUNTARILY AND WITH KNOWLEDGE OF THE LEGAL CONSEQUENCES OF HIS ACTS.

III. PLAINTIFF DID NOT RELEASE DEFENDANT DAVE PALLADINO FROM HIS NEGLIGENCE.

IV. THE COURT SHOULD NOT HAVE GRANTED SUMMARY JUDGMENT TO DEFENDANT DAVE PALLADINO.

V. DEFENDANTS SHOULD NOT BE HELD TO A HIGHER STANDARD THAN ORDINARY NEGLIGENCE.

III.

It is well established in New Jersey that the law does not favor exculpatory clauses, as it is thought that they encourage a lack of care. Gershon v. Regency Diving Ctr., Inc., 368 N.J. Super. 237, 247 (App. Div. 2004). A court must determine whether an exculpatory agreement is permitted in the first instance. The court must determine that the agreement complies with the following factors:

(1) it does not adversely affect the public interest; (2) the exculpated party is not under a legal duty to perform; (3) it does not involve a public utility or common carrier; or (4) the contract does not grow out of unequal bargaining power or is otherwise unconscionable.

[Id. at 248.]

The trial court correctly concluded that these factors were satisfied here.

The exculpatory agreement at issue will not adversely impact the public interest. Mayfair Fabrics v. Henley, 48 N.J. 483, 487 (1967). IMA is not under a legal duty to give Brazilian Jiu Jitsu lessons to the public. McCarthy v. Nat'l Ass'n for Stock Car Auto Racing, Inc., 48 N.J. 539, 543 (1967). IMA is not a public utility or common carrier. Tessler & Son, Inc. v. Sonitrol Sec. Systems, 203 N.J. Super. 477, 482-83 (App. Div. 1985). Neither is there any unequal bargaining power between IMA and Bailey. Ibid.; McBride v. Minstar, Inc., 283 N.J. Super. 471, 491 (Law Div.), aff'd sub nom, McBride v. Raichle Molitor, U.S.A., 283 N.J. Super. 422 (App. Div.), certif. denied, 143 N.J. 319 (1995). This, however, is not the end of the inquiry respecting the enforceability of an exculpatory agreement.

Because the purpose of an exculpatory clause is to relieve parties from their common law duty of care, the agreement itself must also reflect that the decision to give up those rights "was made voluntarily, intelligently and with the full knowledge of its legal consequences." Gershon, supra, 368 N.J. Super. at 247. While such intent need not be stated expressly, "the circumstances [must] clearly show that the party knew of the right and then abandoned it, either by design or indifference." Knorr v. Smeal, 178 N.J. 169, 177 (2003). "The party waiving a known right must do so clearly, unequivocally, and decisively." Ibid. However, even if the party did voluntarily waive his or her rights, if there are any ambiguities regarding the scope of the exculpatory agreement, the agreement must be strictly construed against the drafter. Gershon, supra, 368 N.J. Super. at 247; McCarthy, supra, 87 N.J. Super. at 450.

Our review of the trial court's conclusions respecting the enforceability of the alleged exculpatory agreement is de novo because the interpretation of a contract is a question of law for the court. Simonetti v. Selective Ins. Co., 372 N.J. Super. 421, 428-29 (App. Div. 2004).

Turning to the two documents Bailey signed, the "Information Sheet" is not a voluntary waiver of Bailey's right to sue. There is no clear indication that the document is a waiver of rights. The language below Bailey's signature was apparently making reference to the "Risk Agreement," because it uses the past tense, "I understood and agreed," and thus, is not itself an understanding or agreement to exculpate IMA. Furthermore, the use of the phrase "liable to another employee, trial member, member, or visitor" hardly can be construed to refer to Bailey. If that was the intent, it would have read "liable to me."

In addition, a comparison of the subject language to the rest of the print on the page demonstrates that the alleged waiver on the "Information Sheet" was written in significantly smaller print and located at the bottom of the page under Bailey's signature. It is thus invalid. See Rockel v. Cherry Hill Dodge, 368 N.J. Super. 577, 587 (App. Div.), certif. denied, 181 N.J. 545 (2004) (holding that an arbitration agreement invalid as it was written in small print with no indication on the document that a significant waiver was included). Taken as a whole, the "Information Sheet" cannot constitute a valid waiver of Bailey's right to sue for injuries.

Turning to the "Risk Agreement," a close reading of the document indicates that the scope of the waiver is ambiguous and, thus, cannot bar plaintiff's claim that IMA was negligent. First, the paragraph that was initialed by Bailey states:

In consideration of gaining access to participate in activities associated with FITNESS INTERNATIONAL TRAINING CENTER, INTERNATIONAL MARTIAL ARTS TRAINING CENTER, and ACE'S BOXING CLUB I do hereby waive, release and forever discharge its instructors, officers, agents, employees, representatives, executors and all responsibilities or liability for injuries or damages resulting from my participation in any activities in said program.

(Emphasis added.)

Nowhere in the aforementioned statement does it indicate that IMA will be released from liability. The only persons released are IMA's "instructors, officers, agents, employees, representatives and executors." Therefore, while it may have been the intention of the scrivener of this agreement to secure a waiver of liability for IMA, it is not so stated, and the agreement cannot be interpreted in such a way.

Second, the agreement did not make any reference to negligence, yet such clear and explicit language is necessary to absolve a party from liability. McCarthy, supra, 87 N.J. Super. at 450-51. It is well settled law that, when a party is under a legal duty to exercise care in a given situation, the party "may not relieve himself [or herself] of liability for negligence through an exculpatory clause" without expressly so providing. Abel Holding Co. v. American Dist. Tel. Co., 147 N.J. Super. 263, 270 (App. Div. 1977); Mayfair Fabrics, supra, 48 N.J. at 487.

Exculpatory agreements "are strictly construed against the party relying on them and clear and explicit language in the contract is required to absolve a person from such a liability." McCarthy, supra, 87 N.J. Super. at 450; see also Gershon, supra, 368 N.J. Super. at 242 (holding that the release signed prior to scuba diving, which specifically indicated a waiver of negligence, barred any survivorship claim which may have been asserted.)

In Tessler we stated that "[a]n exculpatory clause that purports to shield a commercial landlord from liability to tenant for negligence must plainly say so, unless the intent to do so is evident from the arrangement of the parties." Tessler, supra, 203 N.J. Super. at 483-84; see also Carbone v. Cortlandt Realty Corp., 58 N.J. 366, 368 (1971). A contract must indicate specifically which claims are covered by an exculpatory agreement, especially if liability for negligence is intended to be waived.

In this case, the "Risk Agreement" is the only document that truly purports to waive Bailey's right to sue. However, nowhere is there mention of the word "negligence." Also, there is no indication that the document intended to cover a claim of negligence. In the paragraph which goes over the risks in connection with the activity in question, the wording seems to indicate that one is assuming the risks of injury resulting from what could be characterized as a potentially dangerous physical activity and not from injuries resulting from the negligence of IMA.

Because IMA is not named as a party who cannot be sued and because the agreement did not specifically include negligence, the clauses in the "Risk Agreement" are ambiguous and must be construed against IMA. Gershon, supra, 368 N.J. Super. at 247. The court below erred in holding that IMA was released from liability for negligence. The same may be said of its ruling that Palladino was exculpated from any negligence. In fact, neither of the documents at issue here makes any reference to members being exculpated, and this ruling also cannot stand. Because the agreement was ambiguous, Bailey could not possibly have freely, voluntarily and knowingly waived his right to sue for negligence.

IV.

We turn to the issue of the standard of care for amateur participants in a sporting event. In Crawn, supra, 136 N.J. at 508, the Court held that a heightened recklessness standard applied to amateur participants. However, in Rosania v. Carmona, 308 N.J. Super. 365, 373 (App. Div.), certif. denied, 154 N.J. 609 (1998), we determined that "[i]nstructors and coaches owe a duty of care to persons in their charge not to increase the risks over and above those inherent in the sport."

Bailey contends that, in only his second course in Brazilian Jiu Jitsu, he was grappling with Palladino, a blue belt in the sport. Further, Bailey alleges that the instructor in the course was not upstairs when the incident in question occurred. Because this case deals with a beginner engaging in a potentially dangerous sport, with another student who had significantly greater experience, a reasonable jury could conclude that an instructor should have been in the area.

Further, Bailey's expert opined that, in only his second class, Bailey "did not have adequate instruction and practice in the art of falling properly, and that as a result thereof, his instructor was negligent and at fault for the injuries he sustained." When viewed in a light most favorable to Bailey, there is a genuine issue of material fact as to negligent supervision by IMA and summary judgment was inappropriate.

Palladino, however, is protected by a higher standard of care. The Supreme Court in Crawn determined that the standard which applies to the conduct of participants during informal sporting activity is a heightened recklessness standard. Crawn, supra, 136 N.J. at 508. In explaining its decision, the Court made the following statement:

The heightened standard will more likely result in affixing liability for conduct that is clearly unreasonable and unacceptable from the perspective of those engaged in the sport yet leaving free from the supervision of the law the risk laden conduct that is inherent in sports and more often than not assumed to be "part of the game."

[Ibid.]

The court in Crawn goes on to note that the ordinary "rough-and-tumble" that accompanies many sporting activities "should not be second guessed in courtrooms." Ibid. We reject Bailey's argument that Crawn does not apply because this activity was not informal but rather was "a 'formal' training program." At least insofar as Palladino vis- -vis Bailey is concerned, it was an informal sporting activity and not a formal sporting activity, such as a professional baseball game.

Therefore, in order to hold a co-participant, such as Palladino, liable for the injuries sustained to Bailey, a fact-finder must conclude that Palladino was acting recklessly or intentionally when he injured Bailey. In the context of recreational sports, our Supreme Court has adopted the following standard to determine recklessness:

Prosser & Keeton have stated that an actor acts recklessly when he or she intentionally commits an act of an unreasonable character in disregard of a known or obvious risk that was so great as to make it highly probable that harm would follow, and which thus is usually accompanied by a conscious indifference to the consequences. Prosser & Keeton on the Law of Torts, 34 at 212 (5th ed. 1984). The standard is objective and may be proven by showing that a defendant "proceeded in disregard of a high and excessive degree of danger either known to him [or her] or apparent to a reasonable person in his [or her] position." Id. at 214. Reckless conduct is an extreme departure from ordinary care, in a situation in which a high degree of danger is apparent. Ibid. Reckless behavior must be more than any "mere mistake resulting from inexperience, excitement or confusion, and more than mere thoughtlessness or inadvertence, or simple inattention . . . ." Ibid.
 
The Restatement (Second) of Torts articulates the standard as follows, contrasting negligence and recklessness:

The actor's conduct is in reckless disregard of the safety of another if he does an act or intentionally fails to do an act which it is his duty to the other to do, knowing or having reason to know of facts which would lead a reasonable man to realize, not only that his conduct creates an unreasonable risk of physical harm to another, but also that such risk is substantially greater than that which is necessary to make his conduct negligent.

[Restatement (Second) of Torts 500 at 587 (1965).]

Recklessness, unlike negligence, requires a conscious choice of a course of action, with knowledge or a reason to know that it will create serious danger to others. Negligence may consist of an intentional act done with knowledge that it creates a risk of danger to others, but recklessness requires a substantially higher risk. The quantum of risk is the important factor. Ibid.

[Schick v. Ferolito, 167 N.J. 7, 19-20 (2001).]

See also, Dare v. Freefall Adventures, Inc., 349 N.J. Super. 205, 215 (App. Div.), certif. denied, 174 N.J. 43 (2002).

In order to survive summary judgment, Bailey was required to present sufficient evidence such that a rational fact-finder could rule in his favor, giving him all reasonable inferences. In this case, Bailey has put forth no evidence which would indicate that Palladino was acting recklessly or intentionally as our Supreme Court has defined those terms. Bailey did not warn Palladino that Bailey was a novice, nor did he attempt to stop Palladino from proceeding by requesting that he cease grappling. Any injury which occurred in the ordinary course of participation in Brazilian Jiu Jitsu is not the result of recklessness. In addition, Bailey did not even allege in the complaint that the conduct of Palladino on February 27 was reckless. Therefore, the grant of summary judgment in favor of Palladino is affirmed.

Affirmed in part, reversed in part, and remanded for further proceedings consistent with this opinion.

 

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A-0504-05T5

July 27, 2006