Seigneur v. National Fitness Institute, Inc.

SALMON, Judge. In this case, we are asked to examine the enforceability of an exculpatory clause found in a fitness club’s contract. On September 4, 1998, Gerilynne. Seigneur and her husband James filed a complaint in the Circuit Court for Montgomery County against National Fitness Institute, Inc. (“NFI”).

The Seigneurs asserted that Ms. Seigneur was injured as a result of NFI’s negligence while she was undergoing an initial evaluation at a fitness club owned and operated by NFI. NFI filed a motion to dismiss the complaint based on an exculpatory clause found in its contract with Ms. Seigneur. Pursuant to Md. Rule 2-332(c), NFI’s motion was treated as a motion for summary judgment because matters outside the pleadings were presented to the court. See also Rule 2-501.

The motion for summary judgment was granted, and the Seigneurs filed this appeal in which they presented a single issue, viz: Does the exculpatory clause in the agreement ²⁷⁵ entered into by the parties validly release NFI from all liability for injuries to Ms. Seigneur caused by NFI’s negligence? 1 We answer that question in the affirmative. I. FACTUAL BACKGROUND 2 NFI is a Maryland corporation operating an exercise and fitness facility on Shady Grove Road in Rockville, Montgomery County, Maryland. On January 30, 1996, Ms. Seigneur, after deciding to begin a weight loss and fitness program, joined NFI on a one-month trial basis. She selected NFI over its competitors for several reasons: First, NFI was recommended to her by her chiropractor; second, NFI promoted itself as a fitness club that employed “degreed, certified fitness, clinical exercise and health specialists” and “promised to provide programs that are appropriate for your health status and fitness level”; and third, NFI promised to “provide advice based upon scientific evidence.” When she signed her membership contract, Ms. Seigneur had a history of serious lower back problems, including a herniated disc.

Moreover, her general physical condition was poor. These facts were disclosed to NFI prior to the accident. As part of the application process, Ms. Seigneur was required to complete and sign a document entitled “National Fitness, Inc. Health Programs Participation Agreement” (“the Participation Agreement”). Besides informing the customer of NFI’s payment and fee collection policies, this agreement contained the following clause: ²⁷⁶ Important Information: I, the undersigned applicant, agree and understand that I must report any and all injuries immediately to NFI, Inc. staff.

It is farther agreed that all exercises shall be undertaken by me at my sole risk and that NFI, Inc. shall not be liable to me for any claims, demands, injuries, damages, actions, or courses of action whatsoever, to my person or property arising out of or connecting with the use of the services and facilities of NFI, Inc., by me, or to the premises of NFI, Inc. Further, I do expressly hereby forever release and discharge NFI, Inc. from all claims, demands, injuries, damages, actions, or courses of action, and from all acts of active or passive negligence on the part of NFI, Inc., its servants, agents or employees. (Emphasis added.) Ms. Seigneur signed the Participation Agreement on January 30, 1996. Kim Josties, an NFI employee, then performed an initial evaluation of Ms. Seigneur, in which Ms. Seigneur was first directed to perform various flexibility tests. Ms. Josties next directed her to the weight machines for strength testing.

Ms. Seigneur worked on the leg extension machine and then the bench press. She made no complaints after using either of these devices. Ms. Seigneur next used an upper torso weight machine. Ms. Josties placed a ninety-pound weight on this machine and instructed Ms. Seigneur to lift this weight once with her arms.

While attempting to lift this load, Ms. Seigneur felt a tearing or ripping sensation in her right shoulder. She instantly reported this to Ms. Josties, but the instructor did not seek immediate medical attention. Instead, Ms. Josties had Ms. Seigneur proceed to the next machine, and shortly thereafter, the initial evaluation was completed. Ms. Seigneur claims that since this incident, she has had pain and difficulty using her shoulder.

In addition, she has undergone shoulder surgery for a condition that her doctor attributed to the use of NFI’s upper torso machine. ²⁷⁷ The Seigneurs’ complaint against NFI alleged, inter alia, that NFI was vicariously liable because Ms. Josties, as an employee or agent of NFI, was negligent in instructing, directing, and/or guiding the [appellant] to lift ninety (90) pounds of weight on the upper torso machine in the manner previously described, especially in light of the physical condition of the [appellant] and the physical and exercise history and experience of the [appellant], which was, or reasonably should have been known to [Ms. Josties], and in directing the [appellant] to continue with and complete the program evaluation despite her complaint of injury. The Seigneurs additionally claimed that NFI breached its duty to Ms. Seigneur by negligently hiring Ms. Josties, who “lacked sufficient training, experience, certification and/or other qualifications and knowledge to properly, reasonably and safely instruct, direct and guide [Ms. Seigneur] in lifting weights and in the use of the weight equipment.” The Seigneurs also asserted that NFI negligently failed to provide Ms. Josties “with sufficient training and knowledge to properly, reasonably and safely instruct, direct and guide ... [Ms. Seigneur] in lifting weights and in the use of the weight equipment.” On October 28, 1998, NFI filed a motion to dismiss arguing that the exculpatory clause contained in the Participation Agreement was valid and enforceable and that NFI was entitled to judgment as a matter of law. The Seigneurs responded by arguing that the Participation Agreement was a contract of adhesion and that the exculpatory clause was void as against public policy. They also argued that the agreement was unclear and ambiguous, thus precluding summary judgment.

II

ANALYSIS A. Validity of the Exculpatory Clause To decide this case, we must first determine whether the exculpatory clause quoted at the beginning of this opinion ²⁷⁸ unambiguously excused NFI’s negligence. In construing the Participation Agreement, we are required to give legal effect to all of its unambiguous provisions. See Calomiris v. Woods, 358 Md. 425, 434 , 727 A.2d 358 (1999); Holzman v. Fiola Blum, Inc. 125 Md.App. 602, 620 , 726 A.2d 818 (1999). Our primary concern when interpreting a contract is to effectuate the parties’ intentions.

Nicholson Air Services, Inc. v. Board of County Comm’rs of Allegany County, 120 Md.App. 47, 63 , 706 A.2d 124 (1998). Moreover, when interpreting a contract, the court “places itself in the same situation as the parties who made the contract, so as to view the circumstances as they viewed them and to judge the meaning of the words and the correct application of the language to the things described.” Canaras v. Lift Truck Services, 272 Md. 337, 352 , 322 A.2d 866 (1974). Not all attempts to limit liability by way of exculpatory clauses are successful. For instance, in Calarco v. YMCA of Greater Metropolitan Chicago, 149 Ill.App.3d 1037 , 103 Ill.Dec. 247 , 501 N.E.2d 268 (1986), the court considered a contract purporting to exculpate the YMCA from liability to a plaintiff who was injured when a weight machine fell on her hand while she was exercising.

Id. 103 Ill.Dec. 247 , 501 N.E.2d at 269 . In Calarco , the clause in question read: In consideration of my participation in the activities of the Young Men’s Christian Association of Metropolitan Chicago, I do hereby agree to hold free from any and all liability the YMCA of Metropolitan Chicago and its respective officers, employees and members and do hereby for myself, my heirs, executors and administrators, waive, release and forever discharge any and all rights and claims for damages which I may have or which may hereafter accrue to me arising out of or connected with my participation in any of the activities of the YMCA of Metropolitan Chicago. I hereby do declare myself to be physically sound, having medical approval to participate in the activities of the YMCA. ²⁷⁹ Id. 103 Ill.Dec. 247 , 501 N.E.2d at 269-70 . The Calarco Court concluded that the above-quoted clause did not contain a clear and adequate description of covered activities, such as “use of the said gymnasium or the facilities and equipment thereof,” to clearly indicate that injuries resulting from negligence in maintaining the facilities or equipment would be covered by the release. “Participation in any of the activities of the YMCA” could be read to mean that the exculpatory clause from liability only pertains to participating in the activities at the YMCA, but not to liability from use of the equipment at the YMCA.

Pertinent to this case, plaintiff at the time of the occurrence was not even using the equipment herself, but was assisting someone else who was using a universal machine which was apparently stuck. It is unclear whether this was “participation” in an “activity” under the meaning of the clause. Id. 103 Ill.Dec. 247 , 501 N.E.2d at 272 . Thus, the court held that “the language of the clause here is not sufficiently clear, explicit and unequivocal to show an intention to protect the YMCA from liability arising from the use of its equipment” at the YMCA.

Id. 103 Ill.Dec. 247 , 501 N.E.2d at 273 . Powell v. American Health Fitness Center of Ft. Wayne, Inc., 694 N.E.2d 757 (Ind.Ct.App.1998), is another case in which the Court found that the exculpatory clause in question was too ambiguous to be enforced. In Powell , a health club member was injured while using a fitness club’s whirlpool.

Referring to the exculpatory clause contained in the club’s agreement with the injured member, the court stated: Nowhere does the clause specifically or explicitly refer to the negligence of American Health. As a matter of law, the exculpatory clause did not release American Health from liability resulting from injuries she sustained while on its premises that were caused by its alleged negligence. Therefore, the exculpatory clause is void to the extent it purported to release American Health from liability caused by its own negligence. Powell, 694 N.E.2d at 761-62 ; see also Alack v. Vic Tanny International of Missouri, Inc., 923 S.W.2d 330, 337 (Mo. ²⁸⁰ 1996) ; Rickey v. Houston Health Club, 863 S.W.2d 148, 150 (Tex.App.1993).

In the foregoing cases where the clause was held to be ambiguous, the common thread was that the clause did not clearly indicate that the injured party was releasing the health clubs from liability for the clubs’ own negligence. Without this clear expression of intent, the courts in those cases felt compelled to invalidate the exculpatory clauses in question. Nevertheless, given the judiciary’s reluctance to interfere with the right of parties to contract, courts are almost universal in holding that health clubs, in their membership agreements, may limit their liability for future negligence if they do so unambiguously. 111 Am.Jur.3d, Proof of Facts, § 13 (Vol. 40 1997) . In Maryland, for an exculpatory clause to be valid, it “need not contain or use the word ‘negligence’ or any other ‘magic words.’ ” Adloo v. H.T. Brown Real Estate, Inc., 344 Md. 254, 266 , 686 A.2d 298 (1996); see also Sanchez v. Bally’s Total Fitness Corp., 68 Cal.App.4th 62 , 79 Cal.Rptr.2d 902, 905 (1998)(same).

An exculpatory clause “is sufficient to insulate the party from his or her own negligence ‘as long as [its] language ... clearly and specifically indicates the intent to release the defendant from liability for personal injury caused by the defendant’s negligence____’ ” Adloo, 344 Md. at 266 , 686 A.2d 298 (quoting Barnes v. New Hampshire Karting Assn., 128 N.H. 102 , 509 A.2d 151, 154 (1986)). In the instant case, there is no suggestion that the agreement between NFI and Ms. Seigneur was the product of fraud, mistake, undue influence, overreaching, or the like. The exculpatory clause unambiguously provides that Ms. Seigneur “expressly hereby forever release[s] and discharged] NFI, Inc. from all claims, demands, injuries, damages, actions, or courses of action, and from all acts of active or passive negligence on the part of NFI, Inc., its servants, agents or employees.” (emphasis added). Under these circumstances, we hold that this contract provision expresses a clear intention ²⁸¹ by the parties to release NFI from liability for all acts of negligence.

In reaching this conclusion, we are in accord with the holding in cases decided in a number of other jurisdictions. See, e.g., Garrison v. Combined Fitness Centre, Ltd., 201 Ill.App.3d 581 , 147 Ill.Dec. 187 , 559 N.E.2d 187, 190 (1990)(en-forcing exculpatory clause “that could not have been more clear or specific” in releasing health club from liability); My Fair Lady of Georgia, Inc. v. Harris, 185 Ga.App. 459, 460 , 364 S.E.2d 580 (1987)(an exculpatory clause that released the fitness club “from liability for injury caused by any negligence” was valid and enforceable and that the member contractually assumed the risk of injury); Schlobohm v. Spa Petite, Inc., 326 N.W.2d 920 (Minn.1982)(no ambiguity in exculpatory clause that specifically releases spa from liability arising out of negligence). B. Public Policy Exception More than one-hundred years ago, it was noted that “the right of parties to contract as they please is restricted only by a few well defined and well settled rules, and it must be a very plain case to justify a court in holding a contract to be against public policy.” Estate of Woods, Weeks & Co., 52 Md. 520, 536 (1879); see also Boucher v. Riner, 68 Md.App. 539, 548 , 514 A.2d 485 (1986); Winterstein v. Wilcom, 16 Md.App. 130, 135 , 293 A.2d 821 (1972). This legal principle continues to hold true today.

In Maryland, unambiguous exculpatory clauses are generally held to be valid in the absence of legislation to the contrary. 3 Adloo, 344 Md. at 259 , 686 A.2d 298 ; Atty. Griev. ²⁸² Comm’n v. Owrutsky, 322 Md. 334, 350 , 587 A.2d 511 (1991); Sullivan v. Mosner, 266 Md. 479, 494-96 , 295 A.2d 482 (1972); Baker v. Roy H. Haas Associates, Inc., 97 Md.App. 371, 377 , 629 A.2d 1317 (1993). The Court of Appeals, in Wolf v. Ford, 335 Md. 525 , 644 A.2d 522 (1994), said: It is quite possible for the parties expressly to agree in advance that the defendant is under no obligation of care for the benefit of the plaintiff, and shall not be liable for the consequences of conduct which would otherwise be negligent. There is in the ordinary case no public policy which prevents the parties from contracting as they see fit.

Id. at 531 , 644 A.2d 522 (quoting W. Page Keeton, et al., Prosser and Keeton on the Law of Torts, § 68 (5th ed.1984)). Three exceptions have been identified where the public interest will render an exculpatory clause unenforceable. They are: (1) when the party protected by the clause intentionally causes harm or engages in acts of reckless, wanton, or gross negligence; (2) when the bargaining power of one party to the contract is so grossly unequal so as to put that party at ²⁸³ the mercy of the other’s negligence; and (3) when the transaction involves the public interest. Wolf, 335 Md. at 531-32 , 644 A.2d 522 ; Winterstein, 16 Md.App. at 135-36 , 293 A.2d 821 .

Ms. Seigneur has not alleged that NFI’s agents intentionally caused her harm, or engaged in reckless, wanton, or gross acts of negligence. She does assert, however, that the second and third exceptions are applicable. Appellants argue that NFI “possess[es] a decisive advantage in bargaining strength against members of the public who seek to use its services.” She also claims that she was presented with a contract of adhesion and that this is additional evidence of NFI’s grossly disproportionate “bargaining power.” It is true that the contract presented to Ms. Seigneur was a contract of adhesion. 4 But that fact alone does not demonstrate that NFI had grossly disparate bargaining power. See Shields v. Star-Fit, Inc., 79 Wash.App. 584 , 903 P.2d 525 at 529 .

As discussed infra, there were numerous other competitors providing the same non-essential services as NFI. The exculpatory clause was prominently displayed in the Participation Agreement and Ms. Seigneur makes no claim that she was unaware of this provision prior to her injury. To possess a decisive bargaining advantage over a customer, the service offered must usually be deemed essential