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New Jersey Trial Court Declines to Enforce Exculpatory Agreement in Favor of Health Club When Patron Burned In Sauna

Blogs, Risk Management

New Jersey courts have again been confronted with the issue of whether an exculpatory agreement operates to shield a health club from claims of negligence. In a recent unpublished opinion, a trial court in New Jersey held that an exculpatory agreement in favor of New York Sports Club (“NYSC”) would not shield the health club from a patron’s claim of negligence. Semeniken v. Town Sports International, Inc., ESX-L-2008-09. Click here for a copy of the decision.

Plaintiff, a member of NYSC, obtained a spray bottle filled with eucalyptus oil, and was severely burned after he sprayed it onto the heating element in the sauna. Plaintiff sued NYSC for negligence, claiming that it was negligent for storing the eucalyptus oil in an unmarked bottle. NYSC moved for summary judgment on the basis of an exculpatory agreement plaintiff had signed, which provided:

[a]ny strenuous athletic or physical activity involves certain risks. Members represent that they are aware that the possibility of accidents or injuries of any kind may be sustained by reasons of or in connection with the use of the facilities.

As discussed in previous posts on this blog (click here and here), New Jersey courts have recently had several occasions to decide issues relating to the enforceability of exculpatory agreements in this context, and the New Jersey Supreme Court recently upheld the enforceability of exculpatory agreements in favor of a health club, holding that such an agreement is enforceable if it “reflect[s] the unequivocal expression of the party giving up his or legal rights that this decision was made voluntarily, intelligently, and with the full knowledge of its legal consequences,” and if the agreement: (1) does not adversely affect the public interest; (2) the health club is not under a duty to perform; (3) it does not include a public utility or common carrier; and (4) the agreement is not the result of unequal bargaining power or is unconscionable. Stelluti v. Casapenn Enters., LLC, 203 N.J. 286, 304-05 (2010). In Stelluti, the New Jersey Supreme Court upheld the enforceability of an exculpatory agreement signed by a patron of a health club who was injured while using an exercise bicycle during a spinning class.

In Semeniken,the Court denied NYSC’s motion for summary judgment, holding Stellutiinapplicable, and held that the exculpatory agreement would not shield NYSC from the plaintiff’s claims. As a threshold matter, the Court held that the exculpatory agreement signed by the plaintiff did not evidence an intention that the plaintiff was giving up his legal rights to sue NYSC. The Court noted that the language of the exculpatory agreement signed by the plaintiff was vastly different than the agreement in Stelluti; the agreement signed by the plaintiff provided only that he was aware of the risks involved with using the facilities, it did not contain the explicit release language contained in the agreement in Stelluti. Further, the Court held that the risks faced by the plaintiff were distinguishable from those faced by the plaintiff in Stelluti. In Stelluti, the plaintiff was injured while using exercise equipment (a foreseeable risk of using a health club’s facilities), while the plaintiff in Semeniken faced the risks of improperly using a flammable substance (a risk that most people would not consider inherent to using a health club’s facilities). Accordingly, the Court did not apply Stelluti to enforce the exculpatory agreement, and proceeded to analyze the agreement under the four-factor test discussed in Stelluti.

 Under the four factor test discussed by the Court in Stelluti, an exculpatory agreement will be upheld if it: (1) does not adversely affect the public interest; (2) the party seeking the benefit of the agreement is under a legal duty to act; (3) the party seeking to enforce the agreement is not a public utility or common carrier; and (4) the agreement is not the product of unequal bargaining power or is otherwise unconscionable. Not surprisingly, the Court held that the exculpatory agreement in Semeniken did not pass muster. 

 The first two prongs of the analysis are essentially intertwined: the whether enforcing an exculpatory agreement would affect the public interest necessarily depends on the nature of the duty owed by the health club. In this case, the Court noted the well-settled rule that business owners have a common-law duty to “make reasonable inspections of the property and remedy any reasonably discoverable defects.” Accordingly, NYSC had a duty to ensure its club was safe, and could have satisfied this duty by either removing the eucalyptus oil near the sauna or warning about its flammability, and this duty would not be outweighed by the public interest in encouraging people to exercise. 

The Court distinguished the public interest analysis in Stelluti from Semeniken – while in Stelluti, the public interest in encouraging exercise outweighed the interest in protecting health club patrons from the foreseeable risks involved in using exercise equipment, the interests in encouraging health club patrons to enjoy a nice hot sauna would not outweigh the interests in protecting those members from foreseeable risks of using eucalyptus oil near a sauna’s heating element.