Samples of Our Work Product — Part 4
At the risk of stating the obvious, we all know that accidents can happen anywhere, at anytime. And while a majority of personal injury claims stem from traffic accidents, we have seen quite a rise in the number of claims occurring in gyms and health/fitness clubs.
One of the favorite “tricks of the trade” these facilities use to weasel out of accountability for their negligence is to slip exculpatory language into the fine print of your membership contract. In other words, the health club will effectively force you to sign a contract which contains language purporting to release them from all liability for any negligence they commit, and/or declaring that you are “assuming the risk” of injury whenever you enter the club. While no one is holding a gun to your head and forcing you to sign the contract, the terms are non-negotiable. So it really is a take-it-or-leave-it situation…..and that’s only if you notice something in the contract you find objectionable. Most people just sign what is in front of them, without noticing the fine print.
While they don’t go far enough in protecting the consumer in my opinion, there are safeguards under Texas law which help to prevent health clubs from hiding one-sided language in the fine print of the membership contract. This one-sided language MUST pass a conspicuousness test, with statutory minimums requiring, among other things:
“10-point type that is boldfaced, capitalized, underlined, or otherwise conspicuously distinguished from surrounding written material.”
The following letter was written on behalf of a client who suffered an injury while exercising at a local Planet Fitness location. Planet Fitness claimed it was shielded from liability due to exculpatory language in the fine print of the membership contract, but we outline in the letter how the gym failed to meet the conspicuousness test established in the Texas Health Spa Act.
VIA FAX TRANSMISSION
HANOVER INSURANCE GROUP
P.O. Box 15148
Worcester, MA 01615-0145
Re: Insured: Taymax Fitness, LLC
Claimant: Xxxxxxxxx Xxxxx
Date of Loss: 09/11/2012
Claim No.: 14-00950274
Dear Mr. Xxxxxxxx:
Thank you for responding to our request for a copy of the back page of the original Membership Agreement Mr. Xxxxx executed with Planet Fitness. It is my understanding that your insured did not retain a copy of the original back page, and thus you sent us what is essentially a specimen copy of Planet Fitness’ back page – albeit a specimen copy of the current back page, as opposed to the version that was in use on February 9, 2012, when Mr. Xxxxx signed the contract. [FN1]
As I advised Mr. Zzzzzz in previous correspondence, if your insured intends to enforce any type of Release of Liability/Assumption of Risk language in the contract, the contractual language must pass muster under Texas law pursuant to: (1) the Texas Health Spa Act; and (2) the common-law conspicuousness standard. In short, the contract fails under both standards, and I assure you that your insured would not be allowed to hide behind such language in the event we submit this case to the courts. Since an argument could at least be made by your insured that the contract satisfies the conspicuousness standard, I will only address the contract’s non-compliance with the Texas Health Spa Act, which in and of itself unequivocally defeats the Release of Liability/Assumption of Risk defense.
Texas Health Spa Act
The Texas Health Spa is found in Chapter 702 of the Texas Occupations Code, and it contains very strict requirements with respect to the language used in health club contracts. Section
Sec. 702.311. VOID CONTRACT.
A contract is void if:
(1) the contract or an assignment of the contract does not comply with this chapter;
(2) the seller does not hold a certificate of registration issued under this chapter at the time of contract; or
(3) the purchaser enters into the contract in reliance on false, fraudulent, or
misleading information wilfully provided by, or a false, fraudulent, or misleading
representation, notice, or advertisement wilfully made by, the seller or the health spa owner or operator.
In addition, the Health Spa Act provides:
Sec. 702.304. CANCELLATION AND REFUND NOTICE.
(a) Except as provided by Subsection (b), a contract must state in at least 10-point type that is boldfaced, capitalized, underlined, or otherwise conspicuously distinguished from surrounding written material:
(1) “NOTICE TO PURCHASER: DO NOT SIGN THIS CONTRACT UNTIL YOU READ IT OR IF IT CONTAINS BLANK SPACES.”
(2) “IF YOU DECIDE YOU DO NOT WISH TO REMAIN A MEMBER OF THIS HEALTH SPA, YOU MAY CANCEL THIS CONTRACT BY MAILING TO THE HEALTH SPA BY MIDNIGHT OF THE THIRD BUSINESS DAY AFTER THE DAY YOU SIGN THIS CONTRACT A NOTICE STATING YOUR DESIRE TO CANCEL THIS CONTRACT. THE WRITTEN NOTICE MUST BE MAILED BY CERTIFIED MAIL TO THE FOLLOWING ADDRESS:
(Address of the health spa home office).”
(3) “IF THE HEALTH SPA GOES OUT OF BUSINESS AND DOES NOT PROVIDE FACILITIES WITHIN 10 MILES OF THE FACILITY IN WHICH YOU ARE ENROLLED OR IF THE
HEALTH SPA MOVES MORE THAN 10 MILES FROM THE FACILITY IN WHICH YOU ARE ENROLLED, YOU MAY:
(A) CANCEL THIS CONTRACT BY MAILING BY CERTIFIED MAIL A WRITTEN NOTICE STATING YOUR DESIRE TO CANCEL THIS CONTRACT, ACCOMPANIED BY PROOF OF PAYMENT ON THE CONTRACT TO THE HEALTH SPA AT THE FOLLOWING ADDRESS:
(Address of the health spa home office); AND
(B) FILE A CLAIM FOR A REFUND OF YOUR UNUSED MEMBERSHIP FEES AGAINST THE BOND OR OTHER SECURITY POSTED BY THE HEALTH SPA WITH THE TEXAS SECRETARY OF STATE. TO MAKE A CLAIM AGAINST THE SECURITY PROVIDE A COPY OF YOUR CONTRACT TOGETHER WITH PROOF OF PAYMENTS MADE ON THE CONTRACT TO THE TEXAS SECRETARY OF STATE. THE REQUIRED CLAIM INFORMATION MUST BE RECEIVED BY THE SECRETARY OF STATE NOT LATER THAN THE 90TH DAY AFTER THE DATE NOTICE OF THE CLOSURE OR RELOCATION IS FIRST POSTED ON THE SECRETARY OF STATE’S INTERNET WEBSITE.”
(4) “IF YOU DIE OR BECOME TOTALLY AND PERMANENTLY
DISABLED AFTER THE DATE THIS CONTRACT TAKES EFFECT, YOU OR YOUR ESTATE MAY CANCEL THIS CONTRACT AND RECEIVE A PARTIAL REFUND OF YOUR UNUSED MEMBERSHIP FEE BY MAILING A NOTICE TO THE HEALTH SPA STATING YOUR DESIRE TO CANCEL THIS CONTRACT. THE HEALTH SPA MAY REQUIRE PROOF OF DISABILITY OR DEATH. THE WRITTEN NOTICE MUST BE MAILED BY CERTIFIED MAIL TO THE FOLLOWING ADDRESS:
(Address of the health spa home office).”
(b) A health spa operator is required to include the statement under Subsection
(a)(3)(B) in a contract only if the operator is required to post security with the secretary of state under Subchapter D.
Directing your attention to the bold-faced sections from above, you will note that (1) a health club contract “is void if …. the contract or an assignment of the contract does not comply with this chapter;” and (2) the required cancellation and refund notice language “must state in at least 10-point type that is boldfaced, capitalized, underlined, or otherwise conspicuously distinguished from surrounding written material.” Simply stated, the contract in this case is void, in that the contractual cancellation and refund notice language is communicated in significantly less than 10-point type. Specifically, this language is in 8-point type, a fact which is easily verifiable by way of opening the Membership Agreement in Adobe Acrobat, and checking the font properties for Section 7, Cancellation Rights (Buyer’s Rights). By way of comparison, the language at the bottom of Page 2 of the Membership Agreement is indeed in 10-point type, but this obviously does not satisfy the clear pronouncements of Section 702.304 of the Texas Occupations Code.
This is no minor or excusable flaw. The law in Texas is very clear, in that courts must “give effect to all the words of a statute and not treat any statutory language as surplusage.” Chevron Corp. v. Redmon, 745 S.W.2d 314, 316 (Tex. 1987). So while you may believe 8-point vs. 10-point type is relatively minor or excusable, please be advised that the Legislature drafted the statute to accomplish the purpose of providing sufficient notice to a health-club customer of his rights and obligations under a contract executed with the health club. No “loophole” was provided, and any non-compliance is fatal to the contract, and thus fatal to your insured’s release-of-liability defense as well. This is not a game of horseshoes, and thus coming “close” to the rigid contractual standards set by the Texas Health Spa Act will not suffice.
Deflecting Blame to the Manufacturer
Finally, it is my understanding that your insured will attempt to deflect all blame and responsibility to the manufacturer of the machine at issue. This defense, too, will fail, as we anticipate that the maintenance records of the machine will reflect that it was under repair immediately prior to Mr. Xxxxx’ use thereof. Moreover, you may not be aware that the manager of the health club at the time of the incident – Yyyyyyy Yyyyy – is no longer employed by Planet Fitness. My client recently located Mr. Yyyyy, who is now managing a local restaurant, and it is my understanding that he will testify to the ongoing repairs being made to the machine, immediately before its use by Mr. Xxxxx.
As referenced in my previous correspondence, we are prepared to file a lawsuit against your insured in an appropriate Texas court of law. Since you were kind enough to communicate with us regarding the contract, we have held off in hopes of reaching an amicable resolution. Specifically, Mr. Xxxxx has agreed to substantially lower his original demand, and will accept the amount of $xxxxx in full and final satisfaction of all his claims against your insured. This offer of settlement will remain open only for twenty-one (21) days from today, and then it will be withdrawn – at which point Plaintiff’s Original Petition will be filed. Additionally, we will include a cause of action under the Texas Declaratory Judgment Act, with regard to the dispute over the validity of the Release of Liability/Assumption of Risk language. The significance of this additional cause of action is that the Texas Declaratory Judgment Act allows Mr. Xxxxx to recover attorneys’ fees, which are customarily not recoverable in a personal injury lawsuit.
Thank you in advance for your prompt attention to this correspondence, and we will await your response. In the meantime, you may reach me or Javier at (210) 239-9420, or e-mail me at firstname.lastname@example.org. Also, for your convenience please note that I have attached copies of the pertinent portions of the Texas Occupations Code cited above.
Dain A. Dreyer
[FN1] A simple comparison of the banner at the top of the front page of the 02/09/2012 contract vs. the specimen copy reflects the company’s growth from eight (8) Planet Fitness locations to the current number of eleven (11) locations. The absence of the actual back page may very well prevent your insured from proving the contents thereof in court, but for the purposes of the following legal analysis, I will give your insured the benefit of the doubt and presume that the language contained in Page 2 of the 02/09/21012 contract mirrors this newer specimen copy’s Page 2.