A suit over fees imposed on a class of health club patrons who quit their memberships has been tossed out by a New Jersey appeals court.
The panel affirmed the ruling of a motion judge who denied class certification and granted summary judgment to the club owner on a claim under the Truth in Consumer Contract, Warranty and Notice Act and on another under the Retail Installment Sales Act. The claim under TCCWNA failed because an exculpatory clause in the health club’s contract was deemed enforceable, and a claim under RISA was properly dismissed because that statute did not extend to health club memberships, the appeals court said. And a claim under the Consumer Fraud Act was properly dismissed because it was premised on RISA, the appeals court said.
The decision in Mellet v. Aquasid was initially made public in June and was approved for publication on Monday. Also on Monday, the Supreme Court denied a petition by plaintiffs for certification in the case.
The named plaintiffs in the case, Robert Mellet and Betty Evans, signed contracts in February 2014 for 20-month memberships at Future Fitness, which has two locations in Cherry Hill. Each plaintiff sought to quit a few months later and stopped making monthly payments. Mellet was charged $1,256 for three months of late fees, collection and administrative fees, and 15 months of dues. Evans had one monthly payment declined for insufficient funds, and the health club sought to collect $198 from her and continued to charge her for monthly payments.
Presiding Civil Judge Anthony Pugliese of Camden County Superior Court denied the plaintiffs’ motion for class certification and granted the defendants’ motion for summary judgment. Pugliese concluded that RISA did not apply to the health club’s contracts because they did not afford an ownership interest in an object or service at their conclusion. The judge also ruled that the contract did not violate RISA because it met state approval under the Health Club Services Act.
Class certification was denied for the lack of predominance on the issue of calculation of total fees. Finding no individual or class claims, Pugliese granted summary judgment to the defendant.
On appeal, the plaintiffs argued that RISA covers health club contracts because its plain language specifically states that it applies to services, including health club services. But Appellate Division Judges Amy O’Connor, Mary Gibbons Whipple and Hany Mawla, temporarily assigned, found the health club case did not fall under RISA, noting that the statute refers to a security agreement, chattel mortgage, conditional sales contract or other similar instrument.
“We fail to see how a health club membership agreement is similar to any of the enumerated instruments. Health club members are not in the category of consumers RISA is designed to protect, because these contracts do not involve the sale of goods. For these reasons, we agree with the trial judge [that] RISA does not apply and affirm dismissal of that count of plaintiffs’ complaint,” Mawla wrote for the court.
Citing the Supreme Court’s 2006 ruling in Perez v. Rent-A-Center, which said the thrust of RISA is to ”protect consumers from themselves and rapacious sellers,” the appeals court concluded that the Legislature intended the act to “protect the public interest regarding the sale of goods.”
Plaintiffs also argued on appeal that the defendant’s exculpatory clause is the type of overly broad contract barred by TCCWNA. They cited the Supreme Court’s 2009 holding in Bosland v. Warnock Dodge, that TCCWNA prohibits any contract provision requiring a consumer to waive his or her rights under the act, that TCCWNA should be broadly construed in favor of consumers, and thus, that it prohibits broad exculpatory clauses like the one in the defendant’s contract.
The exculpatory clause requires customers of the defendant’s facility to “accept full responsibility for my/our use of any and all apparatus, appliance, facility, privilege, or service, whatsoever, owned and operated by” Future Fitness, and ” shall do so at my/our own risk and shall hold [Future Fitness], its owners, partners, shareholders, directors, officers, employees, representatives, agents and/or affiliated companies, harmless from any and all loss, claim, injury, damage or liability sustained or incurred by me/us, resulting from any act or omission of any owner, partner, shareholder, directors, officers, employees, representatives, agents and/or affiliated companies hereunder in respect of any such loss, cost, claim injury, damage or liability sustained or incurred.”
The plaintiffs claimed on appeal that the clause is invalid because it requires a party to sign away a clearly established right. But the appeals court said the clause is “facially enforceable, because it neither broadly waives exercise-related injuries, nor negates defendant’s ordinary duty of care, which may not be waived as contrary to public policy.”
Sean Kelly of Marks, O’Neill, O’Brien, Doherty & Kelly in Cherry Hill, who represented the health club, said the court’s holding on RISA is notable because he is aware of several other pending cases concerning health clubs that include claims based on that statute. The ruling will provide clarification to those cases about RISA’s application to health clubs, he said. The court’s TCCWNA analysis, where the court evaluated the contract clause at issue and found no violation of the act, “shows an important limitation on TCCWNA going forward,” he said.
Andrew Bell of the Locks Law firm in Cherry Hill, who represented the plaintiffs, did not return a call about the case.