Another trampoline park case where the plaintiffs are required to arbitrate their claim even though the release which included the arbitration clause was not enforceable in New Jersey.
Johnson v. Sky Zone Indoor Trampoline Park in Springfield (N.J. Super. App. Div. 2021)
State: New Jersey
Plaintiff: David Johnson, an infant by his guardian ad litem, Shalonda Johnson, and Shalonda Johnson, individually
Defendant: Sky Zone Indoor Trampoline Park in Springfield, Sky Zone, LLC, Sky Zone Franchise Group, LLC, and Go Ahead and Jump 4, LLC
Plaintiff Claims: negligence
Defendant Defenses: release required arbitration of the claims
Holding: For the defendants, claims must be arbitrated
Year: 2021
Summary
The New Jersey Supreme Court held Hojnowski v. Vans Skate Park, 187 N.J. 323 (2006), that a parent could not sign away a minor’s right to sue. See However, in Hojnowski the court stated a parent could agree to arbitrate a minor’s claims. This decision of the injuries received at a trampoline park held the same decision. When signing the release, the mother agreed to arbitration of any claims.
Facts
On July 14, 2018, ten-year-old David and his mother visited the Park. Before they were permitted entry, however, a Park employee apprised Johnson she was required to sign a “Participation Agreement, Release and Assumption of Risk” (the Agreement) on an electronic tablet. On August 15, 2018, plaintiffs again visited the Park and, while jumping on a trampoline, David seriously injured his leg. The appellate record did not include evidence of whether Johnson executed a second waiver.
The Agreement is presented to the patrons at a kiosk in the form of an electronic document. The patrons are expected to read it and acknowledge their consent to be bound by the terms contained therein by placing an electronic “checkmark” and entering certain personally identifying information. Defendants argue David’s mother placed an electronic checkmark where indicated, and thus acknowledged she understood and agreed “to arbitrate any dispute as set forth in this section” and waived “[her] right, and the right(s) of [her] minor child(ren) . . . to maintain a lawsuit against [defendants] . . . for any and all claims covered by this Agreement.”
The mother filed a lawsuit for herself and her son. The defendant argued the arbitration clause in the release should apply. That would remove the litigation from the state court system and have a neutral arbitrator decide the case. Normally arbitrators do not hand out damages to the extend a jury would. The court agreed, leading to this appeal.
Analysis: making sense of the law based on these facts.
The argument was quite simple. The plaintiff argued that since the New Jersey Supreme Court had decided that a parent could not sign away a minor’s right to sue, that the release, including the arbitration clause should be thrown out.
The plaintiff first argued there was no real notice because the plaintiff had checked a box on the electronic form and that was not enough notice required to alert the plaintiff that she was going to have to arbitrate any claim. The defense countered that the plaintiff has completed the form giving the defendant a lot of contact information.
In response, defense counsel argued Johnson did a great deal more than merely place a checkmark on a section of an electronic document. “We don’t just have the electronic signatures. We have her name, her address, her phone number, her date of birth . . . it’s not merely that you have [Janay’s] certification.
The plaintiff then argued the arbitration clause was ambiguous and unenforceable as a matter of law.
As a matter of public policy, our Supreme Court has upheld arbitration as a “favored means of dispute resolution.” Hojnowski, 187 N.J. at 342. The Court has consistently endorsed a “strong preference to enforce arbitration agreements, both at the state and federal level.” In determining whether a valid agreement to arbitrate exists, we will apply “state contract-law principles.” Hojnowski, 187 N.J. at 342. Guided by these principles, “[a]n arbitration agreement is valid only if the parties intended to arbitrate because parties are not required ‘to arbitrate when they have not agreed to do so.
The statement that the arbitration clause is only valid if the parties intended to arbitrate is good for arbitration clauses and contracts. The court also found the language requiring arbitration was not ambiguous or unenforceable.
Mutuality of assent is the hallmark of an enforceable contract. Thus, the initial inquiry is whether the parties actually and knowingly agreed to arbitrate their dispute. To reflect mutual assent to arbitrate, the terms of an arbitration provision must be “sufficiently clear to place a consumer on notice that he or she is waiving a constitutional or statutory right . . . .” “No particular form of words is necessary to accomplish a clear and unambiguous waiver of rights.” If, “at least in some general and sufficiently broad way,” the language of the clause conveys arbitration is a waiver of the right to bring suit in a judicial forum, the clause will be enforced.
The court went further to state:
The language in the arbitration clause states plaintiffs were “agreeing to arbitrate any dispute as set forth in this section” and were “waiving [their] right . . . to maintain a lawsuit.” It sets forth, “[b]y agreeing to arbitrate, [plaintiffs] understand that [they] will NOT have the right to have [their] claim[s] determined by a jury.” This language clearly and unambiguously puts plaintiffs on notice that they are waiving the right to a jury trial and the right to pursue their claims in a court of law. This part of the Agreement is therefore enforceable.
The plaintiff then argued that forcing her to sign an exculpatory contract of adhesion right before a birthday party was a violation of the doctrines of procedural and substantive unconscionability.
We next address plaintiffs’ arguments attacking the enforcement of the arbitration clause based on the doctrines of procedural and substantive unconscionability. In essence, plaintiffs argue requiring Johnson to read and sign an ambiguous contract of adhesion immediately before a birthday party left her with no other choice but to assent.
In New Jersey there is a four-part test to determine if an agreement is a contract of adhesion.
[I]n determining whether to enforce the terms of a contract of adhesion, [a court] look[s] not only to the take-it-or-leave-it nature or the standardized form of the document but also to [(1)] the subject matter of the contract, [(2)] the parties’ relative bargaining positions, [(3)] the degree of economic compulsion motivating the “adhering” party, and [(4)] the public interests affected by the contract.
The court’s response was they could not find anything in the agreement that rose to the level that the contract was a contract of adhesion under New Jersey law.
Although the case is not over, any damages will probably significantly reduce by requiring arbitration.
So Now What?
This is the second decision that is almost identical to this one. Can a release in New Jersey at a trampoline park require the parent to arbitrate the minor’s claim. See New Jersey does not allow a parent to sign away a minor’s right to sue so a binding arbitration agreement is a good idea, if it is written correctly. This decision does not mention the decision is Weed v. Sky NJ, LLC., 2018 N.J. Super. Unpub. LEXIS 410, 2018 WL 1004206 which is almost identical in the facts.
There are two ways to limit damages in a state that does not allow a parent to sign a release giving up a minor’s right to sue. Assumption of the risk agreements and the defense of assumption of the risk. Did the parent AND the minor knowingly and voluntarily enter into the risk that caused the injury. This is only valid if you can prove the minor knew or you provided the minor with the education or knowledge to knowingly and voluntarily assume the risk. Voluntary is the easy part proving the minor knew of the risk is difficult.
Arbitration then is the next defense in this ladder to reduce damages. Most states do not allow an arbitrator to award more than the basic damages. Punitive damages cannot be awarded by arbitrators. Also, arbitrators are not over come by emotion or other factors that would influence them into awarding large damages.
Before putting an arbitration clause in your agreement, you need to determine two things.
- Is arbitration better than the court system in your state. If your state supports the use of a release, a release gets you out of a case without any damages. Even though arbitration will generally not give the plaintiff large awards, they usually award something.
- Are there benefits to arbitration in your state that outweigh other means of resolving the dispute.
In those states that do not support a parent signing away a minor’s right to sue, arbitration is probably a good result. See States that allow a parent to sign away a minor’s right to sue.
What do you think? Leave a comment.
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Jim Moss
I’m an attorney specializing in the legal issues of the Outdoor Recreation Industry
I represent Manufactures, Outfitters, Guides, Reps, College & University’s, Camps, Youth Programs, Adventure Programs and Businesses
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