Court Opinion

ID: 4428789
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:12:46.821388+00
Date Added: 2024-06-11T14:50:49.693001
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

                                                         SUPERIOR COURT OF NEW JERSEY
                                                         APPELLATE DIVISION
                                                         DOCKET NO. A-1789-17T1

JOSEPH KAUFFMAN, JR., and
KRYSTAL KAUFFMAN, on
behalf of themselves and other
persons similarly situated,

          Plaintiffs-Respondents,

v.

NEW ENGLAND FITNESS
SOUTH, INC., d/b/a PLANET
FITNESS,

          Defendant-Appellant.

                    Argued January 30, 2019 – Decided April 17, 2019

                    Before Judges Koblitz, Ostrer, and Currier.

                    On appeal from Superior Court of New Jersey, Law
                    Division, Camden County, Docket No. L-3936-15.

                    Anthony R. Twardowski (Zarwin, Baum, DeVito,
                    Kaplan, Schaer & Toddy, PC) of the Pennsylvania bar,
                    admitted pro hac vice, argued the cause for appellant
                    (Zarwin, Baum, DeVito, Kaplan, Schaer & Toddy, PC,
                    and Anthony R. Twardowski, attorneys; Eitan D. Blanc
                    and Anthony R. Twardowski, on the briefs).
            Charles N. Riley argued the cause for respondents
            (Locks Law Firm, LLC, and Law Office of Charles N.
            Riley, LLC, attorneys; Michael A. Galpern, Andrew P.
            Bell, James A. Barry, and Charles N. Riley, on the
            brief).

PER CURIAM

      Plaintiffs filed this putative class action, alleging an exculpatory clause in

defendant's health club membership agreement violated the Truth-in-Consumer

Contract, Warranty and Notice Act (TCCWNA), N.J.S.A. 56:12-14 to -18. The

trial court granted summary judgment to plaintiffs, finding them to be aggrieved

consumers under the TCCWNA, and certified a class. Following the grant of

leave to appeal, the Supreme Court issued its decision in Spade v. Select

Comfort Corp., 232 N.J. 504 (2018).          In applying the Spade reasoning to

plaintiffs, we find they are not aggrieved consumers under the TCCWNA.

Therefore, we reverse the summary judgment and class certification orders.

      Plaintiff Krystal Kauffman 1 entered into a membership agreement with

defendant New England Fitness South, Inc., d/b/a Planet Fitness (defendant or

1
  Plaintiff Joseph Kauffman, Jr. accompanied his daughter, Krystal, on the day
she joined Planet Fitness. He provided his bank account information from which
the monthly membership fees were withdrawn. Although Joseph also signed the
membership agreement, he was not a member of the club. We refer to them

                                                                            A-1789-17T1
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Planet Fitness), to join its health club facility. The agreement contained an

exculpatory clause releasing defendant from liability for any injury sustained

while using the facility. Fifteen months later, Krystal cancelled her membership

because of financial difficulties. She had used the health club ten times. During

that time, she did not sustain any injury while using the equipment, the locker

room facilities, or walking through defendant's parking lot. Therefore, the

exculpatory clause was never invoked against her.

      In their complaint, plaintiffs alleged defendant violated the TCCWNA, the

Health Club Services Act (HCSA), N.J.S.A. 56:8-39 to -48, and the Consumer

Fraud Act (CFA), N.J.S.A. 56:8-1 to -20. The crux of the complaint alleged

defendant's membership agreement violated the clearly established rights of

plaintiffs and members of the putative class because it contained an overly broad

exculpatory clause. Thereafter, plaintiffs moved to certify a class consisting of

all people who signed a membership agreement with defendant during a seven-

year timeframe. 2

collectively as "plaintiffs" and use their first names for clarity and ease of the
reader.
2
   Plaintiffs' first attempt to certify a class was denied. They subsequently
narrowed the potential class to people who joined the club during a three-year
period.

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                                        3
       Plaintiffs also moved for partial summary judgment as to liability on their

TCCWNA claim and violations of the HCSA. 3 In turn, defendant filed a motion

for partial summary judgment, claiming the exculpatory clause in the

membership agreement did not violate a clearly established legal right as

required under the TCCWNA. The trial judge found Krystal had standing to

pursue her TCCWNA action because she signed the membership agreement and

was subject to its terms, making her an aggrieved consumer within the meaning

of the statute. However, because Joseph did not enter into a written contract

with defendant for membership at the club, he was not an aggrieved consumer

and, therefore, did not have standing to pursue a TCCWNA claim.

       The judge also determined the exculpatory clause in the membership

agreement violated a clearly established legal right under state law. He relied

on Martinez-Santiago v. Pub. Storage, 38 F. Supp. 3d 500, 512-13 (D.N.J. 2014),

to support his conclusion that "the responsibility of a seller was clearly

established with regard to premises liability to business invitees." Orders were

entered granting summary judgment to Krystal as to liability on her TCCWNA

3
    The parties subsequently agreed to dismiss the HCSA and CFA claims.
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claim, granting class certification, appointing Krystal as the class representative,

and granting defendant's summary judgment motion as to Joseph's action.

      We granted defendant leave to file an interlocutory appeal and stayed all

further proceedings pending the Supreme Court's issuance of a decision in

Spade. Following the April 16, 2018 Spade opinion, we lifted our stay, and with

the guidance and clarification provided in the Supreme Court's ruling, we

considered defendant's appeal.

      The TCCWNA "was enacted in 1981 'to prevent deceptive practices in

consumer contracts.'" Dugan v. TGI Fridays, Inc., 231 N.J. 24, 67-68 (2017)

(quoting Kent Motor Cars, Inc. v. Reynolds & Reynolds, Co., 207 N.J. 428, 457

(2011)). The Legislature "did not recognize any new consumer rights [in the

TCCWNA] but merely imposed an obligation on sellers to acknowledge clearly

established consumer rights and provide[] remedies for posting or inserting

provisions contrary to law."      Dugan, 231 N.J. at 68 (quoting Shelton v.

Restaurant.com, Inc., 214 N.J. 419, 432 (2013)).         Upon a violation of the

TCCWNA, the statute mandates an award of a civil penalty of not less than

$100, damages, attorney's fees, and costs to an "aggrieved consumer." N.J.S.A.

56:12-17.

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        A plaintiff pursuing a TCCWNA claim must prove four elements: 1)

defendant was a seller; 2) defendant offered, displayed, or entered into a written

consumer contract; 3) at the time it was signed or displayed, "that writing

contain[ed] a provision that violate[d] any clearly established legal right of a

consumer or responsibility of a seller"; and 4) plaintiff is an "aggrieved

consumer." Spade, 232 N.J. at 516 (citing N.J.S.A. 56:12-15, -17).

        In Spade, the Supreme Court was asked to address two certified questions

from the United States Court of Appeals for the Third Circuit relating to

contracts of sale or sale orders for the delivery of household furniture. Id. at

508. The questions were:

              1. Does a violation of the Furniture Delivery
              Regulations alone constitute a violation of a clearly
              established right or responsibility of the seller under the
              TCCWNA and thus provides a basis for relief under the
              TCCWNA? 4

              2. Is a consumer who receives a contract that does not
              comply with the Furniture Delivery Regulations, but
              has not suffered any adverse consequences from the
              noncompliance, an "aggrieved consumer" under the
              TCCWNA?

              [Id. at 508-09.]

4
    The Court answered this question affirmatively. Id. at 509.
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      Because the issue for our consideration is whether Krystal, who suffered

no adverse consequences from the exculpatory clause, is an aggrieved consumer

under the TCCWNA, we begin with a discussion of question two.

      The Court acknowledged that the TCCWNA does not specifically define

what constituted an "aggrieved consumer" and that the Court had not "squarely

address[ed]" the issue. Id. at 520. Therefore, the Third Circuit's request to

define the term was an issue of first impression. Ibid. Nevertheless, the Court

found "ample evidence of the Legislature's intent in the TCCWNA's plain

language to resolve this question of statutory interpretation." Id. at 521.

      The Court found the term "aggrieved" was significant, reasoning that if

"'aggrieved consumer' were construed to mean nothing more than a 'consumer'

to whom a contract or other writing is offered, given or displayed, the term

'aggrieved' would indeed be superfluous." Id. at 522. Therefore, the Court

found the term "aggrieved" "distinguishes consumers who have suffered harm

because of a violation of [the TCCWNA] from those who have merely been

exposed to unlawful language in a contract or writing, to no effect." Ibid. A

plaintiff alleging a violation of the TCCWNA, therefore, must demonstrate he

or she is "a consumer who has suffered some form of harm as a result of the

defendant's conduct." Ibid.

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      The Court clarified that the harm incurred as a result of a defendant's

conduct was not limited to "injury compensable by monetary damages." Id. at

523. It noted the TCCWNA contemplated "that a consumer may be entitled to

a remedy notwithstanding the absence of proof of monetary damages." Ibid.

See also N.J.S.A. 56:12-17. As an example, the Court stated: "If an untimely

delivery and misleading 'no refunds' language leave a consumer without

furniture needed for a family gathering, the consumer may be an 'aggrieved

consumer' for purposes of N.J.S.A. 56:12-17." Id. at 523-24. But, the Court

cautioned, a consumer must suffer an adverse consequence as a result of a

contract's non-compliance with the particular regulation in order to sustain a

claim under the TCCWNA. Id. at 524.

      With the guidance of these legal principles, and considering the facts in

the light most favorable to plaintiffs, we review the summary judgment orders.

Our review is de novo, and we use the same standard employed by the trial court.

Templo Fuente De Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh, 224 N.J.
189, 199 (2016). "[A] trial court's interpretation of the law and the legal

consequences that flow from established facts are not entitled to any special

deference." Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J.
366, 378 (1995).

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      On appeal, Krystal argues she suffered "adverse consequences" as a result

of the exculpatory clause in the membership agreement because she "has now

taken on additional risks of harms and the costs associated thereto that . . . she

heretofore did not have because they [lay] at common law with a premises owner

like Planet Fitness." Therefore, Krystal maintains she is an aggrieved consumer.

We disagree.

      It is undisputed that Krystal did not suffer any physical harm while using

defendant's facility.   Although she claimed defendant did not maintain its

parking lot properly in the winter, she did not slip or fall or suffer any adverse

consequence from the alleged poor maintenance. Moreover, Krystal admitted

at her deposition she had "no gripe with Planet Fitness." Rather, Krystal seeks

damages and class certification because she signed a membership agreement that

included an exculpatory clause.

      In the aftermath of Spade, Krystal's assertions are not sufficient to deem

her an "aggrieved consumer" under the TCCWNA. The exculpatory clause was

never invoked against her. Her proofs do not establish she suffered any adverse

consequences from executing the agreement. Rather, she fits the scenario of the

consumer described by the Court in Spade who executed a contract that violated

a clearly established legal right, but received its furniture on schedule and as

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                                        9
ordered. 232 N.J. at 523-24.   That consumer, who incurred no monetary

damages or adverse consequences suffered no harm and is not an aggrieved

consumer. Id. at 524. Neither is Krystal. 5

      Because Krystal lacks standing under the TCCWNA, she cannot be the

named representative of the proposed class. "It is well established that, in order

to bring a class action lawsuit, the named representative must individually have

standing to bring their claims." Rosen v. Cont'l Airlines, Inc., 430 N.J. Super.
97, 107 (App. Div. 2013) (citing R. 4:32-1(a)). Without standing, plaintiffs'

"putative class action is improper, because plaintiff [herself] lacks standing as a

member of the putative class." Ibid.

      We reverse the orders granting summary judgment to plaintiff and class

certification.   We remand for the trial court to enter judgment in favor of

defendant.

5
  Because of our determination that Krystal is not an aggrieved consumer and
therefore lacks standing to bring a TCCWNA claim, we do not address the issue
of whether the exculpatory clause violated a clearly established legal right.
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