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Exculpatory Clause revisited in New Jersey
January 20, 2022
Exculpatory Clause revisited in New Jersey
          One of the most fundamental essential provisions in the alarm contracts [and by now you know I use the word alarm to mean all security, fire and related industries]for the alarm industry is the Exculpatory Clause.  It is the most basic of the protective provisions and sets the tone, background and justification for other provisions in the contract that you need.  The Exculpatory Clause is also one of the most scrutinized and distained provisions in the alarm contract; judges look each and every way to avoid enforcement of this provision.  The Exculpatory Clause is called by different names, release, hold harmless, indemnity, waiver – and this isn’t all of them.  In the case I review below the judge calls it a “release” and then goes on to review exculpatory clause cases and issues.
          Plaintiff went to a gun range and before being permitted to participate was required to sign an Agreement which included the following provision in prominent font:
          “I HAVE BEEN ADVISED THAT THE RECREATIONAL USE OF FIREARMS IS AN INHERENTLY DANGEROUS ACTIVIT WHICH CAN AND DOES RESULT IN SERIOUS BODILY INJURY AND/OR DEATH ESPECIALLY IF SAFETY RULES ARE NOT OBEYED In return for the use of the premises and equipment, I agree to indemnify, hold harmless and defend [G&H], [HFC] and [non-party] IAT Reinsurance Company Ltd. and its instructors, employees, directors, officers, agents, representatives, heirs, successors, and assigns from and against any and all claims, demands, causes of action, personal injury (including death), damages, costs, and expenses (including attorney’s fees), arising out of, related to, or connected with the rental of a firearm, instruction, use or discharge of firearms. I hereby further agree, on behalf of myself, executors and assigns, that I will not make any claim or institute any suit or action at law or in equity against [G&H], [HFC] and IAT Reinsurance Company Ltd. Related [sic] directly or indirectly to my use of the firearm referenced in this document or from my use or participation in any activity on this property. I expressly assume the risk of taking part in the activities on the premises, which include the discharge of firearms and firing of live ammunition.”
          The case is pretty simple.  The plaintiff didn’t read the agreement, got on a wagon that transported him and others from shooting station to shooting station, the wagon got stuck, moved backwards and plaintiff jumped off and suffered personal injury.  Plaintiff sued, the gun range pulled out the Agreement and moved for summary judgment to dismiss the case based on the Exculpatory Clause.  
          Case is in Federal Court, in New Jersey.  The judge used New Jersey law and started his analysis with finding that the clause in question didn’t violate New Jersey’s Plain Language Review Act.  This law requires that a contract “shall be written in a simple, clear, understandable and easily readable way”.  Now keep in mind that we are talking about New Jersey, so the standard is apparently something that applies to those living in that great state.  The statute includes the following requirements:
          “The statute sets forth six non-exclusive factors that a court “may consider” in its determination of whether a consumer contract is “clear, understandable and easily readable,” including: (1) Cross references that are confusing; (2) Sentences that are of greater length than necessary; (3) Sentences that contain double negatives and exceptions to exceptions; (4) Sentences and sections that are in a confusing or illogical order; (5) The use of words with obsolete meanings or words that differ in their legal meaning from their common ordinary meaning; (6) Frequent use of Old English and Middle English words and Latin and French phrases.”
          So this judge found that even though the above Exculpatory Clause wasn’t in 10 point font, also a requirement, it was clear enough in this agreement to be enforceable because the Agreement was titled ““SHOOTING SCHOOL AT HUDSON FARM – RELEASE & HOLD HARMLESS AGREEMENT”. 
          But even though that conclusion was reached the judge found other reasons to deny the motion for summary judgment – in other words – allow the case to continue.  In fact, the judge dismissed the Release affirmative defense.  Essentially the judge concluded that
          ” While the literal reading of the Release cannot be sustained, Defendants are free to craft a release with regard “to a standard of care congruent with the nature of their business.” Stelluti, 203 N.J. at 312. To that end, other exculpatory clauses within the Release are tailored to the nature of Defendants’ business insofar as they limit the release to firearm-related activities.”… “The question thus becomes whether Martin’s injury occurred in connection with a firearm-related activity.”
          Then we see familiar language and reasoning by the judge to guide him to the conclusion he was looking for from the start:
          “New Jersey courts narrowly construe exculpatory waivers in light of Stelluti’s admonition that they are disfavored… Courts will enforce an exculpatory clause where a claim is “not an unexpected, unforeseeable result of” the risky activity offered by a facility…. By contrast, New Jersey courts will set aside exculpatory clauses where a potential claim arises from an activity that is not squarely within the ambit of the risky activity offered by an establishment…. Plaintiffs claims do not arise in connection with the activities involved with using a firearm. 437 N.J. Super. at 111. Instead, Plaintiffs’ claims are more akin to a “garden variety” personal injury action. Id. Accordingly, the exculpatory clause of the Release is void and unenforceable as to Plaintiffs’ claims.”
          Your alarm contracts must be written with precision.  More importantly, when faced with a lawsuit you [meaning the lawyer representing you – probably an insurance company house or approved counsel] have to know when and how to invoke the contract provisions and defenses.  This issue is not just important to you and the case you are defending, but impacts the entire industry because judges read each other’s decisions and rely on the decisions they need to reach the conclusion they want to reach. 
          You can read this case on K&K’s website under Alarm Law Issues / leading cases / New Jersey.
The case is Martin v Hudson Farm Club.
           If you haven't updated your contracts you need to, today.  Not just if you're in New Jersey [especially in New Jersey], but everywhere. 

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301