16-CIV-01430 THE ESTATE OF DIEGO GALINDO, et al. vs. BALLY TOTAL

FITNESS CORPORATION, et al.

MARIA GONZALEZ MARK J. GERAGOS

BALLY TOTAL FITNESS CORPORATION JILL COHOE

DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

TENTATIVE RULING:

The motion for summary judgment/adjudication brought by defendant Bally Total Fitness Corporation (Bally’s) is disposed as follows:

· First Cause of Action (Negligence) – denied

· Second Cause of Action (Negligent Retention & Supervision) – denied.

· Third Cause of Action (Breach of the Implied Covenant) – Granted.

Objections to Evidence. Bally’s objects to: (1) the expert declaration (by Ray Coassin) in its entirety, (2) specific provisions of the expert declaration (by Ray Coassin), (3) various items of Plaintiffs’ Separate Statement of Undisputed Material Facts, and (4) the declaration of Marjorie Whitelaw in its entirety.

Objection Nos. 1-5. Bally’s objects to the declaration of Ray Coassin in its entirety, as well as to several specific clauses of that declaration, on grounds that it lacks foundation because it presumes facts that conflict with other evidence—i.e. the expert declaration states that the employee “was a minimum-wage employee with not specialized training” while the testimony from the employee is that he did not remember if he had any specialized training other than CPR. These are disputes of fact to be weighed by a trier-of-fact. They impact the credibility, weight, and interpretation of the expert witnesses testimony and conclusions, but they are not sufficient basis for excluding that evidence for lack of foundation.

Objection Nos. 1-5 are overruled.

Objection Nos. 6-11. Objections must be to evidence—not to statements of fact as framed by opposing counsel. Indeed, Cal. Rules of Court, rule 3.1354 requires that written objections specify the name of the document in which the specific material is located; the exhibit, title, page, and line number of the material objected to; and quote or set forth the objectionable material. Bally’s objections to Plaintiffs’ Separate Statement fail to do so because they target a Separate Statement rather than the underlying evidence upon which the statements are based.

Objection Nos. 6-11 are be overruled.

Objection No. 12. Majorie Whitelaw is an attorney for Plaintiffs. Her declaration was filed Jan 04, 2018. It indicates that Plaintiffs’ counsel received new information the day prior to filing the declaration (i.e. Jan 03, 2018) that a portion of its opposition argument was factually inaccurate because a copy of the signed contract was obtained that did include the “Waiver and Release” provision. Bally’s objects that this declaration was not timely filed. Given the recent discovery of the new information:

Objection No. 12 is overruled.

Legal Standard. On summary judgment, the moving party has an initial burden of production to establish enough evidence to make a prima facie case. Aguilar v. Atlantic Richfield (2001) 25 Cal.4th 826, 861. Where, as here, the party moving for summary judgment is the defendant, the burden is to show that one or more of the elements of the cause of action cannot be established, or that all of the elements of an affirmative defense can be established. Code Civ. Proc. § 437c(p)(2). “A prima facie showing is one that is sufficient to support the position of the party in question. ‘No more is called for.’” Weil & Brown, Cal. Prac. Guide: Civ. Proc. Before Trial (The Rutter Group 2016) ¶ 10:225.2, citing Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 851. If, and only if, the moving party meets that initial burden, the law then shifts the burden to the opposing party to produce admissible evidence showing that a triable issue of fact exists as to one of those elements. Code Civ. Proc. § 437c(p)(1); Green v. Ralee Engineering Co. (1998) 19 Cal.4th 66, 72; Consumer Cause, Inc. v. SmileCare (2001) 91 Cal.App.4th 454, 468.

As with most motions, the moving party bears the burden of persuasion. That burden does not shift and requires the moving party to persuade the court that it is entitled to judgment as a matter of law. Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 861.

The Waiver and Release. The facts of this case involve a homicide that occurred when one member of a fitness gym murdered another member using gym equipment on the premises of the gym. The parties do not dispute the existence of a contract between the victim, decedent Galindo, and the gym, Bally’s. Indeed, Bally’s has submitted the following fact, to which Plaintiffs responded “undisputed”:

Maria Gonzalez entered into a membership agreement with Defendant Bally’s Total Fitness (“Bally”) on Diego Galindo’s behalf, as his agent, in September 2004.

UMF No. 1 (emphasis added). The exact wording of this statement is critical because it states that Gonzalez was Galindo’s agent and signed the agreement on his behalf. See CACI No. 3700; see also Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1171–1172, citing Violette v. Shoup (1993) 16 Cal.App.4th 611, 620.

The gym membership agreement contained a waiver and release clause that read as follows:

…You agree on behalf of yourself … to release and discharge us … from any and all claims or cause of action arising out of our negligence. This Waiver and Release of all liability includes, without limitation, injuries which may occur as a result of…(d) our negligent instruction or supervision, (e) our negligent hiring or negligent retention of any employee… You do hereby waive any right that you may have, by or on behalf of yourself, your spouse or any child (minor or otherwise), to bring a legal action or assert a claim for injury or loss of any kind against us for our negligence…

Decl. of Tucker (f: 07/17/17), Ex. A, ¶ 10. Waiver and release clauses of this nature are routinely upheld in the context of health club liability. See Grebing v. 24 Hour Fitness USA, Inc. (2015) 234 Cal.App.4th 631, 637–638. These terms are within a clause that is clearly labeled, in all-caps, as a “Waiver and Release,” and the clause itself is in bold. The terms thus appear to be clear and understandable, and Plaintiffs’ argument to the contrary has no merit.

Nevertheless, Plaintiffs also raise significant argument regarding decedent Galindo’s ability to read and understand these terms. However, as set forth above, it is undisputed that the girlfriend (Maria Gonzalez) was decedent Galindo’s agent, and thus had the authority to bind decedent Galindo. As such, the issue of whether decedent Galindo could read the contract or received a copy of the waiver clause is irrelevant—the only questions with regard to unconscionability are whether his agent, Gonzalez, received a full copy of the agreement. Because of this admitted agency relationship, Plaintiffs’ argument that the contract was never “brought to” decedent Galindo and that he did not have a chance to review it for himself, has no merit.

Plaintiffs also argue that ’ the girlfriend (Gonzalez) understood the terms she was signing and was fraudulently induced to sign since she could not read the terms. However, “a person who signs an instrument may not avoid the impact of its terms on the ground that she failed to read before signing…” Jimenez v. 24 Hour Fitness USA, Inc. (2015) 237 Cal.App.4th 546, 563–564. Here, there no evidence to show a misrepresentation or a nonverbal gesture that was used to fraudulently induce Gonzalez to enter into the agreement. On the contrary, the sole basis for the claim that the contract at issue is fraudulent or an “overreach” is that Gonzalez spoke limited English and was unfamiliar with legal terms of art. That limitation, however, speaks to a failure to read before signing…” Id. In other words, Gonzelez was fully aware of her own linguistic abilities, and if she started reading the document only to discover that she could not understand it, that is not a fraud induced upon her—it is a failure to read before signing. As such, Plaintiffs’ argument that the contract was fraudulently induced has no merit.

The final waiver argument made by Plaintiffs is that the waiver and release clause was unconscionable. The doctrine of unconscionability requires both substantive and procedural unconscionability to invalidate a contract provision. Armendariz v. Foundation Health Psychcare Servs., Inc. (2000) 24 Cal.4th 83, 114; Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1243-1244. These elements are assessed on a “sliding scale” basis—meaning that if there is more of one present, then less of the other needs to be shown. Here, Bally’s presents no argument to challenge the assertion of procedural unconscionability. While there may have been competition in the form of other gym facilities that were available in the market, that does not automatically negate the possibility of procedural unconscionability. See Gatton v. T-Mobile USA, Inc. (2007) 152 Cal.App.4th 571, 583, citing Szetela v. Discover Bank (2002) 97 Cal.App.4th 1094, 1100. As such, there appears to be sufficient procedural unconscionability present in the bargaining power that went into the gym membership agreement at issue. As to substantive unconscionability, release and wavier clauses for negligence and negligent hiring are routinely upheld. Honeycutt v. Meridian Sports Club, LLC (2014) 231 Cal.App.4th 251. On the other hand, releases for gross negligence are not. See Anderson v. Fitness International, LLC (2016) 4 Cal.App.5th 867, 885. Thus, the substantive unconscionability inquiry here turns on whether the release and wavier clause is for negligent actions only, or gross negligence, which would be unconscionable.

In sum, the terms of the waiver and release were clear and understandable, the failure to read the contract did not work a fraud, and it is sufficient that the terms of the contract were reviewed by the agent, Gonzalez, rather than being “brought to” Galindo himself. However, the waiver and release can only limit liability as to claims that are based on simple negligence—not gross negligence.

“‘“Gross negligence” long has been defined in California and other jurisdictions as either a “ ‘ “want of even scant care”’” or ‘“‘an extreme departure from the ordinary standard of conduct.”’”

Honeycutt v. Meridian Sports Club, LLC (2014) 231 Cal.App.4th 251, 259, quoting City of Santa Barbara v. Superior Court (2007) 41 Cal.4th 747, 754).

“{g}enerally it is a triable issue of fact whether there has been such a lack of care as to constitute gross negligence [citation] but not always…”

Anderson v. Fitness International, LLC (2016) 4 Cal.App.5th 867, 882, quoting Chavez v. 24 Hour Fitness USA, Inc. (2015) 238 Cal.App.4th 632, 640, quoting Decker v. City of Imperial Beach (1989) 209 Cal.App.3d 349, 358 (additional citations omitted) (internal quotation marks omitted)).

Therefore, in analyzing the causes of action for negligence before, only facts that support gross negligence will be sufficient to survive summary judgment/adjudication, as the waiver and release clause bars causes of action for simple negligence.

The First Cause of Action (Negligence). The case of Delgado v. Trax Bar & Grill (2005) 36 Cal.4th 224 provides a useful roadmap for analyzing the issues presented in the instant case. In analyzing that case, the California Supreme Court noted that “it… is well established that, as a general matter, there is no duty to act to protect others from the conduct of third parties…[Citation],” but also that “courts have recognized exceptions to the general no-duty-to-protect rule, one of which [is] the ‘special relationship’ doctrine…” Delgado v. Trax Bar & Grill (2005) 36 Cal.4th 224, 235. “Courts have found such a special relationship in cases involving the relationship between business proprietors such as shopping centers, restaurants, and bars, and their tenants, patrons, or invitees.” Id. That duty is a “general duty of maintenance, which is owed to tenants and patrons, {and} include[s] the duty to take reasonable steps to secure common areas against foreseeable criminal acts of third parties that are likely to occur in the absence of such precautionary measures.” Id., quoting Ann M. v. Pacific Plaza Shopping Center (1993) 6 Cal.4th 666, 674 (brackets in original; braces added) (italics in original; underline added) (additional citations omitted). From these principles, the California Supreme Court broke down a two-tiered approach:

“‘[I]n cases where the burden of preventing future harm is great, a high degree of foreseeability may be required.’ [Citation.] On the other hand, in cases where there are strong policy reasons for preventing the harm, or the harm can be prevented by simple means, a lesser degree of foreseeability may be required.’ [Citation.]” [Citation.] Or, as one appellate court has accurately explained, duty in such circumstances is determined by a balancing of “foreseeability” of the criminal acts against the “burdensomeness, vagueness, and efficacy” of the proposed security measures. {Citation.}

Id., quoting Ann M. v. Pacific Plaza Shopping Center (1993) 6 Cal.4th 666, 678-679 (brackets in original) (braces added) (emphasis added). Notably, the language above references “criminal” acts. Thus, short shrift can be made of Bally’s argument that a proprietor automatically owes no duty if the act in question was a criminal act committed by a third party on the premises. Given that a proprietor can be liable for criminal acts by a third party on its premises—at least where a special relationship exists—it is necessary to turn to the nature of the duty to be imposed. While the approach above has the auspices of being a two-tiered approach, it stems more broadly from the principle that “the scope of the duty is determined in part by balancing the foreseeability of the harm against the burden of the duty to be imposed.” Id. at 237 (citation omitted). But, in assessing that question, the California Supreme Court broke the issue down into, essentially, higher and lower duties.

With regard to heightened duties, the Delgado court quoted Ann M. to recite the principle that:

although ‘there may be circumstances where the hiring of security guards will be required to satisfy a landowner’s duty of care, such action will rarely, if ever, be found to be a “minimal burden.” The monetary costs of security guards is not insignificant… we conclude that a high degree of foreseeability is required in order to find that the scope of a landlord’s duty of care includes the hiring of security guards. We further conclude that the requisite degree of foreseeability rarely, if ever, can be proven in the absence of prior similar incidents of violent crime on the landowner’s premises.[footnote] To hold otherwise would be to impose an unfair burden upon landlords and, in effect, would force landlords to become the insurers of public safety, contrary to well-established policy in this state. [Citations].’

Id., quoting Ann M. v. Pacific Plaza Shopping Center (1993) 6 Cal.4th 666, 678-679 (emphasis in original). In the instant case, there are no facts to show prior similar incidents of violent crime on the Bally’s premises. As such, heightened duties (such as hiring a security guard) do not apply to Bally’s. However, to the extent that Bally’s tries to suggest that this heightened standard is the only standard that could result in Bally’s being subjected to liability (i.e. owing a duty to decedent Galindo) it misdirects the issue by ignoring the lesser standard that may apply.

With regard to the lesser duties that may apply:

… it long has been recognized that restaurant proprietors have a special-relationship-based duty to undertake relatively simple measures such as providing ‘assistance [to] their customers who become ill or need medical attention and that they are liable if they fail to act.’ [Citations.] Similarly, a restaurant or bar proprietor also has a duty to warn patrons of known dangers [citation] and, in circumstances in which a warning alone is insufficient, has a duty to take other reasonable and appropriate measures to protect patrons or invitees from imminent or ‘ongoing’ criminal conduct. [Citations] Such measures may include telephoning the police or 911 for assistance [citation] or protecting patrons or invitees from an imminent and known peril lurking in a parking lot by providing an escort by existing security personnel to a car in a parking lot. [Citation].

Delgado v. Trax Bar & Grill (2005) 36 Cal.4th 224, 241 (citations omitted) (emphasis added).

The standard to be applied is that set forth in the seminal case of Rowland v. Christian (1968) 69 Cal.2d 108, 113. Those factors include: (1) the degree of certainty that the plaintiff suffered injury; (2) the closeness of the connection between the defendant’s conduct and the injury suffered; (3) the moral blame attached to the defendant’s conduct; (4) the policy of preventing future harm; (5) the extent of the burden to the defendant and consequences to the community of imposing a duty to exercise care with resulting liability for breach; and (6) the availability, cost, and prevalence of insurance for the risk involved. Delgado v. Trax Bar & Grill (2005) 36 Cal.4th 224, ftnt. 15, quoting Rowland v. Christian (1968) 69 Cal.2d 108, 113.

The instant case is, ultimately, distinguishable from Delgado because, in Delgado, there were facts to show that the security guard on duty had first-hand knowledge of the incident. He had witnessed the staring context while it was in progress in the bar. He had been advised by the plaintiff’s wife that she believed a fight was likely to break out. And, he had asked the plaintiff and his wife to leave because he recognized the risks of the situation. The instant case has none of these facts.

However, the instant case does have some of the factors set forth above in Saatzer v. Smith (1981) 122 Cal.App.3d 512, 518—facts that were applied in the context of a tavern keeper. In that context, the Saatzer court set forth a set of factors that can potentially give rise to such a duty:

· when a tavern keeper allows a person onto the premises who has a known propensity for fighting;

· when a tavern keeper allowed a person to remain on the premises whose conduct had become obstreperous and aggressive to such a degree the tavern keeper knew or ought to have known he endangered others;

· when the tavern keeper had been warned of danger from an obstreperous patron and failed to take suitable measures for the protection of others;

· when the tavern keeper failed to stop a fight as soon as possible after it started;

· when the tavern keeper failed to provide staff adequate to police the premises; or

· when the tavern keeper tolerated disorderly conditions.

Delgado v. Trax Bar & Grill (2005) 36 Cal.4th 224, 241, citing Saatzer v. Smith (1981) 122 Cal.App.3d 512, 518. Those these factors were applied in the context of a business serving alcohol, they offer helpful guidance for the instant case because, just as a tavern keeper can foresee certain risks common to serving alcohol (such as the situations itemized in Saatzer v. Smith (1981) 122 Cal.App.3d 512, 518), a fitness club can foresee and/or monitor for certain risks at a gym facility. Here, Plaintiffs here have produced evidence that Bally’s own materials (i.e. the “Emergency Manual” and/or the “Accident and Avoidance Procedures” guidelines) describe certain foreseeable risks, as follows:

Misuse or improper use of equipment.

Injuries may occur from persons being cut or injured by equipment… Club personnel should constantly be on the watch for members using equipment improperly and should promptly step forward to assist a member if they observe the equipment is not being used properly.

Horseplay and running.

Proper supervision and maintenance of the swimming pool and the surrounding areas and strict enforcement of the pool rules and regulations may reduce… injuries. Horseplay and running should be strictly prohibited; any dangerous conditions should be remedied immediately.

(Emphasis added.) In light of this awareness, there is, minimally, a question of fact presented in this case as to whether the following Saatzer factors can be proven, namely:

· when a tavern keeper allowed a person to remain on the premises whose conduct had become obstreperous and aggressive to such a degree the tavern keeper knew or ought to have known he endangered others;

· when the tavern keeper failed to stop a fight as soon as possible after it started; or

· when the tavern keeper failed to provide staff adequate to police the premises.

With regard to the first factor above, it is a question of fact as to when Bally’s ought to have known that Osako’s presence was a danger to other patrons. While the theories of Osako’s criminal background or steroid use are factually not connected to knowledge that a Bally’s employee ought to have known, the fact that some form of staring contest or intimidation had occurred on the gym floor two days prior to the incident may be a fact that Bally’s, given proper staffing to monitor its facilities, ought to have known. Similarly, measuring from the time the attack at issue began, a fact-finder may determine that, with proper staffing and/or monitoring of the gym floor, Bally’s ought to have known of the danger Osako’s presence created. Similarly, the evidence here shows a triable issue of fact as to whether Bally’s failed to stop the fight as soon as possible after it started. Again, by having a Bally’s employee with his back turned to the gym floor, the “as soon as possible” issue become a factual issue as to whether the assault, which became a homicide, could have been stopped sooner.

The Delgado court concluded that the security guard could have taken “minimally burdensome measures” such as attempting to maintain the separation between the plaintiff and the defendant, turning his attention to the defendant and his companions to dissuade them from further aggression, or confirming the presence of the exterior security guard. The facts here are similar in that the Bally’s employee could have taken minimally burdensome measures to turn to view the gym floor, or Bally’s could have had security cameras installed to enable the employee to monitor the premises even with his back to it. The exact facts of what could have been done are intensely factual, such that they are inappropriate for summary judgment/adjudication. While it is true that “the existence of a legal duty is a question of law for the court to determine,” the legal duty question presented in this case is too intensely fact-based and to be resolved via summary judgment. Delgado v. Trax Bar & Grill (2005) 36 Cal.4th 224, 237 (citation omitted).

However, as set forth above, overlaid on top of the duty issue extensively discussed above, is the issue of applying the waiver and release. As set forth above, the waiver and release clause waived liability as to claims that are based on simple negligence, but not gross negligence. Here, the facts generally suggest simple negligence rather than gross negligence. However, it is possible—however improbable—that a reasonable fact finder could conclude that gross negligence occurred. To reach that conclusion, a fact-finder could:

· construe the evidence of steroid use as showing an activity so prevalent on site that, circumstantially, Bally’s must have known of it;

· accept the expert testimony regarding how common steroid use is in a gym environment;

· accept the expert testimony that, according to industry standard, another employee should have been on duty to monitor the gym floor; and

· construe from the employee’s slow and deficient response that the employee had not received proper training for handling medical emergencies.

Given these facts, and others supplied in opposition to the motion, a reasonable fact finder could conclude that Bally’s actions here lacked even “scant care” or departed from ordinary standards of conduct in a manner that was extreme.

Second Cause of Action (Negligent Retention and Supervision). The elements of negligent hiring, supervision, or retention of an employee are as follows: (1) that employer hired employee; (2) that employee was (or became) unfit (or incompetent) to perform the work for which he was hired; (3) that employer knew or should have known that employee was (or became) unfit (or incompetent) and that this unfitness (or incompetence) created a particular risk to others; (4) that employee’s unfitness (or incompetence) harmed plaintiff; (5) that employer’s negligence in hiring (or supervising) (or retaining) employee was a substantial factor in causing plaintiff’s harm. CACI No. 426. Here, the parties are arguing the issue of unfitness/incompetence. Plaintiffs have presented expert testimony to show:

· that the employee’s training was inadequate for him to be left as the only employee on duty to supervise the gym floor;

· that an additional managerial employee should have been on duty because the employee who was on duty was inadequate; and

· that the actual skills the employee demonstrated (attempting to apply a towel to decedent Galindo’s wounds) were inadequate.

Decl. of Coassin (f: 01/02/18), ¶¶ 9-10. More specifically, the expert testimony indicates that, while it is customary for a front desk employee to face the entrance to the gym (not the gym floor) the reason that is customary is because it is also customary to have another employee on duty who can monitor the gym floor. Decl. of Coassin (f: 01/02/18), ¶¶ 9-10. The expert testimony also indicates that the employee on duty should have had the training to make an announcement to see if anyone with medical training was available in the immediate vicinity and to perform CPR or defibrillation if needed. The expert testimony also indicates that steroid use is often found in health and fitness club settings and that best industry practice requires a health club to be on the lookout for the type of violent or aggressive conduct that is associated with steroid use. Based on the above, there is sufficient evidence to raise a triable issue of fact as to whether the employee on duty was unfit, incompetent, or inadequately supervised.

Further, the same analysis as set forth above with regard to the waiver issue applies here. The waiver and release in the gym membership contract applies, but is only effective to waive claims of simple negligence—not gross negligence. While not particularly strong, a reasonable fact-finder could weigh all the facts in a way that concludes that the failure to supervise and/or train the employee on duty was grossly negligent. As such, the wavier and release does not automatically bar this claim.

Third Cause of Action (Breach of the Implied Covenant).

Under limited circumstances, the court may find that a contract includes an implied term or covenant. ‘To effectuate the intent of the parties, implied covenants will be found if after examining the contract as a whole it is so obvious that the parties had no reason to state the covenant, the implication arises from the language of the agreement, and there is a legal necessity.’ [Citation.]

A contract term will be implied only where the term is ‘indispensable to effectuate the expressed intention of the parties.’ [Citation.] A term can only be implied ‘…upon grounds of obvious necessity.’ [Citation.]…

Ben-Zvi v. Edmar Co. (1995) 40 Cal.App.4th 468, 473. The gym membership contract at issue contains an express contract limiting liability that reads as follows:

…You agree on behalf of yourself (and your personal representatives, heirs, executors, administrators, agents and assigns) to release and discharge us (and our affiliates, employees, agents, representatives, successors and assigns) from any and all claims or cause of action arising out of our negligence. This Waiver and Release of all liability includes, without limitation, injuries which may occur as a result of…(d) our negligent instruction or supervision, (e) our negligent hiring or negligent retention of any employee… You do hereby waive any right that you may have, by or on behalf of yourself, your spouse or any child (minor or otherwise), to bring a legal action or assert a claim for injury or loss of any kind against us for our negligence…

Decl. of Tucker (f: 07/17/17), Ex. A, ¶ 10. A clause providing that Bally’s would guard against third party criminal conduct is not an obvious covenant that the parties intended to include in their agreement—nor is it indispensable to effectuate the express intent of the parties. As such, summary adjudication of this cause of action is appropriate.