Extension of “Gross Negligence” Liability Means New Dangers for Landlords and HOAs

by Daniel B. Spitzer, Esq.

During 2015, two very troubling appellate opinions were issued which may expand the liability of a landlord or homeowners association for failure to maintain amenities offered to residents. Although both cases dealt with a failure to maintain gym equipment, the rationale may well extend to maintenance of any amenities provided by landlords.

Extension of Gross Negligence Liability Means New Dangers for Landlords and HOAs

The Cases

In both Chavez v. 24 Hour Fitness USA Inc. (2015) 238 Cal. App. 4th 632 and Jimenez v. 24 Hour Fitness USA, Inc. (2015) 237 Cal.App.4th 546, two different appellate courts reached the conclusion that a health club may have liability for “gross negligence” for failing to adhere either to the manufacturer’s recommended maintenance schedule or to a maintenance schedule adopted by the health club on its own.

In each of these cases, a patron of 24 Hour Fitness was injured and brought suit against the gym. The gym defended on the basis of the standard form release required of every member. (The release is very similar to the one most landlords and HOAs use for use of fitness centers and other recreational facilities.)

In the course of each lawsuit, it became apparent that the maintenance schedule performed by gym personnel varied from either the manufacturer’s recommended maintenance or the club’s own maintenance schedule.

Both cases involved motions for summary judgment brought by the defendants, based on the written releases. In each case, the trial courts and the appellate courts found that a claim could be made out for gross negligence based on the failure to keep up the maintenance schedule.

 

Ordinary Negligence vs. Gross Negligence

The legal argument goes something like this. Under ordinary circumstances, a release such as the one normally required of tenants will be effective to release the landlord or HOA from ordinary negligence.

The problem presented by these two cases is that they have defined the failure to adhere to an established maintenance schedule for exercise equipment as the equivalent of the “want of even scant care” or the “extreme departure from the ordinary standard of conduct” which would justify a claim for gross negligence under established California law.

See Rosencrans v. Dover Images, Ltd. (2011) 192 Cal.App.4th 1072, 1082; City of Santa Barbara v. Superior Court (2007) 41 Cal.4th 747, 754; Eriksson v. Nunnink (2011) 191 Cal.App.4th 826, 857.

And, of course, the written release form is not effective as to claims forgross negligence.

Gross negligence claims punitive damages against landlords and HOAs

Why Is This Important?

Because gross negligence claims can lead to awards of punitive damages against landlords and HOAs. The danger presented is therefore quite real and quite extreme.

If this rationale is applied more broadly—and there is no reason to think it won’t be—then any landlord or HOA who provides amenities to residents may be at risk. Residents who use swimming pools or barbecues which are not maintained properly could allege gross negligence. The logic of these cases might also apply to security doors or remotely-operated gates which are not maintained properly.

 

What Can a Property Owner Do?

Two principal steps may be taken. First, make sure that your property managers are apprised of all required maintenance for every portion of the building. Periodic inspections of the building elements, including any amenities, are a must. Second, make sure that your liability insurance provides coverage for such items and that it will provide sufficient coverage to protect the owners in the event of a claim.

Originally published at SES


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