Friday, July 13, 2012

SAFETY OR FITNESS FIRST: Liability of Fitness Clubs for Loss

By Obiter07

We invariably see this notice and hardly pay attention anymore.  You park your car and the ticket says that that the facility is not liable for any loss or damage to your vehicle. In this case, a client goes to his fitness club and leaves his belongings in a locker for safekeeping. He discovers that items have been stolen.  However, the club membership form, club rules as well as posted notices contain a disclaimer that the club has no liability for such loss.  The Court of Appeals has held that the fitness club can be held liable, notwithstanding this disclaimer. [1]

The complaint arose after a lawyer lost his office uniform, a cellphone, a wallet with cash, among other items, after depositing them at a club locker. The club had argued that it was not liable. In ruling for the plaintiff, the Court relied on Article 2003 of the New Civil Code:

“ARTICLE 2003. The hotel-keeper cannot free himself from responsibility by posting notices to the effect that he is not liable for the articles brought by the guest. Any stipulation between the hotel-keeper and the guest whereby the responsibility of the former as set forth in articles 1998 to 2001 is suppressed or diminished shall be void. (n)”

The court held “that a health and wellness center like Fitness First is akin to those engaged in hotel and common carrier businesses which are imbued with public interest.” It further stated that: “Fitness First, being a health club establishment is clearly bound to provide not only a comfortable working-out atmosphere for its members but also a security to their persons and belongings.”  It took into account the club’s “and lackadaisical attitude on the reported loss constitutes negligence and dereliction of its duties and responsibilities as operator of a health and wellness establishment.”[2]

Around 2004, based on a victim’s account, members of Fitness First in Alabang were robbed in broad daylight inside the club when armed men strolled inside the club and held up people one by one. There was no announcement. They just went to people one at a time showed their guns and asked for their victims’ belongings.  Some employees who noticed what was happening simply hid in the fire escape found through the locker room – without warning other people they passed by of what was going on - without even locking the locker room if only to protect everyone inside, including those taking their showers. To make matters worse, after the hold-up, the employees just went back to their stations and resumed operations like nothing happened. Fitness First, indeed.[3]

The Supreme Court was faced with a similar issue in YHT REALTY CORPORATION, et al. vs. COURT OF APPEALS, et al. [G.R. No. 126780.  February 17, 2005.].  It held that the hotel’s requirement for a guest to execute an “"undertaking" contravenes Article 2003 of the New Civil Code for they allow Tropicana to be released from liability arising from any loss in the contents and/or use of the safety deposit box for any cause whatsoever. Evidently, the undertaking was intended to bar any claim against Tropicana for any loss of the contents of the safety deposit box whether or not negligence was incurred by Tropicana or its employees. The New Civil Code is explicit that the responsibility of the hotel-keeper shall extend to loss of, or injury to, the personal property of the guests even if caused by servants or employees of the keepers of hotels or inns as well as by strangers, except as it may proceed from any force majeure. xxx”

As explained by the Court: “Article 2003 was incorporated in the New Civil Code as an expression of public policy precisely to apply to situations such as that presented in this case. The hotel business like the common carrier's business is imbued with public interest. Catering to the public, hotelkeepers are bound to provide not only lodging for hotel guests and security to their persons and belongings. The twin duty constitutes the essence of the business. The law in turn does not allow such duty to the public to be negated or diluted by any contrary stipulation in so-called "undertakings" that ordinarily appear in prepared forms imposed by hotel keepers on guests for their signature.”

In effect, the Court of Appeals in this case has imposed on fitness clubs the obligations the law imposes on hotel keepers.  Under Articles 1998 to 2001, hotel keepers, now including fitness clubs, have the following responsibilities:

“ARTICLE 1998. The deposit of effects made by travellers in hotels or inns shall also be regarded as necessary. The keepers of hotels or inns shall be responsible for them as depositaries, provided that notice was given to them, or to their employees, of the effects brought by the guests and that, on the part of the latter, they take the precautions which said hotel-keepers or their substitutes advised relative to the care and vigilance of their effects. (1783)

ARTICLE 1999. The hotel-keeper is liable for the vehicles, animals and articles which have been introduced or placed in the annexes of the hotel. (n)

ARTICLE 2000. The responsibility referred to in the two preceding articles shall include the loss of, or injury to the personal property of the guests caused by the servants or employees of the keepers of hotels or inns as well as strangers; but not that which may proceed from any force majeure. The fact that travellers are constrained to rely on the vigilance of the keeper of the hotels or inns shall be considered in determining the degree of care required of him. (1784a)

ARTICLE 2001. The act of a thief or robber, who has entered the hotel is not deemed force majeure, unless it is done with the use of arms or through an irresistible force. (n)

ARTICLE 2002. The hotel-keeper is not liable for compensation if the loss is due to the acts of the guest, his family, servants or visitors, or if the loss arises from the character of the things brought into the hotel. (n)

Fitness clubs would be well advised to implement measures to insure the safety and security of the belongings of clients under this ruling.  This decision may still be appealed, however, on the argument that the law does not clearly include fitness clubs as covered by Article 2003.  Legislators may be well advised to amend the law to include such clubs since its clients do have a legitimate interest to be protected from loss, considering the amounts they pay for their membership.  Safety and security should come first before fitness, regardless of the establishment’s notices or name.

[1] Torres, “Fitness First Club liable for member’s stolen items—Court of Appeals.”  
11:37 am | Wednesday, July 11th, 2012.
[2] Ibid.
[3] Macairan, “Cops identify suspect in fitness center robbery.” 12:00 AM |
June 21, 2004.