NEWARK – The Attorney General’s Office and the Division of Consumer Affairs have filed lawsuits against 20 health clubs, alleging that consumers paid for services that they did not receive and that the club operators failed to notify customers of their rights to refunds and other recourse as legally required, Attorney General Peter C. Harvey and Consumer Affairs Director Kimberly Ricketts announced.

The 20 health clubs, operated under the Dolphin Fitness, Olympus Gym, Gold’s Gym, Valley Family Fitness and Executive Fitness names, are alleged to have committed multiple violations of New Jersey’s Consumer Fraud Act, Health Club Services Regulations and Advertising Regulations. The State filed six separate lawsuits in State Superior Court in Bergen, Burlington, Essex, Monmouth and Sussex counties.

"These customers did not get what they paid for. Even worse, their legal rights were violated as the operators allegedly failed to disclose to customers that they could cancel their contracts or get refunds," Attorney General Harvey said.

The Dolphin clubs named in one lawsuit are located in Sayreville and Jersey City, and both are also known as Synergy Fitness. Four additional Dolphin locations named in the lawsuit, in South Brunswick, Rahway, Elmwood Park and Lyndhurst, closed in 2004 and 2005.

Jeff Bodine of Somerset, Eric Holzer of Westfield and Joseph Filipak of Elmwood Park, who each directed the activities at various Dolphin clubs, are named individually as defendants in the lawsuit.

A Dolphin Fitness Club in Freehold which closed in October, 2004 is named in a separate lawsuit.

The Olympus clubs named in another lawsuit are located in Bloomfield, Butler, Clifton, Fairfield, Franklin, Hackensack, Jefferson, Newton, and Randolph. All but the Bloomfield, Clifton, Hackensack clubs have filed for Chapter 11 bankruptcy protection. The Bloomfield club closed in June, 2004.

The Gold’s Gym was located in Somers Point before it closed in late 2001. Another Gold’s Gym was supposed to open in Mount Laurel in mid-2001, but did not open for business. Customers awaiting the opening of the Mount Laurel health club had use of a temporary facility which closed in September, 2002.

Michael C. Jackson of Mount Laurel and William E. Griggs III of Medford are named individually as defendants in the Gold’s lawsuit. Both individuals filed for bankruptcy protection in June, 2005.

The Valley Family Fitness Center was located in Old Tappan and closed in January, 2005. Joseph A. DeMarco of Hamilton Township and Mark Starapoli of Blauvelt, New York are named individually as defendants.

The Executive Fitness Club was located in Green Brook and closed in May, 2005. Kevin J. Beegle of Piscataway and Martin Michalski of Hackettstown are named individually as defendants. Michalski filed for bankruptcy protection in June, 2005.

The six lawsuits allege several violations of the CFA, the Health Club Services Regulations and the Advertising Regulations, including:

• Failure to register some locations with Consumer Affairs and pay the $300 bi-annual registration fee;
• Failure to maintain bond, letter of credit or other security for each location;
• Failure to meet requirements for contracts, by failing to include statements about a consumer’s right to cancellation of the contract or a refund under certain conditions;
• Charging a down payment exceeding 25% of the contract price prior to the opening of the facility;
• Failure to provide refunds to consumers when facilities closed or failed to open;
• Misrepresenting that a facility is registered with Consumer Affairs; and
• Misrepresenting to consumers the number of facilities to which consumers would have access.

Bodine, Holzer and Filipak also are alleged to have violated terms of a 2001 Consent Judgment with Consumer Affairs and thus are now subject to enhanced penalties.

Harvey noted that the requirement to post a bond or a letter of credit protects patrons in the event a location closes and refunds are owed.

Deputy Attorneys General Gina M. Betts, Jeffrey Koziar, Amye R. Steinberg and Frank A. Coppa are representing the State in these lawsuits. Investigators Samuel Castillo and Don Golden led the investigations.

"We’re here as a resource, to help consumers make informed decisions before they sign a contract. Anyone can ask whether a health club is registered with Consumer Affairs and if we’ve taken previous actions against a club or its operators," Director Ricketts said.

Health club information may be obtained by calling Consumer Affairs at 973-504-6261.

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