Robins v. Global Fitness Holdings, LLC

• Citation: 838 F.Supp.2d 631
• Decision Date: 18 January 2012
• Docket Number: Case No. 1:11 CV 1373.
• Parties: Philip S. ROBINS, et al., on behalf of themselves and others similarly situated, Plaintiffs, v. GLOBAL FITNESS HOLDINGS, LLC, d/b/a Urban Active Fitness, Defendant.
• Court: U.S. District Court — Northern District of Ohio

838 F.Supp.2d 631

Philip S. ROBINS, et al., on behalf of themselves and others similarly situated, Plaintiffs,

v.GLOBAL FITNESS HOLDINGS, LLC, d/b/a Urban Active Fitness, Defendant.

Case No. 1:11 CV 1373.

United States District Court,

N.D. Ohio,

Eastern Division.

Jan. 18, 2012.

James A. Deroche, David H. Krause, Seaman Garson, Cleveland, OH, Nicole T. Fiorelli, Patrick J. Perotti, Dworken & Bernstein, Painesville, OH, for Plaintiffs.

David A. Landman, Philip M. Oliss, Richard Gurbst, Squire, Sanders & Dempsey, Cleveland, OH, for Defendant.

MEMORANDUM OF OPINION AND ORDER

DAN AARON POLSTER, District Judge.

This removed case comes before the Court on Defendant Global Fitness Holdings, LLC's Motion to Dismiss Plaintiffs' Second Amended Class Action Complaint (“Motion” or “Motion to Dismiss”). (Doc # : 12 (“Mot.”).) The Court has reviewed the Motion, the opposition brief (Doc # : 13), the reply (Doc # : 14), the sur-reply (Doc # : 15), the attachments thereto and the entire record and is prepared to issue a ruling.

I. INTRODUCTION

On April 15, 2011, Plaintiff Philip S. Robins, on behalf of himself and others similarly situated, filed a complaint asserting a combination of state common-law and statutory claims against Defendant Global Fitness Holdings, LLC d/b/a Urban Active Fitness (“Global” or “Urban Active”) in the Cuyahoga County Court of Common Pleas. (Doc # : 1–1 at 1–15.) Robins filed an amended complaint on June 24, 2011 adding five additional class representatives (Maria Christina Bruch, Tanya Baker, Danette Green, Steve Zadiraka, and Carolyn Odelli), state claims not previously asserted, and two federal claims. ( Id. at 37–88.) Based on the presence of federal claims, Global removed the case to federal court and filed a motion to dismiss. (Doc # : 1 ¶¶ 3–4.)

On September 20, 2011, Plaintiffs filed a Second Amended Complaint (hereafter referred to as “the Complaint”). (Doc # : 11 (“Compl.”).) Plaintiffs generally allege that, contrary to the express terms of Global's Membership Contracts and Personal Training Contracts (collectively, “Contracts”), Global has (1) retained fees paid by members of its health clubs for the period in which they were disabled, deceased, or relocated, (2) collected from Plaintiffs' credit, debit or bank accounts additional fees not part of the agreed-upon monthly fees, and (3) drafted form contracts containing egregious, confusing and misleading cancellation provisions that guarantee members will be charged for one or more months beyond the date they cancel their memberships. ( Id. ¶¶ 1–6.) Based on these allegations, Plaintiffs assert the following common-law claims against Global: breach of contract (Count One), unjust enrichment (Count Two), and fraud (Count Three). Plaintiffs have also asserted claims against Global for violation of the following state and federal statutes: Ohio's Consumer Sales Practices Act (Count Four), Ohio's Prepaid Entertainment Contracts Act, O.R.C. §§ 1345.41 et seq. (Count Five), Ohio's Deceptive Trade Practices Act, O.R.C. §§ 4165.01 et seq. (Count Six), Kentucky's Consumer Protection Act–Health Spas (Count Seven), the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961 et seq. (“RICO”) (Count Eight), Ohio's version of RICO, O.R.C. §§ 2923.31 et seq. (Count Nine), and the Electronic Fund Transfer Act, 15 U.S.C. §§ 1693 et seq. (Count Ten).

On October 5, 2011, Global filed the pending Rule 12(b)(6) Motion to Dismiss, seeking dismissal of all claims.

II. BACKGROUND

Plaintiffs are residents of Ohio or Kentucky who entered into the Contracts at Ohio or Kentucky Urban Active fitness facilities. Plaintiffs Robins, Baker, Green, Zadiraka, and Odelli all executed Membership Contracts with Global. (Mot., Exs. 1, 2, 3, 4, and 5, respectively.) The relevant language of the Membership Contracts differ only in their choice of law provision: the Membership Contracts of Plaintiffs Robins, Zadiraka, and Odelli are governed by Ohio law, while the Membership Contracts of Plaintiffs Baker and Green are governed by Kentucky law. ( Id.) Plaintiff Bruch executed a Personal Training Contract with Global that is governed by Ohio law. ( Id., Ex. 6.) To cover the cost of membership, members must provide a credit, debit, or bank account number that Global charges monthly through an electronic funds transfer (“EFT”).

A. PLAINTIFFS' ALLEGATIONS

For purposes of the Motion to Dismiss, the Court takes the following factual allegations asserted in the Complaint as true, and construes them in the light most favorable to Plaintiffs. Michael v. Javitch, Block & Rathbone, LLP, 825 F.Supp.2d 913, 917, 2011 WL 5554325, at *2 (N.D.Ohio 2011) (citing Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir.2007)).

1. Plaintiff Robins

Phillip Robins entered into a monthly Membership Contract with Global on August 13, 2010. (Mot., Ex. 1.) Robins agreed to allow Global to deduct from his bank account only monthly membership payments. (Compl. ¶ 67.) He claims that he “was not fully advised of the cost of membership including, but not limited to, [the] annual maintenance fee.” (Id. ¶ 68.) On October 7, 2010, Robins underwent surgery that prevented him from using Global's facilities. (Id. ¶ 69.) Robins “informed Global of his disability, cancelled his membership and requested a pro-rated refund”—which refund Global denied. ( Id. ¶¶ 70–71.) Robins claims that Global “continued to charge and collect unauthorized funds” from his bank account after he cancelled his contract. (Compl. ¶ 72.)

2. Plaintiffs Zadiraka and Odelli

Steve Zadiraka and Carolyn Odelli signed the form Membership Contracts with Global on September 26, 2009. (Mot., Exs. 4–5.) They agreed to allow Global to deduct from their credit card bank/debit accounts only monthly membership payments. (Compl. ¶ 102.2.) Like Robins, these Plaintiffs claim that they were “not fully advised of the cost of membership including, but not limited to, [the] annual maintenance fee.” ( Id. ¶ 102.1.) In mid-November 2010, Zadiraka/Odelli informed Global of their intent to cancel, and Global confirmed cancellation in writing on November 22, 2010. ( Id. ¶ 102.4.) Still, Global billed them not only “for the remainder of November, but for the entire month of December, and for the entire month of January”—although January's payment was eventually reversed by the bank. ( Id.) These Plaintiffs construe the allegedly unauthorized post-cancellation payments as “an illegal and unenforceable penalty.” ( Id. ¶ 102.11.)

3. Plaintiffs Baker and Green

On March 30, 2010,¹ Tanya Baker and Danette Green enrolled as members of Global's fitness club “pursuant to a 12–month contract, with monthly installment payments of $24.95 (“the Baker/Green Contracts”).” (Mot., Exs. 2, 3; Compl. ¶¶ 91, 97.) At the time they signed their Contracts, an Urban Active employee “informed [them] there were no [ ] fees other than the monthly $24.95 charge.” (Compl. ¶¶ 92, 98.) Like Robins, Zadiraka and Odelli, Plaintiffs Baker and Green allege that when they signed their contracts, they were “not fully advised of the cost of membership including, but not limited to, [the] annual maintenance fee.” ( Id. ¶¶ 93, 99.) At some point during the period of their 12–month membership, Global unilaterally increased their monthly membership charge by $1, and improperly charged their accounts $25.95 per month (instead of $24.95 per month), and a $15 maintenance fee that was not part of the agreed upon monthly rate, without their authorization. ( Id. ¶¶ 94–95, 100–01.)

4. Plaintiff Bruch

Maria Christina Bruch entered into a Personal Training Contract with Global on March 29, 2011. (Mot., Ex. 6.) Bruch asserts that she only agreed to sign up for two months of personal training services, and was reassured that her membership would only last until the middle of June 2011. (Compl. ¶ 77.) Bruch claims that she was told that she would only have to pay $200/month for personal training services. ( Id. ¶ 78.) Bruch provided her credit card information only to complete the formalities of the enrollment process, and was told that her credit card would not otherwise be used for financial transactions. ( Id. ¶ 79.) Bruch asserts that she signed her contract electronically, and that Global did not provide her with a copy of her contract or notice of cancellation form. ( Id. ¶¶ 75–76.)

On April 11, 2011, Bruch discovered that Global charged $473.02 to her credit card account. (Compl. ¶ 80.) When she disputed the charges, she was told that the additional charges were for fees, taxes and a $200 deposit for the last month's dues—which deposit would be refunded at the end of the program. ( Id. ¶ 81.)

On April 25, 2011, Bruch informed Global that she would make the last payment by personal check. ( Id. ¶ 82.) Global accepted her check for $215 and presumably credited her account for that amount. ( Id.) Bruch also requested that her contract be formally cancelled and requested a copy of the contract. ( Id. ¶ 83.) According to Bruch, this is the first time she saw the entire contract, which indicated that she had signed up for 48 sessions for 12 months instead of the 2 months she originally requested. ( Id. ¶ 83.) Bruch claims that an Urban Active employee told her that she could not change the contract because Global did not allow personal training contracts for less than a year, and encouraged her to check the box for “Cancel Due to Move” on her cancellation form so that she could presumably get a prorated refund, which Bruch did. Global later informed Bruch that she would have to pay $393.20 to cancel her membership unless she could prove that she was canceling due to a move. ( Id. ¶ 86.) Like the other Plaintiffs, Bruch states that she was given false information about the cost of membership and maintenance fees, and that her account was charged unauthorized fees. ( Id. ¶¶ 87–89.) In addition, she was denied a prorated refund presumably for her “relocation” cancellation. ( Id.)

B. CONTRACT TERMS

On...