immediate release -- August 1, 2001.
Contact Bob Brammer, 515-281-6699
Obtains Judgments Against
Fort Dodge Health Club Operators
ordered to make refunds.
Iowa Attorney General Tom Miller announced today that his Consumer Protection
Division has obtained judgments against the two owners of Central Avenue
Gym in Fort Dodge, Iowa. On Monday, July 30, Webster County District Court
Judge Kurt L. Wilke issued a Consent Judgment against one defendant, Ritalee
Shapiro, and a Default Judgment against the other defendant, Andrea Lynn
The state's lawsuit
was filed on March 16, and alleged, among other things, that Shapiro and
Lewis took in excess of $12,000 from Iowa consumers as prepayment for
use of the "Central Avenue Gym" before the gym was open to the
public and failed to either escrow the money or obtain a bond to protect
consumer payments as required by Iowa law. The State's lawsuit also alleged
violations of the physical exercise club law and the Consumer Fraud Act
when some of the funds were applied for personal use and the gym was not
opened on the dates promised when the memberships were sold. On the date
the suit was filed, Judge Wilke granted the Attorney General's request
for a Temporary Restraining Order preventing Shapiro and Lewis from accepting
payment from consumers for the prepayment of physical exercise club contracts,
and from spending any more of the money they had previously collected.
At that time, the Judge also granted the Attorney General's request to
freeze the bank account and other assets of the defendants in order to
preserve resources necessary to restore consumers' money, if appropriate.
Under the Consent
Judgment entered on Monday, Shapiro agreed to cancel all exercise club
contracts and give refunds to all consumers who paid money for use on
Central Avenue Gym. In addition, the Court permanently enjoined her from
accepting any payments from consumers in the future regarding Central
Avenue Gym, or any other facility before it opens, without complying with
the escrow or bond requirement. In addition, she may not disperse any
funds or other types of payment received from consumers without prior
approval from the court or the Attorney General.
Shapiro also was enjoined
from misrepresenting the availability, quality, or extent of facilities
or services of a physical exercise club, and from accepting any money
from consumers without either providing the service within the time frame
she represented it would be provided, or promptly refunding that advance
payment. The court imposed a civil penalty of $5000 on Shapiro, but provided
that she is not required to pay the civil penalty so long as she complies
with the court order.
Also on Monday, the
court found Lewis in default for failing to file a response to the state's
lawsuit. In his order, Judge Wilke issued a permanent injunction against
Lewis under the same terms as the permanent injunction which applies to
Shapiro. In addition, he also ordered that she be subject to a civil penalty
of $5000 if she violates the court order and ordered her to pay the state's
investigative costs and attorney fees, which totaled $6586.
Miller said that his
office is continuing in its efforts to work with Shapiro as she cooperates
in efforts to get refunds to consumers who paid Shapiro or Lewis any money
in connection with Central Avenue Gym. Miller thanked Webster County Attorney
Ron Robertson for his assistance in bringing the matter to the attention
of Miller's Consumer Protection Division and assisting his staff with
the prosecution of the case .