Contract Cancellation Fee Suit

[NefertitiX]

What is the name of your state (only U.S. law)? New York

Our former gym where my husband and I were avid racquetball players decided to get rid of the racquetball courts and gave us 5 days notice that they were about to close for renovations and the courts would be gone when they reopened. We had a monthly contract and one of the cancellation clauses is "If the services cease to be offered as stated in the contract". Regarding cancellation, it also says "There will be a $90 administrative charge on all cancellations and approved transfers on all annual memberships, unless agreed otherwise".

We cancelled our membership and they charged us each a $90 cancellation fee so we filed a small claims suit because we find it ridiculous in light of how things transpired. I thought they'd try to settle but they haven't. So far, my case rests on the fact that a monthly contract is not an annual membership. Any thoughts on what else about this situation bolsters our case?

Also, I noticed as I was looking at the contract, that I signed it but didn't date it...does that negate the contract or give me any leverage?

Thanks in advance for any advice,
Nef

 

[Zigner]

Did your contract specifically state that racquetball facilities would be provided? If not, then I don't see you having a very strong case at all.

 

[Mass_Shyster]

Show up in court with your contract and the notice that they're discontinuing the racquetball.

My guess is that they won't even show up, and will simply make it a pain for you to try to collect.

 

[NefertitiX]

Zigner,

Use of the racquetball courts is listed as part of the membership entitlements.

 

[NefertitiX]

Show up in court with your contract and the notice that they're discontinuing the racquetball.

My guess is that they won't even show up, and will simply make it a pain for you to try to collect.

Thanks Steve, I have one hiccup. I have my contract...my husband can't find his. I do have their cancellation notice to him regarding his contract...how big a problem do you think that will be?

 

[Mass_Shyster]

Thanks Steve, I have one hiccup. I have my contract...my husband can't find his. I do have their cancellation notice to him regarding his contract...how big a problem do you think that will be?

Bring what you've got. You can tell the judge/magistrate that the contacts were the same (assuming they were). The worst thing that will happen is that you lose $90 or $180.

 

[You Are Guilty]

I agree your best bet is to just show up and throw everything at the judge to see what sticks, but, as a word of caution, I read the contract language differently. Meaning, the gym will say that:

Regarding cancellation, it also says "There will be a $90 administrative charge on all cancellations and approved transfers on all annual memberships, unless agreed otherwise".

should be read as "There will be a $90 administrative charge on all cancellations" (i.e. including yours) and "on approved transfers on all annual memberships, unless agreed otherwise". [Reason being a "cancellation" is not equivalent to an "approved transfer of annual memberships"].

To counter, I'd suggest arguing the final clause "unless agreed otherwise", is triggered by the "If the services cease to be offered as stated in the contract" language. [If the racquetball courts are specifically listed in the contract as amenities and are being removed, it would seem that there is an agreement that "services" are ceasing.]

More importantly, if you have time before your small claims hearing, I would try seeking the assistance of the Attorney General's office. Benefits: it's 100% free, and other than filling out an online form and maybe a phone call, you do not have to expend any time prosecuting it. Down side is it usually takes 30+ days to reach a resolution. Check 'em out:
http://www.ag.ny.gov/consumer-frauds/contact

Good luck, and let us know how it turns out.

 

[swalsh411]

Have you actually paid this fee? If so, did you dispute the charge with your bank or credit card company? If you have not paid it, then they would be the ones to sue you not the other way around.

 

[NefertitiX]

Have you actually paid this fee? If so, did you dispute the charge with your bank or credit card company? If you have not paid it, then they would be the ones to sue you not the other way around.

Unfortunately, our monthly bill was paid via automatic debit from our bank accounts (Trust me, we've learned our lesson). They debited our accounts for the month and waited on transactions to clear before notifying us of the closure/renovation. They eventually returned the prorated amount we paid for the month less the $180.

 

[NefertitiX]

I agree your best bet is to just show up and throw everything at the judge to see what sticks, but, as a word of caution, I read the contract language differently. Meaning, the gym will say that:

should be read as "There will be a $90 administrative charge on all cancellations" (i.e. including yours) and "on approved transfers on all annual memberships, unless agreed otherwise". [Reason being a "cancellation" is not equivalent to an "approved transfer of annual memberships"].

To counter, I'd suggest arguing the final clause "unless agreed otherwise", is triggered by the "If the services cease to be offered as stated in the contract" language. [If the racquetball courts are specifically listed in the contract as amenities and are being removed, it would seem that there is an agreement that "services" are ceasing.]

More importantly, if you have time before your small claims hearing, I would try seeking the assistance of the Attorney General's office. Benefits: it's 100% free, and other than filling out an online form and maybe a phone call, you do not have to expend any time prosecuting it. Down side is it usually takes 30+ days to reach a resolution. Check 'em out:
http://www.ag.ny.gov/consumer-frauds/contact

Good luck, and let us know how it turns out.

Thank you for the alternative perspective and the counterpoint! Court is tomorrow so we'll see how it goes...

 

[NefertitiX]

Thank you all for your replies and suggestions, you've been most helpful. I will provide an update after the hearing tomorrow evening.

 

[NefertitiX]

We went to court last night and no one showed to represent them so we had an inquest with an arbitrator and we're waiting on the decision by mail. Hopefully we'll win and then I'll need to figure out how to make them actually pay. I'll update once we receive the decision.

 

[Mass_Shyster]

We went to court last night and no one showed to represent them so we had an inquest with an arbitrator and we're waiting on the decision by mail. Hopefully we'll win and then I'll need to figure out how to make them actually pay. I'll update once we receive the decision.

Guess my crystal ball is working again.

My guess is that they won't even show up, and will simply make it a pain for you to try to collect.

Good luck. Keep us posted.

 

[OHRoadwarrior]

File a lien on their operations.