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Elisabeth Boeynaems, et al. v. La Fitness International

September 12, 2011


The opinion of the court was delivered by: Baylson, J.


I. Introduction and Procedural History

Plaintiffs in these cases signed contracts to become "members" of a health/fitness organization, and allege that they thereafter encountered difficulties and breaches concerning their desire to terminate their membership. Because the agreements themselves have been filed of record, and their terms are undisputed, the Court is obliged to consider the legal consequences of these agreements in more detail than might ordinarily be the case on a Rule 12 motion to dismiss the Complaint.

On November 19, 2010, the Court held oral argument in Boeynams v. LA Fitness International, LLC, No. 10-2326 (ECF No. 21), to consider Defendant's Motion to Dismiss Plaintiffs' Amended Complaint Class Action Complaint (No. 10-2326, ECF No. 9). The argument only addressed the Boeynams case. Following the argument, Plaintiffs Elisabeth Boeynaems, et al. (the "Boeynaems Plaintiffs") filed a Second Amended Class Action Complaint on January 31, 2011 (No. 10-2326, ECF No. 25).

A Motion to Dismiss Plaintiffs' Second Amended Complaint was filed in Boeynams February 28, 2011 (No. 10-2326, ECF No. 26). The Boeynaems Plaintiffs filed a Response on March 30, 2011 (No. 10-2326, ECF No. 27). Defendant LA Fitness ("Defendant's") replied on April 15, 2011 (No. 10-2326, ECF No. 26).

These motions have been held open because of the transfer of Vaughn from the Middle District of Florida (No. 11-2644, ECF No. 2). Defendant had filed a Stipulation of Acceptance of Service and Transfer on April 13, 2011 (M.D. Fla. No. 11-457, ECF No. 10), stating that "the allegations in Plaintiff's lawsuit are virtually identical" to those asserted in Boeynams. Stipulation at ¶ 2.

On May 3, 2011, Plaintiff Joshua Vaughn ("Vaughn") filed a Motion For Consolidation of Actions (No. 11-2644, ECF No. 2). After a telephone conference, the Court issued a May 25, 2011 Order setting out a schedule for Defendant to respond to the Vaughn Complaint and ordering that Vaughn incorporate by reference the "arguments and citations previously presented to the Court" in Boeynams.

On June 14, 2011, Defendant filed a Motion to Dismiss in Vaughn (No. 11-2644, ECF No. 8). Vaughn responded on July 6, 2011 (No. 11-2644, ECF No. 11), and Defendant filed a reply on July 13, 2011 (No. 11-2644, ECF No. 12).

Although the motions before the Court are Motions to Dismiss filed pursuant to Federal Rules of Civil Procedure 12(b)(6) and 12(b)(1), because the Plaintiffs have attached the relevant contracts to their respective Complaints, the Court can consider these contracts in ruling on the breach of contract claims.*fn1

The Court will grant Defendant's Motion to Dismiss as to Plaintiffs Elisabeth Boeynaems ("Boeynams") and Harvey J. and Serena L. Cohen (collectively "the Cohens") with prejudice, but will grant in part and deny in part Defendant's Motion to Dismiss as to Kenneth Silver ("Silver"). In Vaughn, the Court will grant in part and deny in part as to Vaughn. The Motion to Consolidate the two cases will be granted.The Court entered an Order to this effect on August 18, 2011 (No. 10-2326, ECF No. 32).

II. Facts

A. LA Fitness and the Agreement

Defendant LA Fitness operates over 275 fitness clubs throughout the United States and Canada with over 1,000,000 members. Boeynams Second Am. Compl. ("Boeynams Compl.) at ¶ 17. New LA Fitness members may enroll by paying an entire year's dues up front or under a "Monthly Dues Membership Agreement" ("the Agreement"). Id. at ¶ 18. See Boeynams Pl.'s Exs. A and B. Enrolling under the Agreement, members pay an initial fee, first month's dues, and a prepaid last month's dues. Id. at ¶ 19. Members must provide a credit card or bank account that LA Fitness charges monthly through an electronic fund transfer ("EFT"). Id.

The Agreement informs members that "monthly dues will be billed and collected once a month beginning on [START DATE] and continuing on the same day each month until terminated in the manner provided below." Id. Older Agreements sets out the cancellation procedure, as follows:

How to stop your monthly EFT billing: If there is no back dues or a balance due on your membership, you may stop billing of the monthly dues through EFT and cancel your membership by providing the written notice of your request at least thirty days prior to your next billing date: Send the written notice to LA Fitness, P.O. Box 54170, Irvine, CA 92619-4170. If the notice is postmarked at least 30 days prior to your next billing date, no further billing will occur. If the notice is postmarked less than 30 days prior to your next billing date one or more billing will occur.

Id. at ¶ 20; see Boeynams Pls.' Ex. A. (Emphasis added). Newer agreements require 20 day notice before the next billing date to avoid being billed an additional month. Id. at ¶ 21; see Boeynams Pls.' Ex. B. Members located in the state of California need only provide 5 days notice. Ex. C at 1.

The older agreements state that, whether or not the cancellation notice is timely mailed with 30 days notice, a member's "last month's prepaid dues will extend [the members'] membership expiration by an additional 30 days or more, depending on [the] original sign up date." Id. at ¶ 20; see Boeynams Pls.' Ex. A. The language of the newer agreements similarly provide that, regardless of whether a member's cancellation notice is timely postmarked, a member's "last month's prepaid dues will be applied for [the member's] final monthly dues payment, extending [the] membership at least an additional 30 days, at which time [the] membership will expire." Id. Thus, under either agreement, the membership agreement binds the member to a membership term of at least 3 months, unless the member cancels on the date on which the member joins. Id. at ¶ 25.

The Agreement requires written notice of cancellation. Id. at ¶ 33; see Boeynams Pls.' Exs. A, B. While the Agreement contains no reference to the form of the writing, LA Fitness also apparently requires that cancellation be submitted on a pre-printed form, which can be obtained at LA Fitness locations or, with potentially some difficulty, online. Id. at ¶¶ 33-34.

B. Boeynaems Plaintiffs

Each of the Boeynaems Plaintiffs is a resident of Pennsylvania. Id. at ¶¶ 11-14. Each entered into a monthly Agreement with LA Fitness (hereinafter referred to collectively as "the Agreement"). Id. at ¶ 58, 63, 68. Each paid monthly dues via EFT from a credit card account. Id. at ¶¶ at 59, 65, 70. The terms of the monthly agreements are substantially the same, including the requirement to prepay the first and last month's dues, except where specified.

1. Elisabeth Boeynaems

Plaintiff Elisabeth Boeynaems entered an Agreement "on or about July 17, 2006," at which time she paid a total of $144.98. Id. at ¶ 58. Boeynaems paid her monthly dues by EFT from her husband Steven Bilgram's credit card account on or about the fifteenth day of each month. Id. at ¶ 59.

At the end of August 2006, Boeynaems's husband inquired with LA Fitness staff about canceling his wife's membership and was informed that she would have to come to the club to cancel. Id. at ¶ 60. Boeynaems was not able to go to the club until one week later. Id. When she arrived, she was informed that she would have to provide a cancellation form to LA Fitness's Irvine, California corporate headquarters ("California corporate headquarters") and was provided with a form. Id.

In approximately mid-September 2006, Boeynaems provided written cancellation notice to LA Fitness on the company's pre-printed form. Id. at ¶ 61. LA Fitness charged Boeynaems $34.99 on or about October 16, 2006, and then applied her prepaid last month's dues. Id. Thus, Boeynaems's membership was extended until approximately December 15, 2006. Id. Boeynaems alleges that she was overcharged at least $34.99 by LA Fitness. Id.

2. Harvey J. and Serena L. Cohen

Plaintiffs Harvey J. and Serena L. Cohen, husband and wife, entered an Agreement "at or about the time LA Fitness opened its gym in Bensalem, PA." Id. at ¶ 63. Their monthly dues were $31.00 per member. Id.

In late December 2008, Harvey Cohen called the Bensalem, Pennsylvania LA Fitness location to cancel the Cohens' memberships. Id. at ¶ 65. At that time, he was informed by LA Fitness staff that he would need to use the preprinted form provided at the Bensalem location. Id. Harvey Cohen was not able to travel to the LA Fitness location until the first week of January 2009, at which time LA Fitness gave him the cancellation forms. Id.

In approximately mid-January 2006, Harvey Cohen provided written cancellation notice to LA Fitness on the company's preprinted form. Id. LA Fitness charged the Cohens $62.00 on or about February 1, 2009, and then applied their prepaid last month's dues. Id. at ¶ 66. Thus, Cohens' membership extended until approximately April 1, 2009. Id. The Cohens allege that they were overcharged at least $62.00 by LA Fitness. Id.

3. Kenneth J. Silver

Plaintiff Kenneth J. Silver entered an Agreement on or about May 21, 2010. Id. at ¶ 68. Silver signed one of the newer Agreements that required 20 days notice prior cancellation, as distinct from the Plaintiffs discussed above. Id. at ¶ 21. At that time, he paid an initiation fee of $25.00, plus his first and last months' dues for a total of $114.98. Id. Silver's monthly dues were $44.99, which he paid by EFT from a Visa credit card on or about the twentieth day of each month. Id. at ¶ 70. The LA Fitness salesperson failed to provide Silver with a copy of his Agreement and LA Fitness has consistently failed to do so, despite repeated requests. Id. at ¶ 69.

Silver intended to terminate his membership at the end of June 2010. Id. at ¶ 68. Silver first inquired about canceling his membership at the time he entered into the Agreement, on or about May 21, 2010. Id. at ¶ 71. Silver informed the LA Fitness salesperson that he was a college student on a summer break and that he would be returning to school in State College, Pennsylvania, in late June 2010. Id. Since there are no LA Fitness locations in that area, Silver would not be able to use his membership and explained that he only wanted to pay for two months of dues. Id. He asked what steps he would need to take to cancel his membership so as not to incur payments beyond the time he would have access to the gym. Id.

At that time, the LA Fitness salesperson failed to disclose the requirement that Silver send a notice of cancellation on LA Fitness's preprinted form, and that Silver would have to send his notice of cancellation by Saturday, May 29, 2010, to avoid paying more than two months of dues. Id. at ¶ 72. Instead, the LA Fitness staff person told Silver that he could cancel at any time and that he would just need to come to the gym when he was ready to return to school. Id. at ¶ 73.

On or about June 25, 2010, Silver traveled to the Bala Cynwyd, Pennsylvania LA Fitness location and requested that his membership be cancelled. Id. at ¶ 74. At that time, an LA Fitness staff member stated that the location was having difficulty with their computer system, so they could not print or provide Silver with a preprinted cancellation form. Id. The staff member asked Silver to sign a form, but did not give him a copy, and represented to him that she would process his cancellation by sending the form to the California corporate headquarters when the computers were working. Id. Mr. Silver returned to State College believing that his membership had been cancelled. Id.

In early November 2010, Silver discovered that his membership had never been cancelled and that he was still being billed monthly dues. Id. at ¶ 75. Silver's father wrote a letter to the California corporate headquarters requesting 1) cancellation, 2) a refund for charges billed after June 2010, and 3) a copy of the Agreement. Id. The letter was returned as undeliverable. Id. Silver's father also mailed in a cancellation form and followed up with telephone calls to confirm cancellation and request a copy of the Agreement. Id. Silver additionally filed a Better Business Bureau complaint, to which LA Fitness responded that Silver had not attempted to cancel his membership prior to November 2010. Id. at ¶ 77. LA Fitness provided Silver with a refund for September and October 2010 dues, but Silver was not able to obtain a refund for July and August 2010 dues. Id. at ¶ 78.

C. Plaintiff Joshua Vaughn

Vaughn entered into an Agreement with LA Fitness on January 25, 2008, at an Orlando, Florida location. Vaughn Compl. at ¶ 56. At that time, Vaughn paid an initiation fee, plus first and last months' dues. Id. His dues were initially $34.99, but later increased to $37.26. Id.

Vaughn paid his dues through EFT from a bank account. Id. at ¶ 57. His billing date changed from month to month, including the following dates: August 17 and September 17, 2010; October 18, 2010; December 6, 2010; January 3, 2011; February 2, 2011; and February 16, 2011. Id.

In late July or early August 2010, Vaughn inquired about canceling in person at the Orlando location. Id. at ¶ 58. He was then informed about the requirement to cancel by preprinted form sent to the California corporate headquarters. Id. Vaughn obtained the form on the date of his inquiry and sent it via United States mail on the following day. Id. The notice of cancellation was postmarked more than 30 days before the September 17, 2010 billing date. Id.

Vaughn moved to Portland, Oregon, at the end of August 2010. Id. Because he had a "single club" membership with LA Fitness, he was not able to use his membership at the Portland LA Fitness facilities. Id.

Vaughn reviewed his monthly bank statement on approximately February 14, 2011, and realized that LA Fitness had continued to bill Vaughn monthly via EFT for the period between September 2010 and February 2011, despite Vaughn having sent in the preprinted cancellation form. Id. at ¶ 61.

Having been unable to find contact information for the California corporate headquarters, Vaughn telephoned the Orlando gym. Id. at ¶ 63. During that conversation, Vaughn was eventually told that LA Fitness would cancel the membership immediately, but that the company would only refund his "most recent billing." Id.

On February 15, 2011, Vaughn received an email from LA Fitness stating that his final EFT billing date would be February 16, 2011, and that his membership would expire on February 15, 2011. Id. at ¶ 64. On February 18, 2011, LA Fitness confirmed via email that the company would only refund Vaughn $37.26 -- the amount billed on February 16, 2011. Id. at ¶ 65.

Vaughn alleges that he was overcharged for at least seven months because, based on the language of the contract, he would have expected his dues to stop in August 2010. Id. at ¶ 66.

D. Plaintiffs' ...

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