Dana Roberts is taking a karate chop to the wallet.
In May 2011, Roberts signed up her daughter Elizabeth, 7, for lessons. She signed a contract and paid $820 for 50 lessons to be used anytime between May and December, she said.
When that session ended in mid-December, Roberts said, instructor Kyle Freeman called to see about signing up again.
“I told him that I really couldn’t sign her up again right now. I have three kids and my husband is on a deployment to Afghanistan,” she said. “I tried to explain that it’s too much for me to bring my 7-year-old twice a week to lessons and sit there with a 4-year-old and 1-year-old.”
Roberts said Freeman gave her the hard sell, but she explained she also was returning to school in January and didn’t think she’d have the time.
“I have three kids who were trying to get my attention and I was trying to get off the phone with him,” she said. “I honestly felt bullied into signing my daughter up again.”
Roberts said she finally gave Freeman her credit card number but she did not sign another contract. Lessons would restart in January 2012.
At the end of December, Roberts’ husband, Anthony, came home for a two-week leave from his New Jersey Army National Guard duty, and the couple discussed the lessons. They agreed Dana Roberts’ schedule would be too hectic, so they decided to cancel them.
Anthony Roberts called the studio several times in the beginning of January and left messages. No one returned his calls. He e-mailed the studio on Jan. 9, explaining that Elizabeth would be withdrawing from lessons and asking someone to respond so they could discuss a refund.
Again, they didn’t hear back.
Later, the company returned a separate e-mail regarding a military program that might reimburse the couple for the cost of lessons, but a refund wasn’t discussed.
And then a $456 charge appeared on Roberts’ credit card. She disputed the charge, but when Somerville Martial Arts provided a copy of the contract Roberts signed in May 2011 to the credit card company, the charge was reinstated.
She said she didn’t understand why no one from the studio contacted her to discuss the dispute. By then, the studio must have known she was trying to ask for a refund, she said.
The couple then turned to the military’s legal services, but the attorney said there was nothing he could do.
“I e-mailed them (Somerville Martial Arts) and asked them for a copy of this contract. They ignored that request,” she said. “I went to talk to them personally on March 2, 2012.”
The parties had a dispute, but eventually, Roberts was given a copy of the contract.
“They believe they have no legal reason to return any of my money. They also don’t believe they had any legal or ethical reason to contact me,” Roberts said. “It’s hard enough being a single parent for the year my husband is deployed. I’m not working, so this was a lot of money that we put out for lessons we do not wish to take and that I felt bullied into agreeing to.”
She turned to Bamboozled for help.
‘I don’t bully’
There are no typed dates on the contract, but written by hand, it says: “50 classes pd in full.”
The contract also says: “There will be no refunds of amounts paid to SMAA.”
We reached out to Somerville Martial Arts and had a conference call with Freeman and owner Patrick Mehrtens.
Freeman said in no way did he give a hard sell to Roberts.
“I don’t use pressure sales. I don’t bully,” Freeman said. “I take great offense to that.”
Freeman said he was trying to help Roberts find a way for Elizabeth to continue.
We wanted to know why the Roberts’ messages were not returned.
Mehrtens said the studio was flooded after Tropical Storm Irene and there was a time it had no phone service. He also said he didn’t remember the Jan. 9 e-mail.
He offered to freeze the family’s account so Roberts’ husband or another child could take the lessons in the future.
But a refund was out of the question.
“For us to have a refund policy, that would really be a disservice to our ability to run the business,” Mehrtens said. “If we do it once, we’ll be expected to do it over and over again.”
BUT IS IT LEGAL?
We understand the challenges facing small-business owners, but we wondered if that contract would hold water (thank you, “My Cousin Vinny”) in a courtroom.
We asked litigation attorney Timothy Dinan of Laddey, Clark & Ryan in Sparta to take a look at the case.
He said that by verbally agreeing to renew the contract without negotiating any new terms, Roberts agreed to continue the old contract with its provision for “no refunds.” But, he said, she could argue in small claims court that she is entitled to a refund despite the contract language.
“First, Dana could argue the ‘no refund’ provision in the contract is a penalty,” Dinan said. “Under New Jersey law, penalty provisions in contracts are not enforceable.”
Second, she could raise the issue of unjust enrichment. For this, she’d have to show the studio received a benefit and keeping that benefit would be unjust — for example, if it was able to fill Elizabeth’s spot and was in fact compensated twice.
He said if a judge finds the “no refund” provision to be a penalty, the studio has an obligation to mitigate, or lessen, its damages, by finding a student to fill Elizabeth’s spot.
“It would be up to a judge to decide if the studio did in fact mitigate its damages and Dana could recover a portion of the $456 with this argument,” he said.
Finally, Roberts may have a claim under the New Jersey Consumer Fraud Act, which regulates health club contracts, Dinan said. A judge would have to decide whether or not the studio is a health club under the act, then decide if the contract complies with the requirements of the act.
“The lesson Dana had to learn the hard way is how important it is to know what you are agreeing to before you sign a contract or provide a company with your credit card number,” he said.
It’s a lesson all consumers should consider before putting their signature on a contract, he said, and Bamboozled agrees wholeheartedly.
Roberts said she understands they’re trying to run a business, but she feels her request isn’t unreasonable. When her husband returns home at the end of his tour in April, she’ll see if he wants to take the classes. But she says she doesn’t want to send her children there.
“If we had done 10 out of the 25 classes, I wouldn’t have expected a refund,” she said. “If they had only answered our messages back then. … They had no ethical or moral responsibility to get back to me. They only have a responsibility to take my money.”
“It’s customer service and if that’s the way they’re going to treat their families, then I don’t want to be part of it,” she said.