ORDERS:
CONSENT ORDER
This matter
comes before me on Petition of the South Carolina Department of Consumer
Affairs of March 30, 2006, for the Respondents Core Fitness, LLC and J.
Michael Lantz to show cause why cease and desist, and restraining orders should
not be issued requiring Respondents to refrain from engaging in violations of
the Physical Fitness Act; and why an administrative fine of not less than
$1,000.00 should be assessed against Respondents, pursuant to S.C. Code
Ann. § 44-79-80.
The Petition
alleged inter alia that:
1. Petitioner
is an administrative agency of the State of South Carolina as defined in
§1-23-310(1) of the
Administrative Procedures Act and is responsible for administering and
enforcing the South Carolina Physical Fitness Act. (The Act) (S.C. Code Ann.
§44-79-10 et seq.)
2. Petitioner
is required to receive and act on complaints, and commence legal proceedings on
its own initiative, pursuant to S.C. Code Ann. §37-6-104.
3. The
Respondent Core Fitness, LLC., is a limited liability corporation organized
under the laws of the state of South Carolina, and at the times concerned
herein offered physical fitness services as defined in S.C. Code Ann. §
44-79-20(5), to consumers at 9313 Medical Plaza Dr., N. Charleston, and 2700
Highway 17 No., Ste 160, Mt. Pleasant, Charleston County, South Carolina.
4. Upon
information and belief, the Respondent J. Michael Lantz, II (Lantz) is the sole
shareholder of Respondent Core Fitness, LLC doing business as LifeQuest
Express, formerly doing business as Gravity Fitness at the Mt Pleasant location
of LifeQuest Express.
5. Respondent
Lantz first filed for a Certificate of Authority in April or May 2004, as Core
Fitness, LLC dba Gravity Fitness at 2700 Highway 17 N. Ste 160, Mt Pleasant,
SC.
6. Respondent
Lantz subsequently renewed his 2005 Certificate of Authority as Core Fitness,
LLC dba LifeQuest Express at 2700 Highway 17 N. Ste 160, Mt Pleasant, SC.
7. Respondent
Lantz acquired the second LifeQuest Express at 9313 Medical Plaza Dr., N.
Charleston, sometime in April or May 2005 and properly filed for a Certificate
of Authority for this location.
8. Respondent
Lantz renewed his 2006 Certificate of Authority in December 2005, for the 2700
Highway 17 N. Ste 160, Mt Pleasant, SC, location of LifeQuest Express, but
indicated on the renewal application that the 9313 Medical Plaza Dr., N. Charleston,
SC location of LifeQuest Express was closed.
9. In
February 2006 Petitioner received a consumer complaint indicating that the
LifeQuest Express on Medical Plaza Dr. closed on or about November 1, 2005, but
had sold pre-paid memberships to consumers who had not been refunded their
pro-rata amounts.
10. Petitioner
received a written response on the consumer complaint from Respondent Lantz
disclaiming any responsibility for the refund and alleging that Respondent
Sebold had taken control of the Medical Plaza location in September 2005,
operated it for several months, and then was evicted for failure to pay rent
11. Respondents
Lantz and Core Fitness, LLC maintained special deposit bond #FS 7577320 issued
by Great American Insurance Company in the amount of $25,000.00, to secure
their financial responsibility for the 2700 Highway 17 N. Ste 160, Mt Pleasant
location of LifeQuest, and the 9313 Medical Plaza Dr., N. Charleston, pursuant
to S.C. Code Ann. §44-79-80(1).
12. Petitioner
received notice March 20, 2006, that Respondents' Lantz and Core Fitness, LLC,
bond #FS7577320 would be canceled effective forty-five days from the date of
notice.
13. Upon
information and belief the Medical Plaza Dr. LifeQuest Express had 350
members.
14. Upon
information and belief, Petitioner alleges that the Respondents have engaged in
false, fraudulent, or deceptive conduct by selling or continuing to sell
pre-paid and monthly installment memberships at or near the closure of their
facilities, with full knowledge that their respective businesses were in
financial peril and/or in imminent danger of closing. Respondents deny this
allegation and no admission to this allegation is made herein.
15. Petitioner
has received complaints
against Respondents Lantz, and Core Fitness, LLC, alleging Respondents have
failed to provide contracted for physical fitness services.
16. Upon information and belief, Respondents,
Lantz,, and Core Fitness, LLC, their agents or assigns have failed to refund
monies for unused services on pre-paid contracts.
17. Upon information and belief, Respondents,
Lantz, and Core Fitness, LLC, their agents or assigns have failed to cease
collecting on monthly installment contracts after notice that contract holders
at the closed locations wished to cancel such contracts. Respondents allege
that they sold both of the facilities they once operated to others.
18. The special deposit bonds submitted
on behalf of the Respondents and made payable to the Administrator is to
reimburse those consumers who may have a claim against Respondents for
violations of the Act.
I find that:
(1) Petitioner is an administrative
agency of the State of South Carolina as defined in
§1-23-310(1)
of the Administrative Procedures Act and is responsible for administering and
enforcing the South Carolina Physical Fitness Act. (The Act) (S.C. Code Ann.
§44-79-10 et seq.).
(2) The Respondent Core Fitness, LLC., is a limited
liability corporation organized under the laws of the state of South Carolina,
and at the times concerned herein offered physical fitness services as defined
in S.C. Code Ann. § 44-79-20(5), to consumers at 9313 Medical Plaza Dr.,
N. Charleston, and 2700 Highway 17 No., Ste 160, Mt. Pleasant, Charleston
County, South Carolina.
(3) The Respondent J. Michael Lantz, II (Lantz) is
the sole shareholder of Respondent Core Fitness, LLC, doing business as
LifeQuest Express, formerly doing business as Gravity Fitness at the Mt
Pleasant location of LifeQuest Express.
(4) Respondents Lantz and Core Fitness, LLC,
maintained special deposit bond #FS 7577320 issued by Great American Insurance
Company in the amount of $25,000.00, to secure their financial responsibility
for the 2700 Highway 17 N. Ste 160, Mt Pleasant location of LifeQuest Express,
and the 9313 Medical Plaza Dr., N. Charleston location of LifeQuest Express,
pursuant to S.C. Code Ann. §44-79-80(1).
(5). Petitioner has received complaints against
Respondents Lantz, and Core Fitness, LLC, alleging Respondents have failed to
provide contracted for physical fitness services, and that there may be former
members of Core Fitness who are entitled to a refund of monies for unused
services on pre-paid contracts from special deposit bond #FS 7577320 issued by
Great American Insurance Company in the amount of $25,000.00.
(6) Respondents Core Fitness, LLC, Lantz, and
counsel for the Department have agreed to the terms of this Order.
(7) This Consent Order is binding on, and relates
only to settlement by and between the named Respondents Core Fitness, LLC and
Lantz. and the Petitioner.
THEREFORE, based upon the above, Petitioner and Respondents
Core Fitness, LLC and Lantz through their respective attorneys, have consented
and agreed to the following terms as a full and final resolution of this matter
as to these parties.
Respondents
Core Fitness, LLC and Lantz will:
(a) Agree to assessment in full of their special
deposit bond #FS 7577320 issued by Great American Insurance Company in the
amount of $25,000.00, and made payable to the Administrator for those affected
members of the public who have causes of action against Respondents for
violation of S.C. Code Ann. §§44-79-10 et seq.;
(b) Allow Petitioner to hold such monies from
special deposit bond #FS 7577320 issued by Great American Insurance Company
for the statutory period until Petitioner can determine all consumers who may
have been affected during the term of bond #FS 7577320;
(c) Pay an administrative fine of two-hundred
($200.00) dollars for violations of the Act, pursuant to S.C. Code Ann.
§44-79-80(9);
(d) Cease and Desist offering physical fitness
services, pursuant to S.C. Code Ann. §44-79-80(8); and
(e) Be restrained from violating the Physical
Fitness Act.
WHEREFORE, IT IS ORDERED that:
A. Respondents Core Fitness, LLC and Lantz will
comply with all provisions of this Consent Order, as set out in paragraphs (a),
(b), (c), (d), (e) & (f), above, immediately upon the signing of this
document by both parties; and
B. Special deposit bond #FS 7577320 issued by Great
American Insurance Company in the amount of $25,000.00, and made payable to the
Administrator for those affected members of the public who have causes of
action against Respondents for violation of S.C. Code Ann. §§44-79-10 et
seq. be assessed in full, and such monies held for the statutory period
until Petitioner can determine all consumers who may have been affected during
the term of bond #FS 7577320.
AND IT
IS SO ORDERED
______________________________
CAROLYN C. MATTHEWS
Administrative Law Judge
September
14, 2006
Columbia,
South Carolina
We
Consent:
____________________________ __________________________
Helen
Fennell J.
Matthew Dillon, Esq.
Attorney for Petitioner SCDCA 222
W. Coleman Blvd.
P.O.
Box 5757 Mt. Pleasant, SC
29464
Columbia,
S.C. 29250 (843) 216-0414
(803)
734-4241 For
Respondents Core Fitness, LLC and Lantz
Columbia, South Carolina Mt.
Pleasant, South Carolina
________________, 2006 __________________,
2006
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