Howard health club that never opened ordered to repay fees

January 10, 1991|By Michael J. Clark | Michael J. Clark,Howard County Bureau of The Sun

An Ellicott City health club that sold memberships but never opened must pay restitution to about 450 people who were not fully reimbursed for fees they paid, a Howard County judge ruled yesterday.

Circuit Judge James B. Dudley appointed attorney Barry Silber as a special master to determine how much World Gym & Family Fitness Center Inc. owes to individuals who paid part or all of membership fees ranging from $400 to $1,000.

Steven Sakomota-Wengel, an assistant attorney general who handled the case, said the company owes about $135,000.

Judge Dudley said the firm engaged in unfair and deceptive trade practices by selling memberships worth more than the $50,000 surety bond it posted with the state to protect those who joined the health club.

He said those liable for the restitution are World Gym and its owner, Philip Porter, as well as the company's management agent, Fitness Management Inc., and its officers, Anthony Ferraro, Scott Rybak and Craig Witz. Mr. Sakomota-Wengel said Mr. Porter has filed for bankruptcy, and the state has filed a complaint in federal bankruptcy court seeking a finding that Mr. Porter be made responsible for the entire debt owed club members.

In addition, he said the attorney general's office will be trying to find out what assets are available from the other defendants.

"We are pleased the judge found in our favor," said Mr. Sakomota-Wengel. "It is important that health clubs take seriously the legal requirement to comply with the state health club law and the bonding requirement, which protects the consumers."

He said that the $50,000 surety bond posted by World Gym was used to make partial payments to 379 health club members.

Judge Dudley was particularly critical of Mr. Porter paying himself $19,614 from World Gym receipts "by declaring himself to be a preferred creditor to the exclusion of others."

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