Madison - St. Clair Record

Thursday, November 14, 2019

Legal dispute between personal fitness company, facility operators escalates

Lawsuits

By John Breslin | Aug 26, 2019

Madisonfitness

BELLEVILLE -- A legal dispute between Dynamic Fitness Management and Club Fitness has escalated with both parties suing each other in separate courts. 

The dispute between Dynamic Fitness Management (DFM) and Club Fitness, or JCTC, which operates 24 facilities in Illinois and Missouri, centers on allegations by both sides that neither stood by the terms of contracts dating back 15 years.

Although tension has been brewing for some years, the legal suits only began following the death of the owner of Club Fitness, John Crocker, on May 25. 

Club Fitness filed suit in Madison County Circuit Court in June, alleging the personal training company under-reported the amount of revenue it was bringing in under the terms of the contracts. DFM countered with a motion to dismiss, on grounds that the name on the complaint, Club Fitness, was not the name of the actual operating company, which was JCTC.

More recently, DFM, whose main shareholder is Chad Ramley, filed suit in St. Clair County Circuit Court last month, alleging the club had breached the contract in numerous ways over the years, and that the day after Crocker's funeral, the employees were kicked out of each of the clubs. This allegedly was in breach of a contract running until 2021, the suit states.

Mike Haeberle, an attorney for DFM, with the Patterson Law Firm in Chicago, told the Record, "This was breach of agreement … they failed to live up to, make certain payments, provide certain, did not contribute certain things."

Among other allegations in the complaint, DFM is accused of paying out substantial monies to speculate on franchising opportunities, which were abandoned, and paying for staff to bolster the Club Fitness brand.

On the pending action in Madison County, Haerberle alleged there is a motion to dismiss on the numerous grounds, including that the plaintiffs named the wrong party in the complaint.

The two parties first agreed on a deal in 2004, which gave DFM exclusive rights to provide personal training to Club Fitness members at all current and future facilities. DFM, in its complaint, argues it was a good relationship for many years, one that included a personal friendship between Ramley and Crocker.

However, DFM alleges that relationship began to sour in 2017, as Crocker's health began failing and other employees began to take an aggressive stance against the exclusive contract.

The complaint identifies one employee in particular, although it does not name him as a defendant, who allegedly plotted to take over the personal training at all Club Fitness sites, and attempted to secure propriety information on clients.

For its part, JCTC alleges DFM raked in revenue on the back of substantial investments in expanding the number of facilities, and improving them. It did not declare all the revenue, denying JCTC 10 percent and then 12 percent, the suit states.

Dynamic Fitness seeks interest, attorney fees and all necessary and just relief. It is represented by attorneys Thomas Patterson, Michael Haeberly and Sarah Dunkley of Patterson Law Firm in Chicago. 

St. Clair County Court Case number 19-L-0534

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