The Case of Handing, et al, v. Contours Express, LLC: A Contemporary Story of David and Goliath
Late in 2006, I was sitting in my office. My paralegal/assistant at the time (I’ll call her Marci), had gone off the deep end and stopped showing up for work. I was scrambling to do all the administrative stuff she did while also handling my caseload. I put a help wanted ad in the paper and was bombarded with resumes. I picked out ten or so and called them to come in for an interview. No one I interviewed struck me as the type of person who would be a good match. Frankly, I wondered how some of them survived in life. I hate hiring assistants and really wanted to find someone who would be there for the next 15 or 20 years. I was really getting worried. Then, this young lady who had been working for a CPA firm in the building approached me and asked if she could work for me. I guess she thought law was more exciting than accounting. Being a nice guy, and really needing some help, I agreed to let her work part time. I knew she was in college and from my observations, she came in, did her work, and left with no drama. After having to constantly talk Marci off the ledge, it seemed like she would be a perfect fit. The problem was that the building was full and there was no room to put her. We set up a small table in my office with a computer and she worked from there.
At the time, I was just starting to look at a case involving a client who had purchased a franchise of Contours Express, LLC. Contours was one of those women’s-only gyms that had a 30 minute circuit. It was loosely based on the Curves model. My client had lost over $40,000 in her franchise and the amounts kept rising. Ultimately, she had made the tough decision to walk away before she lost everything. However, her pain wasn’t over. She got sued by the landlord and had a judgment entered against her. The more I investigated, the more I was convinced that something had gone terribly wrong with this franchise.
After my new assistant, Kelly, had started working,we started looking at other complaints that were being made against Contours. We found some blog sites in which the franchisees were making complaint after complaint. Somehow, word spread that we were investigating the franchise and we began to get calls. I spent over two full months talking to franchisees all over the country. Kelly, who i now refer to as Ms. Organization, put together a questionnaire that we used so that we were consistent in our interviews. The stories were hauntingly familiar. Most of the franchisees were middle-aged women or younger who were leaving other careers to start their own business. They were all outgoing, enthusiastic and were looking to help other women while also earning a living. They invested retirement accounts, borrowed against their houses, borrowed from family and whatever else they needed to get their businesses up and running. They followed the so-called “proven systems” that the franchisor allegedly had in place. However, they all found out quickly that no matter how hard they worked, and how much they sacrificed, the “proven system” did not exist and they were headed to failure. When they went to the franchisor for help, they were either ignored or told they were not using the “proven system.” It got to the point where they all felt like they were abandoned.
Kelly and I both saw the common themes. I made the decision at that point that the case would be about more than one franchisee. The case was going to be about a “proven system” that never existed and fraud used by the franchisor to get the clients to sign on the dotted line. I spoke to over 100 of the franchisees. In the end, we had 54 franchisees as clients. In March of 2007, while Kelly and I were still sharing the same office, we filed the suit in Missouri state court. I had handled large cases before, but this one was massive. We were suing a company with millions of dollars in revenue that had been identified by Entrepreneur magazine as one of the fastest growing franchises. The franchisor was controlled by the Pilot Group, a private equity firm in New York that was founded by the former CEO and COO of AOL and later AOL/Time Warner. These guys were billionaires. I had no idea what to expect. However, my clients had shown such confidence in me that I knew I would work as hard as I could not to let them down. We weren’t going down without a fight.
Early in the case, the CEO of the Contours sent an email to the franchisees which basically said we were small potatoes and that the Pilot Group lawyers would take care of me. The worst thing anyone can do is underestimate your opponent. However, it gave me motivation and a more of a drive to prove that my clients deserved to be compensated. The years rolled by as the depositions, motions, and other legal maneuvers continued. Kelly finally got her own office and we moved into another part of the building with more space. The files continued to grow and grow and grow. Eventually, I knew that it was more legal work than 1 lawyer could handle while still trying to maintain a practice. The clients had chipped in some money early on which covered some of the expenses. However, as the case grew larger, that money was gone. I did not feel right asking these clients, who had already lost so much, to contribute more money. We switched to a contingent fee which meant that I had to keep money coming into the practice to survive. There were other lawyers that I brought on to help. However, it was always Kelly’s baby and mine too.
We finally got to a position where we could try the case. The judge had us choose a small group of franchisees whose cases would be tried start to finish. We chose eight plaintiffs who had bought into the franchise in the early days. We flew them in, they testified, and then Contours would present its defense. After almost two weeks, the cases, which were being decided by the judge, were completed. After having the cases under consideration, the Judge entered her judgment. She found in favor of the Plaintiffs on every count. She also found against Contours on their counterclaims against the Plaintiffs. My clients were fully vindicated.
It is impossible to accurately portray the blood,, sweat and tears that went into this case. So much has happened in the five years since it was filed. Kelly is no longer my assistant. She is now my paralegal. She has exceeded my expectations of her by leaps and bounds. She has become a wife, a mother for the second time, and the person I depend on to keep me on track as the practice has grown. For me, this case has been the most difficult of my career, but also the most rewarding. For the month before the trial, I basically lived in my office. There were many nights I slept on the couch in my office. My wife would see me when I went home to shower and change clothes. I put everything I had into this case because these clients had put their faith and trust in me. I know each one of them and they are all now friends for life.
It has been a privilege to represent these clients. Even when I would grow frustrated at the delays, they were always there to encourage me. Many of these people have lost everything. Some have lost homes, marriages, friendships. Some had to file for bankruptcy. One client took her own life. All because of the faulty franchise system sold to them. Yet they continued to show optimism and hope that someday someone would tell them it was not their fault. That day has come. I am happy with the outcome and will enjoy it for a day or so. However, there are many more companies out there taking advantage of people. I have found my calling. My part in this world, no matter how small it may be, is to help people who want their day in court. The people that want their voices heard but are up against companies who have so much money that they don’t care about the little people who got them all the money. These companies only respond if you can hurt their bottom line. They need to see that their franchisees are not intimidated and that their attorney will fight relentlessly until the end.