Plaintiff commenced this Commercial Claims action to recover $5,000.00 for services allegedly provided to defendant pursuant to a health club services agreement. Defendant counterclaimed for the return of his $126.00 deposit on the agreement. A trial was held on January 30, 2007. The Court makes the following findings of fact:

Plaintiff, under the name of "Steuben Athletic Club", and defendant entered into a health club services agreement on or about October 3, 1997. The agreement stated the following in bold type: "The term of this contract is one year. This contract will renew automatically each year, without notice, on the Anniversary Date', unless Notice of Cancellation is received by either you or the Club at least thirty (30) days prior to the Anniversary Date. The Notice must be dated, signed and sent certified mail."

Defendant paid $126.00 as a deposit on the contract and continued to regularly pay plaintiff the $42.00 monthly fee through February 2005. On March 1, 2005, defendant submitted to plaintiff a Notice of Cancellation of the contract, which he termed a "letter of resignation" as a member of the Steuben Athletic Club. While defendant ceased his use of the club's facilities, plaintiff continued to bill defendant for the monthly fees, as the terms of the contract only allowed termination on the [*2]contract's anniversary date (October 1st). Plaintiff is seeking payment for the $42.00 monthly fee for the seven months from March 1, 2005 - October 1, 2005 ($294.00).

Section 1804-A of the Uniform City Court Act sets forth the procedure to be followed when conducting a Commercial Claims trial. The Court is required "to do substantial justice between the parties according to the rules of substantive law..."(U.C.C.A. § 1804-A; See Also, Blair v. Five Points Shopping Plaza, Inc., 51 AD2d 167, 379 NYS2d 532 [3d Dept 1976]). The party bringing a claim, however, does bear the burden of proving his/her case. The claimant must produce enough evidence to allow the Court to rule in that party's favor.

Health club services are governed by Article 30 of the New York General Business Law. General Business Law §623(2) states in pertinent part that "[n]o contract for services shall provide for a term longer than thirty-six months [and no] contract for services shall require payments or financing by the buyer over a period in excess of thirty-seven months....". Mr. McGuinness's uninterrupted relationship with the Steuben Athletic Club covered the period from October 1997 to at least March 2005, which is clearly in excess of the statutorily prescribed thirty-six month limit. However, after the initial year of the contract, the relationship was extended by means of the automatic yearly renewal contained in Mr. McGuinness's membership contract. Thus, the question is whether the renewals constitute separate contracts or one single agreement.

In Nadoff v Club Central (203 NY Slip Op 51071U; 2003 NYMisc. LEXIS 854), the Nassau County District Court dealt with facts very similar to these. In Nadoff, defendant had entered into a health club services agreement which was automatically renewed on a monthly basis following the initial 11 month term. The District Court held that since defendant was required to take affirmative action to terminate the membership agreement that would otherwise continue automatically, the agreement fell squarely within the "single agreement" category and thus provided for a term that exceeded the statutory maximum by more than a year. The same is true here where the contract in question provided that it would automatically renew for a one year period unless defendant or plaintiff took the affirmative action of sending a "Notice of Cancellation" to the other by certified mail prior to the anniversary date of the contract. Accordingly, the parties' contract falls within the "single agreement" category, and thus the contract violates the thirty-six month term provision found in Gen.Bus. Law §623(2).

General Business Law § 627(1) states that "[a]ny contract ... which does not comply with the applicable provisions of this article shall be void and unenforceable as contrary to public policy." Since plaintiff's health club services agreement did not comply with the provisions of Article 30 of the Gen. Bus. Law, it is void and unenforceable as contrary to public policy. Therefore, plaintiff's action is dismissed on this ground. Defendant's remaining defenses thus need not be addressed.

On defendant's counterclaim, plaintiff is liable to defendant for the return of his $126.00 deposit. Therefore, judgment shall enter in favor of the defendant and against plaintiff in the sum of $126.00, together with the filing fee of $5.39 paid by defendant, for a total judgment of $131.39.

So ordered.

Dated at Albany, New York

March 30, 2007

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Helena Heath-Roland [*3]

Albany City Court Judge