People of the State of Colorado vs Jeff Mason and Boulder Marathon LLC

INTRODUCTION

1. This is a civil action brought by the 20th Judicial District District Attorney pursuant to the Colorado Consumer Protection Act, C.R.S. 6-1-101 et seq., C.R.S. (2014)

(CCPA) to enjoin and restrain Defendants from engaging in certain unlawful and deceptive trade practices, for statutorily mandated civil penalties, for disgorgement,

restitution, and other relief as provided in the CCPA.

2. Defendants Boulder Marathon, LLC and Jeffrey Mason own and manage two annual Boulder marathon events. The Defendants advertised and accepted runners payments for the October 2013 Boulder Marathon (2013 Marathon) and the October 2014 Boulder Marathon (2014 Marathon). Defendants cancelled the 2013 Marathon but offered no refunds, instead offering to transfer the registration to the 2014 Marathon.

Two weeks before its scheduled date, Defendants cancelled the 2014 Marathon but

again offered no refunds. In total, Defendants collected approximately $198,891.00 in

entry fees for which runners have received no services. Defendants engaged in

deceptive trade practices when Defendants failed to obtain the governmental licenses

or permits required to run the 2014 Marathon, failed to provide services contracted for

with consumers, and made false representations regarding those services including

citing the 2013 flood as a basis for cancellation of the 2014 Marathon. Defendants actions have caused injury to 1,839 paying runners.

DISTRICT COURT, BOULDER COUNTY, COLORADO

Court Address: Boulder County Justice Center

1777 Sixth Street

Boulder, Colorado 80302

Court Phone: (303) 441-3750

PEOPLE OF THE STATE OF COLORADO

vs.

JEFFREY MASON and THE BOULDER MARATHON, LLC

Defendants

COURT USE ONLY

Attorney Name: Stanley L. Garnett, Reg. No. 12282 Case No:

Division: District Attorney

Felisa R. Marcia, Reg. No. 41676

Deputy District Attorney

Boulder County Justice Center

1777 Sixth Street

Boulder, CO 80302

Attorney Phone: (303) 441-3700

Attorney Fax: (303) 441-4703

Attorney E-mail: [email protected]

COMPLAINT

PARTIES

3. Stanley L. Garnett is the duly elected District Attorney of the Twentieth Judicial District and has express authority under C.R.S. 6-1-103 to enforce and prosecute

violations of the CCPA.

4. Defendant Boulder Marathon, LLC is a Colorado Limited Liability Company formed on April 10, 2008, with a principal place of business at Post Office Box 47, Boulder,

CO 80306, and a registered agent, Charles Martien, LLC, at 1818 16th Street, Boulder,

CO 80302.

5. Defendant Jeffrey Mason is the owner and managing member of Boulder Marathon LLC. Mr. Mason currently resides at 2600 S. Rock Creek Parkway, Apartment 21-

204, Superior, Colorado, 80027.

ACTS OF AGENTS

6. Whenever reference is made in this Complaint to any act or practice of Defendants, such allegation shall be deemed to mean that the principals, owners, employees,

independent contractors, agents, and representatives of such Defendants performed,

directed, or authorized such act or practice on behalf of said Defendants, while

actively engaged in the scope of their duties.

JURISDICTION & VENUE

7. Pursuant to C.R.S. 6-1-103 and 6-1-110, this Court has the jurisdiction to enter appropriate orders prior to and following an ultimate determination of liability.

8. The violations alleged herein occurred, in part, in Boulder County and the individual Defendants reside in or have their principal place of business located in Boulder

County. Therefore, venue is proper under C.R.S. 6-1-103 and Colo. R. Civ. P. 98

(2014).

RELEVANT TIMES

9. The conduct that gives rise to the claims for relief contained in this Complaint occurred between September, 2013 and the present. This action is timely brought

pursuant to C.R.S. 6-1-115 because it is brought within three years of the date on

which Defendants engaged in false, misleading, and deceptive acts which violate the

CCPA, and the Defendants continue to engage in false, misleading acts and practices

which violate the CCPA.

PUBLIC INTEREST

10. Through the unlawful practices of their business or occupation, Defendants have deceived, misled, and financially injured consumers in Colorado. Further, Defendants

have taken market share from companies who do not engage in deceptive trade

practices. Therefore, these legal proceedings are in the public interest and are

necessary to safeguard citizens from Defendants unlawful business activities.

PERSONAL LIABILITY

11. This action is brought against the corporate entity and against Defendant Jeffrey Mason, individually.

12. Defendant Jeffrey Mason has at all relevant times directly controlled, authorized, approved and cooperated or participated in the unlawful conduct by Defendant

Boulder Marathon, LLC.

GENERAL ALLEGATIONS

I. Background on Defendants Business

13. Defendant Mason purchased the Boulder Marathon in 2007. As part of the purchase, Defendant Mason gained the rights to run two races annually in Boulder, the Boulder

Spring Half-Marathon and the Boulder Marathon.

14. The process of managing marathons includes, among others,

selecting a date and location for the event,

developing the budget,

obtaining event insurance,

advertising and marketing the marathons in print, voice, and web media,

managing the marathon website,

accepting entries,

processing entries,

managing payment processors,

certifying the course with USA Track & Field (USATF),

garnering governmental permits and authorizations,

noticing impacted residents,

soliciting, educating and managing volunteers,

distributing race day materials,

coordinating all race day emergency services,

coordinating all race day medical services,

coordinating all post-race services,

coordinating all hospitality services,

certifying race winners,

providing race prizes,

providing post-race cleanup, and

making payment for all services provided by outside agencies and contractors.

15. Prior to any marathon, Defendants are required to obtain special event permits. To do so, Defendants file applications with each permit issuer, pay an application fee and pay

the issuers costs of event.

16. Permit issuers for Defendants events include, but are not limited to, the Boulder Reservoir (City of Boulder Property), Boulder County (for use of any road in

unincorporated Boulder County), Boulder County Sheriffs Office (for law enforcement staffing) and Colorado State Patrol (for state highways that require any

type of road closure, restriction, or may create a significant impact to the motoring

public).

17. Defendants have obtained permits for prior events and were aware of the permitting process.

II. Defendants Deceptive Trade Practices

18. In 2013, Defendants advertised and collected entry fees for 1,051 runners for the 2013 Marathon. Entry fees ranged from $80.00 to $121.00 per runner.

19. Total revenues for the 2013 Marathon were approximately $124,000.

20. On or about September 14, 2013, Defendants cancelled the 2013 Marathon citing post-flooding issues. Defendants did not refund entry fees, instead Defendants offered to

rollover registration to the 2014 Marathon or the 2015 Boulder Marathon (2015

Marathon).

21. Three times in 2013 Defendant Boulder Marathons bank account closed with a negative balance.

22. On or about October 31, 2013, Defendant Boulder Marathons bank account had a balance of -322.03.

23. On or about December 31, 2013, Defendant Boulder Marathons bank account reflected a balance of $5.68.

24. In 2013, Defendant Jeffrey Mason had two personal bank accounts.

25. On or about May 15, 2013, Defendant Jeffrey Mason closed one account with a balance of -$1,301.61.

26. Defendant Jeffrey Masons bank wrote off the negative balance of $1,301.61.

27. On or about August, 2013, Defendant Jeffrey Mason opened his second personal account.

28. On or about September 18, 2013, Defendant Jeffrey Masons second account carried a balance of $2,436.15.

29. On or about November 19, 2013, Defendant Jeffrey Masons second account carried a balance of -$304.17.

30. On or about December 17, 2013, Defendant Jeffrey Masons second account carried a balance of $181.00.

31. In 2014, Defendants advertised the 2014 Marathon.

32. As of September 14, 2014, 635 runners from the 2013 Marathon had rolled their registration over to the 2014 Marathon and 788 new runners had registered.

33. As of September 14, 2014, the total number of registered runners for the 2014 Marathon was 1,423.

34. As of September 14, 2014, 416 runners from the 2013 Marathon remain unregistered.

35. In 2014, Defendants collected new entry fees from 788 runners. Entry fees ranged from $80.00 to $120.00 per runner, for a total of $74,891in new revenue.

36. On or about September 14, 2014, Defendants cancelled the 2014 Marathon via a posted statement on http://bouldermarathon.com/29.html and to some runners via

email.

37. Defendants stated that the task of producing the 2014 marathon simply became impossible because of:

the death of a runner in the Spring 2014 Half; and

the hurdles and challenges of the 2013 flooding.

38. On or about September 26, 2014, Defendants issued a second statement on http://bouldermarathon.com/29.html revising their reasons for cancellation.

39. In the September 26, 2014 statement, Defendants admitted the following:

Defendants had been unable to re-design, measure, and secure certification for the new race course from USATF in time to run the 2014 Marathon;

Defendants had been unable to evaluate and create a new medical plan in time to run for the 2014 Marathon;

Without the race course and medical plan, the permits will not be issued; and

Obtaining permits was impossible.

40. Additionally, Defendants website makes false and misleading claims the 2014 Marathon is a USATF/ Colorado State Championship Event and an official qualifier

for the Boston Marathon. In fact, the 2014 Marathon course was not certified by

USATF and could not serve as a qualifier for the Boston Marathon.

41. Defendants website makes false and misleading claims that Boulder County and the City of Boulder are sponsors of the Boulder Marathon. The City and County do not

sponsor Defendants marathons.

42. Defendants website makes false and misleading claims of Support of Many Boulder and State of Colorado Agencies. The local and state agencies have permitting and logistical requirements that involve them in the marathons.

43. Defendants have deceived 1839 registrants for the 2013 Marathon and the 2014 Marathon through false and misleading advertising and their failure to obtain

governmental licenses or permits required to perform the services contracted for with

runners.

44. At all times prior to September 26, 2014, Defendants were aware of the lack of permits, medical plan, course measurement, USATF course certification, City of

Boulder sponsorship and Boulder County sponsorship.

45. Defendants advertising resulted in runners paying total registration fees of approximately $198,891 for the 2013 and 2014 Marathons.

46. Defendants Cancellation/Refund policy includes a no refund or transfers clause.

47. Consumers understood the Cancellation/Refund policy to mean that a runner could not cancel registration and obtain a refund nor could a runner transfer registration to

another runner.

48. Plain language of the Cancellation/Refund policy waives refunds in the event of an act of god or any other kind of unforeseen circumstance.

49. To date, Defendants have made no refunds to the 2013 or 2014 registrants, but instead offered to rollover entries to a 2015 Marathon.

50. From January through August, 2014, Defendant Boulder Marathons bank closing statements reflected balances under $500.00.

51. On or about August 29, 2014, Defendant Boulder Marathons bank account had a balance of $583.26.

52. On or about June 17, Defendant Jeffrey Masons personal bank account had a balance of -$778.04.

53. On or about July 2014, Defendant Jeffrey Mason closed his personal bank account.

54. On or about July 31, 2014, Defendant Jeffrey Masons bank wrote off the negative balance on the account.

55. Defendants estimated 2014 Marathon expenses at $64,620.

56. Defendants had no cash on hand for estimated post marathon expenses of $22,000.

57. Defendants were relying on late entry fees over the last three weeks of registration for the 2014 Marathon to produce a financially successful event.

58. Defendant Mason stated in an email to Boulder County that cancelling the 2014 Marathon would decimate the business and completely destroy [his] livelihood.

59. Defendants lack the financial ability to honor their commitments to 1,839 runners who have paid their fees in 2013 and 2014.

60. Defendants intend to begin offering registration to 2015 marathons.

61. Defendants have no financial reserves to allocate to a 2015 marathon.

62. Defendants have failed to pay agencies in a timely manner.

63. Defendants have been required to make up-front payments to agencies because of failure to pay bills in a timely manner.

64. Defendants are relying upon new revenue in 2015 to fund commitments made in 2013 and 2014.

65. As of September 8, 2014, Boulder County was requiring Defendants to sign a performance contract because of their past inability to meet deadlines.

66. As of September 8, 2014, Defendants were not currently eligible for any special events permits in 2015.

67. Numerous consumers who have registered for 2013 and 2014 races have sent emails, submitted written complaints and made telephone complaints to the Boulder County

District Attorney requesting refunds of their entry fees.

68. Consumers complain of the failure to refund entry fees, the late notice of cancellation, and dissatisfaction with the offer to roll registration to 2015.

69. Consumers uniformly report that they feel deceived by Defendants.

70. Consumers are not confident of Defendants ability to execute any future event.

71. Many more consumers, being unaware of the Defendants financial status and other material information regarding Defendants ability to provide services, will likely be induced to register for a future event.

FIRST CLAIM FOR RELIEF

(Refuses or fails to obtain all governmental licenses or permits required to perform the

services as agreed to or contracted for with a consumer in violation of C.R.S.6-1-105(z).)

72. Plaintiff incorporates herein by reference all allegations contained in paragraphs 1-71 of this Complaint.

73. Through the conduct described in this Complaint and in the course of their business, vocation, or occupation, Defendants have refused or failed to obtain all governmental

licenses or permits required to perform the services as agreed to or contracted for with

consumers.

74. By means of the above-described conduct, Defendants deceived, misled, and unlawfully acquired money for Colorado consumers.

SECOND CLAIM FOR RELIEF

(Knowingly makes a false representation as to affiliation, connection, or association with

or certification by another in violation of C.R.S. 6-1-105(c).)


76. Through the conduct described in this Complaint and in the course of their business, vocation, or occupation, Defendants have knowingly made false representations as to

affiliation, connection, or association with or certification by USATF, the City of

Boulder, the County of Boulder, and State of Colorado agencies.


THIRD CLAIM FOR RELIEF

(Knowingly makes a false representation as to the characteristics of services or as to the

sponsorship, approval, status, affiliation, or connection of a person therewith in violation of

C.R.S.6-1-105(e).)


79. Through the conduct described in this Complaint and in the course of their business, vocation, or occupation, Defendants have knowingly made false representations as to

sponsorship, approval, status, affiliation, or connection of USATF, the City of

Boulder, the County of Boulder, and State of Colorado agencies.


FOURTH CLAIM FOR RELIEF

(Fails to disclose material information concerning services which information was known

at the time of an advertisement if such failure to disclose was intended to induce the consumer to

enter into a transaction in violation of C.R.S.6-1-105(u).)


82. Through the conduct described in this Complaint and in the course of their business, vocation, or occupation, Defendants have failed to disclose material information

concerning services which was known at the time of advertising. Such failures to

disclose material information were intended by Defendants to induce consumers to

enter into a transaction with Defendants.

83. After stating or implying, through internet advertisements and other media, that they had all required approvals, certifications, permits to provide the services contracted for

and affiliations with required organizations, Defendants failed to disclose that they had

not yet received the required approvals, certifications, permits and approvals to run the

2014 Marathon.


RELIEF REQUESTED

WHEREFORE, Plaintiff requests injunctive relief against Defendants as may be

necessary to prevent the use or employment of deceptive trade practices in violation of the

Colorado Consumer Protection Act, 6-1-101 6-1-112, relating to marathon races and the other conduct described herein.

In addition, Plaintiff prays for judgment against Defendants, personally, jointly and

severally, for the following relief:

A. An order declaring Defendants conduct violates the Colorado Consumer Protection

Act, including sections 6-1-110(1)(z), 6-1-110(c), 6-1-110(e), and 6-1-110(u);

B. A judgment pursuant to C.R.S. 6-1-110(1) against Defendants to completely compensate or restore to the original position of any person injured by means of

Defendants deceptive practices;

C. An order enjoining Defendants from engaging in any deceptive trade practices as defined in and proscribed by the CCPA and as set forth in this Complaint;

D. Additional appropriate orders necessary to prevent Defendants continued or future deceptive trade practices;

E. An order for civil penalties pursuant to C.R.S. 6-1-112(1)(a), for civil penalties payable to the general fund of this state in an amount not to exceed two thousand

dollars for each such violation of any provision of the Colorado Consumer Protection

Act with respect to each consumer or transaction involved not to exceed five hundred

thousand dollars for any related series of violations;

F. An order pursuant to C.R.S. 6-1-112(1)(c) for civil penalties payable to the general fund of this state of not more than ten thousand dollars for each violation of any

provision of the Colorado Consumer Protection Act with respect to each elderly

person;

G. An order required pursuant to C.R.S. 6-1-113(4) requiring Defendants to pay the costs and attorney fees incurred by the District Attorney;

H. Any such further relief as the Court may deem just and proper to effectuate the purposes of the Colorado Consumer Protection Act.

Dated this 23rd

of December, 2014.

STANLEY L. GARNETT

District Attorney

s/Stanley L. Garnett

____________________________

STANLEY L. GARNETT, Reg. No. 12282

District Attorney

FELISA R. MARCIA, Reg. No. 41676

Deputy District Attorney

Consumer Protection Division

Attorneys for the Plaintiff

Documents

People of the State of Colorado vs Jeff Mason and Boulder Marathon LLC