New Jersey Division of Consumer Affairs Obtains Final Judgment Against North Jersey Prom Dress Company; Prepares to Disburse Full Restitution Funds to Consumers
NEWARK – Attorney General Jeffrey S. Chiesa and the New Jersey Division of Consumer Affairs have obtained a final default judgment against The Red Carpet Pageant and Prom, a North Jersey dress shop that abruptly ceased operations last spring in the middle of prom season – leaving many young women without the dresses for which they had paid in advance, without refunds, and scrambling to make new arrangements for their proms.
"This judgment brings victory to the consumers who were defrauded after they paid large, up-front deposits for dresses that were supposed to be ready in time for the prom, a major event in an adolescent's life," Attorney General Chiesa said. "The Division of Consumer Affairs took every possible step to put dresses in the hands of their rightful owners before their big events. Today we are providing full monetary restitution to those consumers who have not yet obtained their merchandise or their refunds."
The judgment enables the Division of Consumer Affairs to provide $2,900 in restitution to the 11 consumers who were adversely affected by the actions of The Red Carpet Pageant and Prom LLC, located in Wayne, and who had not received refunds or their actual dresses or formal wear. The money represents the full amount of restitution due to those consumers. It will be taken from the proceeds of a court-ordered auction, held in August 2012, of the store's unclaimed dresses and other assets. The remaining funds from that auction, approximately $6,000, will serve as partial payment to the court-appointed receiver.
The judgment also orders Red Carpet and its owners/managers, Deptford residents Patricia and Michael Dowling, and a related company, Prom and Pageant Place LLC, also owned and operated by Patricia Dowling, to pay $110,000 in civil penalties, $26,000 for the State's attorneys' fees and investigative costs; and $18,000 to Greenbaum, Rowe, Smith & Davis LLP, the law firm that acted as the court-appointed receiver.
In addition, Patricia Dowling is permanently barred from managing or owning any business organization within the State of New Jersey, and all defendants are permanently enjoined from advertising or selling pageant dresses, prom dresses, or other formal wear.
"The State of New Jersey will not tolerate businesses that violate the law by making false promises to consumers, then failing to provide the goods and services consumers have paid for," said Eric T. Kanefsky, Acting Director of the New Jersey Division of Consumer Affairs. "This action stands as a warning to anyone seeking to defraud New Jersey's consumers through dishonest business practices. We will use every available resource to hold you accountable and put money back into the hands of those who have been cheated."
The State Division of Law, acting on behalf of the Division of Consumer Affairs, filed suit against Red Carpet and its owners in June 2012. The company had closed its doors and ceased business operations the previous month. Consumers had paid large, up-front deposits for prom dresses and other garments well in advance of their prom dates. Some consumers paid deposits amounting to 100 percent of the price of their dresses. When the business closed, the consumers were unable to obtain the merchandise they had paid for, and unable to obtain refunds. As consumer complaints mounted, Patricia Dowling was accused by Wayne Township Police of filing a false report of a burglary at the dress shop. The State's lawsuit accused Red Carpet, Prom and Pageant Place, Patricia Dowling, and Michael Dowling of violating New Jersey's Consumer Fraud Act by engaging in unconscionable commercial practices, false promises, misrepresentation, and/or deception.
On June 6, the day after the State filed its lawsuit, the Division of Consumer Affairs obtained a court order that authorized the State to change the locks at the Red Carpet store, impound all merchandise and records in the store, and begin returning prom dresses to their rightful owners. The Division returned a total of seven dresses to consumers who were able to prove the specific garments belonged to them.
On August 22, a court-appointed auction was held of all unclaimed dresses and remaining merchandise left at the store. The auction generated a total of $14,360 from which $5,411 was subtracted for expenses. The remaining $8,949 has been held in the receiver's trust account. Thanks to the final judgment, obtained this week, the Division of Consumer Affairs is now able to pay $2,924.99 to the 11 consumers who are still awaiting refunds. The remaining $6,024.01 will be paid to Greenbaum, Rowe, Smith & Davis for its services as the court-appointed receiver. The rest of the law firm's $18,041.44 balance is to be paid by the defendants under the final judgment.
Investigator Donna Leslie, of the Division of Consumer Affairs' Office of Consumer Protection, led this investigation along with Investigators Oscar Mejia and Ediz Laypan. Deputy Attorney General Nicholas Kant is representing the State in this action.
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file a complaint with the New Jersey Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200.
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