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Painting a lawsuit

A Virginia company is facing a lawsuit for allegedly duping Ohio college students into thinking they could easily make a quick buck over the summer.

Ohio Attorney General Jim Petro has sued Maxco Development, Inc. – which employs students to perform painting estimate services and does business as University Painters – because he said the company offers no realistic promise of profit and violates 14 Ohio laws.

According to the lawsuit, students sign a contract thinking they will learn to manage their own painting business and earn between $8,000 and $170,000 – but instead they often end up in debt.

Upon signing the contract, students agree to sell at least $14,500 in painting services, and to repay the company for marketing tools worth $3,000. Signing on the dotted line also means they agree to pay University Painters $5,000 if they leave the company, are fired for any reason or fail to meet their sales goals.

The attorney general’s office believes students sign the 44-page contract without fully understanding its stipulations.

Adam Hickey, a senior at BGSU who worked as an independent sales manager for University Painters in summer 2002, said the company didn’t provide him with enough information before he signed his contract.

“They told you about the potential money you could make – they never told you about the consequences of not making enough money,” he said, adding his previous research had revealed nothing negative about the company.

Darrell Kendall, a former University Painters’ employee who graduated from BGSU in 2005, said he was given the contract on a Friday afternoon and told that he had until Monday morning to have a lawyer look at it. According to Ohio law, he should have been given 10 days to examine the contract.

Once under contract, the students began going door to door in search of painting jobs, but both said they faced setbacks.

According to Hickey, hail storms in his hometown of Columbus made contractors and painters hard to find. (The company requires its sales managers hire their own painting crews.)

Just a few weeks after he hired a professional painter deemed acceptable by University Painters, the hired help was fired by the company when he complained about a late paycheck.

As a result, Hickey was left without a painting crew to complete several jobs he’d scheduled in previous weeks.

After seeking out painters all over the city of Columbus, Hickey said he was told through the mail his contract had been terminated, and he would owe the company $5,000.

He later learned University Painters sent their other workers to complete jobs he’d secured.

“On paper I failed, but I was in the position to succeed if I’d been given the resources,” Hickey said.

Kendall said the system worked poorly in northeast Ohio because few painters were available to work for the money University Painters offered, and potential customers could find better deals elsewhere.

“Our prices were already outrageous compared to other companies in the area,” he said.

But Ryan Murphy, former University Painters employee and senior at Duquesne University in Pittsburgh, Penn., believes the complaints aren’t valid.

“The company doesn’t make any extra money if someone’s terminated,” he said. “They want people to succeed.”

Murphy, who called The BG News after University Painters was contacted about this article last week, said his work with the company helped him make $106,000 in sales last year. In 2004, he said he was honored as the Rookie Student of the Year.

He said students who aren’t successful with the business aren’t working hard enough.

“I succeeded because I worked at it,” he said.

In a written statement, Maxco Development, Inc. president Joshua Jablon, echoed the idea that success comes to those who work for it.

He acknowledged that while the job opportunity wasn’t for all students, it is a unique business experience for those who are willing to work.

“The managers who don’t succeed are the ones who decided not to devote the time and energy necessary to succeed,” Jablon said in the statement. “It’s no different than the students who succeed in the classroom and those who don’t.”

The trial is set to begin in March 2007 in Franklin County court but Mark Anthony, Petro’s spokesman said the state is anxious to put University Painters on trial.

“We hope to prevent complaints in the future,” he said. “The trend we’ve seen with this company has been a spike in complaints every summer.”

Trouble with the law

One Ohio college student sued Maxco Development, Inc. and its marketing company, Cusik Marketing, a few years ago. She was forced to go to court in Maryland, but won the case. However, the president of Cusik Marketing appealed and she lost the money she had been awarded.

Maxco Development, Inc. has also operated under the following names: Jablon Marketing, The Jablon Group and JZA Development Corp.

At press time, Maxco Development, Inc. had not filed an answer to the attorney general’s complaint.

In the last 36 months, the Better Business Bureau has processed 26 complaints about Maxco Development, Inc. The company is said to have an unsatisfactory record with the BBB because of some unresolved complaints.

The state of Ohio is seeking $300,000 in fines, financial repayment to the students and an end to the company’s illegal practices.

The company has actively recruited Ohio college students to provide estimate services in Ohio since 2001 or 2002.

Complaints have been filed from students at universities including, the Ohio State University, the University of Toledo, Miami University (Ohio) and Ohio University.

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