After the back and forth of my two previous posts on the abrupt closing of OB’s popular arts and crafts store Rock Paper Scissors, and as the comments from former vendors and interested readers still come in almost daily, I felt another follow-up article was due. A couple of vendors had left their names and phone numbers, so I called them up, and this post is the result.
OCEAN BEACH, CA. Many of the vendors kicked out from Rock Paper Scissors are still angry at Dr Jefe who ran the place, and who supposedly decided in one day to immediately close the business – a business that had grown to be one of the most popular storefronts on Newport Avenue. Jeff Fagan, the real Dr Jefe, had told me that the fateful day was February 2nd, when after reading his financial statements, he decided to close RPS immediately.
The vendors don’t believe that. They believe that he and his staff knew business was bad, but the message they gave out to the vendors was that ‘everything was fine.’ That’s what they heard.
In my interview with him, Jeff also told me that because of the faltering economy, his store just went under – that no one could have anticipated that December sales were going to be as bad as they were. The vendors, who were not paid for the January sales of their wares, just lose out, according to Fagan. He was a vendor, too, he told me, so was his son and his father; they lost too.
But under their agreements with him, according to at least three vendors, Dr Jefe had no right to all of their January sales money, the last month the store was open. Plus, because he closed the store abruptly, without giving the vendors a 30 day notice, he still owes them for their security deposits. And earlier Fagan had admitted that he still owed some vendors for December sales.
Some of the vendors plan on taking Fagan to Small Claims Court to get back what they’re owed. Others have simply thrown up their hands and don’t wish to pursue anything that will stir up negative karma.
But, let’s put a name to these allegations. Jean Vavra owns Natural Selection Body and Bath. (Here is her company’s website.) She started her product line 9 years ago by going to San Diego’s street markets, and with the help of her family, has made her enterprise successful.
Her products had been in Fagan’s store for about 16 months, when she decided that she was so fed up with him, that she pulled out in late January. She was in another store, Metropolis in Hillcrest, which also folded due to financial reasons, but in contrast to Fagan, “the owner there was a man of honor and he paid all his vendors their deposits and sales money,” she wrote in her comment to this blog. To be fair, that store closed before the start of this economic downturn.
“Jeff can’t hide behind the economy,” Jean told me. “Once he dipped into our money,” she emphatically said, and didn’t repay it – that’s not legal and violated the terms of their contract. Jean alleged that Fagan would often go to the cash register – the one cash register for the entire store – and take out cash, leaving IOU’s. Who knows how much he took out, how much he dipped in, she said. In addition, when Fagan didn’t know where an item belonged after its sale, he would assume it was his, and credit his own account.
Jean complained of the very shoddy record-keeping at the store. She recounted several incidents with Fagan that: She would be missing large items from her booth and there would not be a record of its sale. After complaining to Jeff, sometimes the item would magically reappear on the sales list or in her booth. One time, after depositing his check, her bank notified her of its rubbery nature. She asked Jeff repeatedly to cut her a new one, and for some reason he refused to reissue it. Then, in December, she was missing a large item, and she questioned Jeff. The very day, the store showed the sale of the item. At first, Fagan credited her account, but then later reversed that move. Jean never got the item back or the money.
During last Christmas season, the vendors were told by Faith, Fagan’s manager, that ‘everything is fine,’ assuring them that the business was stable. Now, Jean said, the staff feel used and burnt, and most of them have nothing to do with Fagan.
Vavra moved out because she couldn’t trust Fagan. There’s just less than a thousand dollars from January sales that Jean is still owed, plus her security deposit of $430. This adds up to $1300. She retained a lawyer, who wrote a demand letter to Fagan, which he apparently has ignored. At this point, she plans to take Fagan to Small Claims Court. As she said in her comments to my ealier post, Jean believes: “… it is important to me that the truth be told and more people are not duped to go in on another venture with this person.”
Jean Vavra has talked to a dozen other vendors, she said. She is busy calling and emailing them letting them know that Fagan is not filing for bankruptcy, as most thought he was. Jean claims that a majority of the vendors agree with her, that Fagan ripped them off, and owes them for Janaruy sales and for their security deposits. She scoffs at Dr Jefe’s comments to me that there is just a handful of disgruntled vendors out of 140. She also believes that not all the workers were paid.
On top of all this, Jean doesn’t believe Fagan when he pleads poverty. He has a new store across the street, although it’is a wholesale business. How much money from the vendors was used to open his new business? she pondered. Plus she said, Fagan has a display in other stores, such as Leaping Lotus in Solana Beach. He has money, she believes.
Michael Turko, of KUSI’s Turko Files, did interview Jean. I spoke to Turko himself, who after praising our blog, confirmed that he had interviewed Jean. But the day of the filming, two other vendors failed to show. So, Turko is waiting on releasing his segment on RPS until he has two more vendors on tape.
Jean says she ran into one of the other vendors who didn’t show. He told her that just as he was leaving to meet with with the TV investigator, he got a call from one of Fagan’s managers, who warned him not to discuss anything with Turko. Turko told me that happens a lot. (If any vendor is interested in talking with Michael Turko, call 858-571-3453.)
I also spoke with Jim Grant, a local photographer, who had a small wall display at Rock Paper Scissors. He agrees with Jean about Fagan. He had only been there a short time, in contrast to others. “I got sucked in,” he told me, “while the whole ship was sinking.” Fagan and the staff convinced Grant to move his photos into the store in late December, by being told that the business was doing great. “They even tried to sell me a large space,” he recounted. He also is missing his January sales money. In his comment to my previous post, he said:
It appears my security deposit, January rent and payments from sales has been absorbed by someone. I can only assume whom.
Grant is out $275 for his January sales, and a security deposit of $70, for a total of near $350. Not a lot, true. But Grant thinks Fagan will benefit from many of the smaller vendors thinking that they don’t want to make a big deal about it. Further, he also believes that Fagan owes vendors their January rents as well, as he doesn’t believe Fagan paid the rent for the building.
At the end, Grant confronted Fagan, he told me, and asked him, “how do we reconcile this?” Jeff told him to simply “write it off in next year’s taxes.” That was Fagan’s attitude. Grant said, disgustedly, “Dr Jefe should write it off. He should take care of business before opening up another one.”
Both Jean and Jim have confirmed what other vendors have told me. It appears that many vendors of the once great Rock Paper Scissors have still to be made whole, that they are out their security deposits and their January sales monies, and some of them are still out their December sale monies.
It is plain to see, as enough of those injured have complained before us, that there has been some kind of injustice done within the walls of the former Rock Paper Scissors. It cannot simply be blamed on the recession, as there were record keeping and business decisions made that are apparently at fault. With the vendors crying foul, what recourse is there besides giving up or taking Fagan to court?
There could be a third way: mediation. The parties could come together and with a trusted and experienced mediator, find a course to resolve the problems outside the use of the government courts – in the spirit of Ocean Beach. The vendors could select some to represent them to sit down with Fagan and his lawyer (maybe employees and landlord too?) and work something out that is mutually accepted. The community could be the witness.
Whether the final score will be tallied in Small Claims Court or through some kind of mediation or simply out in the open like this, Jeff Fagan to this day still operates as a vendor in other stores and still operates his wholesale business, magically named after the very business that has failed.
Until this injury is aired and resolved, there will be a shadow looming over a certain section of Newport Avenue. Damage and distrust linger over this corner of the community.