NY -> CA Small Claims by Corporation?

One where the corporation is right? This one is a doozy (and a little long). I'll take any advice that can be offered - including links to relavent law sections (not lazy here!)

I run a small NY C-corp (1 employee at present, some help from family). We ship large bulky items (I don't wish to disclose what they are as its a very niche market, and disclosing it will possibly give the company away). Shipping charges run over $65 an item.

A person in California purchases 2 of the items (different models of the item), and has them shipped to a family member in Arizona. Almost 2 weeks after UPS shows receipt, the CA person claims the items are 'damaged', but even after 3 emails won't disclose what the 'damage' is. Now, this is odd, because to date we have had ZERO bad items shipped. (and can show a full UPS log, showing NO items being returned to the company). To shorten the story, on the 4th email he states he is charging back the transaction. He also finally explains what the damage is: "one of the parts we installed on the unit has came loose, bounced around inside the item, and damaged it". Now for the kicker: One of the items he ordered, doesn't even have this part! (the other one does). Customer has refused to ship either item back, unless we pay for shipping - leaving the company out almost $300 for shipping charges. It really isn't worth it for us to pay for shipping back. The items are heavy and don't have a large value, but its large enough for us to consider making a claim. We do have a fairly standard RMA policy on our website: describe the damage, and then ship the merchandise back.

The credit card processor has been zero help (they almost always side with the issuing bank; which almost always sides with the consumer.)

So, right now the customer has the merchandise, and has paid '0' for it. I'd like to bring this to small claims court in California to get the merchandise back, or force payment. Yes, I know CA has legal advisors for each county for small claims, but I'd like to amass more general information first.

My next step would be to file a demand letter, right?

1) Can I, as a corporation (representative) initiate action as a plaintiff in small claims court in California? Some states apparently don't allow this?

1a) Or is the proper venue Arizona? (since the merchandise was delivered there, contract was completed there?) I would claim the value against the family member???

Of course, if the answer to #1 is 'no', you can stop reading

2) I've read that in passing a bad check, the merchant can sue for up to 4x the price. Any similar statute for a wrongful credit card chargeback?

3) I'm perfectly ok with a 'temporary judge' hearing the complaint. But, I'd like not to have to travel to CA more than once if the other party refuses the temporary judge. Any way around this, maybe some wording in the initial filing?

4) Any possibility of having travel expenses reimbursed, if the defendant loses the case? (I know court fees are normally reimbursed).

5) I can't have the receiver of the merchandise appear in court, since that person is out of state. However, can I subpoena to have the 'damaged' items present as evidence? (remember, the items are currently supposedly in Arizona)

6) Any statute referencing that a company can be forced to pay shipping on items? Or can a posted return policy be binding? (on almost any RMA, anywhere in the world, customer has to pay shipping.)

7) Both my credit card processor, and his bank are in CA. Any advantage that can be gained from this? Possibly his bank would be more inclined to see reason if they knew they were possibly going to be added as a defendant in the claim?

On topic of #7, is it worth it to send his bank a seperate letter, possibly to the President, etc, explaining the situation? (not threatening lawsuit, just explaining the situation and looking for resolution.) I haven't yet contacted his issuing bank; it has solely been through my credit card processor. Or is this a 'no no'?


Any hints, thoughts, suggestions would be greatly appreciated! (and of course, won't be construed as legal advice). Thank you.

You are a business.

You offer merchandise for sale.

After the 5th email the consumer advised you one of the Items was Damaged.

You refused to take the Item back, even to inspect it yourself .

Under the Law a consumer has a Right to " get what he/she paid for " in GOOD Condition. Not broke.

So the consumer may have been mistaken over which item is which.

That doesn't excuse the consumer's rights.

Since you refused to take the Item back , even to inspect it , the consumer has every right to dispute it .

That includes notifying there CC CO. of the dispute.

What was your response to the CC CO. of the Dispute ?

Yeh yeh You've never had any problems. UNTIL NOW.

Anyway why are you hiding your product from the Public. Your a Business aren't you ?

BL, Thank you for your reply. Maybe I wasn't clear enough in my posting, so I will add some more detail here..

The customer and I exchanged several emails. He let me know about damage in the 1st email. I offered more than once to take the merchandise back, and the offer is still open. I even offered to pay shipping one way. Really, there aren't that many companies that go this far. Not once, did I ever refuse to accept the merchandise back. In fact, in every email I explicitly ask for a description of the damage and tell him to ship the units back.

And, the customer is claiming BOTH units are damaged (this was December time frame). As I mentioned, this was odd, because to date (4/21/04), we still haven't had any other claims. AND, one of the units doesn't even have the part that the customer claims came loose.

In addition, to the emails, I've attempted to call the customer, but they hung up the phone (this was before the chargeback).. The only reason I had even asked for a description of the damage, was because if it was clear that UPS damaged it in shipping, I could file a claim on behalf of the customer.

This is a fairly new company (1 year old this month) and I do strive to do whats right. But its really not feasible to expect a company to pay shipping both ways for a consumer. You've never had to return something? Who paid shipping? (yes, I'm sure you'll find the one example to prove me wrong

I'm still working with with credit card processor on this. They have copies of all the email, pictures of the units and receipts, but have basically said I'm on my own.

But I'm digressing.. Still looking for any information, or pointers to information. Most importantly, my question about jurisdiction..

(only 210 more pages of posts to read )

"1) Can I, as a corporation (representative) initiate action as a plaintiff in small claims court in California? Some states apparently don't allow this?"

Yes.

"1a) Or is the proper venue Arizona? (since the merchandise was delivered there, contract was completed there?) I would claim the value against the family member???"

No. You need to sue the people that paid for the merchandise, since they are the ones reversing charges and such.

"2) I've read that in passing a bad check, the merchant can sue for up to 4x the price. Any similar statute for a wrongful credit card chargeback?"

Not that I am aware of. My understanding is that if a chargeback is truely fraudulent or used to extort the merchant, then a case might be brought undeeeeer fraud statuts, but I am not aware of any specific statute allowing such penalties to be added on.

"3) I'm perfectly ok with a 'temporary judge' hearing the complaint. But, I'd like not to have to travel to CA more than once if the other party refuses the temporary judge. Any way around this, maybe some wording in the initial filing?"

No.

"4) Any possibility of having travel expenses reimbursed, if the defendant loses the case? (I know court fees are normally reimbursed)."

No. Court costs, yes, other expenses, no.

"5) I can't have the receiver of the merchandise appear in court, since that person is out of state. However, can I subpoena to have the 'damaged' items present as evidence? (remember, the items are currently supposedly in Arizona)"

I don't know the answer to this question, but I doubt it.

"6) Any statute referencing that a company can be forced to pay shipping on items? Or can a posted return policy be binding? (on almost any RMA, anywhere in the world, customer has to pay shipping.)"

No.

"7) Both my credit card processor, and his bank are in CA. Any advantage that can be gained from this? Possibly his bank would be more inclined to see reason if they knew they were possibly going to be added as a defendant in the claim?"

Why would you join them in the suit? They are no more responsible for this problem then a bank would be if they didn't honor a check written against an account with no funds in it. Your remedy is against the purchaser, no the credit card company.

"On topic of #7, is it worth it to send his bank a seperate letter, possibly to the President, etc, explaining the situation? (not threatening lawsuit, just explaining the situation and looking for resolution.) I haven't yet contacted his issuing bank; it has solely been through my credit card processor. Or is this a 'no no'?"

What does you agreement with the credit card processing company say about this?

Lets say If the Item was damaged.

Why should the consumer be held liable for shipping ??? Either way .

You could have taken the Item back ( paid for shipping ). Then If in fact you thought UPS damaged it made a claim with them, and replaced the damaged Item ( shipping included ). Yes , why should the consumer pay twice ?

You should have a written Policy on these things , and a written policy of disputes.

Then if they are not fallowed then you have a recourse.

Now If you shipped the items, you told them to return them ( shipping included - pre paid ) and they didn't return them, or pay you , most CO. report the debt to the CRAs , right ?

Work with the CC CO. , but if you didn't offer the consumer a pre paid shipping tag , don't count on anything.

I as a consumer surely wouldn't pay for damaged goods, and wouldn't return w/o a pre paid shipping tag.

"Can I, as a corporation (representative) initiate action as a plaintiff in small claims court in California? Some states apparently don't allow this?"
*** In California small claims, a corporation does not need an attorney.
An employee, officer, or director must act on its behalf.

"Or is the proper venue Arizona? (since the merchandise was delivered there, contract was completed there?) I would claim the value against the family member???"
*** You need to file your suit against the person or company who ORDERED the product from you. That is the ONLY entity who has a contractual relationship.... not the recipient of the shipment.

"I've read that in passing a bad check, the merchant can sue for up to 4x the price. Any similar statute for a wrongful credit card chargeback?"
*** No.

"I'm perfectly ok with a 'temporary judge' hearing the complaint. But, I'd like not to have to travel to CA more than once if the other party refuses the temporary judge. Any way around this, maybe some wording in the initial filing?"
*** Nope. You get what the 'system' allows.

"Any possibility of having travel expenses reimbursed, if the defendant loses the case? (I know court fees are normally reimbursed)."
*** Only if you have them in your 'purchase agreement'.

"I can't have the receiver of the merchandise appear in court, since that person is out of state. However, can I subpoena to have the 'damaged' items present as evidence? (remember, the items are currently supposedly in Arizona)"
*** No, you cannot 'subpoena' an object.

"Any statute referencing that a company can be forced to pay shipping on items? Or can a posted return policy be binding? (on almost any RMA, anywhere in the world, customer has to pay shipping.)"
*** Again, this should be part of your purchase 'terms and conditions'.

"Both my credit card processor, and his bank are in CA. Any advantage that can be gained from this? Possibly his bank would be more inclined to see reason if they knew they were possibly going to be added as a defendant in the claim?"
*** There is no 'legal' advantage.

"On topic of #7, is it worth it to send his bank a seperate letter, possibly to the President, etc, explaining the situation? (not threatening lawsuit, just explaining the situation and looking for resolution.) I haven't yet contacted his issuing bank; it has solely been through my credit card processor. Or is this a 'no no'?"
*** Certainly you can do it, but it will be a waste of the stamp and envelope. Simply, it will NOT do anything for you.

One thing that might be of benefit to you is to know the provision that allows a customer to do a 'chargeback'. This 'right' is provided by the FCBA (Fair Credit Billing Act) and there are some restrictions to its use. And it sounds to me like your customer is NOT in compliance with it.
A summary of the FCBA can be found at:
http://www.ftc.gov/bcp/conline/pubs/credit/fcb.htm

Originally posted by Blonde Lebinese:
"Lets say If the Item was damaged.

Why should the consumer be held liable for shipping ??? Either way."

(1) As far as I know, there is no law saying that the corporation is responsible for this shipping. There is no law saying that the consumer is responsible either; so, it comes down to section (2)

(2) If you were to buy a product from your local retailer, if you were to find fault with the product and wanted to refund, the local retailer would not be responsible for your travel expenses (e.g. your car's fuel). So basically, the corporation should not be responsible about how you get the product to them: whether you decide to ship it, deliver it using your own car, or walk from one state to another to hand deliver it , it'd be the consumers responsiblity (at least in the above case of the retailer).

netio ; 5 post and you chose to quote me twice and respond .
Are you AKA FJ ?

This "retailer" said he/she shipped UPS .

So , again , why should the consumer have to pay shipping Fees twice ???

The retailer admits, he did not contact UPS . If he would have contacted UPS then the "retailer" could have given the consumer
advice on what to do.

The retailer might have a claim however, as one poster quoted, while an item is in dispute it the other parts of the bill have to be paid.

The retailer said he offered to pay for return shipping, but doesn't say how . Before shipment ? Reimburse After ?

So maybe the Consumer IS in their rights to dispute the transaction through their CC Co.

Do you know for a Fact they are wrong ?

Beside the retailer is trying to keep info about the Co. "secrete" .
That tells me his policies could be "secrete" too.

Thank you all for your comments. Still a lot of research to do here. And I'm still trying to work things out with the credit card processor.

Basically, the case is very simple:

We shipped merchandise to the customer.
He claims its broke.
We asked him to ship it back.
He refuses.

There are a lot of other details, but most of them tend to complicate what should be a very simple case.

Our site does have a very clear return policy posted: 'Customer pays shipping'. (It is actually on file with our credit card processor as well, as part of our agreement with them as proof that it hasn't changed since day 1.)

The FCBA link was interesting, but doesn't seem to apply here. (Distance too far)

What does seem to apply, is the mastercard/visa policies.
They state, that in the case for defective merchandise, the merchant must make a good faith agreement to settle the claim. (I currently have a letter off to Mastercard asking for more information on this.). Seeing how we offered, out of our own pocket to pay shipping one way on the items, even when the customer hasn't described the damage properly, I feel that is in 'good faith'. I'd love to hear any comments on whether the 'law' might disagree.

Now, the shipping part is interesting... As netio posts, I can't seem to find any relavent law either (although I only have access to free online resources); it seems to be that company policy applies - as long as the customer has access to it before the sale is completed (which he does; its a link right off our main page)

And still you don't give us your Co. link so we can look ourselves.

How interesting .

So, I found more information... CA civil law, dealing with consumer warranties, specifically: 1793.3(e) , which states that the customer must return the merchandise except due to size or weight matters...

(And yes, there is a 3x penalty somewhere in the 1790 range ( like bad checks ), but I'm still digesting that part..)

CA civil law 1793

So, the question for the experts: The company return policy states "customer must pay shipping back", but: 1790.1 seems to override my policy?

CA civil law 1790.1

Anyone have access to case law, specifically for 1793.3(e) regarding size/weight? These items are about 80 pounds; they are UPSable, and are already packed.