I'd like to sue a large corporation for with holding a portion of a deposit without having notified me of this prior to credit check. What should I do?
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Hello.Can you please explain what happened?
Hello Mr. Law,I can absolutely explain. Early in the year I began looking for a medical/esthetic device for my health spa and weight loss business. (This business is in development and presently I travel to clients homes.) I found a device that I liked and contacted the company for more information. I then had many conversations with a Warren Alfonso beginning late January. I had a location in which I was going to move my business but it fell through and I told Mr. Alfonso I wanted to put off the purchase. At that point he encouraged me to do a pre approval so that I could expedite the process once I find a new location. I agreed to pre approval. But stated the company should not put the purchase through until I found a space. Again, I had many back and fourth conversations and emails with Mr. Alfonse and he assured me this was not a problem, not to worry etc. I gave them a down payment check for $25,000, filled out the credit info and had him write a clause on the contract saying "not to be completed until customers lease is complete". He then submitted my paper work and of course called me saying they need to put the check through in order to secure the machine (April 20) I told him I was not comfortable with this. He then had me speak to the finance department on conference with himself and they also told me not to worry "Daniel Henkel Corp will give the deposit back in full" if you don't find your space. By mid May I still hadn't found a space so I called and emailed Mr. Alfonse and told him I'd like to delay the purchase for a while until I find the appropriate lease, please have Henkel Corp return my deposit. Strangely, one week after this communication Mr.Alfonse was layed off from the company and I could not get anyone to get back to me. I called head office and told them what was going on and that I would like my deposit back as promised. Finally I was able to speak to the sales manager and she told me accounting was to take over and tell me "how this was going to be:" Accounting then sent me a letter saying they don't typically return deposits and because of this they are with holding a 15% "Corporate Discretionary" fee. Of course I freaked out because there was never any mention of such a thing and what does that mean????? The company just makes up a number how they see fit to charge based on what??? I have my paper work and nowhere on the contract is there anything saying that. The only clause is mine which they did not follow by cashing my check. As of Friday June 20 they are only refunding 21,250 and I refuse to agree to that. I do have numerous communications saved from Mr. Alfonse and my discussions about the deposit as well. Thank you for you help.Frustrated,Barbara Baumann
Keep those emails!!!You sound savvy in terms of reading your contract carefully and your instinct correctly tells that there is something wrong. Have they even sent the money? I need to know where the company is. I know you are in Ontario. Tom
According to the email from the accountant, the check should either be sent or arrive Wed 27 of June. The company is called Daniel Henkel Corp located in Quebec but the deal went down in Mississauga Ontario. Thank you.Barbara
I agree that the deal is Ontario. That means you can sue for the balance in Ontario Small Claims Court even though the company is in Quebec. Please look however to see if you ever agreed in anything written that the jurisdiction is Quebec.
There is nothing of the sort mentioned in any of the paperwork I was given.Thanks you
When you get the cheque, look with care at any other documentation that comes with it. Probably they will try and state that if you cash the cheque you are agreeing to a settlement. You are not. A settlement cannot be forced on another party especially in debt. With nothing in writing that makes this any sort of breach of contract on your part, this is a debt as they hold the deposit for you. Its only purpose is to show earnest on the part of a customer and to give comfort to the vendor that they may have a customer so they will take steps to move ahead. It would be wise to cash the cheque so that the issues are somewhat reduced. If they make such an attempt, I would cover the point by sending them a short letter stating that you refute any agreement has been made and that this is your money and that the deductions were arbitrary and not contrary to your contract. Demand an immediate payment in full by a specific time (a week ?) or you will recover through the courts. Of course, keep a copy of the letter. Perhaps send it registered. If they do not respond, then you are in Small Claims Court. Here is their link...http://www.attorneygeneral.jus.gov.on.ca/english/courts/scc/A court will only take jurisdiction if the defendant lives where the court is or if the contract was clearly in their jurisdiction. We have discussed this in brief but the indications that this is an Ontario transaction include the fact it was a mere deposit (a debt), if the contract proceeded, the goods were to be delivered to Ontario and the fact that there is no choice of law stated in any written agreement. On your facts, your worst day is if Ontario thinks it is a Quebec agreement and you must sue them there. I do not see that at all.The Small Claims forms are easy to fill out. There does not have to be a book written to state what it is about. However, when writing a short paragraph of what happened, I would state they they owe you the money in "debt" or alternatively, breach of contract. All you really have to state at this stage is that you gave the defendant a deposit against goods and that you requested your money back and they failed to return some of the money in violation of the debt owed or in breach of contract. Then, you have to find the address they have registered as their address for service. The ordinary business address is not good enough. Many companies have lawyer's offices as their address for service. Here is a link to search the company.http://www.registreentreprises.gouv.qc.ca/en/consulter/rechercher/instructions_recherche.aspxSo, those are the steps. You have a case and I hope the company will see that. Surely their reputation is more important than keeping your money. They will know through a court process that you will be allowed to see all of their documents and will have to provide contact details of the previous employee involved. If necessary, you can subpoena that person but you will have to pay transport.Keep all receipts about this. Service fees and any other expense can be added to your claim. Usually lawyer fees are not compensated for because this is a "peoples" court and most can figure out how to proceed without one. Having said that, here is a link to the lawyer referral service. They will supply names of lawyers in your area who have agreed to consult initially at little or no cost.http://www.lsuc.on.ca/faq.aspx?id=2147486372I hope I have assisted. Please let me know if you need more.Tom
Thank you so much Tom. Your information is a great help. I will wait for the check and see what kind of paperwork if any they send along with it. I may need to ask another question at that time. Thanks again :-)
Please consider accepting my answer now and then we can work through it later.Tom
Hello Tom,I have another question. The Company is now holding the check based on the fact that they want to see my emails, texted etc. We are not in court and they haven't sent me copies of my "documents" so now this is a nightmare. On June 22 the sent me this letter:
Dear Mrs. Baumann,
It is with great regret that we have learned of your interruption in the purchasing of our products and services. We were anxiously hoping to do business with you for years to come, but unfortunately this is not the case at this moment. If at any time you do change your mind or reconsider our proposals, please do not hesitate to communicate with us, it will be our utmost pleasure to resume business with you again.
Our understandings of our past interactions are as follows:
· Meetings and exchanges with Mr. Warren Alfonso as of April 2012;
· On April 20, 2012 a cheque in the amount of $25 000, as a deposit, was received at Daniele Henkel Enterprises;
· Upon reception of your deposit, Daniele Henkel Enterprises ordered the Cellu M6 Integral, which was stored in the warehouse;
· Some exchanges in May 2012 with Mr. Warren Alfonso informing him that you had not yet found a locale, therefore delaying our delivery;
· On June 21, 2012, you spoke with Mrs. Nawel Mahieddine and informed her that you had changed your mind and made a decision to cancel your order and terminate the business transaction;
· Mrs. Nawel Mahieddine then informed you that the details of the refund would be handled by the Accounting department.
As an exception, it has been decided that you will be refunded, contrary to the Company’s policy. Therefore, your refund will be returned to you in the form of a cheque, in the amount of 21 250$, on June, 27, which will be issued to your name, Barbara Baumann, residing atXXXXX Mississauga, Ontario, L5M 1E5. Also, please note that a 15% administrative fee has been withheld from your deposit, an amount which remains at the Company’s discretion.
If any of the above-mentioned information is unclear, please do not hesitate to communicate with us, we will gladly answer any of your concerns.
It is true they would have understood the deal to be that way except that is not how the deal was proposed to me. The problem now is, many of the conversations were via telephone and I can not get a hold of Mr. Alfonso. I did not just "change my mind" there is a hand written note on the contract as well the contract is not complete with my name or address. What should I do here? If they have a contract stating what they claim why do I need to send them anything?
You need to write back. Clarify any point you feel is necessary and of course keep a copy. When you get the cheque, cash it. But make sure in a letter back that you refute the concept of an administration fee. Highlight the existence of your written instructions on the contract. The important line should be at the end. Just as a suggestion......"To avoid the necessity of litigation, please either direct me to where I agreed to a 15% administration fee or refund the total amount immediately. Your company has no discretion on this contract. Either I agreed that you can keep a portion or it is due and payable as a debt to me as no products or services were supplied."When you get the cheque, photo copy it. The banking information could be important. With such a letter sent, you can sue both in debt and in the alternative, breach of contract. By suing in debt, (in most jurisdictions) you can garnishee before judgment so the money in dispute is removed from their bank and held in court. That often stimulates a debtor to just give up.In your letter back, also state a deadline. Please respond with payment or legal justification for not doing so by ......... 10 14 days??Write it as frustrated as you are then do not send it until the next day. They are trying to sound reasonable and so should you but with a hard line at the end. Prove it and prove it now or pay me! In a polite but clear way. Tom
That is great. Except the correspondence today went as follows:
It is unfortunate that you feel this way about Daniele Henkel Enterprises, because all we wanted to do was have an open and honest business relationship with you. We are just as surprised as you are in this turn of events, as we are an established company for the past 15 years, and will continue being so for many years to come. Our company is based on values of open communication and honesty with all of our clients, therefore making sure that everything we do is within legal rights.
In order for us to fully understand the extensive exchanges between yourself and Mr. Alfonso, whether it be via emails, paperwork, or even texts, it would be quite pertinent and frankly very helpful for us to see and read what your file fully consists of. So if you would kindly send or forward us everything you have, it would be greatly appreciated.
As for your cheque being cashed in, the main reason why a deposit is requested and cashed in is to begin our business together and allow us to purchase the equipment and ensure its availability to you the moment you are ready to begin your own business. Without your deposit, there would have been no official business transaction or purchase of equipment for you. Also, since April 20, 2012, you mention that you did not want your cheque to be cashed in and tried to rectify the situation, but to no avail. Ironically, since April, this is the first time we are aware of this, as you never brought it to our attention immediately and directly. Otherwise, a different agreement could have taken place at that point.
Just to shed some light on the credit check information, Daniele Henkel Enterprises ensures a FULL refund to our clients only if and when they are not approved, which is not the case here. It was your sole decision to cancel your order and terminate all business transactions with Daniele Henkel Enterprises.
It is within your rights to seek legal counsel, and you may continue doing so if you feel the need to, but we were under the impression that by clarifying this situation, that it would lead us to a better understanding of our positions.
Awaiting your copies of emails and paperwork, we remain,
Management, Daniele Henkel Enterprises
You are being seduced into the ridiculous. You know this in just a rational brain energy.