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NA
NA, NA
Category: Legal
Satisfied Customers: 184
Experience:  NA
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We are in Washington State. We purchased machinery for ABC

Customer Question

We are in Washington State. We purchased machinery for ABC company in our name. ABC company wired their payment to our bank account for the invoice amount. We did not issue them any paperwork declaring their ownership other than the original invoice. We have been warehousing the machinery for 6 months with no contracts signed and no warehouse receipt. In April we notified them of the dollar amount they owe us with no response from them. They want to remove the machinery this week and ship it to their location in North Carolina. We want to collect storage costs. With no warehouse contract can we assume we have a lien on the machinery pursuant to http://apps.leg.wa.gov/rcw/default.aspx?cite=62A.7 -- in particular the Lien of Warehouse section
Submitted: 12 months ago.
Category: Legal
Expert:  NA replied 12 months ago.

LegalSolutions :

Thank you for your question. I'm taking a look at the link you provided right now.

LegalSolutions :

Hi--Sorry for the delay. I've taken a look at the code.

LegalSolutions :

A warehouse receipt doesn't need to be a formal document in Washington. Do you have anything in writing showing that you intended to charge for storage and that they acknowledged that they'd pay?

LegalSolutions :

It could be something as simple as an email that went along with the original invoice.

LegalSolutions :

You mentioned that you'd sent an invoice for the amount due for storage. How soon after the goods were paid for was that sent?

Customer:

Initially, they promised us the use of the machinery,verbally, but after 6 mths storage in one facility then 7 mths in another they notified us that they were selling the machinery.

LegalSolutions :

How much are the storage charges you are asking for?

LegalSolutions :

And do you charge any other customers for storage fees?

LegalSolutions :

I'm asking because to be a "warehouse" under the code you have to be, "engaged in the business of storing goods for hire".

Customer:

The 6 mths. we were at the previous facility- the entire lease amount as they took up the entire floor space which is $1800./mth. No, we are not technically a warehouse.

Customer:

We were storing the machinery while we negotiated for it to go into production. Now, after moving and storing we are told that they are selling it and moving it out.

LegalSolutions :

It sounds like you wouldn't have anything in writing where they agreed to have you store the machinery and pay you for that storage. Did you have anything in writing regarding what you were negotiating? Even if it wasn't a formal contract...anything that would show your intent and theirs?

LegalSolutions :

Where I'm going is that if you are not a "warehouse" and don't have anything that shows there was a storage agreement you may still be able to recover the storage costs from them.

LegalSolutions :

You wouldn't be able to lien the goods, but you might have an oral agreement, implied contract, or even a written contract that could be inferred from emails that they effectively breached.

Customer:

Written communication discussed the products we would make for them. Agreements to use the machinery were telephone or personal meetings.

LegalSolutions :

Did you have any of those agreements by phone or personal meetings after the machinery had been delivered to your location?

Customer:

Both before and after.

LegalSolutions :

OK-- there's a statute of limitations on oral agreements, but it sounds as if you'd be ok there.

Customer:

They are going to remove the equipment on Friday. Is their any legal means to stop the movement of the machinery from our possession. We also incurred a 5 yr. lease debt of $200,000. based on their promise to let us use the machinery.

LegalSolutions :

From what you have said it doesn't sound like they would have anything showing that they have title to the goods.

LegalSolutions :

At least not expressly

Customer:

That's true. Does that help us in anyway?

Customer:

I mean any way!

LegalSolutions :

Well, it's the old rule that possession is 9/10 of the law. You currently have possession. If they believe that they should have possession they'd have to bring suit if you don't voluntarily agree to give them the goods.

LegalSolutions :

That doesn't mean they don't have legal title, but they'd have to fight to prove it.

Customer:

What would be our basis for the claim?

LegalSolutions :

We're starting to get a little beyond the reading of the code to determine whether you can lien and into an area where I'd be giving legal advice---which I unfortunately am unable to do in this forum

LegalSolutions :

I'm happy to answer questions as best I can, but I'm going to give my disclaimer first that given the amount you're talking about and the short time frame I'd urge you to contact a local attorney to go into this in more detail.

LegalSolutions :

Having said that I'm happy to keep answering whatever i can

LegalSolutions :

You would not really have a basis for claiming ownership of the goods.

LegalSolutions :

It would just buy you time to get an attorney on board.

LegalSolutions :

You could potentially bring a countersuit for breach of contract.

LegalSolutions :

They agreed to either let you use the machinery--or at least to negotiate in good faith.

LegalSolutions :

In return, you stored the goods for them in the meantime.

LegalSolutions :

There could be an implied or actual contract depending on what was said at your phone conversations and meetings.

Customer:

Our local attorney felt that we did not have the right to dispute the movement of the machinery based on verbal commitments and that they are the legal owners of the machinery and have every right to move it regardless of the impact to us

LegalSolutions :

I agree with that assessment.

Customer:

I guess we got..... Thanks for your input and your time!

LegalSolutions :

Sure--- glad to help. My point was that you could still keep the machinery in your possession and just refuse to let them take it on Friday if you felt it would put you in a better negotiating position

LegalSolutions :

Even though they have the legal right to it they can't just walk in and take it

Customer:

That's true but I would be concerned about damages etc.

LegalSolutions :

Agreed--I was going to mention that there's an offset. If they lost use of the machinery or had other issues related to delay they could come after you for that.

LegalSolutions :

If you feel like you'd be able to recover from them your best bet would likely be to let them take the machinery and then pursue whatever legal action you may be able to.

Customer:

Oh well. These things always start out well and then..poof.. Again, thank you!

NA, NA
Category: Legal
Satisfied Customers: 184
Experience: NA
NA and 4 other Legal Specialists are ready to help you

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