I recently had to strongly convince a dealer to settle a court case involving a lawsuit with an unhappy, and unreasonable customer. I forced the settlement on him even though he insisted on having the matter decided by a judge after a trial. I did this by convincing him the proposed settlement was the most practical and economical way to end this lawsuit.

After taking a look at the facts and considerations involved, I ask retailers who read this to write and give me their opinion as to what they would have done in a similar situation. The case began in January of 2002. That was when the customers, a husband and wife, visited the dealer’s showroom and selected two different qualities of carpets, one for two upstairs rooms and the other for the steps leading up to them.

When it came time to place the order the consumers, plaintiffs, requested the purchase be billed to a hardware store that they owned and produced a resale certificate from that store. The purpose of this type of billing may have been to avoid the payment of sales tax on the purchase. In any event, the dealer’s invoice was marked “sold to” the buyer’s store and “ship to” their home.

A few weeks later the carpet was installed. At that time the husband paid the dealer’s mechanics in full by check and signed the receipt that the job was “completed to my satisfaction.” A week or so later the problems began. It started when the wife called and complained that the steps were coming loose and were not cut properly.

An installer was immediately sent out and the repair was made. The wife then called and complained that the upstairs flooring had pieces missing along the walls and had been cut short. The mill rep was asked to look at it with regard to the missing tufts and he described it as “kicker damage” which was easily repairable.

It is at this point the real problems began. The retailer’s installer, who eventually was allowed in the house to do the repair, felt the carpet was not cut short and did not need stretching. At this point, the plaintiffs would not allow the mechanic to proceed.

The plaintiffs’ position however, is that the dealer refused to and, in any event could not, repair the carpet to their satisfaction. Throughout all of this there was much friction between the wife and the installer as well as the store’s manager who was attempting to schedule this.

At some point during these inspections and repairs the plaintiffs complained that during the original installation the mechanic had caused damage to their walls, moldings, flooring and a piece of furniture. They claimed they told the retailer of this within a day or two after the installation. The store owner, however, insists nothing was said until months after the installation.

In any event, late in 2002 the plaintiffs sued the dealer for the purchase price of all the carpet, steps and rooms, $3,450, and for the cost to repair the damage allegedly caused by the mechanics—another $2,000. The case dragged on for some time until eventually, just prior to an arbitration hearing, a sort of settlement was reached. It was agreed that an independent inspector would be sent to the home and that everybody would be bound by his determinations.

The problem was the inspector was unable to unequivocally place the blame. His report stated, while it did appear that there was some minor kicker damage which could, in his opinion, have easily been repaired, it had not been and because of continued use and vacuuming it had gotten progressively worse and could no longer be completely repaired.

An Unclear Resolution The dealer felt this report put the blame on the plaintiffs for not allowing him to make the repair when it would have been effective, while the plaintiffs naturally claimed the report proved the dealer was entirely at fault. Since there could be no resolution, the case was placed back on the court calendar for a trial before a judge. It was now the beginning of 2003.

We arrived in court with our witnesses, the dealer, his mechanic and the mill rep, and the plaintiffs arrived with their experts. They even subpoenaed the impartial inspector. The trial began with introduction of the contract of sale—the retailer’s bill. I immediately objected, pointing out the contract was between my dealer and a hardware store and these individuals had no basis for their lawsuit against the flooring retailer.

I claimed that either they, as individuals, must sue the one who sold it to them, the hardware store corporation or the plaintiff’s corporation must sue the dealer. The judge agreed and dismissed the suit with the provision that it could be reinstated by the plaintiffs if, within a reasonable time, they named the proper parties. This they did and the case we’d actually settled was now between the hardware store and the retailer. Next time, we will look at the last part of this case, especially the settlement negotiations.