The Warranty Game:How to Become a Warranty Warrior in Four Easy Steps
Your new coffee maker quits working three days after you brought it home, your year-old faucet leaks, and your new double-glazed, argon filled, low-e coated, insulated vinyl window fogs up inside the glass every time it rains. You have a warranty claim, so you call the manufacturer's customer service line only to be told that "it's not covered". So you fume, maybe write a complaint on one of those consumer complaint web sites, and buy a new coffee maker, faucet and window.

Well, you're a damn fool, a wuss, a panty-waist. You gave up too easily. Sorry to be so rude, but there it is, you sissy.

Dripping Faucet We deal with manufacturer warranties almost weekly. We buy a lot of stuff, and some of it is going to have a problem. Well over 95% of warranty claims are handled by manufacturers or sellers quickly and satisfactorily, but some are not. If they are not, then that's when the going gets tougher, but the tough get going.

This article is for the guys and gals who are not going to take "no" for an answer. We'll show you how to win the warranty battle nearly every time. What it takes is perseverance, something that manufacturers are pretty confident you don't have. In fact, they're counting on it — all the way to the bank. But if you do, then you will most likely win It's really as simple as that.

The Manufacturer's Express Warranty
An "express" warranty is the seller's written guarantee that a product will perform properly for a specified period of time, and a statement of what the seller will do to fix the problem if the product fails during that time period. When we talk of something having a warranty, this is the type of warranty we are usually talking about. It is considered to be a part of the contract you entered into with the manufacturer when you bought the product. You paid money and in exchange the company sold you the product and gave you a written promise to take care of some or all of the defects in the product for a certain length of time.

   
Moen Limited Lifetime Warranty

This warranty is fairly typical of faucet warranties, and better written than most. We have, however, rearranged some of the paragraphs so like topics are discussed in one place instead of being jumbled around as they are in the original text.
Warranty TermsCommentary
Moen® products have been manufactured under the highest standards of quality and workmanship… This is marketing fluff, and can be disregarded.
…Moen warrants to the ori­ginal consumer purchaser for as long as the ori­ginal con­sumer pur­chaser owns their (sic) home…, that this faucet will be leak- and drip-free during normal use and all parts and finishes of this faucet will be free from de­fects in material and manu­fac­turing workmanship… The warranty is not transferable. It expires when the original purchaser dies or sells his house, so it is not really a "lifetime" warranty. Interestingly enough, the warranty does not require that the faucet be installed in the house the owner lives in. If I install the faucet in a rental property, the warranty expires when I sell my house, even through I still own the rental property. Conversely, if I sell the rental property, the warranty is still in force as long as I continue to live in my own house. This is a fine example of faulty legal drafting.
If this faucet should ever develop a leak or drip during the Warranty Period, Moen will FREE OF CHARGE provide the parts necessary to put the faucet back in good working condition and will replace FREE OF CHARGE any part or finish that proves defective in material and manufacturing workmanship, under normal installation, use and service. This is the section that tells you what Moen will do under the warranty to put your faucet back in working order. All it will do is provide "FREE OF CHARGE" any parts required to repair the faucet. That's it. That's all you get out of Moen.
This warranty is applicable only to faucets purchased after December, 1995 and shall be effective from the date of purchase as shown on purchaser's receipt. This language just tells you when the warranty period starts
This warranty is extensive in that it covers replacement of all defective parts and finishes.… This warranty is not at all "extensive". It is about average for the industry.
…However, damage due to installation error, product abuse, product misuse, or use of cleaners containing abrasives, alcohol or other organic solvents, whether performed by a contractor, service company, or yourself, are excluded from this warranty. Moen will not be responsible for labor charges and/or damage incurred in installation, repair or replacement, nor for any indirect, incidental or consequential damages, losses, injury or costs of any nature relating to this faucet. This is the section where Moen tells you what it will not do. Moen will not pay for the labor cost of having a plumber remove, repair and replace the faucet. This is, of course, the expensive part of repairing a faucet. Moen will not pay for any "consequential" damages or injuries relating to the faucet. A consequential damage is an indirect damage caused by a defect in the faucet to something other than the faucet itself.

For example, your faucet leaks, flooding your kitchen. The damage to your kitchen is a "consequential" damage that Moen says it will not pay for.
Except as provided by law, this warranty is in lieu of and excludes all other warranties, conditions and guarantees, whether expressed or implied, statutory or otherwise, including without restriction those of merchantability or of fitness for use. This is where Moen attempts to disclaim any implied warranty of fitness for purpose or merchantability. In most states such a disclaimer is ineffective and of no consequence because it did not take place before the sale. See the main article for more information.
Some states, provinces and nations do not allow the exclusion or limitation of incidental or consequential damages, so the above limitations or exclusions may not apply to you. This warranty gives you specific legal rights and you may also have other rights which vary from state to state, province to province, nation to nation. This is the section, required by federal law, where Moen admits without actually admitting that its attempted disclaimer of implied warranties and limitations on incidental or consequential damages probably won't work.
Replacement parts may be obtained by calling 1-800-289-6636 (Canada 1-800-465-6130), or by writing to the address shown below. Proof of purchase (original sales receipt) from the original consumer purchaser must accompany all warranty claims. …

…Moen will advise you of the procedure to follow in making warranty claims. Simply write to Moen Incorporated using the address above. Explain the defect and include proof of purchase and your name, address, area code and telephone number.		 This is how you make a warranty claim.
Defects or damage caused by the use of other than genuine Moen parts is not covered by this warranty. This bit is just to scare you into using Moen parts. It sort of sounds like if you don't you may void your Moen warranty, but such tie-in clauses are illegal in most places, and will usually be disregarded.
This warranty promise is completely voluntary. No law or rule requires a manufacturer to guarantee its product. It can just take your money and deliver the product without making any promise to take care of defects. But, if a manufacturer does not make some sort of guarantee, would you buy the product?

A warranty is necessary to compete in the marketplace. In fact, increasingly warranties are marketing and sales tools. Manufacturer's of products with generous, or at least what appear to be generous, warranties, advertise the fact. Milgard, the replacement window company, has created quite a stir in the window world by offering what we think is probably the very first unlimited Full Lifetime Warranty on its replacement windows. Unless this turns into a financial disaster, this warranty is probably going to force other window companies to follow suit.

Ford offers a 36,000 mile, 3 year power train warranty on its small trucks, Dodge offers 100,000 miles or 5 years. For the first time in our company's history, we did not buy Ford trucks. If Ford thinks its power trains will last just 36,000 miles, we'll take their word for it and look elsewhere. Marketing through warranty competition works, and encouraging this competition was one of the major goals of the federal Magneson-Moss Act (see below).

Not that games aren't played with warranties. They are. Many product warranties are written to look like the company is promising a lot, while actually very little is promised. Alside windows, for example, trumpets its lifetime "peace of mind" window warranty, but on careful examination the company promises only what the majority of window manufacturers promise — if your window is defective, it will send you replacement parts. Its up to you to pay to get them installed. This is hardly what we could reasonably call a "peace of mind" warranty.

Most "lifetime" warranties are not really for a lifetime. If you sell the house in which a faucet is installed, most "lifetime" faucet warranties end, despite the fact that you may live on a few more years — albeit warranty-less. Many warranty promises are completely empty. For example, nearly every vinyl window manufacturer warrants its product against peeling or delaminating — something vinyl cannot possibly do, but only a very few warrant their windows against warping or twisting, which vinyl windows do all the time. It's very much like guaranteeing that your bowling ball will not lose its hair.

We call these "Barnum" clauses, in honor of the famous showman, huckster and philanthropist, P. T. Barnum, who reputedly sold a car-load of white salmon by promising that it positively "would not turn pink in the can", something white salmon absolutely cannot do. A warranty against a defect that can't possibly happen looks good, but is really just puff and fluff — a totally hollow promise, a Barnum clause.

There are, however, real warranties available that promise real relief if a product or service fails. Our no-nonsense, plain English workmanship warranty is one. But even it pales compared to Milgard Window's warranty which is the only full warranty we know of for a building product. Download and read this warranty here, and compare it to the Moen warranty at right. The differences should be readily apparent.

But as obtuse and often incomprehensible as most product warranties are today, in former years they were even worse. It finally got so bad that the federal government stepped in to put a stop to most of the major abuses.

Today, the federal Magnuson-Moss Act, defines the types of written or "express" warranties that may be offered by manufacturers and sellers of consumer goods. It requires that any written warranty be conspicuously identified as a "full warranty" or a "limited warranty".

A full warranty must meet every one of the following requirements: A limited warranty is one that does not meet any one or more of these basic warranty requirements. Almost all warranties are limited warranties because rare is the manufacturer who has enough confidence in its products to promise a full warranty.

The Moen warranty shown on this page is a good example of a typical limited product warranty. It limits the warranty to the initial purchaser only. It promises only to replace or repair any defective parts, but specifically excludes any labor cost, and seeks to disclaim any implied warranties. All of these limitations exclude it from full warranty status.

Neither the Magnuson-Moss Act or any state law requires that a warranty be for any specific period. A seller is free to offer a warranty for any time period it thinks is appropriate. But, the length of the warranty period must be clearly disclosed in simple, "easy to understand" language. "Easy to understand" must be, however, very liberally defined. Most warranty language is not all that "easy to understand". The language may also not be deceptive. If the company advertises a "lifetime" warranty, at least something in the warranty must be guaranteed for someone's or something's lifetime, even if everything else is guaranteed for only 30 days.

A manufacturer can also guarantee against certain defects for one length of time and others for a different period of time. "Lifetime" faucet warranties frequently include only a very short warranty term for "exotic" faucet finishes like oil rubbed bronze. The fact is that most of these finishes have not been around long enough for anyone to know how long they will actually last, so the companies are taking no chances.

Understanding a warranty can be a challenge. Warranties can be slippery things. Generous promises given in bold print at the top of the page are often taken away in the fine print at the bottom. Clauses in a warranty are often deliberately jumbled so it is hard to ferret out exactly what is being guaranteed. Usually after carefully parsing a warranty for substantial content rather than marketing fluff, we find that the product warranty actually promises very little. Most warranties promise you parts, but you have to pay to have them installed. If labor is covered, most warranties require you to send the product to an "authorized service center" rfor evaluation at your expense before it will be repaired. Almost every seller seeks to exclude implied warranties. The exclusion usually does not work, but that does not keep them from trying.

Warranties "Implied" by Law
But, even if the manufacturer's express warranty promises you little or no relief if your faucet or coffee maker breaks, you need not worry, because state law usually promises gives you all the help you will need to take care of most problems with consumer products. Everyone seems to have heard of the implied warranties, but few know what they can do for you, and almost no one uses them to replace or supplement express warranties to get relief from defective products. Yet, they can be very intemidating and effective weapons in the armory of the warranty warrior.

Types of Implied Warranties
Every consumer product is sold with a warranty of "merchantability" and "fitness for purpose". These warranties are "implied" by law and automatically "attach" to every sale. The terms "merchantable" and "fit for purpose" are legal terms, and sound formidable, but they are not that complicated.

A product is merchantable if it is "suitable for the ordinary purpose for which it is used". A faucet must actually control water, a coffee maker must make coffee, a DVD player must play DVDs. See, it's simple! The law says that manufacturers make this promise automatically every time one of their products is sold. They don't have to do the actual selling. If they merely place the product into the "stream of commerce", then they are responsible for its merchantability in the hands of the ultimate consumer.

The fitness warranty is a little more nuanced, and more complex, but we are only interested in two of its many facets. It says that a product is fit for a a particular purpose only if it "adequately fulfills that particular purpose". This sounds very similar to the warranty of merchantability, and, in fact the two warranties overlap a lot. But the "fitness" warranty adds two requirements that the warranty of merchantability does not have. First, the product must be suited not only for its "ordinary purposes" but also for any "special purpose" you may intend — provided the manufacturer knows about your special intention. Second, and even more importantly, it requires that a product continue to be suitable for its intended purposes for a reasonable length of time after the initial sale. In other words, the fitness warranty stretches the time during which the product must perform to beyond just the day you bought it. Without this provision the implied warranties would be pretty lame.

So, in essence, the implied warranties require (1) that a product be fit for it ordinary use and (2) for any special use the seller knows or should know about, and (3) that it continue to be fit for these uses for some period of time after the sale. This may not sound like much, but it's everything you need to collect the cost of repairing or replacing a defective product.

What Product Defects are Covered by Implied Warranties
Implied warranties do not protect against every single thing that can possibly go wrong with a product. They do not cover improper installation or setup, abuse, misuse, ordinary wear and tear, failure to follow directions, or improper or incomplete maintenance, war, riot, insurrection, negligence, sabotage, criminal acts, extreme weather conditions or Acts of God.

What they do protect against are problems caused by the design, engineering, and manufacturing of the product — usually lumped together under the term "manufacturing defects" — things over which the manufacturer has almost complete control. And not every manufacturing defect is protected against. If the defect goes to the core of the purposes of the product, you are most likely protected. But if the defect does not affect the basic performances of the the product, you probably are not. If your gleaming white plastic coffee maker starts turning yellow after a few years, you probably have no claim under the implied warranties. The color of the coffee maker does not affect its core purpose of making coffee. But if your gleaming white vinyl windows start turning yellow, then you have a claim because with windows, appearance is an essential feature. One of the core purposes of your windows is to enhance the beauty of your house. But what if you special ordered the gleaming white coffee maker to exactly match the decor of your gleaming white kitchen? Well, that's a different story. Now the discoloration falls under the "special purpose" doctrine of the fitness warranty. Your special order had the effect of notifying the seller that you had a special requirement of the coffee maker. In addition to making coffee, it had to be gleaming white, and the color now becomes a core feature of the product. So, it's covered.

How Long Do Implied Warranties Last?
Implied warranties are promises about the condition of products at the time they are sold and for a reasonable time after the sale. They do not assure that a product will continue to perform after the sale forever. But, they do require that the product be of "normal durability". A product that is not normally durable is not considered "fit for its intended purpose," and breaches the warranty of fitness.

Normal durability is, as you might suspect, a very flexible concept. Courts usually determine what is reasonable based on two things. The first is the general, commonly-held community perception of how long a product should last. The second is any representations the seller has made about the durability or longevity of the product.

Almost everyone can agree that a faucet that leaks right out of the box is not reasonably durable. But what if it starts leaking 5 years later? Ten years later? How long does the common perception say an average faucet should work without leaking? Should a $500.00 faucet go for a longer time without leaking than a $50.00 faucet? What if the manufacturer advertised the $50.00 faucet as lasting a "lifetime". Does that influence the community perception?

Common perceptions and manufacturers' statements create what are known as "reasonable expectations" in the mind of the buyer that can influence the buyer's decision about which product to buy. You may not realize that you have certain preconceptions of the durability of a product, but you almost certainly do. If you buy a $400 coffee maker rather than a $49.99 WalMart special, it's, at least in part, because in the back of your mind you expect the more costly coffee maker to be better made, more durable and last quite a bit longer than the bargain-basement model.

This is especially true if the seller advertises a product as being particularly robust or durable. Sellers have a lot of influence over a buyer's expectations of product performance through promotion and advertising. If the seller's claims would lead a reasonable person to believe that the product will last longer than competing similar products, the seller is probably going to be held to this higher standard. So, if you bought something advertised as a "lifetime coffee maker", your expectation that it should indeed last your lifetime becomes reasonable, even though the common perception is that a typical coffee maker would not last nearly that long.

Disclaiming Implied Warranties
But, if implied warranties are automatic, how is it that Big Al down at Al's Clean Used Cars can sell his clunkers "as is" without any warranty of any kind? Simple. The law allows a seller to disclaim any implied warranties. But he must do it the right way for it to be effective. If Big Al informs you in writing that the cherry '57 Chevy Malibu you are thinking of buying is offered "as is", then the "as is" is an effective disclaimer of any implied warranty. If you then buy the car, you are buying it while fully aware that you and you alone are at risk if it proves to be defective.

Warranty Disclaimer If you received this disclaimer prior to the sale, it is probably effective. But if it was in the box with the faucet, then it was not delivered until after the sale, and is probably not effective. Often a warranty disclaimer is included in the seller's express warranty language — these are rarely effecitve. Big Al's disclaimer was legally sufficient because he made it before the sale. "Before the sale" is the key to an effective disclaimer. Any disclaimer of implied warranty must be made prior to the sale, not after. If the seller disclaims after the sale, you did not have the required advance notice that you were buying the product without implied warranties. You must get that notice before you buy.

Timing is the problem with almost every product warranty disclaimer. With very few exceptions, every manufacturer tries to disclaim all implied warranties. But the disclaimers rarely occur before the sale. Have you ever read a warranty disclaimer actually printed on the box or have a store cleak hand you a warning notice that the product you are looking at is sold without implied warranties? It just does not happen. Most of the time any disclaimer is inside the packaging, and you have no opportunity to read it until you get home and unpack the product. So, most manufacturer warranty disclaimers are ineffective, and, in fact, are little more than a bluff. The sellers know their disclaimers are probably useless, but hope imposing legal language and bold print will lead you to believe that any implied warranties are now void. They aren't. So, don't be fooled. If you were not informed of the disclaimer before the sale, it has no legal effect in most jurisdictions.

But, there is at least one trap here for the unwary. Some courts have concluded that if a consumer makes a claim under a manufacturer's express warranty, he is presumed to have accepted all of the terms of the express warranty, including any disclaimers of implied warranties contained in the warranty document. Ouch! There is a way around, this, however, which we will show you below.

Enforcing Your Rights Under Warranty
So, your guaranteed-not-to-leak-for-your-lifetime faucet is leaking. What to do?

First, fix the faucet. This sounds a little like common sense, but a surprising number of people don't first fix the faucet. They leave it broken while dealing with the manufacturer's warranty claim process. This puts you at a disadvantage because you are sitting there with a faucet that does not work, which makes you impatient. Impatience is your enemy. So, first call the plumber and get the faucet fixed. Let the plumber worry about figuring out what is wrong and getting the parts and materials together to fix it. It's his or her job. If you have the notion that fixing a defective faucet under warranty is not going to cost you anything, forget it. You will pay the plumber first, then get your money back later. If the plumber decides the faucet cannot be fixed, replace it.

Get an itemized receipt from the plumber that details what was wrong and what was required to fix the problem. If you have not already done so, go find your original sales receipt. If we installed the faucet for you, we put your receipt, your warranty card, and a note with the date and time of original installation in a plastic bag and taped it to the inside of your sink cabinet. Even if you forgot where we put it, your plumber will find it. We recommend you do the same with every faucet in your house (also water heater, furnace, air conditioner, water softener, etc). Your original receipt should have the faucet model and possibly a serial number. If it does not, have the plumber put this information on his or her receipt.

Now you are ready to deal with the faucet company.

Step One: The Claims Department
Attitude is everything in making a warranty claim. Stay calm, don't get angry, don't be abusive. The poor customer service agent you are dealing with gets enough of this from other, less enlightened, people. Get him or her on your side by being cordial and friendly. You want the agent to be in a frame of mind where s/he wants to be as helpful as possible because you're such a nice person. Answer all questions, even the dumb ones, as politely and patiently as you can. State your position clearly: The faucet leaked, you had to call a plumber to fix it, and you spent (fill in the blank) dollars to do so, and that's the amount you expect to be reimbursed.

You are unlikely to get a resolution on the very first telephone call. What you will get is a claim number, and a request that you fax or e-mail your supporting documents. Send in the receipt and plumber's bill. Make sure the claim number is written on every single page. A typical claim department is a mad house, somewhat less organized than the proverbial Chinese Fire Drill. Stuff gets lost all the time. Minimize the chance of it getting lost by identifying every page of every document with the claim number. Now, wait. You will get a call back in a day or two. If a week goes by and you have not heard anything, call them back.

Most likely the claims agent's authority is limited to sending out replacement parts, so that's the offer s/he will make. Since you have already bought the parts, this does not resolve your problem. So ask politely to speak to someone who can authorize a payment. You will probably need to explain your position all over again to the supervisor.

We have never seen a written manufacturer's warranty that promises to pay a plumber's labor to fix a defective faucet. All they normally promise to do it replace any defective parts (see the sample warranty above). That should not be good enough. The supervisor will tell you that he or she can only authorize the cost of the part. Ask him or her if there is someone there who can authorize the labor expense. If there is, ask to speak to this person, and restate your case. About one-third of the time, the Big Boss will realize that you have your ducks in a row and will just authorize the labor charge, and you will get a check in a few weeks.

More likely, however, the Big Boss will not agree to pay the labor, claiming that it is specifically excluded by the company's warranty. Your answer is: "I am not making a claim under your written warranty. I am making a claim under the implied warranty of merchantability as provided in the laws of the state of (fill in your state name), so what your express warranty says is not relevant." If they respond that the express warranty disclaimed all implied warranties, your response is: "Your disclaimer is ineffective under the laws of the state of (fill in your state name) because it was delivered only after the sale was completed, and is therefor not binding on me." Say these things with great confidence and authority because (1) you're right and (2) the more you sound like a lawyer, the more attention you will get.

Odds are good that the company will cave in at this point, and pay up. But, if they don't, then there's Step Two.

Step Two: The Legal Department

Sample Warranty Claim Letter


December 12, 2011

Really Big Faucet Company, Inc.
1333 Big Faucet Company Road
Lower Fairmount, N. J. 07830

Attn: Lowell Ridley, J.D.
Legal Department
Mail Stop: 404

Re: Claim Number 11-4443

Sir:

I purchased your company's Model 1234 kitchen faucet on May 4, 2006 (receipt attached). On July 12, 2011 it began to leak. I had a plumber repair the faucet. He discovered that the leak was caused by a defective pull out hose which had become partly detached. The hose was replaced. The plumber's charge tor replace the defective hose was $512.00 (itemized receipt attached). I have made a warranty claim for payment of this amount under the claim number referenced above, but the claim has been denied.

This claim is made under the implied warranty statues of the State of Nebraska, including, but not limited to the implied warranty of merchantability and fitness for purpose. The product is not reasonably fit for the purpose intended in that the faucet was not reasonably durable, which lack of durability caused the faucet to fail in a primary function in ordinary use.

This claim is also made under Really Big's express warranty in effect at the time of the sale that guarantees this product against failure of workmanship in manufacturing.

However, any claim made under Really Big's express warranty does not constitute a waiver of any rights I may have under any implied warranty or my agreement that any disclaimer of implied warranties made by Really Big in its express warranty document is effective in Nebraska.

Demand is made by this letter for payment under warranty of the amount of $512.00. I look forward to an affirmative response from you within two weeks of the date of this letter.

Yours truly,



_______________________________
for StarCraft Custom Builders
P O Box 80265
Lincoln, NE 68501

Tell the claims supervisor politely that you don't feel a resolution can be reached at his/her level, and may you please have the name and address of the head of the legal department. This is usually a lawyer, but may be a para-legal assistant.

Claims departments hate to have a dispute bumped to the legal department. It's a black mark on the ol' bureaucratic score card. So, at this point you will probably get an offer in compromise. Not everything you asked for, but something more than the original offer. If this is good enough, take it. If it isn't, then proceed.

Write a letter something like that at left to the legal department. Again, be polite, don't threaten. People, get oppositional when threatened. Your goal is to bring the legal department over to your side, since yours is the side of reasonableness and light. Don't go into great detail. The information in the sample letter, together with your original sales receipt and the plumber's bill is all you need. Be sure to include the original warranty claim number so the legal department can find the file. Also, be sure to include the part of the letter in italics. Remember the trap for the unwary we talked about earlier? This is how you get around it.

Now wait. The legal department will evaluate the legal soundness of your claim. The first question they will ask themselves is "Will you win if you sue?" The second is "Is it worth our time and money to defend?" This is straightforward, bottom line, arithmetic. And the answer depends on whether they believe you will actually sue. Don't expect a quick answer. Legal departments are usually under staffed and overworked. Like claims departments, they don't make a profit, so manufacturers don't spend much money on them. So, wait. But not too long. Give it two weeks. If you have not heard back in two weeks, write a second letter restating your claim and enclosing a copy of the first letter with attachments. In your second letter, also give them a definite time limit to respond. Two weeks is enough. Wait some more. After two weeks, if you don't hear from them. you can consider their answer is "No".

But most of the time you will get a timely (by legal department standards) response restating the company's position — generally they will pay for parts, but not for labor, and strongly implying that you must be some sort of skallywag and fortune-seeker, daring to ask for more money that the company out of the goodness of its warm and fuzzy, fiscally-ninded corporate heart has agreed to pay. Or, they may agree to pay for parts and some portion of the plumber's labor, "as a gesture of good faith" or "just for customer relations purposes". If this is good enough, take it. If not, then proceed to the next step.

But first, just for fun, send a letter thanking the legal department for their time and consideration, and asking whether the head of the department will accept service of summons on behalf of the company. This rather innocent inquiry usually gets a prompt response, and often an offer to settle, since it indicates you intend to sue. Nobody likes to be sued.

But we won't sue yet. We will first explore alternative dispute resolution.

Step 3: Arbitration
A surprising number of manufacturers are not members of the Better Business Bureau. But many are. As members, they have agreed to use arbitration as a means of dispute settlement if a claim is filed by a consumer. File the claim. There is a handy online complaint form at Council of Better Business Bureaus, Inc.. BBB Logo

Actually, you can also file a complaint against a business that is not a member of the BBB. It is less likely to be successful, but sometimes it works. The BBB publishes records of complaints, and no one wants a bad BBB rap as a business that has not take care of its BBB complaints.

BBB Arbitration is completely free in most areas, and everything, including the final hearing can be done by letter, e-mail and telephone. For a busy person such as yourself, it is ideal. In most instances you will exchange pretty much the same letters (or, more likely, e-mails) you have already exchanged. You will present your claim, the company Small claims manual will explain its position. You will respond with an explanation of why the company's position is not acceptable, and so on. The BBB representative assigned to your case will attempt to mediate a resolution. If mediation fails to reach a resolution agreed to by both parties, the BBB will set the case down for binding arbitration. Manufacturers hate binding arbitration. It's nearly as much trouble for them as a lawsuit. They have to prepare a case, send a representative; it takes time and costs money. Most of the time they will settle with you at this point.

If they don't settle, there will be a hearing before a trained arbitrator, usually a local lawyer, judge or business person in the community. Within a few days you will get a finding, and almost 100% of the time, a binding arbitration award in your favor. Typically the BBB makes the company pony up the amount in dispute which is held in escrow pending the outcome of the hearing, so you get paid right away.

Step 4: Small Claims Court
We have never understood why regular people avoid small claims court. It's the true people's court. It was set up just for us — people who know nothing about the law or how to some someone, but who have a legitimate grievance that should be resolved. It's our chance to get even modest claims adjudicated by an impartial judge on a level playing field against even the biggest and most powerful of the worlds mega-corporations — all without the bother and expense of hiring a lawyer. In fact, in small claims court, lawyers are actually prohibited (a practice more of the institutions of our society should consider adopting). For your warranty claim, it's the perfect venue.

Sample Small Claims Complaint and Notice to the Defendant
STATE OF NEBRASKA
FORM NO. CC 4:1 07/10
Appendix 4, Uniform
County Court Rules
PLAINTIFF'S CLAIM AND
NOTICE TO DEFENDANT
(Small Claims Court)
 CASE NUMBER



(Court use only)

IN THE COUNTY COURT OF       LANCASTER       COUNTY, NEBRASKA

STARCRAFT CUSTOM BUILDERS
Plaintiff,

vs.

REALLY BIG FAUCET COMPANY, INC.
Defendant. 		PLAINTIFF'S CLAIM AND
NOTICE TO DEFENDANT

Plaintiff states that defendant(s) owes(s) and should be order to pay to me the sum of $   512.00    and costs of this action, or return the property valued at $ $   N/A    and the costs of this action because on

July 12, 2011 my Model 1234 faucet, purchased from defendant on May 4, 2006 (receipt attached) began to leak, causing me to pay a plumber the amount claimed of $512.00 to fix the leak (receipt and cancelled check attached). Defendant warrants this model faucet to be free from defects such as would result in a leak, but despite its warranty and despite my having asked the Defendant several times to pay me the amount claimed, Defendant has declined and refused to pay this amount.

Plaintiff declares that the defendant(s) is (are) not a "person in the military service of the United States" as defined in Sec. 101 of the Soldiers and Sailors Relief Act of 1940.

I have filed    zero    small claims this week, and    zero    small claims within the current calendar year.

To the best of my knowledge and belief, the defendant(s) may be served at the following address:
c/o Roger Edam, L.L.C., Registered Agent, 1234 Lawyer Road, Lincoln, NE 68512.   

My printed name and address as as follows:
StarCraft Custom Builders, P O Box 80265, Lincoln, NE 6501-0265.   
Telephone: 402-871-5301   

I elect to have the notice served on the defendants() by [  ] Sheriff/Constable [X] Mail [  ] process server.

DATE: Dec 12, 2011    
PLAINTIFF'S SIGNATURE: __________________


DATE: Dec 12, 2011    
SIGNED IN MY PRESENCE: __________________


Subscribed and sworn before me on the date last written above. (Notary Seal)   

This Part to Be Completed by the Court
NOTICE TO DEFENDANT

This claim has been filed against you. You must appear before this court on the __________________, at ____________________ __.m at The Justice Center, 2nd Floor, 590 S. Ninth St., Lincoln, NE. If you do not appear, a judgment may be entered against you, together with costs of this action. You should read the information on the back of this claim notice. If you have any questions about the procedure, you may contact the Clerk of the Court in person by by calling 402-441-5555.

DATE: _____________

BY THE COURT: _________________________________

(Seal of the Court)
Every small claims court has a brochure or booklet on how to file a small claim. In addition, for most states an enterprising lawyer or two has written a "how-to" manual. This usually goes into more detail about the entire small claim process in your state, and is well worth checking out of the library or purchasing on line. To find out if one exists for your state, just Google "small claims court [your state]", and pick through the results. If someone has written a manual for your state, it will show up. Check the publication date, however. Some of these were written many years ago, and things have probably changed. There are also some general guides. The best we have found is from NOLO, publisher of the respected on-line legal encyclopedia, entitled Everybody's Guide to Small Claims Court. Most of this book is also available for free on-line, along with scads of other useful legal information, at the NOLO web site.

Filing the Complaint Small claims court rules are fairly simple, but they are still rules, and you have to follow them. Find out what they are by calling the clerk of the court and getting a copy of the small claim rules and a complaint form. These are usually free. Read the rules. Read the rules again. Don't hesitate to call the clerk to explain any rule that is not clear. He or she will tell you s/he is not a lawyer and cannot give legal advice, then, after having made this disclaimer, will usually proceed to explain what it all means.

Fill out the complaint form, stating your claim clearly and succinctly just like you did in your initial letter. You might want to write a draft or two first, to get the word count down. Attach your receipts and other supporting documents to the complaint (these are now called "exhibits"), write a check for the filing fee, and send it in.

Serving Summons on the Defendant In a few days you will get a a legal document called a summons from the court. This is a court order requiring the defendant (the company, in this case) appear before the court on a specified date and time to answer your complaint. You have just gotten the power of the state behind you, but the reason it was sent to you and not to the defendant is that it is up to you to actually "serve" the summons on the defendant. The summons will be accompanied by a set of instructions on how to serve a summons. Read these carefully. You can hire a private process server or the sheriff in the county where the company has its headquarters to actually hand the summons to a corporate officer. But, the easiest and cheapest way to serve the summons is just to mail it to the company's resident agent by certified mail.

Every company that does business in your state has to have a registered agent physically located in your state. To find out who this is, you can usually just call the company's legal department. If that fails, you can look it up yourself on line at the state government web site of the agency that handles corporation filings. This is usually the Secretary of State's office. Almost all corporation filings are public documents and available for inspection. If you can't find it on the web site, you can usually telephone to get the information, or at very least, help with using the web site.

If the company does not do business in your state, then you have to look for information about the company in its state of incorporation. Generally this will be either Deleware or New York. You can usually find out from the company's web site it actual corporate name, and the state in which it is incorporated. Look in the "About Us" and "Contact Us" sections.

Deleware Corporation Search A typical corporations search result. The registered agent information is circled. Mailing a summons certified mail, return receipt to the registered agant is legally the same as handing it to the company president in person — and usually a lot easier. Corporation filings will tell you the name of the agent and his or her address. Usually it is a law firm or company that provides multi-state agency service. Mail the summons to the agent by certified mail, return receipt requested. You can do this at the post office. But we usually just drop in on the local SuperMart. One guy gets the coffee and Twinkies, the other takes care of mailing the summons. Many super market stores offer this service at the customer service counter. So do some banks.

In about 10 days the post office will return the signed receipt to you. Make a copy of it for your file, then attach the original to the form you received from the court that certifies that you served the defendant in "the manner as provided by law." Don't forget to sign it. And, don't forget to mail it in. If you don't send in this form, the company is not considered served with summons, and does not have to appear in court.

One of three things will happen now. To the company, getting the summons is a heads up that you are really serious about your warranty claim. Most likely the company will call you and offer you everything you asked for, because it is a massive pain in the butt for them to actually appear in small claims court. They can't just send a lawyer. Remember, lawyers are forbidden in small claims court. In most jurisdictions they have to send an actual corporate officer. Can you imagine even a junior vice president flying to your home town to defend a $350 lawsuit? We can't either. This is when the company gets really serious about getting you out of its hair. Don't forget to add the amount of the filing fee to your revised claim amount, and the cost of the certified service of summons. But don't get greedy and start piling on frivolous charges. If they get their dander up, you just may get to meet the junior vice president after all.

The second most likely result is that they just won't show up. A defendant does not have to show up in a civil case. If it does not appear, the law makes the assumption that it was because the company had no defense to offer to your warranty claim, and the court will usually, without any prompting from you, enter a default judgment against the company in the amount of your claim. But just to be sure, ask for it, politely. This is a judgment you can collect on, and is just as good as a judgment after trial.

The Trial If someone does show up, you get a trial, which might seem scary, bit actually is not scary at all. There are no, or very few, evidentiary rules or formalities in small claims court. Common civility is typically the only requirement. It's all very informal, friendly and non-intimidating. Be polite and speak only when invited to by the judge. In a real courtroom, unlike what you see on TV, there is no yelling, jumping up, waving arms or pounding on the table. Don't waste the court's time being argumentative or interrupting the other guy. There are dozens of cases waiting behind yours, and the judge is a very busy person. Just present your case: stand up, tell your story, sit down and shut up. If the defendant says something you want to dispute, you will get a chance when it's your turn to speak again. Stand when addressing the court unless told otherwise. Don't object to anything. You are not Perry Mason. Don't be confrontational. You can ask questions of the defendant when invited to by the court, but do so politely. Don't try to cross examine. Cross examination is an art that requires a lot of skill and practice, and you have neither.

Taking the Oath The judge conducts the show, so you don't actually have to know what to do. Each side just tells its story under oath. The judge will usually ask both parties questions to clairify the legal points, and also ask you for any receipts or other documents you have to support your claim. Here's what you should bring, Of course, if the defective product is to big to carry around, like a window or your car, bring clear photographs instead.

You may also bring the plumber. He can testify about what he had to do to repair or replace the faucet adn why it was necessary. If your plumber is reluctant to come, you can require his appearance with a subpoena. Your helpful small claims clerk will show you how to go about applying for a subpoena.

The company will defend by explaining that while they may owe you for the parts, labor is explicitly excluded by their express warranty. You will counter by telling the court that you are not claiming under their express warranty, but under the implied warranties of merchantability and fitness for purpose; which have no limitation on labor; your "lifetime" faucet leaked and you had it fixed; and this entailed a reasonable plumber's charge for parts and labor in the amount you are claiming.

You probably won't get a decision that day. Judges like to take matters "under submission" so they have a little more time to read the documents carefully and reflect on the evidence, but you will get your judgment in less than two weeks in most courts. The odds that you will win, barring a complete screw up on your part, are about 100%. In most jurisdictions the losing party (now called the "judgment debtor"; you are the "judgment creditor") has 20-30 days to pay the judgment.

Collecting the Judgment But, keep in mind that a judgment is not money, it is the right to collect money. Most of the time the company will pay promptly. If they don't, send a letter to the president with a copy of the judgment demanding payment. If they still don't pay, you can garnish.

Money The Garnishee Defendant Any one who owes the company money or holds any of the company's assets is a potential "garnishee defendant", and can be garnished. Garnishment is just the process of legally compelling a third party that owes the defendant money to hand it over to the court, rather than the defendant, to satisfy the amount of your judgment against the defendant. The court then uses as much of the money as it needs to pay you, and returns the rest. The defendant's bank is a good choice for garnishee defendant. Banks always seem to have loose money lying around. Also, any buyer of the company's products is a potential garnishee defendant. We like Home Depot. It buys everyone's products and almost always pays in arrears, so it owes almost everyone money on any given day.

Finding a Garnishee Defendant If you are not sure who to go after as garnishee defendant, you can find out exactly who owes the company money, and the name and address and account number of every one of the company's bank accounts in what is called a "debtors examination". In some states the initial examination is by written questions called "interrogatories". You provide a list of questions that you send to the defendant who has about 20 days to answer them. Our one "question" is always an easy one: "Identify, individually for each such account, the name, branch name, branch address, branch telephone number, account name and account number of all of your bank accounts, domestic and foreign." Companies don't like to give out this information, especially in a document that is by law in most states a public document, which we could, were we mean spirited, publish on the web. So rather than answer, they will usually just pay up.

There is also an oral examination in most states. The process for forcing the company to appear for an oral examination varies from state to state, but typically you make an application to the court. The court then sends the defendant an order requiring it to produce a representative to answer questions about its finances. We usually ask for the Chief Financial Officer, figuring he or she probably knows a little something about the company's finances. Your friendly small claims court clerk will help you with the application, after the usual disclaimers.

The company is not going to send its Chief Financial Officer, or anyone else for that matter, nor are they going to risk contempt of court by just not showing up. Small claims court may be a minor court, but it still has all the usual courtly powers, including the power to lock people up when its orders are blatently ignored. Most inconvenient, that "locking up" business. What the company will do is send you a check and ask you to please go away.

But, if the company does return answers to your written questions, or someone actually does show up to answer your oral questions, which s/he must do under oath, then you will find out where their assets are and who owes them money. Now you can proceed with garnishing these garnishment defendants.

How to Garnish You fill out and file with the court (this can all be done by mail) an application for a writ of garnishment for one of more of these garnishee defendants. The count will send the writ which instructs the garnishee defendant to pay to the court any money it owes to, or holds on behalf of, the defendant/debtor; up to the amount of the judgment. The garnishee defendant responds either with money or a response form stating that it does not owe the debtor any money at the present time. You can send out as many garnishment writs as you want, as often as you want until the full amount of the judgment is paid. In most jurisdictions there is a small fee for a garnishment writ, but this is just added to the amount the company owes on the judgment (by the court clerk, you don't have to keep track of it). Usually, after the first one, the company pays. No one wants a reputation in the business community as a judgment deadbeat. But if it doesn't, well, you now know how to collect the rest.

Conclusion
So, there it is. You have enforced your first warranty claim. You are a certified Warranty Warrior. One thing for sure, you won't hesitate to enforce the next one. And, if every one used the enforcement tools readily available instead of just belly-aching on the world wide web, manufacturers would start taking warranties much more seriously than they do now, and there would be a lot less to belly-ache about.

Rev. 01/30/12