Saturday, September 10, 2005

A case study in claims against corporations

I want to share with you all an interesting experience I had in a dispute with Amex Travel. It was instructive to see how the system operates to make it increasingly difficult for an ordinary person to file a case against a big company, even when the amount of money is trivial.

When I was vacationing in LA, I had a rental through Avis, paid with Amex credit card.

On my second day of stay, I wanted to make sure I had accident protection on the card. When I called Amex up to verify this, they said that this was not so, but they can enroll me right then. So I did.

Unfortunately on my way home, I crashed the car against a post. I was thankful for getting the protection on the car. I filed the claim at the airport and came back home.

A month or so later I got a letter from AVIS detailing the damage charges - a little over 1000 $. I called up Amex and explained their liability and they took down the information and promised to look into it. I thought that was the end of it.

A couple of weeks later I got a second notice from Avis, a little more sternly this time, mentioning my liability and hinting at collection agency involvement.

I called up Amex again and they mentioned that the date of crash is reported as 7/17 which was actually the date I rented the car. They mentioned me not having coverage then, as a result my claim would be denied.

I explained to them that I crashed on my last day of stay (7/25) while driving down to the airport. They asked me to get Avis to send them some documentation that will verify this.

I called Avis, told them I must have made a mistake on the accident report and asked them to mention that in writing to Amex, which they did.

Now I was following this closely, calling Amex regularly to see the progress made on this. They continued to say that the claim cannot be honored because of the discrepancy on the date.

This is the time I called up some lawyers. One lawyer was willing to help and took me through how I could fight this in the small claims court. Basically I had to go and see the clerk at the court and file a suit against Amex travel.

Upon going to the court, I learnt that to file against a corporation, I need to find their "Registered Agent". I learnt that corporations have registered agents in different states to handle disputes and perform other related duties. The court clerk handed me a document describing the process I needed to go through to find who the registered agent was for Amex Travel.

It boiled down to calling a number for a government office (secretary of state Office division of Corporate records in Olympia) asking for the information. The number was (360) 753-7115.

I called the number up and the person on the other end told me that Amex was a big corporation with many different branches and that I'd have to find their UBI number first. And I had to call 1-900-463-600 (master licensing) to find that.

At first I thought I had heard the number wrong, but no, it was apparently a 1-900 number.

Rather than burning 3 dollars a minute calling this number (these are of course banned in the office telephone network), I managed to find a web site - that had the information I wanted.

Armed with this information, I went back to the court and filed a suit.

A week later I got back a letter through UPS - from the registered agent. They mentioned that they serve thousands of companies but "has no business connection" with any of them, and as a result I can't name them as defendant on the suit. The letter instructed me remove their name as defendant from the suit and to mention the corporation against which I'm making the claim. It also said that they'll be collecting attorney fees from me, if they had to make a court appearance.

At this point I was very confused. The instructions in the document from the court clerk was to note the registered agent as the defendant. I called my lawyer and he said I had done everything right, and asked me to just go to court on that date.

However, I knew something was amiss somewhere. I consulted with a friend (who was a para-legal) who advised me to mention both the registered agent and the corporation on the suit.

I went back to the court and did the changes and mailed the registered agent a copy.

A week later, 3 days before the trial I got a call from Amex asking to settle, which I did for the full amount excluding 20$ court fees.

Now, I could go through with all these steps, partly because I had a flexible schedule at my job. I could take calls, leave office pretty much any time I wanted to. If this happened to someone who doesn't have that flexibility, there's a good chance he would have given up and Amex would have won.

This is just one example on how the legal system that is supposed to ensure fairness to everyone is heavily biased towards protecting corporate assets.