Thursday, January 29, 2009

$67 Million Dollar Pants Suit Fails on Appeal

This posting was written by Jody Coultas, Editor of CCH State Unfair Trade Practices Law.

A dry cleaner did not violate the District of Columbia Consumer Protection Procedures Act (CPPA) by posting "Satisfaction Guaranteed" and "Same-Day Service" signs in its window and then failing to satisfy a customer or clean his pants on the day they were dropped off, according to a District of Columbia appellate court.

This ruling was yet another blow to a customer who filed numerous claims against a dry cleaner for $67 million in damages, stemming from the loss of a pair of his pants.

In 2005, the customer took a pair of burgundy and blue pinstriped pants to the dry cleaners to be altered and requested a pickup date for two days later. However, the dry cleaner was unable to locate the pants when the customer tried to pick them up, and later allegedly tried to pass off a different pair as the pants that were originally dropped off.

Based on his dissatisfaction with the dry cleaner, the customer filed CPPA claims, alleging that the "satisfaction guaranteed" and "same-day service" signs constituted fraud. The trial court rejected these claims as without merit, and this appeal followed.

“Satisfaction Guaranteed”

The customer based his CPPA claims on the fact that the dry cleaner had not lived up to the "satisfaction guaranteed" sign. The CPPA required the customer to prove by clear and convincing evidence that the dry cleaner made a false representation of a material fact with knowledge of its falsity and with the intent to deceive. Although the customer argued that the sign was an "affirmative representation of unconditional customer-determined satisfaction," the court of appeals concluded that the sign should be viewed in light of the reasonable customer standard.

As with any CPPA claim of fraud, the court looked at how the conduct at issue was viewed and understood by the average customer. In this case, other customers of the dry cleaner testified that they believed the sign to mean that the dry cleaner would try to fix any problems and would make reasonable compensation for any problems that could not be adequately resolved.

According to the court, the customer's interpretation of the sign as an unconditional and unlimited warranty was not supported by any law or reason. Moreover, the court found that the customer did not even make out the underlying factual basis for his allegation that the pants the dry cleaner tried to return were not the same pants he dropped off.

“Same-Day Service”

The customer also failed to state a claim that the dry cleaner violated the CPPA by posting a sign that stated it offered same-day service. Although the customer argued that the sign was fraudulent unless same-day service was always and automatically offered, he presented no evidence to support this proposition.

In situations where a customer drops off clothing just before closing, same-day service could not be reasonably expected, according to the appellate court.

The decision is Pearson v. Chung, CCH State Unfair Trade Practices Law ¶31,737.

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