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Arbitration/Mediation/Owner stole from renter???


QUESTION: I rent a space in a craft mall.  I sold a piece of furniture to a customer , who put it on layaway.  It was paid in full, but hadn't been picked up for almost a year.  I was on vacation for 3 mos., but hubby covered business for me.  He noticed that this piece of furniture that was in layaway, was now out on the floor with a price tag issued from the owner ( not me).  She put it up for sale as soon as I left for vacation without my knowledge.  Granted, I was paid in full for this piece, but is she entitled to resell my furniture?
I have emailed her three times asking for an explanation without a response.  She has recently told an employee that she bought this piece of furniture at an auction & can resell it.  That's a lie.
I've recently sent a fourth email stating that I want my furniture returned to me or reimbursed the $279.99 I would resell it for.  She sold it for $379.99 making full profit!!!  I asked for response in 7 days and if we can't reconcile this, it will become a legal matter.  Still no response.  
So, how can I get this resolved?  I've been in the business for over 28yrs. and cannot believe the audacity of this individual. This does not make for pleasant business.
Please advise.
Thank you, suzanne

ANSWER: Hi Suzanne,

I am somewhat unclear. Is the person selling the item the owner of the craft mall, or the customer who purchased the item on layaway?


---------- FOLLOW-UP ----------

QUESTION: I am the original owner who sold it to a customer through the craft mall.  The owner of the craft mall decided to resell it because the customer did not pick it up from layaway.
I hope this is clear, if not, I'll try again. 😊

Thank you for your question!

If you have looked at some of my previous answers you may know that I always advise questioners that mediators act as neutral third parties to disputes and never "get involved" in judging the merits of conflict, but merely use special techniques to help the parties decide how to negotiate their own settlement.

I am not an attorney and cannot give you legal advice but can respond from my mediation, management and consulting experience.  Note that this issue may certainly have legal ramifications and you may wish to consult an attorney.

Please consult your layaway contract agreement with the purchaser first.  You must determine if you are contractually obligated to act as the custodian for the item, or if you are released from liability after a certain time, even if you are paid in full.  If this is not spelled out, you are then possibly at risk of the purchaser demanding a refund.

Consider doing the following preparatory and proactive steps right away as a good discussion foundation.  Here are my recommendations:

1.  Document a chronological timeline documenting the rise of the conditions leading to the dispute and record how this plays out.  Note any written agreements or oral agreements and understandings.  These carry the force of law.

2.  Review your existing documents.  Review whatever written agreements, operating agreements or other governing documents you have for guidance about rules for disengagement, if any.  Again, oral agreements count.

3.  Look at your legal options.  Remember that litigants to a lawsuit may incur a large cost to file suit, and you have to count the possible cost to yourself to pay for or defend litigation.  Remember that nearly 90% of lawsuits settle before trial so the question is usually not IF you will settle, but when and at what cost.  Disputing parties would be better off to wisely choose a cheaper, faster mediated settlement.

4.  Go see a lawyer.  The local Bar Association usually has a referral service that will give you access to an attorney for free.  You may wish to understand the legal landscape.  

Once you understand where you are and how you got there you are then in a position to work out a settlement.  

My opinion is that this is a case of unjust enrichment.  The craft mall owner (unless he has some rights in his agreement with you) cannot just take possession of property and do what he wishes.  You may wish to pursue this in small claims court.  The cost of a mediation would likely be as much as the disputed amount so I do not think it makes sense - though there may be a free service offered through your local BAR association, and it wouldn't hurt to try it.

These are some ideas.  Feel free to follow up with additional questions.

For your general information, the pros and cons of the types of dispute resolution methods follows.


Arbitration, Mediation, and Litigation

Arbitration: the referral of a dispute to one or more impartial persons for final and binding determination outside of the judicial system

Benefits of Arbitration:

Confidential, no public record
Limited exchange of documentation, information
Quick, don't have to wait for a court date
Arbitrators have expertise in the subject matter and are trained in conflict resolution
Cheaper than litigation
Preserves business relationships

Negatives of Arbitration

It's often a compromise, no 100% winner
Complex arbitration can be costly
If not satisfied, may litigate the arbitration procedure
Poor results with an unskilled arbitrator
Both parties must agree to cooperate in the process

Mediation: the process by which parties submit their dispute to a neutral third party (the mediator) who works with the parties to reach a settlement of their dispute.

Benefits of Mediation:

Neutral mediator can objectively suggest alternatives not considered before
Parties are directly engaged in negotiating the settlement
Can be quicker than litigation
Less costly than litigation
Preserves business relationships
85% of American Arbitration Association cases mediated find successful solutions

Negatives of Mediation

may not reach a binding decision
unskilled mediator

Litigation: using the judicial system to resolve disputes

Benefits of litigation:

a clear winner and loser
uses a prescribed set of procedures
more predictable outcomes
is final

Negatives of Litigation:

waiting for court dates can do more harm
usually more expensive than mediation and arbitration
part of the public record  


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Timmy Chou


I am a experienced Mediator and a partner in a management consulting firm. As a mediator I work as a third-party neutral and specialize in partnership/shareholder disputes, management/labor issues, company culture difficulties, and family-owned business problems. I can help describe why alternative dispute resolution may be a good choice for you. As an experienced management consultant I may be able to offer creative ideas to help resolve your organizational and business problems and disputes. "If you say conflict, I say opportunity".

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