Tuesday, January 17, 2012

Stranger than Fiction: Extortion on Moving Day

The word "extortion" is strong language in law.  It's a criminal offence, and not a word that should be thrown around lightly.  So when Deputy Judge Sebastian Winny, in the course of a civil trial, concluded that a moving company's actions amounted to extortion, we're dealing with pretty serious misconduct.

As a bit of a disclaimer, I'm going off what I read about this case on CBC News, and have not had an opportunity to read the decision itself.  So...a grain of salt, right?  (Indeed, the story completely misses that the case was in Small Claims Court...which I only realized because I know that Sebastian Winny is a practicing lawyer and Small Claims Court Deputy Judge.  In fact, he was counsel acting on the Elsegood v. Cambridge Spring case I posted about recently.)

The gist of the story is this:  In 2009, Natasha Mitchell moved.  She was a cash-strapped single mother, but was able to pull together $500 to pay the movers, "Two Small Men with Big Hearts", per their estimate.  The movers loaded the truck, went to the new house, and unloaded into the driveway...then told her that the price had gone up to $890.

That, in and of itself, shouldn't necessarily be a problem.  If there's a non-arbitrary formula for calculating the cost, such as hourly billing, then it's common for initial estimates to have a margin of error.  I prefer to avoid giving estimates for hourly billed work, but when I do, I make it very clear that there are uncertainties involved:  I'll tell them what my hourly rate is, and how many hours I expect a certain task to take, and explain how it may take more or less time depending on certain variables.

So it's not outside the realm of possibility that a moving company might have a legitimate basis for charging over and above the initial estimate.  And whether or not there's a legitimate basis, it should end up being a fight over $390.

But that wasn't everything.  Not only did they tell her that she owed them $890, but she had to pay it now.  She only had $500, and told them so.  So they loaded her belongings back into the truck and drove away.

The franchise owner called her that night to tell her the bill was increased to $1,245.  The next day, it was up to $1,901, and would increase to $2,529 if she didn't pay immediately, escalating as 'storage fees'.  Not an option.  So she lost everything.  She borrowed dishes from friends and family, and rented furniture, which was repossessed when she couldn't make the payments.  She ended up sleeping on the floor for three weeks.

And obviously, she couldn't afford a lawyer.  But, fortunately, she had the sophistication and guts to pursue the matter herself.

I posted earlier today about how self-represented litigants are almost never successful, because the vast majority of their cases are chaff in the court system - matters which never should have gone to trial.  Mitchell's case is the exception.  Deputy Judge Winny awarded her compensation of $22,419, plus interest and costs, noting that the defendants were fortunate that it was not a criminal court.  (Indeed, other moving companies have faced criminal charges for similar conduct.)

The franchise owner has expressed that he disagrees with the judgment and won't pay, insisting that none of this would have happened if she had just paid the original $890.  This may well be true, but it's difficult to go from there to an entitlement to withhold the goods, and even harder to go from an entitlement to charge hundreds of dollars per day for storage.


Here's the trouble with this sort of issue:  The criminality of the conduct in question is relatively marginal, even if the civil aspects may be relatively straightforward.  The ridiculous and arbitrary escalating costs are what make it very clearly wrong, but what would happen if it wasn't escalating?  Are movers entitled to hold the goods until they get paid what they are legitimately owed?  I would lean towards "no", but it isn't necessarily obvious, and the absence of obviousness means that there could be a "colour of right" defence to allegations of theft.  If the movers thought they were entitled to hold the goods, they can't be held to have committed theft.  So I'm not sure that the criminal law is the way to deal with this.

However, those who can afford to pay the extra few hundred for their belongings will, because it's easier to do that than to have to replace everything, and then actually fighting over a few hundred dollars...well, it isn't worth it.  Whereas those who can't afford to pay the extra few hundred will lose their belongings and be unable to afford to enforce their remedies against the movers.

I think we need legislative guidance on the rights and obligations of moving companies.  On their obligations relating to billing and estimates, and what rights or liens they may have in light of a failure and refusal of the customer to pay.  People who repair and/or store goods are often entitled by statute to a lien over the goods pending payment - i.e. if I bring my watch to a jeweller for repairs, and the jeweller fixes it, he's entitled to hold it until I pay his bill.  There is a rigourous process for him to satisfy if he wants to sell it to satisfy the debt, and then he still has to account to me for money exceeding the amount of the debt.  The statutory regime is nice, and clear.  The common law regarding self-help remedies, especially where bailments are concerned, is very muddy.


This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.

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