May 24, 1996 in Nation/World

Warranties Settlement Is Limited Only About Half Of Idaho Customers Covered By Plan

By The Spokesman-Review
 

Half of the Smith’s Home Furnishing customers who bought extended warranties from the defunct company will not benefit from a settlement announced Wednesday by the Idaho Attorney General’s office, a Spokane attorney said Thursday.

Nor will they get their money returned, as proposed in a lawsuit filed against General Electric Capital Corp. last November, said attorney John Giesa.

Giesa represents four Washington residents who claim GECC refuses to honor the warranties.

GECC was the backer of Smith’s revolving credit and extended warranty plans. Customers could protect their purchases for up to five years by paying premiums of $100 to $400.

If the warranties were not used, Smith’s said the premiums would be converted to in-store credits.

GECC’s refusal to back either the warranties or credits constitutes breach of contract, the complaint says, adding that the company continues to bill Smith’s customers for warranty premiums.

GECC’s agreement with Idaho, and a separate one in Oregon, call for the company to honor the warranties and transfer the Smith’s credits to nearby stores.

But the pact applies only to those customers who had not paid for their warranties in full when Smith’s filed bankruptcy last August 22, said Giesa.

Most warranties were completely paid for, blocking their holders from participating in the settlement.

“We are seeking broader remedies,” said Giesa.

For those who had paid in full, the lawsuit seeks a refund. If the customer still owes money on a warranty, the debt would be cancelled, and the amount paid so far returned.

Next Friday, Spokane County Superior Court Judge Harold Clarke will hold a hearing on whether to certify the suit as a class action.

Giesa estimates about 28,000 customers of Smith’s Washington stores, including residents of North Idaho, could qualify for inclusion if Clarke accepts the proposed classification.

There are two criteria; purchase of the extended warranty at a Washington store, and use of GECC financing.

Giesa noted that Washington residents have been advised by GECC they are eligible for the same deal offered in Idaho.

But, he added, Clark blocked an attempt by GECC to include a note in a letter to Smith’s Washington customers advising them that the terms of the warranty agreement had been approved by the Idaho and Oregon attorneys general.

The letter went our earlier this month.

, DataTimes


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