2019 QCCQ 4208, 2019 QCCQ 4208

Déménagement et entreposage Action inc. c. Amex Bank of Canada 2019 QCCQ 4208 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF montreal Civil Division No: 500-32-157062-177 DATE: June 19, 2019 ______________________________________________________________________ BY THE HONORABLE Catherine pilon, J.C.Q. ______________________________________________________________________ DÉMÉNAGEMENT & ENTREPOSAGE ACTION INC. Plaintiff v.

AMEX BANK OF CANADA Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Déménagement et Entreposage Action Inc. (Action) operates a warehousing business. [ 2 ] Amex Bank of Canada (Amex) is a financial institution which provides financial services and products to card members and merchants who accept the Amex card.

Action was a merchant which accepted the Amex card for rent payments from its tenants. [ 3 ] Action claims $15,000 from Amex for payments from one of its tenants, Strada Italia Inc. (Strada). [ 4 ] The amount claimed by Action includes three rent payments of $7,070.96, for a total of $21,212.88, due by Strada and payable to Action through to its Amex credit card. Action also claims $6,831.61 for its legal fees.

It has reduced its claim to $15,000 to be in a position to claim before the Small Claims Division of this Court. [ 5 ] Amex contests the Demand on the basis that Strada had contested the payments, and that pursuant to its Merchant Operating Manual , it was in a position to issue a charge back in favor of Strada. It also cross-demanded $1,900 from Action for its legal fees and the travel expenses of its representative from Toronto for the hearing. This amount was amended to $1,496.05 at the hearing.

Context [ 6 ] Action signed a lease with Strada on August 1 st , 2014. for a five-year term and a monthly rent of $7,070.96, including taxes. The lease was also signed by Sergio Coletta, owner of Strada. [ 7 ] On April 10, 2015, it was agreed among Action, Strada, and Coletta, that the rent would be paid by Coletta with his Amex credit card. [ 8 ] On September 28, 2015, Theresa Diodati, manager of Action, noticed that Amex had charged back, on September 21, 2015, four months of rent from Strada. [ 9 ] She called Amex and was told that Strada had disputed the charges as unrecognized purchases. [ 10 ] Ms.

Diodati wrote Amex on September 29, 2015, to provide explanations and proof that Strada was indeed a tenant and a debtor. [ 11 ] After several weeks of unsuccessful attempts to obtain an answer from Amex, Action finally received, on October 23, 2015, copies of three letters from Amex dated September 18, 2015, advising that three amounts of $7,070.96 had been debited from its account. Forms dated August 20, 2015 were attached to each of these letters. These forms addressed to Storage advised Action that Strada had not recognized the purchases.

Amex requested evidence in support of the invoices by September 9, 2015. [ 12 ] Ms. Diodati, who is in charge of receiving the mail for Action, denies that the forms which purported to inform Action that Strada disputed the charges were ever received.

Moreover, she testified that one of the clerks from Amex with whom she spoke mentioned that there had been a mistake and that the forms requesting supporting documentation were never sent to Action. [ 13 ] Strada and Coletta vacated the leased premises in November 2015. [ 14 ] Action brought a claim against Strada and Coletta before the Superior Court to claim the unpaid rent. It claimed $123,296 against

Strada in unpaid and accelerated rents, and $49,496.72 in unpaid rent solidarily against Coletta. The lawsuit settled out of court in capital, interest, and costs against both Defendants for $10,000 in 2017. The document evidencing the settlement did not specify which months were covered by the transaction. Analysis [ 15 ] The Merchant Operating Manual which binds Action and Amex provides for a disputed charge process for the card member. Once there is a disputed charge, the merchant is advised by Amex and asked to provide supporting documentation within 20 days.

If the merchant has not replied to the inquiry within this 20-day deadline, Amex may issue a charge back to the card member, which is what was done in this case. [ 16 ] According to Amex, Action’s address on file is 7450 Mile End in Montreal, whereas it also has an address at 675 Montée de Liesse in Montreal. It assumes that the August 20, 2015 notices for the disputed charges were sent to the Mile End address. The copy of the September 18 letters also was sent by Amex to the Mile End address, but was redirected by Canada Post to the Montée de Liesse address.

Amex blames Action for having created confusion in respect of its proper address. [ 17 ] Ms. Diodati indicated to the Court that Action advised Canada Post in January 2015, well before the August 20 notices, to divert all its mail to the Montée de Liesse address. The Court cannot conclude that Action was negligent in managing its change of address and redirecting its mail as Amex suggests.

Given that copies of the letters dated September 20 were properly redirected to the Montée de Liesse address, there is no reason to believe that the August 20 notices would not have followed the same route had they been sent. [ 18 ] The Court is of the view that the preponderance of evidence is that the disputed charge notices were not sent to Action. The promptness with which Ms. Diodati reacted when she realized that there had been charge backs shows that she would have acted upon the notices had she received them in the first place.

Moreover, an Amex representative admitted to her that they were not sent. [ 19 ] Having not followed its own procedure and given Action an opportunity to respond to the disputed charges, the charge backs are not valid. [ 20 ] In addition, Shawn Brand, Senior Manager of Merchant Services at Amex, admitted at the hearing that had Action provided its supporting documentation within the 20-delay if it had received the notices, the charge backs would have been denied to Strada and Coletta. [ 21 ] As a result, Amex’s liability to Action is engaged by reason of the charge backs.

The question is now to determine the value of the claim. [ 22 ] Action claims three months of the rent which was the subject of the four charge backs. Had it not been for these charge backs, Action would have recovered those rents through the credit card payments. If the payments were not honored by Strada and Coletta, it would have been up to Amex to undertake collection proceedings against them.

Nonetheless, Action undertook its own proceedings before the Superior Court, and claimed rent not only for months which included the charge backs, but also for other months. [ 23 ] The settlement does not indicate which months were settled, it applies generally to the entirety Superior Court claim. However, the Court cannot ignore that Action received some payment from Strada and Coletta for the unpaid rent. In the absence of a specific correlation to any given month, the Court must consider that the recovered amount of $10,000 through the settlement must be fully taken into account.

The total of the three months’ rent of $21,212.88 must be deducted by $10,000, thus entitling Action to an amount of $11,212.88. [ 24 ] In respect of the legal fees, Action argues that these fees were required in the Superior Court proceedings. That may well be, but these proceedings were much more encompassing than this claim, and the Court can see no causal link with the present claim against Amex. [ 25 ] Finally, given the result of the Demand, Amex’s Cross-Demand will be dismissed.

The Court adds that since Amex offers and provides its services in Quebec, it cannot expect to be reimbursed for its travel expenses to send a Toronto representative to contest the claim. FOR THESE REASONS, THE COURT: GRANTS the Plaintiff’s Demand in part; CONDEMNS the Defendant to pay the Plaintiff $11,212.88 with interest at the legal rate and the additional indemnity provided at

article 1619 of the Civil Code of Quebec since November 23, 2017; CONDEMNS the Defendant to pay the Plaintiff the Court costs of $300; DISMISSES the Cross-Demand. __________________________________ CATHERINE PILON, j.c.q. Date of hearing: February 19, 2019