[jmarcher]

Our Alberta company has been sued by a Montana company for breach of contract and fraud. We are innocent, but we are afraid that since we are going to a Montana court they may not see things our way. If they get judgement against us how long can they make our lives miserable? How much can they legally do to collect from us?

[ScottGem]

We need a lot more details. What are they suing you for? You generally don't get sued for fraud, its just a grounds to justify what you are being sued for. So they are saying you breached a contract with them and citing fraud as part of the reason. Is there a damage listed in the suit? What have they lost? What was the contract for?

[jmarcher]

This is a very complex situation, but I will try to give you all of the information.

We made a deal with this company to try to sell their dead stock. They had given us an exclusive distributorship for Canada for their camo clothing products. They said they would give us a written contract, but of course, that never happened.

We took the goods, and gave them a written date of when we intended to pay for the goods, and we made sure the bank would give us the money. We had to sell the goods before we could get the money from the bank, and we made that very clear with this company.

Our contract, which we wrote up, said

We are now in a position to take the entire close out of ----------as listed on your fax of -------. We understand there may be a few more items not listed as well. Please note the following conditions.
1. The entire invoice will be net 90 days as of ----------
2. The cost of these close out items will be dealer cost less 25%.
3. (their company) will pay 50% of the duty on items not made in the u.s. or mexico.
4. We require them to maintain insurance on all items until they cross the border for fire theft or vandalism.
5. All boxes must be clearly marked with contents.
6. We need a precise certificate of origin for the entire shipment.

We signed this for our company.

The first thing we know they are trying to get out of paying their half of the duty. They gave us a fake invoice for 1/2 the price, and wanted us to use this to get the goods into Canada so that they would not have to pay anything.

Then when we told them in no uncertain terms that this was not going to happen they wrote on the invoice that they would credit our account for half the duty. We didn't accept that either, but they say this was a legal means of paying their half.

Next problem, they told us that their new product had not been seen by very many people in Canada, so we should not have a problem selling the old pattern. However, we discovered there was another company making clothing out of the new material, and selling it to dealers at a lower price than we could offer on the close out stock. They seem to have forgotten to tell us that!

Perhaps I should now tell you what the suit is about.

They are suing us for breach of contract in that we did not pay for the goods when we said we would, and refused to return it. They are suing for compensatory damages for $71,067.09 Their action for price and incidental damages is for $31,067.09 worth of goods that they say we did not return, and $40,000 loss of resale value of the goods, and attorney's fees and court costs.

1. We did not keep any of their goods. They were in a locked room in a u.s. broker's warehouse the entire time, and we have a witness to testify for us.
2. We told them on 2 occasions that we wanted to return the goods, and they refused to accept them.
3. They still have 2/3 of the goods in their possession and 1 1/2 years have passed since we returned them, so how can they say they lost $40,000 in resale value?

The charge of fraud says that we told them we would pay for the goods, and we never meant it, so we deceived them. We just told them we were going to pay for them so that they would give them to us. They say we did this with malice and with the intent to deceive them. For this they have charged us $630,000.00

This is of course total garbage.

A little more stuff that happened:
We had purchased and paid for some of their new product, and after we took this close out stock we started having product returned with faulty zippers and snaps.
The owner of the company agreed to let us have 3 more months to try to sell the product, but the next day the CEO of the company said we couldn't have one more day, and if they didn't get this money right away they were going to have to declare bankruptcy. They told this to my husband and to me on separate occasions. That made warranty problems an issue.

Maybe that is enough info for now, there is much more, but that is the majority of it.

[ScottGem]

Nope that's enough. So your attorney needs to collaborate with a Montana attorney to represent you. I'm not a lawyer, but the first thing I would be doing is asking for a dismissal of the case on the grounds that it is frivilous and not in accordance with the facts. If you can show at a hearing on that motion, that a) you offered a contract that was never signed, b) you tried to return the goods and it was refused and c) they told you things that were false, you may be able to avoid a trial

If it does go to trial I think you will win and if you can't dismiss it, I would countersue.

But, bottomline is you need an attorney and you will probably want to countersue to cover your court costs. Though if the company is as bad as you say, you may never collect.