Persistence pays off for disgruntled Gateway customer

Dennis Sheehan beat the odds to get his day in court with Gateway, and on Monday the retiree from Grizzly Flats won his battle with the computer giant in small-claims court in El Dorado County.

After a brief trial in which Sheehan argued his own case, Superior Court Judge Daniel Proud ordered Gateway to refund the man's money for a desktop computer Sheehan said was a lemon.

The judgment: $1,218.

That's pocket change to Gateway, a multibillion-dollar corporation. But Sheehan said he hopes computer buyers, for whom endless phone calls to technical support have become a source of anger and frustration, might follow his lead and sue in small-claims court, a forum for basic justice where lawyers are forbidden.

"I think it's going to make a statement to these big companies that somebody really cares about customer service," Sheehan said. "Once we put our dollars on the table, we expect companies to stand behind their products."

Sheehan had sued Gateway after buying a computer he said was defective from the start, with jumbled graphics and other problems. He called technical support for months -- by his estimate nearly 200 times -- but never got the computer working properly, he said.

Gateway refused to replace his computer or refund his money, he claimed. After becoming increasingly frustrated, he sued the company last year in small-claims court.

Gateway's lawyers first tried to have the case thrown out. They argued that the arbitration clause included in the sales agreement required disputes to be heard before a private arbitrator of the company's choosing, not in a public courtroom.

Sheehan successfully argued that his computer's graphics were so broken that he couldn't even click the box to accept the agreement.

In a June hearing, Judge Proud sided with Sheehan and ordered the case to trial.

At Monday's trial in Cameron Park, Sheehan told the judge he had bought a Gateway computer and monitor in early 2006 to start a sign-making business from home. The graphics on the computer never worked right and cost him his business, he said.

A sales representative didn't respond to his messages saying he wanted to return the computer within the initial 15-day refund period, Sheehan said.

Dozens of calls to customer service failed to resolve the problems, he said. In each call, he would have to start from square one with a technical-support worker who didn't have sufficient knowledge to help him.

Sheehan asked the judge for $7,500, the maximum allowed in small-claims court, "to show Gateway they shouldn't be treating people this way."

To argue its side, Gateway sent a representative from its Irvine headquarters while its lawyer, William Portello, was forced to sit in the audience.

Adriana Ayala told the judge that Gateway had done everything it could to make Sheehan happy, including sending him a replacement computer. Sheehan never sent the first computer back, as he had agreed to do, and instead kept both computers, she said.

As proof, Gateway gave the judge a copy of FedEx shipping receipts that showed two deliveries to Grizzly Flats, which is about 24 miles southeast of Placerville, in June. They were for the new computer tower and monitor, Ayala said.

But the receipts lacked Sheehan's name or address or a description of the packages' contents. Sheehan hadn't signed for either package and insisted that he had never received them.

"I don't know who got the computer," Sheehan told the judge. "I would not be here today if I'd received a replacement computer."

At the end of the trial, Proud said he was siding with Sheehan. He said the FedEx receipts that Gateway supplied were insufficient to prove its case.

"I am not satisfied that a replacement computer was sent to Mr. Sheehan," he said.

But Proud said he would order Gateway to pay only the money that Sheehan could show he had spent on the computer and the lawsuit.

He ordered Gateway to refund Sheehan's $1,191 purchase price, minus a 15 percent restocking fee, according to the terms of Gateway's warranty.

He also ordered Gateway to repay Sheehan the $145 he'd paid a local computer shop to try to fix his machine and the $60 he paid to file the case in small-claims court.

Proud made the award contingent on Sheehan returning his defective computer to Gateway within 20 days.

Lana Milligan of Carmichael won a similar small-claims case against Gateway on June 20, when a Sacramento judge granted her a full refund for a computer with scrambled graphics and a hard drive that overheated.

As in Sheehan's case, Gateway tried to compel arbitration, but the judge took her side.

"They're misusing arbitration to confuse and discourage the consumer from taking any action, and they're using it to not honor their warranties," she said.

After court Monday, Gateway lawyer Portello said he was disappointed that Sheehan's case had gone so far. The company had offered Sheehan a more generous settlement than the judgment he'd won in court, he said.

But Sheehan said he felt it was important to take the company to court and get a public judgment.

"I think pestering companies makes a statement," Sheehan said. "I went into this fully intending to lose. I didn't think I had a snowball's chance in hell, but I was going to give it my best shot.

"If more people take action when big companies are bullying them," he said. "It will make them take notice."

About the writer:

• The Bee's Hudson Sangree can be reached at (916) 321-1191 or hsangree@sacbee.com.