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Home Depot makes $1 million boo-boo

Sunday, February 20, 2005 - 12:00 AM

Home Depot makes $1 million boo-boo

By David Haldane
Los Angeles Times

SANTA ANA, Calif. — Home Depot ignored Alan Sporn for almost two years, but a $1 million court judgment got the company's attention.

The Laguna Hills businessman's Social Security number was stolen and ended up in a dozen requests for Home Depot credit.

The fiasco hurt Sporn's credit rating, but the home-improvement giant that prides itself for customer service brushed off his concerns — until he filed a lawsuit, won and tried to collect from a company bank account.

Home Depot then decided to act. It appealed the case, but a California appellate court last week sided with Sporn.

The victor and his lawyer celebrated with a bit of humor Friday. They joked they might just show up at one of the company's Southern California stores to conduct a yard sale.

"I want to sell everything for a dollar," quipped Steve Young, Sporn's attorney. "I imagine the John Deere tractors will be the first to go."

"I feel vindicated," Sporn, 52, said of his nearly three-year effort to persuade Home Depot to respond. "They're such a huge corporation, and we are just little people."

In a written statement, the Atlanta-based company said it was "disappointed in the decision ... and respectfully disagrees with the conclusions of the court."

Sporn's problems began in early 2002, when he was turned down for a low-interest loan to refinance his Laguna Hills home. He learned Home Depot had submitted inquiries to credit agencies regarding Sporn's creditworthiness at least a dozen times in the previous year.

Such inquiries — especially when submitted in large numbers — lower one's credit rating.

"I didn't even have a credit card with Home Depot," Sporn said Friday. Except for buying "the occasional garden hose or light bulb," he doesn't shop there often, he said.

When he asked the company's financial department why it was pulling his credit reports, he was told somebody in Virginia was using his Social Security number to apply for credit, Sporn said.

But Home Depot would not tell him who the culprit was. And when he sent the company a certified letter asking it to stop checking his credit rating, he received no response.

In September 2002, Sporn filed a lawsuit demanding compensation for the financial damages he said he incurred. The company continued to ignore him, he said. He told Home Depot he was seeking a default judgment. Still no response, he said. In July 2003, with no word from Home Depot, a Santa Ana judge awarded Sporn about $930,000 in damages.

The judge ruled that Sporn suffered losses when he was forced to pay a higher interest rate on his home loan and because his damaged credit rating hurt his business reputation.

The court also ruled that Sporn was entitled to a 10 percent annual interest rate and other collection expenses if Home Depot continued to delay payment. Sporn and his attorney estimated the current amount at $1.15 million.

Home Depot didn't show up for the court hearings, they said.

"After we got the judgment," said Young, the attorney, "we waited another seven months expecting that they would do something. Frankly, we just wanted their attention so they would clean this up."

So last February, Sporn and Young contacted the Los Angeles County Sheriff's Department, which sent deputies to the bank that handles Home Depot's payroll accounts with a court order.

They didn't get money, but they did get Home Depot's attention.

In its appeal, the company accused Sporn of being underhanded. Home Depot said in its filings that Sporn "obtained by stealth" the "excessive" default judgment, which the company discovered only when Sporn "began enforcement efforts after laying in the weeds for many months."

In its ruling — published Wednesday — the 4th District Court of Appeal disagreed.

The court scolded the company for seeking "to escape the results of its own carelessness."

"An obvious gap appears in the evidence," acting Presiding Judge William Rylaarsdam wrote. "There is no statement that the [court papers sent to Home Depot] were lost, stolen, forwarded to the wrong person, or eaten by the dog."

Richard Ruben, an Orange County-based attorney for Home Depot, declined to comment, saying he had not read the appellate court's ruling.

The company said it was reviewing its options to appeal.

But Sporn and Young said they were overjoyed.

"A corporation," Young said, "doesn't have skin and blood; the only way you get their attention is with the sting of the dollar."

Los Angeles Times reporter Dan Weikel contributed to this report.

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