The Montgomery County Office of Consumer Affairs this week filed suit against North Carolina Furniture Connection in Silver Spring, accusing it of six counts of deceptive trade practices.
According to the complaint, the store delivered furniture late, damaged or not at all and refused to refund some $40,000 in deposits. Furthermore, the agency alleges that, contrary to its advertising, the store had no special relationship with any firms in North Carolina and was unable to deliver the quality of goods the ads implied.
The consumer affairs office filed suit last Wednesday in Circuit Court seeking an injunction against the store's parent company, Factory Furniture Inc., its officers, and owner Mary Turner. The agency also asked for the return of money owed to customers and the imposition of substantial civil penalties.
Factory Furniture filed for bankruptcy the same day. Yesterday, the Georgia Avenue store had a "closed" sign on its door and the telephone went unanswered. Turner could not be reached for comment.
Montgomery County Consumer Affairs Director Barbara Gregg said that in the past 17 months her office had received 119 complaints, a number she characterized as "very large." Of those, 78 were satisfactorily resolved. Another 40 complaints were received yesterday by the Better Business Bureau, she added. Gregg said that when negotiations to settle the complaints and to reach an agreement to halt deceptive practices broke down last fall, the agency decided to sue. The agency brings about half a dozen such suits a year.
Customer desposits held by the store range up to $2,300, with the average about $900, Gregg said.
According to Stanley M. Salus, bankruptcy attorney for Factory Furniture, there are sufficient assets -- consisting mainly of inventory -- so that customers should receive payment in full. However, he cautioned that this might not happen, since the value of goods sold in a bankruptcy liquidation is usually less than market value.
Salus said the company, which was established in April 1982, encountered cash flow problems as the result of trying to satisfy customer demands for adjustments and refunds. He said the company decided to liquidate in order to give priority in the bankruptcy proceedings to customer claims against it. A creditors meeting will be held Jan. 15 at U.S. Bankruptcy Court in Rockville.