Couple Take Pet-Leasing Store to Court

PORTLAND, Ore. (CN) - An Oregon couple sued a pet store that "leases" pets rather than selling them, allegedly to duck licensing laws.

Sandee and Walter Strunk sued Hannah's LLC dba Hannah the Pet Society on Dec. 4 in Multnomah County Court.

Hannah's operates stores in Tigard and in Happy Valley, both in Oregon, according to the complaint.

The Strunks claims Hannah's engages in a "pernicious form of pet leasing" to duck state and local regulations "governing veterinary practices and boarding facilities."

The Strunks claim Hannah's charges around $200 to use its "pet matching" service that promises to pair a customer with the perfect animal.

Hannah's claims they get their animals only from animal recues and shelters, but the pets really come from "backyard breeders and puppy mills" because rescue organizations "generally refuse to do business with defendant due to its business practices," the Strunks say in the lawsuit.

Once a customer has selected a pet, the Strunks say, Hannah's has them sign a "boilerplate form agreement" agreeing to pay a monthly charge for as long as the animal lives. The monthly charge depends on the breed and size of the animal, but is "generally more than $100," and gives Hannah's permanent "ownership of the pet," according to the complaint.

"In exchange for this monthly charge, defendant agrees to allow the consumer to 'use and enjoy' their family pet and to provide emergency and routine veterinary services, boarding and training for leased pets, and to delivery specified food for leased pets on a prearranged schedule," the complaint states.

By keeping ownership of the animals it leases, Hanna's can make unilateral medical decisions and keep this information from the person who leased the animal, "including any decision to euthanize a leased pet," the complaint adds.

Unlike normal pet health insurance contracts, the Strunks say, forcing people to lease animals enables Hannah's to "ensnare the unaware consumer into a perpetual obligation where they must keep making payments to defendant or lose their household pet - the pet that defendant charged a large initial fee to place in a compatible home."

If people want to stop making those payments, they must return the animal to Hannah's or pay a cancellation fee of more than $600, no matter how long they have been paying the monthly fees, the Strunks say.

"The cancellation fee is intended as a punitive forfeiture penalty to discourage consumers from ever terminating their monthly payment obligations to defendant," according to the lawsuit.

The Strunks claim Hannah's leases pets because it knows people are unlikely to return an animal they have grown to love "if they cannot be sure that the pet will not be euthanized by defendant, which exercises sole discretion to make life-ending decisions as the owner of the pet."

This predicament is what the Strunks face, they say in the complaint.

They say they paid Hannah's $340 to match them with two husky puppies after their husky died. Hannah's matched them with a puppy named Kodee, whom they fell in love with and agreed to lease for a $125 a month.

But the puppy was sickly, the Strunks say, and though part of the monthly fee included health care, Hannah's failed to communicate with them when they tried to schedule appointments for Kodee and refused to accept the dog for an emergency illness because the facility was allegedly too "swamped."

Though the Strunks grew "frustrated" with Hannah's inability to supply them with the promised food, training services and medical treatment for Kodee, they made their payments on time because a Hannah's manager had told them they could cancel the agreement at the end of the one-year minimum term, the complaint states.

When they told Hannah's they wanted to cancel the agreement, Hannah's said they had to pay more than $740 in cancellation fees or return Kodee to the store, the Strunks say.

"As defendant had hoped, plaintiffs were presented with an impossible choice - pay the cancellation fee, continue to pay monthly fees to defendant for deficient and often nonexistent services which they had been required to pay for elsewhere, or give up their family pet," the complaint states.

Kara Hansen, a representative for Hannah's, said the lawsuit has been settled and will soon be dismissed with prejudice.

"The factual allegations in the complaint were materially inaccurate," Hansen told Courthouse News in an interview. "Despite claims to the contrary, the company only sources pets from reputable nonprofit organizations and has a firm policy of re-homing pets returned to us for any reason. Our state-of-the-art veterinary facilities meet all regulatory requirements for the state of Oregon.

"Hannah's is committed to the health and well-being of pets and strengthening the bond between pets and people," she said.

The Strunks seek damages of more than $400, representing the out-of-pocket money they spent on Kodee's care, and damages for breach of contract and breach of the implied covenant of good faith and fair dealing.

They also want a declaration that they are Kodee's legal owners and a declaration that the cancellation fee is "unconscionable and/or unenforceable as a punitive forfeiture penalty."

They are represented by Kevin M. Eckhardt with Hunton & Williams of Los Angeles.

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