Signed and Sealed Does Not Always Mean Delivered

There are so many ways to communicate across great distances these days, but when you are required to put something in writing and the stakes are sizable, it is important to get a signed receipt on delivery.

That is the lesson to be learned from the experience of Albert and Jenny Pennington, 75 and 76, Banning residents who celebrated their golden wedding anniversary in January.

When the retired couple decided to sell 100 of their shares of Conexant Systems stock on Feb. 22, the price was $124 a share.

The Penningtons say that when they phoned the huge Chase Mellon Shareholder Services in New Jersey with instructions to sell, they were told that since the stock was in a living trust, they would have to give written notice.

Instead of using registered, certified mail or overnight priority mail or Federal Express--all of which would have required a signature when delivery was accepted--they sent it regular priority mail, which did not. With their general postal receipt, they were confident it had been delivered Feb. 25 and the transaction consummated. The stock that day was still a robust $115 a share.

Two weeks later, when no check arrived, they called Chase Mellon and were told no sale had been made, and Chase Mellon said it had no record of receiving the mail, even though the Penningtons had the postal receipt.

In the weeks that followed, the stock sank as low as $42 a share, and Wednesday it closed at $57.

The Penningtons, if they sold today, would lose nearly $6,000 they might have had. For weeks, they have been seeking with no success to get Chase Mellon to give them the Feb. 25 amount.

On March 22, Marguerite Vasquez, a customer rep for the firm, sent the Penningtons a letter declaring, “An initial investigation of our records does not reveal receipt of the Federal Express mail you sent to us in February.” Vasquez had somehow gotten the false idea the couple had sent a Fed Ex.

There were further frustrations. When the Penningtons faxed a copy of the receipt for their priority mail, Vasquez said the fax had not been received, even though an executed fax normally constitutes delivery. She did verify a second fax, and later referred them to a supervisor, Gerald Field, who said he would launch another search for the sale order and call back.

Field did not call back. On March 30, Pennington said, “My wife called and left two messages on Ms. Vasquez’s voice mail, saying . . . to have Mr. Fields call her. Neither she nor Mr. Fields called and [later Vasquez] said she never got the messages.

“Then my wife asked Vasquez to please give her the name and title of the highest official at Shareholder Services. After a long hold a Mrs. Aurelia Moialex, who said she was the unit manager, came on the phone and said she would check it out and would call her April 3 at 8 a.m. She never called.”

And so on. By the time the Penningtons contacted me, they were almost beside themselves.

I talked to a few attorneys and stockbrokers about this. Most said the Penningtons might have a shot at getting a full payment if they sued on the grounds of a presumption the mails go through. Chase Mellon would have to show some substantial likelihood it hadn’t received the sale order, they said.

But suing is probably out of the question for the Penningtons. It might well cost them more than the money at stake, and they might lose and conceivably have to pay the other side’s legal costs.

I sought the official view from Chase Mellon.

But, at first, it wasn’t so easy to get through. The woman who answered the customer service line gave me a corporate number in Atlanta, but it turned out to be a number for Bell South, a firm that is a customer of Chase Mellon but has no responsibility for its business.

Finally, I reached someone who could speak for the firm, Stephen Dolmatch, executive vice president and general counsel.

“The receipt the Penningtons had was the receipt by the post office, not us,” he said. “We have our own safeguards. Incoming messages are date-scanned, stamped and put into a folder. We have checked and rechecked and can’t find any record of receiving this.”

The firm occasionally has a problem with customers who send empty envelopes and then, depending how the stock is doing, claim they have sent either a sell or buy order, he added. But he said he was not suggesting the Penningtons were guilty of such behavior.

If the sum in dispute was small, Chase Mellon might well settle with the Penningtons, Dolmatch said. But $6,000 is comparatively a lot, and, while sympathizing with them, he was not inclined to give them the benefit of the doubt and pay that amount.

If only the Penningtons had sent it overnight priority mail rather than regular priority, it would not have been lost, he said.

But Dolmatch seemed a little hesitant to close the door. He asked me whether I thought the firm should give in, and hinted this might still be a possibility.

Dolmatch noted that the Penningtons could ask that all their stock be released to a brokerage closer to their home, where they could simply go in and write out an order for an immediate sale.

He finally said he would call the Penningtons himself. And he did.

Mrs. Pennington told me later that Dolmatch “apologized profusely, which is not exactly what I want. I want my money.”

“He was going to research it a little more,” she related. “He might rule in my favor. It might take longer to come to a conclusion.

“I told him, I don’t mean to be running your company down, but you’re not infallible. I mentioned them losing that first fax and not returning calls.”

So this goes on. It’s a rather sad story. I couldn’t help but feel the Penningtons would be better off with their stock closer to home.

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Ken Reich can be contacted with your accounts of true consumer adventure at (213) 237-7060 or by e-mail at ken.reich@latimes.com.