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China bars O.C. businessman from returning home, citing contract dispute

January 9, 2011 |  5:53 pm

A businessman from Orange County said Chinese government officials have prohibited him from leaving China for the last four days, saying he must resolve a contract dispute with a Chinese supplier before they’ll let him return to the United States.

Horowitz Brian Horowitz of Mission Viejo said he was detained at the Shanghai Pudong International Airport on Thursday and told that he couldn’t board an American Airlines flight to Chicago because of a lawsuit he says he knew nothing about.

Horowitz said he called a judge at the direction of Chinese immigration officials and was told he would need to settle the case, filed by an exporting company in the city of Fuzhou, before he would be allowed to fly home.

The supplier, Fuzhou Trading Co., is seeking payment for a shipment of blenders that Horowitz’s company, On the Edge Marketing Inc., sold briefly in the United States, Horowitz said. The Chinese company’s owner demanded $250,000 to settle the contract dispute before he’d direct the judge to let him leave, Horowitz said. Officials with Fuzhou Trading could not be reached for comment.

Horowitz said he has been staying in hotels while his wife, Tammy, has scrambled at home to drain retirement accounts, liquidate their daughter’s college fund and borrow from friends and relatives. She is preparing to wire the money to China, Horowitz said.

Horowitz said he is scheduled to meet with a Shanghai law firm Monday to make arrangements to pay the money and resolve the matter. The U.S. Consulate in Shanghai and Rep. Gary Miller (R-Diamond Bar) have been assisting, Horowitz said.

Meanwhile, Horowitz, a 46-year-old with diabetes, said he ran out of insulin and spent part of the day Sunday in a Shanghai hospital, where doctors managed to stabilize him.

“I want to go home so bad. I’m starting to break down,” Horowitz said.

Horowitz’s case is a cautionary tale for Americans doing business in China, where laws and customs differ markedly from those of the United States. Under Chinese law, for example, foreigners with pending civil cases can be barred from leaving China until the matter is settled, experts in Chinese law said.

Horowitz’s dispute centers on his 2007 purchase of 3,000 gasoline-powered blenders, which are popular among tailgaters and campers. Horowitz said the Chinese supplier “cut corners” and did not manufacture the blenders to U.S. air quality standards, as the contract specified. The California Air Resources Board fined Horowitz’s company $240,000 in 2009 and ordered him to pull the blenders from stores.

Horowitz said the Chinese company agreed to write off Horowitz’s balance of more than $300,000 because of the fine and recall. And that was the last he heard about the issue until this week. He said that he was never served with a copy of the lawsuit and that he had traveled to China about 30 times in the last two years without incident.

After doing business in China for nearly two decades, Horowitz said, he’s never going to return. Instead, he said, he’ll deal with manufacturers in Taiwan and elsewhere.

“I don’t owe this money. But because they filed a lawsuit and I had no way to defend my rights, I can’t go home,” Horowitz said.

Margaret K. Lewis, a law professor at Seton Hall University and a fellow with the National Committee on United States-China Relations, said Chinese law permits the government to deny exit to foreigners who have unresolved civil cases. But the law also requires that defendants be notified of lawsuits and allowed to present a defense. She said it would be unusual for a Chinese court to enforce a lawsuit against a U.S. defendant who had not been notified of the lawsuit.

“This case strikes me as extreme,” Lewis said Sunday.

Meanwhile, Horowitz’s wife and two daughters have been anxiously awaiting his return.

“He called me in the middle of the night and said we need $250,000. You know how scary this is?” Tammy Horowitz said. “We had to call everybody we know to get the cash. Now, how do we know [the Chinese supplier is] going to show up in court and say we paid it?”

-- Stuart Pfeifer

Times staff writer David Pierson in Beijing contributed to this report.

Photo: Brian Horowitz during a recent family vacation to Thailand. Credit: Horowitz family

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