Apple/Sprint Trade-in claims water damage when unit works never exposed to water

I recently did a trade-in with Sprint and they said they performed a liquid test. They stated device was exposed to liquid, which it had never been exposed to anything but perhaps rain. Apple states the device is water resistant. Device turns on phone, was functionally working, no screen or physical damage. They use some sticker test to determine water exposure, and this supposedly states internals are damaged. Now they have my device, which they claim is damaged, and refuse to return to me. Seems Apple and Sprint a running a scam on their customers to get them to upgrade, then claim device is damaged, make them pay for new device (when deal was upgrade and receive free after trade-in), then worse keep the old device saying they can't return it to you once reaching warehouse. Is not the old device still my property, since they refuse to give me the fair trade-in value for it.

Has anyone else experienced this behavior from Apple and Sprint/T-Mobile?

Thanks