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Plumbing firm faces civil suit

State prosecutors are alleging a New Berlin company that boasts of having “no surprise plumbers” was in the habit of springing unexpected expenses on customers.

The Wisconsin Department of Justice filed a civil summons Monday against Flat Rate Plumbing Inc., accusing company officials of making unnecessary repairs and overcharging customers. According to a civil complaint released the same day, the company advertises that it will unclog almost all small drains for $99, thus avoiding the surprises that supposedly can result when contractors charge according to the time and materials used on a project.

“In fact,” according to the civil complaint, “numerous Milwaukee-area residential homeowners have called Flat Rate over the years to help them with a small problem, such as a clogged drain, only to have Flat Rate’s salesmen come to their homes and tell them they had no choice but to spend large amounts – often thousands of dollars.”

The complaint goes on to allege that much of the work was not needed and that Flat Rate plumbers have gone so far as to damage pipes and other equipment to give themselves something to repair.

A man who answered the phone Tuesday at Flat Rate’s New Berlin office declined to comment.

Dana Brueck, a Department of Justice spokeswoman, said state officials do not comment on pending legal actions.

Patrick Knight, a Milwaukee-based lawyer representing the company, said the state’s allegations are devoid of specifics, making it difficult to respond.

According to court documents, the state Department of Agriculture, Trade and Consumer Protection has received 20 complaints about Flat Rate’s business practices since 2008. Those led Flat Rate on Jan. 11, 2010, to enter into an Assurance of Voluntary Compliance agreement with the state and promise to comply with consumer-protection laws. Despite the pledge, according to court documents, the unfair business practices continued.

The state’s complaint alleges that Flat Rate routinely sent two or three plumbers, a heating-and-cooling technician and a salesman on service calls, no matter how small the job. The crew then would tour the house, according to the complaint, and many times call for large, expensive repairs that were unrelated to the original request for assistance.

In one case, according to court documents, a homeowner who had reported a leaky pipe was told his entire plumbing system needed to be replaced for nearly $8,000. In another, according to the same documents, a homeowner who called about a malfunctioning toilet was told he needed nearly $10,000 worth of plumbing work.

The court documents do not provide the names of alleged victims or give the dates when the supposed misrepresentations occurred.

State officials are not the only ones who have heard grievances aired against Flat Rate. The Better Business Bureau, according to court documents, has received 54 complaints since January 2010.

The organization’s website lists only 19 complaints, many of which make similar allegations to those in the court documents. Lisa Schiller, chief investigator at the bureau’s Milwaukee office, said the records go back no more than three years.

Until Tuesday afternoon, the bureau’s website had listed Flat Rate as having a “B+” rating. The grade has been taken down, though, as the bureau takes into account the Department of Justice’s legal action, Schiller said.

She said ratings are adjusted for a number of reasons, including whether a company has resolved complaints in a timely manner and to customers’ satisfaction. Of the 19 complaints listed on the Better Business Bureau’s website, 15 were resolved with the help of the organization, whereas four resulted in outcomes that had left customers unsatisfied. according to the website.

None of the comments listed online gives the full name of the submitter. According to the website, Flat Rate has responded in each instance by contending, “We are not a time and materials shop, we charge by the job not by the hour.”

According to Flat Rate’s note, the company charges what it must to cover overhead costs.

“A company that provides our type of services (24 hours/7 days) encounters a high cost of overhead,” according to the note, “which is reflected in our prices.”

Ivan Hannibal, a Madison-based consumer-protection lawyer, said cases such as that involving Flat Rate can be difficult because they often pit the words of experts against those of laymen. In other words, he said, it can be hard to prove that repairs ordered by a licensed plumber were unnecessary.

The state’s accusations against Flat Rate concern not only the company but also the owner, Lester M. Gumieny Jr., and an employee, Andrew J. Gomez. Gumieny is registered with the state as a master plumber and Gomez as a journeyman.

Hannibal, who said he is not familiar with the facts in the Flat Rate case, said one way to overcome the usual deference that goes to experts is to enlist the help of other experts. He said he is aware of investigations in which officials have called in trusted contractors to give a second opinion on repairs ordered by a company that is under suspicion.

“That has been done a lot,” Hannibal said, “with auto-repair shops.”

Knight said he and his clients at Flat Rate want more details of the state’s accusations before responding.

“It’s like they put out a complaint saying, ‘You wrote a bad check on some date to some person that you intended not to be paid,’” Knight said. “So, OK, how do I reply? But sooner or later all that will come out or this case will go nowhere.”

About Dan Shaw, [email protected]

Dan Shaw is the managing editor at the Wisconsin Law Journal. He can be reached at [email protected] or at 414-225-1807.

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