A.G. Schneiderman Wins Price Gouging Lawsuit Against Lake George Tree Removal Business
American Tree Company Permanently Enjoined From Engaging In Deceptive Or Illegal Business Practices
Company Must Pay Maximum $25,000 Price Gouging Penalty And Post $50,000 Bond
A.G. Reiterates "Zero Tolerance" Policy On Price Gouging
ALBANY -- Attorney General Eric T. Schneiderman today announced a victory for consumers in a lawsuit against American Tree Company (“American Tree”) of Lake George, New York and its principals, Daniel Stranahan, John Stranahan and Merwin “Skip” Stranahan for price gouging during Tropical Storm Irene in the summer of 2011.
The Honorable Eugene P. Devine of Albany County Supreme Court permanently barred American Tree and the Stranahans from attempting to collect any outstanding amounts billed to those consumers who submitted sworn statements to the Court. He also ordered the posting of a $50,000 bond that can be used to provide restitution to any other consumers who were victimized. The court also imposed a $25,000 penalty, the largest amount permitted under the price gouging statute.
"As New Yorkers continue to recover from the devastation of Hurricane Sandy, this case serves as a reminder that our office continues to aggressively enforce the law and has a zero tolerance policy for price gouging,” said Attorney General Schneiderman. “The tactics used by American Tree during a time of crisis are shocking, and justice has now been served.”
New York State’s Price Gouging Law strictly prohibits merchants from taking advantage of consumers by selling essential goods or services for an “unconscionable excessive price” during an "abnormal market disruption" like those caused by a tropical storm, flood, hurricane or other disaster. Essential services include tree removal services, as well as other services necessary to repair damaged property.
According to the Attorney General's lawsuit, American Tree charged consumers as much as $10,000 per tree for tree removal services; tacked on $1,000 "after hours" and $1,500"emergency service call" fees even when consumers did not call American Tree for services; failed to disclose its fees prior to beginning work; or provided inaccurate “lowball” estimates or false promises of full insurance coverage.
Many consumers were shocked when they were hit with bills totaling tens of thousands of dollars. In many cases, consumers' insurance companies refused to pay American Tree's exorbitant fees and American Tree then sought to collect the unpaid amounts directly from consumers.
In finding that American Tree engaged in price gouging, the court rejected American Tree's contention that the inflated prices were justified by the emergency circumstances, and instead, found that American Tree "failed to produce any credible evidence of extraneous factors that would warrant the increase in storm-related costs…" The court also found that American Tree engaged in fraudulent conduct by intentionally concealing its exorbitant emergency and after-hours fees from consumers.
The case was handled by Assistant Attorneys General Christopher Staszak and Amy Schallop, under the supervision of Consumer Frauds Deputy Bureau Chief Laura J. Levine, Bureau Chief Jane M. Azia and Executive Deputy Attorney General for Economic Justice Karla G. Sanchez.
Consumers who used American Tree's services in connection with Tropical Storm Irene and think they may have been the victim of price gouging are urged to contact the Attorney General's office at 1-800-771-7755 or www.ag.ny.gov.