By Lorraine Mirabella, The Baltimore Sun
7:44 PM EST, January 21, 2013
When the water heater went out at his Pasadena home, Steven Stafford called his home warranty company, which sent a plumber from All State Plumbing, Heating & Cooling to replace it. Stafford paid the plumber $175 in cash to obtain a permit. When the plumber asked for more money, Stafford began to sense something was amiss.
"I couldn't understand what their deal was," Stafford said. "They were charging you all these extra things on top of what they were supposed to do. The next thing I knew, I was paying more for their services than the actual water heater cost."
He canceled the job, deciding to buy and install the water heater himself. When he called the county to inquire about the permit he had paid for, he was told no permit had been obtained.
Stafford is among thousands of Maryland consumers victimized by either All State Plumbing, Heating & Cooling Inc. or All State Plumbing Inc. and its owner, Wayne Garrity. On Jan. 3, the state attorney general ordered the companies and Garrity to pay at least $1 million in penalties and restitution.
All State and Garrity used unlicensed plumbers and skipped required safety inspections, the order found. The companies and their owner also admitted to some of the hundreds of instances of charging customers for permits never obtained, documents show. There is no evidence there was anything wrong with the plumbing work performed by All State.
Finksburg-based All State and Garrity "have a long-standing and disturbing pattern of being cited and fined by state and local regulatory authorities for failing to obtain permits and using unlicensed persons to perform plumbing services," according to findings in the state's case, heard last June by an administrative law judge.
The final order issued by the attorney general's consumer protection division required Garrity to pay a civil penalty of more than $700,000 and reimburse consumers for improper jobs, starting with an initial restitution fund of $250,000. He also must begin to comply immediately with state's Consumer Protection Act, which the state found he violated at least 7,079 times. If the company fails to comply, the order can be enforced in Circuit Court.
"We wanted to send a message," said Philip D. Ziperman, deputy chief of the consumer division, which upholds the consumer code but doesn't regulate plumbers. "We wanted to punish fairly egregious violations that were intentional. Our hope is a penalty this large will deter others who are acting similarly."
Garrity did not respond last week to repeated requests for comment.
But his attorney, Harvey K. Maizels, said he disagrees with the state's case and is considering an appeal.
State regulators who oversee licenses for plumbers and other building trade professionals called the case one of the most flagrant in recent memory because of the number of violations and victims.
"The scale of the violations and the audacity of the perpetrators is not something we run into every day," said Michael Vorgetts, deputy commissioner of the state Department of Labor, Licensing and Regulation. "I think we have made a great deal of progress regarding putting this company out of business."
State regulators hope the case will focus attention on a growing problem — the loophole created by licensing individuals, not the firms that employ them, in areas such as heating, air conditioning and plumbing.
Looking for a way to hold accountable businesses that use unlicensed workers, the state labor department tried to close the loophole with a bill proposed in 2008 that would have required permitting of HVAC and plumbing firms.
"We've recognized that this has been a problem in these industries going back over time," Vorgetts said.
However, he added, "It's a paradigm shift for the industry, and we do try to avoid undue burden on our licensees."
So the department has put the permitting proposal on hold for now and will instead push this legislative session to require continuing professional training for master plumbers seeking license renewals.
Vorgetts said DLLR flagged the All State situation as one to be referred to the attorney general's office because of the number of victims identified. The AG's consumer division filed charges against All State and Garrity in February.
During a June hearing at the Office of Administrative Hearings of Maryland, Garrity refused to answer any of the state's questions. He later defended his actions in an Aug. 27 memo opposing the state's findings.
"Nothing in the statutory text expressly requires that the individual shall be licensed during the time he provides plumbing services in the state, only that he be licensed before he provides plumbing services," the memo said.
Garrity also argued in the memo that two employees who worked with suspended licenses, including one who the state says racked up 6,000 violations while working without the required license for more than five years, still had the knowledge, skill and experience of a master plumber.
Alan Schleicher, a former All State employee who was found to have worked at least 6,250 times without a license, testified at the hearing that he thought he could continue to work as a plumber because Garrity told him the decisions against him were under appeal.
Garrity also argued in the memo that the state failed to show any evidence of real harm to consumers.
"Not a single witness testified as to any physical injuries or deaths resulting from any of respondent's plumbing services. None," the memo said. "Not a single witness testified as to any damage or destruction of property resulting from any of respondents' plumbing services. Zip. Not a single witness testified as to any explosions or leakages of gas or water of any kind. Nada."
Explosions and fires have occurred where installations by other outfits were not inspected, an official with the Washington Suburban Sanitary Commission testified at last year's hearing on the case.
Gas water heaters that are not vented properly could pose a risk of carbon monoxide poisoning, said Bob Frances, director of Howard County's Department of Inspections, Licenses and Permits. He said inspectors also check to make sure pressure relief valves are installed properly and that connections are done so there's no chance that contaminated water could get into the plumbing supply.
"It's a lot more complicated than it used to be, and we're the last line of defense," Frances said. "What's important is that we get out there and we see it so the homeowner has some protection against malfunctions or improper design or to make sure you don't have a company sending out unlicensed plumbers.
"We do find things that are incorrect that need to be corrected," he added. "We're there as an extra set of eyes."
Nearly 700 of All State's violations involved installing water heaters but failing to obtain required permits or inspections, according to the state. In these cases, All State charged consumers about $150 for permits that typically cost no more than $60, but never obtained them.
All State never refunded Stafford's $175 even though he canceled the work and he said he has little hope of ever seeing the money, despite the order.
Garrity likely owes consumers much more than the initial restitution fund of $250,000 required by the state, said Ziperman, whose consumer protection division will maintain the fund. According to the state's findings, Garrity failed to turn over work invoices and other records and "destroyed invoice records for the purpose of hiding their misconduct."
"The $1 million may just be tip of iceberg," Ziperman said of the penalty and restitution order. "We don't know how many people total."
Copyright © 2014, The Baltimore Sun