State officials are lauding a state Supreme Court ruling against the American Tree Company for price-gouging customers after Tropical Storm Irene, but the owners of the Lake George-based business say they never got a chance to tell their side of the story.
In the ruling issued Friday, Judge Eugene Devine indicated American Tree “failed to produce any credible evidence of extraneous factors that would warrant the increase in storm-related costs.” His decision permanently bars American Tree from collecting any outstanding amounts billed to customers who submitted sworn statements in court and requires American Tree to post a $50,000 bond for restitution to anyone victimized by the company. He also imposed a $25,000 fine — the largest amount permitted under the state’s price gouging statute.
“The tactics used by American Tree during a time of crisis are shocking, and justice has now been served,” Attorney General Eric Schneiderman said in a statement released Tuesday.
But the Stranahan family, which owns American Tree, believe they received the exact opposite of justice. John Stranahan, the company’s vice president, said Devine’s ruling came as American Tree was compiling evidence to rebut the state’s claims.
“We’ve never set foot in a courtroom,” he said after learning about the judgment Monday. “We had no idea there was a decision coming.”
John Harwick, the attorney representing the company, vowed to appeal. He said he requested a hearing to provide witnesses and testimony, only to have the judge decide the case on the basis of paperwork filed by both sides.
“We requested a trial — our day in court — before the decision was made,” he said. “We were not given that opportunity to present our case.”
The lawsuit filed against American Tree in December accuses the Stranahans of price-gouging a number of residents who had trees toppled by Irene, which inflicted widespread damage throughout Essex and Warren counties. State officials contend the Stranahans canvassed storm-damaged neighborhoods and even approached several individuals about their tree removal service.
Some said the Stranahans offered to do the work for “several thousand dollars” only to later bill them in far greater amounts. In one instance, a homeowner claimed he was charged as much as $10,000 per tree for the removal.
State officials also accused American Tree of tacking on a $1,000 “after hours” fee and $1,500 “emergency service call” surcharge even in instances where they approached residents about doing the work. The lawsuit claims American Tree failed to disclose its fees prior to beginning work or provide accurate estimates of the cost of their services.
One customer claimed Merwin “Skip” Stranahan — whose sons now operate the company — assured that the work would cost “no more than several thousand” when he visited the property. American Tree ultimately billed the homeowner $49,835, according to the lawsuit.
The Attorney General’s Office launched an eight-month investigation into the company after receiving four complaints after the August 2011 storm. In total, investigators compiled 15 affidavits from customers and then compared American Tree invoices from the storm to ones issued before Irene.
“To determine if American Tree engaged in price-gouging, [the Attorney General’s Office] reviewed 35 invoices covering the 30-day period preceding the storm that were produced by American Tree pursuant to the [Attorney General’s Office]’s subpoena,” Assistant Attorney General Christopher Staszak wrote in the lawsuit. “Tellingly, none of the 35 invoices were for more than $3,745 and most were for significantly smaller amounts.”
The Stranahans dispute this notion or that they defrauded any of their customers. John Stranahan said the customers who complained in the lawsuit never even paid their bills.
“We never received the money from people,” he said. “They never paid us.”