I 0% a: BOARD OF EXAMINERS OF MASTER PLUMBERS Rosemarie S. Baeeile Executive Director 6 CHRISTOPHER S. PORRINO ATTORNEY GENERAL OF NEW JERSEY Division ofI.avv 5th Floor 124 Halsey Street P.O. Box 45029 Newark, New Jersey 07101 Attorney for the Board of Examiners of Master Plumbers By: Joseph Donofrio Deputy Attorney General Tel. (973) 648-2??9 STATE OF NEW JERSEY DEPARTMENT OF LAW PUBLIC SAFETY DIVISION OF CONSUMER BOARD OF EXAMINERS OF MASTER PLUMBERS IN THE MATTER OF Administrative Action MICHAEL J. PERRI, LMP CONSENT ORDER tfa A.J. PLUMBING, LLC License No. 36B101256600 TO PRACTICE PLUMBING TN THE STATE OF NEW JERSEY This matter was opened to the New Jersey State Board of Examiners of Master Plumbers (?the Board?) upon receipt ofthirty (30) consumer complaints (?complaints?) filed against Michael J. Perri, LMP, (?Respondent?) as the bona ?de representative for A.J. Perri Plumbing, LLC Perri Plumbing"). Michael Perri is and has been the bone tide representative of A.J. Perri Plumbing at all times relevant hereto. The complaints allege various violations of the Board?s statutory and/or regulatory provisions. Several complaints allege A.J. Perri Plumbing misrepresented the condition of the consumer?s plumbing in an effort to upsell a repair. A.J. Perri Plumbing would thereby perform a more expensive repair when a less expensive alternative was available. Some complaints included replacing a consumer?s entire sewer andfor water line when a spot repair would have sufficed. Other complaints allege AJ. Perri Plumbing sold unnecessary work to consumers. Several complaints allege the company used ?pressure? or ?scare tactics? in order to upsell more expensive or unnecessary repairs. Many consumers allege they were offered a discounted price to have the work performed, but were pressured to make an immediate decision; otherwise the offered discounted price would eXpire. Finally, several consumers complained they were overcharged for the plumbing work they received. On March 23, 201'}, Respondent appeared for an investigative inquiry represented by Peter 13. Bennett, Esq. Reapondent is the bona fide representative for AJ. Perri Plumbing and is a ten percent owner. The remaining ninety percent is owned by AJ. Perri Holden, LLC, a subsidiary of American Residential Services, a Tennessee based corporation. Respondent stated he has complete control regarding all plumbing work and plumbing related decisions. AJ. Perri Plumbing currently employs twenty-two (22) people who perform plumbing work, including four (4) licensed master plumbers and eighteen (13) technicians. A.J. Perri Plumbing has a ?drain and dig department? which is responsible for performing the initial camera inspection of a consumer?s water or sewer line. AJ. Perri Plumbing does not directly employ saleSpeople in the drain and dig department, instead the camera technicians advise the consumer regarding the condition of their sewer or water line and price thejob for the consumer. Respondent testi?ed that employees ofthe drain and dig department are commissioned based employees, in a manner with what Respondent believes is consistent with the industry in which employer operates, whereby they receive a 10% commission for the price of work performed. Employees providing camera inspections are commissioned ten percent on the sale of a job to a consumer. These employees also receive additional paid time off, contingent on their sales. Non- supervisory licensed master plumbers and technicians employed by Respondent receive a commission, based on the amount of revenue earned. Finally, all employees receive a bonus ifthey sell additional items to a consumer, such as a new hot water heater, or a new boiler. Respondent was questioned concerning individual consumer complaints. Consumer KB. alleged that employees of AJ. Perri Plumbing performed a camera inspection of his sewer line and ?strongly recommended? the entire sewer line be replaced at a cost of$1 1,501. KB. is 86 years old. KB. was shown footage of the camera inspection. The employee represented there were ?several cracks?. Alternatively, a ?spot fix? was offered to KB., whereby a portion of the pipe would be replaced at a cost of $4,882. KB. opted to replace the entire line based on the employees? strong recommendation and representation of the condition of the pipe. Respondent acknowledged the employee who sold the work to KB. was commissioned ten percent on the total price of $11,501. During the excavation of sewer line, it was determined by another employee of AJ. Perri Plumbing, who was not present during the camera inspection, that the line was not cracked in several places. Nor was the line otherwise compromised, except for the end of the line that needed to be spot repaired. Pictures of KBFS pipe, obtained from AJ. Perri and reviewed by the Board, confirm the pipe was not in need of total replacement. Respondent agreed pipe was not in need of a total replacement. Respondent indicated it was company policy to provide customers with Written options of the repair and replacement options in each and every instance. When asked to provide a copy of the written options provided to K.B., Respondent admitted the options were verbally presented to KB. There is no document containing written options, on company letterhead and containing signature. Upon being contacted by KB. regarding his concerns, and prior to the Board?s investigative inquiry, AJ. Perri Plumbing agreed to reduce its charge by $6,619 to $4,882, the original cost for the spot repair. A complaint was received from the son of consumer F.S. AJ. Perri Plumbing was called to provide an estimate for a heating system. F.S. is a longstanding customer. lie is 85 years old and currently suffers from Alzheimer?s disease. A price was agreed upon and the work was performed. son alleged AJ. Perri Plumbing was aware of his father?s age and condition. The son previously instructed Perri Plumbing to refer to him all calls from his father. Respondent acknowledged providing service to F.S., without conferring with his son, was ?our mistake 100 percent.? Respondent confirmed the company records confirmed that it was instructed not to respond to calls from ES. without the son being present. The employees who sold the work to RS. were to be commissioned on the sale. After full completion ofthe work and learning of concerns prior to the investigative inquiry, AJ. Perri Plumbing provided a full refund of $8,693.00 to RS and he was permitted to keep the oil furnace and coil. The Board received a complaint from the granddaughter of consumer R.M., who is 94 years old. R.M. called AJ. Perri Plumbing due to a clogged main drain. R.M. was informed at camera inspection revealed a crack in the line underneath the slab of his basement, resulting in a build-up of sludge. AJ. Perri Plumbing replaced entire interior line at a cost of $18,505. Respondent confirmed the employee who performed the camera inspection received a commission on the work sold. Respondent stated the employee gave RM a choice of available options to resolve the problem. When asked to provide a copy of the written options provided to R.M., Respondent acknowledged the options were only presented verbally. Finally, Respondent stated that a video of line did not exist as the video was recorded over, nor were there pictures substantiating the condition of the line. After receiving complaint, AJ. Perri Plumbing agreed to the customer?s request for reimbursement of $800. Consumer CD. alleged AJ. Perri Plumbing performed a camera inspection of her main sewer line and informed her the line had collapsed. CD. was shown footage from the inspection which supposedly showed a collection of rocks and bugs at the site of the collapse. The technician recommended a brand new sewer line which required removing the basement floor. CD. was told if she agreed to the work immediately, she would be provided with a discount. CD. called another plumbing contractor for a second opinion. According to the subsequent contractor informed CD. that Ad. Perri Plumbing actually diagnosed the French drain and not the sewer line. The subsequent contractor stated the sewer line was perfectly formed and functional. This ?nding was also con?rmed by members of the municipal department of public works, who were present during the inspection by the subsequent contractor. Respondent indicated that footage from the camera inSpeetion of sewer line was not available due to the video being rce0rded over. Although a licensed master plumber employed by AJ. Perri Plumbing apparently reviewed the footage, there were no notes reflecting his ?ndings. Respondent testi?ed he has never seen the video footage or otherwise reviewed the condition of sewer line. After receiving complaint, AJ. Perri Plumbing fully refunded her payment of$100.64, the cost ofthe drain cleaning. Consumer F.C. alleged AJ. Perri Plumbing may have misrepresented the condition of his sewer pipe and pressured him into agreeing to replace it. F.C. called AJ. Perri Plumbing due to his toilet backing-up. A technician inserted a camera into the line and advised F.C. the main line from the house to the street was clogged. F.C. was also told the line appeared to be deteriorating. AJ. Perri Plumbing originally quoted in excess of$18,000 to perform the work. F.C. negotiated the price down to $16,533, however, F.C. asserts he was told by the camera technician that he had to immediately agree to have the work performed; otherwise the negotiated price would be rescinded. F.C. agreed to have the work performed. Respondent testi?ed the footage of the condition of sewer pipe did not exist as the video was recorded over. Respondent did not personally review the footage, nor could he say with 5 certainty whether a licensed master plumber employed by AJ. Perri had reviewed the footage. RcSpondent stated there are no notes re?ecting the ?ndings ofa licensed master plumber concerning the condition ofthe pipe. The camera technician received a 10% commission based on the sale made to RC. Respondent was asked what procedures are in place to ensure that commissioned employees are not upselling to consumers for personal monetary gain. Speci?cally, Respondent was asked whether there are any checks and balances employed by the company, such as reviewing removed equipment at the shop before it is sent to a recycle yard. Respondent stated there is no current practice of reviewing the removed equipment to ensure the necessity of the completed work. Respondent indicated that proposals for work exceeding $1,000 require the customer?s verbal telephone confirmation with the AJ. Perri Plumbing of?ce, confirming the customer?s agreement before work can commence, and verify that they approve the work being undertaken. Respondent testi?ed that AJ. Perri has a long-standing commitment to provide 100% customer satisfaction, and that it strives to reSolve customer complaints quickly and to the customer?s satisfaction. Respondent testi?ed that Al. Perri has an unequivocal policy against upselling, and unscrupulous and unconscionable pricing practices. Respondent stated that AJ. Perri employees are not authorized to arbitrarily set prices at the point of sale or during a customer service visit and must adhere to a standardized price book. Respondent further testified that AJ. Perri voluntarily has and had several policies and procedures to ensure the protection of the customer?s best interest including, continual ethics training, senior sensitivity training, red tagging equipment policies and report-it hot line. Finally, Respondent believes the payment of commission and bonuses to employees is standard in the industry and incentivizes employees to participate in the economic success ofthe company. The Board also heard testimony from three licensed master plumbers employed by AJ. Perri Plumbing. Licensees are paid hourly, but also receive commissions and bonuses based on certain criteria. The criteria included reaching a certain revenue point for the month, as well as obtaining a ?close rate? above 75 or 80 percent. One licensee testified he was paid strictly on commission when he was employed by the company as a camera technician, before receiving his license. He received 10 percent of the cost of work he sold. Licensees are aiso commissioned on accessories sold and installed. A $25 bonus is paid for each hot water heater sold. A $50 bonus is paid for the sale ofa water purifier. The testimony indicated many employees bene?tted from the bonuses awarded for the sale ofwater heaters. Additionally, AJ. Perri Plumbing periodically instituted sales goals. A camera technician, who sold $80,000 or $100,000 worth of work during a month, received a gift card. [fa particular customer could not afford recommended work, employees offered them financing through Wells Fargo. The licensed master plumbers confirmed that AJ. Perri Plumbing has recently instituted a policy whereby a second camera inepection ofa consumer?s line is conducted by an employee who is a licensed master plumber, just prior to excavation and replacement. The employees performing the excavation and installation are no longer relying solely upon the camera work performed by a commissioned based camera technician. The iicensed master plumber now has the ability to step or modify a job, in consultation with the consumer, based on his camera review. One master plumber testified he has exercised this authority about thirty times in the last two years. Additionally, formal, written options are now provided to constimers, and signed, prior to any work commencing. Subsequent to the receipt of the complaints by the Board, and at the Board?s behest, AJ. Perri Plumbing provided full or partial refunds to the satisfaction oftwenty-four consumers. Thirteen of those conSUmers entered into ?Release and Settlement ofAil Claims? agreements with AJ. Perri Plumbing. Based upon the conduct described herein, the Board finds Respondent repeatedly engaged in the use of deception and misrepresentation in violation and professional and i" occupational misconduct in violation of N.J.S.A. and failed to comply with a regulation administered by the Board in violation 45: -21{h) insofar as Respondent, as the bona fide representative for AJ. Perri Plumbing, failed to maintain video Footage, or otherwise document the ?ndings of the persons employed by AJ. Perri Plumbing, in accordance with the requirements of N.J.A.C. Respondent denies the allegations described herein and disputes that there is evidence to support any violation of law. However, in order to amicably resolve this matter without admission of the claims asserted by the complainants or the ?ndings of the Board, and without admission of any allegation of any improper activity or violation of any law, Respondent enters into this Consent Order without a contested hearing or adjudication. The parties having agreed to resolution of this matter without further formal proceedings, and Respondent, having agreed and given his voluntary consent to the within order and waiving any right to a hearing, and the Board finding the within disposition adequately protective of the public health, safety, and welfare, and other good cause having been shown; IT IS THEREFORE ON THIS 5 DAY OF HEREBY ORDERED AND AGREED THAT: l. Respondent is hereby reprimanded for the violations of N.J.S.A. and as detailed above. 2. Respondent is hereby assessed a civil penalty in the amount of one hundred thousand dollars Payment of $75,000.00 shall be made simultaneous with the signing of this Consent Order, by certi?ed check, bank cashier check, or money order made payable to the ?State of New Jersey?, or by wire transfer, direct deposit, or credit card payment delivered or mailed to Rosemarie Baccile, Acting Executive Director, Board of Examiners of Master Plumbers, 124 Halsey 8 Street, sixth Floor, Newark, New Jersey, 07101 The remaining $25,000.00 shall he stayed provided Respondent complies with all terms of this order and shall be activated upon the Board?s receipt of any information, which the Board in its sole discretion deems reliable, demonstrating Respondent has violated any ofthe provisions or requirements ofthis order. 3. Respondent hereby consents to the entry of an additional $10,000 penalty upon the Board?s receipt of any information, which the Board in its sole discretion deems reliable, demonstrating that Reapondent violated the provisions of this Consent Order in relation to a consumer who Respondent knew or should have known was a senior citizen. For purposes of this Consent Order, the term ?senior citizen? means any resident ofthis State of the age of 60 years or over. Respondent shall have the right to apply for the removal of the additional penalty, but in such event shall be limited to a showing that Respondent did not have actual or constructive knowledge concerning the conSUmer?s age. 4. Commencing thirty (30) days from the entry ofthis Consent Order, Respondent shall comply with the following requirements: a. All camera inspections performed on a consumer?s sewer or water pipe system shall be maintained for a period of four (4) years from the date the camera inspection was performed. The footage shall be made available to the Board upon written request to Respondent and Respondent shall be provided fifteen (15} days to respond to such request. b. Respondent shall present to consumers a form containing written options concerning all repair and/or replacement work prior to work being performed for that consumer. The form shall contain AJ. Perri Plumbing letterhead and shall conform to the requirements The written options shall also contain the cost of each possibility presented, as well as an indication by the consumer concerning the option chosen. The form shall be signed and dated by the consumer. Respondent shall maintain the written option forms for a period of four (4) years from the date the form is signed by the consumer. The forms shall be made available to the Board upon written request to Respondent and Respondent shall be provided ?fteen (15) days to respond to such request. c. All recommendations concerning repair andfor replacement of plumbing work made to a consumer by an AJ. Perri Plumbing employee, who is not a licensed master plumber, shall be reviewed by a licensed master plumber employed by AJ. Perri Plumbing, prior to the work being performed. The ?ndings of the licensed master plumber shall be in writing and shall conform to the requirements of N.J.A.C. The written findings ofthe licensed master plumber shall be maintained by Respondent for a period offour (4) years and shall be made available to the Board upon written request to ReSpondent and Respondent shall be provided ?fteen {15) days to reapond to such request. 5. Thirty {30) days from the entry of this Consent Order, Respondent agrees to comply with the following for all consumer complaints received by the Board: a. After forwarding to Respondent the consumer complaint, the Board shall notify the consumer, in writing, of the following: that hisi?her complaint has been forwarded to Respondent; that hefshe should expect a response from Respondent within thirty (3 0) days from the date of this notice; and the right to refer hisz'her complaint to the Alternative Dispute Resolution Unit of the New Jersey Division of Consumer Affairs for binding arbitration if di5putes the complaint andr'or requested relief. b. Within thirty (3 0} days of receipt of the aforementioned complaint from the Board, Respondent shall send a Written response to the consumer and to the Board. If Respondent does not dispute the subsequent complaint and requested relief sought by the consumer, Respondent shall 10 provide Written noti?cation to the consumer. Where restitution concerns a refund or other payment, such shall be made to the consumer by check. c. If Respondent disputes the consumer complaint andr'or requested relief, Respondent?s written response shall include copies of all documents concerning Respondent?s diSpute ofthe complaint. d. Within forty-five {45) days of receipt of the consumer complaint from the Board, Respondent shall provide the Board with Written noti?cation whether the complaint has been resolved. Such noti?cation shall include the following: i. The consumer?s name and address; ii. Whether the consumer?s complaint has been resolved; The restitution provided to the consumer; iv. Copies of all documents evidencing restitution provided to the consumer; v. Con?rmation that Respondent sent all mailings to the consumer as required by this Consent Order; and vi. In the event ReSpondent?s written responSe andz?or restitution to the consumer was returned as undeliverable, the efforts Respondent has undertaken to locate the consumer. e. If within sixty (60) days of Respondent?s receipt of the subsequent complaint: Respondent has not notified the Board that the complaint has been resolved; Respondent has notified the Board that the complaint has not been resolved; or Respondent has noti?ed the Board that the consumer refuses Respondent?s offer of restitution, the Board shall forward such complaint to the ADR Unit for binding arbitration. Respondent agrees herein to consent to this arbitration process and to be bound by the arbitrator?s decision. Respondent further agrees to be bound by the immunity? provisions of the New Jersey Arbitration Act, N.J.S.A. 2A:23l3-l4, and the New Jersey 11 3. Ciir :i Ericgefon Tort Claims Act, N.J.S.A. 59:1-1 et seq. The Board shall notify the consumer and Respondent of the referral or? the complaint to the ADR Unit. Thereafter, the arbitration shall proceed in accordance with the ADR Guidelines. Onoe a dispute has been submitted for arbitration and an award is issued, neither party can later choose to resolve the dispute again in any other manner, ineiuding Use of the court system. If Respondent refuses to participate in the AER program. the arbitrator may enter a default against Respondent. Unless otherwise speci?ed in the arbitration award, Respondent shall pay all arbitration aarards within forty-five (45) days of the arbitrator?s decision. 6. This Consent Order t?uiiy resolves all consumer complaints received by the Board concerning Respondent between January 1, 7.017 and Deoember 31. 201?. BOARD OF EXAMHNIERS 0F MASTER PLUMBERS 7er 244a Peter I. Voroe Board Chairman ihaoe read and understand the within Consent Order and agree to be bound by he terms. Consent is hereby given to the Board to enter this Order. Michael J. Perri. LMP Date I consent to the entry.r of this order as to form. Peter B. Bennett, Bag. 12 le03f2013 HON 13:05 N0. 52591?03 .- - - Mf?hael J. Pen-i, LMP Egg/M I consent to the: entry offhis order as to form. - Peter B. Bennett, Esq. Docs #3033463-vl