Taking the Fall for Other People

September 11, 2006
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Here is the dilemma. On an after-hours emergency, a customer says their water heater blew a temperature & pressure valve (T&P) and flooded the basement. The plumber evaluates the situation, replaces the T&P valve, runs the water heater through a cycle, cleans up, collects the charges from the customer, and leaves.

About a month later, you receive a notice from the customer's insurance company saying "Our investigation of this loss indicates that you are legally liable for damages to our insured's property."

You deny the claim and refuse to accept liability, turning it over to your insurance company. That move causes the customer to bring suit against you and the T&P valve manufacturer. All this because your plumber did the right thing by fixing the problem correctly - and because your company name is on the sticker affixed to the water heater.

This is not fiction. This is a real-life problem facing contractor SECCO Home Services in Camp Hill, Pa.

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SECCO owner Barry Kindt was perplexed. He said, "So, why are we involved in this case, I asked myself?"

Kindt claims that the customer's attorney told him that SECCO installed the water heater, a claim that Kindt denied. "We would have record of the installation," Kindt said. He asked if the customer had proof that SECCO installed the water heater.

The reply from the attorney, according to Kindt, was "Your sticker is on the water heater."

The sticker was put on the water heater during a service/maintenance visit. But Kindt insists that his company didn't install the water heater. The problem is he can't prove he didn't. Although he knows the water heater serial number reveals it was manufactured in 1997 and the SECCO sticker is from 2001.

"You might be thinking that manufacturers track the serial numbers to the vendors and the vendors record them on the invoices," said Kindt. "The equipment manufacturer does this now, but didn't do it with this early serial number range because of the lack of bar code scanners."

The T&P valve is a different story. Kindt said that an independent testing agency confirmed the valve failed.

"The valve manufacturer denies the claim, saying that we should have installed a ‘pan' under the water heater and piped the T&P to a drain, faulting our installation, which wasn't our installation."

This customer was an existing SECCO planned maintenance customer for several years. "We've been cleaning the oil-fired water heater burner motor, along with their oil-fired boiler," said Kindt. "We inherited this customer when we purchased an oil service business's service trucks and inventory a few years prior when they were getting out of the service business."

Hoping to avoid any costly litigation, Kindt agreed to visit the home and inspect the water heater. He recalled the visit.

"First of all, the customer confessed he had a moonlighter install a drain from the T&P valve to a "tee" and tied in the boiler blow-off, and continued the piping up the wall to the outside of the house to a closed-off window well. You can't do that.

"The moonlighter also repiped the oil fill in copper to the 275 gallon tank sitting inside near the boiler. As I am snapping a couple digital photos, the customer said, ‘I know it isn't supposed to be in copper.' I asked if the fill was leaking and he said ‘no.' I also asked where the floor drain was. He said there was no floor drain."

Kindt snapped several digital photos and discovered something in a photo that he hadn't seen the first time. "In the digital photo, I notice two copper pipes coming down the wall to a laundry tub faucet mounted on the wall adjacent to the water heater, but no laundry tub," he said.

"I didn't see it until I checked the photo, and yet, it's right there in front of me. There just has to be a drain there somewhere. I moved more stuff and found the floor drain, about 4 feet from the water heater."

Included in the claim is the cost of 263.1 gallons of fuel oil, which the homeowner said was lost during the time the hot water heating was malfunctioning.

"It's the first time a couple cent call us for service sticker has gotten us in trouble," said Kindt.

SECCO and the homeowner go to trial this fall. If the company loses, the water heater will have cost about $16,700 plus attorney fees for the trial.

Kindt said that if there is a lesson to be learned, it is this: stress the importance of recording models and serial numbers on paperwork, even if technicians resent it.

"Start-up paperwork includes models and serials, but when we add a new maintenance customer, we're not as diligent," he said. "Had we recorded the model and serial numbers of equipment we normally service and install, whether it's on the agreement or not, we could have saved the litigation money."

Feedback requested... The NEWS would like to know what steps HVAC contractors take to protect themselves from a similar situation. Please send your comments to johnhall@achrnews.com. We will publish some of the responses in a later issue.

Publication date: 09/11/2006

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