After three Union City residents came forward with a lawsuit against United Water, Inc. almost three weeks ago, alleging that the company aggressively marketed a repair service plan to homeowners ineligible for coverage, surrounding towns are taking notice – or should take notice, according to one of the plaintiffs’ attorneys, Carl Mayer.
The homeowners were offered a $150-per-year insurance policy to cover repairs to broken water and sewer pipes, plumbing, drainage, and electrical emergencies. However, they did not realize that the policy could not be used by them because multi-unit homes were ineligible.
Union City residents and United Water customers Dan Molloy, Doreen Rosado, and Jose Cortez filed a class action lawsuit on Nov. 23 against United Water in Bergen County Superior Court in Hackensack.
“…It’s obviously more difficult for the Hispanic population to know what’s going on.” – Carl Mayer
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The fine print read, “Sorry, mobile homes, commercial properties, and multi-unit dwellings are not eligible for coverage.”
Since then, Hoboken councilman Peter Cunningham has been approached by a handful of aggrieved Hoboken residents with similar complaints against United Water, and is looking further into the situation.
United Water also covers West New York, Weehawken, Guttenberg, North Bergen, Jersey City, and Secaucus.
Three UC residents file a lawsuit…
The plaintiffs allege that United Water regularly accepted premiums and entered into contracts with ineligible homeowners, which they believes constitute breaches of contract, consumer fraud, unjust enrichment, and violations of The Plain Language Act.
In Union City, the majority of residents live in multi-unit housing and, thus, are excluded under the policy – 96 percent according to the U.S. Census.
The lawsuit seeks the return of money paid by customers plus damages, as well as an order to stop United Water from alleged “illegal” practices in the future.
UC first, now Hudson County
Plaintiff Dan Molloy didn’t find out that he was ineligible for the warranties he had paid until a plumber informed him in 2007 that the company was refusing to pay for a plumbing repair.
In a press conference at the courthouse Nov. 23, his attorneys, Bruce Afran and Carl Mayer, said that a large number of United Water’s New Jersey customers may find themselves in the similar situation.
Mayer said in a phone interview Tuesday that several New Jersey residents have come forward with a similar complaint, including a 69-year-old disabled veteran stuck with an $8,400 repair bill.
Confusing warranties, Mayer said, pose a large problem for Hispanic populations as well.
“Besides the [warranty] being in fine print, it’s obviously more difficult for the Hispanic population [of Hudson County] to know what’s going on…which makes their conduct all the more egregious. They know everything about these customers because they’ve been serving [the area] for over 100 years.”
According to the filed complaint, United Water serves 750,000 people – with 186,000 customers billed – in Bergen and Hudson counties alone. (“Customers billed” refers to the household member paying for the services.) That means that roughly half of the 1,490,259 people living in those counties are served by United Water.
The 2000 U.S. Census shows that Hudson County is primarily multi-unit housing at84.2 percent and New Jersey is 36.1 percent multi-unit housing.
Of the 180,000 customers, Mayer said he is unsure how many people pay for the policy, but believes the number to be in the tens of thousands.
Molloy has started a blog for customers in a similar situation at www.unitedwatercomplaint.blogspot.com.
If not United Water, then who?
United Water spokeswoman Deb Rizzi said in a phone interview Tuesday, “United Water feels that the case is substantially without merit.”
United Water, she said, was not the one behind the policy, but rather its partnering company HomeService, which handles all home emergency repairs.
In 2005, United Water entered into a major business partnership with HomeService USA to provide existing and new Leakguard customers with repair coverage, she said.
Although HomeService is licensed to use United Water’s name and logo, it is not funded by United Water and is the entity responsible for the administration of all repair plans, Rizzi said.
According to the United Water website, “the services offered are not part of United Water’s regulated business and are not funded in any way by the water rates that our customers pay.”
Despite the wording, Mayer believes United Water to be complicit with HomeService and is merely “passing the buck.”
“The check isn’t paid out to HomeService USA. It’s made out to United Water,” he said.
The complaints, Mayer said, go back before the partnership, and “what HomeService is doing is what United Water was doing going back 10, 15 years.”
A spokeswoman for HomeService declined to comment on Tuesday.
Deanna Cullen can be reached at dcullen@hudsonreporter.com.