ONTARIO SUPERIOR COURT OF JUSTICE

Small Claims Court

Court file no. SC-15-007187-00

Brampton

Date: February 22, 2017

B E T W E E N:

Restoration 1 Mississauga

Plaintiff

Representation: Douglas Hogarth, owner

• and -

Nada Zeljkovic

Defendant

Representation: Nadia Schepis, agent

Heard: February 15, 2017

Reasons for Judgment

[1] The Plaintiff is a corporation which specializes in water damage restoration services, basically on-call in emergency and urgent circumstances; cleaning up water leaks/floods and performing restoration services. Its owner, Douglas Hogarth (“Hogarth”) was a witness at trial.

[2] The Defendant is a homeowner, residing in Mississauga. On June 28, 2015, after heavy rains, the Defendant’s sump pump failed, causing water to backup and flow into her basement.

[3] The initial service provider on the scene was Mr. Rooter Plumbing, which pumped out the water and replaced the pump, for $1,982.18. As water had spread to the adjoining hallway, Mr. Rooter suggested that the Defendant calls in the Plaintiff; I assume, one of its preferred companies for getting these jobs done.

[4] When Hogarth arrived on the scene, he went straight to work in inspecting the basement and in ridding any excess water in an area, which appears to have limited itself to the hallway between the cold room where the sump pump was located and the rest of the basement.

[5] As noted by the Defendant, after Hogarth had arrived, he never took the Defendant for a walk-through the premises or gave an estimate or idea of the work that had to be done. This is an interesting point, as the Plaintiff’s former employee, Jordan Foster, gave evidence on behalf of the Plaintiff, stating that it’s usual procedure to go through the premises outlining the work that needed to done, thereby giving a homeowner an idea of approximate costs.

[6] Hogarth told the court that there were about 1.5 to 2 inches of water on the floor. The Defendant objected to this estimate, stating that this was an exaggeration, as she and her daughter had pretty much swabbed up the area with bath towels, by the time Hogarth arrived.

[7] While in the home, Hogarth looked over the Defendant’s RBC Insurance Homeowner’s Policy and assured her that although she only had $25,000 coverage, he was generally successful in getting insurers to increase this amount.

[8] The Defendant signed the Plaintiff’s standard form “Work Order Agreement;” a contract, which states, in part:

The Client hereby authorizes The Contractor to perform the following services to mitigate the loss and/or maintain a suitable living condition and/or comfort level for The Client. The Client certifies that the damaged property has the appropriate insurance coverage to cover this loss and that The Client is responsible for payment of any deductible as well as any charges on the final billing for the services not covered by The Client's insurance policy or not paid by The Client's insurance company for any reason.

If there is no insurance billing provided, The Contractor will collect an equipment deposit fee of $0 in order to start the job.

The Client further authorizes and instructs The Client's insurance company to pay directly to the Contractor (or to include The Contractor as a co-payee on the check or draft) for the amount shown on the final billing for work done by The Contractor in connection with this claim. The Client also understands that the insurance company is billed as a courtesy and convenience to The Client. Should The Client's Insurance Company fail to honor this agreement, The Client will pay The Contractor any balance due. It is understood that The Client is personally responsible for any and all deductible, charges or costs not covered by their insurance company. It is The Client's complete understanding that The Contractor is working for The Client and not The Client's insurance company. Therefore, it is understood that The Client is ultimately responsible to The Contractor for payment of said services.

The Client understands that The Contractor rates for services performed are structured from the Blue Book of Cleaning, Reconstruction, and Repair costs by area zone using the Xactimate program which is the industry standard for this industry.

[9] With respect to this contract, although it states that the responsibility for payment rests wholly with the homeowner, the Defendant told the court that based upon Hogarth’s assurances, upon which she relied, she was confident that there would be no charges to her. Additionally, caught up in the midst of all the trauma of the moment, the Defendant stated that she never bothered to read the contract, which is understandable given the circumstances.

[10] Hogarth was on the property between 9:00pm and 12:30am, during which time he completed the cleanup; installed high speed blower dryers and dehumidifiers and drafted his report, comprised of an estimate of the restoration work required for RBC Insurance.

[11] The next day, Hogarth contacted the RBC Insurance adjuster to advise him that he would be submitting his report and estimate. The adjuster told him not to bother, as the Defendant was already paid out on her claim.

[12] The Defendant was advised to turn off the fans and dehumidifiers the next day, which she did. Interestingly, it was until 13 days later that the Plaintiff picked these up, that is after the Defendant called their office; the Plaintiff charging the Defendant for 3 days use.

[13] On July 15, 2015, the Defendant received the Plaintiff’s invoice, calling for a payment of $5,070.42 for 3.5 hours of labour and the rental of the equipment. Hogarth assured both the Defendant and the court, that the invoice was in keeping with “Xactimate,” the industry’s standard billing program. The Defendant was shocked, felt totally misled and refused to pay the account.

[14] Given the circumstances of this case, I find that the Plaintiff had a duty to the Defendant, to give her an estimate (in the least some idea) of the costs, before the work was done. He ought to have kept this consumer informed so she could make a well informed decision. I can only assume that Hogarth was so certain that RBC would cover his costs, there was no need to take these extra steps. The court is cognizant of the fact that the Plaintiff’s contract clearly states that if the insurer does not come through, the homeowner is on the hook. Yet the court has little doubt, that had Hogarth quoted this $5,000 price, the Defendant would never have had the Plaintiff do the work. Perhaps the unfairness lies with Xactimate that spews out these charges. If (as Hogarth stated), the insurance companies do rely on this software, I am quite surprised, as it certainly churns out very exorbitant price schemes.

[15] At the conclusion of this trial, the Defendant indicated in submissions, that she is willing to pay for the use of the fans, the dehumidifiers and the labour, as quoted in the Plaintiff’s estimate, that is, amounting to $2,548.32.

[16] Based upon the evidence given at trial and on hearing and observing the witnesses, I am of the opinion that Defendant’s position is more than reasonable, and I so grant judgment in this amount.

Judgment

[17] The Defendant shall pay to the Plaintiff the sum of $2,548.32, which is reduced or set-off by $348.32 (using rounded figures) for costs the court awards to the Defendant, leaving the Defendant having to pay to the Plaintiff, the sum of $2,200; to be paid on or before March 17, 2017.

Released: February 22, 2017. ____________________

M. Klein, Deputy Judge