N.Y. AG wins price gouging suit against tree removal business

ALBANY, N.Y. (Legal Newsline) - New York Attorney General Eric Schneiderman announced a court order Tuesday that permanently bars a Lake George-based tree removal business from collecting outstanding funds from consumers after it allegedly engaged in price gouging.

Schneiderman previously filed a lawsuit against American Tree Company and its principals, Merwin Skip Stranahan, John Stranahan and Daniel Stranahan, for allegedly price gouging during Tropical Storm Irene in the summer of 2011. Albany County Supreme Court Judge Eugene Devine permanently barred American Tree and the Stranahans from trying to collect outstanding amounts billed to consumers who submitted sworn statements to the court.

Devine also ordered the posting of a $50,000 bond that could be used to provide restitution to other alleged victims and a $25,000 penalty against the defendants.

"As New Yorkers continue to recover from the devastation of Hurricane Sandy, this case serves as a reminder that our office continues to aggressively enforce the law and has a zero tolerance policy for price gouging," Schneiderman said. "The tactics used by American Tree during a time of crisis are shocking, and justice has now been served."

American Tree allegedly charged consumers as much as $10,000 per tree for tree removal services, in addition to $1,000 after hours and $1,500 emergency service call fees, even when consumers did not call the company for its services. American Tree also allegedly failed to disclose its fees before starting work or provided inaccurate lowball estimates or false promises of complete insurance coverage.

New York state's Price Gouging Law strictly prohibits merchants from taking advantage of consumers by selling necessary services and goods for an unconscionable excessive price during a market disruption like a hurricane, flood, tropical storm or other disaster.