Pest-control contracts source of court battle
Posted on Sunday, March 16, 2008
URL: http://www.nwanews.com/adg/National/219827/
OPPELO — What began 10 years ago as a remodeling project for William and Gail Dickens quickly morphed into a battle against termites and the nation’s largest pest-control company, The Terminix International Co. LP.
At stake is the Dickenses ’ most valuable possession, their 3, 000-square-foot home overlooking the Arkansas River.
On March 25, the couple’s dispute with Terminix is scheduled to go to a Conway County Circuit Court jury in Morrilton. They allege fraud, breach of warranty, negligence and breach of contract, and seek compensation for termite damage.
In an October 2004 answer to the Dickenses’ complaint, Terminix said that it had had “a continual termite contract” on the couple’s house since it was built in 1978. However, in a December 2006 motion for partial summary judgment, the company sought, but failed, to limit its potential liability to $ 150, 000 for damage sustained after Jan. 4, 1999, the date when Terminix International purchased certain assets of Terminix Inc., an Arkansas licensee that had issued the Dickenses’ original contract.
The Dickenses’ lawsuit is one of four similar legal actions in Arkansas.
In two of those cases, one against Terminix and one against Atlanta-based Orkin Exterminating Co. Inc., the plaintiffs are seeking statewide class-action status. If confirmed, that would permit any Arkansan with similar complaints against the companies to join the actions and share in any monetary judgments. Potential class members would be notified by mail or through newspaper advertisements and given the chance to participate or opt out.
More than 100, 000 current or former Terminix customers comprise the pool of potential litigants in the one case. The class of potential Orkin litigants numbers in the tens of thousands.
These legal actions come at a time when the state Plant Board is considering changes to its Form 920, which allows pestcontrol companies to waive compliance — with the permission of the homeowner or home buyer — of up to 17 minimum termitetreatment requirements.
Some pest-control operators say the waiver form is abused, to the detriment of consumers. It was adopted by the agency in October 2003 to streamline real estate closings.
Before that, any pest-control work that failed to comply with state standards required pre-approval from a Plant Board inspector.
The state has only five pestcontrol inspectors to monitor the work of 184 pest-control companies that issued more than 41, 000 termite contracts during the 12 months ending June 30.
In Arkansas, Memphis-based Terminix International has 16 company-owned operations and one licensee, reflecting the fact that the “overwhelming majority” of Terminix locations nationwide are company-owned, according to Terminix.
Terminix said it could not discuss the three legal actions pending against the company in Arkansas. The company released a short statement that reads, in part: “Each home is different and every homeowner has unique issues and concerns. Technology relating to termite protection is also constantly evolving. As a result, generalized statements regarding the methods and effectiveness of termite protection rendered over a long period of time can be misleading and unfair to the professionals who provide these services.”
Martha Craft, Orkin’s assistant vice president of public relations and corporate communications, provided the following statement: “Orkin is very proud of the 8, 000 men and women who are committed to providing quality pest and termite control service to our customers, and we firmly stand behind that service. Based on the company’s stringent quality standards, our long history of upholding those standards, and on similar issues in the past, we are confident that this case has no merit, and we will defend ourselves vigorously against it.”
Meanwhile, Little Rock dentist Dr. Norman Flaxman and his wife, Sheila, filed a claim last March against Terminix with the American Arbitration Association. The Flaxmans claim breach of contract, negligence and deceptive trade practices, and seek compensation.
Terminix denied all allegations. The company said that “the evidence will show that Terminix fully complied with all its obligations under the Termite Protection Plan.”
The Flaxmans have won the first battle in having their case certified as a class action. Arbitrator Edith Dinneen ruled in January that the mandatory arbitration clause in Terminix’s termite-prevention contract was broad enough to allow a class action.
Dinneen’s finding has since been referred to Pulaski County Circuit Court, where Judge Jay Moody must either confirm or vacate her decision.
Roy Sheppard, a North Little Rock resident who filed a complaint in December against Orkin in U. S. District Court for the Eastern District of Arkansas, also seeks class-action status for his case, which alleges breach of contract, negligence and deceptive trade practices, and seeks compensation.
In a February response, Orkin said it had “properly and fully performed its obligations under the agreement (s ) with the named Plaintiff.”
Orkin said it was not responsible for pre-existing termite damage or “if the damage areas were not infested with live subterranean termites at the time of discovery of the damage.”
Orkin also suggested that Sheppard had waived his rights to termite-damage repairs by “failing to eliminate moisture problems and construction defects conducive to termite infestation” in violation of the contractual agreement.
A fourth lawsuit, filed in June 2005 by Glenn Crisel and Sharon Reed-Crisel of El Dorado against Terminix, has bounced between Union County Circuit Court and U. S. District Court for the Western District of Arkansas.
The Crisels sued Terminix in state court and, one month later, Terminix countersued them in federal court, asking U. S. District Judge Harry Barnes to compel arbitration and stay the pending state court action. Barnes ruled in Terminix’s favor in August 2006, but the Crisels have sought to set aside Barnes’ order. Since a December 2006 hearing on the matter, the case has been awaiting a final ruling from Barnes.
WAIVER CONCERNS Some waivers are necessary when construction limitations, such as inadequate crawl-space clearance, make it impractical to comply with all of the state’s termite-treatment standards. But last fall, during three meetings of the Plant Board’s pest-control committee, several members of the Arkansas Pest Management Association, an industry trade group, expressed particular concern about the waiver of chemical treatments. Such contracts cost less, but some operators say they fail to protect homeowners and represent unfair competition. David Hopper, then-president of the association and owner of Hopper Termite & Pest Management in Mountain Home, said he was worried about small companies that waive services critical to the prevention of termite infestations in order to offer cheap prices.
Terminix, which had about 20 Arkansas branch-off ice managers present at two of the meetings, argued that the waiver form should not be changed because many consumers want “green alternatives” to chemical-based termite control.
Terminix Vice President Steve Good said at the meetings that 1, 200 Arkansans already had bought his company’s relatively new Termite Inspection and Protection Plan, which provides coverage for potential damage and includes treatments only if termites are found. To address the questions surrounding Form 920, the Plant Board has mailed questionnaires to a sample group of Arkansans whose termite contracts — issued in July, August and September of 2007 — included a waiver form. These 990 property owners, about 10 percent of all property owners who received termitecontrol contracts during the three-month period, are being asked if they understood the reasons for their waivers. Once the survey information is collected, the pest control committee will review the findings and decide what, if any, changes in Form 920 are indicated.
TURNING POINTS Changes in termite-control technology were the reason one attorney decided in 1997 to concentrate on representing plaintiffs whose homes had been damaged by termites. Tom Campbell, a Birmingham, Ala.-based attorney who represents the Dickenses, said he was initially exposed to termite litigation in about 1988, when the firm he worked for was defending a pest-control company that was accused of poisoning someone with termite chemicals.
That year, the Environmental Protection Agency withdrew the registration of the chemical chlordane for use as a termiticide “because of concerns over cancer risk, evidence of human exposure and build up in body fat, persistence in the environment and danger to wildlife,” according to the Agency for Toxic Substances and Disease Registry.
Pest-control companies have been searching ever since for a good chlordane replacement, Campbell said. None has proved as effective, or as inexpensive, and the result, in many cases, has been inadequate treatment, he said.
Termidor, which is manufactured by BASF Corp., and Premise, manufactured by Bayer CropScience LP, are the leading termiticides currently used by pest-control operators.
A termiticide cannot be effective unless it is applied in the prescribed amounts, Campbell said.
“From the small mom-andpop companies to the big ones like Orkin and Terminix, they’ll put out zero to 15 percent of the chemical that they should have and left the majority of the home’s foundation completely unprotected,” Campbell said.
“All I needed to know when Gail Dickens called me was that Terminix charged $ 45 for the pretreatment of her home, and I knew they could have never bought enough chemical to have done a proper treatment of her house,” he said.
‘FULL OF TERMITES’ William and Gail Dickens ’ termite saga began in November 1997 with the installation of hardwood flooring and carpet. A few months later, the new flooring buckled and an active colony of termites was discovered feasting on the subfloor of their den.
“It’s a wonder we hadn’t fallen through,” said William Dickens, 60, who works at the Green Bay Packaging pulp and paper mill near Morrilton.
Further inspections of the house revealed termite damage in the kitchen, dining room, basement and attic.
“Every wall we’ve opened up has been full of termites,” said Gail Dickens, who is a hairdresser.
The house was pretreated in 1978, while it was under construction, said Paul Bello, an Atlanta-based pest management consultant who was hired by the Dickenses’ lawyers to review their case.
Terminix’s records indicate that 55 gallons of C-8, a chlordane product, were used in the pretreatment, but more than 400 gallons were needed, Bello said.
“It takes X amount of supplies and X amount of labor hours to do this work.... There’s stuff that doesn’t add up,” he said.
Terminix did say, in the statement they provided, “At Terminix, we stand behind our services and guarantees, and on the rare occasion a dispute occurs, we work with each customer to resolve the issue.”
Bello questions the value of such guarantees.
“What good is the warranty that they’re going to give you on paper right now if, right from the start, at square one, they’re not doing the job right ?”
Gail Dickens said reaching an out-of-court settlement with Terminix has been impossible.
As a result, she and her husband have been reduced, at times, to washing their dishes in their bathtub when their kitchen walls were dismantled to reveal termite damage.
Today, the couple lives in a portion of their home, some of which they’ve repaired themselves as cheaply as possible so they could continue to live there.
The den, which is separated from the dining room by heavy plastic sheeting, is neither heated nor cooled. The bare subflooring is piled with furniture and boxes.
Built in 1978, the Dickenses ’ 3, 000-square-foot house on a 2. 6-acre lot had an estimated market value of $ 180, 000 — assuming no termite damage, according to an appraisal in 2000.
In December 2005, the couple rejected an offer from Terminix to accept a judgment for $ 200, 000, an amount they considered insufficient to cover repairs, litigation expenses, attorney’s fees and compensation for their anguish. 1. Access to all crawl-space areas under building not provided. 2. Wood debris and form boards under and around building not removed. 3. Proper clearance under building not provided. 4. Termite tubes on building not brushed down. 5. Wood supports under building not capped with concrete or metal bases. 6. Wood on concrete floors that has been attacked by termites, or wood set into concrete, not cut off and placed on a concrete or metal base. 7. Wood steps not serviced correctly. 8. Pipes not trenched and treated with approved chemical according to label directions. 9. If water can run under building, through access openings or under walls, condition not remedied. 10. Ventilation for each 25 linear feet of foundation not provided. 11. Outside grade not lowered to provide proper clearance below siding or top of foundation. 12. Skirting and lattice not suspended or placed on cemented brick or solid concrete at proper distance above outside grade. 13. Steps, porches and ground slabs not drilled, tunneled and treated as required. 14. Wood supports for stucco do not have proper clearance and stucco extending below grade is not properly treated with chemicals. 15. Soil under building and along inside of foundation walls, piers, chimneys and pipes not completely treated with chemicals. 16. Soil around exterior of foundation not entirely treated with chemicals. 17. Voids in masonry not treated with chemicals. Source: State Plant Board, Form 920 Arkansas Democrat-Gazette Hiring a good company Experts offer these tips for hiring a professional termite-control company: Get several estimates. Compare the contracts, services, treatment methods and products that will be used. Avoid making a decision based only on price. Understand the reasons for any proposed treatment waiver before agreeing to it. Note what the contracts say about dispute settlements. Request references and call them. Check on each company’s reputation and track record with friends and associates, the Better Business Bureau, State Plant Board and Arkansas Pest Management Association. Thoroughly read any contract before signing it. Be present during any termite inspections or treatments. Scrutinize the graph-paper diagram of your home that is prepared by the inspector. Review any product label to be sure that chemicals are applied at the required rate. Study Arkansas’ pest-control law, Act 488 of 1975, as amended. The statute and related regulations are included in the State Plant Board’s Circular 6, which is available online at: www. aspb. arkansas. gov / plant _ structural. html. Read the structural pest study materials that are available at the same Web site. Call the State Plant Board, (501 ) 225-1598, for more information. Visit www. pestworld. org and “pester a pro” for more information about termite control. Sources: American Pest Management Association, State Plant Board
Arkansas Democrat-Gazette
Form 920 Based upon Arkansas’ pest control law, the State Plant Board has established minimum requirements for pest-control operators who place a building under a termite contract. The pest-control operator — with the building owner’s agreement — may exclude up to 17 conditions from compliance. Those conditions, listed on the Form 920, or “waiver of certain minimum requirements for structural pest work,” include the following: