Fichner, Matter of

• Decision Date: 18 June 1996
• Docket Number: T,No. 6213,6213
• Citation: 677 A.2d 201,144 N.J. 459
• Parties: In the Matter of the Suspension or Revocation of the License of Joseph FICHNER, Jr., Licenseo Engage in the Practice of Master Plumbing in the State of New Jersey.
• Court: New Jersey Supreme Court

Page 459

144 N.J. 459

677 A.2d 201

In the Matter of the Suspension or Revocation of the License of Joseph FICHNER, Jr., License No. 6213, To Engage in the Practice of Master Plumbing in the State of New Jersey.

Supreme Court of New Jersey.

Argued March 11, 1996.

Decided June 18, 1996.

Bertram P. Goltz, Jr., Deputy Attorney General, argued the cause, for appellant Board of Examiners of Master Plumbers (Deborah T. Poritz, Attorney General of New Jersey, attorney; Joseph L. Yannotti, Assistant Attorney General, of counsel).

W. Peter Ragan, Asbury Park, argued the cause, for respondent Joseph Fichner, Jr. (Blankenhorn & Ragan, attorneys).

The opinion of the court was delivered by

O'HERN, J.

This appeal primarily concerns the de facto officer doctrine. This common-law doctrine typically holds valid the acts of a person exercising the duties of a public office under the color of authority if the acts are in the interests of the public and third persons. In this case, because three members of an occupational licensing board lacked the statutory qualifications for exercise of the office and another had not heard any of the evidence at the relevant disciplinary proceedings, the Appellate Division ordered the proceedings to commence anew. We are satisfied, in the circumstances of this case, that a reconstituted board should reconsider the charges, but we hold that it may do so on the basis of the record developed in these proceedings.

I

The claimed irregularities arose out of an administrative proceeding, conducted by the State Board of Examiners of Master Plumbers (Board), that resulted in a $35,000 fine assessed against Joseph Fichner and possible revocation of his license.

The State Plumbing License Law of 1968, N.J.S.A. 45:14C-1 to -27, created the Board of Examiners of Master Plumbers and authorized it to license and regulate plumbers throughout the state. The Board examines and licenses those plumbers meeting the qualifications necessary to become a "master plumber," as defined by N.J.S.A. 45:14C-2(a). The Board originally consisted of seven members: three master plumbers with ten years experience, one local plumbing inspector who has held such appointment for at least ten years, one journeyman plumber with ten years experience, and two representatives of the public having no association with the plumbing industry. N.J.S.A. 45:14C-3. The Legislature has since added two additional members to represent the interests of the public, one of which is a holder of a designated office or position in a department of the Executive Branch of the State Government that is closely related to the plumbing profession. N.J.S.A. 45:1-2.2(b),(c). However, because this State Government position and one of the Section 14C-3 public member positions were vacant, only a seven member Board participated in the final decision in this case.

All State occupational and professional licensing boards may penalize licensees for engaging in certain conduct, including fraud and occupational misconduct, as defined by the appropriate board. N.J.S.A. 45:1-21. The Board, pursuant to this authority, has promulgated regulations defining occupational misconduct. N.J.A.C. 13:32-1.12(c) provides that a plumber who charges excessive prices commits occupational misconduct.

Joseph Fichner, Jr., is a licensed master plumber doing business as A-1 Plumbing and Heating, Inc., of Freehold, New Jersey. The Board has twice charged Fichner with occupational misconduct because of his allegedly fraudulent business practices, including charging excessive prices.

The first set of charges in 1988 involved overcharges to five customers. The Board found him guilty of occupational misconduct and fraud. The Board reprimanded Fichner, ordered restitution and fined him $5,000. Fichner appealed the decision and the Appellate Division affirmed.

The current group of charges, consisting of eight counts, was filed by the Attorney General on July 30, 1992, and focused on Fichner's conduct in dealing with seven other customers. The Attorney General alleged that Fichner engaged in fraud and occupational misconduct by charging excessive prices and by providing misleading explanations of his prices and services.

Regarding each of the seven charged incidents, the customer and Mr. Fichner presented the Board with their versions of what occurred. In addition, the Attorney General, in her capacity as Counsel to the Board, retained Robert Muller, a licensed master plumber accepted as an expert, to visit each customer's home, determine what work was done, and present his view as to the reasonableness of the charge based on the time and parts used at each job.

We compress some examples of the Board's findings. A prospective customer called A-1 Plumbing because he had received an unusually high water bill. Fichner came over and told him that the toilet was leaking and needed to be "rebuilt," at a cost of $265. The customer agreed to this price, assuming from the description "rebuilding" that the job would be quite lengthy and complicated. The job took twenty minutes and involved replacing $12 worth of parts. Muller, the State's expert, agreed with the customer's interpretation of "rebuild" as implying a complete overhaul of the toilet and testified that the use of the term was inappropriate in this case. Fichner and three of his plumbing experts, however, disagreed and stated that the term "rebuild" was appropriate to use in this context because, within the industry, it implied a restoration of the toilet to functional use. "Remanufacture" was the appropriate term for complete overhauls.

Another customer called A-1 Plumbing after she discovered water in her basement along with smoke and a burning smell. She was hysterical and in a state of panic before Fichner arrived. He came quickly and examined the problem. He gave her an estimate of $735, and she told him to fix the problem. Fichner fixed the problem. The customer testified that Fichner did a good job but that his work took less than one hour and that he was nasty with her on the phone when she attempted to stop payment on her check. The State's expert agreed that the job should have taken not more than one hour. Fichner testified that he had given the customer an estimate in advance, worked for 2 3/4 hours on the problem, and was not nasty on the telephone after the customer stopped payment on her first check. However, he was upset with customers who tried to renegotiate an agreed price after he had already done the work. He could not take back the work, and customers were trying to take advantage of that fact.

A senior citizen called Fichner when she noticed a slow leak in her bathroom tub. Fichner gave her an estimate of $347. He fixed the leak in a few minutes. She then asked him about fixing a leak in her kitchen faucet. He agreed to do that for $185. When she said that she could not afford it, Fichner fixed the faucet for free. She claimed that he spent less than an hour working on both problems. The State expert allowed one hour's charge to Fichner for his work and counted $16 in parts. Muller believed that Fichner fixed the second problem, the leaking kitchen sink, simply by replacing the washer. Fichner said that he spent two hours working on the two problems, and that he used $40 in parts. There were similar disputes about the facts of each case, sometimes even between the State's expert and the complaining customers.

Both parties presented conflicting expert testimony concerning the appropriate theory to determine whether pricing was excessive and what the "appropriate" prices should have been. The Attorney General's expert examined each complainant's home to ascertain what work was done. He then arrived at estimates of reasonable charges. He calculated that Fichner grossly overcharged each customer, often by as much as 100%. For example, he estimated that the usual and customary charge for repairing a leaking toilet (our first example) was $109, while Fichner charged $265.

Fichner sharply challenged the methodology and theory of excessive pricing used by the State's expert. Fichner presented several plumbing and accounting experts who testified that prices should be derived by calculating a number of factors, including office overhead. Those experts, and Fichner himself, concluded that even if one accepted the time and parts estimates offered by the State's expert, Fichner's fees were not excessive but simply reflected his overhead plus a profit margin ranging from negative (i.e., the job did not cover all of his overhead) to 39% profit.

The Board adopted the methodology and conclusions of the State's expert and concluded that Fichner's charges were excessive in all seven cases because they exceeded "the usual and customary price for the service rendered." In addition, the Board relied on Fichner's misleading use of the term "rebuild" and his use of illegible estimates as evidence that his conduct was fraudulent.

The Board observed that Fichner had "not changed his modus operandi one whit since the prior disciplinary action of this Board [was] affirmed upon appellate review." The Board assessed $5,000 in civil penalties for each of the seven violations, $35,000 in all. Additionally, the Board ordered Fichner to make restitution to each customer for the amount by which his charge was excessive, and ordered him to pay costs of $10,000 including the cost of stenography and the fee of the State's expert. Finally, the Board ordered a suspension of his license for five years, but agreed to stay the suspension if Fichner paid all of the penalties.

Fichner appealed the Board's final decision on October 1, 1993. He argued that the regulations were vague and infringed upon freedom of contract, that one claim was barred by res judicata, and that the decision was based on erroneous factual and legal conclusions.

A year and a half later, Fichner moved before the Appellate Division for dismissal or, in the...