A Washington area plumbing, air conditioning and electrical repair contractor agreed yesterday to pay $1.6 million over the next 10 years to settle a lawsuit brought by Montgomery County officials who charged that the company "deceived, defrauded, and gouged" customers.

The county's lawsuit was filed in Montgomery County Circuit Court in 1996. It charged that Warner Cos., company owner Thomas F. Warner, of Reston, and some of his top managers and employees had engaged in deceptive and unfair trade practices, including overcharging customers.

The complaint alleged that Warner Cos. and some employees billed customers for hours far in excess of the time actually worked, charged prices for repairs and services that exceeded Warner's price lists, charged for work never performed and made unnecessary repairs.

"It's a big victory for consumers in Montgomery County," said Christopher Van Hollen Jr., a Maryland state senator and a lawyer with the firm Arent Fox, which represented the county in the case. "It's a lesson to other contractors in the county that they have to abide by the laws."

Under the agreement, Warner admitted to committing unspecified violations of the county's consumer protection laws between 1993 and 1995.

Money from the settlement will be used to pay the county's legal costs and will be placed in a consumer restitution fund. The county will develop a mechanism for distributing money to consumers who have legitimate claims against the company.

The Warner operations named in the lawsuit have gone out of business. Thomas Warner formed a new company, Utility Service Express, in 1998.

Van Hollen stressed that the allegations in the lawsuit do not apply to the new company.

He added that under the settlement, Warner's new company has agreed to operate under stricter standards than apply to other contractors, and the new company will be monitored by the county for 10 years. Utility Service Express also will be responsible for paying the $1.6 million settlement.

In a statement, Thomas Warner said the company had taken steps to reform its pricing practices even before the county had raised any concerns.

"I am relieved to have reached a settlement after almost four years of legal costs exceeding $3 million and my own personal bankruptcy," he said. "I decided to settle after the county brought my wife into the lawsuit. I did not want her to be subjected to what I had been through. It was time to say enough."

Van Hollen said Warner's wife, Barbara, was made a party to the suit after she was named a co-owner of Warner's new company, with a 70 percent ownership share.

For more information about the consumer restitution fund, people can call the Montgomery County Division of Consumer Affairs at 240-777-3636.