Question about a general contractor's waterproofing/basement work?

In 2/ 08, our basement flooded. We didn't have a waterproof system, so everything was torn out. The contractor put in a baseboard, trench, and sump pump (with battery and backup pump). He verbally warranted his work for life and said it would be in writing when he is paid in full.

Last week, the pump stopped working. We called the contractor and a new pump was installed.

Tonight, we went downstairs and there was an inch of water on the floor. We immediately called the contractor. He told us that the pump had failed and went to get a new one. He told us that he had originally installed a 1/3 pump and it couldn't handle the workload. To "hopefully fix it," he installed a 1.5 horsepower pump and said we may need to get a ¾ pump.

My question is: should the contractor be responsible for knowing that a smaller sump pump will not work in a high water area (which HE mentioned)? My furniture and new walls are ruined… what are my options?
He did not say there would be a charge for the pump replacement. Considering his (lack of) work ethic, I would assume he will send a bill.

He did suggest that we go and buy another sump pump so that we have a spare if this happens again.
My final question... sorry this is so long.... Should he be reported?

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