Whistleblower: Contractors lose licenses, exemptions

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Whistleblower: Contractors lose licenses, exemptions

Updated: August 20, 2012 - 11:00 AM

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One building contractor accepted $212,673 in payments from a customer, but failed to pay $121,905 in debts to subcontractors and suppliers.

Another contractor closed its doors suddenly without refunding customers' down payments. A third, a roofer, installed windows without a license for that kind of work.

In all, 23 contractors lost their licenses or certificates of exemption in the first half of 2012 after the Minnesota Department of Labor and Industry determined they had violated state laws or rules. It was an increase over the previous six months, when 13 contractors lost their licenses.

During the first six months of 2012, the department took action against 105 residential building contractors, remodelers or roofers. Of those, 41 were engaged in unlicensed work.

I've listed the eight contractors that were fined and lost their licenses or certificates of exemption in the first half of 2012. B & R Construction of Owatonna agreed to the state's action without necessarily agreeing to its allegations.

All others listed were subject to licensing orders, which don't require a contractor's consent. Licensing orders and their findings of fact are made public once the licensee fails to request a hearing.

Brown Brothers Remodeling, LLC and John and David Brown, Faribault, $68,533 fine The company closed without notice, leaving bills and commissions unpaid. At least eight customers signed contracts with the company since early November and made down payments totaling $38,299 for work that was never done. Two subcontractors were each owed more than $2,000.

Customers attempting to contact the owners found the company's phone disconnected and its website taken down.

The state said the company "performed in breach of contract, so as to cause injury or harm to the public," and "conducted its affairs in a manner that demonstrates incompetence, untrustworthiness and financial irresponsibility."

Robert L. Peterson, doing business as Bob Peterson Exteriors, Hastings, $10,000 fine

Peterson violated conditions of a 2009 state order when a civil judgment for $23,000 was entered against him.

The 2009 order was based on allegations that the business "had engaged in a fraudulent, deceptive, or dishonest practice by failing to obtain local building permits and inspections," the 2012 order said.

Hmong Minnesota Contractor LLC and Ching S. Lee, St. Paul, $9,500 fine

A St. Paul homeowner paid the business $4,630 as a down payment for the remodeling of a basement and other work. The business failed to do any work or reimburse the customer.

S & S Custom Builders LLC and Charles D. Saleen, North Branch, $8,250 fine

Despite being paid in full for having built a deck for a North Branch homeowner, S & S failed to pay a supplier. When the supplier took a lien out against the customer's property, the customer paid the supplier $3,370.

S & S admitted "not having the financial resources" to pay the supplier, according to the state's order.

Bulldog Home Services LLC and Kathleen Schintz-David, Rosemount, $7,400 fine

Bulldog accepted $27,997 in partial payments for work on two projects, one in St. Paul and one in Minneapolis. The company failed to pay subcontractors with the proceeds and failed to finish the work.

B & G Specialty Contractors LLC and Ronald T. Guild, Minneapolis, $6,500 fine

A Wayzata homeowner paid B & G $212,673 of a $255,423 contract to remodel a house.

The company used defective materials, provided improper work and failed to complete the project, the homeowner told the department.

B & G "failed to use the proceeds of any payment" to pay subcontractors or suppliers. The homeowner ended up paying $77,155 directly to subcontractors and later learned that other subcontractors are owed an additional $44,750.

Kerry and Dawn Dagen, doing business as Dagen Exteriors, Brooklyn Park, $2,000 fine

The company failed to purchase and install four windows in a Maple Grove home after being paid $921.18 for the project. As a residential roofer, the business was not licensed to install windows.

B & R Construction of Owatonna Inc. and Brent Martin, Owatonna, $500 fine

B & R submitted an $18,000 bid to a customer, $3,000 higher than it is allowed to charge per year under its certificate of exemption -- a permit the state offers to small-scale contractors. B & R said the bid amount was an exception for a friend.

The department reviewed several years of company contracts and bids and alleged that B & R made a "false, misleading or incomplete" statement to the department, failed to put contracts in writing, represented that its certificate was a license and failed to call for inspections, the order said. B & R's certificate was revoked.

Hard Data digs into public records and puts a spotlight on rule breakers in Minnesota. Contact me at jfriedmann@startribune.com.