Officials suspended LeMaster Restoration, saying it had a pattern of shoddy work and inflated invoices.
LeMaster Restoration Inc. calls itself the "Midwest's premiere full-service disaster restoration and reconstruction provider," specializing in homes devastated by leaks, floods and fires.
Yet over the past year, the Burnsville construction company headed by Verdean LeMaster has experienced a disaster of its own. In January, the state Department of Labor and Industry took the rare step of summarily suspending LeMaster Restoration's contractor license, effectively putting it out of the construction business.
At a hearing last week, an assistant state attorney general described a "troubling pattern of violations" dating to 2004 that include unfinished projects, inflated invoices, work done without permits, and abusive litigation against former customers.
The state typically allows a contractor to keep operating while appealing a licensing suspension. But about once a year, the agency orders a summary suspension because it decides a contractor poses an immediate threat to consumers.
"We just decided that this guy has to be stopped," said Charlie Durenberger, the Labor Department's enforcement manager for contractor licenses.
LeMaster didn't show up last week for the hearing he requested. But he faxed the administrative law judge an affidavit that blamed the company's woes on bad legal advice, a hostile state investigator, the attorney for a former customer and his protracted divorce.
"I've been clearly a victim," LeMaster said in a brief interview last week.
An August 2008 trade magazine article linked to LeMaster Restoration's website said the company was founded in 1988, employed 40 people and generated $8 million in revenue a year. The firm relied on referrals from insurance companies, which hired LeMaster Restoration for the specialized work of repairing water, smoke and fire damage.
In his affidavit, LeMaster said his company was recently forced into receivership partly because he had to take money out of his firm to pay $250,000 in divorce expenses. A bank with "a secured interest in LeMaster Restoration Inc.'s assets" also seized $132,000 in November, he said, making it unable to meet payroll and prompting layoffs and voluntary departures.
The state says LeMaster's problems go back at least five years.
In 2005, LeMaster Restoration signed a contract with a Brooklyn Center family to repair a garage. The project turned sour and landed in a courtroom, where records showed the company didn't get a building permit before starting work or obtain required inspections.
Also in 2005, a Forest Lake family whose home was struck by lightning hired LeMaster Restoration. Once again, the project ran into trouble and the company sued the homeowners for more than twice as much as the family actually owed. In 2007, LeMaster Restoration filed a "grossly" inflated mechanics lien of $41,603 against a property in Rogers, even though the homeowners owed only $4,634, according to the state's licensing order.
In 2007, the company fixed the water-damaged interior of a Woodbury home but never repaired the leaking roof. Despite that, LeMaster Restoration sued the homeowners for more than their original contract amount, the state said.
The case that first got the state's attention, however, dates to 2004, when an Elk River family hired LeMaster Restoration to repair its fire-damaged home. The family fired the contractor a few months later. LeMaster Restoration was responsible for "grossly overstated" mechanic's liens of more than $300,000, the state said. A judge later ruled that much of the company's renovations were "shoddy, substandard" and "incompetently performed," and also found that LeMaster Restoration had submitted "fraudulent" invoices to the insurance company.
Last year, LeMaster Restoration paid the Elk River homeowners a $301,302 judgment to prevent the loss of its contractor license.
At last week's hearing, Assistant Attorney General Christopher Kaisershot cited a "repeated pattern of abusing the litigation process" as a reason for Administrative Law Judge Kathleen Sheehy to impose disciplinary action against LeMaster Restoration and Verdean LeMaster.
The future of the company is unknown. A state investigator testified that the assets of the company were sold to LeMaster's father, who runs a convenience store in Iowa. Verlin LeMaster is not a licensed contractor in Minnesota.