Brown Brothers Remodeling, a Bloomington company, abruptly closed its doors without an explanation, leaving paying customers with no work done, unpaid sales staff and overdue bills.
Cindy Erickson of Savage thought she'd done her due diligence on Brown Brothers Remodeling LLC. She checked its listing with the Better Business Bureau, looked it up on Angie's List, verified its state license and noted its 20 years in the business.
On April 30, she signed a contract with the Bloomington company for a bathroom remodel and wrote a check for $5,925, half of the total cost. But the workers never showed up.
Instead, Brown Brothers Remodeling abruptly closed, leaving bills and commissions unpaid and at least four customers wondering what happened to their down payments. The company's phone has been disconnected and its website has been taken down. Its two owners, David A. Brown and John R. Brown, did not return phone messages left by Whistleblower.
It's rare that a contractor closes up shop without notice -- the state's contractor license enforcer estimates it happens two or three times a year. When it does, people can try to get their money back in court, or in some cases they can tap into a state fund set up for customers who lose money to licensed contractors.
Edina customer Lil Yamamoto said a cabinet installer told her May 16 that Brown Brothers Remodeling was out of business. Yamamoto, 78, had signed a contract with the company in January for a kitchen upgrade. She paid $3,273, one-third of the job's cost, but work never started.
Erickson got the bad news from her salesperson, Dave Miles, on May 16. He told her that he went to the business and found the doors closed and the furniture missing, she said.
Jae Ruebke, sales manager for Brown Brothers Remodeling, said that he was informed by another employee that president David A. Brown of Faribault and vice president John R. Brown "came in the middle of the night, unloaded the warehouse, came and got all their files and everything and disappeared on everybody."
Ruebke said that when he and other workers heard rumors in April of a shutdown, they were assured by John Brown that the company had no plans to close and told them to continue making sales. Four weeks later, on May 8, according to Ruebke, John Brown told employees the business was closing.
"In that month [since the April meeting] I sold about $70,000 in business. I asked him what about these customers that we just sold. He didn't give me any answer," Ruebke said. Ruebke says he is owed thousands of dollars in unpaid commissions.
Even a neighboring business felt the impact of Brown's sudden departure. Matt Hild, owner of Floorsource & Design, subletted showroom space from Brown Brothers Remodeling.
Hild said he arrived at work the second weekend in May only to discover that the Browns had moved out, filled Hild's Dumpster with garbage and left $100 on a table. Hild says it costs $310 to empty a full Dumpster and he had to scramble to find an alternative destination for the 4,000 square feet of old flooring he had just torn out of a salon that weekend.
The company closure brought an "influx of complaints" to the Better Business Bureau. Up until early May, Brown Brothers Remodeling "had a low complaint volume and did a good job of resolving concerns brought to their attention," according to bureau spokesman Dan Hendrickson.
In mid-April the BBB received a complaint from a subcontractor that said it hadn't been paid, but the BBB "doesn't handle collection issues," Hendrickson said. The next complaint came on May 8, followed quickly by several more and on May 16, the BBB issued an alert on the company after it failed to respond in any way.
Since receiving the news, Erickson has been diligent in her attempt to collect her due. She quickly sent certified letters to the Browns demanding payment within five days. They didn't respond.
She contacted the Department of Labor and Industry (DOLI), which regulates licensed contractors. She told Whistleblower that a certain investigator is "handling the claim," something the department would not confirm.
On Friday Erickson filed suit against Brown Brothers Remodeling to try to get her down payment back.
If the courts rule in her favor and the state-licensed company fails to pay the judgment against it, Erickson may apply to the state's Contractor Recovery Fund for compensation.
If the fund reimburses her, the state "assumes the role of judgment creditor in the homeowner's place," according to Charlie Durenberger, head of DOLI's contractor enforcement unit.
Erickson said she was also planning to contact Attorney General Lori Swanson's office. While consumers may file a complaint with the office, the most it can do is attempt to mediate the dispute, according to spokesman Ben Wogsland.
He did have other suggestions. If a business files for bankruptcy, a customer can join the filing as a creditor, he said.
If there is cause to believe a business took money from customers "knowing full well that they don't intend to deliver the services, you've got potential criminal theft," Wogsland said. County sheriffs and attorneys would be responsible for bringing charges in those cases.
How can you protect yourself before signing a contract? You should insist on reasonable upfront payments, the DOLI recommends. And if a supplier or subcontractor sends you a "pre-lien notice," notify the general contractor that you will want a lien waiver from that supplier or sub the next time you make a payment.
The BBB recommends you pay by credit card, which gives you the option of disputing the charge if something goes wrong.
Yamamoto and her husband, Hubert, did make their down payment by credit card and they have disputed the charge.
Even though he lost money, Ruebke, the former sales manager for Brown Brothers Remodeling, said he can deal with it. "But I feel so bad for my customers. They put all this money down, they're not going to get their work done, and they've lost thousands of dollars."