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State fines Bloomington firm that stiffed clients

  • Article by: JANE FRIEDMANN
  • Star Tribune
  • July 10, 2012 - 11:56 PM

A Bloomington remodeling business that abruptly shut down after taking customers' down payments was fined $68,533, the largest penalty meted out to a contractor since 2010, the Minnesota Department of Labor and Industry announced Tuesday.

The department also revoked the license of the business, Brown Brothers Remodeling LLC, after eight customers reported having paid for work that was never performed.

A Whistleblower story last month described how Brown Brothers Remodeling closed without notice this spring, leaving bills and commissions unpaid and customers with nothing to show for their down payments. One of them was Cindy Erickson of Savage, who had signed a contract for bathroom work and made a $5,925 down payment on April 30, just days before the business dropped out of sight.

Former sales manager Jae Ruebke said that he was informed by another employee that the owners "came in the middle of the night, unloaded the warehouse, came and got all their files and everything, and disappeared on everybody."

A neighboring business found its Dumpster filled with Brown Brothers' discarded belongings.

The Better Business Bureau issued an alert on the business in mid-May following a flurry of customer complaints.

On May 4, the department's Construction Codes and Licensing Division, led by Charlie Durenberger, tried to contact company owners David A. Brown and John R. Brown about a subcontractor's complaint. The Browns, who had no prior disciplinary history, failed to respond to the state.

In addition to Erickson, the order identified seven customers who signed contracts with the company since early November and made payments totaling $38,299 for work that was never done.

Two subcontractors were each owed more than $2,000, the order said.

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

In taking disciplinary action, 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."

The Browns failed to request a hearing to contest the order, which Durenberger signed May 30 but which didn't go into effect for four weeks.

The $68,533 fine is the largest since a $70,000 fine was handed down against Richard P. Wooton in December 2010. More than half of the 295 unstayed fines given out to contractors in the past 24 months were $1,000 or less.

The state determines fines in part based on the number and gravity of the violations, whether the violations were willful and whether the business "gained economic benefit in not complying with the law."

A phone message left by Whistleblower at David Brown's residence in Faribault on Tuesday went unreturned.

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