Contractors can work around state discipline

Lauren Patnode isn't supposed to own or manage a licensed residential contractor company. She doesn't even have a license to work as a building contractor.

But when the state agency that licenses contractors went undercover last year to make sure Patnode wasn't breaking the rules, she told them her company could do a roofing job because it was using someone else's license to operate, investigators later said.

It's not the first time the state Department of Labor and Industry has accused Patnode of flouting its orders. In the past four years, she has been disciplined and fined for allegedly forging a city inspector's signature, lying on a license application, and using other company's licenses.

Patnode, who also uses the last name Tran, told Whistleblower on Friday she no longer does construction work. She also denied forging a signature or using anyone else's license.

"They already forced me out a long time ago," said Patnode, 39. "But now it's all about me personally."

Even if the state revokes a contractor's license, it doesn't have the authority to bar someone from the industry. For instance, Patnode can work for a contractor, as long as she doesn't own or manage the business.

Patnode's case illustrates how contractors can get around disciplinary actions by using different business names and licenses. City officials, who have the challenge of verifying a license number when a building permit is pulled, often encounter people trying to manipulate the system.

Patnode caught the state's attention in 2007, after Edina officials told regulators about a forged letter involving her employer. The letter purported to be from a city inspector, but the inspector's name was misspelled and Patnode's name was listed on an accompanying fax cover letter, city records show.

Patnode said she was out of the country when the letter was sent to an insurance company. She had to pay $2,000 in fines and the department ordered her to stop working as a residential building contractor.

In August 2008, Patnode applied for a contractor's license for Axcellent Construction Inc., but she failed to disclose her previous disciplinary action. The department also found that Axcellent's website falsely claimed the company had been in business since 1995 and had more than 1,200 satisfied customers.

Instead of revoking Axcellent's license in May 2009, the department required quarterly reports about the firm's work and finances. After Axcellent failed to turn in a report, the firm voluntarily terminated its license in November 2009.

Nevertheless, Axcellent Construction applied for a building permit in West St. Paul a few days later. State regulators filed an order to revoke Axcellent's license and impose $25,000 in fines for violations committed by two Patnode companies: Axcellent and Alternative Contracting Inc.

Later that month, the department was tipped that Alternative Contracting, which did not have a license, was soliciting business. When an undercover investigator asked for the company's license number, Patnode allegedly provided the license of Hannah Taylor, a 21-year-old student.

Taylor told the department she had no employees or contracts. Regulators revoked Taylor's license and fined her $2,000. Taylor did not return calls for comment.

Last September, the department sought to impose $17,000 in fines against Patnode, accusing her of violating a previous order and using another person's license to conduct business. Patnode said she does not know Taylor and is contesting the department's fine. The case is scheduled for a hearing on March 29.