EAST MONTPELIER — Tina Desmarais has a roof with no shingles, a building contractor who took off with her deposit, and advice from a lawyer that she’ll probably never see her money again.
Desmarais hired contractor Ryan Kimball of St. Johnsbury in July to fix her roof so she could put the house on the market for half a million dollars, hoping to move back to her home state of Maine before winter.
Desmarais felt she’d proceeded with due caution in hiring Kimball. She had her ex-husband, a building contractor, interview Kimball with her, and she checked his reference, who turned out to be an acquaintance of Desmarais who vouched for his skill and honesty. The two signed a contract on July 15.
“He knew his stuff and had all the right answers to the questions,” Desmarais said Aug. 25.
But Kimball disappeared with her deposit of $10,000. After much back-and-forth with Desmarais, he sent some subcontractors to remove the shingles. They later told her they didn’t get paid. In late August, after appearing in court to answer fraud charges, he texted her threatening messages in an attempt to get her to stop pursuing a legal remedy, and he now faces a hearing Sept. 5 on charges of obstruction of justice.
Desmarais’ experience is extreme, say the officials who come into contact with homeowners and building contractors who have disagreements. But it illustrates that when a contractor does commit an apparent fraud, the person who hired him or her has little recourse.
‘A very dysfunctional process’
After Kimball took Desmarais’ money and failed to do the work as scheduled, Desmarais checked the Better Business Bureau and the Attorney General’s Office, and found an array of complaints against him.
It turned out that Kimball had three pending charges of home improvement fraud in Washington County, according to state police; he had been released on the condition that he stop soliciting home improvement contracts. After a hearing Aug. 29 in Washington County Superior Court, he was released again.
Contractor fraud has always happened sporadically, but it’s becoming a more serious problem now because small claims court, the system set up to handle small disputes like this one, no longer functions as it should, said Vince Illuzzi, the longtime state’s attorney in Essex County.
“Small claims generally ends up costing people money because in most cases you can’t collect against individuals who have no assets,” said Illuzzi. “They have to pay various fees for every motion they file, and pay a sheriff to serve the papers. It’s become a very dysfunctional process.”
John Turner of Montpelier said he filed a small claims charge against Kimball, but Kimball didn’t show up as scheduled to answer it. Every time Turner returned to court, he had to pay another $65 fee to file a claim. Eventually, the judge made a decision in his favor, and advised Turner to contact Kimball’s employer with the paperwork necessary to get a court hold on his salary. The employer told Turner that Kimball didn’t work there.
“The judge told me at this point, ‘Good luck, it’s going to be like getting blood from a stone,’” said Turner.
The lack of remedies frustrates property owners like Joe Hageman, who said contractor Larry White walked off a job at his house in the middle of winter, leaving the siding off on all four sides. Hageman said White owes him between $65,000 and $75,000, and that he has photos of White buying building materials for another job after leaving Hageman’s unfinished. White denies he owes Hageman money and said he has closed his business.
Hageman, who filed a report with the Stowe Police, the Lamoille County State’s Attorney’s Office and the state Attorney General’s Office, has since hired construction lawyer Darren Misenko. “It just floors me that no one is willing to do anything,” he said. “When does this become about larceny?”
A common complaint
Home improvement fraud was the fourth most common complaint that the state attorney general’s consumer complaint office received last year, according to Charity Clark, chief of staff at the office. Consumers lost $299,000 in the 29 cases that were identified by the office as fraud, about $10,000 per case.
The Consumer Complaint Program has several complaints dating back to 2016 involving Kimball, many showing that he took a sizeable deposit for work and then disappeared.
When property owners call construction lawyers for help suing a contractor who owes them money, they usually hear it’s not worth it the cost.
“The likelihood of recovery is low,” said Misenko.
That leaves the option of criminal court, though few think that is the appropriate place for these actions.
“The underlying problems that land non-performing contractors in court are the problems that land most other people in court,” Illuzzi said, listing substance abuse, alcohol abuse and mental illness.
“There are some dishonest people out there but, by and large, most of these individuals take on the job with the best of intentions, but then obstacles pop up in their lives.”
And a criminal action doesn’t guarantee restitution either.
“Unless the person who owes you the money has assets, you might as well give up,” he said. “Because they are not going to pay you. It will cost you a small fortune to find out they are not going to pay you.”
As for the contractor, “unless they’re a repeat offender, chances are they’re not going to go to jail,” Illuzzi said.
This perception goes both ways. White, who is accused of leaving Hageman’s job unfinished, estimated he has accumulated $150,000 in outstanding charges to customers. He, too, said the court system was too broken to help.
“You can go to court all day long; most decisions aren’t worth the paper they are written on,” said White. He said contractors have no choice but to write off unpaid bills, “unless you want to spend $20,000 and three years and get a judgment that’s not enforceable.”
Registration or licensing
Vermont’s one of only a handful of states that doesn’t require contractor certification, registration or licensing, according to the state’s Office of Professional Regulation. Twelve states require a background check, and 14 require contractors to enroll in continuing education.
The issue of licensing or registration has come up sporadically over the decades, most recently last year, when registration was promoted by the Vermont Builders and Remodelers Association, or VBRA. The proposal would have required builders who do jobs valued at around $2,000 – a number that was raised to $5,000 during discussions in the Legislature – to register with the state and sign a written contract. The registration fee was proposed at $70 every two years.
Opponents of the measure told lawmakers the measure would put very small contractors out of business; some said it was a bid by larger companies to squash the small individual residential contractors who didn’t have the skill or the staff needed to complete paperwork. Proponents of registration hope to bring up the issue in the Legislature next year.
In the case of large commercial projects, many investors or owners purchase bonds through banks or insurance companies that provide a financial guarantee the bills on the project will be paid. The bonds also protect the project owner against bad work or failure to complete the project.
Bonds traditionally haven’t been seen as a feasible option for small builders, many of whom operate as one-person businesses. Similarly, licensing or registration weren’t seen as appropriate for Vermont in prior years, said Illuzzi.
“We never felt a compelling need to require licensing before because there are a lot of good-quality small contractors who – believe it or not – can’t read or write,” Illuzzi said. “A lot of people operate out of the back of their truck.” For those people, he said, obtaining a performance bond would be difficult.
But Illuzzi, who remembers seeing the issue of contractor licensing come up when he served in the Vermont Senate in the 1990s, said the time might have come.
Decades ago, people tended to know others in the community, and arrive at remedies locally. But now Vermont has more second home owners who don’t know the community. Illuzzi cited instances in the Northeast Kingdom where property owners from out of state have been taken for thousands of dollars by unscrupulous contractors.
“The world is changing; we have a lot of nonresidents and drug and alcohol abuse and related mental illness, and maybe it’s time for the Legislature to take another close look at this issue,” he said.
Opposition to regulation
If they come up again next year, efforts to create a registration or licensing system will meet stiff opposition.
“Not to make light of the consumers that have been ripped off by some contractors, but the percentage of this problem related to the overall money the industry generates for businesses and the state is minimal,” Rep. Mark Higley, R-Lowell, wrote in a commentary last year for VTDigger. Higley said 61% of the complaints lodged with the Attorney General’s Office were for amounts under $5,000, which qualifies them for Small Claims Court.
Higley advises consumers to try the attorney general’s consumer assistance program, mediation, Small Claims Court, and other court action. He added that the Attorney General’s Office should be doing more to publicize consumer complaints.
“They are supposed to help them mediate the situation, and it sounds like that doesn’t happen,” he said Sept. 2. He noted that this year, lawmakers voted to make it easier for nonviolent offenders to expunge and seal their criminal records to make it easier to secure employment.
“This registration is a form of licensure, so you have to be current with all state and federal taxes and child support,” he said. “So we’re going to let all these people who have stolen stuff, or have some pretty severe felonies, have their records wiped clean so they can get back to work, but not let an individual who is behind in child support payments register to pick up a hammer? How crazy is that?”
Desmarais is also against licensing. She’d like to see repeat offenders like Kimball serve jail time.
“The answer to this problem does not rest with regulation of builders, but with strengthening the laws encouraging incarceration of offenders,” she said. “Adding the burden of a regulating body and all its costs and oversight will prevent many honest, small businesses from being able to operate.”
But whether they pass or not, none of those measures will help people get their money back from contractors who have already spent it.
“Nothing has been done about it,” said Turner of Kimball. “He’s been able to move down the street and rip other people off.”
For her part, Desmarais went on Facebook to tell her story, and heard back from one of Kimball’s Facebook friends with a tale of how he too lost money to Kimball. She also talked to his girlfriend.
“Nobody wrote to me to defend him,” she said.