Kenny C. Guinn Governor MEMBERS KIM W. GREGORY Chairman DOUG CARSON DENNIS K. JOHNSON JOHN LINDELL DENNIS F. NELSON DEBORAH WINNINGHAM SHELTRA MICHAEL ZECH

RENO 9670 Gateway Drive, Suite 100 Reno, Nevada 89511 (702) 688-1141 Fax (702) 688-1271 Investigations (702) 688-1150 LAS VEGAS 4220 So. Maryland Parkway Building D, Suite 800 Las Vegas, Nevada 89119 (702) 486-1100 Fax (702) 486-1190 Investigations (702) 486-1101

MINUTES OF THE MEETING

JUNE 10, 1998
 
 

The meeting of the State Contractors Board was called to order by Vice-Chairman Michael Zech at 8:38 a.m., Wednesday, June 10, 1998, State Contractors Board, Reno, Nevada. Exhibit A is the Meeting Agenda and Exhibit B is the Sign In Log.

BOARD MEMBERS PRESENT:

Mr. Michael Zech - Vice-Chairman
Mr. Doug Carson
Mr. Dennis Johnson
Mr. John Lindell
Ms. Deborah Sheltra

BOARD MEMBERS ABSENT:

Mr. Kim Gregory
Mr. Dennis Nelson

STAFF MEMBERS PRESENT:

Ms. Margi Grein, Executive Officer
Mr. David Reese, Legal Counsel (Cooke, Roberts & Reese)
Ms. Nancy Mathias, Licensing Administrator
Mr. Bill Rizzo, Investigations Administrator
Ms. Kathy Stewart, Licensing Supervisor
Mr. Mike Maloy, Director of Investigations
Mr. Bob Kennedy - Senior Investigator
Mr. John Sapp, Investigator
Mr. Gary Leonard, Investigator
Ms. Betty Wills, Recording Secretary

OTHERS PRESENT:

Leslie Clarkson, Court Reporter, Sierra Nevada Reporters; Peter Bernhard, Interface Group Nevada; Richard Spurrier, Interface Group Nevada; Denny Sikma, Healthcare Builders Inc.; Charlie Baxter, CBK Equipment Rental; Alan Minor, Truckee Meadows Water Reclamation Facility Maintenance Superintendent and Project Manager; Troy Hicks, President, Suntel Communications Inc.; Chris Johnson, Owner, Control Tech Electric Co.; Daniel Flannagan, Owner, Heritage Builders; Larry Digesti, Legal Counsel, Heritage Builders; Jim Spoo, Legal Counsel, Olen J. Wilford Construction Company; Donna Burkett, Alpine Lawn & Landscape; Anthony Shulman, Homeowner; Steve Guinzali, President, Crane Plumbing and Heating; Susan Shirley, Vice President, Cavallero Heating and Air Conditioning; Michelle McCallister, Office Manager, A. C. Houston Lumber; Don Del Porto, Homeowner; Stan Kromydas, Homeowner; Jim Rittenhouse, Homeowner; Christine Boggio, Controller, Olen J, Wilford Construction Company; Holly Riley, Homeowner; John Menges, Homeowner; Joan O'Keefe, Bookkeeper and Office Manager, Classic Drywall; Tim burkett, President, Alpine Lawn and Landscape; and Jon Whitehead, Legal Counsel for John Menges.
Ms. Grein reported the agenda had been posted, in compliance with the open meeting law, on June 4, 1998, by investigator Ron Carney, at the Washoe County Court House, Washoe County Library, Reno City Hall and in each office of the Board in Las Vegas and in Reno.

It was determined there were 31 items on the amended agenda, each of an emergency nature. Two were advisory opinions. One from Construction Equipment Rental, and the second from RPI, Residuals Processing Inc.

MR. JOHNSON MOVED TO HEAR THE AMENDED AGENDA.

MS. SHELTRA SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY BY ALL PRESENT.
 

Vice-Chairman Zech called for a motion to approve the minutes of May 13 and May 28, 1998.

Mr. Johnson voiced he wanted to discuss the minutes of May 28, 1998 but to not approve them.

MS. SHELTRA MOVED TO DISCUSS THE MINUTES OF MAY 13, 1998 BUT TO NOT APPROVE THEM.

MR. CARSON SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY BY ALL PRESENT.
 

MAY 13, 1998

It was determined there were two items which had been discussed in the May 13, 1998 minutes which needed further review. One was Southern Nevada Electrical Industry - Labor Management Cooperation Committee and the second was the Economic Board of Clark County. Ms. Grein was given direction in both matters. She was then asked to pull the minutes from the agenda, and to bring them back at the next Board meeting.

MAY 28, 1998

Regarding the minutes of May 28, 1998, Mr. Johnson noted the minutes required his signature rather than Kim Gregory's as he had been the Acting Chairman.

Both sets of minutes were, thereafter, held in abeyance until the next Board meeting.

The next motion closed the meeting to the public.
MR. CARSON MOVED TO CLOSE THE MEETING TO THE PUBLIC FOR FINANCIAL REVIEW OF THE APPLICATIONS.

MR. LINDELL SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY BY ALL PRESENT.
 

The meeting was then closed to the public pursuant to NRS 241.030 to discuss financial and other data, which is confidential under NRS 624.110 (2).

APPLICATIONS

DENNIS BANKS CONSTRUCTION #20781 (B - General Building) ONE TIME RAISE IN LIMIT, BOARD

DECISION
Darryl Banks and Rod Larva had been present but left before the decision was rendered.

The one time raise in limit was approved for $17,500,000, if required, with payment and performance bonds, if required.

The remainder of the applications on the agenda were reviewed and discussion occurred on the following: Nos. # 6-9, 11, 16-17, 20, 22-25, 27, 29, 33, 36-37, 46-47, 52-53, 59-64, 73, 77, 79-80, 82, 86, 88-89, 91-92, 95-96, 101, 103-105, 107-108, 111, 114-116, 119, 121, 123, 125, and 128. Amended agenda: Nos. 2, 4, 8, 10, 13-15, 19-20, 22, and 31.
MR. LINDELL MOVED TO REOPEN THE MEETING TO THE PUBLIC.

MR. JOHNSON SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY BY ALL PRESENT.

MR. JOHNSON MOVED TO APPROVE ALL APPLICATIONS NOT DISCUSSED IN CLOSED SESSION PER STAFF RECOMMENDATION.

MR. LINDELL SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY BY ALL PRESENT.

MR. LINDELL SECONDED THE MOTION

THE MOTION CARRIED UNANIMOUSLY BY ALL PRESENT.

ADVISORY OPINIONS

SUNTEL COMMUNICATIONS INC. #41386 - INTERVIEW

James Meyers, President, was not present for the interview. The application was for both a change of qualifier and a change of officer as well as name change. It was explained the application had been tabled at the January 14, 1998 Board meeting for an interview and a financial statement review. The new President and qualifier, Troy Hicks, was present to answer questions. The Board was informed Mr. Hicks was currently on probation for vehicular manslaughter and was due to expire March, 2000. The license had expired on February 28, 1997 with the change of qualifier apparently taking place in September, 1996. The board had not been notified of the charge until the application for renewal had been received in January, 1997.

Mr. Hicks stated he had been partners with Mr. Meyers in a sub-chapter S corporation and he had bought Mr. Meyers interest in it. He said he and Mr. Meyers had had another small business in the state of Idaho, but because Mr. Meyers was not interested in doing work so far away from home, they traded each other's stock, leaving each a sole owner of two different companies. Mr. Hicks stated he was interested in doing telephone work only for utilities, he would not be doing anything for businesses. He explained the type of work he would be doing and said the projects could range as high as $30,000. When asked if he would voluntarily be willing to lower the limit, Mr. Hicks said yes.

CONTROL TECH ELECTRIC CO #26551 & #29320 - INTERVIEW

Chris Johnson, Owner, was present for the interview. The Board was informed the item had originated as a financial statement upon renewal and a request for cancellation of a bond. Two separate licenses were at issue. The renewal pertained to license #26551 and the financial review for bond cancellation to license #29320. The Board had acted upon the applications at the October 15, 1997 and, in turn, had requested an interview and a current financial statement within 6 months.

THE MOTION CARRIED UNANIMOUSLY BY ALL PRESENT.

Mr. Johnson was asked if he would consider voluntarily reducing his license limits. He asked the Board to leave the C21 license at $150,000, but to reduce the limit on his C2 license to $50,000. The Board granted Mr. Johnson his request by approving the C21 license, limit and bond to remain the same with a Financial Statement upon renewal and the C2 license was approved with a limit reduction to $50,000 with no bond requirement.

APPLICATION HEARINGS

GARRETT CONSTRUCTION - APPLICATION HEARING

James Garrett, Owner, had requested a continuation to attend his daughter's graduation to be held this same day. Ms. Mathias asked that this be the final continuance.

As the applicant was not present at the specified time, the Board gave the applicant 10 minutes before starting the hearing. At the end of the allotted time, Steven Dunn, President, failed to make an appearance.

Ms. Grein stated the notice of hearing had been mailed on May 8, 1998 and had been received by Mr. Dunn on May 26, 1998. The alleged charges were for NRS 624.263, failure to establish financial responsibility; and NRS 624.265, entered a plea of guilty or guilty but mentally ill to, been found guilty of or been convicted of a felony or crime involving moral turpitude.

Kathy Stewart was sworn in and stated the application was for a C5 contracting license, requesting a limit of $50,000. Steven Dunn had been charged with and pled no contest to domestic assault and battery on August 15, 1996. He was fined $600 and sentenced to 60 days in jail. Both penalties were suspended and Mr. Dunn was required to attend anger management classes and parenting counseling, which he complied with. The charge of financial responsibility was evidenced by his April, 1997 financial statement and credit report. A current financial statement, to be provided by June 3, had been requested but none had not been received.

HERITAGE BUILDERS #24183 - REQUEST FOR REHEARING (Continued from 4/8/98)

Daniel Flannagan, Owner, was present with his attorney Larry Digesti. Mr. Reese informed the Board it was necessary to establish a reason to rehear the matter, consenting to rehear the matter or it could stand by its prior decision. Mr. Reese asked Mr. Flannagan if his request was for an entire rehearing or whether it was to ask for a reconsideration of the Board's decision. Mr. Maloy referenced the original letter of request dated September 18, 1997 on page 9 of the hearing notice.

Mr. Reese explained a bill had been sent to Mr. Flannagan before the formal Board decision had been sent for the fine. Mr. Flannagan had been unable to determine whether or not it was, in fact, the decision. He then petitioned for a reconsideration, meeting the 15 day requirement. The rules required the Board to make a decision on a request for reconsideration at least 5 days prior to the time for filing a court appeal of the decision. Therefore, once the Board made a decision, and if they made a decision not to grant a rehearing, then Mr. Flannagan would have an opportunity to appeal the Board's decision to the court. If the Board decided to allow a rehearing or reconsideration, that would alter the time Mr. Flannagan would have for appealing.

Mr. Digesti stated he believed Ms. Sheltra would have to voluntarily recluse herself from the Board for the purposes of reconsidering Mr. Flannagan's motion due to a business relationship she had entered into with Mr. Flannagan after the last hearing and from which a conflict arose.

Ms. Sheltra responded to the request with comments of her own, indicating she voluntarily chose to recluse herself and to act as a witness against the contractor.

Mr. Digesti said it was his understanding Mr. Flannagan was not requesting to relitigate the issues, rather it was a request to reconsider the fine and the sanctions which were imposed against him. He believed there were mitigating circumstances which were not set forth at the earlier hearing.

Ms. Grein apprised the Board that, to date, the fine had not been paid and that the license status was active. Thereafter, Mr. Digesti recapped what had occurred in the last hearing referencing what he believed was mitigating circumstances. When asked if there was any additional evidence such as 1099's, the answer was no.

MCMILLAN CONSTRUCTION CO. #11711A - HEARING

MCMILLAN HOMES INC. #40311 - HEARING

The complainants: Donna Burkett, Alpine Lawn & Landscape; Anthony Shulman, Homeowner; Steve Guinzali, President, Crane Plumbing and Heating; Susan Shirley, Vice President, Cavallero Heating and Air Conditioning; Michelle McCallister, Office Manager, A. C. Houston Lumber; Don Del Porto, Homeowner; Stan Kromydas, Homeowner; Jim Rittenhouse, Homeowner; Christine Boggio, Controller, Olen J, Wilford Construction Company; Holly Riley, Homeowner; John Menges, Homeowner; and Joan O'Keefe, Bookkeeper and Office Manager, Classic Drywall, and Mike Maloy, Director of Investigations, were sworn in.

Ms. Grein explained the hearing for McMillan Construction Co., license #11711A, was for possible violation of NRS 624.3012 (2), willful or deliberate failure by any licensee or agent or officer thereof to pay any moneys when due for any materials or services rendered in connection with his operations as a contractor; NRS 624.3013 (3), failure to establish financial responsibility; and NRS 624.3017 (1), workmanship which is not commensurate with the standards of the trade in general.

At this time, Mr. Zech disclosed he had never had any dealings with McMillan Construction but he knew one of the family members. He personally did not know Chris or Tom nor did he feel his ability to be impartial was impaired. Ms. Sheltra disclosed the attorney for the construction company had done legal work for her in the past. She did not believe it would prejudice her opinion. Mr. Johnson disclosed he had known the owner, Tom McMillan for many years. He, too, did not believe it would prejudice his opinion. Lastly, Mr. Lindell disclosed he had done work for McMillan Mortgage in years past. He currently did not have any pending contracts with McMillan nor did he feel his opinion would be prejudiced. When asked if there were any objections from the witnesses, a question arose as to how long ago Mr. Lindell had engaged in business with McMillan. Mr. Lindell replied 20 years ago. No objections were forthcoming. Thereafter, the notice of hearing was entered into the record as EXHIBIT 1.

Regarding McMillan Homes Inc, license #40311, the notice of hearing, dated May 8, 1998, had been mailed certified and received by this office on May 11, 1998. The amended notice of hearing dated May 18, 1998 had been mailed certified and received May 27, 1998. The charges were for possible violation of NRS 624.3012 (2), willful or deliberate failure by any license or agent or officer thereof to pay any moneys when due; NRS 624.3013 (3), failure to establish financial responsibility; and NRS 624.3017 (1), workmanship which is not commensurate with the standards of the trade in general. The hearing notice was entered into the record as EXHIBIT 2.

Mr. Maloy noted that neither of the McMillans were present. He did not expect Thomas McMillan to appear for health reasons. Chris McMillan had placed a phone message on Mr. Maloy's voice mail asking Mr. Maloy to call him back this day. Mr. Maloy had done so but Chris McMillan had not returned the call. As the stipulation was not signed Mr. Reese explained the Board's procedure to those present as to when and how a final decision would be made.

SUE SHIRLEY, VICE PRESIDENT, CAVALLERO HEATING, told the Board Cavallero Heating had filed a complaint against McMillan Construction because McMillan didn't want to pay Cavallero on the basis there was some work they wanted done which Cavallero considered extra. Rather than pay for the work that was done McMillan held all of their money. The two companies had met several times and, in writing in August, 1996, Chris agreed to pay a reconciled sum within 30 days of his letter. He did not attempt to make those payments until December of 1997. Two checks had then been received but both had been returned for insufficient funds. In January the companies had spoken on the phone. Chris had said he was waiting for a closure on a home and the money from escrow would cover the checks. That had been the last direct contact from Chris. It was then determined the checks had been written by McMillan Homes. Mr. Maloy declared both companies intertwined their business dealings, it was difficult to keep them straight. When asked if the homes Cavallero had performed the work on had been sold, Mr. Maloy answered they had been because a dispute had arisen due to homeowners complaining about the vents. In further questioning it was established no liens had been filed; negotiations had been with Chris; a balance of $5,229.12 was outstanding; Chris had never given Cavallero any reason why he did not pay; and in the beginning the discussions had been with Tom McMillan who later turned it all over to Chris. Discussion followed.

JOAN O'KEEFE, BOOKKEEPER AND OFFICE MANAGER FOR CLASSIC DRYWALL, said a complaint had been filed because McMillan Construction had refused to pay retention on several of the homes drywall had been performed on. The original had been sent to McMillan Construction but her dealings had been with Chris McMillan or Lou Primak, not Tom McMillan. Material and labor had been supplied to both the Boulders and Evans Creek subdivisions. Invoices, too, had been supplied to McMillan Construction. An invoice dated 5/10/96 indicated McMillan Construction owed Classic Drywall $8,685.27. Ms. O'Keefe said she had personally called and spoke with Chris, who rudely told her he was not going to pay them anymore. Referencing page 17 of the hearing notice, Ms. O'Keefe said it was a computer printout from McMillan Homes dated March, 1996, indicating they owed Classic Drywall money. No money was ever paid on the balance stated earlier. Mr. Maloy said an administrative meeting had been held with the two companies. Chris contended there were some back charges and work not authorized. After reviewing the figures, Mr. Maloy had prepared a recap of what he felt the dispute amounted to. Mr. McMillan had told Mr. Maloy he was going to make an offer of settlement to Classic Drywall, Ms. O'Keefe stated he never had nor had she ever been contacted by him again. When asked what the current balance was, she said she believed the reconciled amount to be approximately $6,000. She stated things were really good when Lou Primak was there. They were paid on time. But once Chris fired Lou Primak things went crazy. Discussion followed.

JIM SPOO, ATTORNEY FOR OLEN J. WILFORD CONSTRUCTION AND CHRISTINE BOGGIO, CONTROLLER, OLEN J. WILFORD CONSTRUCTION - Mr. Maloy said the complaint had started in 1994. Mr. Kennedy had been the investigator handling the matter at the time. It was a dispute between Wilford and McMillan for work being done at Lancers.

Mr. Kennedy said he had been called to mediate the time element of dirt work for the two subdivisions on the Lancer project. The project was under the original license of McMillan Construction. He said he verbally arbitrated on the project and the work was performed. Thereafter, the matter ended up going to an arbitration hearing. The arbitration had been rendered in favor of Olen J. Wilford, DBA Wilford Construction as against Thomas McMillan, individually, Christian McMillan, individually, and both McMillan businesses under discussion. The judgment had been awarded in the amount of $131,000 plus 10.5% interest. Ms. Boggio said a $10,000 payment had been made on July 18, 1997, a $25,000 payment made on December 30, 1997, and a $1,589.00 on May 6, 1998. An attempt had been made on the part of Chris McMillan to exchange property toward the judgment. Wilford Construction had asked for the property to be appraised because the McMillan's were trying to give the property to Wilford under appraised value so the company could build and sell again to recoup their money, Mr. Wilford refused the offer. She said the payments which had been made did not cover the interest against the judgment. With interest the amount currently was $166,462.34. Attorney fees brought the amount to $175,629.98. Ms. Boggio said her company had been in constant contact with the McMillan attorneys and although a payment schedule had been requested, nothing substantial had been provided. She then described how the judgment blanketed everything the McMillan's owned and how Chris had recently tried to get her to sign a property release in order to clear a debt he owed to Bandy Floors. She said she refused. She added liens had been filed against Lancer Estates but the homeowners who purchased the properties received titles, free and clear, from Stewart Title although liens were in place. A complaint had been filed with the Insurance Commissioner. All homeowners had since been notified Wilford Construction intended to foreclose on the liens, both on homes which had been sold and on homes which remained incomplete.

Mr. Spoo clarified there were some 7 to 10 liens which had originally been filed against Lancer Estate lots. Basically, all had been sold and were currently in the hands of third party property owners. The arrangement by Stewart Title and McMillan to sell those lots outside of the liens was not yet understood. That issue was being pursued. The Evans Creek lots, out of which McMillan Construction, McMillan Homes, and Tom and Chris have been trying to reduce some of the indebtedness, were not the original lien lots but because of the arbitration award which had been reduced to a judgment, that judgment now affected virtually everything the McMillans owned. So the McMillans now have to come to Wilford Construction when they sell Evans Creek lots to attempt to acquire releases. Discussion followed.

ANTHONY J. SHULMAN, HOMEOWNER stated he had entered into a contract, a purchase agreement, with McMillan Construction to buy a home. Mr. Shulman said he had submitted a list of 19 problems, itemizing what they were. Very cursory repairs had been done by McMillan prior to Mr. Shulman filing a complaint. After filing his complaint in March, 1997 additional repairs were performed but the repairs were unsatisfactory. The current problems consisted of a leaking roof; major cracks on the interior walls; major texturing and painting problems, both interior and exterior; several drafts; plus many minor problems. Mr. Maloy had inspected the home and validated Mr. Shulman's testimony. Photographs were then entered into the record as EXHIBIT 3. Mr. Shulman was unaware of any liens. Discussion followed.

HOLLY RILEY, HOMEOWNER told the Board she had purchased her home from McMillan Construction. The offer of purchase was dated July 2, 1995. Ms. Riley stated what the basic problems were which had caused her to file a complaint and because the home had not been constructed as agreed upon, the Rileys had wanted a refund on the $10,000 lot premium or for McMillan Construction to take the home back. Chris McMillan considered it for a while but never followed through. There was a cloud on the title and a structural inspection indicated what items needed to be repaired. The back of the fireplace burned when it was used and Ms. Riley believed it was somewhat toxic. The painting was the worst of all the problems. Since moving into the home, some of the problems had been addressed and more where corrected after the complaint had been filed. A judgment had been awarded in small claims court for the paint job and the lien. A check had been received for the judgment, not from McMillan but from one of the properties in Evans Creek. Mr. Maloy validated pages 78-79 of the hearing notice indicated what items had been left unfinished. Photographs were then entered into the record as EXHIBIT 4, with Mr. Maloy describing what each represented and stating they all fell below the standard of the trade in general.

JON WHITEHEAD, LEGAL COUNSEL AND JOHN MENGES, HOMEOWNER - Mr. Menges testified he had a contract, a purchase agreement, to buy a home from McMillan Construction. Mr. Maloy then introduced a final closing statement which was entered into the record as EXHIBIT 6. When he originally purchased the home he found out it had a lien on it, but the lien had been removed once the creditors had been paid. he had not paid the creditors. For the record, Mr. Maloy entered a building permit into the record as EXHIBIT 7. It showed McMillan Construction as the one who pulled it. Mr. Menges then told the Board about the various problems he had encountered. All had been validated by Mr. Maloy and were determined to be below the standard of the industry. Mr. Menges verified an attempt had been made by McMillan Construction to correct some of the problems and he had compromised on one his major problems by offering his own services to install the fireplace. The money furnished to him, though, did not cover the cost of the actual unit which had been purchased. The last attempt to perform work at his house had been around January of 1998. The complaint had been closed but it was reopened when he received the engineer's report of the condensation or moisture problem in the crawl space. The report was forwarded to Mr. McMillan, who never attempted to correct the problem. The moisture, water problem still existed. EXHIBIT 5, consisting of two photographs, was entered into the record. Mr. Menges then described what the engineer found.

Mr. Whitehead said he had sent a notice on May 15, 1998 to McMillan Homes to correct the problems. He had not received any notice from him.

JIM RITTENHOUSE, HOMEOWNER, revealed he had purchased a home from McMillan Homes. The building permit reflected McMillan Construction. He purchased the home on June 3, 1996. Upon moving in, he encountered some problems but the work was corrected. A complaint had been opened and closed with the board. Then another set of problems appeared, and a new complaint was filed in July of 1997. Mr. McMillan agreed to do the work and the complaint was closed in December, 1997. The water problem in the crawl space , though, continued and existed down to this day. No one had been able to determine where the source of the water was coming from. Mr. McMillan promised to rectify the situation but had not. Mr. Maloy then verified there was definitely a water problem. Discussion followed wherein photographs were entered into the record as EXHIBIT 8 and Mr. Rittenhouse was advised to contact his homeowner's insurance for the protection of his children as the photographs showed a lot of black mold, black and white powdery mold, and mushrooms.

DONALD DELPORTO, HOMEOWNER, described he had purchased a home from McMillan Homes. Mr. Maloy stated the building permit reflected McMillan Construction. The contract had been signed

July 24, 1996 and Mr. Delporto, ultimately on February 17, 1998, had filed a complaint with the board over workmanship matters. None of the work in his complaint had been completed by McMillan Construction. He had not even been called back. Mr. Maloy said he had prepared a letter to Mr. McMillan on May 1, 1998, outlining three items that an inspection of the home revealed did not meet industry standards. Mr. Delporto confirmed the problems existed to this day. Photographs were then entered into the record as EXHIBIT 9. One of the photographs indicated a hole next to the foundation where water was collecting. There were some minor drywall cracks throughout the house which became very wet whenever it rained. Mr. Delporto said the last contact he had had with Mr. McMillan was when he filed the one year punch list. Discussion followed wherein Mr. Delporto said his home was one which had a lien on it from Wilford Construction for approximately $26,000.

STEVEN GUINZALI, PRESIDENT, CRANE PLUMBING & HEATING, said he had filed a complaint against McMillan Homes for nonpayment. There were many promises that when lots were closed, he would receive payment. His company had supplied material and labor for Galena Estates, The Boulders. Mr. Guinzali said he knew, for a fact, that some of the homes sold. The original amount of the invoices was $29,269. No payments were ever made, only offers of an exchange of lots for payment. But the lot was substandard and wasn't worth what the valuation of it was. Neither Tom or Chris McMillan had ever denied they owed Mr. Guinzali money or refused to pay him. In fact, there was a letter from McMillans' attorney acknowledging they owed Mr. Guinzali money, although Mr. Guinzali disputed the amount. A second complaint, similar to the first, had been filed involving the Evans Creek Estates. The amount owed was $14,988.50. Again, no payments were made nor were there any attempts to do so. The total sum owed to Mr. Guinzali amounted to $44,257.50. Warranty problems were handled, but only if the homeowner contacted Mr. Guinzali. Mr. Guinzali did not know what may have gone through McMillan's office because he was never contacted by McMillan to make any corrections. Discussion follow.

MICHELLE MCALLISTER, OFFICE MANAGER, A. C. HOUSTON COMPANY. Ms. McAllister said a complaint had been filed September 18, 1997, for repeated attempts to collect balance due from January and February, 1997, for material burnished to McMillan Construction. On page 67 of the hearing notice, there was an agreement to pay for that material. According to the agreement, there were four payment of $2,500 received, totaling $10,000, leaving a balance of $4,231.63. The last payment had been received December 9, 1997. There had been no attempt to make any payments since then nor had there been any contact by McMillan Construction or McMillan Homes. Discussion followed.

TIMOTHY BURKETT, OWNER, ALPINE LAWN AND LANDSCAPE, was sworn in. Thereafter, he told the Board he had filed a complaint with the board for money owing from McMillan Homes for work he had performed at Evans Creek Estates. The outstanding balance was $4,350. No payments had ever been made. He said he had a payable invoice list Chris McMillan had given him indicating how much he was owed. Mr. McMillan had never disputed the amount owed, he only promised to make payment once a home closed. When asked if he had done any additional work for McMillan Homes, he said yes and he had been paid for it. Mr. Burkett indicated he had a personal business relationship with Chris McMillan and knew that the McMillans were currently doing business in the South Meadows Park area, detailing a business agreement which he had backed out of. Mr. Burkett then offered his personal opinion of the McMillans' business strategy and the message any Board action would send.

STANLEY KROMYDAS, HOMEOWNER, stated he had filed a complaint against McMillan Homes. The building permit had been taken out by McMillan Construction. He said his dealing had been with Chris McMillan. Mr. Kromydas said he had moved into his home on December 20, 1996 but escrow had not closed until December 31, 1996 because of the liens. He still did not have the certificate of occupancy (COO). Mr. Maloy verified the building department indicated there was no COO. Mr. Kromydas said he had moved in on Friday and on Saturday he found raw sewage in the lower bathtubs. He had been unable to get in touch with Chris or the real estate agent. He then explained what he next did. By Sunday, he had found out the sewer had never been connected to the main, the main from the house to the street. That had caused considerable water damage in the crawl space and underneath the house, raw sewage. 700 pounds of lye had to be spread to kill the bacteria. Mr. Kromydas ended up paying the bill for $2,500 and it was one year before Chris took care of reimbursing him. Discussion followed wherein more problems which needed correction were brought to light including a lien from Tholl Fence which had been paid for in escrow but the money given to Chris; photographs were entered into the record as EXHIBIT 10; and Mr. Maloy confirmed the validated items fell below the standard of the industry.

Mr. Maloy concluded by saying throughout the last two years on all of the homeowner complaints, Chris McMillan never disputed Mr. Maloy's determinations regarding work to be performed due to not meeting industry standards. He always promised to take care of it, fixing some of the items, but he never followed through on the majority. Chris never denied there were problems and in many cases, even before a determination was made, he would agree something was not right and he would say he would take care of it. Many promises were made but not fulfilled. Mr. Maloy added financial statements had been requested from both McMillans but none had been forthcoming.

Mr. Reese next determined all exhibits, numbered 1-10 had been admitted without objection. Thereafter, the evidentiary was closed and a Board discussion was entered into.

No one from the general public was present to speak for or against any items on the agenda.

There being no further business to come before the Board, the meeting was adjourned by Vice-Chairman Zech at 4:20 p.m.

Respectfully Submitted,
 
 

Betty Wills, Recording Secretary
 
 
 
 

APPROVED:
 
 
 
 

Margi Grein, Executive Officer
 
 
 
 

Michael Zech, Vice-Chairman