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

NOVEMBER 17, 1998
 

The meeting of the State Contractors Board was called to order by Chairman Kim Gregory at 8:48 a.m., Tuesday, November 17, 1998, State Contractors Board, Las Vegas, Nevada. Exhibit A is the Meeting Agenda and Exhibit B is the Sign In Log.

BOARD MEMBERS PRESENT:

Mr. Kim Gregory - Chairman (Exited at 4:40 p.m.)
Mr. Michael Zech
Mr. Doug Carson
Mr. Dennis Johnson
Mr. John Lindell
Mr. Dennis Nelson
Ms. Deborah Sheltra

BOARD MEMBERS ABSENT:

None

STAFF MEMBERS PRESENT:

Ms. Margi Grein, Executive Officer
Mr. Dennis Haney, Legal Counsel (Haney, Woloson & Mullins)
Ms. Nancy Mathias, Licensing Administrator
Mr. Bill Rizzo, Investigations Administrator
Ms. Pat Potter, Licensing Supervisor
Mr. Tom Knapp, Director of Investigations
Mr. Bob Macke, Compliance Supervisor
Mr. Darryl Knight, Investigator
Mr. Greg Mincheff, Investigator
Mr. Clark Thomas, Investigator
Ms. Betty Wills, Recording Secretary

OTHERS PRESENT:

Cari Inkenbrandt, Court Reporter, CSR Associates of Nevada; Marcus Lee, President, Marlisa Enterprises Inc.; John Ramirez, President, S D I; Brett Torino, Manager, Canyon Willow Builders/Trop LLC; Darrell Clark; Legal counsel for Apex Framing; Mark Escoto; President, Apex Framing; John Crawford, Owner, Elephant Construction; Jim Walters, Vice President and General Manager, Insituform Southwest Inc.; John Heisler, Sales Manager, Insituform Southwest Inc.; Michael Garman, Manager, Millworks, LLC; Roy Holt, Member, Mainstream Development LLC; Stan Perry, Legal Counsel, Mainstream Development LLC; John Marsh, General Manager, Prostar Security; Neville Patt, Dennis V. Courtney Construction; Marge Brake, PBS & J, Program Managers for the City of North Las Vegas Capital Improvement Program; Keith Gregory, Legal Counsel, Award Custom Pools & Spa Inc.; Charles Koski, Owner, Chucks Roofing; Randy Costner, Rhodes Homes; Eddie Hart, Complainant; Kristi Saylors, Complainant; Imogene Griggs, Complainant; Alan Lichter, Complainant; Johnny Kim Larsen, President; Matthew and Laura Ragan, Complainants; Douglas and Robin Lee, Complainants; Joseph and Rhea Donnelly, Sr.; Joe and Lisa Donnelly, Jr; Complainants; Ned and Sue Ann Shamo, Jr.; Paul Donahue, Boulder City Building Dept.; Howard Ickes, Desert Fireplaces; Jennifer Ericksen, Desert Fireplaces; and Michael Bohn, Legal Counsel for J K Larsen Enterprises Inc.

It was learned there were 35 items on the amended agenda, each of an emergency nature.

APPLICATIONS

MARLISA ENTERPRISES INC. (B2 - Residential & Small Commercial) NEW APPLICATION,

RECONSIDERATION, BOARD DECISION

Marcus Lee, President, was present and informed the Board the $750,000 limit reflected on the license application was a typographical error. He was only requesting a $150,000 limit. It was learned that amount with a $20,000 bond had been approved on September 9, 1998. Mr. Lee then stated he could only get a $15,000 bond. When asked what type of jobs he would be performing and what size, Mr. Lee replied he would be performing insurance renovation with the largest contract around $65,000.

RECONSIDERATION, BOARD DECISION
 

Brett Torino, Manager, was present, along with Darrell L. Clark, Legal Counsel for Apex Framing, and Mark Escoto, President, Apex Framing. Mr. Clark and Mr. Escoto were asked to leave the room for a financial review of the license application. The Board minutes of October 8, 1998 were referenced.

Mr. Clark and Mr. Escoto were then invited back into the hearing room. Mr. Escoto stated he was appearing to oppose the issuance of a new license to Mr. Torino until the Apex judgment was satisfied. He had collected $47,000 of the $77,000 judgment but an outstanding balance of approximately $35,000 remained. A claim had been filed against the bond but, to date, the claim had not been paid.

Mr. Haney asked Mr. Clark if there was an interpleader on the bond in an attempt to reach a stipulation with Apex Framing. He said he believed there was approximately $29,000 available. Mr. Clark concurred saying he had talked with Bob Griffy who had indicated the funds would be interpleaded into court after the Board hearing. Mr. Clark then confirmed the original judgment had been against Mr. Torino's deceased father and the company Mr. Torino's father had previously owned. Brett Torino had assumed the liability of the company when he had been gifted Torino Construction.

When it was pointed out there would still be an outstanding amount of approximately $6,000 remaining on the judgment after the bond was paid out, Mr. Torino stated that whatever he was asked to do by the court or the Board, he would cooperate.

John Crawford, Owner, was informed liabilities which had not been listed on the financial statement had appeared on his credit report. Mr. Crawford stated he had returned to his CPA and had him list those items. In discussing the $750,000 limit Mr. Crawford had requested, Mr. Crawford said he would take any limit. He would take a $1,000 limit in order to go to work, adding he only performed small jobs.

NEW APPLICATION

INSITUFORM TECHNOLOGIES #33867 (C40 - Insituform Reline/Grouting) - RENEWAL OF EXPIRED

LICENSE, OFFICER CHANGE WITH RENEWAL, BOARD DECISION

Two issues had surfaced regarding the renewal: 1) a question regarding the qualifier's employment; and 2) a bid which had been submitted to the City of Reno. When the application had been submitted on November 4, 1998, it had not been signed by the qualifier. In fact, his name had been crossed out. The application had been returned later that same day with a notarized signature. Staff had later uncovered the qualifier did not sign the application. The application, therefore, was a forged one. Additionally, the qualifier had advised staff he had not been employed by the company since October, 1997. The bid which had been submitted to the City of Reno had been submitted on November 3, 1998 before the application for renewal had been made. Therefore, the license had been in an expired status when the bid had been made.

Mr. Rizzo stated a complaint had been received on November 6, 1998. A formal investigation had been opened and assigned to John Sapp, Investigator, Reno. A copy of the bid which had been submitted to the City of Reno for the sewer rehabilitation program had been obtained. It was dated November 3, 1998. The bidder's name was indicated as Insituform West Inc., and it listed the license number #33867, the license number for Insituform Technologies, an inactive license as of June 1, 1998. The investigation was still continuing. It was then learned that the name of the QE who had provided the affidavit and who was no longer employed by Insituform was James Monaghan.

Jim Walters, Vice President and General Manager, Insituform Southwest Inc. and John Heisler, Sales Manager, Insituform Southwest Inc. were identified and informed the bid submitted to the City of Reno was void. Mr. Walters explained there were four entities involved in the venture. It was explained to him that the problem was the group had failed to notify the Board of officer changes, possibly changes in names, and changes in status, all of which were violations of the statutes. The bid was void because the company did not have a contractor's license to bid the job. Dialogue ensued wherein Mr. Walters explained how the company operated.

MILLWORKS LLC (C3 - Carpentry) NEW APPLICATION

Michael Garman, Manager, was present. The applicant had previously been denied a license based upon financial responsibility issues and the history of the licensure in the state of California. A new application had then been filed for licensure. Mr. Garman stated he had answered some of the questions wrong on the original application so he had submitted a new one. Since then, he had taken care of the IRS lien and the California lien for Pinetree Lumber had been written off in the bankruptcy, not paid off. Mr. Garman then spoke to the Dikeman complaint which remained on his California license record. He said it was the only complaint he had ever had on his license and it was the one for which California had revoked his license. A second license had been revoked after Mr. Garman had removed himself as the QE for the corporation holding the license. In further discussion of the Pinetree Lumber lien, Mr. Garman said if that was an issue, he would pay the amount owed even though the lien should have been against the corporation license, not his personal license. Discussion then turned to indemnification of the license by Theron Jensen, Member. A motion was made, seconded and carried to deny the license for financial responsibility but upon additional conversation regarding reapplying a third time, it was suggested the matter be tabled to allow the principals time to consider the suggestion to indemnify the license. Mr. Nelson agreed to modify his motion and Ms. Sheltra was willing to modify her second on the basis information would be received reflecting the charge offs were taken care of.

Roy Holt, Member, and Stan Perry, Legal Counsel, appeared and were informed the license had been approved with a limit of $750,000 and a $20,000 bond. Mr. Perry stated the company was primarily a developer and had a large apartment project in North Las Vegas. Financing was in place and the company, who owned the project, was ready to start developing it. When the application had been submitted there had been no time to prepare a fully audited financial statement. Mr. Perry said the company needed something to move forward for the specific project being referenced. It was recommended that as soon as the license was issued, the company should immediately file for a one time raise in limit for $20 million and a permanent raise in limit when the CPA prepared financial statement was completed.

PROSTAR SECURITY (C2C,D,E - Fire Detection; Amplifying Systems; Signal Systems) NEW

APPLICATION

John Marsh, General Manager, was present and informed the license had been issued with a $50,000 limit and a $5,000 bond.

RENEGADE PAINT & DRYWALL (C4A,B,C,E,F Decorating; Taping & Finishing; Drywall; Sheet Metal,

Studs, Wallcovering; Painting) NEW APPLICATION

RENEGADE PAINT & DRYWALL (C17 - Lathing & Plastering) NEW APPLICATION

Dick Peck, President, was present and notified both licenses had been approved with a limit of $100,000 and a $10,000 bond.

R & B CRAFTSMEN ASSOCIATES INC - (C3C - Cabinets & Millwork) NEW APPLICATION,

RECONSIDERATION

R & B CRAFTSMEN ASSOCIATES INC - (B2 - Residential & Small Commercial) NEW APPLICATION,

RECONSIDERATION

Richard Failla, President, was present and notified the C3C license had been approved with a limit of $50,000 and a $5,000 bond and the B2 license had been approved with a limit of $200,000 and a $10,000 bond.

Applications on the agenda were reviewed and discussion occurred on the following: Nos. # 1-7, 9, 12, 15-17, 19, 23, 30, 39, 41, 43-44, 50, and 55. The remainder of the applications were reviewed later in the day and discussion occurred on 62, 65-68, 71, 73, 77-78, 83, 90-91 and 95. The Amended agenda was also reviewed later: Nos. 1-3, 11, 13-15, 18, 27-29, and 33-35.

A motion to reopen the meeting to the public was made, seconded, and carried, and a second motion was made, seconded, and carried to approve all applications not discussed in closed session.

ADVISORY OPINIONS

A request had been made to move the advisory opinion concerning Ambrosetti Pond Improvements to the Reno meeting. There was no objection.

MCMILLAN CONSTRUCTION CO. #11711 - FINDINGS OF FACT, CONCLUSIONS OF LAW, AND

DECISION

MR. LINDELL MOVED TO ADOPT THE FINDINGS OF FACT, CONCLUSIONS OF LAW.

MR. CARSON SECONDED THE MOTION.

MR. LINDELL MOVED TO ADOPT THE FINDINGS OF FACT, CONCLUSIONS OF LAW.

MR. JOHNSON SECONDED THE MOTION.

REQUEST FOR SUMMARY SUSPENSION

AWARD CUSTOM POOLS AND SPA INC. #42203 - REQUEST FOR SUMMARY SUSPENSION

The licensee Fred E. Miller, President, was not present for the hearing, but he was represented by his counsel, Keith Gregory.

Mr. Knapp stated there were 16 open complaints against Award Custom Pools and Spa Inc. Eleven of the complaints had been prepared for a notice of hearing but were pending the outcome of this meeting. Staff had been working with Keith Gregory to address the money owing complaints and the workmanship issues which had arisen. Mr. Knapp then explained that in this situation there had been an absentee owner who left the day-to-day operations of his Nevada business to his Qualified Employee, Bob Lane. Mr. Lane had kept no records from May through August regarding the pools which had been constructed nor on the various stages of construction of those pools. Most of the pools which the board had received complaints on, with few exceptions, had been predominately completed. However, in conjunction with the owner's activity, he had filed a chapter 7 bankruptcy in federal district court in September. In a conversation with Keith Gregory, Mr. Knapp had been advised his client could no longer pay any additional monies to rectify the money owing complaints or to have other subcontractors complete the workmanship issues. He, therefore, requested the Board perform a summary suspension of the license.

In response to a question from Ms. Sheltra, Keith Gregory said all open complaints had arisen since May of this year when Bob Lane became the QE. Mr. Gregory then explained the events which had then followed and which lead up to Mr. Lane's disappearance. He stated his client had no intention of continuing his business in the state of Nevada. Mr. Miller was attempting to sell property to generate funds to pay and complete the open complaints but there were problems with the immediate sale of that property which could possibly delay it for some time.

CHUCKS ROOFING #20567 - DISCIPLINARY HEARING (Continued from 10/8/98)

The licensee, Charles Koski, Owner, was not present for the hearing. Mr. Knapp had Mr. Macke update the Board regarding the corrective action which it had directed Mr. Koski to perform. Mr. Macke introduced Mrs. Eure and recapped all the events leading to the corrective order wherein Mr. Koski had been directed to contact Mr. Macke to set up an appointment to review Mrs. Eure's roofing leak and to resolve the matter. Thereafter, Mr. Macke had not heard from Mr. Koski. On 10/24/1998, Mr. Macke had left a message on Mr. Koski's voice mail asking him to contact Mr. Macke to set up an appointment. There was no response. On 11/5/1998, Mr. Macke once again contacted Mr. Koski by voice mail to ask him to get in touch with him. Mr. Caruso had been to the job site the previous day and found the roof in the same condition. Mr. Macke said neither he nor Mrs. Eure had been contacted by Chucks Roofing. Prior to the hearing, Mr. Knapp had confirmed the telephone number for Chucks Roofing was a valid number because the automated message still identified it as Chucks Roofing. The complaint remained unresolved and the roof had not been repaired.

The homeowner, Mr. Anderson, was not present for the hearing. He had provided the board with a statement requesting a continuance and he asked that his letter be entered into the record. At this point Mr. Zech abstained. It was then explained the evidentiary had been closed in the last meeting.

Randy Costner, Rhodes Homes, was present as well as Greg Mincheff, Investigator. Mr. Mincheff stated that on November 2, 1998, Rhodes Homes and Mr. Mincheff had gone to Mr. Anderson's home to review the six items which were left. Corrective work had been started that day but Mr. Mincheff said he had not since been advised of any other days Mr. Anderson let Rhodes Homes perform further work and no communication had been received from Mr. Anderson to relay to Rhodes Homes. Mr. Mincheff said he did not know where the items stood regarding completion nor did he know how much time Rhodes Homes had been allowed to work in the home. The only day he knew for certain work that work had been performed was on Monday, November 2 and that was based upon Mr. Anderson's communication with the board.

Mr. Costner said he concurred with Mr. Mincheff. He had been allowed one day in the home. Several people had worked there for eight hours. Some of the work which remained to be done could not be performed on Saturday. He said he needed the other two days which had been agreed upon and he needed them during normal work hours. He said he was ready to do the work and had been all along. Addressing the continuance which also requested reimbursement of travel expenses, Mr. Costner said he was ready and willing to do the work but this was the problem he had had from the beginning with Mr. Anderson. He said he could not do the work if no one let him in.

When questioned about the three days that had been offered in Mr. Anderson's statement, Mr. Mincheff said the only time Mr. Anderson had offered to him was Saturday, October 31 and Monday, November 2 and this only four days before the Saturday referenced. He said Mr. Costner needed to have enough time to schedule crews.

AUTHORIZED SERVICE CENTER OF NEVADA INC. #33502A - DISCIPLINARY HEARING

FACTORY HEATING AND COOLING #37333 - DISCIPLINARY HEARING

Donald Lasater, President, was not present for the hearing. The notice of hearing had been sent certified mail on September 8, 1998 to the address of record. No return receipt had been received. The notice of hearing had been stamped as undeliverable as addressed, forwarding order expired. Thereafter, the amended notice of hearing was sent certified mail on September 24, 1998 to the address of record. It too was returned as undeliverable.

The notice of hearing was for possible violation of NRS 624.301 (4), willful failure to comply with terms of contract or written warranty; NRS 624.3016 (1), any fraudulent or deceitful act of a contractor whereby substantial injury is sustained by another; NRS 624.3017 (1), substandard workmanship; NRS 624.3018, the performance by any partnership, corporation, firm or association of...constitutes a cause for disciplinary action. The hearing notice was entered into the record as EXHIBIT 1. It was learned both licenses were suspended.

Eddie Hart, Complainant; Kristi Saylors, Complainant; Imogene Griggs, Complainant; Alan Lichter, Complainant; and Bob Macke, Investigator, were sworn in and questioned by Mr. Knapp.

EDDIE HART - Mr. Hart had entered into a contract with Active A/C & Heating on October 16, 1997 to replace the air conditioning/heating units at his residence for an amount of $2,200. The contract included a five year warranty. In order to pay for the service, Mr. Hart had borrowed the money from a lender. Subsequently, Mr. Hart had requested service on his thermostat and was informed that was how the thermostat worked. Thereafter, he received no response to his calls, which were numerous. He quit calling when the number was disconnected. On January 2, 1998, Mr. Hart filed a complaint with the Consumer Affairs Division and on April 10, 1998, Mr. Hart filed a formal complaint with the Contractors Board. Mr. Macke stated he had checked the thermostat on 6/1/98 and it was not functioning properly.

IMOGENE GRIGGS - Ms. Griggs said she had purchased a maintenance contract from Authorized Service Center of Nevada Inc. to maintain the air conditioning/heating units at her residence. It was her fifth contract with the company. She had paid $275 for a one year contract. When Ms. Griggs had contacted the company to perform maintenance she was told to call another telephone number to set up an appointment. She had called the number she was given and spoke to a lady, name unknown, who set up an appointment for Ms. Griggs. When the appointment date arrived, no one kept the appointment. She called again and made a second appointment. Once again there was no response. When she called a third time, she reached someone who told her they did not know of a lady working there nor did they know anything about a service contract. She had not been able to get any kind of service on her service contract and she never found Active A/C when she attempted to find them. Thereafter, she contacted another A/C company to service her unit.

KRISTI SAYLORS - On approximately June 1, 1997, Ms. Saylors had entered into a contract with Authorized Service Center of Nevada Inc. to install a heating and A/C unit at her residence for a sum of $6,161.50. The contract included a 10 year parts and labor contract. When the work was completed the air conditioning units appeared to work fine. A problem arose when the first cold snap hit in November when the heating units did not work. Ms. Saylors tried to find Authorized to come fix the problem but their number had been disconnected and their office abandoned. When certified letters were sent, they were returned as undeliverable. When Ms. Saylors contacted another A/C company to examine the unit, she learned that Authorized Service Center had failed to install the gas lines and the disconnects to the heating unit. She had to pay another $490 to have that work done. Ms. Saylors said she had filed a claim against the bond, signed the release, but had not received payment. Staff was asked to help Ms. Saylors with her bond claim.

ALAN LICHTER - A contract had been entered into with Active A/C & Heating on July 23, 1997 to replace the condenser fan motor on an A/C unit at Mr. Lichter's residence. After Active A/C & Heating Services Inc. had installed the condenser fan motor, they failed to respond to his request to correct the workmanship problem. Mr. Lichter said he had air for the first two months until he switched to heat. When it became time to switch back to air conditioning, the unit failed to work. When he attempted to contact Active A/C, no one returned his call. Several hours later, it was Desert Breeze who called him back and it was Desert Breeze who corrected the problem for an additional $395. They told him the fan motor was undersized for the air conditioning unit and it was a used part. Mr. Lichter learned from Desert Breeze Active A/C & Heating had left town.

THE MOTION CARRIED UNANIMOUSLY.

Mr. Johnson directed staff to assist the complainants with their claims with the bonding company.

J K LARSEN ENTERPRISES #27477 - DISCIPLINARY HEARING

Johnny Kim Larsen, President; Matthew and Laura Ragan, Complainants; Douglas and Robin Lee, Complainants; Joseph, Rhea, Lisa, and Joe Jr. Donnelly, Complainants; Ned and Sue Ann Shamo, Jr.; Paul Donahue, Boulder City Building Dept.; Howard Ickes, Desert Fireplaces; Jennifer Ericksen, Desert Fireplaces; Clark Thomas, Investigator, and Tom Knapp, Director of Investigations, were sworn in. Michael Bohn, Legal Counsel for J K Larsen Enterprises Inc. was also present.

The hearing was for possible violation of NRS 624.301 (1), abandonment without legal excuse of any construction project or operation engaged in or undertaken by the licensee as a contractor; NRS 624.301 (2), failure in a material respect on the part of a licensee to complete any construction project or operation for the price stated in the contract for the project or operation or any modification of the contract; NRS 624.301 (3), willful failure or refusal without legal excuse on the part of a licensee as a contractor to prosecute a construction project or operation with reasonable diligence, thereby causing material injury to another; NRS 624.301 (4), willful failure or refusal without legal excuse on the part of a licensee to comply with the terms of a construction contract or written warranty, thereby causing material injury to another; NRS 624.3011 (1) (A), willful and prejudicial departure from or disregard of plans or specifications without the consent of the owner; NRS 624.3011 (1) (C) (1), willful or deliberate disregard and violation of the building laws of the state or of any political subdivision thereof; NRS 624.3011 (2), if a contractor performs construction without obtaining any necessary building permits; NRS 624.3012 (2), diversion of funds; NRS 624.3012 (2), willful or deliberate failure by any licensee to pay any monies when due; NRS 624.3014 (2) (B), with the intent to evade the provisions of this chapter by combining or conspiring with an unlicensed person to perform an authorized act; NRS 624.3015 (3), knowingly entering into a contract while that contractor is not licensed, bidding to contract or entering into a contract with a contractor for work in excess of his limit or beyond the scope of his license; and NRS 624.3017 (1), workmanship which is not commensurate with standards in the building or construction codes adopted by the city or county in which the work is performed. The notice of hearing was entered into the record as EXHIBIT 1.

Hereafter, Mr. Knapp questioned the following individuals concerning their complaints which is recapped herein. For a more thorough review of the hearing, please reference the formal findings of fact, conclusions of law.

Mr. Gregory chaired the meeting until 4:40 p.m. at which time Mr. Johnson assumed the chair. A quorum remained.

MATTHEW AND LAURA RAGAN - On August 4, 1996, The Ragans had entered into a contract with J K Larsen for $314,921 to build a house. The contract price had been paid in full by Norwest Bank. Prior to beginning work, Mr. Larsen had failed to obtain a building permit from the Boulder City Building Department, although Mr. Ragan admitted it was he, himself, who was responsible for paying for the permit. The work had been started in late August 1996 and continued to June of 1997. On September 27, 1997, the Ragans sent a letter to Larsen alleging substandard workmanship that remained to be corrected. These same workmanship items were later validated by Investigator Thomas. Mr. Ragan said prior to the letter he and his wife had repeatedly asked Larsen to make the needed repairs but to no avail. Mr. Larsen's response had been minimal. On February 6, 1998 Investigator Caruso had sent a validation letter to Larsen directing him to correct the following workmanship items: window replacement; stucco tough-up; paint touch-up; and drywall touch-up. The four items had never been corrected. In an inspection performed on March 3, 1998 by Paul Donahue, Building Inspector, Boulder City Building Department, it was noted there were 2 code violations pertaining to the construction of the Ragan home. Mr. Larsen never corrected the code violations, and to date, they still remained. Mr. Ragan said a protection order (obtained by Mr. Larsen) had been imposed but since its lifting, Mr. Larsen had never returned to perform any of the items discussed nor had any other contractor. When questioned about the use of unlicensed contractors, Mr. Ragan said Don Ritchie, Rick Smith, Peter Sienze, several people from Ed Lee Drywall, Scott Norris, Rick Presley, Bruce Bennett, Marty Harris, and one other whose name he did not know, had performed work on his home. They were not licensed. He had lien releases with Mr. Larsen's signature which denoted Mr. Larsen had performed approximately 80% of the work but Mr. Larsen did not have any employees. There was one lien for $10,000 which had been filed against the property by Mr. Larsen. The lien had not been satisfied and Mr. Ragan said his paper work indicated Mr. Larsen owed him $6,503.99. He then explained why. Thereafter, Mr. Bohn questioned Mr. Ragan regarding his testimony wherein he attempted to show damage had occurred to the property because of Mr. Ragan's own workmanship.

Clark Thomas, Board Investigator, said he had validated the original six items as validated by Linc Dante on November 18, 1997 and 2 code violations. The 2 additional items not referenced in Mr. Caruso's letter were failure to install two pocket doors according to plan and failure to install gate on the side of the house according to plan. Mr. Thomas said Mr. Larsen had voluntarily given him a statement which indicated he had been aware the subcontractors he had used were unlicensed. Further questioning by the Board followed wherein it was learned litigation was pending regarding the liens.

DOUGLAS AND ROBIN LEE - The Douglas' had entered into a contract on March 28, 1997 with Larsen to build a house for $400,000. Mr. Larsen had been paid $309,000 prior to being terminated. Mr. Larsen broke ground on May 1, 1997. The house was to be completed in 7 months. Mr. Larsen had been responsible for obtaining the building permit. Mr. Lee said Mr. Larsen had never obtained the permit so on May 7, 1998, Mr. Lee had obtained it himself at a cost of $5,150. On September 15, 1997, the Lees had entered into an agreement with Mr. Larsen for liquidated damages in the amount of $2,700 per month due at the first of each month beginning on December 1, 1997. The house was running behind and the Lees became concerned they would not get into their house on time. Mr. Larsen kept assuring them the house would be done on time but agreed to pay the Lees' mortgage payment on the house they were in if their new house was not completed on time. Mr. Lee said Mr. Larsen paid the December mortgage payment but, thereafter, all other items agreed to were paid for by Mr. Lee. Green Valley Pools had filed a lien for $8,500 for a spa which had been part of the original contract. Mr. Lee satisfied the lien. On April 20, 1998, the Lees sent Mr. Larsen a demand letter for the completion of their house. There had been no response from Mr. Larsen prior to the Lees terminating the contract on May 3, 1998 for breach of contract. Mr. Lee then cited the names of the unlicensed contractors who had worked on his home. After Mr. Larsen was terminated, the Lees learned they owed Desert Fireplaces $985 for a fireplace they had already paid for. It was learned the Lees had paid Mr. Larsen $2,000 for that item but Desert Fireplaces applied the amount to two other fireplaces Mr. Larsen had purchased and installed on other contracts. Further questioning by the Board and Mr. Bohn followed.

DESERT FIREPLACES - Jennifer Ericksen and Howard Ickes told the Board how their accounts receivable clerk was verbally directed to apply the $2,000 check received from Mr. Larsen. It was their understanding they were to apply the amount to the 2 oldest amounts outstanding, but when Ms. Ericksen was shown she had signed a lien release against the Lee home on the same date the check was received. Mr. Ickes then said there had been an error in the accounting process. Mr. Lee stated he had not been liened but Desert Fireplaces refused to come out and finish the fireplace causing him to hire another contractor to finish it.

JOSEPH AND RHEA DONNELLY, SR - The Donnellys had entered into a contract with Larsen for the construction of their house for a total contract amount of $247,000, plus change orders. Thereafter, Mr. Donnelly had given his son, Joe Donnelly, Jr. the authority to act on his behalf in dealing with Mr. Larsen on the building of the house. Mr. Donnelly, Jr. said additional change orders had been given orally and agreed to by both parties. The change orders added an additional $3,884 to the price of the home. To date, Mr. Larsen had been paid $234,790.02. Mr. Larsen had not obtained a building permit for the project so the Donnellys later paid for one and acquired it. On or about May 22, 1998, Mr. Larsen stopped work on the house and refused to return because in a letter to the Donnellys Mr. Larsen said they had not paid for the extra items on the contract. Thereafter, Clark Thomas, Investigator, had validated four items which did not meet workmanship standards. More dialogue and questioning occurred wherein it was learned one lien had been filed by Jerry Woolrich Drywall, and it had been satisfied by the Donnellys. Another lien for $23,080 had been filed by J K Larsen.

MR. & MRS. NED SHAMO - The Shamos had entered into a contract with Larsen to construct a house for $322,048.47 with change orders. The Shamos had paid Larsen and subcontractors approximately $350,000.00. No building permit had been obtained. Mr. Shamo had received a credit for $21,000 for the electrical and air conditioning work. The framing contractor had been hired by Larsen, who was supposed to pay him $70,000, but Mr. Shamo was asked to pay him and he did. On May 18, 1998, Mr. Larsen forwarded a letter to Shamo stating the contract was void. By that date the kitchen, the flooring, the plumbing, some taping and punch list items had not been completed. Thereafter, Mr. Thomas validated the items which remained incomplete. He said he had met with Mr. Larsen who indicated he was no longer the contractor of record because the Shamos had breached the contract. Mr. Larsen they had failed to pay for extras but did not produce any bills. More questioning centered on the lien placed on the house by Desert Fireplaces. The lien had been satisfied by the Shamos even though there had been no contractual relationship with them. It had been with Larsen.

A discussion then ensued with Desert Fireplaces and the contractors invoice was entered into the record as EXHIBIT 3. A note signed by Larsen to Desert Fireplaces was entered into the record as EXHIBIT 4. Mr. Ickes said there was currently a $985. balance on the Larsen account which he was willing to write off on any property the company had performed work on.

PAUL DONAHUE, BUILDING OFFICIAL, BOULDER CITY BUILDING DEPARTMENT - Mr. Donahue told the Board what the procedure was in Boulder City which allowed a contractor to proceed on building before a building permit had been issued. It was due to staffing and timing. Excavation was allowed to begin before plans were submitted for basements. Later basement only foundations were issued or if complete plan packages were submitted basements were allowed to be constructed and subsequently permits issued during the framing or floor framing stages of the house. In each case the contractor notified the building department and had permission from the building department to proceed to the next step. The issue which had been presented here was regarding payment of those building permit fees. Since some of the owners paid for the permits and in some cases the contractor paid for some of the permits, a great deal of latitude was given to allow work to progress before fees were received. Mr. Donahue said he was not aware of any violation of Boulder City law by J K Larsen for performing construction on the residences in question before he was issued a permit. More questioning followed.

JOHNNY KIM LARSEN - Mr. Larsen then explained to the Board what had occurred in each complaint. He admitted he was in litigation with the Lees for approximately $46,000 and with the Ragans for approximately $16,000. Mr. Shamos provided a signed contract from the drywall contractor with Mr. Larsen's signature on it which was entered into the record as EXHIBIT 5. Mr. Larsen then admitted he had signed other subcontracts.

The evidentiary was closed.

EXECUTIVE SESSION

The Executive Session was continued to the December 1, 1998 meeting in Reno.

PUBLIC COMMENT

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 Chairman Gregory at 5:34 p.m.

Respectfully Submitted,
 
 
 
 

Betty Wills, Recording Secretary
 
 
 
 

APPROVED:
 
 
 
 

Margi Grein, Executive Officer
 
 
 
 

Kim Gregory, Chairman