Contractor takes refuge in bankruptcy court

By PAUL MILLER

- Angry clients say they were cheated

Published: January 30, 2004

MORE THAN $700,000 owed by Carmel contractor Steve Parker will have to be kissed goodbye by the people he owes, thanks to a ruling by a U.S. Bankruptcy Court judge last week.

Parker, who said he has been a builder on the Monterey Peninsula for more than 20 years, acknowledged he collected more than $800,000 from just two local jobs in 2003. But he turned to bankruptcy court to escape his debts after the Internal Revenue Service started pursuing him for back taxes, according to people familiar with the case. And to help him generate cash in the meantime, his accusers say he cheated a string of customers, by double billing for labor and supplies on construction jobs, failing to perform work he was paid for, and not paying subcontractors.

“I paid Parker $22,500 to remodel a small kitchen, and he never finished it,” said homeowner Mary Krieger, a retiree who said she had to pay someone else $10,000 to complete her kitchen after Parker left wires hanging from the ceiling, kitchen cabinets without doors, and an empty hole where a Sub-Zero refrigerator was supposed to be. “He billed me $5,000 for the refrigerator, which I never got, and then I had to buy another one,” Krieger complained. Late last year, she picketed Parker Construction’s office on Mission Street to draw attention to her plight.

Parker admitted that the job — in a kitchen measuring just 10-by-10 feet, he said — took far too long and cost too much. But he blamed all the delays and overruns on Krieger.

“We spent five months there, and she was so difficult about approving every single item,” he said. “It ended up costing me over $70,000” — a claim Krieger hotly denies.

“I was all ready to go to court to try to get my money back,” she said. “But the next day my lawyer called me and said, ‘Guess what? He filed for bankruptcy.”

Money disappeared

Krieger’s case is penny ante compared to other tales of woe told by four Monterey Peninsula property owners who said Parker cheated them out of hundreds of thousands of dollars. All of them spoke to The Pine Cone on condition of anonymity:

- A Pebble Beach resident who hired Parker to help remodel a house for another member of her family said Parker regularly billed her for supplies and materials that were never ordered, for subcontractors who weren’t paid, and almost $50 an hour for work that was never performed. She and her family wrote checks to Parker for more than $300,000 over a seven-month period last year, the woman said, of which at least $190,000 was not legitimate. This week, she filed a formal complaint with the Contractors State License Board.

- An elderly Carmel woman spent $225,000 to have a 327-square-foot space above her garage remodeled into a caregiver’s apartment for her ailing husband. The job took three years — far longer than it was supposed to, the woman said — and her husband died before it was finished. “I was tearing my hair out trying to get Parker to finish it,” she said. She also filed a complaint with the contractors board.

- A retired businessman from San Mateo County hired Parker to build his retirement home near Carmel Point. “I paid him a little less than $500,000, and maybe I have $150,000 worth of value for it,” the businessman said. When he refused to pay more until the roof was completed, Parker walked off the job, the man said. Now he’s left with a lien on his house from a concrete supplier Parker never paid, and worries he will probably be hit with more.

- Another retired businessman who lives in Carmel said he loaned Parker, whom he considered a friend, $500,000. But two years ago Parker quit making loan payments and the debt has now been “discharged” in bankruptcy court, the man said.

“When he defaulted, it cost me a lot, financially and personally,” the man said. And thanks to Parker’s successful bankruptcy filing, he added, a separate lawsuit filed against the contractor “will probably go nowhere.”

‘Run of bad luck’

Parker admitted making some mistakes on these jobs and said he owes one of the clients about $18,000. “Maybe I just had a run of bad luck,” he said.

But he insisted that he didn’t divert any of the $800,000 paid him last year to any other purpose. All of that money went to employees, supplies and subcontractors, he said, and there wasn’t even enough to pay all of them.

“If the man on Carmel Point had made his last payment of $39,000, I would have paid Granite Rock [a concrete company],” Parker said.

Other companies that didn’t collect from Parker include Knapp Mill and Cabinet, United Rentals, Rocky Mountain Hardware, Intertile, Consolidated Electrical Distri-butors, Central Wholesale, Toyota Financial, several credit card companies, Hayashi and Wayland accountants, and three attorneys. One of the Peninsula’s most respected contractors, Ingram Plastering, said it lost almost $8,000 in the Parker bankruptcy. The total Parker owed, according to court records, was $718,434. That has been “discharged,” meaning his creditors are prohibited from ever trying to get their money.

According to several of the companies, homeowners who hire a general contractor must keep in mind that they can be held responsible if the general contractor doesn’t use the money they give him to pay his subcontractors and suppliers.

“We don’t like to go after the homeowner, but we do if we have to,” said Mike Lawless, credit manager for Consolidated Electrical Suppliers. “It has always been our contention that the contractor’s law should require contractors to notify the people who hire them about the way it works.”

No clue at CSLB

Despite Parker’s troubles with numerous clients, the Contractors State License Board said it had a record of only one complaint against him, and the department’s website provides no hint of any problems, simply listing his contractor’s license as “active.” But since Parker stopped paying his workers compensation premiums this year, “the board has sent him a notice of intent to suspend his license,” according to an official at the CSLB in Sacramento. Parker said he hasn’t paid any workers comp premiums this year because he doesn’t have any employees.

But Parker Construction is still in business, he maintained, and so is his other business, DRC (Design Resources Carmel).

A local architect, Brian Congleton, said he worked with Parker on one job and that it went terribly wrong.

“He so delayed and encumbered the job that it went way over budget,” Congleton said. “He failed to pay attention to the project, his workers didn’t understand my drawings, and the stress he caused the homeowner was unbelievable. It was a disaster.”