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And Paul [speaking of himself in the 3rd person] mentioned the cost to do this project might run between $90,000 and $100,000 if they did everything and for sake of these notes, assume the upside if all projects were done right, might be around $110,000. In retrospect, we now note that Paul Stickney revealed an insider’s view of TMC operations: “. . . the experience that TMC has often found.” But back then, the remark went right over our heads. 33. Paul Stickney As Vice President of TMC Paul Stickney wrote: “Note to all parties ...” (above) as if he were not part of Trust Me Construction (footnote), as if he were a disinterested advisor. At no time, before, during, or at any time up to and including the emails from Stickney to Mark in February 2006 (see Exhibit phs 16), did Stickney or any representative of Trust Me Construction reveal that Stickney was an interested party in the TMC enterprise. Note that neither the handwritten estimate from Stickney, nor the tape transcript, was written or printed on TMC letterhead. In August 2005, someone pointed out to us that State of Washington Labor and Industries records show Paul Stickney is Vice President of Trust Me Construction. (Exhibit tmc 2). His name appears under the “business owner” section of the Washington Labor & Industries web site. Readers should note that we have never made the claim Stickney received quid pro quo monetary compensation from TMC, but Stickney is certainly "interested" in it. He has promoted TMC over the years, his brother-in-law Loui Beuler (brother of Stickney's deceased wife) worked (works) for TMC, and the TMC offices and Worthy's home are on the acreage in Sammamish that, according to Stickney, he jointly owns with Trustworthy. And as stated in Stickney's February 2006 email, the Stickney Team is still "using" Trust Me Construction, now called Trust Us Construction. One of the dictionary definition of "vested interest" can certainly be seen to describe Stickney's relationship with TMC: "a special interest in an existing system, arrangement, or institution for particular personal reasons." (Dictionary.com) 34. Conflict of Interest Rules The 2004 Code of Ethics of the National Association of Realtors states that realtors should not recommend their clients or customers use a business in which the realtors have an interest without first disclosing that interest: Code of Ethics and Standards of Practice of the NATIONAL ASSOCIATION OF REALTORS® Effective January 1, 2004 The Code of Ethics also states realtors should give their opinions uninfluenced by personal gain: Code of Ethics and Standards of Practice of the NATIONAL ASSOCIATION OF REALTORS® Effective January 1, 2004 35. Licensed Professionals Hold A Public Trust Real estate agents like Paul Stickney hold a license to practice their profession, granted by the State of Washington. The purpose of Uniform Regulation of Business and Professions Act (RCW 18.235) is to create public confidence in business: RCW 18.235.005 36. What RCW Says About “Unprofessional Conduct” Unprofessional conduct for a license holder includes committing acts involving moral turpitude, dishonesty, or corruption: RCW 18.235.130 Unprofessional conduct -- Acts or conditions that constitute. Helping an unlicensed person to do business when a license is required is also “unprofessional conduct.” RCW 18.235.130 If it is unprofessional to aid or abet an unlicensed worker to practice when a license is required (e.g. electricians), is it also unprofessional to aid or abet an uncertified worker to practice when certification is required (e.g. plumbers)? Is it also unprofessional to aid or abet an unregistered worker when registration is required (e.g. construction contractors)? In short, when Stickney helped Trustworthy rake in contracts for his unregistered construction business, was Stickney engaging in Unprofessional Conduct? 37. Penalties For Unprofessional Conduct Penalties for unprofessional conduct include possible revocation of suspension of license, fine, censure, and limitation of practice. RCW 18.235.110 38. TMC Not Registered, Insured, Or Bonded When Our Job Started We’ve mentioned it before, but we now must mention it again: At the time Paul Stickney recommended them, and at the time he and Bob Trustworthy of Trust Me Construction bid on the job, and at the time renovations to 8209 172nd Ave. NE began (June 2004), Trust Me Construction was still not a registered and bonded contractor in the state of Washington. TMC was registered on October 5, 2004, months after they started our job (Exhibit tmc 2). 39. No Notice To Customer From TMC Also unknown to us at the time, Washington State law (RCW 18.27.114) requires every contractor to provide to his customer a notice that the customer’s property may be subject to a lien if the customer does not pay the contractor. If the contractor fails to deliver such notice to the customer, the contractor cannot lien the customer’s property for non-payment (URL for RCW 18.27.114 follows, below.) The TMC/Stickney Team failed to deliver a Notice to Customer to us. RCW 18.27.114 40. Notice To Customer Must Provide Registration Number It is not surprising that TMC/The Stickney Team failed to provide us with a Notice to Customer, because Washington State law also requires the customer to be given details of the contractor’s registration with the State of Washington: RCW 18.27.114 Since TMC had no contractor’s registeration number, and had not posted a bond, Bob Trustworthy could not provide us with a notice giving us this information. The Notice goes on to explain that the bond is not for the customer’s exclusive use, and may not completely cover a claim the customer may have. Then the Notice states, in caps and bold lettering: RCW 18.27.114 It surely was not in the interests of TMC to have us withhold part of the payment as a guarantee of satisfactory performance; not having the Notice To Customer played a big part in the disaster that was to befall us, as you will see. As we review these facts, we are reminded of the Consumer Protection Act, or “CPA” (RCW 19.86). One of the purposes of the Act is to discourage unfair, deceptive and fraudulent acts or practices in order to protect the public. An article in the King County Bar Association (“The Ins and Outs of the Consumer Protection Act,” October, 2003) states: The judicially-established criteria for proving a CPA violation in the consumer context are set forth in Hangman Ridge Training Stables, Inc., V. Safeco Title Insurance Company, 105 Wn. 2n 778, 784-785, 719 P.2d 531 (1986). Under Hangman Ridge, the plaintiff must prove five distinct elements: Upon information and belief, besides ourselves and Mr. & Mrs. J., there are other victims of the Paul Stickney/Bob Trustworthy combine who can be identified. Now let us return to the Cottage. When selling us on Trust Me Construction, Stickney explained that TMC, unlike many other renovation firms, did not offer fixed price contracts or charge a mark-up on materials. Instead, we’d pay contractor cost for materials and 15% markup on labor. Furthermore, Stickney explained that Trustworthy had a special method for estimating work, which he termed a “range estimate.” TMC would estimate a range within which their charges would fall. This was so much better than any other way, he said, because it keeps the costs down for the customer — the contractor did not have to build a “worse case scenario” into a fixed price contract in order to get his profit margin. What is a “range”? states, in part: Range: The area or sphere in which any activity takes place; an amount or extent of variation. The American Heritage Dictionary, quoted in part In plain English, when a price range is quoted, the lower point on the range fixes the lowest price, the higher point fixes the highest price. At no time did Stickney advise us he was not using this plain English definition of “range.” And at no time did he warn us that we should require TMC to state in writing any additional understanding regarding charges. 43. Stickney/TMC Use The Word LIMIT In fact, Stickney’s words on June 8, spoken before Bob Trustworthy of TMC and ourselves, tape-recorded and transcribed by Stickney himself and sent in a Word document, confirm the mutual understanding that the upper number in the range was the LIMIT. Stickney’s words are as follows: Note to all parties: This is not to sell more of a job but to factor in the reality of the experience that TMC has often found. While a job is under way, a logical, what’s right approach occurs where certain potential things that could be done to a house become self-evident and this upper limit recognizes this truth. (Emphasis added.) (Exhibit phs 9.) In all other contracts we signed — contracts for the heating and ducting, for the hardwood flooring, for the masonry — we knew exactly how much we would be paying. We did not dream we were entering an agreement wherein TMC had no limit on its charges. You’d have to be certifiably insane to enter a contract like that; we certainly aren’t and certainly didn’t. 44. Stickney Fails To Advise Caps, Milestones We have since found out that well-advised homeowners require a written guarantee that the upper end of a range quote is a cap, a “not to exceed” price. Well-advised homeowners also require that contractors provide milestones — dates upon which certain aspects of the renovations are scheduled for completion. Well-advised homeowners also tie their payments to contractors to the timely attainment of the milestones. At no time did Stickney talk to us about any of this. Well, all right, the reader might mumble, how foolish you both were! But we knew we were fools in this business: Brand new to the State of Washington, brand new to the Seattle real estate market and brand new to renovation. That’s why we hired Windermere agent Paul Stickney. We never dreamt that he’d withhold vital information from us, or that he might have had a vested interest in our ignorance. We had the worst of all worlds: No Notice to Customer, no written guarantee of a not to exceed price, no dates or milestones tied to payments, and renovators with a history of operating without licenses, certifications, and registrations, being fired and/or sued or both by former clients, falling behind schedule, and doing shoddy work. 45. Sales Tax and Building Permits The amount of sales tax to be paid during renovation is an important item. The tax has to be added into the amount the contractor will charge in order to determine the full price. Calculating the sales tax is an intimate part of budgeting. In Stickney’s handwritten notes, written prior to May 20, he jotted down a reminder about sales tax (Exhibit phs 8). But in the transcribed notes of the June 8, 2004 (Exhibit phs 9), you will find no discussion of sales tax. Not at that meeting, or at any other, did Stickney say, “Hey, guys, you need to figure sales tax into these estimates . . .” Of course, part of the job of tax accountants and estate planners and fiduciaries is to plan the best tax advantages for their clients. Good fiduciaries help their clients minimize their taxes obligations — legally. Instead, Paul Stickney’s transcription has these words: Trustworthy talked to Carol and Mark about being a consultant and managing the job, while Mark acts as the general contractor. Sometimes as a homeowner, you have many rights as to what you can do to a house when dealing with the city, in terms of how they turn around permits, etc., for homeowners. Stickney did not explain why the City of Redmond might “turn around permits, etc.” differently for homeowners. Let’s see what the State of Washington Department of Labor & Industries booklet, Hiring a Contractor or Remodeler: What you should know says about contractors who recommend homeowners get building permits.
What explanation did Stickney and Trustworthy give for suggesting we pick up the permit? They told us that when the homeowner picks up the permit and is listed as the contractor he does not have to pay sales tax on the labor used to renovate the house. 46. Tax Evasion vs. Tax Minimization Tax Evasion: An illegal practice whereby an individual intentionally avoids paying their true tax liability. Anyone caught evading taxes is generally subject to criminal charges and substantial penalties . . . According to Stickney/Trustworthy plan, we should name ourselves as contractors on the permit, and Trustworthy would act as our consultant. Thus we could avoid paying sales tax on the renovation labor. Since we had never given Stickney any reason to believe we’d be a party to tax evasion, and since Stickney was a duly licensed Windermere agent operating (we assumed) within the laws of the State of Washington, and since Trustworthy had “long experience” with “projects of this nature,” we did not question their advice. We considered it was “tax minimization” advice. Recently, though, we’ve been forced to ask questions . . . an electric bathtub, a brand new roof that needs to be replaced, and upside down kitchen cabinets can shake your faith. Thus we called the Compliance Division of the State of Washington Department of Revenue and asked them if the “no sales tax on labor if homeowner takes out permit” was a sound representation of the law. We found out the Stickney/Trustworthy advice was completely off-the-wall. The Compliance Division told us that naming ourselves as contractor no way, shape, or form relieves us of owing sales tax on labor or relieves our contractor from collecting that tax and remitting it to the Department of Revenue. The cite we were given is WAC 458-20-170. (Exhibit phs 11.) 47. TMC’s Paper Trail Tells The Story Peruse the TMC construction estimates of July 2, July 22, October 12. (See Exhibit tmc 3). Each contains a line showing the amount due for 8.8% Washington sales tax. An independent observer may suspect the sales tax issue is a “she said, he said” controversy. But TMC’s own paper trail verifies our account. The TMC paper trail is proof of the pudding. Of all the money we paid do TMC, all four invoices from TMC show that TMC paid no sales tax on labor to the State of Washington.
Such were all four invoices we received from Trust Me Construction, with no suggestion that sales tax had been, was being, or would ever be paid on the labor they were billing. (Exhibits tmc 5, tmc 7, tmc 8, and tmc 9.) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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48. TMC Responsible For Collecting The Sales Tax Washington state law indicates it is the contractor’s responsibility to collect the sales tax. WAC 458-20-101 49. Sales Tax “Advice” Artificially Lowers Price of Package What was the effect of pretending we could avoid sales tax on labor? The answer may be that Stickney and TMC could offer a more attractive total price for the TMC renovation. Had we calculated the amount of the sales tax on labor into the prices quoted, we might have declined to upgrade to the extent we did. Given TMC’s “long experience” in “projects of this nature,” (Exhibit tmc 3) Stickney and Trustworthy should have known the quality of their tax advice: It wasn’t legal. The effect of the advice was to transfer from our pocket to theirs all the available money. Then, later, after TMC was done and gone, we’d have to face the tax music ourselves. In like manner, as costs escalated, we converted our life insurance and IRAs and went into credit card debt up to our eyeballs to pay TMC. Our net worth was transferred to them. Looking back over the events of that winter and the numbers as they added up, we are struck with some terrible coincidences. When looking at the design and our plans, Stickney had said the house would probably be worth about $500,000. And when he researched comparable sales to persuade the appraiser to name the maximum for refinancing the property, Stickney wrote, "Overall, I feel these comps support from 475 to 500K if not slightly over 500K." That is not an unreasonable number, given that a smaller house across the street sold in the spring of 2006 for almost as much. Think of it. If it had all been planned from the beginning, it could not have been more precisely orchestrated. We paid $280,000 for the property. If it was to be worth $500,000 after the renovation, the margin of equity would be $220,000. TMC’s final bill was $211,166. AHS’s "outstanding" bill was $12,528.53 for high voltage work plus $611 for low voltage. Together, they add up to $224,306. A popular term of art right now in real estate is "equity stripping." It is refers to an unscrupulous lending practice whereby charges and interest are run up with tricky refinancing to strip the equity for a homeowner and possibly push him into foreclosure. Though the term seems poetically apt in our case, it does not normally refer to renovation. So to avoid confusion, we will use the term "equity sucking." The Stickney Team seems to have estimated what the finished house would be worth and arranged to bill us for slightly more, sucking all the equity out of the property. The drama in our case hit a slight hiccup when the appraiser turned in an appraisal of $475,000 instead of $500,000. But the plans for foreclosure were apparently already in place. On May 19, 2005, Trustworthy wrote to us with the following suggestion: You pay tmc $25,000.00 in cash now to allow me to pay outstanding obligations. You give me a one-year note for $20,000.00, interest free with payment in full at maturity and collateralized with the property. This will help guarantee that outstanding deposits can be restored. And what would happen when we failed to cough up $45,000 over the next 12 months? Foreclosure. We would still have the debts, and Stickney’s company would have the property. With June 2005 came yet another grab for the deed. The electrical sub-contractor, Automated Home Solutions, filed a lien on the property claiming they had received no payments on their work since their work had begun in December 2004. Anyone who has worked with the trades can tell you that no contractor will work for 19 weeks without payment, but that is AHS's story and they are sticking to it. For the full story of that lien and subsequent lawsuit, see Electrifying charges. 51. What RCW Says About Fraud, Tricks, Schemes Washington state law stipulates that any real estate agent who knowingly partakes in a material fraud whereby another relies on his word may be disciplined. It also prohibits a real estate agent from engaging in any misrepresentation, concealment, conspiracy, collusion, trick, scheme, or device . . . RCW 18.85.230 With the swirl of the demolition proceeding around us, caught up with the excitement and not understanding the many ramifications of what we were doing, on September 8, 2004, we took out a building permit and named ourselves as contractor. (Exhibit cor 1.) Why didn’t we realize something was wrong earlier? As we have already pointed out, we were convinced of our Windermere agent’s competence, experience, and honesty. Moreover, when we applied for the permit, we told the City of Redmond our plans included building an extension and installing a cathedral ceiling (Exhibit cor 1.) Those items were written into the permit. At no time did the City ask us what experience we had in building extensions or installing cathedral ceilings. The City gave us no indication our homeowners’ application for a permit was anything out of the ordinary. And as renovations progressed, TMC on-site foreman Peter Oakes called in the City inspectors and showed them around the site when they arrived. At one point Oakes boasted to Carol of the “a good relationship” he had with them. Obviously the inspectors knew whose names were on the permit and knew Oakes was not “Mark and Carol DeCoursey.” From all appearances, all the cards were on the table, and everyone was happy. “This was how things are done in Redmond,” we thought. We continued to be oblivious. 53. TMC Had No Registration Number For Permit In this discussion of the building permit issue, let us turn to Washington State law (RCW 18.27.110), which requires a city such as Redmond to refuse to issue a permit until they verify the contractor is registered: RCW 18.27.110 Had Trust Me Construction applied for the building permit in September 2004, the City of Redmond might have checked their contractor number and caught them doing business without a registration. 54. Stickney Recommends Automated Home Solutions During the June 8, 2004 conference at 8209, Paul Stickney recommended we have low voltage structured wiring run through the house for sophisticated data services. (Exhibit phs 9, page 3.) He recommended Automated Home Solutions ("AHS") of Redmond do the job. Paul Stickney told us Wally Trustworthy, Bob's son, owned Automated Home Solutions. Early in December, 2004, Wally came over to The Cottage, and we walked around the house, discussing options. We decided upon wiring for telephone, video distribution (cable or satellite), CAT5 (Internet or custom control systems), a home theatre and surround sound system (screen and other consumer electronics to be purchased separately), and a distributed music system (the speakers to be purchased separately). We showed Wally where we wanted the office, the home theatre, etc. Wally said he'd write up a contract to our specifications, and fax it to us. The fax arrived on December 8, 2004; Mark signed it and returned it to Wally. (Exhibit ahs 2.) Stickney also told us TMC, by preference, used AHS personnel (on TMC payroll) to install line voltage wiring. We will tell you more about AHS and the contributions the firm made to our problems, including electrifying the bathtub in the main hall bathroom (up to 110 volts AC), failed to call for critical inspections, and filing a lien on our property. See further discussion of AHS in "Re-Enter Automated Home Solutions," below. See also Electrifying Charges, and Construction Defects, Section 4. When Wally visited with us in December, 2004, he gave us his AHS business card. This card gave his title as "Vice President, Sales and Marketing" of AHS. (Exhibit ahs 16.) Later, Bob Trustworthy told us that Wally had owned AHS, but had sold to Lester Ellis years prior, and that Wally now worked for Lester. We thought it a bit odd that Stickney had given us such dated information, but it did not seem signficant at the time, given the whirl of activity around us. Later we learned that Wally had been named Secretary of the TMC corporation in October 2004 (Exhibit tmc 2), several months before he was introduced to us as Vice President of AHS. However, no one mentioned Wally's dual roles when we were introduced — not then or at any time since. |
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Prior to May 20, 2004. May 20, 2004. June 8, 2004 June 10, 2004 June 14, 2004 July 2004 A City of Redmond stamp shows John Skoglund’s plans were reviewed on September 3, 2004 and the permit was issued on September 8, 2004. But demolition began in June and proceeded very quickly — carpets were removed, the kitchen was dismantled, and rough carpentry begun. In retrospect, starting the demolition and renovation before the permit was issued was not smart! And not legal, either. But what did we know? We were following along with the program Paul Stickney recommended, using the architect and construction firm he recommended — he knew the ropes, and we were as happy as clams. The Redmond Building Code (International Residential Code, 2003 Edition) prohibits starting a project without a permit, and stipulates that fines be imposed for doing so: R108.6 Work commencing before permit issuance. Any person who commences any work on a building, structure, electrical, gas, mechanical or plumbing system before obtaining the necessary permits shall be subject to a special investigation fee. The investigation fee shall be equal to the amount of the permit fee that would be required by this code if a permit were to be issued. An investigation fee, in addition to the permit fee, shall be collected whether or not a permit is then or subsequently issued. The payment of such investigation fee shall not exempt any person from compliance with all other provisions of this code, nor from any penalty prescribed by law. July 2, 2004 Before we examine the estimates, a few preliminary words of explanation are needed. 55. Notes of Explanation — We Pay Certain Costs Directly During the planning of the renovations, it was decided that TMC would not supply certain labor, equipment, and materials, and that we’d go to other companies directly. We contracted an independent company to supply a new furnace and ductwork, a carpenter to install hardwood floors, and a mason to face the fireplaces. We also bought our own appliances. As the project went forward, we also put money directly into equipment and supplies — equipment and supplies that were implicit in the TMC October 12 proposal but not explicitly mentioned. We bought almost all the lighting fixtures, many electrical sockets and switches, three good quality medicine cabinets, a tub for the downstairs bathroom, many of the tiles to be used in the bathrooms and kitchen, a number of faucets, and other items — $8,414 in all. 56. The Promises vs. Performance Kaleidoscope Measuring TMC’s promises against their performance will not be easy. Have you ever tried to compare the prices of items in three grocery carts when there are different items in each cart? We face a similar problem. TMC estimates for specific tasks are broken out in different ways from estimate to estimate and from estimate to final billing statement. Looking from one estimate to the next is like looking through a kaleidoscope. Realize that construction management has long been a well-defined discipline. In the Seattle area, the University of Washington and Edmonds Community College offer courses in the subject, and textbooks are readily available. Construction companies large and small have access to the skills to control the time and cost-outlays of a project. It is part of a construction company's job, and TMC did not have to invent (or in their case, fail to invent) the wheel. It is easy to see that renaming and recategorizing tasks during a project is inimical to project management; it makes keeping track of costs and time impossible. If a company did that, it would be hard to believe the managers actually intended to keep track of time and cost. But renaming and recategorizing tasks is what TMC did during our renovation. Looking from one TMC document to the next is like looking through a kaleidoscope. For example on July 28, 2004 estimate, we find: Furnish and install ceramic tile in main bathroom, tub surrounds, vanity deck w/back splash and wainscot, floor - $2,250 - $2,600. (Exhibit tmc 3.) On October 12, 2004 estimate we find this: Bathroom, finishes - $5,200.” (Exhibit tmc 3.) On February 10, 2005 left-to-complete estimate we find Ceramic tile and stone - $15,000.” (Exhibit tmc 7.) (All stonework had been contracted to a mason independent of TMC. The $15,000 estimated was to cover only tile work, a task that included work in the kitchen.) Also of interest are the line items that ultimately were not done at all, or were done so poorly they must be repaired or demolished and redone. (See Construction Defects.) Subtraction of Line Items Done by Non-TMC Contractors
Identifying the Price for TMC Work
Thus the real TMC estimate for work TMC was to perform ranged between $94,514and $111,313. (Be reminded that we would ultimately pay directly for other elements of the work, too.) This was the first estimate we received on the TMC letterhead. Note the caveat at the bottom. NOTE: This Estimate SHALL NOT BE CONSTRUED as a FIRM BID. It does, however, reflect long experience with home improvement work, and successful conclusions of many projects of this nature. This is a misleading caveat — it certainly misled us. With these words, TMC made what we now realize were five conflicting statements:
If we could not rely on TMC estimates, what was the point of submitting estimates to us at all? We trusted the TMC estimates because Paul Stickney and TMC assured us they had the necessary expertise to make those estimates. In truth, the estimate was given to us with the intention of persuading us to use TMC, and to convince us the project was within our budget. We were supposed to rely on the estimates. The document itself communicates that, and it had exactly that effect. July 12, 2004 July 28, 2004 Subtraction of Line Items Done by Non-TMC Contractors
Identifying the Price for TMC Work
Thus the corrected TMC estimate for work TMC was to perform ranged between $74,347 and $86,656. The quote had a caveat at the bottom: NOTE: This Estimate SHALL NOT BE CONSTRUED as a FIRM
BID. This statement clearly shows that Bob Trustworthy knew our budget was limited. Note that the previous estimate calculated “Design, supervision, and coordination” at 9.5%, while this estimate drops the rate to 7.5%. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Trust Me Construction gave us another estimate to reflect our final design, including an extension of the kitchen and dining room, and a deck. With the exception of minor change orders (see The White Cane Approach to Quality Renovation), this became the work order for the renovation. (Exhibit tmc 3.) But note both the change and the similarity to previous quotes. The similarity? The quote had the familiar caveat at the bottom: NOTE: This Estimate SHALL NOT BE CONSTRUED as a FIRM BID. The change? This October 12, 2004 estimate was not expressed as a range: it’s a flat $123,748.00 plus a supervision charge. (We’re still excluding sales tax). This estimate was dated October 12. Just a few days previous, on October 5, TMC was reinstated as a Washington corporation and registered and bonded with the Department of Labor and Industries as a contractor in Washington. And Paul Stickney was listed as the TMC Vice President. (Exhibit tmc 2). If TMC’s omission of a “range” in this estimate is significant, surely Paul Stickney would know about it and should have warned us we were making a “sky’s the limit” agreement with TMC on charges. As his own actions would later reveal, Stickney still considered himself our agent: Months later, in February 2005, he researched comparable sales for us to help us get maximum financing through his recommended broker, Redmond Mortgage (see below). But in October, when he officially registered with Washington State as the TMC Vice President and must have known our situation intimately, we heard nothing from him on the proposal. By this sleight-of-hand — by dropping the term “range” from its estimate and not notifying us of the possible significance of the dropped term — Stickney's TMC may claim we signed onto a open-ended, sky’s-the-limit contract. Recall the definition of confidence game: Confidence game: Obtaining of money or property by means of some trick, device, or swindling operation in which advantage is taken of the confidence which the victim reposes in the swindler. The elements of the crime of "confidence game" are: (1) an intentional false representation to the victim as to some present fact, (2) knowing it to be false, (3) with intent that the victim rely on the representation, (4) the representation being made to obtain the victim's confidence and thereafter his money and property, (5) which confidence is then abused by defendant. U.S. v. Brown D.C. App., 309 A.2nd, 257. —Black's Law Dictionary But let's return to our calculations. When we take the October 12 estimate and subtract the amounts we planned to pay directly to other contractors and suppliers and the other TMC expenses we covered, we see the true estimate for TMC work and supplies is $89,695. Subtraction of Line Items Done by Non-TMC Contractors
Identifying the Price for TMC Work
Thus, if the TMC work had stayed within the estimate, we should have owed TMC $89,695 for the entire job with everything complete and satisfactory. 61. TMC Got House Drawing Wrong Trustworthy’s verbal presentations were professional. He seemed to know the construction industry in amazing detail complete with prices, market availability, and so on. At least, he convinced us . . . On October 15, Trustworthy drew up CAD plans showing the renovated house. (Exhibit tmc 6.) Those drawings look quite professional, too. But quite recently we realized the proportions of the house in the real world did not match proportions represented in the drawing. With a photo of The Cottage in hand and using the roofline as a base, we measured from the outside wall on the West to a jog in the building face to the east. We then compared that to the corresponding area in Trustworthy’s drawing. Our conclusion? Trustworthy got some basic dimensions of the house wrong on the drawing. See The White Cane Approach to Quality Renovation for illustrations and discussion. There were practical consequences of Worthy's error because he used his drawing, rather than the actual real-world measurements, to order the window over the front door and build the porch shed roof. We have been warned that contractors often claim projects exceed cost estimates and fall behind schedule due to the customer changing “her” mind about various aspects of the work. We have addressed this issue. See The White Cane Approach To Quality Renovation, which describes the changes we had to make due to TMC design and planning ineptitude, the few genuine change orders we issued, and other related matters. We also describe the work TMC had to redo through no fault of ours: For example, TMC had to shore up the floor of the cantilever they’d just built because the new floor had dropped, and the hardwood floor man could not do his work over the irregular surface. TMC had to re-set widow frames because they had been installed lop-sided. Etcetera. 63. Reappearance of Peter Oakes It was during July that we saw a familiar face working on the framing in the basement of our house. That face belonged to Peter Oakes, the contractor who had visited the Lake Hills house to give his estimate for renovations. 64. Oakes’s $12,000 Bond Awarded To Plaintiff But now Oakes was cheerful: by his exterior, we never would have guessed that just a few weeks before, Oakes’s $12,000 bond had been awarded by a judge to his dissatisfied customer. (Exhibit pfo 4, Order Granting Presentation of Judgment.) 65. Oakes’s Outstanding Fines Sent To Collections What of Oakes’s Labor and Industries citations for working as an electrician without a license and plumber without a certifiation? Those fines had still not been paid, and had been sent to collections. (Exhibit pfo 6.) 66. Oakes Working For Trustworthy Now Oakes was working for Trust Me Construction. How did this happen? Stickney told Mark that after Trustworthy and Oakes submitted bids on the Lake Hills job just 10% apart, Stickney thought the two might have a lot in common, so he introduced them. Trustworthy offered Oakes a job, and Oakes accepted the offer because he had a poor sense of business and could not manage to operate his own company profitably. Stickney did not mention the lawsuit against Oakes, the payment of Oakes’s $12,000 bond to the plaintiff, the two citations by Labor & Industries. This Estimate SHALL NOT BE CONSTRUED as a FIRM BID. It does, however, reflect long experience with home improvement work, and successful conclusions of many projects of this nature. — TMC Estimate of July 2, 2004. “Long experience” with home improvement work is good, provided you learn from it. We certainly had no experience with renovation, and did not understand that we would have to face dozens of significant design decisions. We now know that experienced and reputable remodeling companies predict the design crossroads their customers will face and provide them with professional help. They either have designers on staff or have consulting arrangements with designers. Experienced companies do not send uninitiated homeowners to sail on uncharted waters without navigation tools. If TMC had “long experience” in home remodeling — as Stickney and Trustworthy claimed — why didn’t they learn about the importance of competent design, as other companies have? The lack of design help — and the lack of warning that such help was necessary — proved to be a nightmare. The Gaping Design Hole was in fact a Black Hole. When we saw the unworkable TMC solutions begin to take form — such as the window over the front door — we had to invent another solution. In some cases, we missed the boat, and did not see their mistakes in time. We discuss this more fully in The White Cane Approach to Quality Renovation. Nowhere was this lack of design help felt more keenly than in the design of the kitchen cabinets, to which we will now turn. 68. Kitchens Come From Boxes, Don’t They? Trustworthy told us to order medium quality cabinets and specified we go to a well-known box store to do this. We were to select, order, and pay for the cabinets. After they were delivered, TMC would install them. We’ve since learned professional renovators usually have relationships with tried and trusted cabinet companies and don’t send their customers to buy their own at box stores, but we did not know that then. We visited the box store Trustworthy recommended. The first questions the cabinet designer asked were: “What are the dimensions of your kitchen? I want to make a diagram of the room so we know where to put the cabinets. Where do your appliances go?” In our case the existing kitchen/dining room/living room configuration made poor use of space and we wanted it changed. The walls would have to be moved, but how much? We knew where the kitchen/dining room pass-through went, where the sink, stove, and breakfast nook went, but we could not make the refrigerator fit anywhere. We gave the overall dimensions of the rooms to the designer, explained that the walls would be moved and our quandary about the refrigerator. We also explained we intended to have our contractor install the cabinets. The designer was perplexed. The store’s practice was to order and install the cabinets within a defined space with fixed walls, where the position of the appliances was known, and certainly after the drywall was installed. It was only then that the store could guarantee that the cabinets would fit the space. We began to have fears: Suppose we ordered the cabinets, paid for them, and they didn’t fit? The designer had to ask her supervisor if the store could meet our request. Our situation and Trustworthy’s recommendation did not fit the box store formula. It seemed Trustworthy did not even know how his favorite box store worked. Yet we had been constantly told TMC had “long experience” in renovation work. (Exhibit tmc 3.) The heroic lady at Trustworthy’s recommended box store worked with us for weeks trying different configurations of walls and doorways, etc., trying to figure out what to do with the refrigerator. When we finally figured that out, and when the entire design was 80% complete, we realized the cabinets were going to be far too expensive. We went to another box store. This time they insisted on coming out to measure, saying as long as the walls were framed they could do that. We hurried TMC along, so the appointment could be kept. The measurements were taken and given to the designer. The designer filled the cabinet space with cabinets on her computer-generated floor plan. Trustworthy, Oakes, and another TMC employee named Allan looked the plans over and OK’d them. But then we — Carol and Mark — discovered that despite the TMC review, the designer had made a significant error in the work. We lost confidence in that store. Ultimately we went to four kitchen cabinet suppliers before arriving at the doorstep of the fifth, a well-known company that ran a “to the trade” business. Their salesman came to our house and measured the framed-in space in the presence of Peter Oakes, the TMC foreman. We followed the procedure and ordered through TMC. The result? When installed, the cabinets on the pass-through wall were four inches shorter than the wall. The wall had to be altered. We thank our stars that we did not order the cabinets ourselves, have them delivered, and have TMC install them as Trustworthy first suggested. If the cabinets didn’t fit, it would be our fault, of course, and we’d be out-of-pocket. Kitchen design is an art in itself. That is why renovation companies either have their own designers on staff, or have affiliations with designers. The don’t tell their customers, “Hey, not a problem . . . just go to Lowe’s or Home Depot and order them, we’ll put them in.” | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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In late September, 2005, some months after he had moved in, we began noticing some anomalies concerning the upper kitchen cabinets in the kitchen/dining room pass-through. We called in the cabinet company. Their representatives visited our home and told us that two of the cabinets had been installed upside-down. There is no salvaging those cabinets — they will have to be removed and replaced. Other cabinets were not installed properly and will have to be adjusted. We have devoted a separate chapter to discuss design issues, our change orders and the reworking of errors TMC made during the renovation process. See The White Cane Approach To Quality Renovation. Trustworthy, Oakes, and the two of us had cell phones. We were called over by Oakes almost daily to answer design questions that experienced renovators could have predicted would arise. Almost nothing was self-evident: problems had to be researched meticulously by taking measurements, driving to stores, and looking at stock catalogues. Moreover, we felt it was necessary to check progress regularly. We remember the day we went on site and found TMC workers installing a solid wall when the plans called for a window. We also found it necessary to make sure frames for windows, doors, and vents were not set crooked. As a dressmaker and quilter, Carol had long known the value of using rulers, guides, and cutting boards, and she could not understand the TMC predilection to do carpentry without a level. — to Part III —
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