Home builder on hot seat

Diana Sahagun

Monday, Jan. 10, 2000 | 10:20 a.m.

The president of Falcon Homes faces a disciplinary hearing Tuesday before the Nevada State Contractors Board in the case of a North Las Vegas homeowner who for seven years has doggedly pursued claims of shoddy workmanship.

Margi Grein, executive officer of the board, is requesting disciplinary action against Falcon President Fred Ahlstrom. In addition to any discipline, Grein is also asking that the cost of the Contractors Board investigation be paid by Ahlstrom. Such costs typically run in the thousands of dollars.

Ahlstrom voluntarily surrendered his contractor's license Feb. 5, 1998, and could face permanent revocation of the license. If it finds that discipline is warranted, the board could also suspend or impose limits on the license, fine Ahlstrom up to $10,000, reprimand him, order him to correct the workmanship deficiencies, or increase the license and bonding fees.

If Ahlstrom's license is revoked, he cannot bid on any work, pull permits or continue any work in progress. Grein said license revocation is "the death penalty" for contractors.

The better part of the proposed discipline facing Ahlstrom arises from complaints filed by North Las Vegas resident Russ Lewis, whose situation was profiled in May 1996 as part of the Sun's award-winning "Neighborhood Nightmares" series.

"We believe people should get what they paid for ... and they should live in a safe house," Grein said. "The message to the contractor is 'do it right the first time.' There is no difference between regulations for small contractors or large contractors. The laws have to be followed."

Several calls placed by the Sun to Ahlstrom were not returned. But Brian Terry, attorney for Falcon Inc., said Friday, "I do not comment on pending litigation. Clearly, our position will be stated (at the hearing)."

Lewis bought his home from Falcon in 1993 and immediately began reporting problems to the company, one of the largest and most well-known home building companies in Southern Nevada.

Unsatisfied with Falcon's response, Lewis posted signs on his property, called reporters, wrote letters to elected officials and the Department of Veterans Affairs, and filed a complaint with the Contractors Board.

Falcon sued Lewis, claiming that the loud complaints constituted slander, libel and harassment of Falcon employees. At the time Falcon also maintained that it had conscientiously responded to all of Lewis' complaints, only to be met with more complaints.

"We have made numerous efforts to remedy any of the problems Mr. Lewis or his family had," Terry said Friday. "It's unfortunate that it resulted in a hearing."

Tuesday's hearing, at which the board will hear evidence from both sides to determine if Falcon is guilty, may reflect of how the process has changed for homeowners in the six years since Lewis' troubles began.

Nancy Quon, a lawyer specializing in construction defect law, said historically the board has been protective of contractors and not customer-oriented. But she said that is not the case now.

"There has been a major overhaul of the board," she said. "The goal is now to be more helpful to homeowners."

She added that legislative changes effective July 1 give "more teeth" to the board to take action against faulty contractors.

"We always want to try to make the homeowner whole again," Carmen Caruso, senior investigator for the Contractors Board, said.

Attorney Francis Lynch, who specializes in construction defect cases, said he recommends that his clients first seek help from the Contractors Board before pursuing a lawsuit.

"When I first started doing this, seven or eight years ago, it was hard to get the Contractors Board to get things fixed," he said. "In the last year it has made a concerted effort to get things fixed. They've been great with my people."

A recent six-month study conducted by the board shows disciplinary action taken against contractors has gone up from last year. From July 1999 to December 1999 the board took disciplinary action 97 times, compared with 53 such actions in the same six months of 1998.

The changes in the board come just in time for Lewis, who refused a settlement from Falcon three years ago.

In 1996 Lewis received an offer that promised the company would drop its lawsuit that sought more than $70,000 if Lewis agreed to end all complaints against the company. Lewis at the time said his "hand hovered" over the settlement offer but in the end he just couldn't sign it and keep his honor.

"Sign on the dotted line, take our ball, go home, and don't ever come out and play again," is how Lewis interprets the legal action by Falcon.

The Lewises' attorney, Cal Potter, said a judge has dismissed portions of Falcon's libel and slander claim against Lewis and the remaining claims are still pending, among them, that Lewis claimed Falcon exerted influence over the Contractors Board, that the company threatened his life and that Falcon used illegal aliens to build his home.

Lewis, who has filed a counterclaim as well as a pending, separate lawsuit against Falcon, says he is looking forward to his day in court.

Additional legislation -- Assembly Bill 485 passed in 1997 -- now protects homeowners from the type of suit filed by Falcon against Lewis, commonly referred to as SLAPP suits.

Lewis testified in support of the bill, which says information and opinions provided by citizens to government are "essential" to good decisions. The bill protects citizens from being sued if they in good faith communicate with government agencies and make comments believed to be truthful.

That legislation, however, will not help Lewis.

Although Lewis says fighting Falcon has depleted all of his family's savings while turning their lives into pure hell, he said he feels vindicated now that investigators with the Contractors Board have concurred that there were major construction deficiencies in his home and that Falcon did not resolve them.

Problems included a living room window with an open-air gap in the frame, leaky spots in the house and garage roofs, a crumbling driveway, wrong-sized anchor bolts that secure the home to the concrete slab, and sill plates (the bottom part of a home's wooden frame that attaches to the slab) that were not of the proper grade or placement.

As he pointed out the deficiencies last week, Lewis said, "This was supposed to be our dream home, our utopia."

But he said severe structural problems have not allowed the family to have a worry-free day since they moved in.

"From a novice's point of view, I think what they've done is when they poured the slab, they poured it too small and they forced the wood to fit," Lewis said.

From a not-so novice point of view, he may be right. According to the Contractors Board, Falcon violated the Uniform Building Code in using the sill plates and anchor bolts it used. The city of North Las Vegas Building and Safety Division concurred with the Contractors Board.

Lewis admits that Falcon representatives visited the home two or three times to fix several problems but then, he said, the company quit returning phone calls. An Army veteran, Lewis availed himself of a VA loan with no down payment to get his mortgage. After the VA sent a strong letter to Falcon ordering that repairs be made within 15 days, Lewis said the company came out again.

"I had nine things we were bellyaching about," Lewis said. "They did fix four out of the nine, and even that took three months."

It was at this point, Lewis said, that he posted signs on his property, called public officials, hosted a meeting for neighbors in his living room, and began calling Falcon with complaints.

Falcon bit back with its lawsuit against Lewis in 1996.

Caruso said Falcon was served with two notices, one in April 1999 and one in November 1999, to fix the sill plates, a wall overhang, and the anchor bolts.

When the contractor did not comply, a final notice was sent, the matter was assigned to an investigator, and a date was set for final action.

Facing mounting attorney fees of more than $68,000, Lewis says that in the last six years he has lost everything.

"I'm just obsessed with this. A lot of people were obsessed with that O.J. Simpson thing, I'm obsessed with this," Lewis said.

He continues to hope for his day in court so he can be heard and move his family out of his crumbling house.

"I wouldn't stay here on a bet," he said. "We despise this house because of what it's done to us."

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