Central Valley contractor rebuilding homes after Tubbs fire accused of fraud, negligence

A year and a half after she selected a contractor to begin rebuilding the house she lost in the October 2017 Tubbs fire, Lynette Kronick has nothing to show for it. Her burned lot on Lavender Lane in the Mark West neighborhood remains vacant.

“My roommate has a 3-year-old granddaughter,” she said. “I'd like to have this house built before she graduates from high school.”

That's why in April she fired Chiaramonte Construction & Plumbing Inc., a Central Valley builder who signed contracts with her and about 40 Santa Rosa-area homeowners to rebuild their houses destroyed in the devastating wildfire.

Now, they are a group of disgruntled customers going through the agony of dealing with an out-of-town contractor they say has fallen well short of meeting their expectations. They claim Chiaramonte has blown deadlines, broken promises on construction start dates, made many mistakes, left their homes unfinished and in some cases improperly charged them for unfinished work.

On Friday, Chiaramonte Construction became the first contractor to be accused by fire survivors of negligence and fraud during the massive rebuild underway in sections of Santa Rosa ravaged by the historic fire. Robert Richner and his wife, whose Mark West Estates home burned, filed a civil lawsuit against Chiaramonte in Sonoma County Superior Court, alleging fraud and negligent misrepresentation regarding their home construction contract with the Tulare company.

This week, in response to customer complaints about Chiaramonte, the California Contractors State License Board opened a preliminary inquiry to assess the allegations, which include fraud, abandoning a construction project and lack of reasonable diligence, board spokesman Rick Lopes said.

The Sonoma County District Attorney's Office, which also received complaints about the contractor, is working “in conjunction” with the licensing board, Assistant District Attorney William Brockley said.

County Supervisor James Gore, whose district includes Larkfield-Wikiup and the greater Mark West area, said he heard complaints from 20 to 30 families about Chiaramonte not delivering on its promises, “walking away from contracts” and not responding to customers. Gore then recommended the information be given to the DA's Office.

“Recovering from the fires has been so hard on people as it is,” Richner said in an interview. The “debacle” with Chiaramonte, he said, “has been salt in the wound.”

Brian and Jacqueline Scott, whose Larkfield home was torched in the inferno, also turned to Chiaramonte to build them a new house. They are one of five fire-affected customers interviewed for this story who expressed aggravation with the builder and provided details of their unpleasant experiences.

“We got through it, and we processed it,” Brian Scott said of the fierce Tubbs fire, the worst in California history at the time. “The pain of going through this has been worse than the pain of the fire.”

“For over a year,” Jacqueline Scott said, “every time I came to the home (under construction), I wanted to cry. Because there was something wrong.”

This was a common refrain among the five customers, all of whom signed contracts with Chiaramonte and say they came to regret it. Four of them have terminated the contracts.

Anthony Chiaramonte, a project manager and son of the company president, said the construction firm came up to Sonoma County to help fire survivors get back into homes.

“We didn't go up there to take advantage of the situation,” Chiaramonte said. He called the disgruntled customers' allegations against his family's construction company “false.”

Despite the concern by some of the Santa Rosa-area customers that the contractor's financial condition may be deteriorating, Chiaramonte said the company continues construction work on 37 houses in the burned Sonoma County neighborhoods and has another 10 customers on a waiting list.

“We're not in a financial squeeze like people are saying.” Chiaramonte said. “Nothing's been reduced. In fact, we're pouring concrete right now on a job site.”

Making sales pitches

Based 280 miles south of Sonoma County, Chiaramonte Construction arrived in the North Bay in the wake of the Tubbs fire that nearly two years ago incinerated Santa Rosa neighborhoods, destroying 5,330 homes and causing $8 billion in insured losses countywide.

In meetings with groups of fire survivors in hotel conference rooms, company president and patriarch Sal Chiaramonte assured potential clients his company could rebuild their homes at much lower prices than the competition. This was possible, he said, because he would bring in laborers and subcontractors from the Central Valley, paying them far less than their Sonoma County counterparts.

In their civil suit, Richner and his wife said they “relied on these representations and believed them to be true,” claiming Chiaramonte knew they were “false and without foundation.”

The couple paid $124,634 to Chiaramonte on March 4 with the understanding the foundation on their new house would be poured 45 to 60 days later. Shortly after receiving that check, the contractor informed them that construction would begin within 120 days, according to their complaint.

With Chiaramonte unable to give the couple a start date, Richner and his wife worried their house wouldn't be finished before October, when their insurance company will stop paying for their temporary housing expenses. On March 19, they canceled the contract with the construction company. The contractor declined to comment on the couple's civil suit.

With a backlog mounting, on April 19 Chiaramonte told customers in a letter that Osmun Construction of Novato was taking over project management and scheduling of its fire rebuilding projects. That arrangement lasted about three weeks, before company President Jess Osmun said he became uncomfortable and discontinued it.

What happened, Osmun said, is that Chiaramonte “failed to think things through. They came up here with rock-bottom prices, but they didn't consider worker fatigue,” or the hardship endured by laborers living in trailers, away from their families, four days at a time.

Nor did it seem to occur to Chiaramonte that its laborers, earning about $20 an hour, would be susceptible to poaching by rival builders who could pay them much more. Chiaramonte acknowledged workers were hired away by other contractors.

Andy Guy recalls sitting at a Chiaramonte sales presentation in December 2017 when he and his wife, Kim, were looking for a contractor to rebuild their Larkfield home. “They said, ‘We have all our own guys; we're gonna get everybody up here. We're a good Christian company. We're gonna be here for you.'?”

“They kept throwing Jesus around,” recalled Eric Edenfield, who lost his home on Starview Court in Coffey Park and also attended a similar presentation. “We were told, and I quote, ‘God sent us to help you poor people who lost your homes.'?”

The frequent references to religion struck Edenfield as a bit odd. “But then,” he said, “my husband pointed out, ‘Jesus was a carpenter. Maybe it's a good sign.'?”

To build her new Mark West house, Kronick claimed Chiaramonte quoted her a price of $245 per square foot. Other builders' quotes came in at nearly twice that amount. “When I reflect on this,” she said, “it was all too good to be true.”

Jacqueline Scott had to go from full to part time at her job to deal with the logistics of her home rebuilding project in Larkfield. Despite her and her husband's frustration with the builder, she gives the company credit for its effort to be part of the county's enormous fire recovery and rebuilding task.

“They wanted to help,” Scott said. “I honestly think they just bit off more than they could chew, in an area where they didn't know the codes, didn't have the contractors and didn't have connections.”

Unexpected price hikes

Money was tight for the Scotts as they faced replacing their house. They were pleased when Chiaramonte agreed to build their 1,995-square-foot home for $225 per square foot. That price went up after the couple opted for upgrades, but remained reasonable, they say. Before the couple signed a building contract, Jacqueline expressed concern that because construction materials and labor costs were sure to go up, the price of their house might increase, too.

“And Sal said, ‘No, that's going to be the price of your house, unless you make change orders,'?” she recalled.

That ended abruptly after a geological engineer determined their foundation would have to be twice as deep as specified on their home building plan. That $12,000 foundation, Chiaramonte informed the Scotts, would now cost $24,000.

“And we said, ‘Whoa, whoa, whoa, you just gave us your word,'?” Jacqueline Scott recalled. The couple ended up paying an extra $9,000 for the foundation.

This was the first of a series of mistakes by the contractor, they claim, including the heating vents that were supposed to go on the floor but ended up on the ceiling, and the front porch that kept failing inspection and had to be torn up three times.

“Their porch was done exactly how she wanted,” Chiaramonte said.

In late February, after five weeks during which no one worked on the inside of their house, Jacqueline Scott was excited to drop by and find laborers at work. Then she realized they were using her living room to paint someone else's cabinets.

“That's very common,” Chiaramonte said, “especially in a subdivision setting, to use garages or wherever.”

Fan to forlorn customer

Edenfield was once Chiaramonte's biggest cheerleader, recruiting Coffey Park neighbors to sign contracts with the builder. The son of a contractor, he understood economies of scale. If he and several neighbors all went with the same contractor, the company, he said, “could put up a little trailer on Starview Court, and knock 'em out.”

He checked with the state's contractor licensing board and the Better Business Bureau regarding Chiaramonte Construction. “Everything was on the up and up,” he said.

He shared this recollection Sunday, while standing outside his unfinished home, which has a noticeable gap in the stucco where a window was improperly installed, then torn out.

His house, one of the first properties charred by the fire that Chiaramonte started to build, was supposed to be done in October 2018, he said. That was pushed to Jan. 3, then Feb. 15.

“On Feb. 13, I call 'em, I told ‘em I've got an inspector, we're ready to go,” Edenfield said. The response from the contractor was “radio silence,” he said.

In May, Chiaramonte requested another draw from Edenfield's bank - $70,000 for work the company hadn't finished. Edenfield also got a notice in the mail from a vendor for the builder alerting him that Chiaramonte hadn't paid in 150 days. For that reason, the vendor put a lien on his house.

“And that's when I fired them,” Edenfield said of the Central Valley contractor.

Chiaramonte sees the situation with Edenfield differently.

“His house was within two weeks of being finished, then he decides he's gonna lock us out,” said Chiaramonte, who pointed out his company still holds the building permit on the property. “No other builder's gonna be able to build on that project and finish his home now. He didn't help himself out on that front.”

In response to numerous complaints, Santa Rosa officials have been exploring remedies for customers trying to get Chiaramonte to release its claim on their permits. The city is “looking at various solutions,” said Gabe Osburn, acting deputy director of the city's Engineering Development Department.

Edenfield said he's proceeding as his own contractor. “I'm not moving anywhere until this house is done, even if I have to put an air mattress in the front yard and sleep there.”

Haggling over $127,000

Like Richner, Kronick is one of the Chiaramonte customers with a signed contract and an empty burned lot. More than a year ago, Chiaramonte got $127,000 after Kronick's mortgage company mistakenly sent the builder a check for that amount - roughly a third of her insurance reimbursement to rebuild her home in Mark West. She asked for the money back.

“I didn't have plans drawn, I didn't have materials delivered,” she said. She was told by Chiaramonte that the company did not realize it had her money.

For his part, Chiaramonte said, “There's confusion about the amount of money. Legally, I can't say too much about that one.”

After more than a year of haggling with the company, she sent Chiaramonte a letter of termination on April 3, along with a request to return her $127,000.

“People are saying I'm going to have to hire lawyers,” Kronick said. “I just want my money back. I want to get started with someone else.”

In a reply dated May 10, Chiaramonte informed her that it would reimburse her $104,982. Among the “hard costs” it was billing her were $1,938 in invoices from engineering firm Reese & Associates, an invoice from an interior design firm for $7,253.50, and one from a real estate agent for $7,874.

“I paid the Reese & Associates bill myself,” Kronick said in an email to The Press Democrat. The bill from the interior designer was for work on her kitchen. “If I didn't get any kitchen done, why would I owe $7,000?”

Of the real estate agent, Kronick said, “I met with her a couple of times, but I can't imagine how those meetings could have cost close to $8,000.”

Construction mistakes

Unlike the Scotts, their Larkfield neighbors, Kim and Andy Guy, haven't terminated their contract with Chiaramonte. They were giving it fresh consideration, however, after the contractor's request last month for $80,000. Before releasing the money, a representative of their bank inspected the house, and determined that only $60,000 of construction work had been done.

The Guys' bank records show the builder was paid $225,665 as of April 24, but she shared a document with The Press Democrat showing that Chiaramonte recorded payment of just $202,715.

Five times between September 2018 and February, the contractor told the Guys their house had passed its framing inspection, but it hadn't.

“The trusses are numbered at the truss factory,” Kim Guy said. “And they still got it wrong.”

Because a half-dozen trusses were put in backward, her husband said, the furnace ended up in the wrong spot. Workers had to rip out part of the roof, he said, and nearly 80 percent of the inside walls, because they were improperly framed.

With regard to the Guys' home, Chiaramonte said, “I'm not saying there haven't been issues with their house, and mistakes made. Every house has mistakes and issues. This is construction.”

When will the house be finished? Sooner, they hope, now that they've made an important decision regarding Chiaramonte. “Come Friday,” Kim Guy said, “they will be fired.”

You can reach Staff Writer Austin Murphy at 707-521-5285 or austin.murphy@pressdemocrat.com. On Twitter @ausmurph88.