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Building a Case

The BBB's Parsons praises fraud prosecutors for their post-Allison work.
Phillippe Diederich

When 72-year-old Herb Janzen needed his house repaired from Tropical Storm Allison's flooding last year, he turned to a handyman in the truest sense of the word.

Janzen's son, an attorney, had referred his father to Dale Calcerone, a 54-year-old Clear Lake area contractor who learned the trade from what he calls "hard knocks." That meant helping his grandfather build when he was a child, then picking up various skills such as plumbing, mechanics, welding and carpentry. He'd even helped build camps for pipeline workers in South America. Later, the contractor went into the bar and cafe supply business and tried his hand at part ownership of a local bar.

Calcerone says he assisted Janzen in working with adjusters to get a $34,000 insurance settlement after Allison sent about ten inches of water rushing through the old man's Inwood Forest house. The two discussed a range of work and settled last August on a $17,800 contract for removing and replacing damaged parts of the house as well as some remodeling and foundation repair.

The contractor runs the father-and-son business Sundial Builders. He needed a down payment, so Janzen, as the contract dictated, paid him $7,000. Calcerone took the check to Janzen's Frost National Bank, cashed it and used the money to cover the initial labor and the purchase of the first batch of materials.

But, unknown to Calcerone, that routine bank transaction did more than start him on the project. Under an obscure state law, it also transformed him instantly -- from contractor to criminal.


The Janzen project was plagued almost from the start by somewhat typical problems between remodeler and client, and the passage of time only escalated the friction.

Sundial Builders notes that the contract called for the homeowner to box and remove all belongings and furniture in the house. Calcerone says that his cost estimate had been whittled down further by Janzen. The contractor knew he'd never make up the difference if he had to do piecemeal repairs and painting by having to work around china closets and other household items.

"I tried working with the guy," Calcerone says. "But I kept telling him to get this stuff out because I've got work to do. He goes, 'Oh, there's lots of stuff you can do.' I told him when I come over here to paint, I want to paint everything -- I don't want to stop and have to come back."

Calcerone says he and his son, Dale Jr., helped the old man get some of the clutter out of the way, although more than three months passed before the bulk of it was gone. Then the homeowner began pressing him immediately on why he hadn't finished, Calcerone says. More delays came when Janzen was late in buying a door to be installed and when special tile had to be ordered and shipped. The Sundial owner also swears that he and his son handled work that wasn't even called for in the contract, but they wanted to help Janzen get his house back in shape.

Janzen's son, Herb Janzen Jr., scoffs at the arguments of Sundial. He says that for months, Calcerone gave him false estimates of the completion date, and would seldom show up. Meanwhile, other contractors in the neighborhood were finishing their work and life was returning to normal in that section of Inwood Forest, he says.

When the junior Janzen confronted Calcerone, he says he was told that since there was no deadline specified in the contract, Calcerone felt he didn't ever have to finish the job. Janzen gave him a March 15 deadline. When that passed, the family changed the locks, got another contractor, booted out Sundial and threatened to sue.

Calcerone insists that the project was only days from completion -- the younger Janzen says they only left a mess of unfinished items and work so bad it had to be torn out and redone. Shelf tops and bottoms were unpainted, a used shower door had been installed and the walls showed multiple hues of paint, he maintains. "I could have done better doing it myself -- at night," the lawyer says. As for customer-induced delays, Janzen says, "All I can tell you is the guy isn't very truthful."

Sundial had received $13,800 from Janzen by the end. "He's just a cheapo," Calcerone says. "He thinks that because his son is an attorney that he's not going to have to pay me -- that he can just sue me." The contractor acted first, filing a lien against the property for about $5,400 -- the remainder of the contract amount and two minor upgrades in the work.

And the homeowner called the Harris County District Attorney's Office to complain. His son, the attorney, told him not to expect anything more than an airing of his gripes, that this was the kind of usual dispute that winds up in civil court. "I do this for a living, handling this on the civil end," Janzen says. But what happened next would "surprise the hell out of me."

 


On April 29, a D.A.'s consumer fraud intern contacted the blunt-speaking Dale Calcerone about Janzen's complaint. He says he explained his side, then the intern questioned him about the down payment check -- had he cashed it or deposited it in a trust account?

Calcerone says he asked the woman on the phone, " 'Do I need to be talking to an attorney? Are you pursuing this as a criminal matter?' She says, 'Oh, no, no. We're just trying to settle this matter.' Like a dummy, I was pretty straightforward with her."

Eleven days later, the contractor was arrested on the criminal charge of failing to deposit construction trust funds. He wasn't accused of defrauding the Janzens, or of misusing their contract money, or of anything else involving the quality of his work or lack of it.

Instead, the veteran contractor got hit with an obscure state property code statute that was designed squarely against fly-by-night con artists. The bill was drafted some five years ago by Russell Turbeville, the D.A.'s longtime consumer fraud chief, and has rarely been invoked.

Basically, the law requires that remodeling contractors deposit a customer's payments into a special construction trust fund if the contract is for more than $5,000 and the job is at the client's homestead.

Turbeville and other consumer advocates applaud the law as a prime weapon in the continual fight against blatant remodeling and repair fraud, especially after major catastrophes such as the Allison flooding. There are ample horror stories of contractors showing up in the aftermath of disasters, signing up clients and disappearing as soon as they get their hands on thousands of dollars in repair checks from insurance settlements. Turbeville recalls a lawyer who paid a contractor for a job, only to have the contractor file for bankruptcy the very next day, without doing any work at the job site.

The idea is to force an accounting by the contractors, and to keep them from just converting payments to cash and running away or diverting them for other purposes. Turbeville says he has pushed for stronger legislation because prosecutors must now wait for contractors to show a clear pattern of fraud against customers before fraud charges can be filed.

Dan Parsons, president of the Houston metro area Better Business Bureau, says when Turbeville first announced the new law to a meeting of a home remodeling association, "The remodelers almost killed him." After further explanation, "three hours later they were all hugging him, saying he'd done the right thing for the industry."

"The bottom line is that law has been there. It is a pretty valid one and almost all of the legitimate remodelers embrace it," Parsons says. "When his division moves on somebody, they feel they've got something."

Still, some contractors say the smaller remodeling companies and individual handymen don't even know about the law -- and that it has hardly been applied. "I've never heard of them going after anybody with this law," attorney Janzen says.

Calcerone, in fact, thinks the trust fund law is a good idea -- he says he just didn't know it existed.

The support from all quarters, however, stops far short of anyone endorsing the D.A.'s decision to use it against an apparently established contractor like Calcerone. In his career, he's never had a BBB complaint against him, and only one civil case stemming from a remodeling dispute.

David Waddell, an attorney who works with the Associated Builders and Contractors of Greater Houston, shook his head after hearing an outline of the case.

"It looks like it is an attempt to use the statute for a reason other than what it was intended," Waddell concludes. "They are trying to get him on a technicality as opposed to the substance of the statute… It is clearly a trap -- a lot of contractors just don't even know about it."


What happened next further reinforced Calcerone's feeling of injustice. He says that following his arrest and making bail of $3,500, he was told by a prosecutor (it wasn't Turbeville) that if he dropped the lien, the criminal case would disappear.

Veteran attorneys say such offers are not uncommon in efforts to satisfy disputes on behalf of complainants.

"That stinks to high heaven," the crusty contractor says. The proposed deal made it obvious that they were only using the criminal justice system to force him to back off his civil case with the lien, he says. "I did the work, I'm owed the money and I'll rot in jail before I give in to their schemes."

 

Dale Jr. is a former Eagle Scout who was among the youngest scoutmasters to take over a troop three years ago, at age 21. "If the state knows somebody has broken a law, what gives them the right to let it go, just to help this [Janzen]?"

Turbeville twice reminded a reporter that he only "inherited this case -- I didn't file it." He emphasizes that he is bound by legal ethics from discussing the specifics, and says that Calcerone "shouldn't be trying this case in the press."

The contractor, who can be described as eccentric at best, has refused the help of an attorney, saying he's learned to distrust them. With his charge enhanced by a 1999 conviction for carrying a gun -- he says he had one because his sales and bar business required him to transport sizable sums of cash -- it carried a possible punishment of one year in jail and a $4,000 fine.

Meanwhile, Calcerone says the dispute and criminal action caused him to miss other work, leaving him three months behind on his own house note.

Attorney Waddell says prosecutions under this law are rare, that the statute usually only surfaces as an aside in civil matters, by civil attorneys who try to show it is merely one more mistake by a contractor. "The statute isn't very effective if you really can't get the guys who are really the problem and really the reason why the statute was promulgated," he says.

Turbeville says he's been virtually the lone advocate for stronger laws to fight remodeling abuses, and that industry lobby groups have blunted most of his crusades.

"I'm having people destroyed all the time by contractors who are 'walking' the job," he says. "We prosecute them when we can….You've got a bunch of people whose houses are destroyed, whose life savings are gone. And it is a sad situation when the law doesn't deal with it. I can only enforce the laws that exist."

As the trial date set for later this month approached, on Friday Turbeville dismissed the case, saying it had nothing to do with inquiries made by the Houston Press. But the Calcerone-Janzen dispute will go on -- as a fight over the lien.


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