Hawaii homeowners seek to plug leak
A roofing contractor banned from doing business in Hawaii has found a way to continue making money in the islands
THE principal of a Canadian-based roofing contractor, banned from doing business in Hawaii after skipping town and leaving customers with no choice other than legal action to repair leaky roofs, has found a way to circumvent the order and get the state to pay some of the judgments against him.
Although the state fined Mark Wenzel $205,000 and revoked his license for using Interlock Industries Inc. to engage in deceptive business practices, it couldn't prevent him from starting up another business in Hawaii or make him pay his fine. And now, the state has notified Hawaii consumers that it wants a cut of a pending multimillion-dollar class-action settlement.
"The state did nothing to help the thousands of people named in the class. I think it's ridiculous that it now feels entitled to reimbursement from our settlement," said George Ashford Jr., a Kailua attorney who filed a class-action suit on behalf of Hawaii consumers left high and dry by Wenzel.
The state Contractors Recovery Fund, a monetary pool of last resort that compensates homeowners who have obtained court judgments and are unable to collect on them, paid $25,000 to settle two private lawsuits against Wenzel, said Verna Oda, executive officer for the state Contractors License Board, which administers the fund. Contractor license fees provide the basis for the fund.
Advertisements from Interlock Industries and other affiliated companies, above and at top, promote the product as "the last roof your home will ever need" and it's guaranteed that homeowners will "never re-roof again." CLICK FOR LARGE
Interlock's response to complaints improving
The Star-Bulletin noted improvements in Interlock Industries
' response patterns to Better Business Bureau complaints since its last check in 2005. Interlock now has satisfactory records from the Better Business Bureaus of Saskatchewan and Alaska; Connecticut; Chicago and Illinois; San Diego; Eastern Massachusetts, Maine and Vermont; and Washington and Oregon.
During the last three years, the company resolved nine Better Business Bureau complaints in Massachusetts, Maine and Vermont; one in Chicago; and seven in Oregon and Washington; and one in Alaska.
The company's record in British Columbia is similar. It has clean records in Southern and Eastern Alberta; Vancouver Island; Eastern, Mid-western, Central and Northern Ontario; and Mainland B.C.
During the last three years, the company has resolved four complaints in Mainland B.C., and five in Mid-western and Central Ontario.
But while Interlock owner Mark Wenzel has made strides to improve the company's customer service track record in Hawaii and with Interlock, some lingering problems remain with other affiliated companies.
International Exteriors Ltd., which the Better Business Bureau said also does business as The Super Roof, Atlantic Super Roof, Fin-All Roofing and Atlantic Best Roof, still has an unsatisfactory record in Halifax, Nova Scotia, where the bureau has received 16 complaints in the last three years.
"We hit our cap in the case of Interlock," Oda said, adding that to her knowledge the state's request for compensation from the pending class-action suit is a first.
Attorney Gary Lee, who has filed a notice to the court requesting reimbursement from the class on behalf of the Contractors License Board, said he has not capped the repayment.
"It will be up to court to decide how much," Lee said, adding that a state statute allows for repayment.
Wenzel, who has yet to pay his fine and has been named as a defendant in three private lawsuits and one class-action lawsuit, said in an exclusive interview with the Star-Bulletin that he eventually plans to resolve his debt in Hawaii.
"Our first priority was resolving the class-action suit against Interlock," Wenzel said. "We'd like to resolve the issue of the outstanding fines with the (state Department of Commerce & Consumer Affairs) and we hope to do that within the near future."
In the meantime, it appears Hawaii consumers are the ones who are being punished for Wenzel's actions. While some Hawaii consumers continue to put up with leaky roofs and wait for proceeds from the class-action settlement to help them make needed repairs, Wenzel is still making money in Hawaii and has been for the past four years.
Two local contractors recently used materials from Wenzel's roofing supply company, Future Roof, to bid on a $1.2 million roofing job with the board of the West Molokai Resort Condominium owners' association. The transaction has caused a heated conflict between the board and a condominium owner, who says that she fears history could be repeated. She also brought to light the enforcement difficulty that state regulatory agencies face.
Wenzel's continued presence in Hawaii also has angered past customers, who say they trusted the DCCA to protect consumers from being exposed to future business dealings with Wenzel or any of his companies.
"This wasn't supposed to ever happen again," said Ulysses Guillermo, who paid $25,000 to put an Interlock roof on his Hilo home. After the roof started leaking and Guillermo couldn't get Interlock to cover its warranty promises, he joined the class-action suit that Ashford filed against Wenzel.
Although the state could have ordered Wenzel to compensate consumers, officials decided that the process would have taken too long, said Jo Ann Uchida, the complaints and enforcement officer for the state's Regulated Industries Complaints Office (RICO).
"We wanted to ensure that they stopped operating and levied a hefty fine," Uchida said.
However, unbeknownst to the state, Wenzel found a loophole in their order. The Molokai condominium job brought Wenzel's continued involvement in Hawaii business to light. His other Hawaii business interest dates back some four years when he began supplying kamaaina company Tropical Roofing and Raingutters Inc. with products from his decade-old roofing supply company Future Roof.
Hawaii-based Beachside Construction, a company that Wenzel has not done business with in the past, also has talked with him about installing the product at the West Molokai Resort condominiums, Wenzel said.
While both local companies have clean records in Hawaii, Molokai condominium owner Betsy Thompson said that she is not satisfied with the Future Roof product or warranty and is baffled as to why some owners of her condominium are comfortable doing business with a company whose management has been linked to past problems.
"Why would the board choose to do business with a man who cannot operate his other company in Hawaii?" said Thompson, whose complaints have prompted her board to rethink their decision to use Future Roof and caused the state to become aware of Wenzel's latest dealings in Hawaii.
Wenzel said forging business relationships with both companies is outside the scope of the DCCA order that banned him or Interlock from conducting business in Hawaii.
"We aren't doing any contracting or installation of any roofing product in Hawaii," he said. "We have an affiliated company that is supplying product to local contractors who are doing the work in Hawaii. We aren't hiring people or signing contracts with homeowners."
While Future Roof and Interlock are separate companies, both are affiliated with 35-year-old Delta Building Products, Wenzel said.
The companies are so closely linked that they share the same address on their business name registration applications with the British Columbia government and on Web sites. Interlock and Future Roof carry some of the same product inventory, and warranties for both companies specify that any disputes must be resolved in Canada, he said.
Future Roof has provided materials to contractors in approximately three-quarters of the United States and has a clean business record, Wenzel said.
Charlie Beeck Jr., who owns Tropical Roofing and Raingutters and sits on the ethics board of the Hawaii Roofing Contractors Association that helped run Interlock out of town, said that there is a distinction between doing business with Future Roof or Interlock.
"The Interlock shingle was a good product. It was the installation and warranty that were the problem," Beeck said, adding that he has not received any complaints in the four years that he has offered customers Future Roof products.
Scott Jimenez, the owner of Beachside Roofing LLC, said he used Future Roof products in his bid at the request of his clients at the West Molokai Resort Condominium.
The state is aware that Wenzel is operating Future Roof in Hawaii. However, Uchida said her agency's hands are tied. RICO's jurisdiction is limited to contractors and does not cover manufacturing issues, she said, In addition, the regulatory order banning Wenzel from doing business in Hawaii is specific to Interlock and does not apply to any of his other companies, she said.
"There may not be much we can do to stop him from doing business with another company in the state of Hawaii, but he does so at his own peril," Uchida said. "He has outstanding judgments against him in Hawaii, so if he is making money in Hawaii, we can try and convert those assets into something that we can collect."
Yet, efforts by the state to collect its fines from Wenzel have been futile.
Though Wenzel made several Hawaii appearances for depositions in the class-action suit, the state was unable to collect the money owed to them.
"We can't arrest him for bad debt," Uchida said, adding that the state was aggressive in pursuing circuit court judgments against Wenzel across all islands.
Since the Hawaii judgments against Wenzel show up as unpaid debts on his credit report, they could help to deter Wenzel from starting up any additional businesses, Uchida said.
"The judgments will follow him wherever he goes," she said.
Before you buy a new roof...
» Check your guarantee; you may still be covered by the original roofing contractor.
» Ask friends, neighbors and relatives for recommendations.
» Make sure the company is properly licensed and bonded and that all employees who will work on your job are covered by company insurance.
» Ask each company to provide a detailed written estimate of the job that is to be performed, including the type and costs of materials and labor required, the method and procedures that will be used to fix your roof and how long the work will take.
» Ask for references.
» Keep in mind that in some cases new roofing materials can be applied directly over an existing roof.
» Some roofing contractors provide inspection services free-of-charge in an effort to solicit work. You may want to hire someone who works independently of a contracting company to inspect your roof who may provide a more objective opinion. Be certain to tell the inspector about any problems you may have noticed, particularly during the rainy seasons.
» Use common sense about warranties and read the fine print. Remember if it seems to good to be true it probably is.
Check out the roofing contractor by calling:
» BBB for a reliability report on the roofing company. http://search.bbb.org/results.htm
» State's Consumer Resource Center to verify that the contractor is licensed to perform roofing and for prior complaint history. http://www.hawaii.gov/dcca/quicklinks/online.
» For general information on roofing contractors, call the Building Industry Association of Hawaii at 847-4666.