84 Lumber hit with subpoena in La.
State looking into its handling of contracts
The Louisiana State Licensing Board for Contractors has subpoenaed representatives from 84 Lumber to provide company documents and appear in Baton Rouge for a hearing on Aug. 20 to answer questions about how the Washington County building supply company handled federal contracts to rebuild two schools and a fire station following Hurricane Katrina.
The subpoena issued July 24 by the State Licensing Board for Contractors indicates the hearing is being called because it believes 84 Lumber may not have provided bonding and insurance coverage required by the bid proposal and may have failed to properly serve the public in various ways, including not following construction standards.
“The board may revoke any license issued thereunder, or suspend the right of the licensee to use such license, or refuse to renew any such license, or issue cease and desist orders to stop work, or debar any person or licensee,” the subpoena states.
In response, Jeff Nobers, vice president and public relations officer at 84 Lumber, which is based in Eighty Four, released a statement Thursday:
“84 Lumber is in the process of responding to the subpoenas issued by the Louisiana state licensing board of construction. We treat these matters as we do litigation, and in fact they are the subject of litigation at the present time. As policy we do not comment on litigation. 84 Lumber is confident in our position as it relates to these issues and has every belief that we will be successful as they are resolved.”
New Orleans attorney La Koshia Roberts represents two minority contractors in Louisiana — Addie Mills and Maurice Hurst — who claim their companies were destroyed due to their dealings with 84 Lumber on three projects to rebuild communities following Hurricane Katrina, which struck in 2005.
“84 Lumber has created significant damage for my clients, both financially, professionally and personally,” Ms. Roberts said. “84 Lumber was aware that minority contractors generally have difficulty obtaining bonds for projects and presented itself as a company that could obtain them.
“The company had representatives go to the Louisiana NAACP to recruit minority contractors to participate in a minority contractor’s program,” she said. “It was presented in a way that the contractors would be comfortable with 84 assisting them in obtaining bonds. But 84 Lumber ultimately attempted to take over the minority contractors’ business.”
Under a program that 84 Lumber called the National Corporate Install Program, the company agreed to provide labor and materials and to manage the sites so that the contractors would not need to.
Ms. Mills had been awarded two contracts through the Federal Emergency Management Agency valued at $7.3 million in late 2010 and early 2011 to help rebuild a high school in Port Sulpher, La., and an elementary school in New Orleans. Mr. Hurst was awarded a $1.2 million contract to rebuild the Paincourtville Fire Department in Paincourtville, La.
All three deals went sour, the contractors allege, because 84 Lumber did not hold up its end of the agreement.
Both Ms. Mills and Mr. Hurst said they ran into problems with the bonds they purchased through 84 Lumber.
Ms. Mills, who once owned J&A Construction Management Resources, alleges 84 Lumber had registered the bonds in its own name, not her company’s, and charged her $218,399 for the bonds, but paid $53,526 for them.
Mr. Hurst, owner of The Olympic Group, said when he refused to have the state pay 84 Lumber directly, the company pulled the bonds, prompting the state to shut down his project and suspend his contract’s license.
Meanwhile, another local contractor, Gregory Mortimer, also is still battling 84 Lumber in the U.S. District Court for the Western District of Pennsylvania for faulty construction of 10 housing units in Deep Creek, Md. In April 2011, 84 Lumber sued Mr. Mortimer for $600,000 in the Allegheny County Court of Common Pleas for unpaid labor and supplies.
Mr. Mortimer also took part in 84 Lumber’s National Corporate Install Program in 2010.