1 Contractor, 4 Unfinished Jobs, and an Official Deaf Ear

Just when is damage to consumers so great that government must step in to investigate and try to put things aright?

Certainly, this is one of those times. Four Westside homeowners--in Mandeville Canyon, Benedict Canyon, Cheviot Hills and Brentwood--spent hundreds of thousands of dollars each to remodel their homes with the same contractor and then, with little or no warning, last Nov. 13 he suddenly abandoned the work.

More than that, they found he had not turned over large portions of the money they had been paying for the work to his subcontractors. Rather than face liens on their properties and to finish up, the homeowners had to pay them again. The payments totaled hundreds of thousands of dollars.

All tried to reach the contractor for redress, but his phone numbers were no longer functioning, and his three lawyers couldn’t or wouldn’t facilitate getting in touch with him.

The contractor, Bob Ruhl, head of BRC General Building Contractors Inc., contests none of this.

On Monday, he met with me in the Hermosa Beach office of his lead attorney, Albro Lundy. He said he is a victim of “a small business failure” and acknowledged he should have hired a business manager long ago. “I did bad bookkeeping,” he said.

He had hoped, Ruhl said, that celebrities who owed him money for past jobs would pay up, or that new projects would come through, enabling him to keep the remodelings going with those funds.

“I only have $13,000 left,” he said, his 15 years of “quality” contracting are over, and he is now working for somebody else.

Ruhl, however, has his own views of just how great are the damages in this debacle--considerably less than what the homeowners say.

One of them, Joe Cowan of Mandeville Canyon, says he paid Ruhl’s firm $424,857 but learned after the abandonment that $175,998 of that was still owed to the subcontractors, and he had to repay them that amount. He puts his total losses at $202,398.

Homeowner Diana Miller of Brentwood said that in an aborted mediation, Robert I. Schwartz of the American Arbitration Assn. said it seemed to him Ruhl had taken $1 million from the four parties.

Schwartz told me he could not confirm or deny he said this or even confirm he was the mediator, because all such proceedings are confidential, according to agreement by the parties.

But Ruhl, told of the reported remark, called the $1-million damage figure “incredibly inflated, by a factor of three at least.”

On reflection, he said, “I can’t tell you a figure” for damages.

Ruhl said a third homeowner, Deborah Klar of Benedict Canyon, who is suing him, was one straw that broke his financial back by declining to make a requested $75,000 payment, because she didn’t have the money.

But Klar showed me a Nov. 9 letter from her lender, Merrill Lynch Credit Corp., telling Ruhl she did have the money, and other documents saying for two months payment had been withheld because subcontractors hadn’t been paid.

A state law says that a contractor who diverts more than $1,000 from one project to another can be fined up to $10,000 or sent to jail for up to a year, or both.

In Ruhl’s own description of hoping to use funds from other projects to keep the work going for the four homeowners, he seems to have been intending to evade this law.

For months, however, two of the homeowners’ efforts for intervention by the Los Angeles Police Department or by the Contractors State License Board were unavailing.

Cowan, for instance, tried to file a grand theft report with the LAPD. But Det. Ivett Garay confirmed Tuesday that she told him the LAPD didn’t take such cases, and referred him to the Contractors State License Board.

I wonder if the LAPD can legitimately say crime is going down, if it won’t take theft reports.

When Cowan contacted the contractors’ board late last year, he was referred to investigator Vera McGraw, who, he says, told him two months ago it would be months more before an inquiry started.

McGraw would not comment. She referred me to her supervisor, Jan Silverman, who observed, “We do have heavy caseloads.”

But when I reached the head of the board, C. Lance Barnett, on Monday, his attitude was different.

Barnett said there should have been no reason to tell Cowan there would be months of delay.

“We have a $25-million budget and almost 500 employees,” he said. Regardless of whether there was $300,000 or $1 million in damages, he felt this was big enough so the contractors’ board should have investigated right away.

“It appears this man was building a Ponzi scheme,” Barnett said, “and this is exactly the kind of case we exist to handle.”

The same day, McGraw called Cowan to set up an interview.

Tuesday, Dave Fogt, a manager of the board’s investigative unit, said the matter likely will soon be referred to the L.A. County district attorney for possible prosecution.

Asked how often the statute prohibiting diversion of funds from one project to another is enforced, Fogt said it was “not that uncommon,” but added, “I don’t know how many we have done in the last year,” and he didn’t think he could find out right away.

It sounds as if this law could be more stringently enforced.

But Ruhl told me he feared all this attention would now lead to him losing his present job and really falling into dire straits.

He also assured me he was anxious to make amends. On Sunday night, he said, he had called Cowan, told him he would like to pay him back if he could, and offered to assign to him proceeds from a lawsuit against a past client who had not paid him. Still, since he has so little money, it would be up to Cowan to finance the suit.

Cowan confirmed Ruhl had talked to him for the first time since November. But, if Ruhl hasn’t been able to win the suit so far, Cowan said he doubts the contractor has much chance of victory.

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Ken Reich can be contacted with your accounts of true consumer adventure at (213) 237-7060 or by e-mail at ken.reich@latimes.com.