According to a recent court decision from the Court of Appeals of Virginia, Anthony Cummings signed a contract with a homeowner in Chesapeake, Virginia to build an in-ground swimming pool. The homeowners gave Mr. Cummings a $12,000 down payment on the contract. The contract identified the contractor as “Mid-Atlantic Pools.”
When Mr. Cummings went to the City to apply for the building permit, he was informed that Mid-Atlantic Pools did not have a current business license and therefore the building permit could not be issued. Mr. Cummings then represented that he had listed the wrong company name on the permit and that the correct company was “Currents Construction Company.” Based on this representation, the City issued the building permit.
In fact, Currents Construction Company was not involved in the contract and had never given Mr. Cummings permission to use its name. After Mr. Cummings failed to build the pool or return the down payment, he was charged with the criminal offense of forging a public record. After considering the evidence, the judge found that there was insufficient evidence to convict Mr. Cummings of the forgery charge, but the judge allowed the prosecutor to amend the charge to obtaining property by false pretenses. Mr. Cummings was convicted of that charge and the Court of Appeals of Virginia recently upheld the conviction on appeal.
Of interest, Mr. Cummings was not convicted of obtaining the $12,000 down payment by false pretenses. Instead, he was convicted of obtaining the building permit by false pretenses. It is very likely, however, that the failure of Mr. Cummings to perform the work or return the down payment led to the filing of the criminal charges.
This case highlights the potential risks to contractors if they fail to maintain their business and contractor’s licenses or make false representations in connection with construction contracts. Although these issues may not be discovered if the work is performed as required, the Commonwealth of Virginia has become more proactive to ensure compliance with contracting requirements. For example, and as previously reported in Vandeventer Black LLP’s construction law blog (link), the Governor has directed the Virginia Department of Labor and Industry to investigate the status of subcontractor licenses as part of any Occupational Safety and Health compliance (VOSH) investigations. VOSH may refer the matter to the Virginia Department of Professional and Occupational Regulation (DPOR) if it finds that any contractors have contracted with unlicensed subcontractors. Such an investigation can result in civil fines and may lead to criminal charges.
Any contractors facing a VOSH, DPOR or criminal investigation should contact experienced legal counsel for advice regarding how to respond to the investigation. Vandeventer Black LLP has attorneys who are experienced in construction, government investigation and white collar criminal matters who can assist in these matters.