Studs to Rugs, a local contracting business, unexpectedly closed its doors Monday, Oct. 23, leaving consumers with empty pockets, unfinished projects and anxiety.
One of these consumers was Kjersten Nelson, an associate professor at North Dakota State in the department of criminal justice and political science.
Nelson and her husband did some research and contacted Studs to Rugs in May to get “some ideas of things” and get an estimate on how much it would cost to renovate their kitchen. According to the West Fargo Pioneer, Nelson paid $60,000.
“If somebody had told me I could lose this amount of money, I either would have laughed or passed out because I can’t even comprehend that,” Nelson said. “Going into a project, there is all the anxiety of things that could go wrong, and never in a million years did I think this would be.”
Although Nelson and her family are facing this hardship, she said the response from the community has been overwhelming. Friends are inviting them over for meals, sub-contractors — who are also out of “a fair amount of money” — are giving them lower estimates and volunteers are helping them on weekends “if they can.”
“We try to focus on that part of it; the kindness that has come through,” Nelson said.
Everything started according to plan. It was “very easy and coordinated well,” she said. They eventually made a down payment in late August before Studs to Rugs “tore everything out in late September.”
Four weeks later, and only 5 percent of the way complete with the project by Nelson’s estimate, Studs to Rugs locked its doors for good without any notification to Nelson and her family except for an email.
“It was an auto-response,” Nelson said. She also said it only came after she contacted Studs to Rugs Friday, Oct. 20. There hadn’t been work done for some time, according to Nelson, and she thought it was just “typical contract delay.”
The email informed Nelson the company was now closed and their lawyer will be in touch with them next week. But the lawyer never reached out to them. “That has never materialized,” Nelson said. “We haven’t heard anything.”
Email is the only way consumers can hope to contact Studs to Rugs as the official Facebook page, as well as Tim Rosene’s — the owner of Stud to Rugs — personal Facebook page have been deactivated.
Also, according to Parrell Grossman, director of the Attorney General’s Consumer Protection Division in the state of North Dakota, “(Rosene’s) voicemail message box is full.”
Legal action moving forward
In response, Nelson said, “We’re doing all that we can.” She is currently working with a lawyer to see what civil and criminal avenues there are to pursue. “I know that any civil process is going to take a long time and then, probably, not have much to recover.”
In an interview with KFGO, Grossman said that, sometimes, if the organization doesn’t have the money to pay consumers back, they look to “personal holdings or other funds that would be available for consumers.” Often times, these end up being a mere fraction of what the consumers originally paid.
Grossman said an assistant attorney general and an investigator are working on a subpoena to summon Rosene to court.
Specifically, the attorney general’s office is looking into whether Studs to Rugs knew that it would not be able to complete certain projects after accepting payments.
Before Oct. 23, when Studs to Rugs closed its doors, the Consumer Protection Division didn’t have any reports “from consumers indicating that they had paid money for work that either wasn’t started or completed,” according to Grossman.
After that Monday, however, consumers began filing complaints, and Grossman said, “It looks like this could potentially be a very serious problem.”
“It’s often a case-by-case basis,” Grossman said, “But this business is not insulated, and no business is really insulated, when and if you have engaged in conduct that is illegal under North Dakota’s consumer fraud laws.”
Grossman also had a piece of advice for people who will work with contractors in the future: “I think the best course is just try to limit the amount of money you pay upfront.”