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Evasive builders vex buyers

Nugent Homes is at the heart of a conflict involving people who paid for new homes and others saying they're owed thousands in fees.

© St. Petersburg Times
published January 27, 2002

In March, Jeffrey Rowles contracted with Nugent Homes to build a three-bedroom house in Wesley Chapel's Quail Hollow neighborhood. During construction, he planned to live in a two-bedroom apartment with his wife, two kids, two dogs and two hamsters. The house was supposed to be ready in November.

Today Rowles is still in the cramped apartment.

"I'm going to go postal," he said.

He's seen two move-in dates come and go. No work has been done on the house in a month. His plumbing work failed inspection. He can't get Nugent's owners to return his phone calls. He just got a notice that Cox Lumber put a $6,800 lien on his house.

"I've just had it with these people," he said. ". . . I just can't totally grasp how I'm the one getting (hurt)."

Rowles isn't alone.

A handful of other Pasco residents say they're holed up in rental homes waiting to move into houses that sit unfinished. They, too, await the return of scores of phone messages left for Diane Smith and her husband, David; they too watch their bank accounts drain away.

Others want money from Nugent:

Pasco County's Permitting Office wants $2,300.71 that Nugent owner Diane L. Smith owes for impact fees. Smith bounced a check to the county in December and has not responded to warnings, said Jay Kominsky, director of financial services in the office of the Clerk of the Circuit Court. The county is in the process of turning the matter over to the State Attorney's Office.

Framing contractor Ed Johnson said Nugent Homes owes him $27,000.

So does a couple who gave Nugent $3,000 for a lot the builder did not control.

Late last week, anyone seeking money from the Smiths would have had a hard time reaching them. The phone at their office on State Road 52 had been disconnected.

David and Diane Smith did not respond to telephone calls and questions faxed by the St. Petersburg Times seeking comment and messages left in person at their office.

* * *

No one was more shocked to hear of Nugent's problems than developer Gary Blackwell. He said he did business with the company for decades and had come to know the Smiths as reputable builders who paid their bills promptly.

In 1999, he let Nugent build a model in his Riverside Estates community in New Port Richey. He even provided Nugent with a salesperson on the understanding that Nugent would pass on the sales commissions. Nugent pulled 13 permits to build houses in Pasco last year, according to county records.

David Davis contracted with Nugent in February to build a four-bedroom house, where he planned to start building a family with his wife. Davis, an architect, chose Nugent after careful consideration and after going to Riverside Estates to watch Nugent build the model home.

"It was quality work," Davis said. "They've been in business more than 20 years, so it seemed like they knew what they were doing."

Late last summer, Blackwell said he started hearing rumors that Nugent was having trouble paying bills. Repeatedly, he called Diane Smith into his office to ask her about it, he said. She repeatedly denied the rumors. Diane Smith is the daughter of John Nugent Sr., who founded the company she now owns. (This is not the same individual as the John Nugent Jr. who owns another building company, called Homes by Jonathan. The two companies are not related.)

By September, Blackwell said, the Smiths conceded that they were having financial problems. Blackwell says he offered to help them, but they rejected the idea.

"At that point I felt we certainly needed to stop any future sales," Blackwell said. "We withdrew our salesman from the model and sent a letter to Nugent that they would not receive any more lots, and they were through in Riverside Estates."

In November, James McCulley started getting nervous about his Nugent home. His family had moved into an apartment during construction. He heard rumors that subcontractors weren't being paid. He started calling the Smiths several times a week but got no return calls. So he froze the bank draws on his construction loan.

At that point, the Smiths returned his calls and agreed to meet with him.

According to McCulley, David Smith admitted that there were problems but assured him that Nugent Homes was not going out of business.

"They said, "we will finish your house and everything will be fine,' " McCulley recalled. "He convinced me everything was going to be okay." After the meeting, McCulley lifted the freeze on the bank draws.

In mid November, Blackwell closed Nugent's model home and started negotiating with another builder to buy lot 13 in Riverside Estates, a lot on which Nugent had earlier wanted to build a spec home.

The next month, Blackwell got a call from Nugent client Scott Morlan, who said he had reserved lot 13 with a $3,000 down payment to Nugent. Morlan wanted to know why the Smiths were not returning his phone calls.

Blackwell told Morlan lot 13 was not Nugent's to sell and that Nugent had been told it could no longer build in the neighborhood.

"Nugent never mentioned lot 13 (to us) and they had no legal right to sell it," Blackwell told the Times.

Blackwell's news stung the Morlans.

They had rushed to sell their home in Ellington Place and even dropped the price twice to honor their 90-day contract with Nugent.

Since Dec. 2, the Morlans have lived in a cramped two-bedroom house with their three children, ages 8, 5, and 10 months. They filed a complaint with the county's Department of Consumer Affairs, which has notified Nugent and is awaiting a response.

"But I'm so over this whole thing, I just want my money at this point," said Kim Morlan. "I'm not going to live in there."

Contractor Ed Johnson said the Smiths owe him $27,000 for four homes he worked on for them. He says the Smiths wrote him a check for $5,600 that bounced when he took it to the bank Tuesday and Wednesday. "I've given up," said Johnson. "I've left probably two messages a day for the last 10 days straight. Their cell phones are out. I tried calling the office phone, and that's not working. They don't answer." Blackwell says Nugent still owes him more than $25,000 to compensate the salesperson he put in Nugent's model home for four of the houses that Nugent sold in the community. But he does not plan to take legal action against the company.

"I think if there's anything to be got, it should be gotten by the homeowners (who) may be suffering a financial loss," Blackwell said.

The Smiths "are good people and I think they had every honorable intention, but just somehow, there was just a slowdown or something happened that caused a financial strain."

-- Times researcher John Martin contributed to this report.

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