Grubbs can't lose deadbeat tag
The Brooksville company says it is not a former firm that went bankrupt in 2003. A co-owner says, "We pay our bills."
By DAN DEWITT
Published February 18, 2007
BROOKSVILLE - In 2003, officials from Grubbs Emergency Services LLC scrambled to distance the company from its namesake, John G. "Gary" Grubbs, and the debt accumulated by his once-thriving construction firm.
"Grubbs Emergency Services," John Richardson, former Hernando County commissioner and a longtime Grubbs employee, said in June of that year: "Totally different company."
But several of Grubbs' former subcontractors said they doubt this.
Not only has Gary Grubbs negotiated agreements and signed checks for the new company, they said, but the company also has repeated the pattern of failing to pay bills that forced Grubbs and his Brooksville construction firm to seek bankruptcy protection four years ago.
The new company, also in Brooksville, owes a total of nearly $5-million to five former subcontractors from cleanup jobs in the 2004 and 2005 hurricane seasons, according to suits filed in Hernando County and North Carolina.
Bonnie Belchior, the owner of one of these subcontracting firms, was angry enough about her unpaid bill that she complained to Lady Lake officials. Grubbs has been working there since Feb. 2, when tornadoes killed nine people and destroyed more than 100 homes in and around the city.
Hiring Grubbs "is a slap in the face because it owes us money for the last storm," said Belchior, president of a Brooksville trucking company, Cascais Inc., which she said is due $46,000 from Grubbs.
"I wanted to tell Lady Lake officials that he is not going to pay his subcontractors."
"Just because a snake sheds its skin doesn't mean it's not the same snake," said Tim Brown, founder of Brown Storm Services in Illinois, another former Grubbs subcontractor.
"All he does is grow a little bigger, and that son of a b---- will still bite you."
Vic Taglia, who owns Grubbs Emergency Services with Brooksville lawyer Tom Hogan, said in an interview last week that Gary Grubbs has worked as a consultant for the company and, because he enjoys it, as a part-time heavy equipment operator.
"Gary is not an owner. He does not sign checks. And we pay our bills," Taglia said.
In some cases, the company has been unable to pay subcontractors because it has not received full payment itself. And the companies that have sued the firm represent a small fraction of the number it deals with, said Taglia and Grubbs vice president Brian Thomason, who wrote an e-mail to Lady Lake responding to Belchoir's complaint.
"In 2004 our company employed over 150 separate subcontractors and over 10,000 personnel ... At its peak, our payroll was over $8-million per week," Thomason wrote. "Obviously, when you do business at that level, issues will arise."
But Belchior and others said issues arise frequently with companies bearing the Grubbs name.
The original Grubbs Construction Co., owned by John Grubbs, was one of the largest building companies in Hernando County, with contracts to build several public schools during the 1980s. After accumulating debts to suppliers and subcontractors, John Grubbs fled to Georgia.
His son, Gary Grubbs, started a new company with the same name, paying off his father's bills by concentrating on road construction and, more profitably, cleaning up after storms; bankruptcy court records show that the company's revenues peaked in 2001 at $72-million.
But faced with more than $10-million in debt to banks, insurance companies, subcontractors and the county Tax Collector's Office, Gary Grubbs and the company filed for bankruptcy protection in April 2003.
When Grubbs Emergency Services LLC was formed the next month, some of his creditors and competitors said it was a strategy to guard Grubbs' assets from bankruptcy court.
The parallel claim that the new company failed to pay its bills started with its first major job - clearing roads of debris after Hurricane Isabel struck northern Virginia in September 2003.
Richmond, Va., and two nearby counties paid Grubbs a total of about $25-million. But Grubbs refused to pay $1.4-million to Brown Storm Services, said Brown, who added that Gary Grubbs handled the negotiations with his company and signed the checks.
Though the claim has since been settled, he said, "we ended up taking a $125,000 bath."
Grubbs Emergency Services had reason not to pay Brown full price, Taglia said. Instead of providing haulers with mechanized loaders, as required by Grubbs' contract with Chesterfield County, Va., Brown's subcontractor arrived with laborers to throw debris in its trucks.
"That was less efficient, slower and, most importantly, not acceptable to Chesterfield County," Taglia said.
Five active claims stem from the storm seasons of 2004 and 2005.
When Polk County stopped Grubbs from working because of a price dispute after Hurricane Charley in 2004, the company asked its subcontractors to stand by until the matter was resolved, Belchior said. Though she kept her trucks and loading equipment parked for four days, her company was not paid for its downtime, nor did it receive a 10 percent "retainage" due after the completion of the job.
Her claim is not credible, Taglia said. "We never pay people not to work."
Work bills disputed
Grubbs still owes R.L. Baker Inc. of Alabama $3.5-million on its $12.6-million bill for clearing debris after Charley, said Ralton Baker, the company's owner.
After R.L. Baker had begun working, it negotiated a price increase from $8 to $10 per cubic yard of waste removed. Taglia said the two companies simply disagreed on how much of the debris was hauled at the higher price and how much Grubbs owes Baker for each tree stump it removed.
"We think we owe Ralton one amount of money, and he thinks it's a larger amount," Taglia said.
Baker, who said he was stiffed by one of Grubbs' previous companies, said the new firm operates the same way.
"They try to settle for less than they promise," he said. "They just beat people out of money."
Grubbs has paid a South Carolina company, Daniel's Tree Service, only about $400,000 of the $1.5-million it charged for removing trees and stumps for Tamarac in Broward County after Hurricane Katrina in 2005.
Taglia said the dispute arose because of grossly inaccurate measurements of the trees and should be resolved amicably.
The final two claims are from Sullivan Brothers Inc., which said Grubbs owes it $46,054 for cleaning up after Hurricane Katrina, and North East Rail Service Inc., which has sued for back payments of $171,000.
Gary Grubbs hired North East to grind fallen limbs and trees in Osceola County in 2004, said owner Sandy Ferrucci, whose company is in Eden, N.Y. Grubbs then abruptly fired North East because Ferrucci demanded to be paid after working two weeks without a check, he said.
"Gary Grubbs was the one who hired us. He was the one tooling around in his pickup truck with his $400 cowboy boots - Mr. Bigshot," Ferrucci said.
But, Taglia said, North East fell behind in its duties because it showed up with an old grinder that repeatedly broke down.
"He couldn't get it fixed fast enough, so we sent him down the road," Taglia said.
Taglia has a more general response to questions about the payment claims against his company: There is no evidence that they have interfered with the company's performance, which has generally been praised by its clients.
Grubbs usually works from "prepositioned" contracts bid on and negotiated in advance. These agreements call for the company to be paid for the work as it is performed. They also include clauses to ensure that public bodies that hire Grubbs are exempt from the claims of subcontractors.
That doesn't mean it doesn't matter whether Grubbs pays its subcontractors, said Bill Vance, town manager of Lady Lake.
Grubbs and two other debris removal companies arrived within a few hours of the moment the early-morning storms swept through Lady Lake, with Grubbs taking on about 40 percent of the debris removal, said Ken Keough, the town's public works director.
The company's performance has been excellent, he added: "They're a top-notch organization."
But the city has racked up $1.6-million in charges to the contractors. Though the Federal Emergency Management Agency will repay most of the money, it is a large expense for a small town such as Lady Lake, Vance said; the town wants to be sure the money is being distributed to the people who earned it.
"We don't want to be associated with anybody that doesn't treat their subcontractors right."
Dan DeWitt can be reached at (352)754-6116 or email@example.com.
[Last modified February 17, 2007, 19:15:38]
[an error occurred while processing this directive]