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Subcontractor awaits payment from Armory contractor

After an Idaho contractor left a city project incomplete despite accepting payment, two suppliers are awaiting payment and a third was recently awarded a $27,000 judgment.

Two Rivers Construction, LLC, owned by Brian Kjerstad of Meridian, Idaho, was hired for a roof project at the Dickinson Armory, but the roof sits incomplete and in need of repair, despite the city paying Kjerstad about $70,000.

Two Rivers was hired as a general contractor on several city projects and the company then hired Tooz Construction, Inc. in Dickinson as a subcontractor to perform work on four city lift stations, said company Vice President Tracy Tooz.

The city paid Two Rivers but the funds didn't reach Tooz Construction, according to a text message from City Administrator Shawn Kessel.

"A very large portion of the work that Kjerstad owes us money for is from the city of Dickinson," Tooz said.

Tooz said he filed judgments against Two Rivers and another company owned by Kjerstad, Nordic Construction, LLC, in both Idaho and North Dakota.

Tooz Construction provided materials and services for several projects in Stark County in an agreement with Nordic Construction, according to court documents.

Nordic owes Tooz Construction about $26,800, an amount the company "has failed and refused" to pay, according to court documents.

As a result of Nordic's past due balance, Kjerstad executed a promissory note and disclosure statement on June 8 in the amount of $16,150, with the first payment slated for June 10.

When Two Rivers executed and delivered the documents to Tooz Construction as well as when Nordic contracted with Tooz Construction, Nordic Construction was dissolved, according to court documents.

After the promissory note and disclosure statement was entered into, Tooz Construction provided additional materials and labor under a contract with Nordic for about $9,200, an amount that remains unpaid, according to court documents.

Kjerstad was served with a court summons and complaint on Nov. 16, but didn't respond, according to court documents.

Since Kjerstad didn't respond within 20 days, a civil judgment was filed in favor of Tooz Construction last week, according to court documents.

But, Tooz fears the company is out the money as Kjerstad has filed for bankruptcy, according to an e-mail from Kjerstad to the city.

"But, it doesn't matter anymore because he took the cash, he cashed the checks, he did not pay us, the city didn't substantiate the liens to make sure that we're paid and now he claimed bankruptcy so I'm out," Tooz said.

When a municipal or state entity signs a contract, each payment is signed off, affirming subcontractors have been paid, Tooz said. A lien certificate provided by the contractor should then be signed by the subcontractor and provided to the municipal entity showing payment has been made, relieving the entity of the obligation.

"Two Rivers would show that Tooz Construction was paid $23,189, signed off by Tracy Tooz -- that's turned into the city, the city knows they're relieved of that obligation. The city never did that," Tooz said. "He (Kjerstad) signed a form between him and Skip Rapp (former city public works director) I guess saying that, 'Yeah I paid everybody.' "

Two additional companies are also waiting for payments.

Bosch Lumber in Dickinson is awaiting about $8,500 for materials supplied for Two River's work on city lift stations and Valley Truss Co. is awaiting about $28,000, according to a memo from City Attorney Matt Kolling.

Kjerstad signed and provided the city with a master lien waiver stating he paid the suppliers, Kolling said in November.

"We've since discovered that's not accurate," Kolling said.

The two suppliers "have made demands that the city satisfy their outstanding bills and threatened to place liens upon the Armory and the city's lift stations," according to Kolling's memo.

Dickinson-based attorney Randall Sickler, who is representing Tooz Construction in the matter, was unavailable for comment.

A cell phone number provided by Kjerstad in March has been disconnected.

A number to Kjerstad's Idaho home has been disconnected.

An e-mail to Kjerstad went unanswered.

A call to Rapp went unreturned.