Court battles mount for Penticton contractor facing claims in the millions

New claims against a Penticton-based construction company already facing numerous legal battles have surfaced, alleging that millions of dollars are owed and the company owner misappropriated funds to pay for construction on his own home.

Okanagan Extreme Home Builders (OEHB) has been served with continuous lawsuits throughout 2024 and has already been ordered to pay some debt claims against them. Local contractors have alleged being left completely unpaid for projects, while some homeowners face liens against their homes after claiming the company never paid the bills they were collected on.

Castanet first reported on the legal predicament in January. Since then, totals of alleged unpaid claims have mounted, nearing $8.5 million.

Millions provided and unpaid

One lawsuit was filed in B.C. Supreme Court in Penticton in the past month, with a claim submitted by AMB Holdings and Panorama View Estates (PVE), who allege they are owed more than $2.7 million from OEHB and its owner Jason Stutzke.

According to the lawsuit filed on Sept. 4, work began in 2019, when they entered into a verbal agreement to build a property in Penticton, and PVE supplied the funds for it.

They allege that PVE sold lots and AMB referred the builds to OEHB on the agreement that AMB would be provided 50 per cent of the build profits.

From this, they claim that OEHB owes them $125,000 for two lots.

They claimed that this continued growing as more lots were sold and profits were withheld, as a third lot sale was alleged to have not split the profit of $108,000.

They also provided $200,000 to OEHB to be used for land development.

AMB said next OEHB entered into a verbal promise to build six more lots that they had purchased, but in February 2022, bids on only four of them were provided, ranging from $718,000 to $968,000.

Those bids were then increased by $80,000 a piece due to rising construction costs in July 2022.

AMB said only one lot was completed and fully paid for, which after the increases, has a total price of $965,000. With this lot, AMB claimed that they were not aware of where the funds originally provided for the lot were used by OEHB.

Eventually, AMB terminated one of their agreements with OEHB, claiming that they had become aware of various builders' liens against Stutzke and his company. AMB alleged that they expect to have to pay another $120,000 on top of the $970,000 paid to OEHB to complete the home.

On top of the AMB claim they have advanced more than $1.8 million towards construction costs, and paid out contractors on behalf of OEHB totalling more than $208,000.

They are also facing multiple builders’ liens registered against one of their lots that have not yet been paid by OEHB, which total more than $62,000.

AMB alleged that a temporary sales office from a trailer for the development, which cost $28,000 to set up, was moved to Stutzke’s own property from the development and is still located there.

AMB also gave OEHB an additional $100,000, which they claim Stutzke used to purchase a foam truck which he still retains.

“When [AMB] engaged [OEHB], Stutzke was in the process of building his home on the Garnet Way Property,” the lawsuit reads. “Prior to Stutzk completing the construction, there was a fire in or about November 2021, which resulted in work done on the property to be lost. Stutzke advised [AMB] that he did not receive a payout from insurance.”

“Stutzke began rebuilding his property in the spring of 2022 and advised [AMB] that he put approximately $3.5 million into rebuilding.”

Construction has not been completed for Stutzke’s home, which is facing foreclosure and builder’s lien. Stutzke listed his property for sale on June 5 for $17 million. That listing has now been taken down.

AMB said they believe that the funds provided to pay for the lots to be built were used to build Stutzke’s home.

“Through the party’s relations [OEHB] accepted funds from [AMB] and Stutzke paid himself the management fees from Ok Extreme in relation to the work for [AMB].”

AMB and PVE are seeking more than $2.73 million dollars in payment and accounting from Stutzke, less the value of two lots’ foundation, as well as repayment of $62,000 in funds for repayment in builders' liens, a return of the sales office trailer they paid for and any further relief the court deems.

Lawsuit after breach of contract

Naramata homeowners have filed against Stutzke and OEHB, claiming that the company materially defaulted on several contractual obligations, failed to repay their deposit on incomplete work and filed a builders lien claiming unfair bills without substance.

The lawsuit was filed on July 22, 2024, stating that OEHB refused to honour the fixed price of the contract, demanding an additional $102,000 and never delivered the improvement work agreed upon for the house before the spring 2024 possession deadline.

Uzmair Baig and Amanda Griffith Baig claimed that as owners of a house in Naramata, they entered into a contract with OEHB, and agreed they would pay a deposit in the amount of $135,317.70

This included making payments to OEHB as they become due and payable.

The homeowners claimed that as of the possession deadline, OEHB had yet to begin construction or obtain building permits for the house forming the central part of the Improvement.

“On 14 May 2024, the owners delivered a notice of default to [OEHB], demanding that the defendant take steps to remediate the delay and honour the fixed price contract, which demand was refused,” the lawsuit reads.

“On 22 May 2024, the owners elected to accept the defaults, and the contract was terminated.”

The homeowners claimed that OEHB also failed to return their deposit, which the parties never agreed would be non-refundable.

“Further, the deposit was not used as working capital to complete the improvement, in breach of the contract. No permits were obtained to construct the house, and no materials were used either.”

The Baigs claim that OEHB has registered a claim of lien against the lands, in the amount of $26,979.85, which "was exaggerated and without reference to amounts due and owing under the contract."

“The owners have fully paid all proper accounts. The Claim of Lien thereby improperly represents an additional amount over and above the contract’s fixed price," reads the suit.

The homeowners are seeking judgment in favour of the liquidated amount of $135,317.70 on account of the deposit, general damages, tracing to or disgorgement of the deposit, and a declaration that the Claim of Lien is an abuse of process, among other costs.

Defaults on the home front

Following court records from April showing that Stutzke had been served with a foreclosure petition filed by two numbered companies, having allegedly defaulted on his mortgage, he has now been ordered to pay.

The petition filed back in spring was seeking an order that the lands and any personal property of Stutzke and OEHB be listed for sale by their own conduct.

According to the petition, demand has been made for the payment of the money owing, but this money has not been paid and to date totals more than $2.5 million, plus accruing interests.

Stutzke filed a reply in April to the petition, claiming the fair market value of the lands exceeds the combined value of the charges on the lands, including the subject mortgage.

BC Assessment lists the value of the property at 148 Garnet Way at approximately $4.34 million.

He said that he was in the process of refinancing so that the petitioner will be paid out in full.

Further, Stutzke denied that he owed over $2.54 million, and the principal cumulative amount borrowed was a flat $2 million.

The courts ordered on Aug. 22, 2024, that Stutzke and OEHB are to pay the sum of $2,585,043.99, plus interest.

The Cambridge Mortgage Investment Corporation also served Stutzke with a foreclosure petition, claiming he defaulted on his mortgage with them as well.

The petition, filed on June 25, is seeking an order that the lands and any personal property of Stutzke be listed for sale by their own conduct.

According to the petition, demand has been made for the payment of the money owing, but this money has not been paid and to date totals more than $2.26 million, plus accruing interests.

The petition claims Stutzke has been in default since April 2024 and a letter sent on May 7, 2024, demanding payment from Stutzke for payment, was unanswered.

In August, Stutzke filed a reply to the petition, arguing that the fair market value of his property exceeds the outstanding amount of his mortgage and claiming that an appraisal report from May of 2024 assessed the value of the property at Garnet Way at $8.6 million.

“To date, the outstanding balance of mortgage debt charged to the lands, including the amount due to the petitioner, totals approximately $4,852,852,34 plus interest,” the reply reads.

Company settles for payment

After Legacy Garage Doors claimed that they had an alleged six outstanding invoices for work contracted multiple times by OEHB, completing 18 jobs over the past six years, the companies were able to come to an agreement.

Along with filing fees and administration labour on the civil claim, Legacy Garage Doors was seeking $12,085.23 from Stutzke.

Stutzke claimed in his reply soon after that one of the invoices they were seeking payment for should not be made, since the work was "not adequate and had to be re-installed by a separate company."

He was seeking $2,500 from Legacy, along with filing fees.

On July 11, 2024, the parties agreed to settlement, in which Stutzke would pay $10,000 to Legacy.

Judge Shannon Keyes wrote that this was to be paid on or before Aug. 16, 2024 and that the claim and counterclaim filed by Stutzke was dismissed.

Homeowners fire back

TwinCon Enterprises filed a suit against Stutzke back in March, which included naming the owners of the land of six properties they allegedly worked on, seeking money owed.

The lawsuits claim that previous agreements stipulated that TwinCon Enterprises would supply Stutzke with excavation materials and services, and would be invoiced for payment. In all cases, they allege Stutzke has refused or neglected to make payment, despite demands.

TwinCon Enterprises has since caused a claim of lien to be filed in the Kamloops Land Title Office for all six properties, which under the law means the company would have the right to "keep possession of property belonging to another person until a debt owed by that person is discharged."

In total, TwinCon Enterprises claimed they were owed roughly $189,000 from all six properties, plus potentially more due to contractual damages.

One of the homeowners filed a response in late March, claiming that they were issued “extra invoices” by OEHB, which equal the claim amount against them from TwinCon.

Another homeowner filed a response to the civil claim in July, claiming they have paid sums to the company over any amounts properly claimable as progress payments under the contract.

“[TwinCon] knowingly filed its CBL in a grossly overstated amount for the express purpose of exerting financial pressure on the defendants and securing litigation advantage,” the response reads.

“The defendants will seek to set off so much of its costs and expenses and counterclaim as will be sufficient to satisfy or extinguish the Plaintiff's claim.”

Building material payments mounting

Penticton Home Hardware Building Centre first filed a claim against Stutzke back in January, alleging he owes an estimated $166,000 for construction materials, which has not received a reply or filed an update.

They filed a new notice of civil claim in July, alleging that as of June 20, 2024, OEHB owes $403,027.74 for construction materials supplied to them, which includes interest totalling $58,953.44.

Home Hardware claims that they entered into an agreement with OEHB where they agreed to provide construction materials for various construction projects, on May 20, 2021.

“On Nov. 28, 2022, Stutzke, by a written guarantee, agreed to unconditionally guarantee to the Plaintiff the payment when due by,” the lawsuit reads.

“Despite demand made by [home hardware] for payment of the amount owing, [OEHB] and Stutzke have refused to pay it.”

They are seeking judgment against Stutzke for the more than $400K owed at the rate of 16.5 per cent per annum to June 20, 2024, and costs to the court.

A reply to this claim has not yet been filed in court.

Ongoing cases

Burnco filed a suit against Stutzke in March, which included naming the owners of the land of nine properties they allegedly supplied materials for, seeking money owed. They claimed they are owed roughly $29,200 from six properties, plus potentially more due to contractual interest and solicitor and client costs.

Burnco filed a notice of discontinuance in July for AMB Holdings and three of the homeowners.

A lawsuit filed by Finish First Interiors, which claims Stutzke and OEHB have a balance owing on an account for residential drywall and finishing work done in Penticton in December of 2022, has moved into the courts.

Finish First Interiors is seeking the balance owed for their completed work, which they say was invoiced at $20,509.50. They claim that OEHB paid $6548.25 towards total debt, leaving $14,042.25 owing to Finish First, which allegedly amounts to $15,011 including interest.

They also claim OEHB has been paid by the property owner for its work.

The court ordered that Stutzke must attend court on Sept. 16 and OEHB his to pay costs of the appearance on that date of $350 to Finish First.

None of the allegations in the lawsuits have yet been proven in court, and all named parties have a right to respond with countersuits should they choose to do so.