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Former Castle Builders owners say they can't afford to pay mediator cost share

By Stephen Betts | Jul 15, 2020
Malcolm and Elizabeth Stewart

The couple who operated Castle Builders and took more than $1 million from more than 100 homeowners, who got little or nothing to show for their payments, have told the court they cannot afford to pay toward a mediator in a civil lawsuit brought against them by the state.

Malcolm and Elizabeth Stewart also appealed to the Maine Supreme Judicial Court, over their alleged default in the lawsuit against them as individuals. The couple responded to the state lawsuit on behalf of Castle Builders but did not file a response on their own behalf. They have later claimed that this was simply due to them not listing their names on the same paperwork they filed on behalf of the company. The appeal is pending before the state high court.

The Maine Attorney General's Office filed a lawsuit against the Stewarts and Castle Builders in Knox County Superior Court Dec. 18.

The Attorney General is suing the couple under the state's Unfair Trade Practices Law, claiming the Stewarts violated that law on multiple counts. The state is seeking an injunction to prevent them from soliciting further business but also restitution for customers, legal and court costs, and civil fines of up to $10,000 per violation.

The AG began the investigation after numerous complaints were filed by customers, some before the couple closed their contracting business in September 2019. Complaints have since come in from homeowners in Knox, Lincoln, Waldo, Kennebec and Somerset counties.

No criminal charges have been filed.

Malcolm Stewart informed the court in March that he and his wife could not afford to pay half the cost of a court-ordered mediation in the state lawsuit.

"We are struggling to figure out how to satisfy the alternate dispute resolution requirement of the court in this matter," Stewart said. "We are without funds to pay half a mediator that costs $200 to $300 per hour."

He pointed out that the couple filed for bankruptcy and are relying on family members to help with their living situation.

The Stewarts filed bankruptcy in federal court in Bangor for themselves and the defunct business.

Attorney Anthony Manhart of Portland, who is serving as trustee in the bankruptcy case, said in a July 13 email to the newspaper that he was still investigating the debtors' financial affairs. He said the meetings of creditors have been concluded.

The Stewarts pleaded the Fifth Amendment against self incrimination to nearly all questions posed during the first hearing for creditors earlier this year.

The Stewarts operated Castle Builders for nearly three years before abruptly closing it and their Agway store in Union Sept. 8.

The couple moved to South Carolina to live with relatives.

The civil lawsuit alleges that the Stewarts hired people to cold call homeowners in an effort to solicit business for Castle Builders. The Stewarts would then request down payments for work before beginning and often times would seek a second advance payment before any work was done.

Much of their work was faulty, according to the state, resulting in damages to homes. A lot of that damage came from not ensuring that the properties were protected from rain and snow during repair work. In addition, electrical work was done by unlicensed workers and did not meet minimum standards.

The AG claims that the Stewarts violated the unfair practice law by soliciting and accepting more than one-third down payments at the start. They also failed to give an expected start and completion time for the work as is required by the law.

Requesting and accepting second advances when work had not been done was another violation of the state law, according to the AG.

The failure to the Stewarts to respond to the numerous complaints by customers about work not being done also constitutes a violation, according to the lawsuit.

The Stewarts also failed to pay subcontractors, which left workers without money but also exposed homeowners to liability for the debt, the AG argues.

Assistant Attorney Generals Linda Conti and Carolyn Silsby are handling the case for the state.

The Courier-Gazette contacted Malcolm Stewart by telephone Nov. 15, 2019.

He said a lot of "false things" were being said about him and that his attorney was "working on the resolving the matter." He would not comment further and did not detail what false things were being said. He then said he had no comment and ended the call by saying that he did not want to be called at work.

Filings in U.S. Bankruptcy Court in Maine by the Stewarts indicate that they have claims against them totaling $1,215,877. This includes $165,234 in taxes owed to the government.

There are 177 creditors listed in their bankruptcy filing with most of them former customers of Castle Builders. Former workers, suppliers and the government are also listed as creditors.

Castle Builders was formed as a corporation by the Stewarts in December 2016.

Law enforcement began receiving complaints Sept. 3 from people who said they paid for work that was never done.

An auction of inventory, shelving and equipment at the Stewart's former Agway business in Union was held Dec. 12.

The response filed by the Stewarts in the civil case on behalf of Castle Builders includes denials to all the claims filed by the state.

"Plaintiff's alleged injuries and/or damages were caused by the negligence of third parties who Defendants had no control," the Stewarts stated.

In addition, the Stewarts claim that the plaintiffs have "failed in their duty to mitigate damages and, therefore, are barred from recovery against the Defendants," the Stewarts state in their written response to the court.

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Comments (4)
Posted by: STEVEN VITTUM | Jul 16, 2020 09:00

They are thieves of the highest order with absolutely no conscience.  This was not their first time doing this to customers.  What I’d like to know is why the attorney general’s office is not pursuing this as criminal offenses as well as civil?  If jail time was ever deserved, we really see it here!

Posted by: Valerie Wass | Jul 16, 2020 07:57

GET A JOB and own up to your law breaking!


Posted by: Valerie Wass | Jul 16, 2020 07:56

Than they should have thought about the consequences of stealing that much money from innocent people!  I have no sympathy for them what so ever!

Posted by: Francis Mazzeo, Jr. | Jul 15, 2020 15:59

Sounds like a man Trump might want to hire.

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