The Money Pit

Angry customers say a Valley log home builder has stolen their dreams and pocketed their cash

Robert Zenor is mesmerized by the thought of owning a log cabin in the mountains. So when he and his wife, Lynn, decided to build a vacation home they could enjoy with their children, it had to be log.

"You get it in your system and no other home will do," says Zenor, a Scottsdale insurance agent.

The Zenors discovered a Great Bear Log Homes exhibit at a Phoenix home show in early 1997. After meeting Great Bear owner Fredrick John Lee at the event, Zenor visited him again at the company's Scottsdale office. He learned more about the "flush cut" method of construction employed by the company, a technique that involves using only part of the log but gives the illusion of a full log cabin.

Robert Zenor holds a "trust no one" sign he posted at his Payson cabin to commemorate his experiences with Great Bear Log Homes.Great Bear has a highly visible headquarters just off the Loop 101.Visitors to a May open house walk inside unfinished homes.Attractive ads in local publications give no hint of the company's legal and financial woes.Robert Zenor holds a flier he says contains a false endorsement from him.
Bruce Reade
Robert Zenor holds a "trust no one" sign he posted at his Payson cabin to commemorate his experiences with Great Bear Log Homes.Great Bear has a highly visible headquarters just off the Loop 101.Visitors to a May open house walk inside unfinished homes.Attractive ads in local publications give no hint of the company's legal and financial woes.Robert Zenor holds a flier he says contains a false endorsement from him.
Robert Zenor holds a "trust no one" sign he posted at his Payson cabin to commemorate his experiences with Great Bear Log Homes.
Kevin Scanlon
Robert Zenor holds a "trust no one" sign he posted at his Payson cabin to commemorate his experiences with Great Bear Log Homes.

Lee says the method makes their homes more affordable, without sacrificing quality. The company offers a standard set of house plans, builds the home shells at its construction yard, then takes them apart and transports them to the home site for assembly.

In March 1997, Zenor signed a contract for a $100,000 California model home to be built on a four-acre site in Payson. Eight months later, on the day before Thanksgiving, Zenor got a phone call that, he says, "drained the blood from my face."

A construction worker who was framing the interior of the home had called to alert Zenor to some serious problems. The framer told Zenor he was quitting Great Bear because Lee wouldn't let him build the home properly. But, he said, he felt compelled to warn the Zenors that they were "getting screwed royally on this house."

Zenor says he left his office and drove up to Payson immediately so the worker could point out the flaws and shortcuts to him.

As Zenor walked through the construction site, he saw logs that didn't match up, window frames with no support, a pier on which several pieces of scrap wood held up a huge centerpiece log. And he saw another enormous log held in place with one nail -- a dangerous detail that would have been covered up with drywall had the worker not called Zenor when he did. Other logs were also supported with only a nail or two.

"These are extremely heavy beams that would flat crush you if they came down," he says.

Zenor's battle to get his log home built properly turned what should have been an exciting time into a contentious, aggravating task. Payson building inspectors held up the approval of the project until structural engineers could determine what needed to be done to ensure the safety of the home. Zenor spent more than $17,000 fixing the construction errors on his house. He complained to Great Bear, the state and the town of Payson.

He was surprised to learn that Lee was not a licensed contractor, so there was no license that could be suspended or revoked by the state. Lee was eventually convicted of contracting without a license, a criminal misdemeanor that in Payson carried a trivial fine -- $550. Not a deterrent likely to change the builder's ways.

But Zenor also learned that he was not alone.

Although it has been less than five years since Great Bear Log Homes moved from California to the Valley, the company has built a long list of unhappy customers and gathered a string of legal troubles.

Court documents and interviews show that at least 16 other Great Bear homebuyers, two business associates and five companies or investment groups have filed legal or administrative complaints against Lee or his company, seeking damages in the millions of dollars.

They claim the firm has repeatedly failed to deliver on its promise of creating well-crafted log homes. They allege Great Bear has taken money, then refused to build or complete homes. They say some houses that are built suffer from shoddy workmanship. And they accuse the firm and its owners of not paying its debts, ignoring promissory notes and dodging court judgments.

Since moving here, Lee and his wife Carolyn have filed for bankruptcy -- the fifth time in 15 years. John Lee, 56, has been convicted of a misdemeanor crime as a result of the Zenor case and is the target of a separate investigation by the state Registrar of Contractors.

Log Creations, an offshoot firm that built Great Bear's premanufactured homes, had its contractor's license revoked last year after state investigators found it had performed deficient work and overbilled a client.

Still, Great Bear has been able to effectively avoid any meaningful consequences, promoting itself in glossy magazine advertisements as "the industry leader around the world." And it has continued to sell log homes from its headquarters at the Loop 101 and McDowell Road.

"It's like they are hiding in plain sight," says Zenor.

Great Bear did not respond to New Times' requests for comment. Carolyn Lee first claimed there were no lawsuits against John Lee, then promised to have her husband call back. He never did. In several court documents, the Lees have denied any wrongdoing, often blaming unreasonable customers for delays and stalemates in the building process.

But their arguments have not proven successful. Great Bear hasn't won a judgment in any of a dozen lawsuits filed in Maricopa County Superior Court. Most of the cases have been settled out of court, some without details of the settlement made public. In three cases, terms of the settlement were recorded, and in all of those Great Bear agreed to pay damages to its clients. Three cases have resulted in formal monetary judgments against the firm; the most recent was a case in which a judge ruled in September that Great Bear and the Lees should pay more than $50,000 to disgruntled customers. Two lawsuits, both stemming from the same incomplete home construction, have been stayed, then dismissed after Great Bear and the Lees filed for bankruptcy. Two more cases have been ordered to arbitration.

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