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.
Great Bear has a highly visible headquarters just off the Loop 101
Kevin Scanlon
Great Bear has a highly visible headquarters just off the Loop 101
Vistors to a May open house walk inside unfinished homes.
Laura Laughlin
Vistors to a May open house walk inside unfinished homes.
Attractive ads in local publications give no hint of the company's legal and financial wores.
Attractive ads in local publications give no hint of the company's legal and financial wores.
Robert Zenor holds a flier he says contains a false endorsement from him.
Kevin Scanlon
Robert Zenor holds a flier he says contains a false endorsement from him.

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.

None of this is commonly known in the Valley.

Indeed, consumers who don't search through court records would be hard-pressed to discover the firm's past troubles. A member of the Better Business Bureau, Great Bear has a satisfactory record there, meaning complaints filed over the last three years have been addressed by the firm and that the number of complaints is not higher than what would be considered normal for the industry. The nature and number of those complaints can be learned only through a subpoena, a bureau spokesperson said. The bureau is a private, nonprofit organization whose files are not public record, she said.

A check with the state Registrar of Contractors reveals no disciplinary problems with John Lee or Great Bear because they are not registered contractors. If the company merely builds materials for the home, it doesn't need to be licensed. Some customers allege Lee is bending the law here. They say he has not only built Arizona homes in the past -- a fact he has admitted under oath -- but he is erecting houses, not just making materials, on the company's site.

The license revocation of Log Creations, which is a contractor, wouldn't turn up during a search under John Lee's name. His wife, Carolyn, and the couple's partner, Patricia Jones, are listed as the officers of Log Creations Inc. And Carolyn Lee is listed as the owner of Log Creations, according to Secretary of State records.

Even a call to the state Attorney General's Office wouldn't raise any red flags. Neither the company nor Lee has ever been sued or prosecuted by the office. Spokeswoman Pati Urias says the office is prohibited by law from revealing even that it has received any complaints about a company before a public action -- like a civil or criminal complaint -- is filed.

So while lawyers for customers, suppliers and associates of the firm have been waging legal and regulatory battles behind the scenes, potential clients continue to be drawn to Great Bear and the promises it makes.


The last time the company held an open house at its Indian reservation locale, Valley skies were overcast and the weather was hot and muggy. Lured by a newspaper ad that asked "How do I get my Log Home in the Cool Pines?" a steady stream of visitors drove down a dusty road on that May weekend, past horse corrals and a rodeo arena, to the Great Bear Log Homes headquarters.

Some who flocked to the site were obviously well-heeled, driving convertible sports cars and new SUVs, and some were more middle class, arriving in older model cars, vans or trucks. Potential customers entered the corporate office -- two trailers configured in an L-shape -- then went out the back to find a mock log cabin porch.

There, they nibbled on fresh fruit and homemade brownies and sipped cold water out of Great Bear Log Homes bottles. A chef barbecued meat for sandwiches nearby. Relaxing in a high-backed, rustic chair, a teenage girl pointed to a large color photo of a log home nestled in a forest.

"I want that one, Dad," she said.

Visitors were handed colorful brochures that included a romantic history of John Lee and his love of log home building. It emphasized the dream of owning a log cabin but gave no hint of Lee's past or present troubles.

In corporate handouts and on the company Web site (greatbearloghomes.com), Lee says he became enamored of log home construction in his native Canada. He says he watched his Swedish stepfather build a log house with an ax like in "the old country." Later, his biography says, he observed another builder construct a log home in his bare feet so as not to mar the wood. Lee has built homes for more than 30 years, he says, and adds an ingredient his grandmother put in her bread: "a little piece of my heart."

Several people describe Lee as a likable fellow who projects this down-to-earth image while he sells cabins. One described him as a "teddy bear"; another says he and his wife are more like hicks. But they all agree this warm and fuzzy persona changes when Lee is challenged or crossed. They say he has a temper and a confrontational nature that makes disgruntled customers want to steer clear, even if it means abandoning their complaints against him.

Before moving to Arizona, John Lee built log homes in Canada, then northern California. A chapter in a 1986 book, Stone, Log and Earth Houses, profiles Lee and describes in detail his careful construction of a log home for an El Dorado County, California, family. The book says Lee had to fix problems made by an unlicensed contractor and it says Lee got his general contractor's license in time to make the needed corrections on the cabin. (A check with California records shows Lee was not licensed until 1988.)

While the book gives a glowing review of Lee's techniques -- the same ones he uses in Arizona -- other public documents show Lee and his wife were having financial problems for years in California.

They filed for bankruptcy in 1986, 1993, 1995 and 1996. In 1996, Richard and Barbara Piper filed a claim in bankruptcy court in California, accusing the Lees of "despicable conduct." They said the Lees fraudulently took $32,000 of their money in 1993, used it for something other than purchasing logs and never built them a cabin in Colorado.

Barbara Piper, whose husband died two years after they moved into their retirement home, says John Lee cost them much more than that initial $32,000. The couple were forced to sell their car and an investment townhome, borrow money from their son and spend $150,000 in savings to fight Lee and finish their house.

"He took every damn dime we had," she says.

By 1996, when the Pipers were just beginning their battles with the Lees, Great Bear was soliciting business in Arizona via advertising and trade shows, court records show. It was at a 1996 show that Gary Martinson first came in contact with Lee and Great Bear. Owner of the company now known as Mirage Homes, Martinson visited the Lees' operations in California and convinced them to move to the Valley. Mirage, which is developing the Bison Ranch Western-themed community on the Mogollon Rim, had hoped to build a business relationship with Great Bear. It was an alliance Martinson would come to regret, according to his attorney, Chester Yon.

Martinson helped Great Bear find its first office space on Frank Lloyd Wright Boulevard in Scottsdale, lent the Lees money and found them a place to live, court records show. He and his firm even leased a truck for the Lees. But Martinson soon learned the Lees' credit was so bad they couldn't even open a checking account, records say. And despite signing promissory notes pledging to repay Mirage with interest, the Lees never paid a cent, files show.

"He [Martinson] was the reason they got here and then they stiffed him," Yon says.

The Lees moved their operation to a spot at the Loop 101 and McDowell Road. Some customers believe Great Bear's relocation to this corner of the Salt River Pima-Maricopa Indian Community was no accident. They allege the Lees are trying to insulate themselves from regulation and law enforcement by conducting their business on Indian land, where legal jurisdiction is complicated.

Since coming to Arizona in January 1997, Great Bear Log Homes has had high visibility and nothing but positive media coverage. Its small-scale log home has been a favorite exhibit at trade shows. Many customers who are now angry at Great Bear say they were attracted to the company after visiting its exhibit. The Arizona Republic called the cabin "the centerpiece" of a home show one year and said a tour of it "is not to be missed."

This weekend, November 9, 10 and 11, the company is scheduled to be part of a log home show at the Arizona State Fairgrounds.

Great Bear has advertised frequently in newspapers and magazines. It has hosted regular open houses at its construction site. And the company was even profiled in the Phoenix Business Journal under the section "Success Strategies for Small Businesses."

The company's slogan: "You've worked hard, you deserve the best."

Gerald Rasmussen, a Great Bear log home owner from Scottsdale who spent years fighting with Lee and his business partners in and out of court, says the continued use of that slogan galls him.

"What he thinks you deserve is sheer hell," he says. "He's stealing people's dreams. Building your retirement log home is a dream."

Records show Great Bear has sold dozens of log homes from its Valley headquarters. A company price sheet shows the houses range from about $58,000 for a 1,200-square-foot cabin to the Zenors' choice, a 2,300-square-foot model now priced at about $110,000. Garages, extra decking, customized plans, transportation of the material to the construction site and completion of the home all cost extra.

As to tangible credentials for building the homes, Lee testified in a deposition that he has no post-high school degree, although he did study at an engineering school. California state records show Lee was a licensed contractor from 1988 to 1994. The license was revoked after Lee failed to renew it, a state Web site says.

But a call to the regulatory agency reveals Lee's license was revoked in 1998 after an investigation substantiated the Pipers' complaint. Lee was found to have broken nine laws, including abandonment of a project and diversion of funds.

Lee never held such a license in Arizona, yet some homebuyers allege he told them he did. In a deposition this year, Lee admits he and Great Bear did act as a contractor, actually constructing the homes in Arizona on customers' property for a few years after moving here.

After Robert Zenor brought Lee's work to the attention of Payson town officials, Lee was prosecuted by the town attorney and was convicted of contracting without a license. He was fined $550 and ordered to pay Zenor $17,000 in restitution. But the misdemeanor case was appealed and the restitution order -- but not the conviction -- was overturned early this year by a Superior Court judge.

While Zenor was arguing with Lee, people started calling the homebuyer and stopping by the cabin. Lee had been touting it as an example of his work, Zenor says. Indeed, Zenor has a copy of a Great Bear flier in which he is quoted as saying the company "has set a new standard of excellence in log home building."

Zenor says he never said that. He demanded the company stop using the false endorsement, which was also on its Web site. When he got no response from Lee, he appealed to the Web master and got the endorsement taken off the Internet.

Two other Great Bear customers, Lee and Debbie Atwood of Mesa, were at the top of the current "client testimonials" list on the Web site until early last month, when they found out their laudatory words were still being used to promote the company.

Lee Atwood said John Lee asked for a letter of recommendation when the Heber home Lee had built for him and his wife was nearly complete. They were pleased at the time, so they wrote a letter praising Great Bear.

"We believe the Great Bear Log Homes to be second to none in terms of construction quality and value," their Internet testimonial began.

But three years later, they are calling their experience with Great Bear "unpleasant." The Atwoods, whose cabin was featured on a billboard near Payson, say they have found hidden problems with their home and have had several disputes with Lee. They say they never realized their letter would be used on the company Web site and they recently got it removed.

Most troubling of a number of construction problems, they say, was a discovery made when they wanted to add on to their house. Most of their roof lacked protective black paper, which is supposed to be installed beneath the shingles to protect homes from leaks. Lee Atwood says the paper lined only the perimeter of the roof, so that a cursory check along the edge of the home wouldn't reveal the incomplete work. He says John Lee blamed the problem on a subcontractor. But the Atwoods and others say Lee always called the shots on the construction process.

The couple filed complaints with regulatory agencies but decided not to file a lawsuit against Lee or Great Bear because of the expense and irritation.

Others have come to the same decision.


More than 20 disgruntled clients, subcontractors and others involved with Great Bear met twice in 1998 and considered filing a class-action lawsuit against Lee, records and interviews show. But Zenor, who hosted one of those meetings, says given Great Bear's past legal record, trying to recoup some of their losses would be futile and cost more in attorneys' fees than the homeowners could recover in damages.

In May 1997, just days after Zenor gave the company $40,000 toward the construction of his cabin, Great Bear Log Homes and the Lees filed for bankruptcy in Phoenix, claiming no assets, no income and nearly $80,000 in debts. The case was closed without any money distributed.

Zenor was not listed as a creditor on that case, and construction of his cabin continued. Only two Arizona creditors were noted. One was the Preserve Investment Group, a company that had obtained a $20,000 judgment stemming from an incomplete construction job. (Interestingly, records show, notice of the default judgment was served upon John Lee on January 10, 1997, at a home and garden show at the Arizona State Fairgrounds, the same show at which Zenor first met Lee.)

The other local creditors in the Arizona bankruptcy case were Tempe teachers Ted and Candee Raper, who had paid the Lees $56,000 toward construction of a log home in Pinetop.

They lost the entire sum.

The Rapers already owned one cabin in the area and decided to have Great Bear build another cabin nearby for Ted Raper's mother. Candee Raper says she was impressed by Great Bear's display at a trade show, which had been held in the Valley before the company relocated here from California.

She talked to satisfied customers and received clean reports from the California offices of the Better Business Bureau and the contractors' licensing board.

Even after the company filed bankruptcy here, Candee Raper says Lee and his attorney promised them they would still get their cabin.

"We had the foundation done already," she says. "It sat there for three years. And he sat with our money."

Raper says after hearing nothing but promises and excuses over the years (the logs are on the truck, the logs got rained on), she and her husband just chalked it up as a loss. A friend who was a real estate lawyer looked over their case at no charge and told them they didn't have a chance against Lee, given the legal protection a bankruptcy affords. Raper says she didn't bother filing a complaint with the Attorney General's Office. She just figured she would only be incurring legal fees and generating paperwork if she decided to fight him.

"I figured it would be like throwing money down a rat hole and I had already thrown enough money down there," she says.

Still, Raper says, the decision she and her husband made just to cut their losses was not an easy one. "I was just sick for two years about it," she says.

Raper says she tried to get Lee to give her the money back or build the home. Once, she planted herself in a chair and glared at Lee while he entertained visitors to his booth at a WestWorld trade show. Another time, she threatened to buy a billboard warning other customers about him.

"He said, 'I'll see you in court,'" she says.


Lee likely would have fulfilled that promise.

When Gerald Rasmussen filed complaints with regulatory authorities regarding shoddy work on his Lakeside log home, Great Bear and the Lees sued him for breach of contract and slander. They alleged he was refusing to give them the money needed to complete construction of the house and that he was ruining the company's reputation in conversations with the state, his bank and others.

He says the bank, which was to release money in increments for construction of the $220,000 home, did its own inspection and refused to pay anything further because prior phases had not been completed.

Rasmussen contacted the local office of the state Registrar of Contractors with a lengthy list of problems, ranging from improperly installed windows and incomplete features to a cracked foundation through which daylight was visible.

The state ordered Great Bear's affiliate contracting company, Log Creations, to correct the work, but it never did. State records note that the company abandoned the job, leaving unused building materials and the unfinished home to deteriorate. Officials eventually revoked Log Creations' contracting license, saying the contractor had "repeatedly invoiced" Rasmussen for a greater percentage of work than had been completed, walked off the job and "made no effort to correct its deficient workmanship."

Rasmussen says he is disappointed in local and state authorities because they have never brought charges or regulatory action against Lee. A state Registrar of Contractors criminal investigation into Lee is still pending, officials say.

Rasmussen believes investigators view his dispute as an isolated case, a small problem not worthy of their time. In reality, he and others say (and court records show), there are unhappy customers and clients all over Arizona and beyond. And they share similar complaints against Lee and Great Bear.

Barbara Piper says she can sympathize with Arizonans who believe complaints have fallen on deaf ears. She says her lawsuit against Lee was abandoned after she and her husband ran out of money to pay lawyers. And she says despite problems Lee had with other homeowners and suppliers, prosecutors in California never acted.

"If you're parked at a red light and a gangbanger steals your $30,000 car . . . he'll go to prison," she says. "But John Lee can walk into your life, lie to you and take all your money and nothing happens to him."

Local attorneys who have battled with Great Bear and the Lees say they now communicate with each other. And court documents show they are beginning to get wise to the Lees, their past history and their methods of operation.

A May motion in a lawsuit filed by a Nevada company includes some chronological history of the Lees, noting some of their bankruptcies and legal maneuverings the lawyer alleges were designed to avoid paying debts. A settlement in that case includes a provision for allowing the lawsuit to proceed in the event of a subsequent bankruptcy.

And the most recent lawsuit filed against Great Bear, this one by a Valley company called SES, alleges that Great Bear is in a sorry financial state and has a poor reputation among clients. SES fronted $50,000 for a distributorship that never materialized.

The complaint, filed in June, said the Lees acted in a "willful, wanton, evil, knowing, intentional and outrageous" manner when negotiating the distributorship. The lawsuit, which sought more than $1 million in compensatory damages in addition to punitive damages, alleged the Lees told SES they were moving to Mexico to expand their operations. SES was to take over most of Great Bear's Arizona territory, records show.

But SES alleged the Lees painted a fake, rosy picture of the business, withholding key facts, such as its "significant" cash flow problems and "financial distress," its practice of making customers pay large sums up front "then using the funds for unrelated matters," that a majority of its clients were dissatisfied with Great Bear and that some had filed or were considering filing lawsuits against the company.

The case was recently dismissed after a judge determined that according to terms of the distributorship contract, disputes needed to be handled through arbitration. That step in the process hasn't yet begun.

Those who are willing to stand up to Lee in court should prepare for a long, frustrating, expensive fight. "He plays the legal system like a fiddle," Rasmussen says.

Court documents and interviews show Great Bear and the Lees don't give up, continuing to fight lawsuits and file appeals despite rulings against them. In a couple of cases, Great Bear and the Lees have turned the tables, suing someone they claim has hurt them financially, when the facts of the case show the defendants were the ones hurt by Great Bear.

Rasmussen's case was one example of this. Another involved a local drafting firm called the Tektone Company, which had drawn plans for the log home models. Great Bear Homes Inc. sued the firm and its owners in 1999, claiming they refused to turn over electronic plans that Great Bear had ordered. Tektone, in its answer to the lawsuit, explained the plans were not turned over because Great Bear refused to pay about $7,000 it owed the firm. An arbitrator later ruled that Great Bear owed Tektone the $7,000 plus more than $5,000 in legal fees that Tektone had incurred defending itself against Great Bear's suit. Great Bear, of course, appealed. But the case was settled before trial.

The Lees and their company are also known for their delay tactics. Records indicate customers and attorneys frustrated by the lack of cooperation from the Lees once a problem arises find only more obstacles in court. Great Bear has been accused of dragging out the pretrial process, filing last-minute requests for more time and being less than cooperative in sharing information.

In four different depositions, John and Carolyn Lee and Patricia Jones consistently testify -- under oath -- that they can't remember pertinent details. In the depositions, the trio comes across as extremely hazy on the details of their business transactions, failing to remember or recognize contracts, identify signatures or remember receiving money or signing promissory notes. (Jones also did not answer a request for comment.)

John Lee demonstrates an almost comical lack of knowledge when it comes to basic questions about himself and the operation of his business.

In a February deposition, Lee was nearly stumped by the first question -- a request to state his name and address. He got his name right, answered with an address, then backpedaled. "I don't recite that very often. I think that's it. Been through this before. I should know somebody's going to ask me. Fountain Hills. We'll try that. I'm trying to think what might have my address on it."

He later gave an inconclusive answer when asked whether his company was formally called GBH Inc. "I think so, yes. Great Bear Homes, Inc., I believe that's it, yes."

He was also unclear what position he holds with the firm. "President, secretary and whatever else I have to be -- to be legal. I forget what it was. But that's me."

The Lees have also made a habit of not cooperating with -- or paying -- their own attorneys. Two lawyers from separate firms have bowed out of several cases, saying the Lees won't assist or pay them. One Great Bear attorney filed his own lawsuit against his former clients to try to recoup $20,000 in legal fees. That case is pending.

Rasmussen and others say constant legal delays and the turnover in Great Bear lawyers serve to jack up court costs for their opponents. People are faced with choosing between continuing to shell out money to fight Lee or just end the case in the easiest way, settling for less than they believe they deserve.

Rasmussen says he was facing bankruptcy himself trying to defend himself against the Lees while seeking to recover thousands of dollars spent finishing and fixing his log cabin.

Adding to his legal bills were extra costs incurred as a result of the Lees changing attorneys three times. The Lees never paid their first two attorneys (prompting them to quit the case); Rasmussen says he had to pay his own lawyer $200 an hour to bring each new Great Bear attorney up to speed.

Rasmussen's case settled in March, one year after Great Bear had sued him and he countersued. It was more like a truce than a victory for either side.

Great Bear did not win the injunction it sought preventing Rasmussen from talking about his complaints with regulators or others. Neither did it get monetary damages the company claimed Rasmussen should pay.

Rasmussen received $20,000 (the maximum allowable) from the state Registrar of Contractors' recovery fund designed to reimburse homeowners damaged by licensed contractors. But the payoff was a pittance, Rasmussen says, compared to the $65,000 he spent in attorneys' fees.

In a motion asking a judge to reconsider his refusal to award attorneys' fees in a separate case, Phoenix lawyer Barry Reiss says the Lees' behavior drove up legal fees for his clients as well. Not only did they force the couple to sue by refusing to return their deposit on a home never built, the Lees refused to consider settlement, and "delayed and delayed and delayed" the pretrial process by not cooperating with standard requests for information.

Lawyers and customers also find themselves frustrated over the company's frequent name changes. Since coming to Arizona, the firm has been known as Great Bear Log Homes, Great Bear Homes Inc. and GBH Inc. The spin-off contracting company has been known as Log Creations and Log Creations Inc. Lee operated under at least three additional company names in California. Plaintiffs suing the firm face defense motions claiming they've sued the wrong entity, that another incarnation of the business really contracted with the customer.

Attorneys allege this is part of Great Bear's scheme. Cary Forrester represented a Nevada firm whose two-story million-dollar log home in Colorado was held up for months while the unfinished top half of the home -- the only portion of the house to be built by Great Bear -- sat at Great Bear's construction yard. The Nevada firm got a court order seizing the partial home after Great Bear threatened to dispose of it. But then it faced lengthy proceedings in which the wrong-defendant argument was used.

Lawyers also suggest the Lees have used bankruptcy courts as a way to avoid paying their bills. In California, for example, the Lees had filed for liquidation in a Chapter 7 bankruptcy in 1995. But the Pipers filed a complaint in that case, alleging the Lees should not be allowed to avoid paying them a debt they say was incurred fraudulently.

The Lees then filed Chapter 13 bankruptcy, allowing them to gradually pay off creditors without losing any property. That type of bankruptcy filing does allow the discharge of a debt created by fraud. (Their complaint was dismissed last year and the bankruptcy cases were closed.)

In the Preserve Investment Group case, the Lees were able to avoid paying a judgment against Great Bear by claiming the company had no assets, then filing for bankruptcy.

Attorneys who have prevailed in recent cases are determined to collect on their judgments.

One of those lawyers is Chester Yon, who sued the Lees in 1999 on behalf of Mirage Homes and Gary Martinson, attempting to get the Lees to pay on their promissory note. The case was settled in February. Mirage agreed to forgive the debt for the leased truck and the Lees agreed to pay an $89,000 judgment.

But Yon says the Lees are "way behind" on their $2,000-a-month payments to satisfy the judgment.

In another case, the couple who paid Great Bear and the Lees $50,000 in 1998 for a cabin in Washington that was never built is also hoping to collect on another judgment. A judge ruled last month that they were entitled to get that money back, plus interest.

Yon predicts the Lees may soon be forced to pay some of their obligations. Not only might they be restricted from seeking a discharge of these debts in bankruptcy court (there are time limits that preclude this), but lawyers who are better informed as to Great Bear's legal tactics could get tough. That could mean collecting on the judgments by seizing property at the company headquarters, then selling it at public auction to pay off the debts.

Raper is hoping for more aggressive enforcement for Lee: "He needs to be run out of town."

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