Home project turns life 'upside down'

November 14, 1997


Staff Writer

Diane Leisinger has a warning for anyone planning on having a new custom home built.

Watch how your money is spent.

Leisinger, 33, said she and her husband, Robert, lost about $25,000 because a builder allegedly used their money to pay bills other than for their subcontractors and suppliers.

"It's turned our life upside down," said Leisinger, who filed charges against Kenneth P. Dluhy, of Frederick, Md., in Washington County District Court. Dluhy was a partner in Surber Homes Inc. in Frederick, which is now out of business.


Dluhy said Thursday he was unaware of the charges and had no comment.

"It's not a common crime," said Peter Lazich, an investigator for the Washington County Sheriff's Department. Lazich said he has seen about three similar cases in the past two years, but would not comment on the specifics of the pending Dluhy case.

The newlywed Leisingers were supposed to return home from their honeymoon and prepare to move into a new three-bedroom, two-car garage home on Crystal Falls Drive southeast of Hagerstown in late June, said Diane Leisinger, of 136 Fairground Ave.

Instead they discovered some of the subcontractors working on their $175,000 house were being paid late or hadn't been paid yet, she said.

When Leisinger started looking into the matter, she discovered about $25,000 of unpaid bills that Dluhy was supposed to pay with a $34,960 withdraw he had made from the Leisinger's construction loan, she said.

At that point, Leisinger said she began paying subcontractors and suppliers directly. She also checks regularly on the progress of her home's construction to ensure everything is going smoothly.

Since Dluhy filed for bankruptcy for himself and Surber Homes Inc. on Sept. 5, Leisinger said she cannot sue him for the money he owes.

Under Chapter 7 provisions of U.S. bankruptcy law, an applicant is protected from his creditors, said Brett Wilson, an attorney with Schlossberg & Associates. However, fraudulent debts might not be forgiven under Chapter 7, he said.

Leisinger said by filing criminal charges against Dluhy, the judge could order him to pay restitution to the couple if he is convicted.

According to court records, Dluhy is charged with:

* Violating a payment held in trust.

* Violating the contents of a contract.

* Violating contract disclosures.

* Violating escrow accounts.

If found guilty of all four charges, Dluhy could face up to 46 years in prison and/or fines of up to $31,000, according to court records.

The charges could be filed because it was a custom built house, said Joseph Michael, assistant state's attorney. The Maryland Custom Home Protection Act of 1986 requires the contractor use the owners' money to pay suppliers and subcontractors, Michael said.

Michael would not discuss the specifics of the case against Dluhy.

Roger Surber, president of Surber Homes, said he didn't think Dluhy had done anything wrong.

Surber said a concrete subcontractor, Daniel Price, had not paid his own subcontractor, North Star Foundations in Middletown, Md.

Price said Friday that Dluhy didn't give him enough money to pay North Star. He said he was still owed money on the project.

North Star did get paid the $5,265 on July 22, four months after the bill was sent out, said Linda McNey, North Star's office manager. She said they were paid directly by the Leisingers.

Dluhy also has been charged with writing a bad check to Cavetown Home Center for $8,483.57 around June 30, according to court records.

Surber said Dluhy stopped payment on the check to prevent it from bouncing.

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