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Englewood-based Armstrong Steel faces class action lawsuit

Lawsuit alleges systemic false marketing, selling of metal building systems
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Posted at 5:47 PM, Sep 26, 2022

Every time Mai Samhouri looks at the empty field outside her Elizabeth home, she is reminded of what is supposed to be there.

"This is where our future building is going to go," she said, pointing to the unassembled building sitting nearby. "I can't afford to erect that pile of steel because I spent all my money to get it delivered."

Samhouri signed a contract for a building system with Armstrong Steel in November 2020 and paid a $5,000 initial deposit.

"After I gave them my deposit, I felt like all customer service completely was gone," she said, detailing months of delays and price increases. "My faith in humanity is gone."

Her story sounds all too familiar to several Armstrong customers who reached out to Contact Denver7 and joined the "Armstrong Steel Buildings Victims Group" on Facebook.

"We started the Facebook group because we wanted other people to know that they were not alone," said Tracy Toth, who is an administrator of the group. "It's been very heartbreaking to hear all of the stories from people in the group."

"We have exactly the same story as everybody else," said Kim Herb, who contracted with Armstrong in October 2020. "Bait and switch, lock in your steel price and steal your money. Bottom line."

Tyler Armantrout said Armstrong Steel increased the price of his building 350% after he signed the contract, claiming steel prices had increased.

Meanwhile, Tony and Charity Maddox said they faced delays and price hikes with Armstrong Steel, so they decided to cut their losses and go with another company, despite losing thousands of dollars in deposit money.

"We were able to find another steel company out of Florida, so we're actually getting the building for less than our original building cost," said Tony Maddox. "It's kind of crazy when you look at it and you see what Armstrong is doing. Everybody feels a little shafted in the process."

Many former customers have joined a class action lawsuit that alleges Armstrong Steel pressures people to sign contracts to "lock in" prices, but after long delays, the company demands significantly more money and then refuses to refund deposits when customers balk. The complaint alleges there are more than 100 class members, and the amount in controversy exceeds $5,000,000.

"I knew we couldn't do it alone. They could pick us off one by one," said Susan Whitehall, who helped initiate the legal action. "So I figured the more people I got together [who] could go after them together, the easier it would be."

According to the lawsuit, Armstrong Steel's founder, Ethan Chumley, is a former employee of General Steel, a company that settled a $4.5 million consumer protection case in 2007 brought by the Colorado attorney general after a judge found deceptive sales and marketing tactics.

Armstrong Steel refused multiple requests for interviews regarding the lawsuit. When Contact Denver7 paid their Englewood office a visit, a vice president said we were disrupting business and asked us to leave.

In a statement, Sean Andrews, an Armstrong Steel spokesman, wrote:

"We have maintained an excellent reputation in the industry for 15 years. The sharp rise in material prices was out of our control and, unfortunately, led to a number of customers feeling priced out of their projects. Folks across all industries experienced rising costs due to the effects of the COVID pandemic, rising inflation, material scarcity and other supply chain issues. 

Initial engineering payments cover design consultation with a project manager, drafting, detailing, engineering, drawings, blueprints and other preliminary work, all of which must take place before materials can be ordered.

We remain willing to work with customers who no longer wish to proceed due to budget constraints. We have not required anyone to pay for a building they could no longer afford. In appropriate circumstances, we have provided refunds even though work was already performed and significant expenses were incurred. 

Prices, while much higher today, are relatively stable and the folks currently engaging us are not seeing any material increases or out of the ordinary delays."

Former customers, however, said that is no help for them, as they try to figure out the best course of action.

"I have a $60,000 pile of steel over there," said Samhouri.

Samhouri's building system was finally delivered, but she had to save more money to put it up because of the price hikes and delays.

"I'm not a complainer I'm not a money seeker. We're going to get there. It's going to take us longer," she said.

Editor's note: Denver7 seeks out audience tips and feedback to help people in need, resolve problems and hold the powerful accountable. If you know of a community need our call center could address, or have a story idea for our investigative team to pursue, please email us at contact7@thedenverchannel.com or call (720) 462-7777. Find more Contact Denver7 stories here.