What's at stake?
Fresno pledged $2M to Poverello House to build tiny homes. Three years later, there are more lawsuits tied to the project than built homes.
The Poverello House, a Fresno-based nonprofit that offers services to the unhoused, is suing a local contractor, alleging a breach of contract in connection with the failed construction of more than two dozen tiny homes.
The lawsuit comes after Fresnoland reported previously that the City of Fresno was planning to launch litigation against the Poverello House for their inability to deliver on a contract to build 26 tiny homes for people experiencing homelessness.
In 2023, the Poverello House entered an agreement with Dave Clevenger and his business, PreFab Innovations, to build 26 tiny homes for the City of Fresno for about $2 million. The nonprofit’s funding for the contract came from the city’s supply of state and federal dollars.
The contract’s language says the homes were expected to be completed later that year.
However, three years later, the Poverello House has now filed a lawsuit against Clevenger and his business for, among other things, allegedly failing to build any of the tiny homes and intentionally misrepresenting themselves as capable of handling the project, according to a copy of the lawsuit filed in Fresno County Superior Court on Aug. 18.
The Poverello House paid Clevenger about $965,000 in an initial deposit, with the remaining money expected to be delivered later in the process, according to the service agreement. The nonprofit’s lawsuit is aiming to claw back that money, and seeks other legal remedies.
Zachary Darrah, CEO of the Poverello House, deferred a request for comment to the nonprofit’s attorney in the case, Eric Grijalva.
The Poverello House’s lawsuit also alleges that Clevenger diverted some of the near $965,000 toward “other projects, corporate expenses, debts or personal use.”
When asked what makes them believe Clevenger did this, Grijalva said the evidence was self-evident.
“We don’t have the tiny homes,” Grijalva said.
The contract between the two parties included a second and third payment scheduled for PreFab Innovations, with the first expected to kick in after the construction of 13 homes, or when the contractor made it halfway through the project.
The lawsuit alleges they never got that far.
“Any other use of the money other than building those homes, in my opinion, would be improper,” Grijalva said.
Grijalva said the Poverello House’s lawsuit “was not related to” the story published by Fresnoland earlier this month.
The status of any potential lawsuits involving the city and Poverello House remained unclear and neither side was willing to comment directly.
Fresno City Attorney Andrew Janz on Wednesday declined to elaborate on how the Poverello House’s lawsuit might affect the city’s plans to file their own suit against the nonprofit.
“What I can say is that Poverello still owes the City and taxpayers nearly two million dollars,” Janz told Fresnoland on Wednesday.
Clevenger did not respond to Fresnoland’s request for comment on this story.
Earlier this month, following news of the city’s lawsuit, Clevenger reached out to Fresnoland to offer “the true part of the story,” before adding that the Poverello House is “less than innocent” in the case, and placed the blame for the project’s failure back on the nonprofit.
Clevenger did not follow through on his offer, instead sharing a statement after the story was published.
“I read the story,” Clevenger’s statement said. “PreFab Innovations disputes the characterizations made. I’d only say that the Poverello matter is much more complicated than a simple failure to deliver. There’s a documented history, including a mediated agreement, that I believe tells a different story. PreFab Innovations remains committed to fulfilling its customer contracts, strengthening its service, and it will cooperate fully with any official review of its work. Because it involves confidential agreements and active proceedings, I’m not able to get into specifics right now, but I expect the full record to come out in the proper forum.”
The Poverello House’s lawsuit is expected to initiate court proceedings in December.
The nonprofit’s lawsuit follows a string of cases against Clevenger that allege similar acts of fraud and bad faith business practices from other organizations and private citizens across the Central Valley.
The office of California Attorney General Rob Bonta has filed documents that could strip Clevenger of his contractor’s permit to the state’s licensing board, following some of these complaints.
