Illinois Home Repair And Remodeling Act, Consequences Of Not Following Procedures....

3809 Views 2 Replies 2 Participants Last post by DetailHandyman, Sep 24, 2009

Ed the Roofer

Discussion Starter · Aug 26, 2009

An interesting legal article on an Illinois Law Blog Site I frequent.

Ed

If I Complete My Contract But Fail To Comply With The Home Repair And Remodeling Act, Can I Still Get Paid?

Posted on August 13, 2009 by Ashley Brandt

Take a look at this chart:

The different colored sections represent the jurisdictions of the different appellate court districts in the state. The answer to the question is “yes” if you’re in the green, “no” if you’re in the tan, and “undecided” if you’re red, blue or orange. It’s a split between the districts that just occurred.

In the case of K. Miller Construction Company, Inc. v. McGinnis (1st Dist. Doc. No. 1-08-2514) the first district appellate court (the green one) has recently decided that a claim for quantum meruit (unjust enrichment) can be made against a home owner by a contractor even if the contractor failed to comply with the Illinois Home Repair and Remodeling Act (815 ILCS 513) which requires that contracts for more than $1000 on home improvements be put in writing or they are deemed “unlawful” by the statute.

As a side note, the 4th District (the tan one above) has ruled that such a claim cannot stand if the requirements of the act are not met in Smith v. Bogard (2007)

In McGinnis, Miller was a contractor that worked on the renovation of McGinnis’ house. After some work was performed, but before it was all completed, the McGinnis refused to continue paying Miller’s invoices which by then were more than $123,000 and demanded that he finish the job before any more payments occurred. Miller took out a $150,000 line of credit to complete the project and when he was done, the McGinnises approved of his work. The opinion notes that the project’s construction price increased to more than $500,000 by the time of completion.

The McGinnises, however, refused to pay more than $177,580.33, and Miller filed suit to recover payment. The opinion notes that Mr. McGinnis is no ordinary consumer, but that as a lawyer, he is a “sophisticated consumer”. The district court dismissed claims made by miller for a mechanics lien and breach of a time and materials oral contract because the terms of the Act provide that such contracts are unlawful if not in writing for home repair. The appellate court agreed. What the appellate court did not agree with was the district court’s interpretation that a claim for unjust enrichment was not available to a contractor who had actually performed the work where that work was accepted.

Noting that the 4th District reached a different conclusion, the 1st District found that where the work was accepted, the availability of an unjust enrichment claim was not quashed by the use of the term “unlawful” in the Home Repair and Remodeling Act.

Where no party disputed that a trial on the unjust enrichment claim would render “justice” to both parties, the appellate court found that because the Act did not expressly repeal the quantum meruit claim the “unlawful” nature of contracts that are not in writing did not preclude the cause of action and such a claim would likely not “reward deceptive practices” or violate public policy.

The court also noted that a real estate attorney like Mr. McGinnis might well utilize his expertise in the field to exploit the 4th District’s interpretation by keeping any contract for home renovation oral in order to deprive a contractor of the reasonable value of his services.

Interestingly, a concurrence by Justice Gordon notes, as several others have contended, that the Home Repair and Remodeling Act was not intended to provide either a cause of action or an affirmative defense to any private party, but rather, the sole remedy under the act is through action by the Attorney General’s Office.

The lesson for all home contractors is to get the agreement in writing. There likely wouldn’t be an appeal if the contract was in writing because the lien claim and the breach of contract claim would have remained as well as the alternative theory of unjust enrichment. However, even if a contractor fails to comply with the law, there is still a possibility that he could receive justice if his intentions and actions are honest.

Tags: Articles, Cases, Contract, Contracting, Damages, Evidence & Procedure, Payment, Statutes

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Ed the Roofer

Discussion Starter · #2 · Sep 22, 2009

This case is getting very very interesting now.

On the last day available for appeal to the IL Supreme Court, Miller filed timely.

Now, this District Courts findings which go against previous decisions regarding the Home Repair And Remodeling Act will prove even more fruitfull for potential litigation from contractors who's avenues were seemingly closed due to not having a signed contract and still being able to pursue Quantum Meruit claims against the defendants if this continues forth according to the 41 page decision thus far.

Ed

Miller v. McGinnis

Major News Flash: In a bold split from the Fourth District Appellate Court decision of Smith v. Bogard, 879 N.E.2d 543, 377 Ill.App.3d 842 (4th Dist. 2007), the first district has announced that “quantum meruit remains an equitable remedy available under the Homer Repar Act…” Miller v. McGinnis, 2009 WL 2448568 (1st Dist. 2009)(not yet published). This case is a must read for any practitioners who encounter the Home Repair & Remodeling Act (815 ILCS 513/1 et seq.) in their practice. The Act declares it “unlawful” for a contractor to have an oral contract for work exceeding $1,000. In Bogard, the Fourth District concluded that permitting quantum meruit recovery would “run afoul of the legislature’s intent of protecting consumers…”. The First District announced that it was “unpersuaded by the reasoning in Smith” and it chose instead to allow a quantum meruit claim to be made so that a proper and fair balancing could be achieved between protecting consumers on the one hand while fairly compensating contractors on the other. ■

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