COA rules on home improvement fraud

Jennifer Nelson
January 1, 2007
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When two parties knowingly enter into a contract for home improvements that will not be done, the contractor cannot be charged with home improvement fraud under Indiana Code 35-43-6-12(a)(4), the Court of Appeals ruled today.

In Lawrence Golladay v. State of Indiana, 08A02-0701-CR-93, the court reversed Golladay's conviction for home improvement fraud under subsection (4)(a), which states, "A home improvement supplier who enters into a home improvement contract and knowingly: uses or employs any deception, false pretense, or false promise to cause a consumer to enter into a home improvement contract ... commits home improvement fraud[.]"

Max Starkey signed a contract with Golladay to replace the roofs on Starkey's house and barn, replace siding on the house, and move an electrical box from outside to inside the house. Weeks after Golladay began working on the house, Starkey told him that his insurer was telling him to sue Golladay for not completing the work fast enough. Golladay eventually walked off the job, citing the threat of a lawsuit from Starkey as the reason.

After he walked off, Starkey and his wife did sue Golladay; Golladay failed to respond to the lawsuit and default judgment was entered against him. He was charged with home improvement fraud as a Class C felony under I.C. 35-43-6-12(a)(3), which states: "A home improvement supplier who enters into a home improvement contract and knowingly promises performance that the home improvement supplier does not intend to perform or knows will not be performed" commits home improvement fraud.

Golladay claimed that Starkey asked Golladay to include siding in the contract but because he had already spent a portion of the insurance money, asked that Golladay paint the house instead. Starkey denied the claim. The trial court found Golladay guilty of violating subsection (a)(4) of the Indiana Code, not (a)(3), the statute under which he was charged.

The Court of Appeals reversed Golladay's conviction under subsection (a)(4) for two reasons. Judge Ezra Friedlander wrote that in order for someone to be charged under subsection (a)(4), the homeowner had to have been deceived by the home improvement supplier. In this case, Starkey and Golladay discussed including new siding in the contract even though Starkey only wanted the house painted because he had already spent some of the insurance money.

The goal of the statute is to protect homeowners; if one knowingly enters a contract where work will not be completed, then the homeowner is not deceived.

Golladay's conviction also violates his due process rights because he was charged under subsection (a)(3) but convicted under subsection (a)(4). Subsection (a)(4) is not inherently included under subsection (a)(3), because (a)(4) requires the defendant to use deception to get a consumer to sign a contract, wrote Judge Friedlander.

The court reversed the conviction and remanded with instructions to enter a judgment of acquittal.

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  1. I think the cops are doing a great job locking up criminals. The Murder rates in the inner cities are skyrocketing and you think that too any people are being incarcerated. Maybe we need to lock up more of them. We have the ACLU, BLM, NAACP, Civil right Division of the DOJ, the innocent Project etc. We have court system with an appeal process that can go on for years, with attorneys supplied by the government. I'm confused as to how that translates into the idea that the defendants are not being represented properly. Maybe the attorneys need to do more Pro-Bono work

  2. We do not have 10% of our population (which would mean about 32 million) incarcerated. It's closer to 2%.

  3. If a class action suit or other manner of retribution is possible, count me in. I have email and voicemail from the man. He colluded with opposing counsel, I am certain. My case was damaged so severely it nearly lost me everything and I am still paying dearly.

  4. There's probably a lot of blame that can be cast around for Indiana Tech's abysmal bar passage rate this last February. The folks who decided that Indiana, a state with roughly 16,000 to 18,000 attorneys, needs a fifth law school need to question the motives that drove their support of this project. Others, who have been "strong supporters" of the law school, should likewise ask themselves why they believe this institution should be supported. Is it because it fills some real need in the state? Or is it, instead, nothing more than a resume builder for those who teach there part-time? And others who make excuses for the students' poor performance, especially those who offer nothing more than conspiracy theories to back up their claims--who are they helping? What evidence do they have to support their posturing? Ultimately, though, like most everything in life, whether one succeeds or fails is entirely within one's own hands. At least one student from Indiana Tech proved this when he/she took and passed the February bar. A second Indiana Tech student proved this when they took the bar in another state and passed. As for the remaining 9 who took the bar and didn't pass (apparently, one of the students successfully appealed his/her original score), it's now up to them (and nobody else) to ensure that they pass on their second attempt. These folks should feel no shame; many currently successful practicing attorneys failed the bar exam on their first try. These same attorneys picked themselves up, dusted themselves off, and got back to the rigorous study needed to ensure they would pass on their second go 'round. This is what the Indiana Tech students who didn't pass the first time need to do. Of course, none of this answers such questions as whether Indiana Tech should be accredited by the ABA, whether the school should keep its doors open, or, most importantly, whether it should have even opened its doors in the first place. Those who promoted the idea of a fifth law school in Indiana need to do a lot of soul-searching regarding their decisions. These same people should never be allowed, again, to have a say about the future of legal education in this state or anywhere else. Indiana already has four law schools. That's probably one more than it really needs. But it's more than enough.

  5. This man Steve Hubbard goes on any online post or forum he can find and tries to push his company. He said court reporters would be obsolete a few years ago, yet here we are. How does he have time to search out every single post about court reporters and even spy in private court reporting forums if his company is so successful???? Dude, get a life. And back to what this post was about, I agree that some national firms cause a huge problem.