The Indiana Court of Appeals ruled a contractor violated the Home Improvement Contracts Act when he misled a family into thinking he was locally licensed and voided the contract between the two. However, the court said he should still be paid for the work he did because the family would be unjustly enriched if he was not paid.
Faye Warfield, her daughter Keyotta Warfield, and Keyotta’s husband and daughter all lived together in a house. After it sustained hail damage, Faye Warfield filed a claim with Liberty Mutual Insurance to pay for the damage to the home’s roof. The company sent Jim Dorey and his business JRD Construction Services to look at the damage and perform the repairs. The Warfields also asked that the fireplace be rebuilt, and Dorey said he would do that, but the fireplace would not be covered by insurance.
Three months after the work was completed, Dorey was not paid and filed a complaint asserting breach of contract and unjust enrichment. He later filed a motion for summary judgment, which was granted. After a denied motion to correct error filed by the Warfields, the trial court vacated summary judgment anyway and granted Dorey 10 days to amend his complaint. The trial court conducted a bench trial and entered judgment in favor of Dorey. The Warfields appealed.
The Court of Appeals, in a decision written by Judge Patricia Riley, noted there were several violations of HICA in Dorey’s contract. It did not include the address of the home improvement supplier, failed to specify the approximate starting and completion dates of the home improvement, did not provide signature lines and did not include a notice of cancellation. While Faye Warfield is identified as the consumer, she never signed it.
Also, while Dorey was a licensed contractor, he was not licensed in Marion County at the time of his work. He also never applied for the permit for the decking work he did on the roof, even though local regulations required a permit.
“Because Dorey was yet to be licensed at the time he solicited the roofing work and failed to apply for the required permit, we conclude that he committed an incurable deceptive act as he intended to mislead Faye that he was a licensed contractor providing work in compliance with the statutory requirements and local ordinances,” Riley wrote. “While we acknowledge that ‘the General Assembly did not intend that every contract made in violation of HICA to automatically be void;’ the violation before us is precisely one of the ‘well-known abuses’ found in the home improvement industry” which the HICA intended to protect the consumer against.” Because of that, the judges declared the contract void.
However, the COA ruled Dorey was still entitled to reimbursement for his work under the theory of unjust enrichment or quantum meruit. The work is a valuable benefit the Warfields would retain unjustly in the absence of making payment, Riley wrote.
The measure is usually the fair market value of services rendered, which in this case is $8,548 for the roof, $3,677.10 for the decking and $1,700 for the fireplace rebuild. The court also remanded the case to the trial court for determination of prejudgment interest at 8 percent annum.