Monday, February 15, 2010

Illinois Home Repair and Remodeling Act - the 4th District

This is part five in a series of posts on the Illinois Home Repair and Remodeling Act (HRRA).  The first three parts were 1) the introduction, 2) the statute itself, 3) statewide law.  The fourth part kicked off a district by district analysis of the law, starting with the Fifth Appellate District.  With this post we move to the Fourth District.

Here's a map of the Illinois Appellate Districts.  The Fourth District cuts across the center of the state, from east to west, and includes Springfield, Champaign/Urbana, and Bloomington/Normal.  The Fourth District Appellate Court has ruled on three HRRA cases to-date--two at the end of 2009 and one in 2007.  The 2007 case, Smith v. Bogard,1 was the second Illinois appellate case interpreting the HRRA.  The Bogard opinion is an important one because it is the first case in which an Illinois appellate court explicitly held that a contractor, by not complying with the HRRA, had lost its right to recover payment for its work (the 2005 Third District case Central Ill. Electrical Services, LLC v. Slepian came close but, after ruling that the HRRA applied to the contractor, remanded the case to the trial court for further proceedings).2

In Bogard, the contractor (Smith) gave the homeowners an oral estimate of "$20,000 or less" as the cost of labor and materials to complete a living room addition.  Nothing was put in writing, and the final cost turned out to exceed $25,000.  The contractor did not give the homeowners the consumer rights pamphlet required by the HRRA.  The contractor sued the homeowners for breach of contract, unjust enrichment, and quantum meruit.  The homeowners responded that the contractor violated the HRRA and therefore they did not have to pay.  The trial court agreed and dismissed the case.  On appeal the Fourth District Appellate Court held that 1) Smith was not a "subcontractor" and thus was required to comply with the HRRA; 2) Smith failed to comply with the HRRA; 3) therefore he was precluded from recovering "any amounts he claims due for work performed."  The court specifically agreed with the trial court that the contractor was not entitled to recover payment under equitable theories (unjust enrichment and quantum meruit).

The Fourth District did not issue any subsequent opinions involving the HRRA until the last quarter of 2009, when it ruled on two more cases.

In Tom Geise Plumbing, Inc. v. Taylor,3 the Fourth District held that the HRRA did not apply where the defendant and alleged "homeowner" slept in unfinished spaces on the second and third floors of a commercial building and intended to partially convert the building to residential space, finding that this building was not a "residence" under the HRRA.

In Behl v. Gingerich,4 the court held that where the contractor provided a written work order with "reasonable particularity" but failed to execute a signed contract with the homeowner and failed to provide the HRRA consumer rights brochure, the contractor was not barred from recovering payment under legal and equitable claims, because the contractor had substantially complied with the HRRA and the homeowner was not prejudiced by the items of noncompliance.  The court noted that in this case, although the work order was not signed, there was evidence that it had been negotiated and accepted by the parties; the court also found it significant that the homeowner was the party that initially sought out the contractor to perform the work, and not the other way around.  In addition, the court held that the contractor was not entitled to payment for extra work performed since there had been no written change order or other notification until after the lawsuit was filed.

1  Smith v. Bogard, 879 N.E.2d 543 (4th Dist. 2007).
2  Central Ill. Elect. Svcs, LLC v. Slepian, 831 N.E.2d 1169 (3rd Dist. 2005).
3  Tom Geise Plumbing, Inc. v. Taylor, No. 4-08-0799, __ N.E.2d __, 2009 WL 3838984 (4th Dist.         November 10, 2009).
4  Behl v. Gingerich, No. 4-08-0974, __ N.E.2d __, 2009 WL 5112480 (4th Dist. December 21, 2009).

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