Tuesday, August 17, 2010

New Illinois Home Repair and Remodeling Act Case - Fleissner v. Fitzgerald

The Appellate Court of Illinois, Second District issued an opinion on August 6, 2010 in another Illinois Home Repair and Remodeling Act (HRRA) case, Fleissner v. Fitzgerald, Case Number 2-09-0805.  In Fleissner, a home repair contractor sued a homeowner to enforce an oral contract, by asserting four counts - I. Mechanics Lien Foreclosure; II. Breach of Contract; III. Unjust Enrichment; and IV. Quantum Meruit.  The homeowner moved to dismiss the suit under Code of Civil Procedure Section 2-619(a)(9) because the contractor failed to provide and have the homeowner sign a written agreement, and failed to give the homeowners the consumer rights brochure required under the HRRA.  The trial court granted the homeowners' motion and the contractor appealed.

On appeal the contractor argued that the trial court erred in dismissing the equitable remedy counts (Unjust Enrichment and Quantum Meruit) but the Appellate Court determined that the contractor did not contest the dismissal of the Mechanics Lien and Breach of Contract counts.  The Court reviewed the HRRA case law and noted the modified language in Section 30 of the HRRA, which had been passed by the legislature but was not yet signed into law at the time the Court wrote its opinion.  The Court agreed with the First District decision in McGinnis, and held that the HRRA did not affect a contractor's ability to recover in equity (Unjust Enrichment and Quantum Meruit) for work it had performed pursuant to an oral agreement.

Because the Court found the contractor failed to contest the Mechanics Lien and Breach of Contract counts, the Court noted that it was not required to consider these in its opinion.  However, the Court did take issue with the Third District Appellate Court's opinion in Fandel v. Allen, in which the Third District held that the HRRA did not preclude a contractor from enforcing a mechanics lien where the contractor failed to have the homeowner sign a written contract, specifically disagreeing with the Fandel Court's interpretation of Central Illinois Electrical Services, L.L.C. v. Slepian.

The Court then noted the changes made by the Illinois legislature to Section 30 of the HRRA (now law).  The Court notes that the legislative purpose here appears to have been to clarify, rather than change, the law, so that there is no question that equitable remedies remain available to the contractor and that the homeowner has a right of action under the Consumer Fraud and Deceptive Business Practices Act (see my earlier post about that).

The Second District's interpretation of new HRRA Section 30 is extremely significant.  The Court appears to be saying that the new Section 30 merely reinforces the interpretation of the law expressed in McGinnis.  The logical conclusion, which is left unsaid in the opinion, is that even under new Section 30 a contractor who does not comply with the HRRA may be left with equitable remedies only - in other words NO MECHANICS LIEN RIGHTS!  

Thus although new Section 30 helps to clarify the HRRA, the statute is still subject to judicial interpretation.  Contractors should still get home repair/remodeling contracts in writing, and otherwise comply with the HRRA, to protect their rights.

1 comment: