Contractor Permanently Enjoined From Future Home Repair or Remodeling Work in Illinois
The Illinois Appellate Court, 1st District recently released its opinion in People v. Smith, affirming a circuit court's award of summary judgment on claims alleging a contractor violated the Consumer Fraud and Deceptive Business Practices Act (CFA), the Home Repair and Remodeling Act (HRRA), and the Illinois Roofing Industry Licensing Act. The trial court awarded $50,000 damages and, in a first for an HRRA case to the best of my knowledge, permanently enjoined the contractor from "future home repair and remodeling work in Illinois."
The case was brought by the Illinois Attorney General against the individual contractor personally, as well as two corporations for which he served as agent. Apparently several consumers had filed complaints with the Attorney General alleging that they had hired this contractor to do home repair and remodeling work and paid a significant down payment, but that the contractor had never completed the work nor returned their money. In addition, the Attorney General alleged that the contractor had undertaken to complete roofing work with a license per Roofing Act, failed to provide the consumer rights brochure required by the HRRA, and failed to notify the consumers of their right to cancel as required by Section 2B of the CFA.
The case indicates that the contractor did not initially retain counsel but filed a pro se Answer, which failed to respond to all the paragraphs of the Complaint (it is not clear from the opinion whether the contractor tried to file his Answer on behalf of the two corporations as well as himself personally). It sounds like he responded to "common allegations of fact" but did not respond to the actual counts alleging violations of the various statutes. Although the contractor later retained counsel, unfortunately for him the trial court ruled, and the appellate court upheld (correctly in my opinion), that these allegations were admitted.
The court held that the trial court properly assessed against the contractor a civil penalty of $50,000 pursuant to Section 7(b) of the CFA and did not need to find "an intent to defraud" (the contractor appears to have tried to argue for the first time on appeal that as to the HRRA a question of fact remained as to whether he "knowingly" violated the statute, but this argument was deemed forfeited as it was not raised to the trial court). The court also held that the injunction was proper per Section 7(a) of the CFA and reasonably limited in scope to "the activity underlying the [contractor's] illegal acts."
If you are a Homeowner who has suffered damages as a result of a contractor's violation of these laws, you do have options. Talk with a licensed Illinois attorney about your rights to a private cause of action, or call the Illinois Attorney General's office and ask about filing a consumer complaint. If you are considering hiring a contractor to perform roofing or plumbing work, you can check with the Department of Financial and Professional Regulation to make sure that the contractor is properly licensed.
If you are a Contractor, consult with a licensed Illinois attorney to ensure that you are complying with these laws. The case particularly notes that the contractor tried to argue for leniency due to 1) the economy and 2) that he had a right to make a living. The court rejected these arguments. The economic downturn is not an excuse for disregarding the law, or for ignorance of the law.
Finally on a related note, the case also shows the importance of retaining qualified counsel, and the risk of representing oneself pro se in court. Had this contractor had counsel to begin with, he almost certainly would not have filed an incomplete Answer and thereby admitted the case against him.