According to the Indiana Court of Appeal’s November 2014 ruling in Paul v. Stone Artisans, LTD, the strict requirements of the Home Improvement Contract Act (the “Act” or “HICA”) appear to have loosened. Designed to protect consumers from unscrupulous contractors, the Act provides a series of remedies for consumers who have hired contractors for projects exceeding One Hundred and Fifty Dollars ($150.00). Under the Act, contractors are required to provide consumers with contracts containing specific provisions.
In light of the Stone Artisans decision, however, contractors may now be able to avoid some harsh penalties if they fail to comply with the Act’s requirements. In the Stone Artisans case, the homeowner, Timothy Paul, sought to replace his countertops and backsplashes in the bathrooms and kitchen of his home. Stone Artisans e-mailed a contract to Paul asking for approval. Upon receiving Paul’s approval and a deposit of one-half the contract price, Stone Artisans began and completed the services, to which both Paul and his interior designer expressed their satisfaction. After Stone Artisans was unable to collect payment from Paul, it filed a mechanic’s lien and soon thereafter filed a complaint against Paul.
In his response, Paul contended, among other things, that the contract did not comply with all of the specific requirements of the Act.
There was no discussion whether Stone Artisan had failed to comply with the Act’s requirements; as it clearly had failed to do so. The issue for the Court, therefore, was to determine whether or not Stone Artisan’s failure to comply with certain provisions would void the contract or require Stone Artisans to pay damages.
In analyzing the Act’s application, the Court noted that the Indiana General Assembly had not included a provision voiding contracts that violate the Act’s requirements. Rather, the Court concluded that the Act instead creates a cause of action for which the contract being voided is one possible remedy. Therefore, the Court reasoned, “the statute leaves it to the trial court to determine whether voiding the contract is an appropriate remedy.”
Because the Act was initially enacted in response to well-known abuses found in the home improvement industry, the Court adopted the trial court’s finding that “despite any deficiencies in the contract, Paul received the benefit of Stone Artisans’ services and was fully aware of all the terms of his relationship with Stone Artisans.” Further, the Court found that “Paul failed to identify any damage he suffered as a result of any deficiencies in the contract with Stone Artisans…” and that the Act “allows a person relying upon an uncured or incurable deceptive act to bring an action for the damages actually suffered.”
In light of this recent decision, the Court of Appeals has essentially concluded that while a violation of the Act is considered a “deceptive act,” the consumer is not always actually deceived. This stands to reason that if a contractor substantially complies with the terms of the Home Improvement Contract Act and any failure is not such that the consumer would be deceived or damaged, contactors may now avoid certain liability from the non-compliance, not considering the costs involved in litigation.
It is important for contractors performing home improvements to be aware of the Home Improvement Contract Act’s requirements to ensure that their contracts are compliant. For more information on HICA or Construction Law, please contact attorney Shannon Frank at sfrank@KDDK.com or (812) 423-3183, or contact any member of the KDDK Construction Law Practice Team.
About the Author
Shannon S. Frank, a Partner at Kahn, Dees, Donovan & Kahn, LLP (KDDK), in Evansville, Indiana, has more than 20 years’ experience in the practice of business law, construction law, estate planning and probate administration, health care law, and real estate law. Shannon takes prides in giving exceptional service to her clients, recognizing that relationships with clients play a significant and essential role in providing tailored and comprehensive legal advice.