Court Opinion

ID: 4587381
Source: CourtListenerOpinion
Date Created: 2020-11-18 16:03:50.446591+00
Date Added: 2024-06-11T13:49:50.490418
License: Public Domain

FILED
                                                                                  Nov 18 2020, 8:52 am

                                                                                      CLERK
                                                                                  Indiana Supreme Court
                                                                                     Court of Appeals
                                                                                       and Tax Court

ATTORNEYS FOR APPELLANT                                   ATTORNEY FOR APPELLEE
John P. Higgins                                           William K. Doss
Brooke Smith                                              Carmel, Indiana
Katz Korin & Cunningham
Indianapolis, Indiana

                                            IN THE
    COURT OF APPEALS OF INDIANA

McGraw Property Solutions,                                November 18, 2020
LLC,                                                      Court of Appeals Case No.
Appellant-Plaintiff,                                      20A-PL-630
                                                          Appeal from the Boone Superior
        v.                                                Court
                                                          The Honorable Bruce E. Petit,
Jason Jenkins,                                            Judge
Appellee-Defendant.                                       Trial Court Cause No.
                                                          06D02-1708-PL-1000

Riley, Judge.

Court of Appeals of Indiana | Opinion 20A-PL-630 | November 18, 2020                    Page 1 of 12
                                STATEMENT OF THE CASE
[1]   Appellant-Plaintiff, McGraw Property Solutions, LLC (McGraw), on

      interlocutory appeal, appeals the trial court’s summary judgment in favor of

      Appellee-Defendant, Jason Jenkins (Jenkins), concluding that Jenkins timely

      cancelled the contract within three days of acceptance.

[2]   We affirm.

                                                     ISSUE
[3]   McGraw presents this court with two issues on appeal, which we consolidate

      and restate as the following single issue: Whether a genuine issue of material

      fact exists that Jenkins did not timely cancel the contract when McGraw had

      cured the deficiencies included in the original contract and back-dated the

      replacement cure agreement to the effective date of the original agreement.

                       FACTS AND PROCEDURAL HISTORY
[4]   In the spring of 2017, Jenkins’ property in Boone County was damaged during

      a severe storm. McGraw is a general contractor focusing primarily on storm

      remediation. On June 11, 2017, Jenkins and McGraw entered into an

      agreement whereby McGraw promised to complete all storm remediation work

      to the property for the price approved by Jenkins’ insurer. The contract

      provided that “[i]f the insurance company does not approve your claim, this

      agreement automatically terminates.” (Appellant’s App. Vol. II, p. 19). It also

      required Jenkins to pay McGraw 20% of the replacement cost value as

      liquidated damages if Jenkins refused to allow McGraw to finish the work.
      Court of Appeals of Indiana | Opinion 20A-PL-630 | November 18, 2020    Page 2 of 12
      After the execution of the agreement, a representative of McGraw surveyed and

      documented the storm damage. McGraw took comprehensive measurements

      of the damage, generating a nine-page document detailing the materials, types,

      quantities, and costs for every item needing replacement. McGraw’s estimate

      indicated a total replacement cost value of $170,559.63. Approximately one

      month later, on or about July 11, 2017, Jenkins decided that he would not

      complete the repairs, but would sell his property and relocate to Florida. On

      August 10, 2017, Jenkins’ insurer approved Jenkins’ claim with a replacement

      cost value of $109,371.97 and issued a total payment to Jenkins in the amount

      of $64,597.37.

[5]   On August 15, 2017, McGraw filed its Complaint against Jenkins, raising

      claims for breach of contract, unjust enrichment, and promissory estoppel. On

      October 18, 2017, Jenkins responded with a Notice of Violations under the

      Home Improvements Contracts Act (HICA), alleging, in pertinent part, that:

              Pursuant to I.C. [§] 24-5-11-10(a), the [c]ontract lacked several
              minimum statutory requirements. It did not include the date it
              was submitted to my client or the time limitation on my client’s
              acceptance of the [c]ontract, a violation of paragraph (3); the
              [c]ontract did not include the approximate starting and
              completion dates of the improvements, a violation of paragraph
              (6); and it did not include a statement of any contingencies that
              would materially change the approximate completion date, a
              violation of paragraph (7).

              Pursuant to I.C. [§] 24-5-11-10(c), the [c]ontract start and end
              dates of ‘TBD’ are insufficient, and are violations of paragraphs
              (1) and (3). Further, the [c]ontract failed to inform my client of

      Court of Appeals of Indiana | Opinion 20A-PL-630 | November 18, 2020         Page 3 of 12
              his rights under section 10.5(b), as intentionally omitted proper
              notice of cancellation language and form as required under
              paragraph (6). My client was never informed of this right to
              cancellation within three (3) days of notification from his
              insurance company that all or part of the claim or contract was
              not a covered loss as is required by I.C. [§] 24-5-11-10.5(b). Had
              the notice been given, which is required under the law, my client
              would have rescinded the contract that forms the basis for the
              [C]omplaint.

              Pursuant to I.C. [§] 24-5-11-10.5(b), a home improvement
              supplier shall not act as a public adjuster. However, two full
              paragraphs of the [c]ontract discuss McGraw’s experience and
              expertise to assist with claims and work with insurance
              representatives to get homeowners fair repair or replacement
              allowances from their insurance company. In essence, McGraw
              is claiming to do the actions of a public adjuster in all but name,
              which further violates HICA.

              Pursuant to I.C. [§] 24-5-11-11, the [c]ontract failed to include the
              contractor’s written signature indicating the contractor’s
              unequivocal agreement to the term of the [c]ontract. Further, as
              there was no contractor signature, neither did my client’s copy of
              the [c]ontract include the date of the contractor’s execution of the
              [c]ontract, a violation of I.C. [§] 24-5-11-12.

      (Appellant’s App. Vol. II, pp. 54-55). In accordance with HICA’s provision to

      cure the deficiencies, Jenkins demanded that McGraw submit a replacement

      cure contract.

[6]   On August 24, 2017, McGraw issued a replacement cure contract which,

      according to its terms, related back to June 11, 2017, i.e., the date of the original

      Court of Appeals of Indiana | Opinion 20A-PL-630 | November 18, 2020          Page 4 of 12
      contract. With respect to the right to cancel, the replacement cure contract

      provided:

              You may cancel this contract at any time before midnight on the
              third business day after:

              (A) The date of this Agreement.

              (B) You have received written notification from your insurance
                  company that all or any part of the claim or contract is not a
                  covered loss under the insurance policy.

      (Appellant’s App. Vol. II, p. 140). After accepting the replacement cure

      contract on August 27, 2017, Jenkins also submitted a notice to McGraw

      cancelling the replacement cure contract that same day.

[7]   On May 18, 2018, Jenkins filed his Answer, affirmative defenses, and

      counterclaim sounding in breach of contract. On January 2, 2019, Jenkins filed

      his motion for summary judgment on all Counts; while McGraw filed a motion

      for partial summary judgment on its breach of contract claim only. On March

      15, 2019, the trial court conducted a hearing on the cross-motions for summary

      judgment. On September 19, 2019, the trial court issued its Order on the

      parties’ cross-motions for summary judgment, entering judgment against

      Jenkins on his counterclaim for breach of contract. The trial court also issued

      judgment against McGraw on its breach of contract claim, concluding, in

      pertinent part, that:

      Court of Appeals of Indiana | Opinion 20A-PL-630 | November 18, 2020         Page 5 of 12
              The [c]ourt believes that McGraw’s request [i.e., accepting the
              back-dated provision in the replacement cure contract] would, in
              essence, require this [c]ourt to put form over substance. The
              unambiguous language in the HICA is clearly intended to
              provide a consumer with the option to rescind a contract under
              certain circumstances. This protection can only be exercised by
              the consumer if they have knowledge of that right. If the [c]ourt
              were to adopt McGraw’s argument, then how could the original
              error ever be cured? The required notice of cancellation when
              accompanied by the relate back clause does not cure the
              contractual error. It merely put Jenkins back in the exact
              position he was in when the required language was omitted.
              Jenkins cannot be expected to exercise his right to cancellation if
              he was never given notice of that right before July of 2017.
              McGraw asks that Jenkins be required to give notice of
              cancellation months before he was advised of his right to give
              that notice. Such a finding would fly in the face of HICA’s
              intent. This [c]ourt believes that under these circumstances,
              McGraw has not provided a cure which would allow the
              consumer an opportunity to exercise his option of rescission.
              The consumer is simply put in the untenable position of not
              being provided with notice of his rights that HICA was enacted
              to insure and protect.

      (Appellant’s App. Vol. III, p. 132).

[8]   On November 20, 2019, McGraw filed its motion to reconsider, or

      alternatively, to certify for interlocutory appeal. On February 12, 2020, the trial

      court issued its Order, concluding, in pertinent part, that:

              In its [m]otion to [r]econsider, [McGraw] alleges that the [c]ourt
              improperly voided the ‘cure contract’ which was executed by the
              parties on October 27, 2017. However, [McGraw] misinterprets
              this [c]ourt’s Order. To the contrary, the [c]ourt did not void the
              ‘cure contract’ but rather enforced it. As set out in paragraph 12
      Court of Appeals of Indiana | Opinion 20A-PL-630 | November 18, 2020      Page 6 of 12
              of the [c]ourt’s original Order, the [c]ourt stated “the [c]ourt finds
              that Jenkins did timely cancel the contract within three (3) days
              of acceptance of the ‘cure contract’ on October 27, 2017.” The
              original contract entered into between the parties improperly and
              in violation of statute omitted the right to cancel within three (3)
              days of receiving notice of insurance denial. That right was
              contained within the ‘cure contract’ and [Jenkins] exercised that
              right. The [c]ontract was not voided, it was cancelled pursuant
              to its terms.

      (Appellant’s App. Vol. III, p. 173). That same day, the trial court also certified

      the September 19, 2019, and February 12, 2020 Orders for interlocutory appeal,

      which we accepted. Additional facts will be provided if necessary.

                               DISCUSSION AND DECISION
                                             I. Standard of Review

[9]   In reviewing a trial court’s ruling on summary judgment, this court stands in the

      shoes of the trial court, applying the same standards in deciding whether to

      affirm or reverse summary judgment. First Farmers Bank & Trust Co. v. Whorley,

      891 N.E.2d 604, 607 (Ind. Ct. App. 2008), trans. denied. Thus, on appeal, we

      must determine whether there is a genuine issue of material fact and whether

      the trial court has correctly applied the law. Id. at 607-08. In doing so, we

      consider all of the designated evidence in the light most favorable to the non-

      moving party. Id. at 608. A fact is ‘material’ for summary judgment purposes if

      it helps to prove or disprove an essential element of the plaintiff’s cause of

      action; a factual issue is ‘genuine’ if the trier of fact is required to resolve an

      opposing party’s different version of the underlying facts. Ind. Farmers Mut. Ins.

      Court of Appeals of Indiana | Opinion 20A-PL-630 | November 18, 2020          Page 7 of 12
       Group v. Blaskie, 727 N.E.2d 13, 15 (Ind. 2000). The party appealing the grant

       of summary judgment has the burden of persuading this court that the trial

       court’s ruling was improper. First Farmers Bank & Trust Co., 891 N.E.2d at 607.

[10]   We observe that, in the present case, the trial court entered findings of fact and

       conclusions of law thereon in support of its judgment. Generally, special

       findings are not required in summary judgment proceedings and are not binding

       on appeal. AutoXchange.com. Inc. v. Dreyer and Reinbold, Inc., 816 N.E.2d 40, 48

       (Ind. Ct. App. 2004). However, such findings offer a court valuable insight into

       the trial court’s rationale and facilitate appellate review. Id.

                                                    II. Analysis

[11]   McGraw contends that the trial court erred by not construing the cancellation

       clause in the replacement cure contract to relate back to the execution date of

       the original contract thereby erroneously allowing Jenkins “a springing right to

       cancel in a manner that will lead to absurd results.” (Appellant’s Br. p. 12).

[12]   HICA “requires home improvement suppliers performing any alteration, repair,

       or modification to the residential property of a consumer for an amount greater

       than $150 to provide the consumer with a written home improvement contract,

       containing the nine elements listed in I.C. § 24-5-11-10.” Warfield v. Dorey, 55

       N.E.3d 887, 892 (Ind. Ct. App. 2016). Among other things, HICA requires that

       these contracts include the name and address of the consumer, the name and

       address of the contractor, a reasonably detailed description of the

       improvements, the start and end date, a statement of any contingencies and

       Court of Appeals of Indiana | Opinion 20A-PL-630 | November 18, 2020      Page 8 of 12
what may affect these start and end dates, and in the event the contract price is

to be satisfied by the proceeds of an insurance policy, a statement informing the

consumer of his right to cancel the contract within three business days after

receiving written notification from the insurance company that all or part of the

claim is not covered under the policy. See I.C. § 24-5-11-10.

        Violations of the HICA are labeled ‘deceptive acts’ and are
        actionable by the attorney general or by the consumer. I.C. § 24-
        5-11-14. The Act provides victims of deceptive acts with the
        same remedies and penalties granted to victims of deceptive
        consumer sales under the Indiana Deceptive Consumer Sales Act
        (DCSA). I.C. § 24-5-11-14. Specifically, ‘[a] person relying upon
        an uncured or incurable deceptive act may bring an action for the
        damages actually suffered as a consumer as a result of the
        deceptive act or five hundred dollars ($500), whichever is
        greater.’ I.C. § 24-5-0.5-4(a). An ‘uncured deceptive act’ means
        a deceptive act of which the consumer gave proper notice to the
        supplier and either the supplier made no offer to cure within
        thirty days of the notice or the act was not cured within a
        reasonable time. I.C. § 24-5-0.5-2(a)(7). An ‘incurable deceptive
        act’ means ‘a deceptive act done by a supplier as part of a
        scheme, artifice, or device with intent to defraud or mislead.’
        I.C. § 24-5-0.5-2(a)(8).

        Thus, to establish entitlement to the remedies under HICA, the
        consumer must show that the deceptive act was either uncured—
        meaning that notice was given and the deceptive act was not
        cured—or incurable—meaning that the supplier acted with an
        intent to defraud or mislead the consumer. I.C. § 24-5-0.5-4(a).

Warfield, 55 N.E.3d at 892.

Court of Appeals of Indiana | Opinion 20A-PL-630 | November 18, 2020     Page 9 of 12
[13]   McGraw now contends that “[d]espite no evidence of any deception or damage

       to the homeowner,” the trial court “chose not to enforce McGraw’s contract”

       because “it originally failed to include immaterial boilerplate language required

       by” the HICA. (Appellant’s Br. pp. 13, 14). McGraw mischaracterizes the

       statute. It is irrelevant whether the language that was omitted from the contract

       was boilerplate or important, as soon as one of the statutorily enumerated

       requirements is not included in the contract, a deceptive act has occurred and

       the contract is in violation of HICA, regardless of any intent by McGraw. See

       I.C. §§ 24-5-11-10; -14. On October 18, 2017, Jenkins notified McGraw with a

       Notice of Violations under HICA, which included the omitted right to cancel

       within three days of the insurance company’s partial or complete denial of his

       claim. On August 24, 2017, McGraw issued a replacement cure contract,

       which according to its terms, related back to the June 11, 2017, the date of the

       original contract. 1 The main issue now revolves around whether the

       replacement cure contract can be backdated to the date of the original defective

       contract in light of HICA’s intent.

       1
         HICA provides that a contractor’s failure to give a consumer a contract satisfying the HICA requirements is
       a deceptive act and brings that deceptive act within the purview of the remedies and penalties of Indiana
       Code chapter 24-5-0.5. Hayes v. Chapman, 894 N.E.2d 1047, 1053 (Ind. Ct. App. 2008). However, to
       establish entitlement to those remedies, the consumer must show that the deceptive act was either uncured,
       meaning that notice was given and the deceptive act was not cured, or incurable, meaning that the contractor
       acted with intent to defraud or mislead the consumer. Id. As the defective original contract was cured by
       McGraw, Jenkins no longer had any recourse under HICA and therefore, unlike McGraw’s contention,
       could only pursue a breach of contract action and not an action sounding in HICA.

       Court of Appeals of Indiana | Opinion 20A-PL-630 | November 18, 2020                           Page 10 of 12
[14]   Initially we note that, when interpreting statutes, “[c]ourts must consider the

       goals of the statute and the reasons and policy underlying the statute’s

       enactment.” Paul v. Stone Artisans, 20 N.E.3d 883, 887 (Ind. Ct. App. 2014).

       Additionally, we must consider the effects of our interpretation. Id. This court

       has observed that the purpose of the HICA

               Is to protect consumers by placing specific minimum
               requirements on the contents of home improvement contracts . . .
               [because] few consumers are knowledgeable about the home
               improvement industry or of the techniques that must be
               employed to produce a sound structure. The consumer’s reliance
               on the contractor coupled with the well-known abuses found in
               the home improvement industry, served as an impetus for the
               passage of [HICA] and contractors are therefore held to a strict
               standard.

       Benge v. Miller, 855 N.E.2d 716, 720 (Ind. Ct. App. 2006) (citations omitted).

       We agree with the trial court’s sound reasoning that adopting McGraw’s

       position would be meaningless and not cure the original contract. The main

       focus of the right to cure was to remedy the deficiencies of the original contract

       and to grant Jenkins the rights he was not awarded originally despite the

       provisions enumerated in the HICA. These cured deficiencies only become

       meaningful if a possibility to exercise these rights exists. By relating the

       replacement cure contract back to the effective date of the original contract,

       McGraw attempted to circumvent granting Jenkins an effective remedy. As the

       HICA is instrumental in protecting consumers with contractors held to a strict

       standard, the protection can only be effective if the consumer has knowledge of

       the right. Jenkins received knowledge of his rights on October 27, 2017 when
       Court of Appeals of Indiana | Opinion 20A-PL-630 | November 18, 2020       Page 11 of 12
       McGraw offered the replacement cure contract which included a dual right to

       cancel the contract—either within three business days of the effective date of the

       contract or within three business days of receiving notice from the insurance

       company that the claim is partially or completely rejected. Therefore, we

       conclude that the replacement cure contract is effective from the date of its

       execution on October 27, 2017, and Jenkins timely exercised his right to cancel

       the contract. 2

                                                CONCLUSION
[15]   Based on the foregoing, we hold that Jenkins timely cancelled the agreement

       entered into with McGraw and affirm summary judgment in favor of Jenkins.

[16]   Affirmed.

[17]   May, J. and Altice, J. concur

       2
        Unlike McGraw’s contention, the trial court, by effectuating the replacement cure contract’s right to cancel
       provision, did not void the contract but rather enforced it pursuant to its terms. This result does not offer a
       windfall to Jenkins as McGraw’s unjust enrichment claim is still pending.

       Court of Appeals of Indiana | Opinion 20A-PL-630 | November 18, 2020                              Page 12 of 12