Fandel v. Allen ( 2010 )

No. 3-08-0237
______________________________________________________________________________
Filed January 14, 2010 CORRECTION
IN THE
APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
A.D., 2010
______________________________________________________________________________
DAVID W. FANDEL, Individually ) Appeal from the Circuit Court
and d/b/a Fandel Construction, ) of the 13th Judicial Circuit
) Bureau County, Illinois,
Plaintiff-Appellant, )
) No. 07-CH-91
v. )
)
TIFFANY ALLEN, ) Honorable
) Cornelius J. Hollerich,
Defendant-Appellee. ) Judge Presiding.
______________________________________________________________________________
JUSTICE McDADE delivered the opinion of the court:
______________________________________________________________________________
Plaintiff, David Fandel, doing business as Fandel Construction, performed construction
work for defendant, Tiffany Allen, on defendant’s home. After the project was complete,
plaintiff recorded a “claim for lien” and commenced suit to foreclose the lien after defendant
stopped payment on the check she tendered in payment of the services. Plaintiff now appeals
from the trial court’s granting of summary judgment in favor of defendant. We reverse and
remand.
FACTS
In July 2007, defendant contacted plaintiff and requested that plaintiff submit a bid to
replace the roof on her home. Plaintiff inspected the roof. The day after his inspection, plaintiff
tendered a written, itemized work order to defendant for her consideration. Plaintiff did not
provide defendant with a copy of a consumer rights brochure prepared by the Attorney General’s
office. The work order specified the work to be done, the materials to be used, and the total cost
of $9,581 to complete the work. The work order was not signed by defendant. Instead,
defendant merely advised plaintiff to proceed in accordance with the itemized work order. The
job was completed August 1, 2007, and defendant tendered a check to plaintiff pursuant to the
work order plus $100 for a change defendant requested, thereby totaling $9,681. Defendant
subsequently stopped payment on the check.
Plaintiff filed a “claim for a mechanic’s lien” in the recorder’s office of Bureau County.
On October 17, 2007, plaintiff commenced a suit to foreclose the lien. Defendant filed a
response and a motion for summary judgment arguing that plaintiff’s failure to comply with
sections 20(a) and 30 of the Home Repair and Remodeling Act (Home Repair Act) (815 ILCS
513/1 et seq. (West 2006)) barred him from asserting a lien upon her property. Upon hearing
argument, the trial court granted defendant’s motion, thus denying plaintiff any payment for the
work he had done.
ANALYSIS
Plaintiff appeals the trial court’s order granting defendant’s motion for summary
judgment. The sole issue in this appeal is whether plaintiff’s failure to comply with sections
20(a) and 30 of the Home Repair Act (815 ILCS 513/1 et seq. (West 2006)) bars him from
asserting a mechanics’ lien upon defendant’s property.
Principles of statutory construction dictate that the language of a statute be given its plain
and ordinary meaning. First Bank & Trust Co. of O’Fallon v. King, 311 Ill. App. 3d 1053, 1058-
2
59, 726 N.E.2d 621, 625 (2000). When the language of the statute is clear and unambiguous, the
court should not add exceptions, limitations, or conditions that the legislature did not express.
First Bank, 311 Ill. App. 3d at 1059, 726 N.E.2d at 625. A court should interpret a statute as a
whole so that no term is rendered superfluous or meaningless. Texaco-Cities Service Pipeline
Co. v. McGaw, 182 Ill. 2d 262, 270, 695 N.E.2d 481, 485 (1998). The standard of review for
both statutory construction and summary judgment is de novo. Swavely v. Freeway Ford Truck
Sales, Inc., 298 Ill. App. 3d 969, 976, 700 N.E.2d 181, 187 (1998); Sears Roebuck & Co. v.
Acceptance Insurance Co., 342 Ill. App. 3d 167, 171, 793 N.E.2d 736, 739 (2003).
We begin by setting out the pertinent sections of the Home Repair Act in their entirety.
Section 20(a) of the Home Repair Act states:
Ҥ20. Consumer rights brochure. (a) For any contract over
$1,000, any person engaging in the business of home repair and
remodeling shall provide to its customers a copy of the ‘Home
Repair: Know Your Consumer Rights’ pamphlet prior to the
execution of any home repair and remodeling contract. The
consumer shall sign and date an acknowledgment form entitled
‘Consumer Rights Acknowledgment Form’ that states: ‘I, the
homeowner, have received from the contractor a copy of the
pamphlet entitled “ ‘Home Repair: Know Your Consumer
Rights.’” The contractor or his or her representative shall also sign
and date the acknowledgment form, which includes the name and
address of the home repair and remodeling business.” 815 ILCS
3
513/20 (West 2006).
Section 30 of the Home Repair Act states:
Ҥ30. Unlawful Acts. It is unlawful for any person
engaged in the business of home repairs and remodeling to remodel
or make repairs or charge for remodeling or repair work before
obtaining a signed contract or work order over $1,000 and before
notifying and securing the signed acceptance or rejection, by the
consumer, of the binding arbitration clause and the jury trial waiver
clause as required in Section 15 and Section 15.1 [citations] of this
Act. This conduct is unlawful but is not exclusive nor meant to
limit other kinds of methods, acts, or practices that may be unfair
or deceptive.” 815 ILCS 513/30 (West 2006).
Section 5 of the HRRA sets forth the policy statement of the General Assembly in
enacting the Home Repair Act. It states:
Ҥ5. Policy. It is the public policy of this State that in order
to safeguard the life, health, property, and public welfare of its
citizens, the business of home repair and remodeling is a matter
affecting the public interest. The General Assembly recognizes
that improved communications and accurate representations
between persons engaged in the business of making home repairs
or remodeling and their consumers will increase consumer
confidence, reduce the likelihood of disputes, and promote fair and
4
honest practices in that business in this State.” 815 ILCS 513/5
(West 2006).
It, thus, appears to us that the legislative purpose is to empower the Attorney General and State’s
Attorney to correct a potential harmful practice, not to deny an honest and competent workman
the fair value of his work nor to give a homeowner a valuable benefit without paying for it.
In the present case it is undisputed that the written work order provided by plaintiff to
defendant was not signed by defendant. It is also undisputed that plaintiff did not provide
defendant with a copy of the consumer rights brochure. Plaintiff acknowledges that when he
began work for defendant, the anticipated costs were over $1,000. Plaintiff, however, asserts that
because the Home Repair Act does not provide individual homeowners with a private right of
action to enforce violations of the Home Repair Act, defendant is not entitled to judgment as a
matter of law. Plaintiff also alleges that the trial court’s holding improperly implies a judicial
repeal of the Mechanics Lien Act (Lien Act) (770 ILCS 60/0.01 et seq. (West 2006)).1 At the
time this case was argued, there were only two Illinois appellate opinions relevant to our
analysis: a previous decision by this court, Central Illinois Electrical Services, L.L.C. v. Slepian,
358 Ill. App. 3d 545, 831 N.E.2d 1169 (2005), and the Fourth District’s decision in Smith v.
Bogard, 377 Ill. App. 3d 842, 879 N.E.2d 543 (2007).2 Since that time the First District decided
1
While defendant argues plaintiff waived this contention, we note that the waiver rule is
binding on the parties but not on this court. Catholic Charities of the Archdiocese of Chicago v.
Thorpe, 318 Ill. App. 3d 304, 311, 741 N.E.2d 651, 655 (2000).
2
We are aware of our supreme court’s holding in MD Electrical Contractors, Inc. v.
Abrams, 228 Ill. 2d 281, 888 N.E.2d 54 (2008). This holding, however, is not relevant to our
5
K. Miller Construction Co. Inc. v. McGinnis, 394 Ill. App. 3d 248, 913 N.E.2d 1147 (2009).
While we are aware that the parties have not had the opportunity to brief and orally argue the
impact of the Miller holding, we discuss the case briefly in footnotes 6 and 7.
In Slepian, the plaintiff, Central Illinois Electrical Services (CIES), entered into an oral
contract with the homeowners to provide electrical work as part of a remodeling project. Upon
completion of the project, the Slepians failed to pay CIES. CIES subsequently sued to foreclose
a mechanics’ lien on the Slepians’ property and, in addition, alleged claims for unjust enrichment
and quantum meruit. In response, the Slepians alleged that CIES had violated the HRRA by
failing to provide a written contract. Thus, the Slepians argued that the oral contract was void
and therefore could not be the basis of recovery under a mechanic’s lien. After a bench trial, the
trial court found in CIES’s favor with respect to the mechanic’s lien, dismissed CIES’s additional
counts as moot, and denied, on the merits, all of the Slepians’ claims pursuant to the Consumer
Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/10(a) (West
2006)). On appeal, we discussed CIES’s claim that the Home Repair Act did not apply to it
because it was a successor contractor without a clearly defined project against which to itemize
analysis in that it dealt solely with the question of whether the Home Repair Act applied to
subcontractors. The court concluded that the Home Repair Act does not apply to subcontractors
who, by virtue of their working for a general contractor, did not make “representations” to a
homeowner, did not negotiate with a homeowner, did not present written contracts to a
homeowner, and were not in a position to accept counter offers. Abrams, 228 Ill. 2d at 291-92,
888 N.E.2d at 60-61. The court found the remaining issue of whether subcontractors are able to
recover in quantum meruit was forfeited. Abrams, 228 Ill. 2d at 299-300, 888 N.E.2d at 65.
6
expenses and reversed that portion of the trial court’s order that relied upon the finding that the
Home Repair Act was not applicable. Slepian, 358 Ill. App. 3d at 550, 831 N.E.2d at 1173.
Specifically, we stated:
“The language of the Act clearly and unambiguously
requires anyone engaged in the business of home repair and
remodeling to obtain a signed contract before initiating work that
will exceed $1,000 in cost. The trial court erred in concluding the
Act did not apply in the instant case, and the court should now hear
any claims that were dismissed on that basis. Thus, to the extent
that the trial court’s rulings relied upon a finding that the Act was
not applicable, this cause is reversed and remanded for
proceedings consistent with this opinion.” (Emphasis added.)
Slepian, 358 Ill. App. 3d at 550, 831 N.E.2d at1173.
In addition, we affirmed the trial court’s dismissal of the Slepians’ CFA counts acknowledging
that the trial court was the proper entity to determine that the charges for the work were not
unreasonable. Slepian, 358 Ill. App. 3d at 550, 831 N.E.2d at1173. We also determined that the
outcome of the proceedings would not have been different had the Slepians been allowed to
proceed on their Consumer Fraud Act claims. Slepian, 358 Ill. App. 3d at 550, 831 N.E.2d
at1173.
We believe the holding in Slepian is very narrow. Specifically, the Slepian court: (1) held
that the Home Repair Act applies to CIES regardless of the fact that it is a successor contractor,3
3
While we offer no position on this issue, we recognize that an argument can be made
7
(2) affirmed the dismissal, on the merits, of the Slepians Consumer Fraud Act counts, and (3)
reversed and remanded the matter so that the trial court could hear any challenges under the
Home Repair Act. See Slepian, 358 Ill. App. 3d at 550, 831 N.E.2d at1173. We further believe
that the limited nature of Slepian is reinforced by Justice Barry’s dissent, which concentrates
entirely on whether CIES, as a successor contractor, knew enough to comply with the Home
Repair Act or whether the Slepians were in the class of consumers the Home Repair Act was
intended to protect. See Slepian, 358 Ill. App. 3d at 551-54, 831 N.E.2d at 1175-77. (Barry, J.,
dissenting). Ultimately, he would have found the Home Repair Act inapplicable. It is for these
reasons that we find Slepian both factually and legally distinguishable from the present case.
The Bogard court and the dissent, however, read Slepian much more broadly, apparently
finding the implicit creation of the use of the Home Repair Act as an affirmative defense.
Inasmuch as there was no discussion of rights of action or affirmative defenses or other uses of
the HRRA, we would suggest such a reading is incorrect.
In Bogard, the plaintiff, Dan Smith Building Services (Smith), entered into an oral
contract with the homeowners to build a living-room addition. The Bogards refused to pay the
last installment, in the amount of $10,515.85 claimed due for the work performed. Smith filed a
that the holding in Abrams, which held that the Home Repair Act did not apply to subcontractors,
overruled our previous holding in Slepian that the Home Repair Act applies to CIES regardless
of the fact that it is a successor contractor. The resolution of this question would appear to rest in
whether CIES made “representations” to the Slepians, negotiated with the Slepians, presented
written contracts to the Slepians, or was in a position to accept counteroffers. See Abrams, 228
Ill. 2d at 291-92, 888 N.E.2d at 60-61.
8
breach of contract claim and, in addition, alleged claims for unjust enrichment and quantum
meruit. The Bogards filed a motion to dismiss claiming that Smith violated the Home Repair Act
by not securing a written contract prior to initiating construction and failing to provide them with
the consumer rights brochure. They claimed that these violations precluded Smith from
recovery. Upon hearing argument, the trial court granted the Bogards’ motion in its entirety,
finding that because Smith had failed to comply with the Home Repair Act, he was precluded
from recovery on his breach of contract claim. The court further found that because Smith was
unable to recover under an action at law, he was precluded from recovery under any equitable
theory as well because such a recovery would defeat the entire purpose of the Home Repair Act
and the public policy behind it.
On appeal, Smith argued that a disputed issue of whether the Home Repair Act applies to
him remains, and even if the HRRA does apply to him, he is not precluded from recovery under
the theories of unjust enrichment and/or quantum meruit. The Fourth District rejected Smith’s
claim that he was merely a subcontractor and thus not required to comply with the Home Repair
Act. Bogard, 377 Ill. App. 3d at 847-48, 879 N.E.2d at 548. The court also rejected Smith’s
claim that he is entitled to recovery under the theories of unjust enrichment and/or quantum
meruit. Bogard, 377 Ill. App. 3d at 848, 879 N.E.2d at 548. Erroneously relying upon our
decision in Slepian, the court stated:
“Because Smith is obligated to comply with the provisions
of the Act, and because he failed to do so, he is precluded from
recovering any amounts he claims due for work performed.
Allowing a contractor a method of recovery when he has breached
9
certain provisions of the Act would run afoul of the legislature’s
intent of protecting consumers, would reward deceptive practices,
and would be violative of public policy. [Citations.]
Based on the record before us, we conclude the trial court
did not err in granting the Bogards’ motion to dismiss because we
find that an affirmative matter (Smith’s violation of the Act)
defeated Smith’s claim for recovery.” Bogard, 377 Ill. App. 3d at
848, 879 N.E.2d at 548.
With the above authority in mind, we now turn to plaintiff’s claim that because the Home
Repair Act does not provide individual homeowners with a private right of action to enforce
violations of the Home Repair Act, defendant is not entitled to judgment as a matter of law.
Plaintiff argues that violations of the Home Repair Act alone do not affirmatively preclude a
contractor from asserting a mechanics’ lien upon a homeowner’s property. Instead, plaintiff
asserts that the homeowner must prove that “the violation, through Section 10(a) of the
Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/10(a) (West 2006)),
caused her to suffer actual damages as a proximate result of the deficiency.” We agree.
At the outset, we note that the Home Repair Act does not contain any language that
explicitly or implicitly provides that a violation of the Home Repair Act may be enforced by
consumers in a private cause of action. Rather, section 35 states that the Attorney General or the
State’s Attorney “may bring an action in the name of the people of this State against any person
to restrain and prevent any pattern or practice violation of this Act.” 815 ILCS 513/35 (West
2006). Section 35(b) also states that “[a]ll remedies, penalties, and authority granted” to the
10
Attorney General or the State’s Attorney “by the Consumer Fraud and Deceptive Business
Practices Act [(815 ILCS 505/1 et seq. (West 2006))] shall be available to him or her for
enforcement of this Act.” 815 ILCS 513/35 (West 2006). Moreover, “any violation of this Act
shall constitute a violation of the Consumer Fraud and Deceptive Business Practices Act.” 815
ILCS 513/35 (West 2006).
Here on appeal, defendant does not assert that she was unaware of her consumer rights at
the time she instructed plaintiff to begin work on her roof. Instead, she has merely alleged that
plaintiff’s procedural errors in not securing her signature on the written contract prior to initiating
construction and failing to provide her with the consumer rights brochure bar him from asserting
a mechanics’ lien upon her property. In the present case, plaintiff asserted a mechanics’ lien
against defendant’s property under the Lien Act. The purpose of the Lien Act is “to require a
person with an interest in real property to pay for improvements or benefits which have been
induced or encouraged by his or her own conduct.” Leveyfilm, Inc. v. Cosmopolitan Bank &
Trust, 274 Ill. App. 3d 348, 352, 653 N.E.2d 875, 877 (1995). Section 1 of the Lien Act permits
a lien upon premises where the value or the condition of the property has been increased by
reason of the furnishing of labor and materials. 770 ILCS 60/1 (West 2006). Specifically,
section 1(a) states in pertinent part:
“Any person who shall by any contract or contracts, express
or implied, or partly expressed or implied, with the owner of a lot
or tract of land, or with one whom the owner has authorized or
knowingly permitted to contract, to improve the lot or tract of land
or for the purpose of improving the tract of land, or to manage a
11
structure under construction thereon, is known under this Act as a
contractor and has a lien upon the whole of such lot or tract of land
and upon adjoining or adjacent lots or tracts of land of such owner
***.” 770 ILCS 60/1(a) (West 2006).
As seen above, the Lien Act makes no distinction between oral and written contracts.
Moreover, Illinois law provides that a contractor’s right to a mechanics’ lien under the Lien Act
derives from the contractor’s performance of the contract. Leveyfilm, Inc. v. Cosmopolitan Bank
& Trust, 274 Ill. App. 3d 348, 354, 653 N.E.2d 875, 879 (1995). Thus, the pertinent question in
the present case regarding whether plaintiff can assert a lien against defendant’s property
revolves around the validity of the agreement between the two parties and the plaintiff’s
performance of that agreement. The legal capacity to foreclose a mechanics’ lien depends upon
the validity of the lien. G.M. Fedorchak & Associates, Inc. v. Chicago Title Land Trust Co., 355
Ill. App. 3d 428, 433, 822 N.E.2d 905, 909 (2005). The lien, in turn, must be based upon a valid
contract, and in its absence, the lien is unenforceable. G.M. Fedorchak, 355 Ill. App. 3d at 433
822 N.E.2d at 909.
In the present case, defendant requests that we find the agreement she entered into with
plaintiff invalid because plaintiff failed to comply with sections 20(a) and 30 of the Home Repair
Act. While plaintiff’s failure to comply with these sections does constitute an unlawful violation
under the Home Repair Act, we find that this unlawful violation does not act to automatically
invalidate the agreement between the parties. In coming to this conclusion, we note once again
that the Home Repair Act is void of any language which serves to invalidate the parties’
agreement when the contractor fails to secure a written contract or fails to provide the
12
homeowner with a consumer rights brochure. Instead, the Home Repair Act merely provides that
these procedural errors, along with the other procedural errors contained within its provisions,
constitute unlawful violations. 815 ILCS 513/30 (West 2006).
These unlawful violations, however, do not act to invalidate an otherwise enforceable
agreement. We have previously held that “ ‘[u]nless a bargain necessarily involves an illegal act,
it is not unenforceable, and if it is later performed in a way that involves some slight violation of
law, not seriously injurious to the public order, the person performing may recover on his
bargain.’ ” Amoco Oil Co. v. Toppert, 56 Ill. App. 3d 595, 597, 371 N.E.2d 1294, 1296 (1978),
quoting 6 Williston, Contracts §1767, at 5018 (rev. ed. 1938). The First District stated this
principle more broadly:
“ ‘*** “[W]here a contract could have been performed in a legal
manner as well as in an illegal manner, it will not be declared void
because it may have been performed in an illegal manner, since bad
motives are never to be imputed to any man where fair and honest
intentions are sufficient to account for his conduct. The rule has
been stated to be that if an agreement can by its terms be performed
lawfully, it will be treated as legal, even if performed in an illegal
manner ***.” ‘ “ Mani Electrical Contractors v. Kioutas, 243 Ill.
App. 3d 662, 666, 611 N.E.2d 1167, 1170 (1993), quoting
Meissner v. Caravello, 4 Ill. App. 2d 428, 431-32, 124 N.E.2d 615,
616-17 (1955), quoting 12 Am. Jur., Contracts §153, at 647.
Here, the parties entered into an oral agreement to repair defendant’s roof. Specifically,
13
defendant sought out plaintiff and asked him to submit a bid to replace the roof. Plaintiff
tendered a written, itemized work order to defendant for her consideration. Defendant advised
plaintiff to proceed in accordance with the itemized work order. Plaintiff completed the job and
defendant tendered a check to defendant for the amount stated in the work order plus $100 for a
change defendant had requested, thereby totaling $9,681. Defendant subsequently stopped
payment on the check. While plaintiff’s failure to provide defendant with a copy of the
consumer rights brochure and secure a written contract does constitute an unlawful violation
under the Home Repair Act, the underlying bargain to repair defendant’s roof did not provide for
or require any violation of law. Thus, we find that the underlying agreement between the parties
was valid and plaintiff’s procedural violations relative to that agreement do not bar recovery.
Defendant is incorrect in asserting that such an interpretation renders sections 20(a) and
30 of the Home Repair Act meaningless. While the Home Repair Act does not prohibit a
contractor from recovery in the event a contractor fails to secure a written contract or fails to
provide the homeowner with the consumer rights brochure, it does exact penalties for these
violations. Specifically, the Home Repair Act states that the Attorney General may seek
penalties against the contractor in case of violation. 815 ILCS 513/35 (West 2006). More
importantly for our consideration, however, the Home Repair Act plainly and unambiguously
provides that “any violation of this Act shall constitute a violation of the Consumer Fraud and
Deceptive Business Practices Act.” 815 ILCS 513/35 (West 2006). Section 10(a) of the
Consumer Fraud Act provides defendant with the right to bring an action against plaintiff for any
actual damages she suffered as a result of any violation of the Consumer Fraud Act. 815 ILCS
505/10(a) (West 2006). It is through section 10(a) of the Consumer Fraud Act that plaintiff can
14
recover for any actual damages she suffered as a result of plaintiff’s failure to comply with
sections 20(a) and 30 of the Home Repair Act.4 This court, in Slepian, has previously recognized
this fact by affirming the trial court’s dismissal of plainitff’s Consumer Fraud Act claims on the
merits, not as a matter of procedural inapplicability. Slepian, 358 Ill. App. 3d at 550, 831 N.E.2d
at1173.
It is clear based on a reading of both the Home Repair Act and the Consumer Fraud Act
that the legislature did not intend to provide homeowners with a private right of action under the
Home Repair Act. Nor do we believe the legislature intended to allow homeowners to use the
Home Repair Act as an affirmative defense to mechanics’ liens.5 To hold otherwise would result
4
While some may argue that our position would require homeowners to engage in dual
litigation in that they would have to come back to court after a mechanics’ lien has been secured
against their property, this reasoning is simply incorrect in that it ignores the fact that trial courts
can hear both a contractor’s mechanics’ lien claim and a homeowner’s Consumer Fraud Act
claim in the same hearing. We note that this type of combined hearing is exactly what occurred
in Slepian. See Slepian, 358 Ill. App. 3d at 550, 831 N.E.2d at1173. Moreover, the Home
Repair Act is void of any condition restricting the time a homeowner can bring a Consumer
Fraud Act action. Instead, the Home Repair Act simply provides that “any violation of this Act
shall constitute a violation of the Consumer Fraud and Deceptive Business Practices Act.” 815
ILCS 513/35 (West 2006).
5
The authority relied upon by the dissent which illustrates situations where courts have
allowed a defendant to use a plaintiff’s violation of other acts, such as the Motor Vehicle Retail
Installment Sales Act (Sales Act) (815 ILCS 375/1 et seq. (West 2006)), as an affirmative
15
in a judicial repeal of the Lien Act. In coming to this conclusion, we reject the holding
announced in Bogard, as we believe it was incorrectly decided.6 We have already stated that we
believe the holding in Slepian is extremely narrow and both factually and legally distinguishable.
However, to the extent that one accepts the broad interpretation of Slepian, as both the Bogard
court and the dissent does, we would find that Slepian was incorrectly decided.
Moreover, we reject the dissent’s contention that our holding here on appeal “deviate[s]
from the rationale” in our previous decision in Route 50 Auto Sales Inc. v. Muncy, 331 Ill. App.
3d 515, 771 N.E.2d 635 (2002). Slip op. at 6. Initially, we note that our decision in Muncy did
not even deal with the Home Repair Act. Instead, the defendants in Muncy filed a motion to
dismiss plaintiff’s complaint, asserting that plaintiff was precluded from enforcing a contract
because it did not meet the requirements of the Sales Act (815 ILCS 375/1 et seq. (West 2006)).
defense against a plaintiff’s claim even though the acts limit enforcement to the Attorney General
or State’s Attorney is distinguishable and simply has no bearing on this appeal. These cases are
all distinguishable on the grounds that they deal with entirely different factual scenarios, and with
entirely different bodies of law.
6
We note that on August 10, 2009, the First District in Miller denied a builder’s claims
for breach of contract and lien foreclosure due to the builder’s failure to comply with section 30
of the Home Repair Act. Miller, 394 Ill. App. 3d at 253-54, 913 N.E.2d at 1152. For the reasons
stated above, we disagree with this holding. The Miller court held, however, that the equitable
remedy of quantum meruit remained available to the builder. Miller, 394 Ill. App. 3d at 265, 913
N.E.2d at 1161. We offer no opinion on this specific issue, as we have already found that a valid
contract exists in the present case.
16
It is on this basis that we find Muncy factually distinguishable from the instant case. We would,
however, also note that while we believe the holding in Muncy is inapplicable, the court
specifically held:
“[F]ailure to comply with the provisions of the [Sales Act] does not
render the contract void or unenforceable. [Citation.] The remedy
for noncompliance with the Sales Act is limited to the penalties
provided in the statute.” Muncy, 331 Ill. App. 3d at 517, 771
N.E.2d at 637.
The quote above clearly illustrates that Muncy does not stand for the proposition that the Sales
Act can be used to void an existing legal contract. Instead, the contract remains valid, but the
noncomplying party is subject to the penalties provided in the statute. Muncy, 331 Ill. App. 3d at
517, 771 N.E.2d at 637. To this extent, we believe the Muncy court’s interpretation of the Sales
Act is consistent with our interpretation of the Home Repair Act.
Based upon a review of the record, it appears that the failure to provide defendant with a
copy of the consumer rights brochure and to secure a signature on the itemized work order were
oversights on the part of plaintiff grounded in ignorance of the statute. The public welfare which
these sections were calculated to protect was not injured and defendant received her new roof.
All elements for a valid contract existed, including offer, acceptance and consideration. None of
these terms provided for or required a violation of law. Thus, we find that the oral agreement
between the parties does constitute a valid oral contract under Illinois law. Consequently, we
hold that plaintiff’s subsequent performance of that agreement creates a right to a mechanics’ lien
under the Lien Act. See Leveyfilm, 274 Ill. App. 3d at 354, 653 N.E.2d at 879. Because the
17
Home Repair Act is void of any language which serves to invalidate the parties’ agreement,
defendant cannot now use the Home Repair Act to bar plaintiff from asserting this lien.7
However, if defendant has suffered any actual damages as a result of plaintiff’s unlawful
violations, the statute has created a cause of action for her under section 10(a) of the Consumer
Fraud Act. See 815 ILCS 513/35 (West 2006); 815 ILCS 505/10(a) (West 2006). Moreover, the
Attorney General or the State’s Attorney is free to seek penalties against plaintiff for his unlawful
7
The use of “void” in section 15.1(c) of the Home Repair Act does not act to void a valid
contract. Section 15.1 deals with situations where the contractor presents the homeowner with a
written offer containing provisions whereby the homeowner agrees to submit all disputes to
arbitration and waive her right to a trial by jury. See 815 ILCS 513/15.1 (West 2006). Section
15.1(b) requires the contractor to give the homeowner the “option of accepting or rejecting both
the arbitration clause and the jury trial waiver clause.” 815 ILCS 513/15.1(b) (West 2006). It
also requires that the homeowner sign “her name and write the word ‘accept’ or ‘reject’ in the
margin next to each *** clause.” 815 ILCS 513/15.1(b) (West 2006). Section 15.1(c) merely
states: “Failure to advise a consumer of the presence of the binding arbitration clause or the jury
trial waiver clause or to secure the necessary acceptance, rejection or consumer signature as
provided in this Section shall render null and void each clause that has not been accepted or
rejected and signed by the consumer.” (Emphasis added.) 815 ILCS 513/15.1 (West 2006). In
using section 15.1 to reject the builder’s claim that section 30 does not bar oral contracts, the
Miller court has misread and incorrectly applied section 15.1. Had the legislature intended to
allow a contractor’s “unlawful violation” to be used to void a valid contract, it could have
included such language in section 30, as it did in section 15.1.
18
violations.
For the foregoing reasons, we reverse the judgment of the Bureau County circuit court
and remand the matter for further proceedings.
Reversed and remanded.
Filed January 14, 2010 (2nd correction)
No. 3--08--0237, Fandel v. Tiffany Allen
JUSTICE SCHMIDT, specially concurring:
I concur, but write separately to point out some additional
reasons as to why I believe that Justice McDade's construction of
the Home Repair Act is the correct one.
Nowhere does the Home Repair Act say that a contract that
does not strictly comply with the statute is void or otherwise
unenforceable. The section of the statute titled "Enforcement"
contains no such language. 815 ILCS 513/35 (West 2006). It does
not state that one who fails to get a signature on a written work
order and/or hand out a consumer rights brochure cannot collect
for his or her work. It does say that the Attorney General may
take action against the contractor and it also points out that
the homeowner has an action under the Consumer Fraud Act. See
815 ILCS 513/35 (West 2006). This statute is in derogation of
the common law and must be strictly construed. Adams v. Northern
Illinois Gas Co., 211 Ill. 2d 32, 809 N.E.2d 1248 (2004).
19
Consequently, applying the rules of statutory construction, I
believe that expressio unius est exclusio alterius applies.
At common law, a contract that is otherwise legal is not
unenforceable simply because it is performed in an illegal manner
as long as the subject matter is legal. Federal Land Bank of St.
Louis v. Walker, 212 Ill. App. 3d 420, 571 N.E.2d 242 (1991).
There is nothing inherently illegal about contracting to put a
new roof on a house. For example, a contract to build a home or
an addition to a home may violate municipal ordinances if done
without the requisite permits. Nonetheless, the violation of the
law in performing the contract does not render the contract
unenforceable. Meissner v. Caravello, 4 Ill. App. 2d 428, 124
N.E.2d 615 (1955); Lavine Construction Co. v. Johnson, 101 Ill.
App. 3d 817, 428 N.E.2d 1069 (1981); Mani Electrical Contractors
v. Kioutas, 243 Ill. App. 3d 662, 611 N.E.2d 1167 (1993).
There are three appellate court cases to date dealing with
the Act. Slepian was decided in 2005. Central Illinois
Electrical Services, L.L.C. v. Slepian, 358 Ill. App. 3d 545, 831
N.E.2d 1169 (2005). A close reading of Slepian discloses that
the decision states the Home Repair Act is applicable in a
mechanics lien action. It does not even discuss the "So, what?"
of that statement. It does not hold that the failure to strictly
comply with the Home Repair Act renders a contract for home
repair or remodeling unenforceable.
20
Smith v. Bogard is an interesting case. Smith v. Bogard,
377 Ill. App. 3d 842, 879 N.E.2d 543 (2007). There was an oral
contract to build an addition to a home for "'$20,000 or less.'"
Smith v. Bogard, 377 Ill. App. 3d at 843. At some point before
construction was completed, the homeowner paid the contractor
$15,000. Upon completion, the contractor gave the homeowner a
final bill for approximately $25,500 (25% more than the high
estimate). The appellate court held that the contractor could
not recover the additional $10,500 allegedly due because it
failed to comply with the provisions of the Home Repair Act.
Reasonable people can look at the Bogard case and decide that it
seems like a very fair result based on a contractor attempting to
overreach. One has to wonder whether the appellate court would
have reached the same result had the homeowner paid nothing up
front or had the homeowner countersued for the return of the
$15,000 paid up front. After all, if the contract is void and
unenforceable because of a violation of the Home Repair Act, then
the homeowner owed nothing, as the homeowner alleges she owes
here. The Bogard court rejected the contractor's claims based on
breach of contract, unjust enrichment and quantum meruit. The
contractor did not attempt to plead a cause of action under the
Mechanics Lien Act. I might add that the result could have been
the same even without applying the Home Repair Act by virtue of
the defenses available to the homeowner under the Mechanics Lien
21
Act. 770 ILCS 60/13 (West 2006).
The court in the Miller Construction case, in my opinion,
got the right result with the wrong analysis. K. Miller
Construction Co. v. McGinnis, 394 Ill. App. 3d 248, 913 N.E.2d
1147 (2009). I agree with Justice Wolfson that it makes no sense
to deny contract damages on the basis that the contract violates
public policy and then, in the next breath, to award equitable
relief. K. Miller Construction Co., 394 Ill. App. 3d at 267, 913
N.E.2d at 1162-63 (Wolfson, J., dissenting).
However, Justice Wolfson further asserts that failing to
perform home repair work in strict compliance with the Home
Repair Act renders a contract to do so unenforceable. K. Miller
Construction Co., 394 Ill. App. 3d at 267-68, 913 N.E.2d at 1162
(Wolfson, J., dissenting). He concludes that the legislature
intended this result without any analysis to support that
conclusion. I submit that this conclusion that performing a
contract in violation of the law renders the contract void and
unenforceable flies in the face of the contract law discussed
above and set forth and summarized nicely in Mani Electrical
Contractors v. Kioutas, 243 Ill. App. 3d 662, 611 N.E.2d 1167
(1993). Justice Wolfson's dissent fails to acknowledge that it
was not the legislature that said any violation of the Home
Repair Act, ipso facto, renders the contract unenforceable; it
was some judges. In an ironic twist, Justice Wolfson cites Chief
22
Justice John Marshall in support of his judicial restraint
argument. K. Miller Construction Co., 394 Ill. App. 3d at 268,
913 N.E.2d at 1163 (Wolfson, J. dissenting).
There is nothing in the Home Repair Act to lead one to
believe that the legislature intended it to be a giant legal
"Gotcha!" permitting a homeowner to improve his or her house at
the expense of an honest contractor. As pointed out by Justice
McDade, the enforcement section allows the Attorney General to
take action and gives the homeowner an action under the Consumer
Fraud Act for any damages the homeowner might have sustained.
Apparently some courts fear that unless a violation of the
Home Repair Act renders a contract for home repair unenforceable,
homeowners will not be protected. Not so. In a mechanics lien
action, the contractor still must prove faithful performance of a
contract or an excuse for nonperformance. 770 ILCS 60/11 (West
2006). Poor performance, nonperformance, and/or fraud in the
inducement will defeat or reduce recovery by the contractor in a
mechanics lien action. 770 ILCS 60/13 (West 2006). The same is
true in a common law contract action.
It is apparent that those who favor the Bogard construction
of the Home Repair Act feel such a construction is necessary to
"put teeth" in the Act. Thirty-five years ago, the Peoria police
department had a police dog named Prince. Prince had teeth.
Real sharp ones. Powerful jaws, too. The dog was to use those
23
teeth to bite and subdue criminals who were fleeing or fighting
police. The problem was, Prince bit virtually anybody and
everybody, except his handler. Prince bit as many officers and
citizens as he did combative criminals. In some instances, we
are not talking about just drawing blood. There were gaping
holes, missing tissue, and broken bones where human flesh used to
be. After paying out a small fortune in personal injury
settlements, the city decided it was time to retire Prince and
pay for well-trained police dogs that use their teeth only as
intended.
I submit the Bogard construction of the Home Repair Act, in
addition to being unsupported by the statutory language, has
created another Prince. There is no need to unleash a dog that
bites indiscriminately. If there is fraud or failure to perform,
the contractor's recovery under the Mechanics Lien Act will
either be denied or reduced, depending on the facts of the
particular case. The dissent believes that anything other than
strict compliance with the Act means no recovery for the work
performed. In the real world, this can mean financial hardship
or even ruin for an honest, unsophisticated, small-time
contractor who expends great time and materials on a project.
Nothing in the language of the Home Repair Act supports this
draconian interpretation.
Justice Wolfson also points out the obvious: the contractor
24
can protect himself by simply having the homeowner sign the work
order and handing him/her a consumer rights brochure. K. Miller
Construction Co., 394 Ill. App. 3d at 267, 913 N.E.2d at 1162-63
(Wolfson, J., dissenting). Absolutely a true statement, as far
as it goes. However, the evil the Home Repair Act targets is not
the failure to satisfy some societal need for more signatures or
more brochures. It is dishonest contractors.
The legislature chose not to say that failure to secure a
signature or hand a homeowner a brochure means the homeowner gets
a free roof or addition. It did provide for other penalties.
Courts should not ignore long-standing contract principles absent
explicit statutory language to the contrary.
JUSTICE LYTTON, dissenting:
I dissent. I believe that defendant has the right to raise
plaintiff’s noncompliance with the Home Repair and Remodeling Act
as an affirmative defense; furthermore, plaintiff’s noncompliance
with the Act precludes him from foreclosing on his mechanics’ lien.
I
In 2000, the Illinois General Assembly created the Act because
"the business of home repair and remodeling is a matter affecting
the public interest." 815 ILCS 513/5 (West 2006). The purpose of
the Act is "to safeguard the life, health, property and public
welfare of [Illinois’s] citizens" through "improved communications
and accurate representations between persons engaged in the
25
business of making home repairs or remodeling and their consumers"
in order to "increase consumer confidence, reduce the likelihood of
disputes, and promote fair and honest practices." 815 ILCS 513/5
(West 2006).
To effectuate its purpose, the Act imposes certain
requirements on individuals and businesses involved in home repair
and remodeling. See 815 ILCS 513/20 and 30 (West 2006). Section 20
of the Act requires that those engaged in the business of home
repair and remodeling provide to their customers a copy of a
pamphlet that explains consumers’ rights prior to the execution of
any home repair or remodeling contract. 815 ILCS 513/20(a), (b)
(West 2006). If the contract is for over $1,000, the homeowner
must sign a form acknowledging that he received a copy of the
pamphlet, and the contractor must retain the form. 815 ILCS
513/20(a) (West 2006). Additionally, section 30 of the Act
requires that contractors obtain a signed written contract or work
order for work over $1,000. 815 ILCS 513/30 (West 2006).
Section 35 addresses enforcement of the Act: "The Attorney
General or the State’s Attorney of any county in this State may
bring an action in the name of the people of this State against any
person to restrain and prevent any pattern or practice violation of
this Act." 815 ILCS 513/35(a) (West 2006). The Act contains no
express provision conferring upon individuals, other than the
Attorney General or State’s Attorneys, a cause of action to enforce
26
the Act. See 815 ILCS 513/35 (West 2006).
II
The issue in this case is whether homeowners can raise a
contractor’s violation of the Act as an affirmative defense when a
contractor is suing a homeowner. Three Illinois courts have said
that they can. See K. Miller Construction Co., Inc. v. McGinnis,
394 Ill. App. 3d 248, 913 N.E.2d 1147 (2009); Smith v. Bogard, 377
Ill. App. 3d 842, 879 N.E.2d 543 (2007); Central Illinois
Electrical Services, L.L.C. v. Slepian, 358 Ill. App. 3d 545, 831
N.E.2d 1169 (2005). In McGinnis, the First District held that a
contractor who did not comply with the Act was precluded from
recovering on his mechanics’ lien foreclosure and breach of
contract claims. McGinnis, 394 Ill. App. 3d at 253, 913 N.E.2d at
1152. In Bogard, the Fourth District held that a contractor’s
violation of the Act precluded him from bringing a breach of
contract, unjust enrichment or quantum meruit action. See Bogard,
377 Ill. App. 3d at 847-48, 879 N.E.2d at 548. In Slepian, this
court ruled that a homeowner can raise a contractor’s violation of
the Act as an affirmative defense to a suit to foreclose a
mechanics’ lien. Slepian, 358 Ill. App. 3d at 550, 831 N.E.2d at
1173.
However, Justice McDade finds that because defendant had no
private right of action to enforce the Home Repair and Remodeling
Act, she cannot raise the Act as an affirmative defense. I
27
disagree. Courts analyzing similar consumer protection statutes
have found that a defendant can raise a violation of a statute as
an affirmative defense even though the statute does not provide a
private right of action.
In an analysis of this exact issue under the Motor Vehicle
Retail Installment Sales Act (Sales Act) (815 ILCS 375/1 et seq.
(West 1998)), this court, in a unanimous decision, ruled that a
defendant could raise a plaintiff’s violation of the Sales Act to
defend against a plaintiff’s claim even though the statute limits
enforcement to the Attorney General or State’s Attorney. Route 50
Auto Sales, Inc. v. Muncy, 331 Ill. App. 3d 515, 516-17, 771 N.E.2d
635, 636 (2002). The court reasoned that "the defendants did not
file an action to enforce the provisions of the [Sales] Act in this
case. Instead, the defendants are raising the violation of the
[Sales] Act as a defense against plaintiff’s action." Muncy, 331
Ill. App. 3d at 517, 771 N.E.2d at 636. Thus, the penalty
provision of the Sales Act can be used as an affirmative defense to
a plaintiff’s claim for recovery. Muncy, 331 Ill. App. 3d at 517,
771 N.E.2d at 637.
Similarly, regulations adopted by the Department of Housing
and Urban Development (HUD) pursuant to the National Housing Act
(12 U.S.C. §1701 et seq. (2006)) may be raised as an affirmative
defense in foreclosure actions even though the regulations do not
create a private right of action. See Wells Fargo Home Mortgage,
28
Inc. v. Neal, 398 Md. 705, 922 A.2d 538 (2007); Prudential
Insurance Co. of America v. Jackson, 270 N.J. Super. 510, 637 A.2d
573 (1994); Fleet Real Estate Funding Corp. v. Smith, 366 Pa.
Super. 116, 530 A.2d 919 (1987); Bankers Life Co. v. Denton, 120
Ill. App. 3d 576, 458 N.E.2d 203 (1983); Cross v. Federal National
Mortgage Ass’n, 359 So. 2d 464 (Fla. App. 1978); Federal National
Mortgage Ass’n v. Ricks, 83 Misc. 2d 814, 372 N.Y.S.2d 485 (N.Y.
Sup. 1975). The court in Denton stated:
"The legislative purpose of the National Housing Act ***
is to assist in providing a decent home and a suitable
living environment for every American family. Thus, the
primary beneficiaries of the act and its implementing
regulations are those receiving assistance through its
various housing programs. This would include the
defendants as mortgagors of a H.U.D. insured mortgage.
Therefore, in order to effectively insure that the
interests of the primary beneficiaries of the H.U.D.
mortgage servicing requirements are being protected,
mortgagors must be allowed to raise noncompliance with
the servicing requirements as a defense to a foreclosure
action." Denton, 120 Ill. App. 3d at 579, 458 N.E.2d at
205.
To allow a mortgagee to foreclose on a home despite its violation
of HUD regulations "would be to permit it to subvert the very goal
29
the program was established to achieve and to make a mockery of the
National Housing Act." Ricks, 83 Misc. 2d at 825, 372 N.Y.S.2d at
496.
Likewise, many states have held that a defendant can raise a
plaintiff’s failure to comply with the Farm Credit Act of 1971
(FCA) (12 U.S.C. §2001 et seq. (2006)) as a defense in a
foreclosure proceeding even though the Act does not create a
private right of action. See State ex rel. Farm Credit Bank of
Spokane v. District Court of the Third Judicial District, 267 Mont.
1, 881 P.2d 594 (1994); Farm Credit Bank of Texas v. Sturgeon, 93-
1536 (La. App. 3 Cir. 6/1/94); 640 So. 2d 666; Burgmeier v. Farm
Credit Bank of St. Paul, 499 N.W.2d 43 (Minn. App. 1993); Western
Farm Credit Bank v. Pratt, 860 P.2d 376 (Utah App. 1993); Lillard
v. Farm Credit Services of Mid-America, ACA, 831 S.W.2d 626 (Ky.
App. 1991); Federal Land Bank of St. Paul v. Overboe, 404 N.W.2d
445 (N.D. 1987). The FCA was created to protect borrowers "to
ensure that they received fair treatment, due process and every
realistic opportunity to avoid liquidation and stay in business."
Redd v. Federal Land Bank of St. Louis, 851 F.2d 219, 222 (8th Cir.
1988). Allowing defendants to raise the FCA as a defense is
necessary to achieve the statute’s goal of advancing agricultural
development and protecting farmers. See Burgmeier, 499 N.W.2d at
50; Lillard, 831 S.W.2d at 629; Overboe, 404 N.W.2d at 449.
In Production Credit Ass’n of Fargo v. Ista, 451 N.W.2d 118
30
(N.D. 1990), the North Dakota Supreme Court explained:
"There is a vast difference between allowing use of a
regulatory violation as a 'shield' in the form of an
equitable defense to foreclosure, and allowing its use as
a 'sword' to create a state-based tort action for
recovery of damages where no direct private right of
action for damages is recognized." Ista, 451 N.W.2d at
125.
Applying this reasoning to the Home Repair and Remodeling Act, I
find the analysis of the North Dakota Supreme Court compelling.
Although a statute may inhibit its use as a private right of
action, it may be employed as a defense against a violation of
statutory requirements.
Considering the intent and purpose of the Home Repair and
Remodeling Act, I find no reason to deviate from the rationale in
our previous holding in Muncy. Like the Sales Act, the Home Repair
and Remodeling Act was created to ensure that businesses treat
consumers fairly and honestly. Compare Bogard, 377 Ill. App. 3d at
845, 879 N.E.2d at 546 (purpose of Home Repair and Remodeling Act
is to promote fair and honest practices), with Chrysler Credit
Corp. v. Ross, 28 Ill. App. 3d 165, 168, 28 N.E.2d 65, 68 (1975)
(purpose of retail installment sales statutes is to protect
consumers from fraud, deception and other unscrupulous practices).
Allowing a contractor to sue a homeowner without regard to whether
31
the contractor complied with the Act would defeat the Act’s purpose
of protecting consumers and render the Act meaningless. See
Bogard, 377 Ill. App. 3d at 848, 879 N.E.2d at 548 (refusing to
allow contractor to recover under theories of unjust enrichment and
quantum meruit because "[a]llowing a contractor a method of
recovery when he has breached certain provisions of the Act would
run afoul of the legislature’s intent of protecting consumers,
would reward deceptive practices, and would be violative of public
policy").
Although the legislature has restricted the use of the Act as
an offensive tool, it has not prohibited a homeowner from using the
Act as a defense against a contractor who seeks payment on a
contract that the statute makes unlawful. Thus, a homeowner may
raise a contractor’s failure to comply with the requirements of the
Act as an affirmative defense.
III
Justice McDade and Justice Schmidt incorrectly hold that
plaintiff’s failure to comply with the provisions of the Act did
not preclude him from foreclosing on his mechanics’ lien.
The legal capacity to foreclose a mechanics’ lien depends on
the validity of the lien. G.M. Fedorchak & Associates, Inc. v.
Chicago Title Land Trust Co., 355 Ill. App. 3d 428, 433, 822 N.E.2d
905, 909 (2005). The lien must be based on a valid contract; if it
is not, the lien is unenforceable. G.M. Fedorchak, 355 Ill. App.
32
3d at 433, 822 N.E.2d at 909. When a contract does not comply with
the Act, it is invalid and cannot form the basis of a breach of
contract action or an action to foreclose a mechanics’ lien. See
McGinnis, 394 Ill. App. 3d at 253-54, 913 N.E.2d at 1152; Bogard,
377 Ill. App. 3d 842, 879 N.E.2d 543; Slepian, 358 Ill. App. 3d at
550, 831 N.E.2d at 1173.
In McGinnis, the McGinnises orally agreed to pay Miller, a
contractor, $187,000 for remodeling work in 2004. In 2005, the
project expanded significantly and the McGinnises orally agreed to
pay over $500,000. In 2006, Miller completed the project. The
McGinnises paid Miller $177,580.33 but refused to pay any more.
Miller filed a complaint against the McGinnises, alleging that he
was entitled to (1) a lien on the McGinnises’ property for over
$300,000, (2) recover the unpaid balance based on breach of the
oral contract, and/or (3) compensation for his labor, materials,
and services on a quantum meruit theory. The McGinnises filed a
motion to dismiss, arguing that Miller could not recover because he
never provided a written contract as required by the Act. The
trial court granted the McGinnises’ motion to dismiss. The
appellate court affirmed the trial court’s dismissal of Miller’s
foreclosure and breach of contract claims, stating:
"We find no merit to Miller’s contention that his
lien foreclosure claim in count I and his breach of
contract claim in count II can stand in the face of the
33
plain language of the Act that bars recovery for work
that exceeds $1,000 on a residence without a written
contract or work order." McGinnis, 394 Ill. App. 3d at
253, 913 N.E.2d at 1152.
The court concluded, "In the absence of a written contract or work
order, Miller’s time and materials oral contract is unenforceable
under the Act." McGinnis, 394 Ill. App. 3d at 253, 913 N.E.2d at
1152.
In Bogard, a contractor provided homeowners with an oral
estimate of "$20,000 or less" for a room addition but did not
provide a written contract or a consumer rights pamphlet. The
homeowners filed a motion to dismiss the contractor’s breach of
contract action against them, claiming that the contractor was
precluded from recovery. The trial court agreed, and the appellate
court affirmed the trial court’s decision, stating: "We find the
Act applies to Smith, that Smith violated several provisions of the
Act, and those violations support the dismissal of his breach-of-
contract claim." Bogard, 377 Ill. App. 3d at 847-48, 879 N.E.2d at
548.
In Slepian, a contractor filed a complaint to foreclose a
mechanics’ lien against homeowners, alleging that they failed to
pay for labor and materials the contractor provided under an oral
contract for work on their property. The homeowners raised an
affirmative defense, alleging that because the contractor violated
34
the Act, the oral contract for services was void and, therefore,
could not form the basis of recovery under a mechanics’ lien. The
trial court found in favor of the contractor. This court disagreed
with the trial court’s decision, stating:
"The language of the Act clearly and unambiguously
requires anyone engaged in the business of home repair
and remodeling to obtain a signed contract before
initiating work that will exceed $1,000 in cost. The
trial court erred in concluding the Act did not apply in
the instant case, and the court should now hear any
claims that were dismissed on that basis." Slepian, 358
Ill. App. 3d at 550, 831 N.E.2d at 1173.
We reversed and remanded the trial court’s decision. Slepian, 358
Ill. App. 3d at 550, 831 N.E.2d at 1173.
Here, plaintiff filed a suit to foreclose his mechanics’ lien
against defendant. Defendant filed an answer to the complaint,
alleging that she stopped payment on her check to plaintiff because
his work was defective. She further claimed that defendant
violated the Home Repair and Remodeling Act by failing to provide
her with a consumer rights pamphlet and obtain a signed written
contract from her.
There is no question that defendant’s failure to provide
defendant with a consumer rights pamphlet and obtain a signed
written contract prior to performing work on defendant’s home
35
violated the Act. See 815 ILCS 513/20(a), 30 (West 2006);
McGinnis, 394 Ill. App. 3d at 253, 913 N.E.2d at 1152; Bogard, 377
Ill. App. 3d at 847-48, 879 N.E.2d at 548; Slepian, 358 Ill. App.
3d at 550, 831 N.E.2d at 1173. Nevertheless, Justice McDade
contends that these violations were merely "procedural errors." I
disagree with this characterization.
The Home Repair and Remodeling Act is written in mandatory
terms requiring contractors to provide customers with a copy of a
consumer rights pamphlets and obtain a signed written contract
before beginning work. See 815 ILCS 513/20(a), 30 (West 2006). A
contractor’s failure to obtain a written contract prior to
performing work over $1,000 is "unlawful." 815 ILCS 513/30 (West
2006). Nothing in the Act excuses a contractor’s failure to
strictly abide by the Act’s terms.
Because defendant did not sign the work order or any other
written contract with plaintiff, there is no valid contract between
plaintiff and defendant that could form the basis for plaintiff’s
mechanics’ lien. See Bogard, 377 Ill. App. 3d at 847-48, 879
N.E.2d at 548; Slepian, 358 Ill. App. 3d at 550, 831 N.E.2d at
1173. Thus, since plaintiff’s mechanics’ lien is not based on a
valid contract, it is unenforceable. See G.M. Fedorchak, 355 Ill.
App. 3d at 433, 822 N.E.2d at 909. The trial court properly
entered summary judgment in favor of defendant.
IV
36
The majority’s decision in this case has far-reaching
implications that will affect not only the Home Repair and
Remodeling Act but at least 18 other Illinois consumer protection
statutes that contain enforcement provisions like the one in the
Act, which allow only the Attorney General and/or State’s Attorney
to bring an action to restrain violations.8 Until now, this court,
8
Those statutes are Residential Improvement Loan Act (815
ILCS 135/6 (West 2006)); Credit Card Issuance Act (815 ILCS 140/8
(West 2006)); Unsolicited Credit Card Act of 1977 (815 ILCS 150/4
(West 2006)); Copper Purchase Registration Law (815 ILCS 325/8
(West 2006)); Fraudulent Sales Act (815 ILCS 350/11 (West 2006)
(created to prevent fraud and misrepresentations often associated
with "going out of business" and "removal sales" (815 ILCS 350/2
(West 2006))); Motor Vehicle Retail Installment Sales Act (815
ILCS 375/23 (West 2006) (intended to protect consumers from
fraud, deception and other unscrupulous practices (see Ross, 28
Ill. App. 3d at 168, 28 N.E.2d at 68)); Opthalmic Advertising Act
(815 ILCS 385/8 (West 2006) (purpose is to "require advertisers
of ophthalmic materials to tell the whole truth to the general
public" for the public’s protection, safety, and health (815 ILCS
385/1 (West 2006))); Platinum Sales Act (815 ILCS 395/7 (West
2006)); Resident Alien Course Act (815 ILCS 400/4 (West 2006));
Retail Installment Sales Act (815 ILCS 405/30 (West 2006) (intent
37
like countless others, has held that a consumer can raise a
violation of such consumer protection statutes as an affirmative
defense to a plaintiff’s claim for recovery. See Muncy, 331 Ill.
App. 3d at 517, 771 N.E.2d at 637; Slepian, 358 Ill. App. 3d at
550, 831 N.E.2d at 1173.
Consumer protection statutes are to be liberally construed to
effectuate their purpose of protecting consumers. See Price v.
is to make borrowers more aware of consequences of incurring
debts (see Garza v. Chicago Health Clubs, Inc., 347 F. Supp. 955,
962-63 (N.D. Ill. 1972))); Second-Hand Watch Act (815 ILCS 410/5
(West 2006)); Transportation Ticket Fraud Act (815 ILCS 415/3
(West 2006)); Travel Promotion Consumer Protection Act (815 ILCS
420/7 (West 2006)); Used Lubricant Act (815 ILCS 435/2 (West
2006)); Home Repair Fraud Act (815 ILCS 515/4 (West 2006) (goal
is to "prohibit and prevent knowing use of fraud to induce an
unwitting homeowner to actually enter into an agreement for home
repair" (People v. Flynn, 341 Ill. App. 3d 813, 830, 792 N.E.2d
527, 542 (2003))); Internet Caller Identification Act (815 ILCS
517/15 (West 2008)); Job Referral and Job Listing Services
Consumer Protection Act (815 ILCS 630/12 (West 2006)); Motor
Vehicle Leasing Act (815 ILCS 636/75(1) (West 2006) (intended to
"promote the understanding of vehicle leasing in this State by
providing for the disclosure of lease obligations to consumer
lessees") (815 ILCS 636/5 (West 2006))).
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Philip Morris, Inc., 219 Ill. 2d 182, 233-34. 848 N.E.2d 1, 32
(2005). Until today, this court has enforced the intent of these
statutes in decisions such as Muncy and Slepian. The majority’s
opinion in this case, which precludes defendant from raising a
violation as a defense, is a narrow, restrictive interpretation of
the Act that substantially erodes the effectiveness the statutory
scheme of Illinois’s consumer protections. For these reasons, I
dissent.
39