Margaret Killion v. Jarrod Kendall, d/b/a Kendall Kontracting and Jarrod Kendall ( 2012 )

Pursuant to Ind.Appellate Rule 65(D), this
Memorandum Decision shall not be
regarded as precedent or cited before any FILED
Jul 17 2012, 9:13 am
court except for the purpose of
establishing the defense of res judicata,
collateral estoppel, or the law of the case. CLERK
of the supreme court,
court of appeals and
tax court
ATTORNEY FOR APPELLANT: ATTORNEY FOR APPELLEES:
JEFFREY D. STANTON JOHN R. HILLIS
Logansport, Indiana Hillis Hillis Rozzi & Knight
Logansport, Indiana
IN THE
COURT OF APPEALS OF INDIANA
MARGARET KILLION, )
)
Appellant-Plaintiff, )
)
vs. ) No. 09A04-1109-CT-513
)
JARROD KENDALL, d/b/a KENDALL )
KONTRACTING and JARROD KENDALL, )
Individually, )
)
Appellees-Defendants. )
APPEAL FROM THE CASS SUPERIOR COURT COURT
The Honorable Richard A. Maughmer, Judge
Cause No. 09D02-0902-CT-1
July 17, 2012
MEMORANDUM DECISION – NOT FOR PUBLICATION
RILEY, Judge
STATEMENT OF THE CASE
Appellant-Plaintiff, Margaret Killion (Killion), appeals the trial court’s denial of
her motion to correct error in the court’s conclusion that Appellee-Defendant, Jarrod
Kendall, d/b/a/ Kendall Kontracting, and Jarrod Kendall individually (Kendall), did not
commit any fraud during Killion’s home improvement project.
We affirm.
ISSUES
Killion raises two issues on appeal, which we consolidate and restate as the
following single issue: Whether Kendall’s statements to Killion and his conduct during
the project support a finding of fraud under the Home Improvement Fraud Act.
FACTS AND PROCEDURAL HISTORY
In the early summer of 2008, Killion, at the time seventy-seven years old, decided
to make some improvements to her residence, located in Logansport, Indiana. The
project would include new siding, new doors and windows, a sunroom addition, a new
bathroom shower and tile, a new garage door, and new posts supporting the front porch.
Killion initially contacted Bob Brown (Brown), a general contractor, to perform the
work. Brown was not interested in the project and referred her to Kendall.
In July of 2008, Killion phoned Kendall and they discussed in general terms the
work to be performed on Killion’s home. Later that month, Kendall travelled from
Lafayette to Logansport to view her residence. Prior to hiring Kendall, Killion inquired
about his experience in home improvement projects. Kendall handed Killion his business
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card and indicated that he had worked for Brown prior to incorporating his own
contracting business in March 2008. During his conversation with Killion, Kendall
represented that the project would be a “piece of cake” and that he had the expertise
necessary to complete the work. (Transcript p. 24). Kendall gave Killion a total
estimated project cost of approximately $30,000. At the time of the meeting, Kendall
was twenty-one years old and was not bonded. Although he held himself out to be a
general contractor, he was not licensed as such because a license “was not required where
[he] practiced.” (Tr. p. 253).
At some point after the meeting in July of 2008, Kendall drafted some documents
which he presented to Killion. Throughout the project, Kendall continued to draft
documents to address changes made to the home improvement project. Some of these
documents were signed by Killion; others were not. Kendall started the project in late
July of 2008, and even though it was generally “advised” to obtain a home improvement
permit prior to commencing the work, he did not do so. (Tr. p. 253).
During the project, Killion expressed concern with the quality of Kendall’s work.
Specifically, she expressed dissatisfaction, among others, about the siding on the house
which was not level, the garage door which was improperly installed, the front and rear
door of the house which did not close, and the furnace which stopped working because
Kendall had cut off and improperly re-routed the exhaust pipe. Also during the project,
Kendall removed the gutters and soffit from the residence and failed to re-install them.
She noted that Kendall would not work more than two hours for two or three days each
week. During the work on the residence, Kendall rented a “lift” which proved to be
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unnecessary. When Killion expressed her concerns to Kendall, he told her that he would
repair his work to her satisfaction—he never did.
After experiencing continuing problems with Kendall’s poor workmanship, his
failure to correct the defects, and the inappropriate amount of time he spent on the
jobsite, Killion decided to release Kendall on September 24, 2008. At the time of the
termination, Killion had paid Kendall more than $34,700.
On February 18, 2009, Killion filed her Complaint for damages against Kendall
alleging breach of contract, negligent or poor workmanship, fraud under the Home
Improvement Fraud Statute, and a violation of the Indiana Home Improvement Contract
Statute. On June 24, 2010, Kendall filed his notice of bankruptcy and the cause was
stayed. On October 27, 2010, Killion filed her motion to set trial date, which was granted
by the trial court. On May 5, 2011, a bench trial was conducted.
At the trial, Kendall testified that Killion’s project was the first new construction
work that he had undertaken. He stated that while he was working on the project, he also
re-roofed another client’s house and performed some small jobs for another customer.
During his testimony, he admitted to covering up the exhaust pipe on Killion’s furnace
and not getting an improvement permit for the project. He also stated that approximately
one year prior to trial, he discovered he owed Killion $7,274 and admitted that he had not
yet refunded her the money.
Lawrence Vail (Vail), a general contractor, testified that he was contacted by
Kendall to install the foundation for the sunroom addition to Killion’s home. Vail
explained that he had met Kendall when they both worked for Brown. Vail clarified that
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at that time, Kendall worked as a “third hand,” an assistant to get material, clean up, and
to generally help out. (Tr. p. 80). He stated that he was surprised to get a phone call
from Kendall because he did not realize that Kendall was performing general
construction work. Vail opined that based on his observation of the work that Kendall
had completed on Killion’s house, Kendall “seemed like he was out of his league,” and
did not appear to know what he was doing. (Tr. p. 106). After Killion released Kendall
from the project, she hired Vail to complete the work. Vail testified that Killion paid him
$15,800 to perform work that Kendall was supposed to have completed.
On May 12, 2011, the trial court entered an Order, finding and concluding in
pertinent part that:
36. [Kendall] desired to successfully complete [Killion’s] home
improvement project and incorrectly assumed that he had the ability to
complete [Killion’s] home improvement project.
***
48. [Killion] did ask [Kendall] to fix some discrepancies [Killion] noticed
during the project prior to [Kendall’s] termination. [Kendall] failed to fix
any of said discrepancies.
49. [Kendall] is a home improvement supplier subject to the Home
Improvement Contract Act (HICA).
50. [Kendall] drafted the four written agreements [].
51. None of the agreements meet the standard provided for in I.C. [§] 24-5-
11-10(4).
52. [Kendall’s] failure to comply with I.C. [§] 24-5-11-10(4) is a deceptive
act per the HICA.
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53. While the court concludes that [Kendall] was incompetent in this
matter, [Kendall] did not engage in willful deceptive behavior with the
intent to defraud or mislead [Killion].
54. [Killion] did not give [Kendall] written notice of problems observed
with [Kendall’s] workmanship, and the record is vague how much verbal
notice [Killion] gave [Kendall] to fix the discrepancies prior to terminating
[Kendall] from the project.
55. Neither party complied with I.C. [§] 32-27-3-1.[1]
56. [Killion’s] damages caused by [Kendall] are $23,575.94 and [Killion]
is entitled to a judgment in the same amount, to wit: Twenty three
thousand five hundred seventy five dollars and ninety four cents against
[Kendall].
(Appellant’s App. pp. 18-19).
On June 10, 2011, Killion filed her motion to correct error and motion for
clarification, asserting that the evidence presented at trial established that (1) Kendall had
intentionally committed fraud under the Home Improvement Fraud Act and (2) Kendall’s
retention of Killion’s money constituted willful misconduct. On September 1, 2011, after
conducting a hearing, the trial court denied Killion’s motion to correct error and motion
for clarification.
Killion now appeals. Additional facts will be provided as necessary.
DISCUSSION AND DECISION
I. Standard of Review
1
I.C. § 32-27-3-1 refers to the definition section of the Notice and Opportunity to Repair Chapter of the
Construction Warranties Article of the Property Title. We believe that the trial court in general meant to
refer to the fact that neither party followed the provisions of the Notice and Opportunity to Repair
Chapter.
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A trial court has discretion to grant or deny a motion to correct error and we
reverse its decision only for an abuse of that discretion. Hawkins v. Cannon, 826 N.E.2d
658, 661 (Ind. Ct. App. 2005). An abuse of discretion occurs when the trial court’s
decision is against the logic and effect of the facts and circumstances before the court or
if the court has misinterpreted the law. Id.II. The Home Improvement Fraud Statute
Killion contends that the trial court abused its discretion by concluding that
Kendall did not commit fraud under the Home Improvement Fraud Statute. The Home
Improvement Fraud Statute provides, in pertinent part, that
(a) A home improvement supplier who enters into a home improvement
contract and knowingly:
***
(2) creates or confirms a consumer’s impression that is false and that the
home improvement supplier does not believe to be true;
***
(4) uses or employs any deception, false pretense, or false promise to cause
a consumer to enter into a home improvement contract
***
commits home improvement fraud, a Class B misdemeanor[.]
(b) A home improvement supplier who, with the intent to enter into a home
improvement contract, knowingly:
***
(2) does work on the property of a consumer without the consumer’s prior
authorization;
***
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commits a Class A misdemeanor[.]
I.C. §§ 35-43-6-12(a)(2), (4); -(b)(2). Indiana Code section 34-24-3-1 permits customers
to maintain a civil cause of action against home improvement suppliers for a violation of
the Home Improvement Fraud Statute.
Although the tort causes of action for fraud, constructive fraud, and home
improvement fraud share some overlapping elements, they are distinct tort theories with
elements unique from each other. Benge v. Miller, 855 N. E.2d 716, 721 (Ind. Ct. App.
2006). For example, to prove fraud and constructive fraud, the plaintiff must show a
material misrepresentation of a past or existing fact. Id. To prove home improvement
fraud, the plaintiff can either show that the home improvement supplier misrepresented a
material fact or promised performance that he did not intend to perform, or used or
employed deception to cause the plaintiff to enter into the contract or entered into an
unconscionable contract. Id. Further, to prove fraud or constructive fraud, the plaintiff
must show that he relied on the material misrepresentation. Id. There is, however, no
reliance requirement in the Home Improvement Fraud Statute. Id.With respect to the claim of fraud, Killion makes a two-fold allegation. First, she
argues that Kendall’s statements, representing himself to be a general contractor and that
the project would be easy to complete, support a finding of fraud under the Home
Improvement Fraud Statute. Secondly, she asserts that Kendall’s knowing failure to
return $7,274.00 that he admittedly owed Killion, constituted theft “and as such would
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constitute willful deceptive behavior with the intent to defraud or mislead [Killion].”
(Appellant’s Br. p. 13). We will analyze each contention in turn.
A. Kendall’s Statements
Because there is no reliance requirement in the Act, Killion’s argument that she
relied on Kendall’s statements to hire him for the work necessarily fails. Even if we were
to rephrase her argument in terms of misrepresentations of material fact or false promises,
i.e., Kendall knowingly misrepresented or promised that he could perform the work, her
claim is equally unsuccessful.
At the time of the initial meeting between Killion and Kendall, Kendall was
twenty-one years old and was not bonded. Prior to hiring Kendall, Killion inquired about
his experience in home improvement projects. Although Killion first contacted Brown to
perform the work, Brown was not interested but recommended that she contact Kendall.
Kendall had previously worked for Brown prior to incorporating his own business in
March 2008. When they met, Kendall handed Killion his business card and confirmed
that he had worked for Brown. During his conversation with Killion, Kendall
represented that the project would be a “piece of cake” and that he had the expertise
necessary to complete the work. (Tr. p. 24).
While the record contains evidence indicating that Kendall was inexperienced and
optimistic about his skills necessary to perform the work, Killion does not present any
evidence establishing that Kendall knowingly misrepresented his prior experience or
promised work which he did not intend to perform. We agree with the trial court’s
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finding that did he not engage in willful deceptive behavior with the intent to defraud.
Therefore, the trial court properly denied Killion’s motion to correct error.
B. Theft
Additionally, Killion asserts that Kendall’s knowing failure to return $7,274.00
that he owed Killion, constituted theft, which in turn points to a willful deception with the
intent to defraud her. Again, we disagree.
Even though Kendall admitted that he owed Killion the money, he also stated that
he “was trying from the start to [] give her everything back that she was deserving.” (Tr.
p. 251). At no point did Kendall ever deny that he owed Killion additional money or
refused to return the amount. Therefore, we cannot conclude that the trial court abused
its discretion when it denied Killion’s motion to correct error.
CONCLUSION
Based on the foregoing, we conclude that the trial court properly determined that
Kendall’s statements to Killion and his conduct during the project did not support a
finding of fraud under the Home Improvement Fraud Act. Therefore, the trial court did
not abuse its discretion when it denied Killion’s motion to correct error.
Affirmed.
NAJAM, J. and DARDEN, J. concur
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