Litigation

ILLINOIS HOME REPAIR AND REMODELING ACT CLARIFIED BY SUPREME COURT

By Mark P. Loftus, Esq.

Finally, after much back and forth among the Appellate Courts, the Illinois Supreme Court has weighed in on what happens when a contractor technically violates the Illlinois Home Repair and Remodeling Act ["the Act"]by not complying with some of the provisions.

In K. Miller Construction Company, Inc. v. Joseph McGinnis, K Miller Construction, the plaintiff, was a Illinois construction company owned by Keith Miller. Defendant Joe McGinnis was an Illinois real estate attorney. Plaintiff had previously done remodeling work for McGinnis and the two guys were friends[operative word there is "were" - another example of why you should never do business with friends].

In 2004 McGinnis bought a three flat that he intended to convert into a single family home. He entered into an oral contract with the defendant to do the remodeling for about $190,000. Not long thereafter, McGinnis decided to incorporate significantly more work than originally discussed. The cost grew to around $500,000. McGinnis paid Miller the first $65,000 but refused to make any further payments until the job was done.

McGinnis visited the building repeatedly to give approval for work being done. In the summer of 2006, the final walk-throughs were done. Most of the work was approved. McGinnis made some additional payments but still owed Miller over $300,000. McGinnis refused to pay, so Miller sued. Plaintiff had a three count complaint: Count I seeking to foreclose a mechanic's lien; Count II breach of oral contract and Count III, in quantum meruit, basically asking for the reasonable value of the work done. McGinnis moved to dismiss arguing that plaintiff had not complied with the Act, which require a written contract for jobs over $1000. The trial court granted the motion and dismissed the case.

Miller appealed and got some, but not total relief. The Appellate Court ruled that the breach of contract count and mechanic lien counts were out. But, the Court said Miller could go forward on a quantum meruit claim. McGinnis of course, was not about to let that result stand. So he took an appeal to the Illinois Supreme Court.

The Illinois Supreme Court didn't overthink this one. They simply looked to Public Act 96-1023, effective July 12, 2010[after Miller filed his case]. Public Act 96-1023 rewrote the Act and indicated that any violations were to be remedied by an action under the Consumer Fraud Act. The Court ruled that the amendment made quite clear that entering into an oral contract does NOT make the contract unenforceable. Similarly, the Court held that quantum meruit would still be available to a contractor, even if there was no written contract. A good, common-sense result, that probably makes lots of contractors very, very happy.

Full post as published by Illinois Lawyer Blog on September 24, 2010 (boomark / email).