A warranty not included in writing is not enforceable, appeals court affirms

A warranty not included in an installation contract for heating and air conditioning equipment is not enforceable because it was not documented in writing, the Indiana Court of Appeals affirmed.

Barry Logan contracted with Curtis Evans to install heating and air conditioning equipment in Logan’s home.

Evans installed that equipment between Dec. 29, 2015, and March 31, 2016.

The invoice embodied the complete agreement between the parties and included an invoice price of $22,875, which Logan paid in two installments.

The invoice, dated Dec. 29, described the HVAC equipment to be installed but made no reference to a warranty for service or repair.

Logan contends the first installment payment of $14,000 he made on the invoice included $10,000 for a warranty; however, there is no documentation to support that contention except Logan’s own assertions in his affidavit.

In September and October 2021, Logan requested that Evans perform “warranty repair” on the first-floor furnace.

After Evans did not respond, Logan filed a small claim against Evans alleging that he had “paid Evans $22,875 to perform and warrant HVAC work” on his property and had “not been able to receive agreed upon products/services.”

Logan requested $10,000 in damages from Evans, the amount he attributed to purchase of the warranty. Logan’s claim was, in effect, a complaint for rescission of the alleged service and repair warranty.

Evans filed a motion to dismiss which alleged that Logan was attempting to “repackage” claims that had been previously litigated as a fraud claim.

The Marion County Small Claims Court granted Evans’ motion to dismiss all claims “originating from fraud, breach of contract, and home improvement” and denied the motion to dismiss “for breach of [a] service and repair warranty.”

In November 2022, the trial court conducted a bench trial on the remaining claim.

After Logan had completed the presentation of his evidence, Evans moved for an involuntary dismissal under Trial Rule 41(B) based upon the statute of frauds, specifically, Indiana Code section 32-21-1-1(b)(5) (2002).

The court found that Logan’s claim that Evans had “personally agreed to perform warranty service after one year had passed from the date of [HVAC] installation under an agreement not reduced to writing would “if true” be barred under Indiana Code section 32-21-1-1(b)(5) because the alleged agreement “was not reduced to writing.”

It held that “upon the weight of the evidence and the law” Logan had failed to show that he was entitled to relief on his claim that Evans had breached an agreement to personally provide warranty and repair service to Logan for the HVAC systems Evans installed in Logan’s residence.

The court granted Evans’ motion for involuntary dismissal and dismissed Logan’s claim.

Logan then filed a motion to correct error, which the trial court denied.

In his appeal, Logan argued that, categorically, the statute of frauds does not apply to the alleged transaction. He also contends that the statute of frauds does not apply to home improvement contracts.

Also, Logan argued that the statute of frauds does not apply because the agreement is governed by Article 2 of the Uniform Commercial Code.

Finally, he contends that, in any event, there is sufficient evidence of an oral warranty agreement between the parties.

The Court of Appeals affirmed the small claims court’s rulings, finding that the statute of frauds applies and precludes Logan’s warranty claim in that the alleged ten-year agreement is not to be performed within one year from the making of the agreement.

The appellate court also found that neither the home improvement statutes cited by Logan nor Article 2 of the Uniform Commercial Code avoid or nullify the operation and effect of the statute of frauds.

It concluded that the alleged oral agreement is barred by the statute of frauds.

Senior Judge Edward Najam wrote the opinion for the appellate court.

Logan asserted that Indiana Code Title 32, Article 21, only concerns real property and that this case presents “no material issue related to conveyance procedures or to real property,” and, therefore, that section 32-21-1-1(b)(5) “simply does not apply to Logan’s claim.”

Najam wrote that Logan’s argument that Indiana Code section 32-21-1-1(b)(5) “simply does not apply” because this dispute does not concern real property is not well-taken.

“It is well settled and, indeed, beyond dispute that the statute of frauds can apply to transactions that have no connection with real estate,” Najam wrote.

Logan contended that Evans documented the purchase in an invoice that constituted a home improvement contract.

Najam noted that Logan attempted to avoid the statute of frauds by citing two statutes, one concerning real property improvement contracts, and the other concerning construction warranties on real property.

The senior judge wrote that the thrust of Logan’s argument appeared to be that these real property improvement and construction warranties statutes avoid or supersede the statute of frauds as it pertains to application of his warranty claim.

Logan’s agreement with Evans does not satisfy the statutory requirements for a real property improvement contract, as clearly set out in Indiana Code section 24-5-11-10, Najam wrote.

Logan stated that the complete agreement between Logan and Evans was embodied in a single invoice.

“A single invoice, even where, as here, proof of payment is shown by a cashier’s check, does not constitute a real property improvement contract under Indiana Code section 24-5-11-10,” Najam wrote.

Logan also relied on the statutory citation for Construction Warranties on Real Property [Ind. Code § 32-27-1-1, et seq.], concerning statutory home improvement warranties.

The appellate court rejected Logan’s argument, finding that the two home improvement statutes cited by Logan do not correlate with the facts in this case.

Najam wrote that Logan asserted neither a statutory implied warranty nor a statutory express warranty upon a sale-of-goods claim under the U.C.C.

Logan claimed a breach of warranty to service and repair the HVAC equipment. His claim is not a U.C.C. warranty claim but a common law action for what he called a “refund.”

“Thus, we conclude that Logan’s warranty claim is not covered by the U.C.C. because a service and repair warranty is not a warranty that the goods conform to an affirmation or promise, i.e., not a warranty of the value or fitness of the goods, but a warranty ancillary to the sale of goods,” Najam wrote.

Najam concluded by pointing out that this case illustrates the perils of oral contracts not to be performed within one year from the making of the agreement, precisely the kind of disputed agreements the statute of frauds seeks to prevent.

“To survive the statute of frauds, not only must there be a writing but the writing must be signed by the party against whom the contract is to be enforced, and, here, Evans’ signature is nowhere to be found,” Najam wrote.

Judges Paul Mathias and Peter Foley concurred.

The case is Barry F. Logan, Jr. v. Curtis Evans, 23A-SC-1324.