COA concludes genuine issues of material fact exist in roof repair breach of contract suit

The Court of Appeals of Indiana has affirmed the denial of summary judgment requests from both an Indiana roof contractor and a certified class over disputes stemming from a breach of contract case, finding genuine issues of material fact exist as to whether their contract is null and void.

After a customer relationship failed in 2015, Hoosier Contractors LLC sued Indianapolis homeowner Sean Gardner, alleging Gardner breached a contract that provided for Hoosier to make roof repairs on his home.

The contract, signed by Gardner before his Hoosier roof inspection took place, provided that if the owner’s insurance company did not agree to pay for the proposed repairs then the contract “shall be null and void.” It also contained a clause providing for liquidated damages in the event of breach of 20% of the total contract price.

Gardner’s insurer provided an itemized list of the work Hoosier would perform on Gardner’s home in the amount of $50,619.46. Gardner never gave the go-ahead to Hoosier to complete the work while also never canceling the contract. He eventually paid another company $18,000 to repair his roof, prompting Hoosier’s breach of contract suit.

Gardner filed a counterclaim on behalf of himself and a class of those similarly situated, alleging that Hoosier violated the Indiana Deceptive Consumer Sales Act.

Hoosier filed a motion for partial summary judgment asserting that the certified class lacked standing under the DCSA because they had not suffered actual damages, which the trial court denied. In response, Gardner filed a motion to approve class action notice.

The trial court then issued an order addressing notice of class action, which required that the notice advise potential class members that they could be liable for Hoosier’s attorney fees under the DCSA if Hoosier prevailed at trial. But it also denied Gardner’s motion for partial summary judgment contending that the contract was null and void and that its liquidated damages provision was unenforceable.

Affirming in Hoosier Contractors, LLC v. Sean Gardner, 21A-CT-1331, the appellate court first noted that the class has standing to bring a claim for statutory damages under Indiana Code Section 24-5-0.5-4(a). It determined that the plain reading indicates that a violation of the DCSA supports an action for a statutory damage award of $500.

“Thus, if the class carries its burden to show that Hoosier committed incurable deceptive acts upon which its members relied, its members are entitled to recover statutory damages of $500,” Judge Terry Crone wrote, concluding that the trial court did not err in finding that the class has standing and in denying Hoosier’s motion for partial summary judgment.

On Gardner’s cross appeal, the COA concluded that pursuant to Section 24-5-0.5-4(b), the trial court has discretion to award attorney fees to the prevailing party. It also concluded that genuine issues of material fact existed as to whether the contract is null and void and therefore affirmed the trial court’s denial of Gardner’s partial summary judgment on that issue.

The COA disagreed with Gardner’s characterization of evidence that he claimed indicated that his insurance company, Cincinnati Insurance, and claims company Spartan Claims LLC, never came to a final agreement about the price the insurer would agree to pay.

“The evidence shows that at the time of the email, Cincinnati and Spartan were discussing the price of the repairs; it does not show that they never reached an agreement,” Crone wrote, pointing to the undisputed fact that Gardner received two or three checks from Cincinnati for the claim later on.

Finally, the COA concluded that numerous unresolved issues existed as to whether the contract violates the Home Improvement Contractors Act, whether such violations constitute an incurable deceptive act under the DCSA, whether the Contract is null and void because Cincinnati failed to agree to the requested repairs, and whether Gardner breached the contract.

“These issues make a determination regarding the liquidation clause premature,” the opinion concluded. “Accordingly, we affirm the trial court’s denial of summary judgment on this issue.”