COA reverses against restoration company in dispute over tornado-torn home

The Indiana Court of Appeals has reversed for a Posey County couple whose home sustained damage following a tornado, finding that partial summary judgment was incorrectly awarded to a restoration company the couple hired to fix the roof.

After the roof of their Posey County home was torn off by a tornado in 2017, Nathan and Laura Kluger contracted with Servpro of North Lexington to provide residential and commercial cleanup and restoration services. While Servpro provided some cleanup services at the Klugers’ residence, it failed to place a tarp on the roof before a heavy rainfall and did not provide any water extraction services to the residence or to the Klugers’ personal property. Additionally, no one from the company came to cover the roof with a tarp until several days after the contract was signed.

Although Servpro’s standard practice is to send an invoice after the services are completed, it never sent a bill to the Klugers. A Servpro representative indicated its sole reason for failing to invoice the Klugers was because the project had “slipped through the cracks.”

As a result, the Klugers sued, alleging Servpro had failed to perform the cleanup and restoration services in a timely and proper manner. However, Servpro denied the allegations and instead alleged the Klugers owed $8,132.74 for the services provided, plus attorney fees and costs.

The Posey Circuit Court denied the Klugers’ motion for summary judgment on the issues of assumption of duty, breach of an oral contract and negligence. The court concluded that while Indiana’s Home Improvement Contracts Act applied to the type of services Servpro provided, the Klugers were not entitled to summary judgment because the “designated, undisputed facts do not support all of the elements of a cause of action under HICA.”

The trial court later denied the Klugers’ motion for partial summary judgment and instead granted partial summary judgment in Servpro’s favor, concluding HICA did not apply to the Klugers’ claims because the $150 threshold contract amount had not been met.

On interlocutory appeal, the Indiana Court of Appeals reversed and remanded in the Klugers’ favor in Nathan Kluger and Laura Kluger v. J.J.P. Enterprises, Inc. d/b/a SERVPRO of North Lexington, 20A-PL-235.

The panel held that to construe HICA’s contract price requirements as the trial court did would lead to unjust results and not hold improvement industry contractors accountable to consumers. Thus, because Servpro had already violated HICA when it commenced work, the appellate court concluded the company could not evade potential liability by simply withdrawing its demand for payment during litigation.

“For all these reasons, we conclude that HICA’S $150 contract-price threshold has been satisfied as a matter of law in this instance, and the trial court erred in granting Servpro’s motion for partial summary judgment,” Judge Robert Altice wrote Friday. “Thus, the grant of partial summary judgment for Servpro is reversed and we remand this cause with instructions that the trial court enter partial summary judgment in the Klugers’ favor and to conduct further proceedings consistent with this opinion.”