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The Indiana Supreme Court has ordered a trial court to dismiss a consumer’s counterclaim to a breach-of-contract suit brought by a contractor, finding the consumer did not prove he was actually injured by the contractor’s allegedly deceptive acts.
But the court’s analysis in Hoosier Contractors, LLC v. Sean Gardner, 22S-CT-381, led one justice to pen a separate discussion about the possible harm of the state looking to federal standing doctrine.
The case began in December 2015, when Sean Gardner contacted Hoosier Contractors LLC for a roof inspection and estimate for repairs.
Before agreeing to the inspection, Hoosier Contractors required Gardner to sign a contract agreeing, among other things, to hire the company for any needed repairs and to pay 20% of the contract price if the contract was breached. Gardner agreed and signed.
The estimated cost of the repairs initially came out to more than $50,000, then increased to nearly $60,000 after an adjustment that Gardner requested. Gardner questioned whether all the repairs were necessary and ultimately hired another company, Calber Construction, to complete $18,000 in repairs.
Hoosier Contractors filed a breach-of-contract claim against Gardner, who responded with a class-action counterclaim alleging the contract with Hoosier Contractors violated the Home Improvement Contractors Act.
After its initial motion for summary judgment was denied, Hoosier Contractors filed a second motion for summary judgment on the counterclaim, alleging Gardner and some of the class members lacked standing because they did not suffer actual injury. Gardner also filed a motion for partial summary judgment, alleging the contract was null and void and the 20% damages provision was unenforceable.
The Hamilton Superior Court denied both summary judgment motions, and the Court of Appeals of Indiana affirmed.
In its Wednesday opinion, the Supreme Court affirmed the denial of partial summary judgment for Gardner but reversed the denial of Hoosier Contractors’ motion.
“We hold that Gardner, on behalf of himself and as a class representative, lacked standing to bring his counterclaim against Hoosier — a disposition that moots the class-action issues — and we summarily affirm sections 3 and 4 of the court of appeals’ opinion … which affirmed the denial of Gardner’s motion for partial summary judgment as to Hoosier’s breach-of-contract claim,” Justice Geoffrey Slaughter wrote.
“… At oral argument, Gardner underscored that his claimed injury — the ‘detriment’ he allegedly suffered — was indistinct from Hoosier’s procedural violations of the Act: ‘the detriment, I think, is the deceptive act itself,’” Slaughter wrote. “But as we have emphasized, any such violations are insufficient by themselves to confer standing.
“On this record, Hoosier’s deceptive acts did not hoodwink Gardner. He paid Hoosier nothing and hired a different company to repair his roof for less than Hoosier would have charged him. A deceptive act that deceives no one injures no one.”
Thus, the justices concluded Hoosier Contractors “proved the absence of a genuine factual dispute on a determinative issue — that Gardner suffered no injury,” and Gardner failed to create an issue of fact.
But Slaughter concluded by adding, “Our disposition today does not mean that Hoosier necessarily escapes legal liability for its business practices generally or even its practices as to Gardner specifically. The attorney general retains enforcement authority to seek any number of statutory remedies against those that violate the Act, including obtaining injunctions and securing civil penalties.”
The case was remanded with instructions to dismiss Gardner’s counterclaim.
In a separate opinion, Justice Christopher Goff — joined by Chief Justice Loretta Rush — concurred in the judgment but wrote to “express (his) concern that the majority’s reliance on recent developments in federal standing doctrine could do injury to Indiana law.”
Goff pointed to Indiana Code § 24-5-0.5-4, the statute underlying the Home Improvement Contractors Act, which holds that “(a) person relying upon an uncured or incurable deceptive act may bring an action for the damages actually suffered … .” It also provides that a person can pursue a class action “on behalf of any class of persons of which that person is a member and which has been damaged by such deceptive act.”
“… I conclude that an action may be brought on behalf of a class who suffered damages in reliance on a defendant’s act,” Goff wrote. “The deceptive act itself is not, therefore, a compensable loss in these circumstances. Here, Gardner designated no evidence of loss, harm, or damage beyond the alleged deceptive acts, and therefore Hoosier is entitled to summary judgment.”
In the majority opinion, Slaughter addressed, among other cases, Spokeo, Inc. v. Robins, 578 U.S. 330 (2016), where a consumer tried to sue a consumer-reporting agency under the Fair Credit Reporting Act of 1970 for allegedly making an inaccurate credit report about him.
In the Spokeo decision, the U.S. Supreme Court held that a consumer “cannot allege a ‘bare procedural violation’ sufficient to confer standing … without also alleging the violation caused him injury.”
While Goff noted Slaughter’s opinion didn’t expressly adopt federal standing law, he said he was “concerned … that continued reliance on the United States Supreme Court’s standing doctrine could do harm to Indiana law, especially considering where the Court has gone since Spokeo.”
“… Further reliance on cases like Spokeo could lead this Court down the road of reviewing whether rights the General Assembly has decided to protect are sufficiently ‘concrete’ to confer standing,” Goff concluded. “This would be an interference with the power of the legislature to define Hoosiers’ rights and to provide remedies, including nominal or statutory damages, when those rights are violated. For this reason, I concur only in today’s judgment.”
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