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Not every claim under home improvement act is legitimate

The Wisconsin Home Improvement Practices Act, also known as HIPA, is a consumer-protection regulation imposing contract and business practice requirements on contractors performing home-improvement projects. It also provides that attorneys may recover double damages and attorney’s fees if they’re successful in pursuing a claim against a contractor who fails to comply with the act.

Although the Legislature intended HIPA to shield consumers from unscrupulous contractors, attorneys sometimes try to turn it into a sword by aggressively pursuing contractors for merely technical violations in the hope of obtaining double damages and attorney’s fees. But whether a violation of HIPA has actually occurred depends on the facts. As the recent ruling in Roob v. Maxcare Hardwood Flooring demonstrates, despite the act’s many possible pitfalls for contractors, not every HIPA claim will succeed.

In Roob v. MaxCare, Roob hired MaxCare to refinish water-damaged wood floors in his house. Even though Roob approved the color of the stain that was used, he was dissatisfied with the result and hired a different contractor to refinish the floors. When MaxCare sued Roob seeking payment for some of the work it had performed, Roob countersued asserting that MaxCare had failed to comply with certain provisions of HIPA and, as a result, he had suffered damages. Presumably, Roob hoped the court would double the damages and award him his attorney’s fees for countersuing MaxCare. However, it appears Roob’s claims were based more on a hyper-technical reading of HIPA than on the facts.

Roob asserted that MaxCare had violated HIPA’s requirement of having a signed contract. He argued that although he had signed a contract with MaxCare, the estimate, which provided details about the products MaxCare would apply, was a separate, unsigned document. The appellate court referred to the long-settled rule in Wisconsin that contracts required to be in writing normally may consist of multiple documents and it is enough if one of them is signed. The appellate court agreed with the trial court that MaxCare and Roob entered a signed written contract consisting of multiple documents.

Roob next claimed that MaxCare had changed the contract terms without providing notice and made substitutions of the products used on the floor without first getting Roob’s approval. Again, the court found that the evidence did not support Roob’s claim because the contract had called for MaxCare to apply either stain or a sealer. And, in any event, Roob had authorized the specific product before MaxCare applied it. The appellate court noted that the circuit court had found that MaxCare had applied the products that the parties had contracted to use and that Roob had expressly approved it.

Next, Roob argued that MaxCare had made a false, deceptive, or misleading representation to induce Roob to enter into a home-improvement contract. This argument was also based on the contention that MaxCare applied products that differed from those identified in the estimate. As noted above, the court found that Roob had ultimately approved in writing the products that MaxCare applied.

Roob’s final argument was that the trial court erroneously analyzed his claim for damages. The appellate court held that Roob was not entitled to any damages because he had failed to establish any violations of HIPA.

Bottom Line

Because of the threat of double damages and attorney’s fees, home-improvement contractors would be wise to ask their attorney to ensure that they meet both the contract and business-practice requirements of HIPA. But not every claim under HIPA is legitimate. If you’re faced with a HIPA violation claim, have your attorney carefully review the facts of the matter to see if the claim has merit or is merely saber-rattling.

Dave McCormack is a partner at the law firm Axley. He specializes in employment law, commercial real estate, contract drafting and negotiation, finance and environmental law.

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