MD ELECTRICAL CONTRACTORS, INC., Aрpellee, v. FRED ABRAMS et al., Appellants.
No. 104000
Supreme Court of Illinois
April 3, 2008
228 Ill. 2d 281
Richard C. Slocum and Michael W. Huseman, of Dreyer, Foote, Streit, Furgason & Slocum, P.A., of Aurora, for appellee.
Chief Justice Thomas and Justices Fitzgerald, Kilbride, and Karmeier concurred in the judgment and opinion.
Justice Freeman dissented, with opinion, joined by Justice Burke.
OPINION
Plaintiff, MD Electrical Contractors, Inc., filed suit against defendants Fred and Carol Abrams, under a theory of quantum meruit to recover for services that it rendered as a subcontractor on defendants’ home improvement project. Defendants moved to dismiss the case pursuant to
This court allowed defendants’ petition for leave to appeal pursuant to
BACKGROUND
On November 2, 2005, plaintiff, an Illinois corpora-
Defendants filed a motion to dismiss pursuant to
Plaintiff countered that the Act does not apply to subcontractors. The basis for this assertion was the Act‘s focus on communications with the homeowner. Plaintiff asserted that because subcontractors generally do not have significant interaction with the homeowner, the Act could not be meant to apply to them. In support of its argument, plaintiff attached a copy of an affidavit of
The circuit court, after considering the above arguments and ascertaining that plaintiff‘s theory of liability was quantum meruit, granted defendants’ motion to dismiss. In the process of dismissing the complaint, the trial court asked plaintiff: “[Q]uantum meruit is a contract that‘s implied, and how can the court imply a contract when the law prohibits one?” At plaintiff‘s request, the trial court clarified that its finding was that “to grant the relief that [plaintiff is] saying would be under quantum meruit would be in derogation of statute and a clear legislative pronouncement contrary.” The court concluded by saying that plaintiff could either amend the complaint or the court could issue a finding under
Plaintiff presented two issues to the appellate court:
In their petition for leave to appeal to this court, defendants raised, as the sole issue, the application of the Act to subcontractors. However, in their brief to this court, defendants raise a second issue, namely, whether subcontractors are able to recover in quantum meruit or any direct action outside the
As to the first issue, plaintiff maintains that the language is ambiguous. In response to the second issue, plaintiff contends that this question is forfeited because the issue was not raised in thе defendants’ statement of points relied upon in the petition for leave to appeal, as required by
ANALYSIS
I
This is a case of first impression and requires this court to examine the meaning of the Home Repair and Remodeling Act with respect to subcontractors. As this case is one of statutory interpretation, the standard of review is de novo. Harshman v. DePhillips, 218 Ill. 2d 482, 490 (2006).
It should be noted at the outset that the use of general contractors and subcontractors is a common business practice in the home repair and remodeling industry. This relationship usually entails a homeowner contract-
The process of statutory interpretation is firmly established. The goal is to ascertain and give effect to the intent оf the legislature. The simplest and surest means of effectuating this goal is to read the statutory language itself and give the words their plain and ordinary meaning. Illinois Graphics Co. v. Nickum, 159 Ill. 2d 469, 479 (1994). However, it is not sufficient to read a portion of the statute in isolation. We must, instead, read the statute in its entirety, keeping in mind the subject it addresses and the legislature‘s apparent objective in enacting it. Gill v. Miller, 94 Ill. 2d 52, 56 (1983). Where the language of the statute is clear and unambiguous, we
In the present case, we are asked to decide whether and to what extent the Home Repair and Remodeling Act applies to subcontractors. We begin with the language of the Act itself. The Act requires that “a person engaged in the business of home repair or remodeling shall furnish to the customer for signature a written contract.”
The next stage of analysis looks to the definitions provided within the Act. “Person” is defined in
For the purposes of the case at bar, plaintiff does not dispute that it was engaged in home repair and remodeling work at defendants’ place of residence. Further, the parties do not dispute that the work plaintiff performed, had it been done by a general contractor or in direct relationship to the homeowner, would fall squarely within the Home Repair and Remodeling Act. Finally, plaintiff does not claim that it attempted to comply with the Act. Instead, the question is whether, by nature of plaintiff‘s being a subcontractor, the Act applies in a way that prohibits plaintiff from recovering from the homeowners because it did not comply with the Act.
Defendants argue that the Act is unambiguous in its use of the term “any person,” which, they contend, clearly includes subcontractors. Plaintiff contends that the Home Repair and Remodeling Act was designed to regulate the communications between contractors and the consumer/homeowner. Thus, because subcontractors typically dо not have significant direct communications with homeowners, the Home Repair and Remodeling Act cannot apply to them.
The text of the Act lends support to plaintiff‘s position.
The text of the consumer rights brochure that must accompany a contract also militates against a reading
However, defendants argue that the statute is unambiguous and applies to plaintiff. They note that plaintiff‘s complaint states that it is an Illinois corporation with its principal place of business in Illinois. Corporations are specifically listed in the definition of “person.”
Instead of adopting either the defendants’ or plaintiff‘s argument, this court recognizes that “[s]tatutes should be read as a whole with all relevant parts considered.” In re Marriage of Kates, 198 Ill. 2d 156, 163 (2001). When the Home Repair and Remodeling Act is considered in its entirety, it is clear that the statute unambiguously applies only to those who directly contract with a homeowner.
The entire focus of the Act is on regulating the direct contact and contracting between the “person” and the homeowner or consumer.
The conclusion that the Act applies only to those who contract directly is further supported by
In addition,
“A person engaged in the business *** that prepares or presents a written offer for home repair and remodeling to a consumer, shall advise the consumer, before the contract or agreement is accepted and executed, of the presence of any contractual provision that requires the consumer to: (i) submit all contract or agreement disputes to binding arbitration *** and (ii) waive his or her right to a trial by jury.”
815 ILCS 513/15.1(a) (West 2006).
Further, aside from the point that a subcontractor does not prepare or present a “written offer for home repair and remodeling to a consumer,” there is the negotiations clause that appears in
Defendants maintain that a proper reading of the Act merely requires a subcontractor to comply with the Act if it wants to preserve the right of direct action against the homeowner. Preserving a right of action, however, is not the sole focus of the Act. The Act also regulates liability for failure to comply with its terms. The enforcement provisions use the same “any person” language as the rest of the Act. Thus, the Act implicates not just civil recovery, but civil liability as well.
Section 35 of the Act authorizes the Attorney General or the State‘s Attorney to “bring an action *** against any person to restrain and prevent any pattern or practice violation of this Act.” (Emphasis added.)
Our conclusion that the Act does not include subcontractors is also consistent with related statutes. A subcontractor‘s recovery against a homeowner is usually
The Mechanics Lien Act is designed to provide, among other things, a remedy for wronged subcontractors. If the Home Repair and Remodeling Act applies to subcontractors, portions of the Mechanics Lien Act are rendered superfluous. For instance,
“Each subcontractor who has furnished, or is furnishing, labor, sеrvices, material, fixtures, apparatus or machinery, forms or form work in order to preserve his lien, shall notify the occupant either personally or by certified mail, return receipt requested, addressed to the occupant or his agent at the residence within 60 days from his first furnishing labor, services, material, fixtures, apparatus or machinery, forms or form work, of his agreement to do so.
The notice shall contain the name and address of the subcontractor or material man, the date he started to work or to deliver materials, the type of work done and to be done or the type of labor, services, material, fixtures, apparatus or machinery, forms or form work delivered and to be delivered ***.”
770 ILCS 60/5(b)(ii) (West 2006).
If the Home Repair and Remodeling Act required each subcontractor, before work began, to “furnish to the customer for signature a written contract or work order that states the total cost, including parts and materials listed with reasonable particularity and any charge for an estimate” (
“The subcontractor providing this notice has performed work for or delivered material to your home improvement contractor. These services or materials are being used in the improvements to your residence and entitle the subcontractor to file a lien against your residence if the services or materials are not paid for by your home improvement contractor. A lien waiver will be provided to your contractor when the subcontractor is paid, and you are urged to request this waiver from your contractor when paying for your home improvements.”
770 ILCS 60/21 (West 2006).
By comparison, the brochure required under the Home Repair and Remodeling Act requires the statement, “homeowners should know who provides supplies and labor for any work performed on your home. Suppliers and subcontractors have a right to file a lien against your property if the general contractor fails to pay them. To protect your property, request lien waivers from the general contractor.”
If each subcontractor is required to contract with the homeowner directly, there would be no need for these provisions in the Mechanics Lien Act. All the information required in both the Mechanics Lien Act notice and warning would already have been given as required under
Forcing subcontractors to comply with the Act would increase the burden on the very homeowners the Act is meant to protect. Such a homeowner would have to read and examine each contract, ensure that the totals in the subcontracts do not exceed the amount allocated to that portion of the project under both the contract with the general contractor and the contract that the general contractor has with the subcontractor. The homeowner
The statute is focused on regulating the communications and business practices of those people who directly solicit and contract with the homeowner.
The statute‘s plain language limits its application to only those who contract directly with the homeowner. To allow any other interpretation not only would be contrary to our principles of statutory interpretation, but would also do severe damage to industry practice and other statutes. The Home Repair and Remodeling Act is unambiguous and only applies to those who form direct contracts with the homeowner.
II
Defendants’ petition for leave to appeal raised only the issue of the application of the Home Repair and Remodeling Act to subcontractors. However, in defendants’ brief to this court, they raise the question of plaintiff‘s ability to recover under quantum meruit where there was no direct contractual relationship between the defendants and plaintiff. In reality, this question is far broader than the application of quantum meruit to the present action. Indeed, the argument is that a subcontractor has no direct right of recovery outside of the Mechanics Lien Act. This question was not properly presented in the defendants’ petition for leave to appeal (PLA). Accordingly, plaintiff argues that the issue is forfeited. For the reasons that follow, we agree.
The defendants’ contention that the issue was properly raised before the appellate court is a “red herring.” As this court stated in Marshall v. Burger King Corp., 222 Ill. 2d 422, 430-31 (2006), “[i]t is well settled that where the appellate court reverses the judgment of the circuit court, and the appellee in that court brings the case before this court as an appellant, that party may raise any issues properly presented by the record to sustain the judgment of the circuit court.” Marshall v. Burger King Corp., 222 Ill. 2d 422, 430-31 (2006) (noting that the sole issue before the trial court was whether defendant owed a duty of care to decedent; thus, when defendant raised the issue of proximate cause before this court, this court found the issue was not properly presented by the record and thus ineligible for review). In the present case, defendants prevailed in the circuit court. They were the appellees in the appellate court, where plaintiff prevailed, and are the appellants in the present action. Therefore, the relevant inquiry is not, as defendants contend, whether the issue was “directly and properly raised before the appellate court,” but rather whether the issue is properly raised by the trial court record and can now be utilized to support the finding of the trial court.
At the outset, we note that the issue before this court is a different issue than was addressed by the circuit court. Defendants, in their motion to dismiss plaintiff‘s first amended complaint, argued that the trial court could not allow plaintiff‘s action to go forward because to do so would be in derogation of a statute which prohibited the enforcement of this agreement. To support this argu-
In the present case, the trial court, in granting the motion to dismiss asked plaintiff‘s counsel, “[H]ow can the court imply a contract where the law prohibits onе?” Thus, the question before the trial court was not the availability of the quantum meruit theory of recovery itself, but whether the court‘s enforcement of an implied contract would be lawful where the Home Repair and Remodeling Act (if it applied to subcontractors) would prohibit the contract from existing in the first place.
Before this court, the issue presented by defendants is decidedly different. Defendants present the issue by stating that a “subcontractor has no claim against a homeowner in quantum meruit under long-settled Illinois law.” Thus, the issue changes from one that was intertwined with the application of the Home Repair and Remodeling Act to a question that is an independent basis for dismissal of the case. It is also worth noting that the first time the cases of Redd v. Woodford County Swine Breeders, Inc., 54 Ill. App. 3d 562 (1977), Vanderlaan v. Berry Construction Co., 119 Ill. App. 2d 142 (1970), and Suddarth v. Rosen, 81 Ill. App. 2d 136 (1967), appear as cited authority is in defendants’ brief to this
Further,
Contrary to defendants’ assertions, the issue was not directly raised in the PLA. The first time the quantum meruit issue is even mentioned in the PLA is in footnote 2 on page 12 of the PLA, where the defendants note that the appellate court declined to address the “related issue” of whether a subcontractor can recover from a homeowner with whom there is no direct contractual relationship. The issue is alluded to a second time in the last paragraph of the conclusion, where the defendants state that the plaintiff has no right to proceed directly against the defendants “under аny theory except a properly perfected mechanic‘s lien.” These passing references do not constitute a statement sufficient to meet the requirements of
Finally, there is no legal support to claim that a court should reach an issue simply because plaintiff has had an “ample opportunity to respond.” Beyond the defendants’ implication that plaintiff had “ample opportunity to respond,” plaintiff‘s only response to this argument was
CONCLUSION
For the reasons stated, the Home Repair and Remodeling Act does not apply to subcontractors. We affirm the judgment of the appellate court, which remanded this cause to the trial court for further consideration.
Affirmed.
JUSTICE FREEMAN, dissenting:
The court‘s decision today rests on the assumption that the Hоme Repair and Remodeling Act is an affirmative defense to the cause of action asserted in this case. The court‘s opinion, however, never addresses if this assumption is correct. The court‘s analysis is therefore incomplete. Additionally, the court‘s decision rests upon its discussion of the relationship of a “subcontractor” to a “general contractor.” This is problematic for a number of reasons, not the least of which is the fact that the court‘s understanding of that relationship comes from “facts” not found in the record. In fact, operation of the Home Repair and Remodeling Act in this case has nothing to do with notions regarding the relationship between general and subcontractors at all—the Act does not even use the terms, a fact all but ignored by the court. Instead, the Act concerns only the nature of work done and whether the work has been done pursuant to the Act‘s requirements concerning accuracy of communications about that work to the consumer. Facts about these things are entirely underdeveloped in this record, a fault оf plaintiff‘s complaint to be sure, but a fault that the court condones. In utterly failing to allege any specifics
The court is not bothered by any of this, or the niceties of proper procedure for that matter. The result is an opinion of near-advisory nature and a confusing one at that. Readers of the court‘s opinion may try, as I have, to determine exactly what the court‘s ruling is. As far as I can perceive, it is this: the Home Repair and Remodeling Act applies only to entities that contract directly with consumers and, to the extent that plaintiff claims that it was not such an entity, the Act does not apply to it. This perhaps would be an acceptable ruling, if there were any basis in the record for it. The record, however is far too underdeveloped to allow for that conclusion, and I therefore respectfully dissent.
Procedural Background & Controlling Principles
The first indication that the court‘s opinion is off-track appears early on in its “Background” section. In a footnote, the court explains that because neither party has “claimed that plaintiff was anything other than a subcontractor,” it need not address the fact that the record reflects that plaintiff may have “ceased to act as a subcontractor.” 228 Ill. 2d at 285 n.1. The court asserts that this discrepancy has no bearing on its analysis because such a dispute is a “factual question and beyond the scope of this opinion.” 228 Ill. 2d at 285 n.1.
I am not entirely sure what the court means by “beyond the scope of this opinion.” This case is before us on the dismissal of plaintiff‘s complaint pursuant to section 2—619 of the Code of Civil Procedure (
It could be said that all of the problems in today‘s opinion stem from the court‘s inability to properly frame the central issue before it. As I have noted, the question raised in this appeal is whether the circuit court properly dismissed plaintiff‘s complaint. The court, however, sees the issue differently, stating that, in this appeal, it is asked “to decide whether and to what extent the *** Act applies to subcontractors.” 228 Ill. 2d at 288. The court‘s failure to accurately recognize the issue leads it to assert that the standard of review in this case is de novo because the case is “one of statutory interpretation.” 228 Ill. 2d at 286. This, of course, is wrong. Although the circuit court‘s decision to dismiss raised an ancillary question concerning the interpretation of a statute (a legal question to which rulings made by the circuit court are given no deference on appeal), the standard of review in all appeals, including this one, is governed by the circuit court‘s ultimate disposition, nothing else. In this case, that disposition was the dismissal of plaintiff‘s complaint pursuant to section 2—619. An appeal from such a ruling is the “same in nature” as an appeal following the grant of summary judgment and is “likewise a matter given to de novo review.” Kedzie, 156 Ill. 2d at 116. The reviewing court must consider whether the existence of a genuine issue of material fact should have precluded the dismissal or, absent such an issue of fact, whether dismissal is proper as a matter of law. Kedzie, 156 Ill. 2d at 116-17. See also 4 R. Michael, Illinois Practice §41.9 (1989).
What, then, did plaintiff allege in its complaint? The complaint alleged in conclusory fashion that, over the course of a five-month period in 2004, plaintiff “furnished sub-contractor services, which consisted of providing electrical materials, equipment, labor and services” at defendants’ residence. The complaint, all of a page and a half, alleged that “no contract existed between plaintiff and defendants to govern the method by which plaintiff would be compensated for its services.” Plaintiff sought the reasonable value of its services. The complaint otherwise failed to specifically allege what “subcontractor services” were actually performed or even the scope of its subcontract in relation to the rest of the general contract.
That affidavit also stated, however, that other work, outside of Apex‘s contract, was performed by plaintiff. O‘Brien‘s affidavit stated that “during the same initial walk-through, [defendants] requested that [plaintiff] provide additional material and services not included in the original plan including but not limited to under-cabinet lighting; television and data wiring; and full electrical services to an additional family room and an additional bathroom.” (Emphasis added.)
Importantly, O‘Brien‘s affidavit says nothing about the central concern for this case: whether the recovery sought by plaintiff represented costs for work “not included in the original plan” as opposed to costs for work that plaintiff performed under Apex‘s contract with the defendants.
Finally, defendants supported their reply with affidavits which stated that neither Apex nor plaintiff provided them “with a written agreement or change
What are the consequences of these alleged facts? A section 2—619 motion is designed to test, like a motion for summary judgment, if a material or genuine disputed question of fact is raised. If so, the circuit court may decide the motion
“upon the affidavits and evidence offered by the parties, or may deny the motion without prejudice to the right to raise the subject matter of the motion by answer and shall so deny it if the action is one in which a party is entitled to a trial by jury and a jury demand has been filed by the opposite party in apt time.”
735 ILCS 5/2—619(c) (West 2004) .
See also Castro v. Chicago, Rock Island & Pacific R.R. Co., 83 Ill. 2d 358 (1980). Therefore, section 2—619, unlike a motion for summary judgment, allows the trial judge the discretion to litigate disputed questions of fact if a jury demand has not been made. In exercising this discretion, the judge may hear and determine the merits of the dispute based on the pleadings, affidavits, counter-affidavits, and other evidence presented, but may not weigh conflicting affidavits. In re Estate of Silverman, 257 Ill. App. 3d 162 (1993). When presented with conflicting affidavits, the judge must hold “an evidentiary hearing” at which “the unresolved issue or issues of fact must be determined on the basis of a preponderance of the evidence.” 4 R. Michael, Illinois Practice §41.8, at 336 (1989), citing Chapman v. Huttenlocher, 125 Ill. App. 2d 39 (1970); Calloway v. Kinkelaar, 168 Ill. 2d 312, 331-32 (1995) (Freeman, J., specially concurring) (noting the shifting burdens in section 2—619 practice).
Whether the circuit court correctly dismissed plaintiff‘s complaint turns upon whether the Act has any application to this case in light of the facts actually alleged, and not оn generalizations about the relationship between subcontractors and contractors. As an initial matter, I note that both this court and the appellate court have accepted the underlying premise of defendants’ section 2—619 motion—that the Act serves as an affirmative defense to plaintiff‘s cause of action. As a result, neither court has engaged in any analysis on the question of whether the legislature intended, by virtue of the Act‘s passage, to abolish the common law remedy of quantum meruit or even to provide individual consumers like defendants with a private right of action to enforce violations of the Act. Certainly, the plain language of the Act is silent as to both of these related issues. The Act‘s stated purpose is to “increase consumer confidence, reduce the likelihood of disputes, and promote fair *** practices” between consumers and those “engaged in the business of making home repairs or remodeling” by way of “improved communications” and “accurate representations.”
“may accept an assurance of voluntary compliance from anyone engaged in any conduct, act, or practice deemed in violation of this Act. Failure to perform the terms of any such assurance constitutes prima facie evidence of a violation of this Act.”
815 ILCS 513/35 (West 2004) .
Section 35(b) also states that “[a]ll remedies, penalties, and authority granted” to the Attorney General or the State‘s Attorney “by the Consumer Fraud and Deceptive Business Practices Act [
Rather than provide that analysis, the court chooses to confine the focus of this case to the issue of whether the terms of the Act apply tо subcontractors such as plaintiff. In this regard, the court again accepts, without
None of these concerns, however, can be answered from the record in front of us. What the case needs for proper disposition is development of evidence, as the complaint failed to allege the relevant facts and the affidavits merely hinted at them. The relevant questions are: What was the scope of the work defined in the contract between defendants and Apex? What portion of that work did plaintiff agree with Apex to perform? What was the extent of the additional work ordered by defendants and agreed to by plaintiff? Was there a written contract signed by the homeowner with respect to this
Given the existence of these factual questions, the circuit court‘s dismissal of plaintiff‘s complaint was, at best, premature and, at worst, incorrect. The record before us does not indicate that plaintiff filed a jury demand at the commencement of the proceedings as required by section 2—1105 of the Code of Civil Procedure. See
Rather than construe the actual terms of the Act and
Unfortunately, the court‘s discussion leads to an analysis based on little more than conjecture. Specifically, the court states that “[s]ubcontractors do not directly contract with a homeowner/customer” so the Act cannot apply to them. 228 Ill. 2d at 292. However, even the paltry facts before us suggest that such a generalization is not always true. Here, plaintiff, Apex‘s subcontractor, may have directly contracted with the homeowner/customer about additional work that was not a part of the original contract. The court further states that “[s]ubcontractors, by virtue of their working for a general contractor, do not make ‘representations’ to a homеowner” 228 Ill. 2d at 291. Again, this generalization is not always true, as the record before us suggests. Plaintiff may have made “representations” to the homeowner even though it was “working for a general contractor.” Because the court‘s discussion is not founded in either fact or law, the result is an interpretation of the Act that is oftentimes difficult to understand and even more difficult to apply. By directly contracting with the homeowner and making direct representations to the homeowner, plaintiff, described throughout the court‘s opinion as a “subcontractor,” would seem to fall within the class of home repairers and remodelers that the legislature sought to regulate in the Act.
The court‘s treatment of this case is unfortunate because the Act is a relatively new piece of legislation that has been the subject of few published decisions. In fact, in addition to the appellate court‘s opinion in this case, only two other decisions have addressed questions of the Act‘s interpretation. See Smith v. Bogard, 377 Ill. App. 3d 842 (2007); Central Illinois Electrical Services, L.L.C. v. Slepian, 358 Ill. App. 3d 545 (2005). A thorough, fact-based opinion from this court would have been help-
JUSTICE BURKE joins in this dissent.
(No. 104029.—
THE PEOPLE OF THE STATE OF ILLINOIS, Appellant, v. RICHARD GANCARZ, Appellee.
Opinion filed April 3, 2008.