Wisconsin Home Improvement Practices Act Claims Rejected
The Wisconsin Home Improvement Practices Act, Wis. Admin. Code § ATCP 110, (“HIPA”) is a consumer protection regulation imposing contract and business practice requirements on contractors performing home improvement projects[1]. It also provides that attorneys may recover double damages and attorney’s fees if successful in pursuing a claim against a contractor who fails to comply with the Act[2]. Although the legislature intended HIPA to shield consumers from unscrupulous contractors, attorneys may 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 Roob v. Maxcare Hardwood Flooring, No. 2019AP1265, 2021 WL 787553 (Wis. Ct. App. Mar. 2, 2021) demonstrates, despite the Act’s many potential pitfalls for contractors, not every HIPA claim will succeed.
In Roob v. MaxCare, Roob hired MaxCare to refinish water-damaged wood floors in his home. Even though Roob approved the color of the stain, 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 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 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.
Citing ATCP 110.05, Roob asserted that MaxCare violated HIPA’s requirement of a signed contract because although he 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 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 violated ATCP 110.05(1) by changing the contract terms without notice and violated ATCP 110.023(1) by substituting products used on the floor without Roob’s approval. Again, the court found that the evidence did not support Roob’s claim because the contract indicated that MaxCare would apply either stain or a sealer and in any event, Roob authorized the specific product before MaxCare applied it. The appellate court noted that the circuit court found that MaxCare applied the products that the parties had contracted to use and that Roob expressly approved it.
Next, Roob argued that MaxCare violated ATCP 110.02(11) by making a false, deceptive, or misleading representation in order 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 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 are 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 faced with a HIPA violation claim, have your attorney carefully review the facts of the matter to determine if the claim has merit or is merely saber-rattling.
[1] HIPA applies to a very broad range of contractors including landscapers. HIPA defines “Home improvement” to include: “the remodeling, altering, repairing, painting, or modernizing of residential or non−commercial property, or the making of additions thereto, and includes, but is not limited to, the construction, installation, replacement, improvement, or repair of driveways, sidewalks, swimming pools, terraces, patios, landscaping, fences, porches, garages, basements and basement waterproofing, fire protection devices, heating and air conditioning equipment, water softeners, heaters and purifiers, wall−to−wall carpeting or attached or inlaid floor coverings, and other changes, repairs, or improvements made in or on, attached to, or forming a part of, the residential or non−commercial property. The term extends to the conversion of existing commercial structures into residential or non−commercial property. “Home improvement” does not include the construction of a new residence or the major renovation of an existing structure.
[2] HIPA incorporates Wis. Stats. § 100.20(5: ) which provides; “Any person suffering pecuniary loss because of a violation by any other person of any order issued under this section may sue, for damages therefore … and shall recover twice the amount of any such pecuniary loss, together with costs, including a reasonable attorney’s fee.”
