Kunkel v. P.K. Dependable Construction, LLC

Opinion

NO. 5-07-0684 N O T IC E

Decision filed 02/13/09. The text of IN THE this dec ision m ay b e changed or

corrected prior to the filing of a APPELLATE COURT OF ILLINOIS P e t i ti o n for Re hea ring or the

disposition of the same. FIFTH DISTRICT ________________________________________________________________________

HERBERT KUNKEL and JERAL DEAN ) Appeal from the KUNKEL, ) Circuit Court of ) St. Clair County. Plaintiffs-Appellees, ) ) v. ) No. 06-AR-860 ) P.K. DEPENDABLE CONSTRUCTION, LLC, ) and PETER KOFARAGO, d/b/a P.K. Dependable ) Roofing and Construction Company, ) Honorable ) Vincent J. Lopinot, Defendants-Appellants. ) Judge, presiding. ________________________________________________________________________

JUSTICE SPOMER delivered the opinion of the court:

The defendants, P.K. Dependable Construction, LLC, an Illinois limited liability

company, and Peter Kofarago, doing business as P.K. Dependable Roofing and Construction

Company, appeal the order of the circuit court of St. Clair County that entered a judgment

in favor of the plaintiffs, Herbert Kunkel and Jeral Dean Kunkel, in the amount of $6,725 for

compensatory damages and $6,151.50 in attorney fees and costs. We restate the issues on

appeal as follows: (1) whether the circuit court erred in finding the defendants liable to the

plaintiffs for a breach of contract and warranty, (2) whether the circuit court erred in its

determination of the amount of compensatory damages, and (3) whether the circuit court's

award of attorney fees and costs is improper. For the reasons that follow, we affirm that

portion of the judgment that awarded compensatory damages of $6,725, but we vacate the

award of attorney fees and costs of $6,151.50.

FACTS

The plaintiffs filed a complaint against the defendants, alleging a breach of contract

1 and warranty in count I and a violation of sections 2Q(c) and 2Z of the Illinois Consumer

Fraud and Deceptive Business Practices Act (the Act) (815 ILCS 505/2Q(c), 2Z (West

2002)) in count II. The complaint alleged that on July 25, 2003, the plaintiffs entered into

a contract with the defendants for the replacement of the roof on their residence, which

included a five-year warranty for defects in workmanship. According to the complaint, the

roof the defendants installed was defective, and despite numerous demands to comply with

the warranty and numerous attempts by the defendants to repair the problems with the roof,

the roof continued to leak and needed to be replaced. In addition, the complaint alleged that

the defendants failed to provide the plaintiffs with a copy of the "Home Repair: Know Your

Consumer Rights" pamphlet prior to the execution of the contract, as required by section 20

of the Illinois Home Repair and Remodeling Act (815 ILCS 513/20 (West 2002)).

On March 30, 2007, the circuit court held a bench trial on the plaintiffs' complaint.

Jeral Dean Kunkel testified that in 2003, she and her husband were having problems with

their roof leaking over their porch. At that time, there were no other leaks in the roof. They

entered into a contract with the defendants to replace the roof. The contract was admitted

into evidence. The contract provided that the plaintiffs were to pay $4,522 for the roof

replacement and that the defendants would warrant their workmanship for five full years

from completion. The contract also provided that upon tearing off the roof, the defendants

would check for sheeting damage and, if they discovered damage, would replace the wood

at an additional cost. Mrs. Kunkel testified that prior to entering into the contract, the

defendants did not give them any pamphlets and, specifically, did not give them a pamphlet

called "Home Repair: Know Your Consumer Rights."

Mrs. Kunkel testified that she witnessed some employees of the defendants, while

tearing off the roof, knocking the stucco siding loose. She complained and the employees

attempted to patch those areas with cement. The defendants completed the roof, and due to

2 some sheeting damage, the total bill was $5,623. The Kunkels paid the bill in full, and copies

of the checks used for payment were admitted into evidence. The roof was completed on

approximately August 12, 2003. A few days later, during the first rain following the roof

replacement, the roof began leaking inside the house. The rain came into the house on both

sides of a dormer. After a foundation was established for Mrs. Kunkel to refer to

contemporaneous notes she made over the following months, she testified to a series of calls

and attempts by the defendants to correct the problems. Photographs of water stains on the

ceiling of the home and pots and buckets used to catch the water coming into the kitchen

were admitted into evidence.

According to Mrs. Kunkel, the calls and attempts by the defendants to correct the

problems with the roof continued over the course of the next three years. Mrs. Kunkel also

wrote a letter during this time period, explaining some of the problems with the roof. This

letter, which was admitted into evidence, does not contain a demand for a return of their

payment but instead requests that the defendants fix the problems. In addition, there was no

evidence regarding whether Mrs. Kunkel sent the letter to the defendants via certified mail.

Mrs. Kunkel estimated that the defendants attempted to fix the leaks between 20 and 25

times. Although the defendants were able to fix a leak in the front of the house above a

storeroom, the kitchen and dormers continued to leak. The circuit court admitted an estimate

into evidence without objection, which reflected that it would cost approximately $1,475 to

replace the kitchen ceiling due to the water damage.

Tony Fuller, a self-employed roofing contractor for 20 years, testified that he

examined the plaintiffs' roof at their request on June 11, 2006. He observed that the roof was

heavily tarred on top of the shingles. He also observed the water stains on the interior of the

home. It was his opinion that in order to resolve the leaks, it would be necessary to tear the

roof off and start again to see what was underneath and what was causing the leaks. He also

3 opined that it would be necessary to install an aluminum pan underneath the shingles to slide

under the stucco siding against the wood on the dormer walls to make sure that the walls did

not leak and did not need a lot of tar on them. This would ensure, according to Mr. Fuller,

that any water that got under the stucco would be diverted on top of the shingles. Mr. Fuller's

estimate for replacing the roof was admitted into evidence without objection. According to

his estimate, the cost would be $5,250 and would include a five-year labor warranty.

Herbert Kunkel testified as an adverse witness during the defendants' case in chief.

He testified that the defendants never told him that there was a problem with the poor

condition of the stucco siding that would impact the roof. Tim Utley, an employee of the

defendants, testified that he did some of the work on the plaintiffs' roof. He further testified

that based on his 26 years of experience, the condition of the sheeting at the time the

defendants tore off the old roof indicated that there had been leaks inside the house

previously. Mr. Utley also testified, contrary to the testimony of Mrs. Kunkel, that he did not

tear up the stucco when tearing off the roof and did not attempt to repair the stucco with

cement. He testified, contrary to the testimony of Mr. Fuller, that it would be impossible to

slide flashing underneath the existing stucco because the condition of the stucco was so poor.

He also testified, contrary to the testimony of Mr. Kunkel, that he told Mr. Kunkel that he

needed to replace the stucco because that was the source of the leaking. According to Mr.

Utley, because M r. Kunkel refused his suggestion to replace the stucco, he did what he

considered to be the next best thing, which was to shingle up to the dormer walls and put

down R-140 rubberized caulk, which is a tarlike substance commonly used in the roofing

industry. On cross-examination, Mr. Utley testified that he did not attempt to use flashing

under the stucco as recommended by Mr. Fuller's testimony.

Peter Kofarago testified that he is the owner of P.K. Dependable Roofing and

Construction Company. He testified that he is not in the business of repairing stucco. He

4 expressed his opinion that based on the condition of the sheeting on the plaintiffs' roof at the

time he began to tear it off, there had to be leaking in the interior of the home prior to the

roof replacement. He testified that he explained to Mr. Kunkel that based on the poor

condition of the stucco siding on the home, he would not be able to install flashing and that

if the stucco was not replaced, he could not guarantee that the roof would be leakproof

around the wall lines. According to Mr. Kofarago, Mr. Kunkel denied that the stucco was

the problem and insisted it was a problem with the roof. It was Mr. Kofarago's opinion that

Mr. Fuller's suggestion to install a bed pan would be ineffective because the condition of the

stucco was so poor that the stucco would crumble. On cross-examination, Mr. Kofarago

testified that he no longer participates in manual labor and was not present for much of the

time the roof was being replaced. He explained that he did not put language in the contract

or warranty that he could not guarantee the wall lines due to the stucco issue because he did

not know about the problem until the old roof had been torn off. He also testified that it

would not be necessary to replace the roof in order to correct the problem.

The affidavit of the plaintiffs' counsel regarding the amount of attorney fees and costs

incurred by the plaintiffs was also admitted into evidence. The affidavit states that the

plaintiffs' counsel and other members of his law firm expended approximately 36 hours in

work related to the litigation of this case. The total amount of fees and costs associated with

pursuing the plaintiffs' causes of action against the defendants was $6,161.50, which

represents attorney fees in the amount of $5,812.50 and costs in the amount of $349.

On August 15, 2007, the circuit court entered an order finding that the defendants had

breached the contract and warranty and awarding the plaintiffs $6,725 in damages on count

I of the complaint. We note that this amount represents the amount of the estimate for the

interior damage to the home from the leaking and the amount of the estimate for the

replacement of the roof. On count II of the complaint, the circuit court found that the

5 defendants violated sections 2Q(c) and 2Z of the Act (815 ILCS 505/2Q(c), 2Z (West 2002)),

and the court awarded the plaintiffs attorney fees and costs in the amount of $6,151.50,

which was the amount reflected in plaintiffs' counsel's affidavit. On September 13, 2007, the

defendants filed a motion to reconsider, which the circuit court denied on November 8, 2007.

On December 7, 2007, the defendants filed a timely notice of appeal.

ANALYSIS

The first issues on appeal are whether the circuit court erred in finding the defendants

liable to the plaintiffs for a breach of contract and warranty and in setting the amount of

compensatory damages it awarded to the plaintiffs for that breach. "The standard of review

in a bench trial is whether the judgment is against the manifest weight of the evidence."

Chicago Pizza, Inc. v. Chicago's Pizza Franchise Limited USA, 384 Ill. App. 3d 849, 859

(2008). " 'A judgment is against the manifest weight of the evidence only when the opposite

conclusion is apparent or when findings appear to be unreasonable, arbitrary, or not based

on evidence.' " Chicago Pizza, Inc., 384 Ill. App. 3d at 859 (quoting Judgment Services

Corp. v. Sullivan, 321 Ill. App. 3d 151, 154 (2001)). "As the trier of fact, the trial judge was

in a superior position to judge the credibility of the witnesses and determine the weight to be

given to their testimony." Chicago Pizza, Inc., 384 Ill. App. 3d at 859. "When contradictory

testimony that could support conflicting conclusions is given at a bench trial, an appellate

court will not disturb the trial court's factual findings based on that testimony unless a

contrary finding is clearly apparent." Chicago Pizza, Inc., 384 Ill. App. 3d at 859.

When we apply these principles to the circuit court's finding of a breach of contract

and warranty, it is clear from the above summary of the testimony that in making its

determination, the circuit court had to resolve conflicts in the evidence. There is ample

evidence in the record to support the circuit court's finding that the problems with the roof

were a product of the defendants' defective workmanship, and the circuit court's rejection of

6 what amounted to an impossibility defense involved a credibility determination and a

resolution of contradictory evidence, which we will not disturb.

With regard to the circuit court's determination of damages, it is clear from the record

that this determination was based upon the estimate given by Mr. Fuller regarding the cost

to replace the roof and the estimate admitted into evidence regarding the cost to replace the

kitchen ceiling. The measure of damages for the breach of a contract when a contractor has

provided defective performance is generally the cost of correcting the defective condition.

Arch of Illinois, Inc. v. S.K. George Painting Contractors, Inc., 288 Ill. App. 3d 1080, 1082

(1997). Contrary to the defendants' assertions, a diminution of value is not the correct

measure of damages unless the defects can only be corrected at a cost unreasonably

disproportionate to the benefit of the purchaser or if correcting the defects would entail an

unreasonable destruction of the builder's work. Arch of Illinois, Inc., 288 Ill. App. 3d at

1082. Mr. Fuller testified that in order to ensure that all the leaking was corrected, it was

necessary to replace the roof. Although the defendants' witnesses testified to the contrary,

this created a contradiction that was within the circuit court's province to resolve. Because

a contrary finding is not clearly apparent, we will not disturb the circuit court's resolution of

conflicts in the testimony.

The defendants argue that Mr. Fuller's estimate is "invalid" because he did not testify

that his estimate was reasonable and necessary and his estimate did not contain a breakdown

of the charges for labor and materials. However, we note that the defendants did not

challenge the admission of the estimate into evidence for a lack of a factual basis and did not

cross-examine Mr. Fuller regarding an itemization of labor and materials. In addition, the

defendants introduced no contrary evidence of the cost to replace the roof. "An estimate of

the cost of repairs by a person qualified in a certain class of work, while not as persuasive

as it might be, is nonetheless admissible as a basis upon which a reasonable cost may be

7 determined." Marth v. Illinois Weather-Seal, Inc., 50 Ill. App. 3d 577, 581 (1977). "[S]uch

an opinion, although unsupported by statements of fact, is sufficient to support a finding by

the trial court when unopposed by other evidence." Marth, 50 Ill. App. 3d at 581. We also

note that in Northern Illinois Gas Co. v. Vincent DiVito Construction, 214 Ill. App. 3d 203,

215 (1991), the case upon which the defendants rely, the estimate at issue was not

accompanied by the testimony of a person qualified to give an opinion regarding the estimate,

and that case is therefore inapposite. Accordingly, we find that the circuit court did not err

in its determination of damages.

Finally, we turn to the issue of whether the circuit court's award of attorney fees and

costs is improper. Our standard of review is whether the circuit court abused its discretion.

Schorsch v. Fireside Chrysler-Plymouth, Mazda, Inc., 286 Ill. App. 3d 1028, 1031 (1997).

"Illinois follows the 'American Rule,' which provides that absent statutory authority or a

contractual agreement, each party must bear its own attorney fees and costs." Negro Nest,

LLC v. Mid-Northern Management, Inc., 362 Ill. App. 3d 640, 641-42 (2005) (citing Morris

B. Chapman & Associates, Ltd. v. Kitzman, 193 Ill. 2d 560, 572 (2000)). "Statutes permitting

the recovery of costs are in derogation of the common law and must be strictly construed."

Negro Nest, LLC, 362 Ill. App. 3d at 642. Section 10a(a) of the Act (815 ILCS 505/10a(a)

(West 2002)) provides, "Any person who suffers actual damage as a result of a violation of

[the] Act committed by any other person may bring an action against such person." Section

10a(c) provides that a court may award reasonable attorney fees and costs to the prevailing

party. 815 ILCS 505/10a(c) (W est 2002). Therefore, in order to prove a private right of

action under section 10a of the Act, and thus recover attorney fees and costs, the plaintiffs

must show actual damage proximately caused by the defendants' violation of the Act. See

also Avery v. State Farm Mutual Automobile Insurance Co., 216 Ill. 2d 100, 179-80 (2005).

8 The circuit court's award of attorney fees and costs was based on its finding that the

defendant violated sections 2Q(c) and 2Z of the Act (815 ILCS 505/2Q(c), 2Z (West 2002)).

Section 2Z of the Act provides, "Any person who knowingly violates the *** Home Repair

and Remodeling Act *** commits an unlawful practice within the meaning of [the

Consumer Fraud and Deceptive Business Practices] Act." (Emphasis added.) 815 ILCS

505/2Z (West 2002). Section 20(a) of the Home Repair and Remodeling Act (815 ILCS

513/20(a) (West 2002)) provides, "For any contract over $1,000, any person engaged in the

business of home repair and remodeling shall provide to its customers a copy of the 'Home

Repair: Know Your Consumer Rights' pamphlet prior to the execution of any home repair

and remodeling contract." Here, the plaintiffs provided uncontradicted testimony that the

defendants did not provide them with the brochure. However, the plaintiffs provided no

evidence on the defendants' state of mind in not providing the brochure, and there is no

evidence in the record to support a knowing violation of the Home Repair and Remodeling

Act. Accordingly, there was no violation of section 2Z of the Act.

Although the record does not reflect that the plaintiffs proved a violation of section

2Z of the Act, section 35 of the Home Repair and Remodeling Act, which provides in

subsection (a) for the enforcement of that statute by the Attorney General or a State's

Attorney, does state in subsection (b) that "any violation of this Act shall constitute a

violation of the Consumer Fraud and Deceptive Business Practices Act." (Emphasis added.)

815 ILCS 513/35(a), (b) (West 2002). An interpretation of subsection (b) that would provide

a private right of action is seemingly incongruent with subsection (a), which provides for the

enforcement of the Home Repair and Remodeling Act by the Attorney General or a State's

Attorney, and also 2Z of the Act, which requires a knowing violation. However, there is no

need to resolve this inconsistency in this case because, in any event, there must be a showing

of actual damage in order to sustain a private right of action under the Act. See 815 ILCS

9 505/10a(a) (West 2002); see also Avery, 216 Ill. 2d at 179-80. Here, the plaintiffs introduced

no evidence that the defendants' failure to provide the brochure proximately caused their

damages. Accordingly, the plaintiffs did not acquire a private right of action under the Act

for the defendants' failure to provide them the "Home Repair: Know Your Consumer Rights"

brochure.

We note that the circuit court also found a violation of section 2Q(c) of the Act (815

ILCS 505/2Q(c) (West 2002)). That section provides, "A person engaged in the business of

home repair *** who fails or refuses to commence or complete work under a contract or an

agreement for home repair[] shall return the down payment and any additional payments

made by the consumer within 10 days after a written demand sent to him by certified mail

by the consumer or the consumer's legal representative ***." 815 ILCS 505/2Q(c) (West

2002). In finding a violation of section 2Q(c), the circuit court necessarily construed the

defendants' defective performance as a failure to "complete work under a contract" within

the meaning of section 2Q(c).

We disagree that the defendants violated section 2Q(c), for two reasons. First, a

reading of section 2Q(c) that equates a defective-performance situation with a failure to

"complete" work would render every breach of contract for defective performance a

consumer fraud. We do not believe that the legislature intended that result, especially in a

case such as this, where the defendants made extensive attempts to correct the defective

condition. Second, even if the facts of this case fell under the purview of section 2Q(c), there

is no evidence that the plaintiffs sent a written demand by certified mail to the defendants for

a refund, as required by that section. For these reasons, the record does not support a finding

that the defendants violated section 2Q(c). Because the circuit court erred in finding that the

plaintiffs sustained a private right of action under the Act, we find that it abused its discretion

in awarding the plaintiffs attorney fees and costs.

10 Although the defendants argue on appeal only that the amount of attorney fees was

incorrect and do not argue that the plaintiffs failed to sustain a private right of action under

the Act, the scope of our review is not limited to the issues preserved for appeal. See

Schutzenhofer v. Granite City Steel Co., 93 Ill. 2d 208, 210-11 (1982). The Illinois Supreme

Court has interpreted Illinois Supreme Court Rule 341(h)(7) (210 Ill. 2d R. 341(h)(7))

(formerly Rule 341(e)(7)), "which expresses the waiver doctrine, as 'an admonition to the

parties, not a limitation upon the jurisdiction of the reviewing court.' " Schutzenhofer, 93 Ill.

2d at 211 (citing Hux v. Raben, 38 Ill. 2d 223, 224 (1967)). Moreover, Illinois Supreme

Court Rule 366(a)(5) (155 Ill. 2d R. 366(a)(5))) provides, "In all appeals the reviewing court

may, in its discretion, and on such terms as it deems just, *** enter any judgment and make

any order *** and grant any relief *** that the case may require." Because it is clear from

the record that the plaintiffs were unable to sustain a private right of action under the Act as

a matter of law, we will not sustain the circuit court's award of attorney fees and costs to the

plaintiffs.

CONCLUSION

For the foregoing reasons, we affirm that portion of the judgment which awarded

compensatory damages of $6,725 and vacate that portion of the judgment which awarded

attorney fees and costs of $6,151.50.

Affirmed in part and vacated in part.

WELCH and GOLDENHERSH, JJ., concur.

11 NO. 5-07-0684

IN THE

APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT ___________________________________________________________________________________

HERBERT KUNKEL and JERAL DEAN ) Appeal from the KUNKEL, ) Circuit Court of ) St. Clair County. Plaintiffs-Appellees, ) ) v. ) No. 06-AR-860 ) P.K. DEPENDABLE CONSTRUCTION, LLC, ) and PETER KOFARAGO, d/b/a P.K. Dependable ) Roofing and Construction Company, ) Honorable ) Vincent J. Lopinot, Defendants-Appellants. ) Judge, presiding. ___________________________________________________________________________________

Opinion Filed: February 13, 2009 ___________________________________________________________________________________

Justices: Honorable Stephen L. Spomer, J.

Honorable Thomas M. Welch, J., and Honorable Richard P. Goldenhersh, J., Concur ___________________________________________________________________________________

Attorney Gary A. Mack, Law Offices of Gary A. Mack, P.C., 2001 North 17th Street, for Belleville, IL 62226 Appellants ___________________________________________________________________________________

Attorney Timothy A. Gutknecht, Crowder & Scoggins, Ltd., 121 West Legion Avenue, for P.O. Box 167, Columbia, IL 62236-0167 Appellees ___________________________________________________________________________________