In a coup for contractors, two recent decisions from the Pennsylvania Superior Court, Shafer Elec. & Const. v. Mantia and Durst v. Milroy General Contracting, Inc. and
Durst v. Milroy General Contracting, Inc., allowed contractors to proceed with lawsuits to collect debts against homeowners, even when a written contract is invalidated by HICPA, 73 P.S. §§ 517.1
et seq., or where none exists at all.
In Shafer Electric, the court found that a contractor may recover on a theory of
quantum meruit (meaning that the homeowner should be required to pay for the value of benefit the homeowner received from the contractor) when the contractor complies with the requirements of § 517.7(a) of HICPA. This section requires that all home improvement contracts be in writing. It is well-settled law in Pennsylvania that recovery on
quantum meruit or unjust enrichment theories are precluded when a written agreement exists. Nevertheless, the
Shafer court reasoned that the statute would produce an absurd if read to preclude recovery under a quantum meruit theory. The court explained that when a statute is ambiguous, it should be read in a manner that effects the obvious intent of the General Assembly. As a result, the court found that when a written contract is unenforceable because it fails to comply with § 517.7(a) of HICPA, the contractor may still pursue its payment claims under theories of quantum meruit or unjust enrichment.
The Shafer decision is consistent with the Superior Court’s holding last year in
Durst v. Milroy General Contracting, Inc., which found that HICPA was silent on quasi-contract theories, and therefore allowed a
quantum meruit claim to proceed an oral agreement, even though HICPA specifically requires that all home improvement contracts be in writing.
These decisions should not be construed as a “green light” for contractors to disregard the requirement of compliance with HICPA, as there are very real penalties for non-compliance. Nevertheless, the Superior Court has indicated through these decisions that it will not invalidate a contractor’s right to recover on payment claims against homeowners based soley on a technical violation of the requirements under HICPA.
More information regarding the requirements under HICPA may be found here.
Craig J. Fleischmann