Hopper v. Moling, No. W2004-02410-COA-R3-CV (TN 8/26/2005)
| Decision Date | 26 August 2005 |
| Docket Number | No. W2004-02410-COA-R3-CV.,W2004-02410-COA-R3-CV. |
| Parties | DONALD GREG HOPPER v. BETTY J. MOLING. |
| Court | Tennessee Supreme Court |
Kevin Carter, Lexington, TN, for Appellant.
J. Brandon McWherter, Jackson, TN, for Appellee.
OPINION
The plaintiff, an unlicensed home improvement contractor, entered into an agreement with the defendant/homeowner to make certain improvements to her existing home. Shortly after the plaintiff left the job site, the defendant/homeowner began to experience several problems associated with the plaintiff's work. The defendant/homeowner paid to have the defects repaired and/or completed. The plaintiff filed a petition against the defendant/homeowner to enforce a materialman's lien. The defendant/homeowner filed a counter-complaint seeking damages for breach of contract, breach of implied warranties, fraud, and violations of the Tennessee Consumer Protection Act. At the conclusion of the bench trial, the chancellor held that the plaintiff's conduct amounted to constructive fraud, thereby voiding the contract; the plaintiff was only entitled to recover the cost of his labor and materials under quantum meruit; and the defendant/homeowner was entitled to damages, attorney's fees, and discretionary costs. The plaintiff appealed to this Court to contest the chancellor's inclusion of certain costs in the damage award, the limitation of his quantum meruit recovery, the finding of constructive fraud, and the award of attorney's fees to the defendant/homeowner. The defendant/homeowner appealed the chancellor's exclusion of certain costs from the damage award and the method used by the chancellor in calculating the damages. We affirm in part and vacate in part.
In 1998, Betty J. Moling ("Ms. Moling" or "Appellee") entered into an oral contract with Donald G. Hopper ("Mr. Hopper" or "Appellant") whereby Mr. Hopper agreed to make certain improvements to Ms. Moling's home located in Jackson, Madison County, Tennessee. Ms. Moling is an elderly female, and she is the aunt of Mr. Hopper's wife's mother. Mr. Hopper is employed as a trooper with the Tennessee Highway Patrol. Mr. Hopper has also performed construction work for approximately ten years. He previously performed construction work for Ms. Moling prior to engaging in the projects which gave rise to the instant litigation.
Regarding the projects which are the center of this dispute, Ms.Moling asked Mr. Hopper to make two improvements to her home. First, Ms. Moling asked Mr. Hopper to install vinyl flooring in a significant portion of her home. Mr. Hopper agreed to perform this task for $2,600.00 , which represented the cost of his labor and materials. Second, Ms. Moling asked Mr. Hopper to construct a garage/bathroom addition onto her existing home. Mr. Hopper agreed to perform this task for $ 19,800.00, which represented the cost of his labor and materials. Thus, the total agreed upon cost of both projects equaled $ 22,400.00.
During the process of entering into the agreement with Ms.Moling, Mr. Hopper admitted that he held himself out as a person who was qualified and competent to perform the requested work. Ms. Moling believed that Mr. Hopper held the proper licenses and had obtained the proper permits necessary for the work she requested him to perform. In fact, Mr. Hopper did not have a contractor's license, an electrician's license, or a plumber's license. Mr. Hopper obtained a building permit on January 15, 1999, after he began constructing the garage/bathroom addition, but he only obtained a permit for $4,000.00.
Mr. Hopper completed the installation of the vinyl flooring on December 9, 1998, and Ms. Moling paid Mr. Hopper the $2,600.00 agreed upon by the parties. According to Ms. Moling, Mr. Hopper assured her that the garage/bathroom addition would be completed by Christmas of 1998, which Mr. Hopper denied. Mr. Hopper began constructing the garage/bathroom addition on January 15, 1999. Ms. Moling paid Mr. Hopper $5,000.00 on January 15, 1999, $5,000.00 on January 28, 1999, and $5,000.00 on February 9, 1999. These payments, totaling $15,000.00, were the only payments Ms. Moling made to Mr. Hopper for the garage/bathroom addition. According to Ms. Moling, each time she gave Mr. Hopper a $5,000.00 payment, he would assure her that the garage would be completed in three to four days. Ms. Moling asserted that, when she gave Mr. Hopper the final $5,000.00 payment on February 9, 1999, he told her that his laborers quit, and he promised that the garage/bathroom addition would be completed in three to four more days. According to Mr. Hopper, the weather in January and February of 1999 delayed construction of the addition. There was a dispute between the parties as to whether Mr. Hopper abandoned the construction project or was fired after he received the final $5,000.00 payment on February 9, 1999. Mr. Hopper asserted that Ms. Moling fired him. Ms. Moling asserted that Mr. Hopper failed to return to complete the job after she made the last payment.
During the installation of the vinyl flooring, Ms. Moling asserted that she pointed out several problems to Mr. Hopper regarding the quality of his work, and he agreed to fix the problems. She also expressed her dissatisfaction with the installation when she tendered the $2,600.00 payment to Mr. Hopper on December 9, 1998. Mr. Hopper stated that the floor was "good" when he finished the installation, and he believed that Ms. Moling was satisfied with his work up to that point. However, within three months after Mr. Hopper completed the installation, the vinyl flooring began to "peel up." Because she lacked the funds needed to repair the floor at that time, Ms. Moling placed rugs over the floor to cover those areas where the vinyl flooring was "peeling up." Just prior to the trial in this matter, Ms. Moling hired Tim Roe ("Mr. Roe") of T & L Tile Center to repair the flooring. Mr. Roe removed the vinyl flooring and installed a new vinyl floor of the same model installed by Mr. Hopper. Ms. Moling paid Mr. Roe $3,187.00 to repair the flooring.
Ms. Moling also experienced numerous problems with the new garage/bathroom addition constructed by Mr. Hopper. At some point after February 9, 1999, the last time that Mr. Hopper was at the job site, Ms. Moling began to experience electrical problems, and "the breakers kept kicking out all over the house." Ms. Moling contacted Rodney Owens ("Mr. Owens"), a licensed electrician, to inspect her home and determine the cause of the problem. Mr. Owens inspected the home on or around February 15, 1999, and he discovered that Mr. Hopper had improperly installed the electrical wiring for the new garage/bathroom addition. Mr. Owens opined that Mr. Hopper's electrical work was "not too good." Mr. Owens, assisted by Charles Roe ("Mr. Roe"), Ms. Moling's son, pulled off some of the walls erected by Mr. Hopper and noted problems with the plumbing as well. According to Mr. Hopper, he had only completed the "rough wiring" and "rough plumbing" when he left the job site, and he planned to have a friend, who is licensed electrician, finish the electrical and plumbing work.
Mr. Owens instructed Ms. Moling to contact Richard Woodard ("Mr. Woodard"), the building inspector for Madison County at the time, to inspect the garage/bathroom addition. In fact, Mr. Woodard inspected the progress of the construction project on three separate occasions: January 19, 1999, February 19, 1999, and February 24, 1999. During his inspections, Mr. Woodard noted several problems with the construction, and he drafted a letter to Mr. Hopper on February 25, 1999, setting forth his findings. Specifically, Mr. Woodard noted numerous code violations to include the following: (1) failure to obtain a permit for the correct amount of work to be done; (2) failure to obtain a permit to build a bathroom; (3) failure to request a framing or insulation inspection before covering the framing and insulation: (4) failure to square the slab forms before pouring concrete, which allowed water to run under the bottom plate and into the garage; (5) the bottom plate of the walls were improperly anchored; (6) excessive notches were cut in several studs when cutting them for the plumbing drain; (7) insulation was installed on the wrong side of the water supply lines; (8) the water heater was installed so that access to the heating element faces a wall which makes it inaccessible for service; (9) several plumbing leaks have been noted; (10) the shower drain was improperly vented; (11) the new front door was installed in the existing door jam and did not fit, allowing a 1/4 inch gap on the hinge side; (12) the vinyl floor was installed incorrectly, leaving a gap between blocks in two or more areas; and (13) the electrical work was not inspected by the state electrical inspector. Mr. Woodard characterized Mr. Hopper's work as "not up to standard" and "the workmanship was poor."
In late February of 1999, Ms. Moling hired Chris Stephenson ("Mr. Stephenson"), her granddaughter's husband, to inspect and complete the plumbing work begun by Mr. Hopper. Mr. Stephenson, a licensed plumber at the time, noted that Mr. Hopper had "roughed in the plumbing," but he had not hooked the plumbing up to the water supply. With the assistance of Mr. Roe, Mr. Stephenson hooked the plumbing to the water supply, turned it on, and found that the plumbing installed by Mr. Hopper leaked. Mr. Stephenson also found that a lack of proper ventilation caused the smell of sewage from the septic tank to enter the bathroom, and he noted several...
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