Truitt v. Miller, 13497.

• Decision Date: 31 October 1979
• Docket Number: No. 13497.,13497.
• Citation: 407 A.2d 1073
• Parties: Joel E. TRUITT et al., Appellants, v. J. Douglas MILLER et al., Appellees.
• Court: D.C. Court of Appeals

407 A.2d 1073

Joel E. TRUITT et al., Appellants, v. J. Douglas MILLER et al., Appellees.

No. 13497.

District of Columbia Court of Appeals.

Argued March 5, 1979.

Decided October 31, 1979.

COPYRIGHT MATERIAL OMITTED

Roger A. Morrison, Washington, D. C., with whom John P. Meade, Washington, D. C., was on the briefs, for appellants.

Leonard C. Collins, Washington, D. C., with whom Heidi D. Miller, was on the brief, for appellees.

Before NEWMAN, Chief Judge, and KELLY and HARRIS, Associate Judges.

KELLY, Associate Judge:

We review here a grant of summary judgment in favor of J. Douglas and Heidi Miller (the Millers) and against Joel Truitt and Truitt & Associates, Inc.¹ Appellant, a home improvement contractor, contracted with appellees to do extensive remodeling of the latter's residence. Appellant did not have a license to do such work, as is required by 5Y DCRR § 2.1 (1970). After appellant completed a significant amount of remodeling, appellees repudiated the contract, citing the license violation, and sued in Superior Court for the return of the amounts already paid under the contract. Appellant counterclaimed for the value of the work performed for which no payment had been made. Appellant now argues that the adverse action by the trial court was in error because (1) the regulation, which applies only to home improvement contractors who accept payment in advance of the completion of the contract, does not apply to him; (2) he should have been allowed some contractual or quasi-contractual relief; and (3) should there be liability, that liability should attach to the principal, i.e., the corporation, and not the agent, Truitt.

Truitt & Associates, Inc., a District of Columbia corporation established in 1972, is engaged in the business of buying, restoring, and selling real estate in the District. In 1974, the emphasis of the business was placed primarily on the restoration, under contract, of homes. According to Truitt's affidavit,² he was at that time told by an employee of the District of Columbia Licensing Division that licensure as a home improvement contractor was not required for his type of operation.³

The Millers, then residents of suburban Maryland, purchased a house in Southeast Washington. Their desire was to renovate the house so that it would be an attractive residence and contain a basement apartment which could be leased out. They retained the services of Michael Bignell, an architect, to aid them in the design of the reconstruction work and to help them select a contractor to perform the work. Bignell knew and had done business with Truitt, and suggested that the Millers contract with Truitt and his corporation.⁴

Truitt, the Millers, and Bignell met on a number of occasions to discuss the terms of the contract. Numerous documents were drawn, yet as of May 30, 1976, no formal contract had been executed. In order to expedite renovation, Miller and Truitt signed a short, handwritten contract for demolition work not to exceed $1700 in cost.

The parties entered into two agreements, dated April 24, 1976, and May 7, 1976, for the restoration of the basement apartment and the remainder of the house, respectively. These agreements provided for a "costplus" method of payment whereby the Millers would pay Truitt the cost of work done plus a 10% finance administration fee and a 7% supervising fee. Rather than meet the cost of each element of the construction work as it accrued, Miller made periodic payments to Truitt. In essence, then, Truitt would make disbursements for Miller for which Miller would reimburse Truitt. Miller gave Truitt ten checks, of which three were deposited in Truitt's personal account and seven in an account in the name of Truitt & Associates, Inc.

Miller inspected the job site frequently at fairly regular intervals. Suggestions and alterations were made, and work progressed, albeit slightly behind schedule. On August 6, Miller wrote Truitt a check for $8,000; on August 7, Miller caused payment to be stopped on that check. Although the record does not indicate, beyond dispute, the reasons for the stop payment order,⁵ we know that on August 7, Miller, by letter, informed Truitt that he was displeased with the quality and speed of Truitt's work. By subsequent letter, Miller expressed a willingness to arbitrate cost disputes for work already completed.⁶ He also requested the subcontractor's time cards and payroll receipts and expressed a desire to deal with the subcontractors directly. Although Miller changed the locks on the house, Truitt and his employees continued to do some work, but they could only work when Miller was present.

Arbitration never occurred because Bignell, the arbitrator designated in the initial agreement declined to so act. All work by Truitt stopped on September 7, 1976. At that point, Truitt had performed, by his account, $57,400 worth of work, exclusive of fees, of which Miller had paid $40,785 to Truitt and $5,179 directly to the subcontractors.

In order to recover the remaining $11,400 in expenses, as well as $8,200 in fees, Truitt, on September 7, filed a mechanic's lien against the home.⁷ On November 3, 1976, the Millers instituted the action that forms the basis of this appeal, requesting actual and punitive damages amounting to $350,000. On June 30, 1977, partial summary judgment was granted the Millers on their claim for a return of the amounts paid Truitt and dismissing Truitt's counterclaim. The Millers later dismissed their remaining damage claim and the partial summary judgment became final on February 22, 1978.⁸ This appeal followed.

The issues presented are encompassed in three arguments. First, appellant contends that judgment based on Title 5Y was in error. Second, he argues that the remedy granted appellees was too severe. And, third, appellant maintains that should there be liability, that liability should attach to the corporate entity and not to himself. These issues are subsumed within the broader question of whether the court erred, as to each of its rulings, in granting summary judgment.

I

In ruling on a grant of summary judgment, we first view the evidence in a light most favorable to the party opposing the motion (the appellant). Yasuna v. Miller, D.C.App., 399 A.2d 68, 71 (1979); Bennett v. Kiggins, D.C.App., 377 A.2d 57, 59 (1977). If we find that that evidence gives rise to a genuine factual dispute, the grant of summary judgment would have to be reversed and a trial held on those issues. Sullivan v. Heritage Foundation, D.C.App., 399 A.2d 856, 859 (1979), citing Super.Ct. Civ.R. 56; 6 J. Moore, Federal Practice and Procedure ¶ 56.27[1]. In short, what we seek is evidence from which, were it accepted as true, a trier of fact might find for the appellant.

II

Appellant claims that the licensure regulation is not applicable to him. All parties agree that Title 5Y of the DCRR § 1.1 et seq. (1970), was designed to protect consumers against unscrupulous dealings by home improvement contractors. Bathroom Design Institute v. Parker, D.C.App., 317 A.2d 526, 529 (1974). In Miller v. Peoples Contractors, Ltd., D.C.App., 257 A.2d 476, 476-77 (1969), we outlined the effect and operation of Regulations:

Section 2 of the Regulation prohibits "any payment" to an unlicensed contractor under a "home improvement contract in advance of the full completion of all of the work required to be performed by such contract". The Regulations define the term "home improvement contract as "an agreement for the performance of home improvement work for a contract price of $300 or more" . . . . The Regulations define "home improvement work" as "the improvement, repair, restoration, alteration * * * of any residential property". . . .

* * * * * *

The Regulations require a contractor, in order to obtain a license, to prove trustworthiness to the licensing authority [Section 3(a) and (b)], deposit a security bond with such authority [Section 5(a)], obtain public liability and property damage insurance [Section 6], appoint the licensing authority as its agent for purposes of accepting service [Section 7], use appropriate identification cards in soliciting business [Section 11(a)] and reduce to writing on a prescribed contract form all agreements in their entirety entered into by and between a contractor and a homeowner [Section 13 and 14]. Penalties of up to $300 and imprisonment for as much as 90 days for violations thereof are provided. [Emphasis in original.]

A contract made in violation of the regulations is void. Id. at 478, citing Brown v. Southall Realty Co., D.C.App., 237 A.2d 834, 837 (1968) (contract in violation of Housing Regulations is void).

Appellant offers three reasons why the regulations should not apply to him. He argues, first, that the regulations specifically exempt certain work performed by licensed individuals, citing Section 1.1 of the regulations which provides that

The term "home improvement work" shall not extend to or include work performed by licensed electricians, licensed plumbers and gas fitters or licensed refrigeration and air conditioning mechanics so long as the work performed by them is limited to that of their licensed occupations.

Appellees do not maintain that this section is in any way inapplicable, nor do they deny appellant's assertion that work contemplated by the section was performed. We therefore must reverse the grant of summary judgment as to that work, and remand for a determination of the amount of such work. Section 1.1 simply provides that where a home improvement contractor contracts to renovate an entire house, as here, and subcontracts out certain responsibilities which have assurances of quality, the contractor should not be held liable for those operations should it be determined that the contractor was not duly licensed. Consequently, § 1.1 of the regulations does not exempt home improvement contractors such as appellant.

Appellant's other reasons why the regulations do not apply to...