Case of the Day – Wednesday, August 17, 2016

BUYER’S REMORSE

What do you get when you cross a lousy businessman with a careless homeowner? In today’s case, you get a whopper of a lawsuit.

The job's not finished until the paperwork's done.

The job’s not finished until the paperwork’s done.

The lousy businessman was Jeff Davis, who may well be a very good arborist but clearly was lacking is paperwork and billing skills. The shocked homeowner was Ron Sexton, who — to put it charitably — was woefully (and conveniently) forgetful, not to mention rather unforgiving.

Ron had hired Jeff to trim trees in 2002, and he paid the invoice, which had been figured at $1,200 (although he couldn’t remember ever seeing the bill he paid). He hired Jeff again the following year, but Jeff not only didn’t prepare a written proposal or estimate, he couldn’t even be sure he had told Ron the price would be the same as the year before.

For his part, Ron kept expanding the scope of the work, appearing frequently as the crews worked to suggest additional trimming. By the time Ron was done changing the job to encompass all 60 trees on his land, Jeff’s crews had 14-1⁄2 days of work in, presenting Ron with a bill for $17,400.

You’d think that Jeff would have said something to Ron about how the bill was mounting up. For that matter, you’d think Ron might wonder at some time during the two weeks of tree work how much it was all costing him. But neither Dumb nor Dumber questioned anything until the bill arrived in the mailbox. And then, Ron refused to pay.

Like every state, Kansas has a consumer practices act, intended to protect consumers from unscrupulous businesses that prohibit unconscionable acts and deceptive practices. And even if Dorothy isn’t in Kansas anymore, that doesn’t mean that the state’s restrictions are over the rainbow: just about all states have unfair or deceptive acts and practices statutes, consumer protection statutes, consumer fraud statutes or the like. The laws are well intended, but as our homeowner hero proves today, the likelihood that they can be used for mischief is high.

Here, we suspect that Ron didn’t feel like a defrauded consumer until some lawyer suggested that some KCPA claims would be a dandy way to beat paying Jeff. So Ron claimed Jeff had violated the KCPA by deceptive practices (not telling him how much it would cost and trimming well beyond the scope of the work in order to jack up the price) and unconscionable acts (performing unnecessary work and not giving Ron his money’s worth). The jury didn’t buy it — especially the whopper that he didn’t know it was $1,200 a day because he hadn’t gotten last year’s bill, which he had managed to pay without seeing — but it did apparently find that the value fell somewhat short of $17,400, because it awarded Jeff Davis only $6,500.

Never trust your case to a panel of people who aren't smart enough to be able to get out of jury duty.

Never trust your case to a panel of people who aren’t smart enough to be able to get out of jury duty.

And here, we encounter a popular fiction: juries are wise and Solomonic. They’re not, often hurried, bored, a collection of weak-willed people bullied by one or two strong ones, even just plain stupid. But juries as fact-finders are the foundation of our legal system, and appellate courts protect that foundation with a most deferential standard of review. Typlcally, an appeals court won’t overturn a jury’s findings of fact unless no rational juror — even taking the evidence in a light most favorable to the winner — could have made the decision the jury handed down.

Here, just about everything in the record was contradicted. But assuming the jury believed evidence in favor of Davis Tree — and the appeals court made that assumption — it could have come to the conclusion it reached. Interestingly, the Court of Appeals seems to have been less than thrilled with the jury’s verdict even while showing it deference, asking cryptically, “Would the evidence also support contrary inferences? Yes, but that is simply not the question which we are called upon to decide.”

Everyone was a loser here, especially because all of this could have been avoided with a written estimate from the arborist and a careful written record of change orders maintained throughout the job. The homeowner was negligent to the point of recklessness as well, but … well, he’s the customer. Expect them to be foolish or to try to beat the contractor out of his or her price. The tree professional has to prepare for the naïve and the cunning customer alike.

Davis Tree Care v. Sexton, 197 P.3d 904 (Ct.App. Kan., 2008). In 2003, Ron Sexton hired Jeff Davis, doing business as Davis Tree Care, to trim the trees at his house. It was a big job, over 60 trees trimmed with a final bill of $17,400. When Sexton refused to pay, Davis sued him for breach of contract and unjust enrichment. Sexton counterclaimed under the Kansas Consumer Protection Act (KCPA), alleging deceptive practices and unconscionable acts. Sexton had used Davis Tree the year before, for which he was billed $1,200 per day. He denied having seen the 2002 invoice and denied the 2002 job was priced on a per day basis, but he admitted he had paid the same amount as was shown on the invoice. He maintained that Davis had never told him the 2003 job would cost the same as the 2002 work, and that was “willful misrepresentation of a material fact” under the KCPA.

Sexton and Davis Tree agreed the work was intended to include removing two trees and removing an oak tree branch, but Sexton said he didn’t ask for anything else. Davis testified Sexton also wanted some general trimming and that he came out from time to time and pointed out additional work he wanted done. Sexton argued there was no need for general trimming because that was what Davis Tree had done the year before. The trial court found against Davis Tree on the contract claim, but it awarded Davis Tree $6,500 on the unjust enrichment claim. As for Sexton’s creative KCPA claims, the court found that Davis Tree had committed neither deceptive practices nor unconscionable acts.

Sexton didn’t appeal the $6,500 he was found to owe Davis Tree on the unjust enrichment claim, but he did challenge the findings that Davis Tree had not violated the Kansas Consumer Practices Act.

ToocloseHeld: Davis Tree had not violated the law. Because the trial court jury had found for Davis Tree, the appellate court had to consider the evidence in a light most favorable to the tree trimmer. If the evidence so viewed supports the verdict, the appellate court will not intervene to disturb the verdict. The question on appeal, the Court said, was whether there was evidence to support the jury’s findings against Sexton’s claims.

The issue was whether Jeff Davis believed Ron Sexton knew the price and requested added tree trimming services. There was ample evidence that he knew what he had paid the year before, and that Davis believed he knew the price would be the same in 2003. Likewise, there was plenty of evidence that Sexton had asked for extra services. Based on that, a rational jury could have found from the record that Davis Tree did not willfully conceal or misrepresent the price or scope of the work.

Under the KCPA, a supplier shall not engage in deceptive acts or practices, including the willful use in a misrepresentation of “exaggeration, falsehood, innuendo or ambiguity as to a material fact,” the willful failure to state a material fact, or the willful concealment of a material fact. Such practices are violations regardless of whether the consumer has, in fact, been misled. Here, the evidence supported that Jeff Davis of Davis Tree believed he and Sexton had discussed price and that Davis believed Sexton knew the price for the 2003 job would be the same as the prior year — $1,200 per day. Likewise, the evidence supported the inference that Sexton requested additional trimming services. That, the Court said, was sufficient to find Davis Tree did not willfully conceal or misrepresent the price or scope of the work.

Sexton also claims the trial court erred in finding Davis Tree did not commit unconscionable acts in violation of the KCPA. He argued that because KCPA cases were so “fact sensitive,” the appellate court had to conduct an “unlimited review” of findings that certain conduct was not unconscionable. But the Court disagreed, holding that the standard is “abuse of discretion,” that is when no reasonable person would take the view adopted by the trial court. This is especially true where the credibility of witnesses is central to resolution of the case. Credibility determinations will not be reweighed on appeal.

The KCPA prohibits a supplier from engaging in an unconscionable act in connection with a consumer transaction. In determining whether an act is unconscionable, a court considers a nonexclusive list of circumstances “which the supplier knew or had reason to know,” including whether when the consumer transaction was entered into, the price grossly exceeded the price at which similar property or services were readily obtainable in similar transactions by similar consumers, and whether the consumer was able to receive a material benefit from the subject of the transaction.

Sexton argued that the Davis Tree invoice lacked documentation, and compared it to invoices for other Davis Tree customers which differed both in amounts charged and in how specifically the tasks were described. Davis Tree cited the extensive equipment and complex procedures required to trim the large number of trees on the Sexton property over the claimed 14-1/2 days of work. The trial court found that “just looking at $1200 a day for three people and the equipment, the Court … does find that it has not been established by a preponderance of the evidence that the price was grossly exceeding the value of what was being provided.”

Davis Tree Service learned a costly lesson

Davis Tree Service learned a costly lesson

The Court of Appeals found essentially that Sexton had not sustained his burden of proof. The trial court found there were three people working on the project, using a number of machines and at least two of the people climbing trees with their gear. Even Sexton admitted to seeing the equipment and work being done. However, the trial court noted, Davis Tree’s failure to prepare specific proposals was “a bad way to run a business,” and “more of a poor business that was run by Mr. Davis and not an unconscionable act or an intentional misleading business. Just bad business practices.”

At trial, in support of the claim that he did not receive a material benefit under the KCPA, Sexton argued the work Davis Tree claimed to have done was the same as done the previous year and, therefore, unnecessary, or that Davis Tree charged for work not done, and that Sexton did not receive the benefit of the full $17,400 charged. But as the Court noted, the jury did not order Sexton to pay the full $17,400 charged. The jury’s verdict against Sexton was for $6,500, and that was not challenged on appeal.

The trial court found there was little evidence to show what the value of the work actually should be, but it considered the evidence of the number of people and amount of equipment involved to conclude $1,200 a day was not excessive and, therefore, not unconscionable. The Court of Appeals couldn’t say that no reasonable person would agree with that ruling. Thus, the trial court’s ruling that Sexton received a material benefit would not be disturbed.

TNLBGray140407

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