Write a bad contract for New York home improvement work and you may end up with less than nothing. The case of Goodspeed v. Aiello proves the point.
A leaky radiator damaged Maria Goodspeed’s New York home earlier this year. Wallboard and flooring had to be removed and replaced. Michael Aiello of A & B flooring agreed to do the work. Michael wrote up the contract on a small sheet of notebook paper:
I Michael Aiello agree to do all repairs caused by the radiator leaking. Work includes sheet rock, paint, flooring, demo & removal. A deposit of $6,200 will be recieved [sic] on 1-27-22. the balance of 2.800 is due upon completion. Any additional cost must be disgussed [sic] and agreed to by both parties.
The page was signed by both Maria and Michael. Maria paid A & B the $6,200 on February 15, 2022.
Two weeks later, work had not started. But Maria’s insurance carrier, Allstate, was now involved. Maria gave Allstate’s adjuster a statement:
On 3/1/22 an invoice was turned into Allstate as an additional expense to original job that was being done for Maria Goodspeed. Invoice was agreed to and approved by myself, homeowner and insurance company. The additional invoice was for a total of $8,050.00 The total amount owed to A & B Flooring to date is $11,000.
A & B scheduled work for the middle of March. By April 1, 2022, demolition was well under way. But Mike wanted another advance to continue work. Maria asked to see receipts for materials purchased for her job. When Mike wouldn’t provide those receipts, Maria gave up on A & B Flooring. She filed suit on April 7 to recover her $6,200 advance.
You decide.
- What
portion of the deposit was A & B Flooring entitled to keep for work on
the Goodspeed job? They had done plenty. In Maria’s words, they ” gutted our house . . . "
- Did
either of the two written documents that describe the Goodspeed job qualify
as a New York home improvement contract?
Judge Bannister
at Little Falls (NY) City Court had no trouble with either question.
Payment for Partial Completion?
“The court will not allow the Defendant
to draw the Claimant and the court into a controversy concerning the amount and
value of the benefits received when the value of those services left her with a
demolished home interior and a contractor asking for things outside the scope of
their contract. The Claimant gave the Defendant $6,200 as an initial payment. This
Court finds that she is entitled to a return of the initial payment.”
A Valid New York Contract?
The General Business Law section 771
requires notices and disclosures in home improvement contracts. The contract offered
by A & B included none of these:
- Estimated
dates when the work will begin and end, any contingencies that could change
those dates, and whether a completion date is the essence of the contract.
- Description
of the work to be performed, the materials to be provided to the owner . .
. and the agreed upon consideration for the work and materials.
- Notice
that subcontractors and suppliers have the right to claim a lien on the property.
- Notice
that the contractor is required to either deposit all advances in an escrow
account or post a bond.
- Schedule
of progress payments showing the amount due at each stage of completion.
- Notice
of the three-day right to cancel.
- Disclosure
of the contractor’s property and casualty insurance coverage.
New York law imposes a civil penalty of up to $2,500 for writing a bad home improvement contract. Since this was a first offense, Judge Bannister didn’t impose the civil penalty, but with a warning. “However, if there are future sustained violations in the future, this Defendant is on notice that a civil penalty will be considered.”
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