Martinez v. Hobbs Mechanical ( 2021 )

NOT DESIGNATED FOR PUBLICATION
No. 123,027
IN THE COURT OF APPEALS OF THE STATE OF KANSAS
DAN MARTINEZ,
Appellant,
v.
HOBBS MECHANICAL, INC, HARVEY MILLER, and DIANNE MILLER,
Appellees.
MEMORANDUM OPINION
Appeal from Sedgwick District Court; SEAN M.A. HATFIELD, judge. Opinion filed August 6,
2021. Reversed and remanded with directions.
Dan Martinez, appellant pro se.
Carl N. Kelly, of Kelly Law Offices, of Wellington, for appellees.
Before WARNER, P.J., BUSER and CLINE, JJ.
PER CURIAM: Dan Martinez appeals the summary judgment disposition of his
Kansas Consumer Protection Act (KCPA) claims. The district court found Martinez had
no right to relief under the KCPA because it interpreted the KCPA to require an actual
exchange of services or property for value. Because we disagree with the district court's
restrictive interpretation of the KCPA, we reverse and remand for further proceedings.
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FACTS
In the spring of 2018, Martinez wanted to convert an open, wood-burning fireplace
into a closed, gas-burning fireplace. He researched products online and decided he
wanted a Mendota fireplace insert installed. The Mendota website stated the
manufacturer's warranty for the insert was valid only if an authorized dealer and installer
sold and installed the product. The website also listed Hobbs Mechanical, Inc. in
Wellington, Kansas, as an authorized dealer. Hobbs Mechanical was owned by Harvey
and Dianne Miller, who were husband and wife.
Martinez called Hobbs Mechanical and spoke with Dianne. He explained that his
house had an existing concrete or stone fireplace that would require modification for a
gas-burning insert. According to Martinez, he told Dianne he wanted Hobbs Mechanical
to perform the installation "with everything that goes with it," and they discussed
installing a Mendota 47 or 49 model.
Martinez claimed Dianne agreed to sell and install a fireplace at a cost of "$10,000
plus." He noted Dianne assured him that she was a certified fireplace installer, Hobbs
Mechanical could perform the installation, and Hobbs Mechanical was an authorized
dealer for Mendota products. Martinez said Dianne outlined the scope of work her
company would perform, which included a description of the equipment and an estimated
date of completion. Martinez claimed he relied on Dianne's assertions that Hobbs
Mechanical could perform the installation. Dianne denied the bulk of Martinez'
assertions.
Martinez admitted he did not know whether the Mendota fireplace inserts he
discussed with Dianne would fit in the existing fireplace. Dianne said she knew the
inserts they discussed would not work in the existing fireplace as described by Martinez.
She claimed she scheduled an appointment to examine the fireplace to see what would
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work. She denied she would have promised to install a fireplace insert without first
examining the existing space and claimed Hobbs Mechanical would have engaged
another company to perform the installation.
About a week later, Harvey drove to Martinez' house to examine the existing
fireplace. Harvey took measurements of Martinez' fireplace. Based on his measurements,
Harvey told Martinez the fireplace would need modification to accommodate a Mendota
fireplace insert. Martinez claimed Harvey told him that Harvey had an employee who
could perform the necessary modifications. Harvey claimed he told Martinez only that he
knew of someone who could perform the modifications.
Harvey then called Tracy French to discuss the job. French contacted Martinez,
telling him Harvey had asked French to arrange a visit to inspect the fireplace for
modification. At some point, French inspected the fireplace and Martinez engaged him to
make the required modifications for the fireplace insert. The Millers both admitted that
Harvey referred French for modifications to Martinez' fireplace but denied that French
was an employee of Hobbs Mechanical.
While French was working on the fireplace modifications, French determined the
Mendota model 49 would not fit in the existing fireplace structure, but the Mendota
model 47 might. French discussed his conclusion with Harvey by telephone and then on
site.
While Harvey was on site, Martinez asked him about French's statement that
Harvey would require a down payment before ordering the insert. Harvey explained that
the company required a down payment on special orders because, if the customer
changed his or her opinion about the order before installation, the company was stuck
with return charges. Martinez told Harvey that he had no intention of changing his mind
and offered to pay the down payment or even the entire purchase price. Harvey told
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Martinez to talk to Dianne. Martinez said he emphasized his desire to push forward with
the project to get it completed.
Either on this visit or on another visit, Harvey inspected the work French had
performed on the fireplace modifications and told Martinez, "[D]id I pick the right guy or
what?" At some unspecified time, Harvey also purportedly told Martinez that installation
of the fireplace insert should be completed within two days after receiving the unit.
Harvey expected to receive the unit in a couple of weeks.
About the same time as Martinez spoke to Harvey about a down payment, Dianne
purportedly called Martinez at home. In this conversation, Dianne allegedly asked
Martinez for a down payment on the fireplace insert. Martinez says he told Dianne that he
would pay the entire purchase price up front because he did not want any delays in the
installation. When Dianne told him that she did not know the precise figure yet, Martinez
claimed he offered to pay $10,000 and have Hobbs Mechanical bill him for the rest.
Although Martinez offered to put a check in the mail, he admitted that he never paid
Hobbs Mechanical any money.
Dianne allegedly asked what type of tile Martinez wanted, and Martinez told her
he wanted his fireplace to look like the picture on the Mendota website. According to
Martinez, Dianne told him that she would call him back in a couple of days with the price
total. When Martinez asked whether she wanted a $10,000 down payment, he said
Dianne told him to wait until she provided the total.
When five days passed without hearing from Dianne, Martinez called Hobbs
Mechanical to speak with her. He said she told him Hobbs Mechanical had given priority
to air conditioning jobs because it was summer, and those customers had greater need.
Dianne supposedly told Martinez that she would need to speak with Harvey, and she
would call Martinez back after she spoke to Harvey.
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Several days later, Martinez called Hobbs Mechanical and spoke with Dianne. She
reported that she had spoken with Harvey, and he told her about an issue with the fans on
the fireplace insert. Dianne told Martinez that she needed to speak with French before
providing Martinez with a price quote.
At some point, Martinez called back to see if the fan issue had been resolved.
Dianne reported that she had spoken to French but had not talked with Harvey after
receiving the information from French.
After more time passed, Martinez again called Hobbs Mechanical and spoke with
an office assistant. Martinez left a message for Dianne to call him back, expressing
frustration that his fireplace had been torn apart without the installation progressing.
After several more days passed without receiving any communication from
Dianne or anyone else at Hobbs Mechanical, Martinez concluded Hobbs Mechanical was
never going to complete the project. He obtained an attorney and filed his first petition.
Martinez later dismissed the suit without prejudice, wanting to represent himself.
Martinez refiled his petition against Hobbs Mechanical, Inc., Dianne, and Harvey,
and French, individually, requesting declaratory and injunctive relief, damages, and
attorney fees for violating the KCPA. French answered the petition separately from the
other defendants. Martinez amended his petition twice more, each time generally seeking
relief from alleged violations of the KCPA. Though Martinez' claims are a bit difficult to
discern, he seems to allege the following violations of the KCPA by Hobbs Mechanical,
Inc.: (1) false statements regarding licensure to perform the work; (2) false statements
regarding French's qualifications to perform the fireplace modifications; (3) failure to
obtain a city permit for the modifications; (4) concealing or misleading Martinez
regarding the fact that Hobbs Mechanical, Inc. was only licensed to sell Mendota gas
fireplaces but not to install them; (5) concealing or misleading Martinez regarding Hobbs
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Mechanical, Inc.'s expertise in modifying stone and brick fireplaces; (6) representing that
French was an employee or agent of Hobbs Mechanical, Inc.; and (7) inducing Martinez
to undergo fireplace modifications at a time when Hobbs Mechanical, Inc. had no
intentions of installing a fireplace at Martinez' residence. At some point, Martinez
reached a settlement agreement with French, who was then dismissed from the suit with
prejudice.
Martinez and the remaining defendants filed competing motions for summary
judgment. After engaging in a valiant effort to parse through the parties' pleadings (which
were difficult to follow on Martinez' side and in violation of Kansas Supreme Court Rule
141 [2021 Kan. S. Ct. R. 220] on the defendants' side), the district court ultimately denied
Martinez' motion and granted the defendants' motion on Martinez' KCPA claims. The
district court denied the defendants' motion on their counterclaims.
The linchpin of the district court's decision on the KCPA claims was its conclusion
that liability under the KCPA requires an actual exchange of services or property for
value because the Act defines "consumer transaction" as "a sale, lease, assignment or
other disposition for value of property or services within this state . . . to a consumer."
K.S.A. 2020 Supp. 50-624(c). The court found no facts that would support such an
exchange between Martinez and Hobbs Mechanical. At best, the court found only a
standalone oral proposal or quote with no payment by Martinez or work by Hobbs
Mechanical. The court did not attribute French's work to Hobbs Mechanical because no
evidence showed French was an employee, assign, or representative of Hobbs
Mechanical.
On appeal, Martinez challenges the district court's interpretation of the KCPA to
require an actual exchange of services or property for value to trigger the Act's
protections. While he also reasserts other arguments from his motion for summary
judgment, those issues are not properly before us. Once the district court made its
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threshold determination that Martinez could not recover under the KCPA because the
parties did not exchange value for property or services, it understandably did not consider
whether the defendants committed deceptive and unconscionable acts or practices.
Because we find the district court erred in requiring an actual exchange of value for
property or services to recover under the KCPA, we reverse the district court's summary
judgment decision on that basis alone and remand Martinez' KCPA claims for further
proceedings. We make no determination of the merits of Martinez' KCPA claims.
ANALYSIS
In evaluating a motion for summary judgment, a court must resolve all facts and
reasonable inferences in favor of the party against whom summary judgment is sought. A
party opposing summary judgment must come forward with evidence establishing a
genuine dispute about a material fact on a conclusive issue in the case. If reasonable
minds could differ as to the conclusions drawn from the evidence, summary judgment is
inappropriate. Because an appellate court is in the same position as the district court to
evaluate a motion for summary judgment, appellate review of summary judgment is de
novo. Hammond v. San Lo Leyte VFW Post #7515, 311 Kan. 723, 727, 466 P.3d 886(2020).
Our review of the district court's interpretation and application of the KCPA to
Martinez' claims is also de novo. Wichita Eagle and Beacon Pub. Co., Inc. v. Simmons,
274 Kan. 194, 221, 50 P.3d 66 (2002).
While the parties hotly dispute the facts material to their claims, those factual
disputes do not impede our determination of the narrow issue on appeal, which is: Does
the KCPA require an actual exchange for value of property or services to trigger
coverage? We find the plain language of the KCPA reveals it does not.
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The district court granted summary judgment against Martinez because it
concluded Martinez had not established a completed consumer transaction. The court
based this conclusion on its finding that "no fireplace was ever installed and no money
ever exchanged hands for such service." While Martinez never paid Hobbs Mechanical
for any property or service, this fact does not exclude Martinez from the protections
afforded consumers under the KCPA.
One of the cardinal rules of statutory construction is that we must give effect, if
possible, to the entire Act and every part of it. We must reconcile different provisions to
make them consistent, harmonious, and sensible. We cannot consider only a certain
isolated part or parts of the KCPA but are required to consider and construe together all
parts of it in pari materia. Cochran v. Kansas Dept. of Agriculture, 291 Kan. 898, 903-04,
249 P.3d 434 (2011). Yet, the district court's interpretation of the KCPA considers the
definition of "consumer transaction" in isolation, without reference to how this term is
defined and used throughout the Act. For example, the Act's definitions of "consumer,"
"supplier," and "consumer transaction" all encompass situations where no actual
exchange of value for property or services has occurred. See K.S.A. 2020 Supp. 50-
624(b) (defining consumer to include someone who "seeks or acquires property or
services"); K.S.A. 2020 Supp. 50-624(l) (defining supplier to include a seller who
"solicits, engages in or enforces consumer transactions"); K.S.A. 2020 Supp. 50-624(c)
(defining consumer transaction to include "a solicitation by a supplier with respect to
any" "disposition for value of property or services within this state").
Further, the KCPA generally prohibits both deceptive acts or practices and
unconscionable acts or practices "in connection with a consumer transaction," K.S.A.
2020 Supp. 50-626(a); K.S.A. 50-627(a). This "catch-all" prohibition covers conduct that
occurs in anticipation of a contemplated consumer transaction. Indeed, K.S.A. 2020
Supp. 50-626(b) contains an illustrative (but nonexclusive) list of per se deceptive acts
and practices which includes conduct that commonly occurs without any actual exchange
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of value for property or services, such as a supplier's offer of property or services with no
intent to sell them or no intent to supply reasonable, expectable public demand. K.S.A.
2020 Supp. 50-626(b)(5), (b)(6). And, K.S.A. 50-627(a) specifically notes "[a]n
unconscionable act or practice violates this act whether it occurs before, during or after
the transaction." (Emphasis added.) The broad language of these prohibitions necessarily
covers allegations like Martinez', which include behavior before the exchange of any
value, property, or services.
Last, in defining the parameters of a violation, the KCPA denotes a violation "not
identified to be in connection with a specific identifiable consumer transaction but which
is continuing in nature" as a separate violation for each day such act or practice exists.
K.S.A. 50-636(d). Since continuing deceptive acts or practices which do not involve an
actual exchange of property or services for value (such as a supplier's deceptive
advertising campaign) are outlawed, we see no basis to treat isolated deceptive acts or
practices which do not involve such an exchange any differently.
The district court's restrictive interpretation of the KCPA immunizes suppliers
from liability for actions the Act specifically prohibits. For instance, the Act also
prohibits deceptive acts and practices "whether or not any consumer has in fact been
misled." K.S.A. 2020 Supp. 50-626(b). Yet under the district court's interpretation, a
consumer would have to proceed with payment, even after learning of deceptive conduct,
to recover under the KCPA.
One of the enumerated purposes of the KCPA is "to protect consumers from
suppliers who commit deceptive and unconscionable practices." K.S.A. 2020 Supp. 50-
623(b). The Act is to be liberally construed to promote this purpose. K.S.A. 2020 Supp.
50-623. The district court's restrictive interpretation of the KCPA would seriously
undermine the legislative intent of the Act.
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The district court referenced several published decisions which it claimed
supported its restrictive interpretation of the KCPA. Yet none of these decisions stand for
the proposition adopted by the district court.
In The CIT Group v. E-Z Pay Used Cars, Inc., 29 Kan. App. 2d 676, 32 P.3d 1197(2001), a car dealer sued a financing company for violating the KCPA based on the terms
of a financing agreement between CIT and E-Z Pay. One of the terms of the agreement
required Paul Colyer to guarantee performance under the contract as an individual. Even
though Colyer acted as an individual guaranteeing performance under the financing
agreement, he was guaranteeing performance of a corporation, which had entered the
financing agreement with CIT. Under these circumstances, this court concluded that
Colyer was not a consumer under the KCPA because he was promising performance of a
corporation that had entered a contract with a supplier. 29 Kan. App. 2d at 685. The
court did not address the meaning of the term "consumer transaction," it addressed the
meaning of the term "consumer" under the Act.
The CIT Group is also distinguishable because Martinez did not engage Hobbs
Mechanical to install a fireplace insert as a representative of a corporation. He sought
installation of the insert as an individual for his residence. The relationship between
Hobbs Mechanical, the supplier, and Martinez, an individual, is the quintessential
consumer transaction. The district court improperly relied on The CIT Group to justify
summary judgment for the defendants.
In Ellibee v. Aramark Correctional Services, Inc., 37 Kan. App. 2d 430, 154 P.3d
39 (2007), an inmate brought KCPA claims against Aramark, a contractual meal provider
for the Kansas Department of Corrections (DOC). In affirming the district court's
dismissal of Ellibee's KCPA claims, this court reasoned that Aramark did not contract
directly with Ellibee for goods or services. Instead, it found Ellibee was a third-party
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beneficiary, and Aramark never made any representations to Ellibee directly which could
give rise to a KCPA claim.
"In this case, there is no evidence in the record on appeal that Aramark ever
made any representation directly to Ellibee. Aramark negotiated its contract with the
DOC. Further, the KCPA requires that any consumer transaction consist of a 'disposition
for value.' K.S.A. 50-624(c). There is no evidence of any sale or trade, as the DOC is
legally required to provide sustenance for all inmates.
"Ellibee provided nothing of value to Aramark. What was provided to Ellibee
was simply a by-product of Aramark's contract with the DOC. The facts are that Ellibee
received the meals he requested. Aramark made no representations to Ellibee or engaged
in any negotiations with him. Under this set of facts, a third-party beneficiary is not a
party to a KCPA consumer transaction. The trial court properly granted Aramark's
motion to dismiss." 37 Kan. App. 2d at 433.
The Ellibee discussion of the meaning of the term "consumer transaction" was in
the context of the relationship of the parties. The agreement to provide meals for inmates
was not a consumer transaction because the agreement for goods and services was
between Aramark and the DOC. As an arm of the State, the DOC was not a consumer
under the KCPA, just as a corporation was not a consumer under the KCPA in The CIT
Group. It was the DOC, not Ellibee, who provided value to Aramark in exchange for
property or services which Aramark provided to the DOC. Ellibee did not qualify as a
consumer because he was not a party to the transaction for goods or services.
Ellibee could not establish a consumer transaction under the KCPA because he
was a third-party beneficiary of goods and services. Here, Martinez directly solicited
property and services from Hobbs Mechanical. And in the transaction contemplated by
the parties, Martinez would provide value to Hobbs Mechanical in exchange for Hobbs
Mechanical providing property and services to Martinez. Martinez was not a third-party
beneficiary of a separate transaction between Hobbs Mechanical and another party.
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In Berry v. National Medical Services, Inc., 41 Kan. App. 2d 612, 205 P.3d 745(2009), a registered nurse admitted to the state nursing board that she struggled with
alcohol dependency. She agreed to participate in an assistance program that contracted
with a private company to provide random testing. As in Ellibee, this court affirmed the
district court's dismissal of Berry's KCPA claim against the testing provider. In
conducting its review, this court assumed for purposes of the appeal that alcohol testing
was a service encompassed by the KCPA. 41 Kan. App. 2d at 621-22. That said, the court
reached the inevitable conclusion that Berry was a third-party beneficiary of a contract
between the nursing board and the service provider. 41 Kan. App. 2d at 622 ("[Berry's]
factual allegations disclose transactions between the Board and the defendants but not a
consumer transaction between Berry and the defendants.").
Berry is distinguishable from Martinez' case in the same way as Ellibee. Martinez
was not the third-party beneficiary of goods or services provided through a contract
between two other parties. Taking the evidence in a light most favorable to him, Martinez
entered an oral agreement with Hobbs Mechanical to provide both property (the fireplace
insert) and services (the installation of the insert). According to Martinez, he did so
because of untrue representations from Hobbs Mechanical's employees. Nothing in Berry
supports the district court's conclusion that Martinez' interactions with Hobbs Mechanical
did not constitute a consumer transaction under the KCPA.
The district court erred in requiring an actual exchange of value for property or
services to recover under the KCPA. Taking Martinez' allegations in the light most
favorable to Martinez (as we are required to do), we find he has alleged facts to support
application of the KCPA to his claims.
Our finding here is in line with other states' interpretation of comparable consumer
protection statutes. See McCrann v. Klaneckey, 667 S.W.2d 924 (Tex. App. 1984)
(noting contemplated purchase or lease transaction does not have to be consummated to
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invoke provisions of Texas' Deceptive Trade Practices Act, since Texas DTPA defines
consumer to include person who merely seeks to purchase or lease good or services);
Scavio v. Smart Corporation, No. 397CV7209, 2001 WL 631326 (N.D. Ohio 2001)
(unpublished opinion) (finding Ohio Consumer Sales Protection Act applies to actions
which occur prior to completion of transaction since Ohio's CSPA is to be construed
broadly and it prohibits deceptive and unconscionable conduct that happens before,
during, or after transaction); Breuer v. Freedom Movers, No. 58038, 1990 WL 14154, at
*2 (Ohio Ct. App. 1990) (unpublished opinion) (noting legislative language used in
illustrative list of prohibited deceptive acts and practices in Ohio's CSPA [which mirrors
KCPA's similar list] "indicates the desire to regulate and control suppliers, and not just
completed transactions").
Since the district court only analyzed whether Martinez' claims fell within the
scope of the KCPA, our analysis of his claims must also stop here. The district court did
not address whether Martinez could establish any violation of the KCPA under these
circumstances, whether Martinez was aggrieved by any such violation, or whether the
Millers could be individually liable as suppliers under the KCPA. Thus, we remand
Martinez' KCPA claims for further proceedings with no determination of the merits of
those claims.
Reversed and remanded with directions.
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