4 minute read
Practice Tips
PRACTICE TIPS By: Mariel S. Cooper
Quist, Fitzpatrick & Jarrard, PLLC
Surely, I am not alone in this. We all dread the inevitable questions that surface toward the end of an initial meeting. “So now, if I win, the judge will award us the amount demanded plus attorney’s fees, right?” My standard response is to launch into a spiel informing my client that Tennessee follows the American Rule1: unless provided for by contract or law, each party is responsible to bear the cost of its own attorney’s fees incurred on the case. However, one of my favorite scenarios occurs when I can advise the client that she may be able to recover attorney’s fees by application of the nexus of two Tennessee regulations. Moments like these allow attorneys to feel as if our clients will really begin to see the value in hiring us early on in their case.
One such situation where a client may be able to recover attorney’s fees by application of a combination of laws is when a Tennessee homeowner hires a contractor that purports to be licensed (and usually bonded and insured as well, although that is the topic of an article for a different day) to do work valued in excess of $25,000.00, and that same unlicensed contractor winds up causing damage to the homeowner’s property. Tennessee law protects the naïve homeowner in this situation through the Tennessee Contractor Licensing Act2 (the “TCLA”). This act requires any person engaged in contracting (or offering to engage in contracting) for any project in this state to be licensed by the Tennessee Board for Licensing Contractors.3 The TCLA broadly defines a contractor to mean any person who undertakes, attempts, or submits a price or a bid to construct or alter in any way a building, highway, road, housing, improvement, or any other construction undertaking for which the total cost is $25,000.00 or more.4
The TCLA not only limits the types of recovery available to unlicensed contractors to actual, documented expenses (as opposed to recovery under the contract or quantum meruit), it also characterizes the contractor’s engagement in contracting while unlicensed as an unfair or deceptive act or practice that affects the conduct of trade or commerce.5 Thus, in these situations the TCLA incorporates the applicability of the Tennessee Consumer Protection Act (the “TCPA”). Under the TCPA, a right of private action is afforded to the homeowner who suffers an ascertainable loss of money or property due to the actions or inactions of the contractor, and the homeowner would then be entitled to an award of reasonable attorney’s fees and costs.6 In the right circumstances, the homeowner could even seek treble damages depending upon whether the contractor willingly or knowingly deceived the homeowner.
The topics discussed hereinabove may not be new information to many of you reading this article as only a narrow fact pattern involving a residential homeowner and an unlicensed contractor has been considered. What about situations in which the work being performed by the unlicensed contractor was performed on property that is technically considered personal property, such as a mobile home, motor home, floating home, or a houseboat? The broad considerations listed in the TCLA defining what is considered to be a “contractor” thereunder, which was briefly summarized earlier, then become very important.7 The factors and considerations regarding the characterization of the property at issue as a building, housing, or improvement and its primary purpose being residential or for transportation would weigh heavily on the outcome of the applicability of the TCLA if this issue was heard before a court. Our firm recently tried a similar issue on behalf of a client who had hired an unlicensed contractor to do some work on his floating home. One fact that our argument hinged upon in that case was that we effectively draw the distinction for the Court between a floating home and a houseboat: both might be used as a residence for human habitation. But, respectively, one is moored to the shore and is non-navigable as it lacks its own propulsion system, and the other is used for navigation or transportation. The Court in that case ultimately found in our client’s favor on this issue and found that the requirements of the TCLA—that the contractor must be licensed with the Tennessee Board for Licensing Contractors to lawfully perform the type of work at issue—applied to the unlicensed contractor in this case. Thus, through the nexus of the TCLA and the TCPA discussed herein, our client was awarded attorney’s fees in addition to the amount of damages awarded on the merits of the case.
Access to the recovery of attorney’s fees could be crucial for a client in the course of pursuing her case. If you come across an issue such as this in your practice where a homeowner hired an unlicensed contractor, do not forget about the possibility of the homeowner recovering attorney’s fees in addition to the amount of damages sustained through the interworking of Tennessee regulations. Also, in a case that might not be so clear as to whether the structure at issue is considered under the TCLA, be sure to analyze the descriptions of structures contained therein against the structure at issue in your case for the possibility that the work being undertaken may require the contractor to be licensed. Such description under the TCLA is quite broad, and even in a case where on the face it might seem that the TCLA does not apply, upon conducting an analysis you may be surprised.
1 Pullman Standard, Inc. v. Abex Corp., 693 S.W.2d 336, 338 (Tenn. 1985). 2 Tenn. Code Ann. § 62-6-101, et seq. 3 Tenn. Code Ann. § 62-6-103(a)(1). 4 Tenn. Code Ann. § 62-6-102(4)(A)(i). 5 Tenn. Code Ann. § 62-6-136(b). 6 Tenn. Code Ann. § 47-18-109(e)(1). 7 See supra note 4.
