Litigation

Commonwealth of Pennsylvania, Office of Attorney General v. Gillece Services, LP, --- A.3d ----, 2024 WL 3282546 (Pa. Cmwlth. 2024)

Contractors operating in Pennsylvania must honor customers’ cancellation requests, regardless of whether those requests are made verbally or by another medium. A contractor’s failure to honor such a request will expose them to significant potential liability, as treble damages and attorneys’ fees may be assessed in addition to actual damages.

On July 3, 2024, the Commonwealth Court of Pennsylvania held that contractors are required to “honor requests for rescission made verbally or by any other medium” under the Home Improvement Consumer Protection Act (“HICPA”). In Commonwealth of Pennsylvania, Office of Attorney General v. Gillece Services, LP, --- A.3d ----, 2024 WL 3282546 (Pa. Cmwlth. 2024), a three-judge panel of the court adopted the trial court’s opinion holding that Section 517-7(b) of HICPA “facially requires contractors cancel Home Improvement Contracts ‘regardless of the medium used by the customer to provide actual notice of cancellation.’”

This case arose from allegations that various home improvement contractors “would receive phone calls from customers seeking to cancel home improvement contracts and, despite such notice, would proceed to send crews to the customers’ properties and attempt to commence work, refusing to honor the attempt at cancellation unless and until a signed notice was given[.]” The Attorney General filed a complaint to enjoin what it believed were prohibited business practices. The trial court granted the Attorney General’s motion for summary judgment and entered permanent injunctive relief, requiring the contractors to permit customers to rescind their home improvement contracts within three business days of signing.

The contractors argued that Section 201-7 of the Unfair Trade Practices and Consumer Protection Law (“UTPCPL”) specifically requires written notice of the cancellation of contracts. However, the trial court noted that a similar provision of HICPA, Section 517-7(b), “makes no mention of any form requirements for the provision of notice,” and thus does not require written notice. Despite the similarities between Section 201-7 and Section 517-7(b), the trial court observed that HICPA applied to the subject home improvement contracts, which could therefore be rescinded verbally. “HICPA functions much like an expansion upon the [UTP]CPL,” the trial court noted. “Violations of the HICPA are treated as violations of the [UTP]CPL, and no provision of the HICPA precludes any right a consumer may have under the [UTP]CPL.”