Date: 11-08-2012

Case Style: Jessica Mitchell Design Studios LLC v. Dorothy B. Story

Case Number: CJ-2011-52

Judge: Stephen R. Kistler

Court: District Court, Payne County, Oklahoma

Plaintiff's Attorney: Kent Clark Phipps

Defendant's Attorney: William James Baker

Description: 1. The Plaintiff is J. Mitchell Design, L.L.C. company licensed and conducting business in the State construction, remodeling and roofing services.

2. The Defendant is Dorothy Story, an individual residing in Payne County, Oklahoma.

3. This dispute arises out of service contracts between the parties. The contracts were negotiated and executed in Payne County.

4. This Court has jurisdiction over the parties and claims. Venue is proper in Payne County.

5. In early 2009, a storm damaged the roof of the residence of the Defendant and damaged the roofs of multiple rental houses that she owns. She contracted with JMD to replace the damaged roofs. Additionally, the Dcfendant submitted claims, partially through the work, investigation and effort of JMD, to her insurance carrier, State Farm Insurance Company, for the weather damage to her residential roof and the roofs on her investment properties. (“JMD”), an Oklahoma limited liability of Oklahoma. JMD performs design,

6. The Defendant’s residence is located at 4815 W. 1 1th Avenue, Stiliwater, Oklahoma. She contracted with JMD to replace the roofof this residence for the replacement cost value assigned by State Farm Insurance Company to her home. That value was $20,324.56. JMD replaced the roof The Defendant made only a partial payment leaving an unpaid balance of $7,111.78.

7. JMD has caused a lien to be filed in Payne County for the unpaid balance of the contract for services.

8. The Defendant is the owner of investment properties used as rental houses located at 419 S. Duncan and 41972 S. Duncan, in Stillwater, Oklahoma. She contracted with JMD to replace the roofs on both rental houses for the replacement cost value assigned by her insurance carrier, State Farm Insurance. Those values were $4,095.71 and $2,076.17, respectively. The Defendant has made partial payments to JMD leaving a balance of $2,595.71 on one house and $1,806.84 on the second property.

9. The Defendant is the owner of at least seven additional investment properties used as rental houses in Stillwater, Oklahoma. She contracted with JMD to replace the roofs on each of these properties for the replacement cost value assigned by her insurance carrier, State Farm Insurance Company. The total contract price for the replacement of all the rental houses was $34,891.15.

10. Pursuant to the contracts and in reliance upon the Defendant’s agreement and representations, JMD spent its efforts to investigate and evaluate the nature and extent of the roof damage and to communicate with Ms. Story’s insurance company, State Farm, regarding the damage to the roofs and the replacement costs and expenses for the roofs. Upon the completion of these tasks, JMD stood ready, willing and able to complete the roofs under the contracts between itself and the Defendant. However, the Defendai’it unilaterally cancelled all the contracts in violation of the terms and provisions of those contracts.

11. The terms of the contracts provide for a 15% cancellation fee. This amount is due and owing by the Defendant to the Plaintiff. The cancellation fee due, owing and unpaid is $5,233.67.

12. The Defendant has breached her contract for services with the Plaintiff The Defendant owes $7,111.78 for the completed roof on herresidence. The Defendant owes $2,595.71 on the completed roofof the property located at 419 S. Duncan. The Defendant owes $1,806.84 on the completed roof of the property located at 4l9V2 S. Duncan. The Defendant owes cancellation fees in the amount of $5,233.67 for breach of her additional contract with the Plaintiff

WHEREFORE, the Plaintiffprays for actual damages for the breach ofcontract for services, enforcement of its lien on the Defendant’s residential house located at 4815 W. 1l Avenue, an award of attorney’s fees, recovery of costs and other relief this Court should deem equitable.

Defendant answered and counterclaimed as follows:

COMES NOW the Defendant, Dorothy Story, and for her Answer to the Amended Petition herein, together with her Counterclaims, alleges and states as follows:

1. The Defendant admits the allegations contained in Paragraphs 1, 2, 3 and 4 of the Amended Petition.

2. That in regard to Paragraph 5 of the Amended Petition, the Defendant admits that in 2009, the roof of the residence owned by her, as well as the roofs of other properties owned by her, were damaged; however, she is without sufficient information or knowledge to determine exactly when the damage occurred on said properties. The Defendant further admits that she entered into a contract with Aaron Mitchell d/b/a J. Mitchell Design, to repair the roofs, and provide other services as well; however, the Plaintiff advised her that she could cancel those agreements at any time, without penalty. This Defendant further admits that she submitted claims to her insurance carrier, State Farm Insurance, for such damage; however, denies in part and otherwise states that she is without sufficient information or knowledge with which to either admit or deny that the Plaintiff provided work, investigation and effort in submitting said claims, and requests the Plaintiff be required to make strict proof thereof.

3. This Defendant admits the first sentence in Paragraph 6 of the Amended Petition; however, in regard to the remaining allegations, denies same, as she contracted with Aaron Mitchell d/b/a J. Mitchell Design, to replace the roof of her residence, as well as provide other services, for the replacement cost value assigned by State Farm Insurance Company to her home. She admits that the replacement cost value was determined by State Farm Insurance Company to be $20,324.56. This Defendant admits that the Plaintiff replaced the roof; however, states that the work done by the Plaintiff in replacing the roof was unworkmanlike, and resulted in additional damages which have been incurred by the Defendant. She admits that the Plaintiff claims there is a balance of $7,111.78; however, denies that she owes any additional monies to the Plaintiff for any work done on her residence.

4. This Defendant admits that the Plaintiff has filed a lien in Payne County against her residence, as well as against another property; however, the lien filed against her residence is in the amount of $20,324.56, while the Plaintiff, in Paragraph 6 of its Amended Petition, states that the balance owed is $7,111.78, and accordingly, the lien amount is incorrect.

5. This Defendant admits the allegations in Paragraph 8 to the extent that she admits that she owns certain rental properties located at 419 S. Duncan and 419 ½ 5. Duncan, Stillwater, Oklahoma, and that she contracted with Aaron Mitchell d/b/a J. Mitchell Design to replace the roofs on both properties for the replacement cost value assigned by her insurance carrier. She further admits the amounts as stated in said Paragraph 8. The Defendant admits that payments to the Plaintiff in regard to the work done on 419 S. Duncan; however, denies that she owes any balance for work done on said property. This Defendant further denies that any work at all was done by the Plaintiff on the property located at 419 V2 S. Duncan, and specifically denies that she owes $1,806.84, or any other sum, by reason of work done by the Plaintiff on that property.

6. This Defendant admits the allegations contained in Paragraph 9 to the extent that it is alleged that she owns additional rental property in Stillwater, Oklahoma; however, she denies that she contracted with the Plaintiff as alleged therein, rather, she alleges that she agreed to pay the Plaintiff for work actually done in a workmanlike manner, with the option of cancelling said contracts without penalty at any time, as a part of the inducement from the Plaintiff to persuade her to sign the contracts. She further states that she is without information or knowledge with which to either admit or deny that the total contract price for the replacement of all the roofs on the rental properties was $34,891.15, and requests that the Plaintiff be required to make strict proof thereof.

7. This Defendant denies the allegations contained in Paragraphs 10, 11 and 12.

AFFIRMATIVE DEFENSES

Accord and Satisfaction.

Estoppel.

Failure consideration.

Fraud.

Illegality.

Payment.

Statute of Frauds.

Waiver.

COUNTERCLAIMS

For her Counterclaims against the Plaintiff, the Defendant adopts and incorporates herein all of the statements contained in paragraphs 1 through 7 above, and further alleges and states as follows:

8. Aaron Mitchell, represented himself to be employed by J. Mitchell Design, and contacted the Defendant to discuss the possibility of his company providing roof repair work and other services for the Defendant’s residence located at 4815 W. 11th Ave., Stillwater, Payne County, Oklahoma. That conversation occurred in February, 2010, by reason of damages done to the roof of said property in 2009.

9. That the said Aaron Mitchell represented to the Defendant that he could provide the necessary services and make the repairs, on her residence, for an amount of money equal to the replacement cost value (‘RCV”), as determined by her insurance carrier, State Farm Insurance Company (“State Farm”), together with payment of the deductible, if any, on the policy for her residence. At the time she signed said contract with Mr. Mitchell, the RCV for her residence was unknown, and Mr. Mitchell did not provide her with an estimate as to what she would be required to pay from her own funds, in addition to insurance funds, for the repairs in question.

10. That a copy of the Contract used for her residence is attached hereto, marked Exhibit “A” and incorporated herein by reference. That the print on the front page of the Contract is considerably larger than the print on the reverse side of the contract, and in fact, the print on the reverse side is so small that the Defendant was unable to read same, and neither Mr. Mitchell nor any representative of Plaintiff explained any of the terms and conditions shown on the reverse side of the Contract. In particular, the Plaintiff did not point out or explain the provisions of paragraph 3, regarding cancellation. Further, Mr. Mitchell specifically advised the Defendant that she could cancel the Contract at any time, without penalty.

11. That subsequent to the signing of the said contract on her residence, the Defendant signed similar contracts pertaining to various properties owned by her and located in Stillwater, Payne County, Oklahoma, as follows:

a. 419 S. Duncan

b. 419%S. Duncan

c. 1012 S. Duck

d. 1012 ¼ 5. Duck

e. 1016S. Duck

f. 808 S. Washington

g. 810 S. Washington

h. 810 Y2 S. Washington

i. 812 S. Washington

j. 813 W. 4 Ave.

That all of the contracts signed in regard to the above described properties were signed on or about March 30, 2010, and again, the Plaintiff, through Mr. Mitchell, advised the Defendant that she could cancel any of those contracts at any time, without penalty. Each of those contracts had a back side with print so small she could not read same.

12. That prior to entering into the contracts referenced in paragraph 11 above, the Defendant advised Mr. Mitchell, as a representative of the Plaintiff, that she was dealing with some very difficult family issues, specifically the grave illness of her sister-in-law, and that she was going to be leaving the State of Oklahoma within a few weeks, or on or about May 1, 2010, such that she requested and made as a condition of the contracts that the work in question would be complete on her residence and the properties located at 419 S. Duncan and 419 ¼ S. Duncan prior to her departure. She further advised Mr. Mitchell that it was imperative that those rental properties be repaired immediately due to the fact that she had been notified by her insurance carrier that if those properties were not repaired, her policies on same could be cancelled.

13. The Plaintiff did commence work on her residence on or about April 20, 2010, and left the job, after receiving payment from the Defendant. However, the work was not complete, such that the Defendant requested that the Plaintiff return to the jobsite, and was assured by Mr. Mitchell that he would return the following week to complete the work. In fact, Mr. Mitchell never returned to her residence to do any further work, nor did anyone else provide any further work or services in regard to her residence.

14. That the Plaintiff did undertake the roof repairs and related services on the property located at 419 5. Duncan, and has received payment for those services. However, the Plaintiff has provided no work or services to repair any of the remaining properties listed herein.

15. As the Defendant had advised Mr. Mitchell, she did leave the State of Oklahoma on or about May 1, 2010, and did not return until approximately August 25 or 26, 2010. Upon her return, she immediately contacted the Plaintiff’s place of business, and spoke with an employee of Plaintiff regarding the need to complete the work on her residence, as well as the other properties. She was advised by the Plaintiff’s representative that representatives of the Plaintiff would be coming to Stillwater the following week. No mention was made by the Plaintiff’s employee that any further appointments would need to be arranged, as the work to be done had already been identified, and the necessity for completion of the work on her residence was known to all parties. Notwithstanding such representations, the Plaintiff at no time retumed to Defendant’s residence, nor any other property owned by her, and provided no additional work, labor, services or materials for any such property.

16. That on or about the 16th day of August, 2010, the Plaintiff caused a Materialman’s lien to be filed against Defendant’s residence in the amount of $20,324.56 (ML# 1-2010-010122); however, the Plaintiff’s invoice dated June 22, 2010, reflected a balance due of $7,111.78. That by reason of no additional work, services or materials being provided in regard to Defendant’s residence from June 22, 2010, to the present, the lien filed against her property in the amount of $20,324.56 is false, misleading, is a misrepresentation, and is fraudulent, and that by filing said lien, the Plaintiff has slandered the Defendant’s title to said property. That on or about the 16th day of August, 2010, J. Mitchell Design did file another lien statement, being Mechanic’s or Materialman’s Lien #ML-2010-076, recorded in Book 1905, Pages 95-98, against the following described property and the improvements located thereon, to-wit: Lot Sixteen (16) and Seventeen (17), in Block Fifteen (15), COLLEGE ADDITION, to the City of Stillwater, Payne County, state of Oklahoma, according to the recorded plat thereof claiming the sum of $4,402.55 due and owing by reason of work, labor and materials furnished on said property. The Plaintiff has at no time provided an invoice or statement to the Defendant which sets out the amount of said lien, and therefore, is false, misleading and a misrepresentation, resulting in fraud against the Defendant, and slander of her title.

17. That by reason of the failure of the Plaintiff to perform the services according to the agreement of the parties, the Defendant was required to employ or contract with third parties to provide such services, which she did, for which payment in full was made, such that the Defendant has paid the amount allegedly owed to the Plaintiff, if not more.

18. That as set forth above, the Plaintiff claims to have provided labor, services and materials in regard to the repair of the roof of the property located at 419 ½ S. Duncan, Stillwater, Payne County, Oklahoma; however, in truth and in fact, the Plaintiff provided no services, labor or materials in regard to such property, and any and all claims or allegations by the Plaintiff to the contrary are false and fraudulent misrepresentations. This Defendant contracted with a third party to provide such services to repair the roof on said property, which repairs were made, and the Defendant paid for said repairs, in an amount equal to or in excess of the amount claimed by the Plaintiff as being owed on said property.

19. That at the time that the Plaintiff attempted to enter into contacts with the Defendant for repair of the various properties, Mr. Mitchell, on behalf of the Plaintiff, falsely and intentionally misrepresented to the Defendant that the repairs would be made in a timely manner, and that she could cancel the contracts at any time without penalty. Notwithstanding those representations, which the Defendant relied upon to her detriment, the Plaintiff has filed its Amended Petition claiming damages for work which was done in a poor or unworkmanlike manner, as well as damages for cancellation fees on properties for which the Plaintiff provided no labor, services or materials.

20. That in regard to the labor, services and materials provided on the Defendant’s residence, the Plaintiff failed to complete the work as agreed, and the work which was done was done in an unworkmanlike manner, the combination of which resulted in additional damage to the Defendant’s property, requiring her to contract with a third party to make the necessary repairs and to incur damages caused by reason of the defective work done by the Plaintiff, all resulting in the Defendant paying an amount equal to or in excess of the amounts claimed by the Plaintiff for the work done on the residence.

21. That Mr. Mitchell, on behalf of the Plaintiff, made material misrepresentations as to the work which would be done, the quality of the work, and the amount that the Defendant would be required to pay. That by reason of the Defendant’s age and health, the actions of the Plaintiff through Mr. Mitchell constitute deceptive trade practices, as that term is defined in Title 15 0.5. §752. Under the Oklahoma Consumer Protection Act, such actions were deceptive, and did deceive and mislead the Defendant to her detriment.

22. That the practices of the Plaintiff, through Mr. Mitchell and others on its behalf, constitute unfair trade practices, as that term is defined in Title 15 0.5. §752.

23. That the Plaintiff’s use of the name “J. Mitchell Design”, rather than its true and correct name of “Jessica Mitchell Design Studio, LLC” as well as the Plaintiffs actions in inducing the Defendant to enter into contracts for services described above, knowing that the services to be provided would not be provided by the Plaintiff, but rather by an unrelated and unaffiliated person, constitute deceptive representations on the part of the Plaintiff, as set forth in Title 15 O.S. §752.16.5.

FIRST COUNTERCLAIM - BREACH OF CONTRACT

24. The Plaintiff breached the contract entered into with the Defendant in regard to her residence, by failure to fully and competently complete the services as agreed, such that the Defendant was required to contract with a third party to complete the necessary work and make the necessary repairs, as well as remedying damages caused by the defective work done by the Plaintiff, such that the Defendant sustained damages in excess of $10,000.00

25. That by reason of the failure and refusal of the Plaintiff to complete the services as provided for in regard to the contract on the property located at 419 ½ S. Duncan, the Defendant was required to contract with a third party to provide such services, thereby causing the Defendant to suffer damages in excess of $375.00.

SECOND COUNTERCLAIM — SLANDER OF TITLE

26. That by reason of the Plaintiff filing lien statements against properties owned by the Defendant, in amounts which are false and misleading, the Plaintiff did thereby slander the title of the Defendant in regard to said properties. That by reason of such unlawful, intentional, willful and fraudulent acts, the Defendant has sustained damages in excess of $10,000.00, such that the Defendant should be awarded punitive damages in an amount in excess of $10,000.00

THIRD COUNTERCLAIM - CONSUMER PROTECTION ACT

27. That the acts and practices of the Plaintiff, in regard to dealings with the Defendant, constitute unlawful practices as defined under the Oklahoma Consumer Protection Act, §751, et seq., such that the Plaintiff did:

a. Make false and misleading representations, regarding the services to be provided, the cost of same, and the terms of the contract, thereby engaging in deceptive trade practices which deceived and mislead the Defendant to her detriment, resulting in damages in excess of $10,000.00.

b. Did engage in unfair trade practices, by reason of the use of the contract in question, by using print of a size on the reverse side of the contract in question which members of the public, and in particular, the Defendant, would be unable to read due to the extremely small size of same, and the failure to dearly designate and/or highlight the conditions and terms therein, including but not limited to. the alleged cancellation right of the Defendant, such that that practice is immoral, unethical, oppressive and scrupulous and substantially injurious to consumers, including the Defendant, resulting in damages to the Defendant in excess of $10,000.00.

28. That it has been necessary for the Defendant to employ the services of an attorney and to incur legal expenses, pay costs of litigation, for all of which the Plaintiff should be required to pay.

WHEREFORE, PREMISES CONSIDERED, the Defendant prays that upon hearing this cause, that the Court grant and award relief to the Defendant as prayed for herein, including the causes of action set forth in her Counterdaims, and for such other and further relief as the Court may deem proper, including reasonable attorney fees, costs and expenses.

Outcome: Trial on the merits on Plaintiff’s Amended Petition and the Defendant’s Answer and Counterclaim was presented to the Court on May 31, 2012, June 12, 2012 and June 28, 2012. At all times the Plaintiff appeared by its attorney K. Clark Phipps and Defendant appeared with her attorney William J. Baker. After the parties rested and concluded their closing arguments, the Court ordered the parties to submit proposed findings of fact and conclusions of law by a date certain for the Court to consider in its decision. Each of the parties filed their proposed findings of fact and conclusions of law on August 17, 2012.

The Court does now FIND and ORDER as follows:

1. Plaintiff substantially performed under the terms of the contract sued upon relating to the Defendant’s property identified as 4815W. Stillwater, OK (Plaintiff’s exhibit #1). Plaintiff is entitled to recover the contract price not already paid by the Defendant less the costs to the Defendant of correcting omissions, deviations or defects caused by the Plaintiff (OUJI-CIV 23.56).

2. For the 4815W. 11th contract the unpaid balance on the contract (Plaintiff exhibit #1) is $7,111.78. That sum reflects a downward deviation from the contract price for guttering and the service charge for guttering. Guttering was originally included in the contract (Plaintiffs #1, #3 and #4). It was not installed due to parties’ inability to agree on details concerning the guttering. Therefore, the original charge for guttering are excluded from said unpaid balance.

3. The Defendant proved by the greater weight of the evidence that some of the Plaintiff’s work done pursuant to the contract on the 4815W. 11th property was defective. The Defendants’ cost of correcting the omissions and defects caused by the Plaintiff exclusive of the guttering (Defendant’s exhibit #18) is the sum of $6,097 (Defendant exhibits #17= $1,590; #19 and #20 = $507; #21 = $1,800; and #22 = $2,200).

4. Concerning the 4815 W. 111th contract, the difference between the unpaid balance on the contract (paragraph #2 above) and the Defendant’s cost of correcting the omissions and defects of the Plaintiff (paragraph #3 above) is $1,014.78. Plaintiff is awarded judgment against the Defendant in the sum of $1,014.78. As to each parties’ prayer for attorney’s fees and cost relating to the contract on 4815 W. 11th, both parties are prevailing parties on their competing claims. Attorney fees and cost will be awarded as provided by law on subsequent application.

5. Plaintiff performed the conditions required under the terms of the parties’ contract related to 4195. Duncan. There was insufficient proof that the work done by the Plaintiff at 4195. Duncan was defective. The Defendant has not repaired any of the alleged defects or omissions related to Plaintiffs work on that property and did not timely notify the Plaintiff of such alleged defects.

6. Concerning 419 5. Duncan, the unpaid balance on the contract (Plaintiff exhibit #11) is the sum of $2,595.71. Court finds in favor of the Plaintiff concerning the cause of action for breach of contract related to the 4195 Duncan contract. Plaintiff is awarded judgment against the Defendant in the sum of $2,595.71 plus attorney fees and costs as determined on subsequent application.

7. The Plaintiff’s lien for labor and materials on 4815W. 11th (Defendant’s exhibit #2) filed June 16, 2010, and recorded in the records of the Payne County Clerk at Book 1905, pages 92-94 is a valid lien on said real property of the Defendant in the amount of $1,014.78 plus costs and attorney fees as determined on subsequent application. Said lien is ordered foreclosed and said real property sold with the proceeds applied as required by law.

8. The Plaintiff’s lien for labor and materials on 419 S. Duncan (Defendant’s exhibit #3) filed June 16, 2010, and recorded in the records of the Payne County Clerk at Book 1905, pages 95-98 is a valid lien on said real property of the Defendant in the amount of $2,595.71 plus costs and attorney fees as determined on subsequent application. Said lien is ordered foreclosed and said real property sold with the proceeds applied as required by law.

9. The Court finds in favor of the Defendant on Plaintiff’s causes of action against the Defendant for cancellations fees resulting from the Defendant’s cancellation of contracts between the parties relating to the replacement of the roofs on eight other rental properties of the Defendant (said properties identified on Plaintiff’s exhibit 27A). The “Cancellation/Termination” provision of each of said contracts is not a reasonable pre-breach estimate of the Plaintiffs probable loss. The fifteen percent (15%) of the contract price cancellation fee contained in said contracts is a penalty and is void.

Relating to said causes of action, the Defendant is awarded attorney fees and costs as provided by law upon subsequent application.

10. The Court finds in favor of the Plaintiff on the Defendant’s counterclaims for slander of title, violation of the Consumer Protection Act and fraud.

11, Counsel shall prepare the journal entry and circulate it to counsel for the Defendant within 20 days of this date.

Plaintiff's Experts:

Defendant's Experts:

Comments: