Pelletier v. Johnson

Rule of Law:

A seller who provides goods or services under a contract that is rendered ineffective for failing to comply with the Home Solicitations and Referral Sales Act may still recover equitable, restitutionary damages under a theory of unjust enrichment, provided that denying recovery would cause a disproportionate forfeiture.

Facts:

• G & B Design Builders (G & B) and the defendants entered into a written contract for G & B to install vinyl siding on the defendants' home for $5,475.
• The contract provided that the defendants could cancel the transaction within three business days.
• While the contract contained the cancellation clause, it lacked other specific notice language required by the Home Solicitations and Referral Sales Act.
• The defendants were aware of their right to cancel but never attempted to do so.
• Approximately one week after the contract was signed, after the cancellation period had expired, G & B completed the installation of the siding.
• The defendants received the benefit of the siding and its installation but subsequently refused to pay G & B.

Procedural Posture:

• G & B Design Builders sued the defendants in trial court for breach of contract.
• G & B later amended its complaint to add claims for quantum meruit and unjust enrichment.
• The case was submitted to arbitration, and a party appealed the arbitrator's decision to the trial court.
• Following a bench trial, the trial court dismissed G & B's contract claim, concluding the contract was ineffective for violating the Home Solicitations and Referral Sales Act.
• The trial court, however, entered judgment for G & B on its unjust enrichment claim for $5,475, plus attorney's fees.
• The defendants, as appellants, appealed the trial court's judgment to the Arizona Court of Appeals.