Opinion
Docket No.: CL20-5381
10-07-2020
Re: Elise Theuer v. Norfolk Air Heating & Cooling, Inc.
James R. Theuer, Esquire
JAMES R. THEUER, PLLC
555 E. Main Street Suite 1212
Norfolk, Virginia 23510 Scott C. Hartin, Esquire
McKenry Dancigers Dawson, P.C.
192 Ballard Court, Suite 400
Virginia Beach, Virginia 23462 Dear Counsel:
Today the Court rules on the demurrer (the "Demurrer") filed by Defendant Norfolk Air Heating & Cooling, Inc. ("Norfolk Air") in response to the complaint (the "Complaint") filed by Plaintiff Eleise Theuer. In count four of the Complaint, Theuer seeks statutory damages and attorney's fees under the Virginia Consumer Protection Act based on Norfolk Air's alleged violation of the Virginia Home Solicitation Sales Act ("VHSSA"). Norfolk Air demurred to count four of the Complaint, asserting that Theuer failed to adequately allege that Norfolk Air violated the VHSSA. The two issues before the Court are as follows: (1) whether Theuer sufficiently pleaded a VHSSA violation based on Norfolk Air coming to Theuer's residence—at Theuer's request and without prior negotiations—and the parties entering into a home repair contract without a statement of the buyer's right to cancel, and (2) whether, as pleaded, Theuer's agreement to purchase Norfolk Air's services was "there given" under the statute.
The Court holds that (1) Norfolk Air did not engage in a "home solicitation sale" under the VHSSA when it came to Theuer's residence, at her request and without prior negotiations, and the parties entered into a home repair contract; and (2) Theuer has not sufficiently pleaded that her agreement to purchase Norfolk Air's services was "there given" under the statute. The Court therefore SUSTAINS Norfolk Air's demurrer to count four, but grants Theuer leave to amend the Complaint.
Background
Theuer owns and resides in a home in Norfolk (the "Residence"). (Compl. ¶ 4.) Theuer desired a ductless heating, ventilation, and air condition ("HVAC") system, otherwise known as "mini-splits," for the second floor of her home. (Id. ¶ 6-7.) The Residence is an historic property, and any other HVAC system allegedly would require extensive renovations. (Id. ¶ 8) Norfolk Air advertised installation and service of heating and air conditioning systems to Norfolk residents, including the ductless system that Theuer desired. (See id. ¶¶ 5-6.)
The first contact between the parties was apparently when Theuer telephoned Norfolk Air and informed the company of the home repair services she desired. (Id. ¶ 7.) Norfolk Air subsequently visited the Residence to further discuss with Theuer the installation and services it was willing to provide. (See id. ¶ 9.) Norfolk Air offered to install a "ducted, forced air system for the first floor and six mini-split units on the second floor." (Id.) Norfolk Air provided Theuer a typed quote dated September 25, 2017, for the sale and installation of the heating and cooling system, and Theuer apparently signed the quote on November 21, 2017. (See id. Ex. A.) The quote did not include any notice of Theuer's right to cancel the transaction. (See id.)
Norfolk Air ultimately installed the requested HVAC system in the Residence, and the system subsequently failed to operate correctly. (Id. ¶ 12.) After numerous service calls, Norfolk Air allegedly "refused to take further steps to bring the [s]ystem into proper operation." (Id. ¶ 15.) In 2020, Theuer claims to have contracted with a different heating and air conditioning company to mitigate Norfolk Air's alleged breach. (Id.)
Theuer filed a complaint, asserting in count four that the HVAC system sale violated the VHSSA—by not including the statutorily required notice of the right to cancel—and that a violation of that act is also unlawful under the Virginia Consumer Protection Act. (Id. ¶¶ 29-33.) Norfolk Air demurred to count four, and Theuer filed a response in opposition to the Demurrer. The Court held a hearing on the matter on August 27, 2020.
Positions of the Parties
Norfolk Air's Position
In the Demurrer, Norfolk Air asserts that count four of "Plaintiff's Complaint fails to allege sufficient facts to state a cause of action for a violation of the Virginia Consumer Protection Act." (Dem. ¶ 22.) Norfolk Air contends that the Complaint alleges that Theuer solicited information from Norfolk Air and fails to assert that Norfolk Air "commenced the sales process with a solicitation by door-to-door sales activity, or telemarking sales activity, or electronic sales activity." (Id. ¶ 21.)
Norfolk Air argues that the VHSSA requires that "the transaction at issue must stem from a 'solicitation' by the seller," either in person, by telephone, or electronically. (Id. ¶¶ 8, 12.) Norfolk Air contends that the Court should employ the ordinary meaning of the word "solicitation" as defined by the Merriam-Webster dictionary—"the practice of soliciting"—and further notes that the dictionary definition of "solicit" includes "to approach with a request or plea." (Id. ¶ 13.) Norfolk Air reasons that the "ordinary meaning of solicitation" under the VHSSA therefore requires that the "seller must have approached a buyer." (Id. ¶ 14.)
Theuer's Position
Theuer argues that the Complaint alleges sufficient facts to support its contention that Norfolk Air violated the VHSSA and that the count four of the Complaint therefore must withstand the Demurrer. (Br. Opp'n 4-5.)
In response to Norfolk Air's argument that the term "solicitation" requires that a seller initiate the contact, Theuer asserts that "[t]here is no support in statute or case law for Norfolk Air's contention that the [VHSSA] only applies to 'cold calls.'" (Id. at 5.) Theuer also points out that in the case upon which Norfolk Air relies, "the court expressly held that 'the contract was signed during the visit from an agent of the defendant and thus constitutes a sale by personal solicitation'" and that "[t]he visit by the seller in the buyer's home resulting in the contract is the focus, not the initiation of the relationship." (Id. (quoting Hantske v. Brandenburger & Davis, Inc., 36 Va. Cir. 423, 425 (Albemarle Cnty. 1995)).) Theuer also points out that the VHSSA, unlike analogous statutes in some other jurisdictions, does not have an exception for buyer-initiated contacts that result in home sales. (Id. at 6.)
Theuer further contends that her initial contact did not constitute prior negotiations as envisioned by the VHSSA. (Id.) As support, Theuer cites the Ohio Home Solicitation Act, which contains a statutory exception for "prior negotiations" similar to the exception in Virginia's statute. (Id.) Theuer asserts that courts have interpreted the term "negotiations" in the Ohio law as an action that "necessarily involves bargaining, including the 'submission and consideration of offers.'" (Id. (quoting Tambur's, Inc. v. Hiltner, 379 N.E.2d 231, 233 (Ohio App. 1977)).) Theuer also argues that unlike similar statutes in other states, such as Mississippi, the VHSSA does not contain an exclusion for sales that result from initial contact by the buyer. (Id. at 6.)
Analysis
Legal Standard
A demurrer tests the legal sufficiency of the claims stated in the pleading challenged. Dray v. New Mkt. Poultry Prods., Inc., 258 Va. 187, 189, 518 S.E.2d 312, 312 (1999). On demurrer, the court must admit "the truth of all material facts that are properly pleaded, facts which are impliedly alleged, and facts which may be fairly and justly inferred from alleged facts." Cox Cable Hampton Rds., Inc. v. City of Norfolk, 242 Va. 394, 397, 410 S.E.2d 652, 653 (1991). However, a demurrer does not admit the correctness of any conclusions of law. Ward's Equip., Inc. v. New Holland N. Am., Inc., 254 Va. 379, 382, 493 S.E.2d 516, 518 (1997).
Even if imperfect, a complaint drafted such that a defendant cannot mistake the claim's true nature should withstand demurrer. CaterCorp, Inc. v. Catering Concepts, Inc., 246 Va. 22, 24, 431 S.E.2d 277, 279 (1993). The court will not consider any factual assertions not included in the pleading being attacked, or its accompanying exhibits, for purposes of a demurrer. See id. at 24, 431 S.E.2d at 279. If a court sustains a demurrer, it is within the court's discretion to allow leave to amend the complaint, and such leave "shall be liberally granted in furtherance of the ends of justice." Va. Sup. Ct. R. 1:8.
Under the VHSSA, a "home solicitation sale" is defined as
(1) [a] consumer sale or lease of goods or services in which the seller or a person acting for him engages (i) in a personal solicitation of the sale or lease or (ii) in a solicitation of the sale or lease by telephonic or other electronic means at any residence other than that of the seller; and (2) [t]he buyer's agreement or offer to purchase or lease is there given to the seller or a person acting for him.Id. § 59.1-21.2(A)(1)-(2). Absent an emergency, "the buyer has the right to cancel a home solicitation sale until midnight of the third business day after the day on which the buyer signs an agreement or offer to purchase." Id. § 59.1-21.3(1). When a seller engages in a home solicitation sale, "the seller must . . . obtain the buyer's signature to a written agreement or offer to purchase . . . which contains a statement of the buyer's rights and a notice of cancellation." Id. § 59.1-21.4(1).
A sale or lease made pursuant to prior negotiations between two parties cannot constitute a home solicitation sale. See Va . Code § 59.1-21.2(B)(2).
A violation of any provision of the VHSSA also violates the Virginia Consumer Protection Act. See Va . Code § 59.1-21.7:1.
Discussion
The Court has considered the pleadings, oral argument at the Hearing, and applicable authorities.
In 1995, another Virginia circuit court pointed out that "[t]he precise range and scope of the [VHSSA] have never been affirmatively defined by Virginia courts." Hantske v. Brandenburger & Davis, Inc., 36 Va. Cir. 423, 424 (Albemarle Cnty. 1995). This was true then, and it remains true twenty-six years later. See Yarney v. Wells Fargo Bank, 3:09-CV-00050, 2010 WL 3663182, at *1, *4 (W.D. Va. Sept. 15, 2010) (noting that there is "a dearth of authority applying and interpreting the VHSSA"). A. The Complaint Fails to Sufficiently Allege a "Home Solicitation Sale" as Envisioned by the Virginia Home Solicitation Sales Act Because Norfolk Air Came to Theuer's Residence at Theuer's Request to Conduct Home Repair Services.
The VHSSA provides that personal solicitations for services that take place in a residence and result in a sale must be accompanied by a written agreement that contains a description of the buyer's rights, including an express notice of the buyer's right to cancel the transaction. Va. Code § 59.1-21.3(1). The Virginia General Assembly enacted the VHSSA to protect consumers who make purchases in their own homes as opposed to the seller's place of business. 1997 Op. Va. Att'y Gen. 213, 213. The legislature's intent was two-fold: (1) to protect consumers from home solicitation sales requiring an immediate decision whether to purchase a product or service they had not contemplated acquiring and (2) to avoid the pressure a seller might apply once in the consumer's residence and the consumer is unable to simply leave or walk away from the seller. Id. Although the legislature intended to protect buyers from sellers' coercive sales tactics, such as those that unannounced door-to-door salesmen might use, the act does not expressly address sales stemming from initial contact by the buyer. See Va . Code § 59.1-21.2. By contrast, several other states with similar statutes include such an exception. See, e.g., Miss. Code § 75-66-1 (stating that a home solicitation sale "does not include a sale . . . where the sale is initiated by the buyer").
Here, it is undisputed that Norfolk Air did not provide Theuer with a written notification of her right to cancel. It also is undisputed that Theuer initiated contact with Norfolk Air and invited a corporate representative to visit her home. The relevant issue before the Court is whether Theuer sufficiently alleges that a home solicitation sale—as defined by the VHSSA—took place in light of her initially contacting Norfolk Air, such that Norfolk Air was statutorily required to notify her in writing of her right to cancel the sale. The Court finds that she does not.
As an initial matter, the VHSSA contains an express exception for sales consummated in the buyer's residence after "prior negotiations" between the parties. See Va . Code § 59.1-21.2(B)(2) (stating that a "home solicitation sale" does not include "a sale or lease made pursuant to prior negotiations between the parties"). Noting that Virginia courts have not defined "prior negotiations," the Hantske court relied on an Ohio appellate court definition: "bargaining, including the 'submission and consideration of offers.'" 36 Va. Cir. at 426 (quoting Tambur's, Inc. v. Hiltner, 379 N.E.2d 231, 233 (Ohio App. 1977)). In Tambur's, Inc. v. Hiltner, the Ohio Court of Appeals held that a homeowner who invited a contractor to visit her home to draft a home improvement estimate engaged in prior negotiations. 379 N.E.2d 231, 233 (Ohio App. 1977); see also Brown v. Jacob, 454 N.W.2d 226, 229 (Mich. App. 1990) (Griffin, J., dissenting) (finding that a phone call from a homeowner to an aluminum siding contractor's place of business constituted prior negotiations when the homeowner requested an estimate for the desired non-emergency repairs), rev'd for reasons stated in the dissent, 476 N.W.2d 156, 157 (Mich. 1991). Here, the Court finds that Theuer does not allege facts that constitute prior negotiations; she merely contacted Norfolk Air to communicate her request for services.
Although there apparently are no Virginia appellate decisions interpreting the VHSSA, the Virginia Attorney General provided an opinion regarding the act's application under circumstances very similar to those present here. Specifically, the Attorney General considered whether a home solicitation sale would take place if a homeowner contacts a plumbing company regarding certain necessary home repairs, the company sends a plumber to the residence to assess the need for repairs, the plumber presents the homeowner with a quote during the visit, and the homeowner instructs the plumber to start work immediately. See 1997 Op. Va. Att'y Gen. at 213. The Attorney General concluded that the VHSSA is not "intended to apply to sales that are initiated by the buyer and that are conducted in the home because the sale relates to repairs and maintenance of systems within the home itself." Id. This is because "the buyer's home is the normal place for transactions regarding repairs and maintenance of the immovable property within the home, such as plumbing or heating systems." Id.
As is appropriate, the Court does not consider Attorney General opinions to hold precedential value; however, the Court acknowledges that they "are entitled to due consideration." Va. Beach v. Va. Rest. Ass'n, Inc., 231 Va. 130, 135 (1986).
The Attorney General distinguished this proposed situation from an earlier opinion, which concluded that "the fact that the buyer requested the seller to appear at his residence does not remove the transaction from the Act's coverage." Id. (citing 1984-1985 Op. Va. Att'y Gen. 76-77). The earlier opinion involved an automobile salesman who telephoned a prior customer—who had previously purchased a car from him—to inquire about the car, which led to the customer asking about the possibility of acquiring another car. 1984-1985 Op. Va. Att'y Gen. at 76. The seller agreed to bring the new car paperwork to the buyer's home, where the parties signed the papers. Id. Unlike the plumber in the more recent Attorney General opinion, in the earlier opinion the seller initiated the contact, and the item purchased by the buyer did not relate to systems within the buyer's home. Together, these opinions—despite the lack of an express VHSSA buyer-initiated-sale exception—stand for the following proposition: although seller-initiated contacts that result in home sales unrelated to the residence do not necessarily remove the transaction from the confines of the VHSSA, buyer-initiated contacts that result in home sales related to the residence likely are outside the ambit of the act.
Non-binding judicial opinions, from both Virginia and other states with similar statutes, agree with the Virginia Attorney General's interpretations. For instance, in Hantske v. Brandenburger & Davis, Inc., the Albemarle County Circuit Court held that a home solicitation sale occurred when the seller first contacted the buyer, and the parties later met in person and signed a contract in the buyer's residence. 36 Va. Cir. at 423, 426. There, the seller telephoned the buyer to offer to represent him in an estate inheritance matter. Id. at 423. The two then met in person the following day in the buyer's home to discuss the seller's services, which did not relate to the residence. Id. The seller produced a contract—without a cancellation provision—at the meeting, and they both signed the agreement. Id. at 423-24. The court ultimately found that the agreement constituted a home solicitation sale as defined by the VHSSA. Id. at 425.
The Court does not consider an opinion from another Virginia circuit court to hold precedential value. The Court instead considers the rationale offered by that court to the extent that this Court finds it persuasive.
Unsurprisingly, the Hantske court also concluded that the seller's telephone call, which generally offered estate representation services and led to the meeting in the buyer's residence, did not constitute "prior negotiations" as defined by the VHSSA. 36 Va. Cir. at 426.
Additionally, although the VHSSA lacks an express exclusion for sales initiated by the buyer, several states that similarly lack such buyer-initiated exclusions have nonetheless found that their Home Solicitation Sales Acts do not apply when a buyer initiates the transaction. See, e.g., All Am. Pools, Inc. v. Lato, 569 A.2d 562, 564 (Conn. App. 1990) (holding that a service contract was exempt from the Connecticut Home Solicitation Sales Act when the buyer initially contacted the seller requesting swimming pool repairs); Patrick v. U.S. Tangible Inv. Corp., 595 N.W.2d 162, 166 (Mich. App. 1999) (opining that there was little danger of undue pressure in a sale of coins when an investor contacted a consultant for investment advice and was referred to a coin seller). But see Weatherall Aluminum Prods. Co. v. Scott, 71 Cal. App. 3d 245, 248, 139 Cal. Rptr. 329, 331 (Cal. Ct. App. 1977) ("[T]he mere fact that the seller appears at the buyer's home in response to a phone call from the buyer is insufficient to remove a contract from the statute's ambit.").
Theuer claims that although she contacted Norfolk Air initially, Norfolk Air solicited the sale while in her home. She relies on In re Bayless, in which the U.S. Bankruptcy Court for the Eastern District of Michigan opined that a salesman "making an initial contact is not the equivalent of soliciting a sale" and ultimately found that the solicitation occurred in the home—and not in the store where the initial contact occurred—and therefore came under the Michigan Home Solicitation Sales Act. 326 B.R. 411, 415 (Bankr. E.D. Mich. 2005). There, a salesman approached the homeowner in a hardware store, obtained the homeowner's phone number, and another sales representative later called to schedule visits to the home, where the parties negotiated home improvement contracts. Id. at 413. The court reasoned that the salesman's initial contact with the homeowner in the hardware store did not constitute a "solicitation" because a solicitation requires "serious meaningful discussions about the subject matter of the agreement." Id. at 415. The court noted that the decision was consistent with Michigan caselaw indicating that the Michigan Home Solicitation Sales Act did not apply to customer-initiated telephone calls absent prior solicitation by a business. Id. at 416-17. Although this Court agrees with the Bayless court's ruling that the location of the initial contact is not always determinative of whether and where the solicitation took place, initial contact outside the home that leads to the consummation of a sale while in the home does not automatically invoke the VHSSA. Further, Bayless involved seller-initiated contact—both at the hardware store and at the buyer's home—making this case analogous to the earlier Virginia Attorney General opinion that involved an automobile salesman.
The court also found that the conversation in the hardware store did not constitute prior negotiations. In re Bayless, 326 B.R. at 416.
Accepting the facts alleged in the Complaint as true, as the Court must for purposes of ruling on the Demurrer, Theuer fails to allege sufficient facts to support a violation of the VHSSA. Although there is nothing in the Complaint that could reasonably be interpreted as prior negotiations between the parties, Theuer initially contacted Norfolk Air when she telephoned the contractor and informed it of her desire for a heating and air conditioning system, i.e., repairs to her home. As the Virginia Attorney General opined, the statute is not directed at home repair sales initiated by the buyer and conducted in the home. Rather, the statute's purpose is to prevent on-the-spot contracts in a buyer's home without a contractual provision informing the buyer of her right to cancel the contract within three business days. Va. Code § 59.1-21.4.
Based on the above, the Court finds that Theuer fails to sufficiently allege a "home solicitation sale" as envisioned by the VHSSA because Norfolk Air came to Theuer's residence at Theuer's request to conduct home repair services. B. The Complaint Fails to Sufficiently Allege that Theuer's Agreement Was "There Given" as Required by the VHSSA.
As stated above, the purpose of the VHSSA is to protect consumers from being bound by an immediate decision regarding a service or product they have not previously considered without being informed of the right to cancel the contract. See 1997 Op. Va. Att'y Gen. 213. The requirement that the parties contemporaneously meet in the buyer's house and execute an agreement is evidenced by the statutory language that the "buyer's agreement or offer to purchase or lease is there given to the seller." Va. Code § 59.1-21.2(A)(2) (emphasis added).
In Yarney v. Wells Fargo Bank, the U.S. District Court for the Western District of Virginia held that, for purposes of the VHSSA, a home solicitation did not occur when a homeowner contacted a mortgage broker by phone and ultimately signed a brokerage services contract that arrived by mail days after the parties' telephone conversation. No. 3:09-CV-00050, 2010 WL 3663182, at *1, *4-5 (W.D. Va. Sept. 15, 2010). The broker had periodically contacted the homeowner—by both phone and mail—asking her to refinance her home mortgage loan before she eventually called the broker and applied for refinancing. Id. at *1. Several days later, the broker mailed the homeowner a contract, which the homeowner signed, and the closing took place over a week later. Id. The court dismissed the homeowner's VHSSA claim, noting that the homeowner had failed to allege (1) that the broker initiated the call during which the homeowner requested refinancing or (2) the time lapse between the broker's "last alleged solicitation" and the homeowner-initiated call. Id. at *4. The court found that the homeowner therefore did not sufficiently allege that the contract she received in the mail and signed was "there given to the seller." Id.
The Court does not consider an opinion from a federal district court to hold precedential value. The Court instead considers the rationale offered by that court to the extent that this Court finds it persuasive.
In Patrick v. U.S. Tangible Investment Corp., the Michigan Court of Appeals found that a sale of coins did not constitute a home solicitation sale. 595 N.W.2d 162, 165 (Mich. App. 1999). There, an investor contacted a financial consultant for investment advice and was referred to a coin seller. Id. at 164. The coin seller visited the investor's home and presented the investor with an investment strategy, and the investor purchased the seller's coins the following month after additional communications and negotiations. Id. The court found that the offer to purchase was "not there given" as required under the statute because the contract was signed a month after the home solicitation. See id.
Theuer's complaint fails to allege that she agreed to purchase services from Norfolk Air when its representative first visited her at her home. The Court further notes that the contract for specific services is typed, indicating that it likely was not completed at the time of the initial visit. Additionally, the contract is dated almost two months before Theuer's dated signature, further proof that Theuer probably did not execute the agreement during the home visit or contemporaneously with Norfolk Air. Accepting the facts alleged in the Complaint as true, as the Court must for purposes of ruling on the Demurrer, Theuer does not state sufficient facts to support a violation of the VHSSA.
Conclusion
The Court finds that (1) Norfolk Air did not engage in a "home solicitation sale" under the VHSSA when Norfolk Air came to Theuer's residence, at her request and without prior negotiations, and the parties entered into a service contract; and (2) Theuer has not sufficiently pleaded that her agreement to purchase Norfolk Air's services was "there given" under the statute. Because Theuer fails to state a valid cause of action under the VHSSA, the Court SUSTAINS the Demurrer as to count four of the Complaint. However, the Court grants Theuer leave to amend the Complaint within twenty-one days, should she choose to do so.
The Court directs counsel for Norfolk Air to prepare and circulate an Order consistent with the ruling in this Opinion and submit it to the Court for entry within fourteen days.
Sincerely,
/s/
David W. Lannetti
Circuit Court Judge DWL/bds