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147727 - Epps v 4 Quarters Restoration, LLC

Danny Epps and Joyce Epps,
 
Gerald F. Posner
 
Plaintiffs-Appellees/Cross-Appellants,
 
v
(Appeal from Ct of Appeals)
 
 
(Wayne – Sapala, M.)
 
4 Quarters Restoration, et al,
 
Roger L. Premo
 
Defendants-Appellants/Cross-Appellees,
 
and
 
 
AM Adjusting & Appraisals, et al,
 
 
 
Defendants.
 
 
 

Summary

This case involves flood cleanup and home repair work that defendant Troy Willis and his companies, defendants 4 Quarters Restoration, LLC and Emergency Insurance Services, performed for plaintiffs Danny and Joyce Epps. Willis was not licensed as a residential builder and his companies were not licensed. He misrepresented this fact to the Epps, who in turned signed contracts valued at $128,000 to retain Willis and his companies to perform repair work. The Epps also executed a limited power of attorney, giving Willis the authority to cash checks issued by the Epps’ insurance companies as reimbursement for the work performed. The repair work was completed, and Willis used the limited power of attorney to cash checks provided by the Epps’ insurance companies.  
 
About three years later, Mr. and Mrs. Epps sued, seeking to recover all of the insurance money that the Willis defendants had received for their work. Mr. and Mrs. Epps asserted that the unlicensed status of the Willis defendants, and the fact that they were not aware of the unlicensed status, meant that the documents assigning the insurance proceeds to Willis' companies, and the power of attorney were invalid.
 
The trial court granted summary disposition to Mr. and Mrs. Epps. The court held that MCL 339.2412, which precludes an unlicensed contractor from bringing or maintaining a collection action, created a cause of action for the Epps. 
 
Defendants appealed. In an unpublished opinion per curiam, the Court of Appeals ruled that the trial judge had erred in holding that MCL 339.2412 created a cause of action in favor of the Epps. However, the Court of Appeals held that should be affirmed on an alternate ground -- fraud. The misrepresentation to Epps that Willis was a licensed residential builder rendered the various contracts void and meant that the insurance power of attorney was never valid. Willis lacked authority to endorse the insurance checks on behalf of Mr. and Mrs. Epps, the Court of Appeals panel held, and all of the insurance proceeds had to be returned to them.
 
Both the Epps and the Willis defendants sought leave to appeal to the Supreme Court. On June 13, 2014, the Supreme Court ordered oral argument on whether to grant the application or take other action and instructed the parties to address whether the contracts and limited power of attorney at issue are void or merely voidable, and whether the plaintiffs are required to establish actual damages to recover on their breach of contract and fraud/misrepresentation claims.