The case, which arose out of the omission of soft-close features in a closet cabinet installation and a dispute over a $2,500 repair, resulted in a lawsuit seeking damages plus nearly $500,000 in punitive damages.
Jordan v. Closet Factory Franchise Corporation, arises from a dispute between a homeowner and a contractor regarding certain missing features in a custom closet installation. In February 2023, the homeowner entered into a contract with the closet contractor for custom closet fabrication and installation. During the sales process, the homeowner indicated he wanted soft-close drawers and cabinets, and the closet contractor’s sales person indicated that all of the company’s cabinets included soft close features and that no additional description of that feature needed to be added into the contracts.
The contractor completed installation, and the homeowner paid approximately $14,000 of the $16,000 contract for the cabinets, before realizing that the cabinets did not have the soft close features he had requested. When he asked the contractor to remedy this, the contractor refused and offered to install the soft close features for an additional payment. The homeowner ultimately spent $2,500.00 remedying the missing soft close features issue.
When the contractor sought final payment from the homeowner, the homeowner refused, but indicated a willingness to walk away from any claims against the contractor if the contractor would do the same. Ultimately, the homeowner came to believe that the contractor was not registered or licensed with the State and also that the contractor had manipulated Google reviews to prevent him from posting negative reviews and to only show positive revised.
Eventually the homeowner sued the cabinet contractor in federal court, asserting claims for breach of contract, fraudulent misrepresentation, unjust enrichment, negligence, and violations of Florida’s Deceptive and Unfair Trade Practices Act. He sought approximately $17,000.00 in damages, plus various unspecified additional damages and punitive damages. The contractor moved to dismiss, arguing that the homeowner failed to meet the minimum amount in controversy requirement for federal court of $75,000.00.
The trial court granted the motion and the homeowner was allowed to amend his complaint. In the amended complaint, the homeowner asserted his original claims, plus three new claims, and included a summary of damages, estimated at a minimum of $654,113.56. Again, the trial court dismissed the lawsuit, finding that because the conduct pleaded in the complaint would not trigger a right to punitive damages, and therefore could not establish damages sufficient to meet the federal threshold. The homeowner appealed the dismissal.
On appeal, the homeowner argued that the trial court failed to properly account for his claims for attorneys’ fees, his entitlement to civil penalties under FDUPTA, and his pleaded punitive damages in dismissing the case.
As to the attorneys’ fees, the Eleventh Circuit Court of Appeals noted that while pro se parties, like the homeowner, can recover attorneys’ fees to the extent the services of an attorney were used and incurred, there was nothing in the court records to show that this had occurred. Accordingly, the appellate court affirmed the trial court’s determination that no attorneys’ fees should be included in the amount in controversy calculation.
As to the FDUPTA penalties, the court noted that civil penalties under FDUPTA can only be recovered by an enforcing authority, not an individual, and therefore those amounts also could not be included in the amount in controversy calculation.
Finally, as to the punitive damages, the court first noted that “punitive damages must be considered when determining the jurisdictional amount in controversy unless it is apparent to a legal certainty that such cannot be recovered.” The court then found that the homeowner had pleaded entitlement to punitive damages in nine separate counts, each in the amount of approximately $51,000 for a total of $465,000. The court concluded that it did not appear that the allegations were made solely to establish jurisdiction and that the other allegations of the complaint regarding fraud prevented the court from finding that the homeowner could not recover punitive damages “with legal certainty.” Therefore, the appellate court reversed the trial court and required the matter be allowed to proceed.
The key takeaway from this case should be that even seemingly small issues in construction can snowball into much larger ones very quickly. This was essentially a dispute over $2,000.00, that now has turned into a nearly half-million dollar dispute in federal court. While it’s unclear from the decision what drove it there, contractors should be mindful that cases can turn ugly quickly, and even presumably unsophisticated parties (like a homeowner representing himself) can advance litigation to the point of creating severe problems.