## Facts

- Gene Pelletier, doing business as G & B Design Builders (G & B), was an Arizona-licensed contractor.
- Douglas and Terri-Lynn Johnson contracted in writing with G & B to purchase and have vinyl siding installed on their home for $5,475 (approximately $5,500).
- The contract was dated, signed, and provided to the Johnsons, and it included a notice above the signature lines stating the transaction could be cancelled within three business days.
- The Johnsons knew of the three-day cancellation right but never attempted to cancel.
- About one week after the contract was executed, G & B supplied and installed the vinyl siding.
- The Johnsons refused to pay.
- G & B sued for breach of contract and later asserted alternative claims for quantum meruit and unjust enrichment.
- The Johnsons argued the contract was unenforceable because it did not strictly comply with the notice-and-cancellation language required by Arizona’s Home Solicitations and Referral Sales Act, A.R.S. §§ 44-5001 to -5008.
- After a bench trial (following arbitration), the superior court found the transaction was a “home solicitation sale” under A.R.S. § 44-5001(1) and ruled the contract “ineffective” under the Act because it lacked language required by A.R.S. § 44-5004(B).
- The superior court dismissed the breach-of-contract claim but entered judgment for G & B on unjust enrichment for $5,475 (the reasonable value of the siding and installation) and awarded $7,800 in attorney’s fees (out of $11,160 requested), plus costs.
- The Johnsons appealed the restitution and fee rulings; G & B cross-appealed, seeking a larger fee award.

## Issues

1. Whether a seller whose home-solicitation contract is “ineffective” for noncompliance with the Home Solicitations and Referral Sales Act may nevertheless recover restitution from the buyer under unjust enrichment principles.
2. Whether awarding restitution in this setting improperly defeats the Act’s consumer safeguards.
3. Whether attorney’s fees under A.R.S. § 12-341.01 may be awarded, and in what amount, when the contract claim is dismissed but the dispute arises from the parties’ contractual transaction.

## Decision

- The Court of Appeals affirmed the judgment.
- The court held that, although the Act made the contract “ineffective” and barred contract enforcement, it did not automatically bar equitable restitution where the buyers retained valuable improvements without paying.
- The court affirmed the $5,475 unjust-enrichment award as the reasonable value of the siding and installation.
- The court affirmed the reduced attorney’s fee award of $7,800 and denied relief on G & B’s cross-appeal seeking additional fees.

## Legal Principles

- A statutory declaration that a home-solicitation contract is “ineffective” can render the contract unenforceable at law, yet still allow equitable restitution unless the statute clearly eliminates such relief.
- Unjust enrichment permits recovery when (1) a benefit is conferred, (2) the recipient retains the benefit, and (3) it would be unjust to allow retention without payment; restitution prevents the recipient from keeping improvements for free.
- Consumer statutes requiring specific cancellation language protect the buyer’s right to cancel, but absent clear legislative language, courts will not infer a forfeiture that allows a buyer to keep goods or services without paying after accepting performance and not exercising the cancellation right.
- Attorney’s fees may be awarded under A.R.S. § 12-341.01 in an action “arising out of a contract” even if the contract claim fails, when the dispute stems from the contractual relationship; the amount of fees is reviewed for abuse of discretion.

## Conclusion

Pelletier v. Johnson held that a home-solicitation contract that fails to meet the Act’s required cancellation language is unenforceable as a contract, but the seller may still recover restitution for the reasonable value of siding and installation the homeowners accepted and kept without paying, and the trial court may award reasonable attorney’s fees under A.R.S. § 12-341.01 in its discretion.


Pelletier v. Johnson, 188 Ariz. 478, 937 P.2d 668 (1996)