Wisconsin Couple Loses Consumer Act Lawsuit Against Home Improvement Chain

By Joe Forward, Legal Writer, State Bar of Wisconsin

Sept. 27, 2012 – A couple who sought $75,000 from Home Depot claiming violations of the Wisconsin Consumer Act recently lost in the federal court of appeals.

Brenda and Timothy Parent (the Parents) obtained a Home Depot credit card issued by Citibank for Home Depot purchases only. The couple was in the business of building log cabins through Crivitz Log Cabins LLC, and entered into an agreement with a customer to build one.

The customer also maintained a Citibank-issued Home Depot credit card, and a Home Depot log cabin package worth $9,761 was charged to the customer’s account. The customer later disputed the charge, and Citibank ultimately transferred the charges to the Parents’ account when the bank discovered that Timothy Parent signed the customer order forms.

The parties settled their own dispute through mediation, but the Parents sued Home Depot and Citibank in state court when they realized the $9,761 remained on their account and had accrued interest of more than $11,000. The Parents thought the settlement included payment of the Home Depot charge. The case was removed to the federal district court in Wisconsin.

The Parents claimed that Home Depot violated Wisconsin’s Consumer Act, including provisions that prohibit debt collectors from claiming or threatening to enforce rights that do not exist, or disclosing or threatening to disclose information about credit worthiness that is false.

The unpaid charge negatively impacted their credit and the ability to operate business, the Parents argued, and Home Depot was liable as a debt collector in a consumer transaction.

After dismissing Citibank, the U.S. District Court for the Eastern District of Wisconsin granted summary judgment to Home Depot, concluding that the home improvement retailer could not violate the consumer act provisions at issue without attempting to collect the debt.

The U.S. Court of Appeals for the Seventh Circuit affirmed in Parent v. Home Depot U.S.A., No. 11-3665 (Sept. 24, 2012), noting that required evidence was insufficient.

“[T]he Parents failed to present any competent evidence that Home Depot attempted to collect a debt from them,” wrote Judge William Bauer. “Without such evidence, a reasonable jury could not conclude that Home Depot violated the Wisconsin Consumer Act.”

The appeals court explained that Citibank owned the debt and supplied information to credit agencies, not Home Depot, and there was no agency relationship between them.