Ask a homeowner about their experience with hiring a contractor, and you will hear horror stories. Jannell Moore is no exception. A Pennsylvania federal court recently ruled Moore could proceed with her claims against Angie’s List, Inc. for breach of contract and fraud after the contractor Moore found on Angie’s List failed to finish her kitchen remodel.

Angie’s List operates a paid-membership review service where consumers can rate local service providers. Angie’s List claims it determines a service provider’s rank by grades given by consumers and number of reviews. The better the ratings, the higher on the list a service provider will appear. According to Angie’s List, service providers cannot influence its ratings and or pay for a higher rank.

Angie’s List members agree to a Membership Agreement that disclaims any control or manipulation of the consumer-generated reviews or ratings. The Agreement states Angie’s List is a “passive conduit” for consumer reviews, does not endorse service providers, and reviews and rankings are based on first hand experiences.

Moore is an Angie’s List member, and she used its services to hire a contractor to remodel her kitchen. Moore claims that, at the time she hired the contractor, the contractor did not have any negative reviews on Angie’s List. Unfortunately, the contractor did not finish the job and refused to return Moore’s money. Moore then submitted a negative review to Angie’s List. Moore claims only then was she able to see negative reviews. Thereafter, Moore alleges she received information that service providers could pay for higher rankings and to suppress negative reviews.

Moore sued Angie’s List alleging its practices deceived consumers. Moore claimed that Angie’s 2 List did not count negative reviews or made the negative reviews unreadable for those service providers who paid advertising fees, thus affecting the service provider’s ranking.

Angie’s List asked the court to dismiss Moore’s claim. Angie’s List based its arguments mostly on presenting evidence contradicting Moore’s complaint. The court denied the motion, and only considered the allegations made in Moore’s pleading. The court held Moore had alleged sufficient facts to state a claim for breach of contract and fraud. The court did dismiss Moore’s claim for unjust enrichment because the parties did not dispute the existence of a contract. The court also denied Moore’s claim for breach of duty of good faith and fair dealing because Pennsylvania does not recognize such breach as an independent action.

This case serves as a cautionary tale to other consumer review websites – you must be transparent with consumers on how you obtain reviews and rankings. In the meantime, can anyone recommend a good contractor to finish a kitchen remodel? 

A special thanks to my colleague, Zoraida Vale, for her assistance on the articles for this edition.