Who pays for contractor's cost miscue?

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In the case ProBuild LLC v. Ellis, homeowners Ronald and Kimberly Jinks entered into a contract with home improvement contractor Steven Ellis for work to the Jinkses’ home. The Jinkses paid slightly more than the contract price, which included labor and materials. After the contract and the work was completed, supplier ProBuild North LLC (ProBuild) filed a mechanics’ lien against the Jinkses home, in an effort to recover the amount of Ellis’ outstanding bill for building materials that Ellis used on the Jinkses’ job and never paid for.

Eventually, ProBuild sought to foreclose on the lien, collecting against the Michigan Department of Labor and Economic Growth’s Homeowner Construction Lien Recovery Fund (the Fund), which then sought to be repaid by the Jinkses.