California has very strict rules against unlicensed contractors. A recent case the rope tighter. The Court in Robert D. White. v. Terry E. Harper Cridlebaugh (2009) 178 Cal App 4th 506, 521 stated in pertinent part, "[W] e conclude the [Business and Professions Code Section] 7031 (b) 's reference to the recovery of all compensation paid to a contractor without a license means that the unlicensed contractor can not reduce the Recovery authorized [by consumers] from asserting claims for compensation arising from the work without license [since either materials, services, labor, etc.]. "
Cridlebaugh was hired to build a log cabin (retirement home) for Whites, who were friends of the church. Then began the work of whites was concerned with the work of Cridlebaugh and competition. White Cridlebaugh finally dismissed. Cridlebaugh recorded a mechanic lien on the property to White. White sued Cridlebaugh and filed its own suit Cridlebaugh, which was consolidated.
During the project Cridlebaugh was working on a corporate license agreement for JC Builders, Inc. The responsible officer or management of RMO for builders JC Inc., a gentleman named Diani was not involved with the project and stated that White had only been in the United States twice in the last two years White pre-contract and that he did not even know Cridlebaugh was working with the corporate license. In other words, the builders had borrowed Cridlebaugh JC, Inc. license, but was not the same license Cridlebaugh was not being supervised by one of the licensees.
If a responsible official management or employee of RMO / RME is not involved in construction activities or actively participate in day to day operations of the business entity, the Court of Appeals in California v. Buzgheia Leasco Sierra Grove (1977) 60 º Cal.App.4 374, has stated that it is as if the contractor is not licensed at all. In other words, the contractor is a farce and is not licensed by operation of law.
Diani virtuous testimony by Cridlebaugh, particularly the licensed entity corporate, JC Master Builders, Inc., was considered an unlicensed contractor for the project Blanco and had to vomit all the money being paid by whites. In accordance with B & P 7031 that are not entitled to promote its own lawsuit against the Whites.
Previously, the California Supreme Court explained that contractors without a license are required to disgorge all monies are paid in accordance with Business and Professions Code 7031 (b). In the seminal case Systems Hydrotech, Inc. v. Oasis Waterpark (1991) 52 Cal.3d 988, 955, Hydrotech court stated that "[t] he purpose of the licensing law is to protect to the public from incompetence and dishonesty in providing construction services … The licensing requirements provide assurance minimum that all persons offering such services in California have the requisite skill and character, understand the laws and codes, and know the rudiments of running a contracting business … [Business and Professions Code] Section 7031 advances this purpose by withholding legal aid for those who seek compensation for unlicensed contract work. The clear intent is to prevent legal persons who could not comply with the law for granting license to offer or provide services without a license to pay … Due to the strength and clarity of this policy is well established that  § 7031 is applicable even of injustice to the unlicensed contractor …. Section 7031 represents a legislative determination that the importance of deterring unlicensed persons to engage in business recruitment outweighs any harshness between the parties, and that deterrence as can be best achieved by denying violators the right to maintain a action for damages in the courts of this state … "
On appeal Cridlebaugh and JC Master Builders, Inc. argued that they were harmed by unable to follow the compensation (for materials supplied, services provided, and labor, etc.) on the disgorgement claim. The Court analyzed the history of long dates of the statutes of licensing and determined that allow unlicensed contractors to claim compensation for services or reduce the effectiveness gut the preventive nature of the law. Prevent attempts by unlicensed contractors to claim compensation against compensation claims for materials supplied and services loan was consistent with the statutory scheme.
Therefore, an unlicensed contractor is prohibited by the recovery of their claims for breach contract, or vomiting should return all money paid by the consumer to the unlicensed person, and are not entitled to any compensation from materials provided positive and services provided. The displacement clarification clarified some earlier references to previous case law that predated the 2001 amendment to B & P 7031 (b), thus eliminating any possible confusion or ambiguity.
The Lesson
When you are considering hiring a contractor for any project that you should carefully check their credentials and experience. First, you can go online to rel = "nofollow" href = "http://www.cslb.ca.gov/"> www.cslb.ca.gov and out of state contractor's license and staff. Second, you must request a written list of his latest projects and interview all clients involved with the contractor in recent years. Third, if the contractor is a company, you should require interviewing the RMO / RME is responsible for construction activities. Fourth, you should request a list of subcontractors that the contractor intends use at work and check your license status online. Fifth, once the contractor has been selected a lawyer review the contract, revising the construction schedule, and review any agreement you have talked to the contractor before signing the contract.
In our experience, in reviewing the contracts of contractors, found that 9 out of 10 of these construction contracts do not comply with Business and Profession Code  §  § 7000-7200. These simple contract violations legally sufficient to subject a contractor to discipline and possible suspension of his license.
Unfortunately, the CSLB processes tens of thousands of applications license each year. This administrative body can not properly form selection and qualification of each person applying for a license, therefore, has to rely on people being truthful, honest and professional. The public must be aware of it and must do everything possible to protect themselves in hiring of a contractor.
Let the consumer beware.
David S. Roberson, Esq. is an associate at the law firm of Rossi, Hamerslough, Reischl & Chuck, 1960 The Alameda, Suite 200, San Jose, CA 95126, http://www.rhrc.net, daver@rhrc.net, 408-261-4252.
For Answers to Any and All Construction Questions Go To http://www.ConstructionQandA.com.
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