California Appellate Lawyer Blog

Since the California Legislature amended Business & Professions Code section 7031, subdivision (e), to narrow the doctrine of substantial compliance with contractor licensing requirements, a contractor attempting to recover for construction work performed may no longer avoid the harshness of the bar against recovery by claiming lack of licensure was merely a matter of form. On this subject, I authored the case of Opp v. St Paul Fire & Marine Ins. Co. (2007) 154 Cal.App.4th 71. Opp involved an individual who was barred from utilizing his personal license because he was a different entity than the corporate entity that contracted to perform the work in question.

In this blog's June 27, 2011 edition, I discussed the contrasting facts of Ball v. Steadfast-BLK (2011) 196 Cal.App.4th 694. There, the trial court's judgment barring recovery was reversed because the business name listed in the contract was deemed one and the same as the individual sole proprietor operating the business, although the owners name appeared nowhere in the business name; the business was not a legal entity licensable separate from its owner who was licensed.

Montgomery Sansome LP v. Rezai (filed March 28, 2012) 2012 DJDAR 4042 presents yet another variant on this issue. Defendants hired "Montgomery Sansome Ltd. Lp, 305 Adrian Road, Millbrae" to perform repairs at an apartment building they owned; the work orders had the quoted information printed on the work orders along with contractor's license # 741713. Defendants paid $65,000 on the contract prior to terminating it. Plaintiff claims a balance of about $203,000 is owed it.

Continue reading "Contractor Licensing Law revisited: triable issue whether contracting entity and licensed entity are one and the same" »

In Tverberg v. Fillner Construction Inc. (filed January 26, 2012) 2012 DJDAR, general contractor Fillner (defendant) was expanding the fuel pump area of a gas station. Two items of work involved the construction of a canopy and the erection of concrete posts to prevent vehicles from colliding with the fuel dispensers. Plaintiff Tverberg was the independent contractor who was the foreperson of Perry, the subcontractor constructing the canopy. Another sub, Alexander, was erecting the concrete posts. Plaintiff asked defendant's lead person twice, once before the start of the canopy construction and once on the next day after that construction started, to cover the wholes that had been dug where the posts (unrelated to canopy construction) were going to be installed. On the first occasion, the response was no equipment was available that day to over the holes. On the second occasion, a tractor was used by defendant to flatten the dirt piled around the holes. Later on that second day, Tverberg injured himself when he fell into one of the holes while walking toward the canopy work area.

In Solano Superior Court, defendant was granted summary judgment on each of two claims of liability: (1) breach of nondelegable regulatory duty and (2) negligent exercise of retained control. The Court of Appeal, First Appellate District, Division Four, reversed.

The appellate court first notes that the California Supreme Court in SeaBright Ins. V. US Airways, Inc. (2011) 52 Cal.4th 590 determined that the first theory is not actionable because the duty is delegable. However, the second theory here, if factually in dispute, is actionable. The court finds that triable issues of fact remain on that theory and reversed the judgment accordingly.

Continue reading "Factual issue of hirer's negligent exercise of retained control in form of affirmative contribution renders reversal of grant of summary judgment" »

During my time on the trial court bench, I would often hear the following analogy argued concerning the concept of circumstantial evidence: "When I see a bird that walks like a duck and swims like a duck and quacks like a duck, I call that bird a duck." I doubt that poet James Whitcomb Riley, when he first coined this phrase in about 1884, could have imagined he was providing attorneys with trial argument material.

In California Traditions, Inc. v. Claremont Insurance Co. (filed June 21, 2011, certified for publication on July 11, 2011) 2011 DJDAR 10405, the project developed by plaintiff consisted of 146 separate residences with no shared walls, halls, roofs or plumbing or electrical lines. But to avoid minimum set-back requirements for non-condominium single family homes and to allow higher density, the project was developed, marketed and sold as condominiums. Plaintiff hired Ja-Con Systems to do the rough framing work. Ja-Con was insured under a comprehensive general liability policy issued by defendant. That policy provided an exclusion for work on condominium and townhouse projects. In a separate action homeowners sued for defective construction; plaintiff developer obtained a $2 million judgment on its indemnity cross complaint against Ja-Con and now seeks to satisfy that from the policy.

The San Diego Superior Court granted defendant's motion for summary judgment based on the undisputed fact that the condominium exclusion precluded recovery. Plaintiff had argued that Ja-Con had a reasonable expectation of coverage because the units gave the outward appearance of non-condominium detached homes.

Continue reading "Condominium construction work excluded in liability insurance policy: looks can be deceiving" »

Before any reader gets too excited with this caption, be aware that the California Business & Professions Code section 7031, subdivision (a) bar of compensation for contract work done by anyone other than a person or entity stated in a state-registered license is unaffected by the recent case discussed below. As I wrote in Opp v. St. Paul Fire & Marine Ins. Co. (2007) 154 Cal.App.4th 71, 76, a contractor's taking liberty to use a name to contract with parties that is different from a state-registered name and then seek recovery under the contract "would be tantamount to permitting an individual to adopt a prohibited fictitious business name and then to sue on a contract, when such suit would be barred for any other unregistered business."

Nonetheless, in Ball v. Steadfast-BLK (filed June 14, 2011) 2011 DJDAR 8745, the Court of Appeal, Third Appellate District, concluded that plaintiff Ball was a licensed contractor and as such was able to perform contracting work under the name Clark Heating and Air Conditioning, as was stated on his license, even thought the work in question was contracted under the transposed name of "Clark Air Conditioning & Heating." In so concluding, the appellate court reversed the Sacramento Superior Court's sustaining defendant's demurrer without leave to amend plaintiff's cause of action for foreclosure on a mechanic's lien.

What makes the difference in the Ball case is that plaintiff Ball was the sole proprietor of the business who possessed the license and did nothing to mislead his customers that anyone other than himself was the contractor; that he, rather than some possibly shell corporation, would be responsible for the quality of the work. As the appellate court points out, "Contrary to Steadfast's assertion, such a ruling does not 'deprive the CSLB [Contractors State Licensing Board] from providing the transparency and accountability essential to the integrity of the licensing system.' "Where, as here, Ball was the licensee and contracting party, the public would be able to check licensing status."

Continue reading "Contractor, licensed as individual, may recover for work performed even though he used varied business name" »

In 2002, hoping to reduce construction litigation and the impact on housing costs, the California Legislature enacted Civil Code sections 895-945.5 that included a nonadversarial prelitigation procedure requiring home purchasers, who believe their home may be defective, to give the builder notice of the claimed defects and an opportunity to investigate and repair the defects prior to the homeowner being allowed to bring a lawsuit. Section 914, subdivision (a), allows the builder to provide in the home purchase contract an alternative procedure to that provided by statute so long as the alternative procedure is "fair and enforceable."

In Anders v. Superior Court (filed February 7, 2011) 2011 DJDAR 2137, the homeowner petitioners, owners of 54 homes built by real party Meritage Homes, filed their lawsuit for alleged defects without exhausting the prelitigation procedure. Meritage moved in the trial court to require the procedure it had prescribed in its home sale contracts. The Stanislaus County trial court found the particular procedure set out in the contracts unconscionable and unenforceable; however the court found it appropriate to require the homeowners to comply with the statutory prelitigation procedures. The homeowners petitioned the California Court of Appeal, Fifth Appellate District, to be relieved of this prelitigation requirement claiming the unenforceability of the builder's contractual procedure exempted them from having to comply with the statutory procedure. The appellate court agreed with the homeowners, with the exception of two homeowners whose contractual provision contained an election to use the statutory procedure.

The Court of Appeal points to the plain language of the statute that stated the builder's election was binding regardless of the success or unenforceability of the builders own contractual provision; that the builder waives the statutory provision by so electing. The trial court tried to take a practical approach, in the appellate court's view, by thinking the statutory procedure "would not harm them (the homeowners) and might be beneficial." But the problem with that thought, as is correctly noted by the appellate court, is the statute absolutely precludes such recourse.

Continue reading "Home Construction Defect Case Prelitigation Procedure Under California Civil Code Section 914 Backfires on Homebuilder Drafting Its Own Contract Provision" »

In Cortez v. Abich ( filed January 24, 2011) 2011 DJDAR 1257, plaintiff was seriously injured while employed by an unlicensed contractor performing roof demolition, when he fell through a seemingly intact portion of the roof of homeowner defendants' property while he was clearing debris from the portion of the roof already demolished. Defendants moved for summary judgment contending no duty to warn plaintiff of the roof's condition, in part arguing the safety requirements of California Occupational Safety and Health Administration (Cal-OSHA) did not apply to the residential remodeling project. The trial court granted the motion determining as a matter of law that the defendant homeowners were not plaintiff's employers. The Court of Appeal affirmed, concluding that while defendants were plaintiff's employers, as a matter of law the home improvement project fell within Cal-OSHA's "household domestic service" exception. The California Supreme Court disagreed and reversed, finding the plain meaning of the statute (California Labor Code section 6303, subd. (b)) does not allow application of the exception to this situation.

The Supreme Court looked to legislative intent of the language of this statutory subdivision which defines "employment" as "the carrying on of any trade, enterprise, project, industry, business, occupation, or work, including all excavation, demolition, and construction work, or any process or operation in any way related thereto in which any person is engaged or permitted to work for hire, except household domestic service." The employer of a person so employed is required to provide a "safe" place of employment. Defendants contended a homeowner is broadly exempt whenever an employee performs services on the property for the homeowner's personal benefit and not for commercial purposes. The Supreme Court disagreed that the statute is so broadly worded or intended. It viewed household domestic service as relating to maintenance of a home which is different than the present case of home remodeling. So while noncommercial tree trimming falls within the scope of the household domestic service exception (See Fernandez v. Lawson (2003) 31 Cal.4th 31), this case concerns the demolition and rebuilding of a significant portion of the home.

Given some of the underlying assumptions in this case that isolate this issue of statutory interpretation, future construction accident cases present many possible permutations of the nature of work provided to a homeowner. We do know there is no broad exemption for the homeowner. But would a cleanup crew that dusts and vacuums a home immediately after a remodeling job is completed fall within the exception? Is merely painting a home a maintenance activity? What about changing of old light fixtures in a home? The list of possibilities goes on.