(Los Angeles County Super. Ct. No. BC343834) APPEAL from a judgment of the Superior Court of Los Angeles County, John T. Shook, Judge. Reversed and remanded.
Opinion following rehearing
CERTIFIED FOR PUBLICATION
Subcontractor Pacific Caisson & Shoring, Inc. (Pacific) sued its general contractor Bernards Bros. Inc. (Bernards) seeking payment for work performed under Pacific's subcontract. The trial court granted Bernards' motion for judgment, ruling, because Pacific did not maintain a Class C-12 specialty license, that it was not "a duly licensed contractor" and was hence not entitled to bring its action. (Bus. & Prof. Code, § 7031, subd. (a).)*fn1 Pacific appeals.
We hold that Pacific was duly licensed because it held a Class A general engineering contractor's license when it commenced performance of the subcontract. However, Pacific's Class A license lapsed for two and a half months during performance. Where the trial court ruled Pacific was never duly licensed, the court never reached the question whether Pacific nonetheless was entitled to recover because it substantially complied with the Contractor's State Licensing Law (the CSLL) (§§ 7000 et seq., 7031, subd. (e)). Accordingly, we reverse the judgment and remand for further proceedings.
FACTUAL AND PROCEDURAL BACKGROUND
The evidence is not in dispute. Bernards and Pacific executed a subcontract (the subcontract) in 2002 for Pacific to provide temporary excavation and support work on a project to construct a medical center for the County of Ventura. Under the subcontract documents, Pacific agreed to excavate the site for footings, grade beams, plumbing and utility lines, and other requirements, backfill and grade, and provide temporary support. Pacific also agreed to prepare and submit "calculations [of] subsurface conditions and geotechnical design parameters, factors of safety, assumptions, design criteria, overstress values and serviceability/deflection tolerances." The subcontract price was $360,000. The prime contract required the bidder for the temporary excavation and support subcontract to maintain a Class C-12 specialty earthwork and paving contractor's license (Cal. Code Regs., tit. 16, § 832.12).*fn2 Pacific held a Class A general engineering contractor's license (§ 7056) and a Class B general building contractor's license (§ 7057) but never obtained a Class C-12 specialty license. (§ 7058.)
Pacific commenced work under the subcontract at some point before July 29, 2002 and billed for work performed through October 28, 2003. Meanwhile, the Contractor's State License Board (the Board) suspended Pacific's licenses on April 1, 2003 for nonpayment of a judgment. During the period the licenses were under suspension, they also expired. The licenses were reinstated on June 25, 2003.
Eventually, Pacific filed this lawsuit seeking $544,567 owed it by Bernards under the subcontract. In its answer to the complaint, Bernards asserted as an affirmative defense that Pacific was not at all times relevant to this action properly licensed to perform the work that is the subject of the subcontract. Bernards also cross-complained alleging Pacific breached its subcontract and seeking reimbursement for monies owed.
Following the presentation of Pacific's case, Bernards moved for judgment (Code Civ. Proc., § 631.8)*fn3 on the ground that Pacific was precluded by section 7031, subdivision (a) from recovering on its complaint. Bernards based this argument primarily on the fact that Pacific lacked a Class C-12 specialty earthwork and paving contractor's license. Secondarily, Bernards argued that the license Pacific held was suspended during the period that Pacific was performing its subcontract work and so it was not duly licensed at all times during the performance of the subcontract. (Ibid.) Pacific countered that its Class A and B licenses were sufficient and that it substantially complied with the CSLL.
The trial court "reluctantly" ruled in favor of Bernards and dismissed the lawsuit for "lack of a C-12 license." The court did not address any other arguments or decide any other issues involving Pacific's complaint.
Pacific moved the trial court for reconsideration arguing that the Class C-12 specialty license is subsumed in the Class A license. In its opposition, Bernards argued that Pacific's subcontract specified that Pacific must have a Class C-12 license not a Class A license; and in any event, during the time Pacific was performing work under its subcontract, Pacific's Class A license was suspended for nearly three months for failure to satisfy a judgment against it. The trial court granted the motion for reconsideration, reconsidered its prior ruling, and reconfirmed it. The court entered judgment against Pacific pursuant to section 7031, subdivision (a) and awarded Bernards damages in the amount of $206,437.91 on its cross-complaint representing the money it paid to an unlicensed contactor. Pacific filed its timely notice of appeal.
The CSLL (§ 7000 et seq.), a comprehensive legislative scheme governing the construction business in California, is " 'designed to protect the public from incompetent or dishonest providers of building and construction services. [Citation.]' [Citation.]" (Alatriste v. Cesar's Exterior Designs, Inc. (2010) 183 Cal.App.4th 656, 664 (Alatriste).) The purpose of section 7031 is to enforce the CSLL. (Asdourian v. Araj (1985) 38 Cal.3d 276, 282, superseded by statute on another point as stated in Kashani v. Tsann Kuen China Enterprise Co. (2004) 118 Cal.App.4th 531, 541.) To accomplish that aim, section 7031 denies a contractor " 'access to the courts to recover for the fruits of his labor . . . when he violates the statute.' [Citation.]" (Asdourian v. Araj, supra, at p. 282.)
Section 7031, subdivision (a) reads in relevant part: "Except as provided in subdivision (e), no person engaged in the business or acting in the capacity of a contractor, may bring or maintain any action, or recover in law or equity in any action, in any court of this state for the collection of compensation for the performance of any act or contract where a license is required by this chapter without alleging that he or she was a duly licensed contractor at all times during the ...