Legal Question in Construction Law in California

Since the company did not have a license at the time the work was started and done, it can not collect for any work it did. The entity for whom the work was done can only sue you for the damages it suffered; if you did all the work correctly, they have no damages. If they do have any damages, you might be able to cross-complain alleging that it is similar to the situation where a claim is barred by the statute of limitations but can be raised if the other side files suit on the same matter [I do not think that will work, but it may put some pressure on the other side].

Mr. Shers should stick to answering questions in areas of the law he knows. By doing work that required a contractors license while not licensed you committed a crime. In addition, you are entitled to exactly zero dollars for your work. If the owner paid you anything for the work they are entitled to a 100% refund, with prejudgment interest. If the work you did was defective, they are also entitled to any damages to their property as a result of the defective work. They probably cannot sue for any problems with the work that only affects the work itself, since they got the work for free, but if it affected any other aspects of their property or structures, or work by other trades on a larger project, or if it has to be demolished at their expense, they can recover that from you on top of the 100% refund. I know this is really harsh, but that is the law. The legislature got tired of unlicensed contractors getting the courts to allow them to keep what they had been paid or the reasonable value of their work even though they could not enforce the contract, so the legislature made it this way by code. No license = no right to payment; no right to keep payments received; and liability for all damages resulting from the work. That's the law.