Legal Question in Construction Law in California

Re: Unlicensed contractors

Notwithstanding the somewhat impudent response of Mr. Nelson, I think the question is appropriate and interesting.

I have found no cases directly on point, and reading the statute carefully is not determinitive. My treatises do not address the issue, either.

I know lawguru contributor Jim Schaefer (sp?) thinks that this scenario gives you a cause of action for recovery of monies paid to the general, but he hasn't spoken about going after the unlicensed subs. I've found only one case from 1937 supporting Jim's view.

To be sure, there is an answer, and I'd like to know it. Unfortunately, we don't seem to have the expertise online at present.

What I can tell you is that the unlicensed subs become employees of the GC as a matter of law, and failure to provide workers compensation for them automatically suspends the GC's license by operation of law, thus giving you the 7031 against the GC. Note that if the GC were not licensed during the project, then the license bond will not pay out, which is why I do not make these allegations when the GC doesn't have assets.

Good luck.

Re: Unlicensed contractors

Also, the quantum meruit ("reasonable value...") worry that Mr. Nelson has is inapposite. The statute clearly precludes actions in equity.

Courts have repeatedly held that 7031 permits unlicensed contractors to keep only their out-of-pocket expenses (i.e., not compensation). The "reasonable value" of their services is of no consequence.

Re: Unlicensed contractors

You can ask for anything you like. Winning a lawsuit for recovery of your money is a different thing. Even IF you have all the required legal grounds for doing so, you still face the issue of the service providers being entitled to the reasonable value of their services. You didn't think that you could game the system to make them work for nothing, did you?