Legal Question in Construction Law in California
unlicensed GC with a twist...
We hired a realtor who advertised that his services included handling the refurbishing of your home with his group of contractors. We hired him. He had us sign a note for $23,000 that was effectively a personal note as we signed no grant deed and no lien was filed. There was no other contract. He turned out to be unlicensed for GC work (though he claims he was not acting as a GC), none of his men were licensed, and no permits were obtained. He put off showing us any receipts until we found a buyer and were 3 weeks into a 4 week escrow to give us a higher tally of $32,000 and improper copies of receipts and checks given to his subcontractors. He's a successful realtor and managed to stall excrow and almost stop the sale due to our unwillingnes to pay the extra. He got the $23,000 out of escrow and an additional $20,000 plus for commission, even though he failed to represent us and refused to allow us to disclose all all this to buyer, so we hired a lawyer to help us with disclosure and getting through escrow. Now I wonder if we can file 2 separate claims in small claims court for the max allowed for each claim and just let him keep the rest of what he got. He definately failed us in both positions, but no room to elaborate.
2 Answers from Attorneys
Re: unlicensed GC with a twist...
Let me answer your question directly: No, you can't bring two small claims actions. The law doesn't allow you to split claims.
On the other hand, if the guy is unlicensed, it's as close to a slam dunk case as you'll ever find. You can not only refuse to pay him any balance that might be owed, but the court will order him to disgorge anything that you may have paid him for construction services. I'm also curious how he managed to get the escrow company to release the funds without your approval. There may be some liability on the part of the escrow company. Hire an experienced construction law attorney to file a civil suit on your behalf to force the realtor to disgorge the funds.
There are a couple of other things you can do in addition to or in lieu of a civil suit. You should register a complaint with the Constractors State License Board and also see if the police will take a report and refer this to the District Attorney. (It's often hard to get the police to get involved in these kinds of problems, but be polite and tell them you lost a lot of money because of this guy.) Contracting without a license is a crime. Neither the Contractor's State License Board nor the courts are fooled by people saying that they aren't acting as general contractors when they are obviously managing a project.
Re: unlicensed GC with a twist...
I would add that if this person holds a real estate license and is using his capacity as a real estate salesperson or broker to attract "clients" to his contracting racket, the Department of Real Estate should be informed. They have very competent and aggressive enforcement of their rules (once you get their attention in the first place) and also have procedures for restitution to victims of fraud.
When you retain an attorney, discuss with him/her the practical aspects of handling a matter with mixed civil and criminal aspects. An attorney is ethically prohibited from threatening to bring a criminal or disciplinary proceeding to gain an advantage in a civil suit, regardless of how justified the threat may be.
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