Sometimes Tricky Doesn't Pay

Womack v. Lovell, No. G049587 (D4d3 Jun. 15, 2015)

This seems substantive, but it’s really procedural.

Under Business & Professions Code § 7031(a), a contractor can’t sue for non-payment unless validly licensed. And under under § 7031(d), if licensure is controverted, the only sufficient proof is a verified certificate of licensure from the state contractors’ board. 

Here, Plaintiff plead that defendant was licensed in its complaint and—pursuant to a Local Rule requiring the parties to list the controverted issues in a pre-trial filing—did not list licensure as a controverted issue. But right before the case went to the jury, Plaintiff moved for nonsuit on Defendant’s non-payment counterclaim, arguing that because Defendant had neither procured the requisite certificate nor introduced it into evidence, the counterclaims failed for want of proof. Once the issue was raised, Defendant scrambled but failed to obtain a verified certificate—going so far as sending someone to Sacramento to pick it up. But it takes several dates for the certificate to issue and Defendant didn’t get it in time. After taking briefing, the trial court reluctantly agreed with plaintiff, and, because the jury had subsequently rendered a defense verdict, granted JNOV on the issue.

The court of appeal is less inclined to let Plaintiff get away with his shenanigans. Looking to the language and legislative history of § 7031(d), the court focuses on the caveat that proof by verified certificate is required only when licensure is “controverted.” Here, licensure was admitted in Plaintiff’s complaint—largely because Plaintiff at first tried to proceed against the defendants’ surety, which required an allegation of licensure. And then Plaintiff did not raise the issue as controverted in pretrial filings required by a Local Rule. Under the circumstances, the court court of appeal considers the admission in the complaint to be a binding judicial admission, even though Plaintiff’s later general denial of the allegations of Defendants’ counterclaim—including a licensure allegation—would ordinarily be significant to controvert the point.

Reversed.