Michael Simkin

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Kim v. TWA Construction, Inc., 78 Cal.App.5th 808 (2022), the California Court of Appeal, in a matter of first impression, expanded the effect of Section 7031(a) to bar a licensed general contractor recovering from an owner for work completed by an unlicensed subcontractor.  The Court of appeal focused on the phrase in the Business and Professions Code §7026 to prevent the General Contractor to circumvent the licensing requirement of ‘by or through others,’ (§7026).

The Court of Appeal examined the definition of contractor in BPC § 7026 (which includes both “subcontractor and specialty contractor,” and a person does the work “himself or herself or by or through others”), taken together, BPC §§ 7026 and 7031(a) subject subcontractors to the same rules as contractors, prohibiting a subcontractor from taking legal action to recover compensation from the owner or general contractor for unlicensed work performed by the subcontractor. This makes sense to me, a contractor should not be able to recover compensation for the performance of unlicensed work, simply because the work was accomplished by hiring a subcontractor, which circumvents the purpose of BPC § 7031(a).

I love how the Court of Appeal Appellate Court referred to BPC § 7031(a) as “the shield” and BPC § 7031(b) as “the sword” of the Contractors State License Law.  The reasoning of the trial and appellate court differs a bit, but this is a just result.  The lesson to be learned is a contractor should not fight over $10,000 and money does not grow on trees!
Continue Reading Contractors cannot recover for work performed by unlicensed subcontractors. –Kim v. TWA Construction, Inc., 78 Cal.App.5th 808 (2022)

A common fallacy is that a written contract is required to enforce a mechanic’s lien. While unlicensed contractors are barred from lien enforcement and recovery (Bus. & Prof. Code § 7031; see also White v. Cridlebaugh (2009) 178 Cal.App.4th 506). The good news is that a written contract is not required; a properly licensed contractor may still enforce lien rights based on labor or materials furnished, so long as the statutory deadlines are met.
Continue Reading Mechanic’s Liens are valid even if no written contract, so long as the contractor is licensed when the work was performed.

The most common contractor error is waiting too long to record the lien or file the lawsuit.  Once a mechanic’s lien is recorded, he lawsuit must be filed within 90-days to file a foreclosure lawsuit (Civil Code § 8460). After the lawsuit is filed, the contractor’s lawyer must also record a lis pendens within 20 days or the lien is unenforceable (Civil Code § 8461).  Not filing the lis pendens, or notice of pendency of action, is a common error.…
Continue Reading Mechanic’s Liens: Be timely! (Civil Code §8460)

A new law, effective January 1, 2026 adds as a habitability requirement that the rental unit include a refrigerator and stove.  See Civil Code 1941.1 (10) and (11)  The landlord can determine the size, make, color, features.  Maybe I should buy some Best Buy stock!  As with all laws, there are exceptions, and the parties under this new law can agree the tenant provides their own, with a clear written disclaimer.
Continue Reading Landlords Now Required to Supply Refrigerators and Stoves! (Civil Code 1941.1)

As with anything, arbitration is good and bad.  As a Plaintiff/Claimant, the good is you may have a “final” hearing sooner than with many state courts.  The good includes less stress for the attorney’s because arbitrators tend to use common sense and be informal and the attorney fees probably are less than in “real court”.  The bad is no right to appeal, the substantive decision is usually final and you pay tens of thousands of dollars in costs for the arbitration.  As a Defendant/Respondent, demanding arbitration opens a door to an early settlement discussion because the Plaintiff won’t want to spend the money on an arbitration.  For the law how that benefits you, keep reading …

All arbitration companies have their own “rules”.  They cover a variety of procedures the parties follow.  They cover administrative and substantive issues how to conduct the arbitration.  For example, ADR Services has a Rule 43 that essentially states  if one party does not pay its share of fees, then the the other party can pay all of the arbitration costs, and the arbitrator has discretion to now allow affirmative relief or put forth evidence of defense.  The problem is that is illegal under California law.  Code of Civil Procedure § 1286.2 also allows an award to be vacated “ by the refusal of the arbitrators to hear evidence material to the controversy”.

Where arbitrators are required by the terms of submission to determine a matter according to law, a failure to so determine is sufficient ground to avoid the award.  Utah Const. Co. v. Western Pac. Ry. Co. (1916) 174 Cal. 156.

I have other blog posts here on this issue, it is clear “California’s long-standing public policy of ensuring that all litigants have access to the justice system for resolution of their grievances, without regard to their financial means.”  “when a party who has engaged in arbitration in good faith is unable to afford to continue in such a forum, that party may seek relief from the superior court.”

As stated in Aronow v. Superior Court (2022) 76 Cal.App.5th 865, 879 , “What we can do, however, is give [the defendant law firm] a choice: if the trial court determines that any of these plaintiffs is unable to share in the cost of arbitration, [the firm] can elect to either pay that plaintiff’s share of the arbitration cost and remain in arbitration or waive its right to arbitrate that plaintiff’s claim.’ And held “Supported by a wealth of jurisprudence, we conclude the trial court has jurisdiction to address Aronow’s request and, if he demonstrates financial inability to pay the anticipated arbitration costs, to require Emergent either to pay Aronow’s share of the arbitrator’s fee or to waive the right to arbitration.” (Aronow v. Superior Court (2022) 76 Cal.App.5th 865, 885.

Another hint, is read your arbitration clause.  E.g. CAR does not require a particular set of “rules” to be followed.  Did the arbitration company make an affirmative (not click wrap) requirement for the parties to agree to “their rules”.  Usually the only thing an arbitrator does is ask do you want to follow the CCP or modify them.

By example, AAA, JAMS, Signature Resolution all allow a non-paying defendant to still present a defense.  ADR Services is a wonderful company, with many amazing arbitrators, but I suspect in the very near future (due to “moi”) they will be updating their rules to comply with the law.

 …
Continue Reading Killer Arbitration Secrets … It’s all about the money…

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In Eshagian v. Cepeda (2025) B340941, the Court of Appeals held that a tenant cannot appeal a judgment for possession in an unlawful detainer proceeding if the landlord has outstanding damages claims that have not been adjudicated because the case was not yet final.  This case involved a default judgment for possession only but the default was after discovery terminating sanctions.  This case was a royal shit show!  (That is a technical legal term.)  The Court treated the “appeal” as a writ to save time.  This is also a rare case where the Court of Appeal, 2nd District, transferred the case to it from the Los Angeles Superior Court Appellate Department.  The short answer for the Court’s holding is an unlawful detainer cause of action is for “rent” AND “possession”.  Since the landlord can still seek “rental damages”, the matter was not yet final. The Appellate Department had held the possession judgment “was final under these unique circumstances”, whatever those are, but I assume the terminating sanctions was the reason.  The reason the tenant won is a common error by landlords (or their attorneys), the Three Day Notice was defective.  The defect was the form was “invalid for failure to make clear by when and how Cepeda had to pay the rent” so it failed to state a cause of action.  I am impressed with the Basta lawyers, they even filed a motion under CCP §663.

The error was failure to comply with CCP 1161(2).  “The notice did not specify the date on which the three-day notice commenced (simply listing “12/19/2022” on the notice to the left of Eshagian’s signature with no explanation), nor did it state that Cepeda would lose possession of the premises if he did not pay the amount due by a specified date.”

As if directly from the book “3 Day Notice for Dummies”, the Court stated 1. the three-day notice was deficient because while titled, “3 Day Notice To Pay Or Quit,” it did not state that Eshagian would repossess the premises if Cepeda did not pay rent prior to expiration of the three-day notice period.  The mere use of the words “pay or quit” in the title of the document was insufficient to “clearly, positively, and unequivocally” place Cepeda on notice that he was facing imminent eviction.  (Horton-Howard v. Payton, supra, 44 Cal.App. at p. 112; accord, Hinman v. Wagnon, supra, 172 Cal.App.2d at pp. 27-28.)

Second, the notice did not state when the notice period commenced or ended, nor did it inform Cepeda that the three-day period excluded weekends and judicial holidays.  The notice appears to have provided the date it was signed by Eshagian but not when the notice was served, which commenced the three-day period.  We observe, for example, that the notice is dated December 19, 2022, but the complaint alleged the notice was served “[o]n or about December 20, 2022.”  Absent this information, an ordinary tenant would not have reasonably understood the deadline by which the tenant needed to pay the rent due to avoid forfeiture of the premises.

Third, the notice was deficient because it did not provide a clear address where rent could be paid, as required by section 1161(2).  The address listed on the notice was the leased premises where Cepeda lived.  By directing Cepeda to deliver the rent to Eshagian at the unit where Cepeda lived, and specifying that the rent could be delivered to Eshagian between 8:00 a.m. and 9:00 p.m. (when presumably Eshagian would not be in the rental unit), the notice did not meet the Legislature’s stated purpose “to avoid confusion and ‘protect both landlords and tenants alike, by setting forth clear rules for payment to whom and where.’”  (Sheehan, supra, 105 Cal.App.5th at p. 75.)

The Notice failed to state a cause of action for unlawful detainer, so the possession-only judgment must be reversed.  (See Kim v. Westmoore Partners, Inc., supra, 201 Cal.App.4th at p. 282 [“if the well-pleaded allegations of the complaint do not state any proper cause of action, the default judgment in the plaintiff’s favor cannot stand”]; Sheehan, supra, 105 Cal.App.5th at p. 75 [“service of a ‘valid three-day notice to pay rent or quit is a prerequisite to an unlawful detainer action’”].)

(I will withhold judgment on the plaintiff’s lawyers because I know them, but OMG!)…
Continue Reading An Unlawful Detainer Possession Only Judgment is Not Appealable and a “default judgment” can be reversed if a cause of action is not stated! (Eshagian v. Cepeda (2025) B340941, 6/26/2025, 2nd Appellate District)

The issue is Business and Professions Code section 10131 and Section 10137. Essentially, a licensed broker cannot pay a fee to a non-licensee to do something for which a real estate license is required. The court’s have addressed this (Shaffer v. Beinhorn (1923) 190 Cal. 569, 573-574, Tyrone v. Kelley (1973) 9 Cal.3d 1) and…

If you own or operate a for profit corporation, LLC, limited partnership or “any business entity that requires registration or creation by filing a form with any governmental entity, you need to go and file at https://boiefiling.fincen.gov  There are 23 categories of exemptions, general partnerships and trusts do not need to register.  Tax-exempt…

The first challenge to obtaining a waiver, or ascertaining the best way to overcome denial of entry into the United States is figuring out what information the U.S government has on you. The U.S. has a lot of information publicly available such as from here https://www.dhs.gov/foia-library and look here https://www.uscis.gov/records/electronic-reading-room.  However, you also want…