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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)

The legislature has passed several bills promoting additional housing loosening up restrictions on building Accessory Dwelling Units (ADU’s). Until 2025, new for January 2020, Senate Bill 13 adds Government Code §65852.2, and removes Health and Safety Code 17980.12 restrictions as to land use. The new law now allows ADU’s up to 1,200 sq. feet to…

Multiple contracts invoke Civil Code §8186 (former §3117) which can  be fatal to mechanic’s lien claims. Section 8186 provides when projects are built pursuant to more than one “direct” contract, with each contract covering a particular portion of the work, the owner may record separate notices of completion for each particular portion of the work performed under each contract, rather than waiting for completion of the project as a whole.  This affects the time to record a mechanics lien.  (See also Gunther v. McCormick (1922) 60 Cal.App. 350) For example ….
Continue Reading Mechanic’s Lien Problems with Multiple Contracts (Civil Code §8186)

New Labor Code Section 218.17 (AB 1701) makes a general contractor jointly liable for the unpaid wages, fringe benefits, or other benefit payments or contributions of a subcontractor (at any tier).

Labor Code 218.7 provides “down-the-chain protection” to a sub-contractor’s employees if they are  misclassified as as independent contractors or not paid. The bill applies…

header-construction-lawsSome strong cases extending the 1993 “Privette doctrine”,  Privette v. Superior Court (1993) 5 Cal.4th 689, holding that if an independent contractor’s employee is injured on the job and subject to workers’ compensation coverage, he cannot seek recovery of tort damages from someone who hired the contractor, but did not cause the injury, have been expanded.  Plaintiffs still will try to show that the hirer retained control over the cause of the accident.  But these cases  help refute many of plaintiff’s arguments such as:
Continue Reading Cases helping General Contractors, Developers and Property Owners to avoid liability for injuries to subcontractors

construction-law“ Generally, when employees of independent contractors are injured in the workplace, they cannot sue the party that hired the contractor to do the work.” (SeaBright Ins. Co. v. US Airways, Inc. (2011) 52 Cal.4th 590, 594.) This rule has been known as the “Privette doctrine” since 1993 when the Supreme Court decided Privette v. Superior Court (1993) 5 Cal.4th 689, holding that when an independent contractor’s employee is injured on the job and thus subject to workers’ compensation coverage, he cannot seek recovery of tort damages from someone who hired the contractor, but did not cause the injury. Thus, a roofing employee injured carrying buckets of hot tar up a ladder could not sue the property owner for injuries compensable under the workers’ compensation system.  But there are some exceptions:
Continue Reading General Contractor’s still “generally” not liable for their sub’s employee’s injuries (“Privette Doctrine” Remains)