Brown v. Mountain Lakes Resort, Inc.

• Decision Date: 05 February 1988
• Citation: 521 So.2d 24
• Parties: Jimmy BROWN, d/b/a Brown's Ready Mix v. MOUNTAIN LAKES RESORT, INC. 86-1324.
• Court: Alabama Supreme Court

Page 24

521 So.2d 24

Jimmy BROWN, d/b/a Brown's Ready Mix v. MOUNTAIN LAKES RESORT, INC.

86-1324.

Supreme Court of Alabama.

Feb. 5, 1988.

John C. Gullahorn of Gullahorn & Hare, Albertville, for appellant.

Ralph Smith, Jr., Guntersville, for appellee.

BEATTY, Justice.

Appeal by Jimmy Brown, d/b/a Brown's Ready Mix, from a judgment in favor of Mountain Lakes Resort, Inc., in the latter's action for a declaratory judgment under a construction contract. We affirm.

Mountain Lakes Resort, Inc. ("Mountain Lakes"), contracted with Herman Lovell, d/b/a M & H Home Repair, for Lovell to do certain construction work. Lovell was to furnish all labor, materials, and equipment for the job and was to receive $37,550 for his work. During the performance of this contract, Lovell ordered materials from Brown's Ready Mix, but did not pay for them, or for certain materials from other suppliers, whereupon Mountain Lakes refused to make any further payments to Lovell.

Brown's Ready Mix, after notifying Mountain Lakes of the amount owed to it, filed a lien on the real property of Mountain Lakes, which, under Code of 1975, § 35-11-210, extended "only to the amount of any unpaid balance due the contractor by the owner."

Thereafter, Mountain Lakes filed a declaratory judgment action, seeking to have the trial court declare "the rights of the respective parties ... under the contract." Brown's Ready Mix, one of the parties, answered, counterclaimed against Mountain Lakes, and cross-claimed against Lovell. The plaintiff, Mountain Lakes, answered the counterclaim of Brown's Ready Mix with a general denial.

During the ensuing trial, Mountain Lakes sought to elicit testimony as to whether Lovell was an unlicensed general contractor. This evidence was objected to by Brown's Ready Mix on the ground that such a defense would constitute an affirmative defense under Rule 8(c), A.R.Civ.P., and that this defense had not been specially pleaded. At that time, the trial court stated that the matter would not be considered if it was an affirmative defense. At that time, additionally, plaintiff, Mountain Lakes, offered plaintiff's Exhibit G as evidence, which was duly admitted. This exhibit was the business license of M & H Home Repair issued by DeKalb County for the year 1985-86, the only license offered by Lovell as his authorization to engage in business as a general contractor. At the conclusion of the trial, the trial court found that the validity of the contract had been placed in issue by the complaint, which sought a declaration of the contract rights; that the issue of proper licensing had been raised; that Lovell was a general contractor as defined by statute; that the costs of construction exceeded $20,000; and that Lovell was not licensed as required by law. Having so found, the trial court found that the contract between Mountain Lakes and Lovell was null, void, and unenforceable, and, therefore, that no unpaid balance under the contract was due Lovell from plaintiff, and, thus, that there was no unpaid balance that could be recovered by Brown's Ready Mix. ¹ See § 35-11-210.

The issue presented on appeal is whether the defense that Lovell, d/b/a M & H Home Repair, was not a licensed general contractor, as he was required to be by Code of 1975, § 34-8-1 et seq., was an affirmative defense that was required under Rule 8(c), A.R.Civ.P., to be pleaded thereunder, and whether the failure to affirmatively plead that defense was a failure to place it in issue, thus foreclosing the court's consideration of it in arriving at a judgment.

The requirements of the licensing provisions of § 34-8-1 are penal in nature and express a firm public policy of this state to guard our citizens "against incompetent contractors for certain-type structures, and also to better assure properly constructed structures which [are] free from defects and dangers to the public." Cooper v. Johnston, 283 Ala. 565, 567, 219 So.2d 392 (1969), quoted in Hawkins v. League, 398 So.2d 232 (Ala.1981). Thus, contracts of unlicensed general contractors have been held null and void as a violation of that public policy. Cooper v. Johnston, supra.

Rule 8(c), A.R.Civ.P., on pleading affirmative defenses, reads:

"In pleading to a...