Chas. L. Harney, Inc. v. Contractors' State License Bd.

• Decision Date: 23 September 1952
• Citation: 247 P.2d 913,39 Cal.2d 561
• Court: California Supreme Court
• Parties: CHAS. L. HARNEY, Inc. v. CONTRACTORS' STATE LICENSE BOARD et al. S. F. 18224.

Page 913

247 P.2d 913

39 Cal.2d 561

CHAS. L. HARNEY, Inc. v. CONTRACTORS' STATE LICENSE BOARD et al.

S. F. 18224.

Supreme Court of California, in Bank.

Sept. 23, 1952.

Gardiner Johnson, Roy D. Reese and Thomas E. Stanton, Jr., San Francisco, for appellant.

Edmund G. Brown, Atty. Gen., and J. Albert Hutchinson, Deputy Atty. Gen., for respondents.

GIBSON, Chief Justice.

This appeal was taken from a judgment on the pleadings for defendants in an action for declaratory relief, and the sole question to be determined is whether plaintiff corporation has alleged facts which entitle it to a declaration of its rights and duties.

The complaint alleges that plaintiff is licensed as a general engineering contractor and is qualified to perform all types of construction requiring special skill, including all classifications of 'specialty contract work' as defined in the Business and Professions Code. ¹ Defendant board has adopted a regulation, rule 732, which subdivides all specialty contracting work into 31 classes and requires a separate license to perform each class of work. ² The board has informed plaintiff that all general engineering contractors, prior to bidding on, contracting for or performing any class of work referred to in the rule must apply for and obtain the specialty licenses required thereby. The several departments, divisions and agencies of the state and all political subdivisions having to do with public work have been notified that general engineering contractors have no right to bid on, contract for or perform specialty construction work unless they are holders of the appropriate specialty licenses. Plaintiff corporation has never applied for any specialty licenses, and it asks for a declaratory judgment with respect to its right to perform the types and classifications of work referred to in rule 732.

There is no statute which requires licensed general engineering contractors to obtain additional specialty licenses as a condition to performing the types of jobs which are listed in rule 732, and it is not claimed that the rule requires such additional licenses where the general engineering contractors undertake specialty work as a part of a larger project which they are entitled to perform. The rule, however, operates to prohibit a licensed general contractor from undertaking any contract which involves specialty work alone, unless the general contractor first obtains the appropriate specialty license. Plaintiff, by this action in declaratory relief, is seeking to test the validity of the administrative regulation.

Section 1060 of the Code of Civil Procedure provides that an interested person may obtain declaratory relief 'in cases of actual controversy relating to the legal rights and duties of the respective parties'. Section 11440 of the Government Code, which is a part of the Administrative Procedure Act, provides that any 'interested person may obtain a judicial declaration as to the validity of any regulation by bringing an action for declaratory relief * * * in accordance with the provisions of the Code of Civil Procedure * * *.'

Plaintiff corporation is qualified to perform specialty work, but it is prohibited by rule 732 from undertaking any contract therefor without obtaining a specialty license, unless the work is part of a general project. It is, therefore, an interested party within the meaning of the sections cited above. Defendants contend, however, that plaintiff has failed to show that an actual controversy exists because there is no allegation that it has bid or intends to bid on work for which a specialty license is required by the board. Although plaintiff does not specifically allege that it intends to bid on such work, it is clear from a reading of the complaint as a whole that it desires to do so. With respect to plaintiff's failure to allege that it has bid on specialty work, we are of the view that such an allegation is unnecessary. As we have seen, plaintiff as an interested party is entitled under section 11440 of the Government Code to obtain a judicial declaration as to the validity of rule 732 in accordance with the provisions of section 1060 of the Code of Civil Procedure which specifically authorizes a declaration of rights or duties 'before there has been any breach of the obligation in respect to which said declaration is sought.' Plaintiff, therefore, is not required to violate the administrative regulation and thereby subject itself to possible criminal prosecution or disciplinary action in order to obtain a declaration of its rights and duties. See Bus. & Prof.Code §§ 7028, 7030, and 7090. In this connection, it may be noted that if plaintiff performed the work in violation of rule 732, it would run the risk of being unable to maintain a suit to recover therefor. See Bus. & Prof.Code § 7031. The Legislature, by enactment of section 11440, must have intended to permit persons...