Miller v. Peoples Contractors, Ltd., 4630.

• Decision Date: 15 October 1969
• Docket Number: No. 4630.,4630.
• Citation: 257 A.2d 476
• Parties: Ruth C. MILLER, Appellant, v. PEOPLES CONTRACTORS, LTD., Appellee, A Corporation.
• Court: D.C. Court of Appeals

Page 476

257 A.2d 476

Ruth C. MILLER, Appellant, v. PEOPLES CONTRACTORS, LTD., Appellee, A Corporation.

No. 4630.

District of Columbia Court of Appeals.

Argued June 24, 1969.

Decided October 15, 1969.

John Louis Smith, Jr., with whom Thomas A. Farrell, Washington, D. C., was on the brief, for appellant.

Jacob Gordon, Washington, D. C., for appellee.

Before FICKLING, KERN and NEBEKER, Associate Judges.

KERN, Associate Judge.

Appellee, a contractor, sued appellant, a homeowner in the District of Columbia, to recover for work done on her house under an agreement they had executed on May 11, 1966. The trial court held the agreement valid and enforceable and rendered judgment for appellee in the amount of $780. Appellant contends that the agreement is illegal and unenforceable because it violated the Regulations Governing the Conduct of the Home Improvement Business in the District of Columbia (the Regulations) issued by the Commissioners in Order No. 61-863 pursuant to D.C. Code 1967, §§ 47-2344 and 47-2345.

Appellee's president had sought from the Commissioners and been denied a license to conduct a home improvements business in the District of Columbia. Thereafter, he and appellant executed two agreements, dated May 8th and May 11th, respectively. Under the first, his company was to paint the exterior of appellant's house and install aluminum sidings and shutters and, under the second, it was to scrape, paint and plaster interior walls in her house. On May 12th, four days after the parties had executed the first agreement, appellee's president accepted $3,000 from appellant in full payment of that agreement. His men had not completed the work thereunder. Sometime later, she refused to pay the amount due under the second agreement, although appellee had performed a part of the work it required, on the ground that appellee's materials and workmanship were inferior. Appellee brought this action to recover under the second agreement and appellant counterclaimed for return of the $3,000 she had paid him under the first agreement.

Section 2 of the Regulations prohibits "any payment" to an unlicensed contractor under a "home improvement contract in advance of the full completion of all of the work required to be performed by such contract". (Emphasis supplied.) The Regulations define the term "home improvement contract" as "an agreement for the performance of home improvement work for a contract price of $300 or more" including "the second or any subsequent agreements entered into between the same contractor and the same homeowner within any twelve month period". The Regulations define "home improvement work" as "the improvement, repair, restoration, alteration * * * of any residential property". Appellee violated the Regulations because it had no license to do home improvement work in the District of Columbia yet nevertheless it accepted $3,000 from appellant before it finished the work it was to do under its agreement of May 8th with appellant. See Hoffheins v. Heslop, D.C.App., 210 A.2d 841 (1965).

Appellee urges that since there were two agreements executed, its violation of the Regulations by accepting payment in full of the May 8th agreement before completion has no bearing on its enforcement of the May 11th agreement. We disagree. The Regulations expressly define a "home improvement contract" to encompass all agreements between the parties provided they were executed within a twelve month period. Appellee and appellant made their two agreements within three days of each other and these agreements related to the same house. Since the Regulations forbid acceptance of payment prior to "full completion" of "such contract" and the May 8th agreement was a part of "such contract", appellee cannot avoid the reach of the Regulations when it now seeks to enforce the May 11th part of "such contract".

Appellee next argues that appellant prevented it from completing the work under the May 8th agreement so that she cannot now be heard to complain about its acceptance of the $3,000. Although there was testimony that appellant refused to permit appellee to continue its work at her house these difficulties arose out of the May 11th agreement and did not occur until after appellee had accepted full payment from appellant of the May 8th agreement.

Appellee argues that not all contracts in violation of statutes or regulations are unenforceable. It cites Murphy v. Mallos, D.C.Mun.App., 59 A.2d 514 (1948), in which we held that a real estate broker might recover his commission from a sale although it was made without the owner's written consent in violation of the Code. However, we pointed out in that opinion that a broker who is without a license may not recover his commission. We merely declined to extend such a punitive measure to a broker who procures a buyer without a listing from the seller. "[T]he general rule is that an illegal contract, made in violation of the statutory prohibition designed for police or regulatory purposes, is void and confers no right upon the wrongdoer." Hartman v. Lubar, 77 U.S.App.D.C. 95, 96, 133 F.2d 44, 45 (1942).

In the instant case, the Commissioners issued the Regulations to protect the public by prohibiting any unlicensed contractor from accepting payment before he completes the home improvements work he contracts to do. The Regulations require a contractor, in order to obtain a license, to prove trustworthiness to the licensing authority [Section 3(a) and (b)], deposit a security bond with such authority [Section 5(a)], obtain public liability and property damage insurance [Section 6], appoint the licensing...