Pickens v. American Mortg. Exchange

• Decision Date: 30 January 1969
• Citation: 269 Cal.App.2d 299,74 Cal.Rptr. 788
• Court: California Court of Appeals Court of Appeals
• Parties: Francis PICKENS and Mary Pickens, Plaintiffs and Appellants, v. AMERICAN MORTGAGE EXCHANGE, a California corporation, Frank Weaver, individually and Frank Weaver as Executor of the Will of Lyle C. Horn, Deceased; Maureen Gelin and Hans Gelin, Defendants and Respondents. Civ. 24457.

Page 788

74 Cal.Rptr. 788

269 Cal.App.2d 299

Francis PICKENS and Mary Pickens, Plaintiffs and Appellants, v. AMERICAN MORTGAGE EXCHANGE, a California corporation, Frank Weaver, individually and Frank Weaver as Executor of the Will of Lyle C. Horn, Deceased; Maureen Gelin and Hans Gelin, Defendants and Respondents.

Civ. 24457.

Court of Appeal, First District, Division 3, California.

Jan. 30, 1969.

Bergen Van Brunt and Sheldon I. Balman, San Francisco, for appellants.

Tinning & DeLap, Robert Eshleman, Walnut Creek, for Maureen Gelin.

John K. Hagopian, San Francisco, for American Mortgage Exch.

HAROLD C. BROWN, Associate Justice.

This is an appeal from the judgment of dismissal following the granting of defendants' motion for summary judgment. The plaintiffs filed a 'Complaint For Money, Damages for Fraud and to Foreclose Mechanics Lien' followed by an 'Amendment to Complaint' in which it was alleged that the plaintiff was a general contractor duly licensed by the State of California. The defendants' motion for summary judgment was based upon affidavits which established that plaintiffs were not licensed general contractors, as required by Business and Professions Code section 7031. Plaintiffs contend that the court erred in granting the summary judgment on the ground that their complaint, together with declarations in opposition to the motion (hereafter referred to as declarations), sets forth triable issues of fact in causes of action not barred by the failure to possess a general contractor's license, i.e., (1) for fraud, (2) for wages, and (3) for the value of furniture delivered to defendants' property.

It is well settled that the matter to be determined in considering the propriety of the granting of a summary judgment is whether there has been presented any facts in the complaint or affidavits which give rise to a triable issue. The court in considering the motion may not pass on the issue. The aim in summary procedure is to discover through the media of affidavits or other discovery procedure whether there is any evidence which requires a determination by the trier of fact. Doubts should be resolved in favor of the party opposing the motion, as summary procedure is drastic relief and should be substituted cautiously for the open trial method of determining facts. (See Wilson v. Bittick, 63 Cal.2d 30, 34, 35, 45 Cal.Rptr. 31, 403 P.2d 159; Saporta v. Barbagelata, 220 Cal.App.2d 463, 33 Cal.Rptr. 661, re use of depositions on motions for summary judgment.)

It is clear that insofar as plaintiffs are seeking to recover for work done under a contract as contractors, they are precluded from doing so by section 7031 of the Business and Professions Code. Failure to be licensed during any portion of the term of a contract requires a dismissal of an action on a motion for summary judgment. (Bierman v. Hagstrom Construction Co., 176 Cal.App.2d 771, 1 Cal.Rptr. 826, 82 A.L.R.2d 1424.) Plaintiff had only a painter's license rather than a general contractor's license. His affidavit alleges that the work he did would be covered by this license since the work was largely painting, except for small repair jobs necessary to the painting. However, the plaintiff had no painter's license during the period July 1, 1960 through September 29, 1960 (a period of time during which he claims he performed services). Further, plaintiffs' allegation that any work required to be done by a licensed general contractor was done under the supervision of such a contractor will not avoid the effect of the statute. (Payne v. De Vaughn, 77 Cal.App. 399, 246 P.2d 1069.) It is also settled that plaintiffs' allegations that they informed defendants that they were unlicensed does not protect them from the proscription of the statute. (Cash v. Blackett, 87 Cal.App.2d 233, 196 P.2d 585.)

Despite plaintiff's failure to have a contractor's license, there are three causes of action not barred by section 7031 of the Business and Professions Code set forth in the complaint as supplemented by his declarations.

First, the complaint alleges that plaintiffs were induced to enter into an oral contract by the fraudulent misrepresentation of defendant Weaver, representative of the defendant American Mortgage Exchange. It is alleged that Weaver represented that the Crockett property was encumbered only to the extent of $30,000, when, in fact, there was an additional encumbrance, a second deed of trust in the sum of $25,000, and that in reliance on these representations plaintiffs moved to Crockett, California, and performed services and furnished materials in remodeling the property owned by defendants or in which they had an interest. Plaintiffs have alleged that defendant Weaver promised that they would have the right to purchase the property, and if they exercised this option, they would receive credit for any work performed or materials furnished. If plaintiffs produce evidence that they relied upon this promise as an inducement to improve the property, the truth of the representation as to the extent of the encumbrances becomes material. It is also alleged that the American Mortgage Exchange promised to pay for the work done and had no intention of keeping that promise at the time it was made. These allegations are sufficient to come within the definition of fraud as set forth in Civil Code section 1572. ^* While the plaintiffs could not recover on the contract, nor for the breach of it, nor for the value of the work or for monies expended therein (Bus. & Prof.Code, § 7031), the fact that they were unlicensed did not bar them from the prosecution of their cause of action for fraud by which they were induced to enter the contract.

In Grant v. Weatherholt, 123 Cal.App.2d 34, 42, 43, 266 P.2d 185, 191, the court said: 'The sections of the Business and Professions Code which require the licensing of contractors and declare the contracts of unlicensed persons to be invalid, and bar actions based thereon, relate only to obligations which arise out of contracts under which express promises are made, and to acts which would normally create an implied obligation to render compensation. * * *

'Plaintiff's cause of action for fraud is not 'for the collection of compensation for the performance of any act or contract for which a license is required.' Plaintiff's right is the outgrowth of the deceit practiced upon him by the defendants. The validity or invalidity of his contract does not affect that right. Proof of the contract under the cause of action for fraud was merely proof of the circumstances under which plaintiff's services were rendered and his money was expended.

'Plaintiff's action for fraud is not barred unless by the provision of the above sections of the Business...