Stewart v. Hammond, 41171

• Decision Date: 02 July 1970
• Docket Number: No. 41171,41171
• Parties: Archie STEWART, Appellant, v. Jack HAMMOND and Eleanor Hammond, his wife, Respondents.
• Court: Washington Supreme Court

Page 216

78 Wn.2d 216

471 P.2d 90

Archie STEWART, Appellant, v. Jack HAMMOND and Eleanor Hammond, his wife, Respondents.

No. 41171.

Supreme Court of Washington, En Banc.

July 2, 1970.

C. Orno Shoemaker, Clarkston, for appellant.

S. Dean Arnold, Clarkston, for respondents.

STAFFORD, Justice.

This is an appeal from a judgment of dismissal entered on respondents' motion at the end of appellant's case.

Archie Stewart, the appellant, lived in Lewiston, Idaho and pursued the trade of carpentry both in Idaho and nearby Clarkston, Washington. During the time here involved he was not registered as a contractor pursuant to RCW 18.27.

The respondents, Mr. and Mrs. Hammond, engaged appellant to make minor repairs and alterations to their home in Clarkston. It was orally agreed that appellant would furnish all labor and procure material necessary for the undertaking. Appellant was to be reimbursed for his actual costs and paid an hourly wage for his personal labor. As frequently happens, the job expanded into a major project. During the nine weeks that followed, appellant made numerous purchases of materials, hired four halpers, and employed several other contractors to perform specialty services.

As the work progressed, respondents made partial payments from which appellant paid for the materials and labor as agreed. However, when appellant submitted his final statement for $2,405.81, respondents felt it was excessive and refused to pay more than $1,800. Appellant filed a claim of lien for the balance and brought this action to foreclose the lien.

The trial court granted respondents' motion to dismiss at the end of appellant's case because of his failure to allege and prove that he was registered as a contractor. ¹ The trial court also found that appellant was not relieved from compliance by RCW 18.27.090(15). ²

The sole issue presented by seven of appellant's ten assignments of error is whether his lack of registration precludes recovery.

The trial court held that funds received by appellant for the payment of laborers, specialty contractors and materialmen were 'compensation' in excess of wages. It concluded that appellant was not entitled to the benefit of RCW 18.27.090(15). On the other hand, appellant contends that 'reimbursement' for out-of-pocket expenses is not 'compensation', citing State ex rel. Todd v. Yelle, 7 Wash.2d 443, 110 P.2d 162 (1941). Continuing with the argument, appellant asserts that the balance of funds received by him consisted of 'wages as his sole compensation' and thus RCW 18.27.090(15) exempted him from the operation of the 'contractor registration' law.

It is not necessary for us to resolve the issue posed by appellant. Contrary to his suggestion, RCW 18.27.090(15) does not exclude All persons who receive 'wages as their sole compensation'. One must be an employee in order to receive the benefit of the exclusion.

Appellant classified himself as 'self employed' and as a 'sole proprietorship' in his federal income tax returns. He made his own provision for social security and self-employment taxes rather than having them withheld by an employer. No payroll relationship common to wage earners existed between appellant and respondents. He performed his work in the pursuit of an independent business as he had done for 23 years. He undertook to repair, add to, and improve the respondents' building. Nevertheless, appellant suggests that these factors are not sufficient to classify him as an 'independent contractor'.

The common law definition of 'independent contractor' is not applicable because a specific statutory definition has been adopted. Furthermore, foreign authority is not helpful because little uniformity exists in either the content or application of the various 'contractor registration' statutes. ³ Each case rests on its own peculiar fact pattern or its own unique statutory language.

Clearly, appellant was a 'contractor' within the meaning of RCW 18.27.010:

A 'contractor' * * * is any person * * * who * * * in the pursuit of an independent business undertakes to * * * construct, alter, repair, add to, subtract from, improve * * * for another, any building * * * or other structure * * * attached to real estate or to do any part thereof * * * or works in connection therewith; * * *. Inasmuch as appellant falls within the specific language of the statutory definition, he is not entitled to the exclusionary benefit of RCW 18.27.090(15). It is expressly limited to 'employees'.

RCW 18.27.010 et seq., was designed to prevent the victimizing of a defenseless public by unreliable, fraudulent and incompetent contractors, many of whom operated a transient business from the relative safety of neighboring states. Public protection was sought by the registration and bonding of contractors. RCW 18.27.020--.040 inclusive. Noncompliance was discouraged by providing a criminal penalty, RCW 18.27.020, and by denying offenders access to the courts for collection of compensation for performance of work or for breach of contract. RCW 18.27.080. Having failed to comply with a statute designed for protection of the public, appellant must abide the consequences of that failure even though it is not contended that he performed the contract improperly.

Appellant suggests that he be permitted to recover despite the statutory prohibition. He argues that respondents have received that for which they contracted; that enforcement of the statute as written will cause him an undue forfeiture; and that it will result in an undue enrichment of respondents.

The statute was designed for protection of the public. The overriding public policy must not be defeated by an attempt to accommodate one who has violated its specific provisions, albeit unwittingly. ⁴ The law will be nullified if noncomplying contractors are permitted to evade the statute by a claim of 'unwitting violation' or 'undue loss' or by a claim that the other contracting party will be 'unduly enriched'. Every noncomplying contractor could raise one or all of the suggested defenses. The remedy for those who find themselves in the position of appellant lies with the legislature.

Appellant's remaining assignments of error relate to the trial court's rejection of his proposed findings of fact 2, 3, 4 and 5. None were set out verbatim in his brief as required by ROA I--43. The assignments of error will not be considered. El Cerrito, Inc. v. Ryndak, 60 Wash.2d 847, 376 P.2d 528 (1962).

The trial court is affirmed.

HUNTER, C.J., and FINLEY, ROSELLINI and HAMILTON, JJ., concur.

NEILL, Justice (concurring).

This action to foreclose a labor and materialman's lien under RCW 60.04 brings into issue the applicability of the Contractor's Registration Act (RCW 18.27) as a bar to the action. ¹ Plaintiff was not registered under the act and had made no attempt to comply with the requirements thereof.

At the conclusion of plaintiff's case the trial court granted defendants' motion to dismiss. In so doing, he weighed the evidence and entered findings of fact. CR 41(b)(3); See N. Fiorito Co. v. State, 69 Wash.2d 616, 419 P.2d 586 (1966). It is clear from the record that the dismissal was based on findings that plaintiff was a contractor within the terms of RCW 18.27.010 and that plaintiff was not an 'employee with wages as his sole compensation' for the reason that reimbursement for materials and other labor constituted compensation.

Where the trial court has weighed the evidence our function is to determine whether there is substantial evidence to support his findings and, if so, whether those findings support the conclusions of law and judgment. Enterprise Timber, Inc. v. Washington Title Ins. Co., 76 Wash.Dec.2d 639, 457 P.2d 600 (1969). Further, it is settled principle that the trial court will be affirmed if there is any theory to support the judgment even though we may disagree with the basis enunciated by the trial court. National Indem. Co. v. Smith-Gandy, Inc., 50 Wash.2d 124, 309 P.2d 742 (1957). Guided by these principles, I concur in the majority's affirmance even though I am not in agreement with its reasoning. The considerations involved in the interpretation of the Contractor's Registration Act are of sufficient importance to belabor the bar with my reasons for disagreeing with the approach taken by the trial court and the majority of this court.

As the majority observes, the Contractor's Registration Act (RCW 18.27) has a beneficent purpose. However, it also imposes a criminal penalty (RCW 18.27.020) and limits the right of a citizen to earn a living and go about his business without government interference in fields of endeavor characterized by the personal labor of the individual engaged in common crafts (as distinguished from the professions and crafts wherein a license is granted following some testing of skill or is granted following some educational or training prerequisite). Such burdens should not be inflicted by the courts except where the legislature has clearly and constitutionally imposed them. See Marble v. Clein, 55 Wash.2d 315, 317--318, 347 P.2d 830 (1959), and authorities cited therein; People v. Moss, 33 Cal.App.2d Supp. 763, 87 P.2d 932 (1939).

The majority states that the factual question is to be resolved simply by reference to the definition of 'contractor' in RCW 18.27.010. ² In applying that section, the majority infers that, once a person acts as a 'contractor' in his general business, he cannot be an 'employee' on a particular job. I disagree with both the statement and the inference.

In relevant part, RCW 18.27.010 reads:

A 'contractor' * * * is any person * * * who * * * in the pursuit of an independent business undertakes to * * * construct, alter, repair, * * *.

As I read it, the above subsection neither seeks nor manages to achieve a substitute for our traditional means of ascertaining whether a given party in a given situation occupies the status of employee or independent contractor. The...