Opinion
NOT TO BE PUBLISHED
Super. Ct. No. 15835
BUTZ, J.Antony P. Dethloff, doing business as Metco Engineering & Construction, challenges the trial court’s granting of summary judgment to Krump Construction, Inc. (Krump) based on its finding that Dethloff failed to comply with the licensing requirements of the Contractors’ State License Law (the CSLL) (Bus. & Prof. Code, § 7000 et seq.). The valid contractor’s license at issue was in the name of “Metco Engineering,” a sole proprietorship of Antony P. Dethloff, but Dethloff signed the contract with Krump on behalf of Metco Engineering & Construction.
Undesignated statutory references are to the Business and Professions Code.
We agree that the trial court erred in granting summary judgment and shall reverse.
FACTUAL AND PROCEDURAL BACKGROUND
Metco Engineering & Construction entered into a subcontract with Krump Construction, Inc., to perform work on a condominium project in Mammoth Lakes (the contract), at a contract price exceeding $4 million. Although the portion of the contract describing the work to be performed is not in the record, the record elsewhere indicates that Metco Engineering & Construction contracted “to provide site work, concrete and rebar, framing and sheeting, winterization, woodsiding [sic], trim and chinking” for the project.
The contract was signed by Dethloff on behalf of “Metco Engineering & Construction, Subcontractor.” Below his signature appears the “Subcontractor’s License [No.]” 828398.
In fact, the parties later agreed the verified certification of records issued by the Contractors’ State License Board for that license number shows it issued in the name of Metco Engineering; the license type is “sole owner”; and the owner is Dethloff.
Before entering into the contract, Dethloff had filed a fictitious business name statement indicating he does business as Metco Engineering. Dethloff later filed a fictitious business statement in the name of Metco Engineering & Construction.
A person transacting business under a fictitious name may maintain an action on its behalf only if he has filed a fictitious business name statement in accordance with the statute. (§ 17918.) That Dethloff filed a fictitious name statement for Metco Engineering & Construction after initiating this lawsuit is of no moment, though, because even if the action is filed before the certificate, “the bar to suit disappears once the fictitious name certificate is filed.” (Kirby v. Coastal Sales Ass’n, Inc. (S.D.N.Y. 2000) 82 F.Supp.2d 193, 199 [construing § 17918]; Henning v. Clark (1920) 46 Cal.App. 551, 553 [construing predecessor statute to § 17918].)
As relevant to this appeal, the parties later stipulated that “‘Metco Engineering & Construction,’ which is identified in the Contract as the Subcontractor, is merely a fictitious business name that was inserted on the Contract”; “[a]t the time the parties entered into the Contract, Dethloff informed Krump that his business was a sole proprietorship and that ‘Metco’ was a name used by him in subcontracts”; and “Krump’s representatives acknowledged that Krump was entering into the Contract with Dethloff as an individual.”
Metco Engineering & Construction was incorporated in California before the contract and lists its address as 4 Skyline Place, Mammoth Lakes; this is the same address Dethloff gave on his fictitious business name filing for Metco Engineering. The existence of the corporate entity is not relevant to this appeal: Krump acknowledges that “Metco Engineering & Construction, Inc., did not submit a bid on the Project or enter into any contractual relationship with Krump.”
A dispute between the parties arose after work under the contract began. Dethloff (as an individual doing business as Metco Engineering & Construction) sued Krump for breach of contract and to recover the reasonable value of work under a theory of quantum meruit, claiming damages in excess of $974,466.
Dethloff also sued the owner of the project, but subsequently dismissed his complaint against it.
Krump answered and admitted that the reasonable value of the work rendered by Dethloff on the project was $974,466.
Krump then moved for summary judgment on the grounds that Metco Engineering & Construction is not a licensed contractor and, pursuant to the CSLL, is precluded as a matter of law from maintaining any action for contracting work performed.
Opposing the summary judgment motion, Dethloff responded that, while he “used varying fictitious names on his paperwork when he dealt with Krump on the construction project” and his “paperwork was sloppy,” Dethloff himself was “a properly and duly licensed contractor,” whose contractor’s license number appeared on the contract, and Krump knew Metco Engineering & Construction was merely a fictitious business name. In supplemental briefing, Dethloff argued he merely failed to contract in the exact name set forth on the license, an omission that could only expose him to discipline of his license and a fine, not a ban on recovering the value of work performed under the contract.
In its tentative decision, the trial court reasoned that “Dethloff, as an individual, was the contractor for all purposes, which Krump acknowledges,” but the valid contractor’s license is held in the name of Metco Engineering, not Dethloff. Accordingly, it ruled, Dethloff cannot recover under the contract.
Dethloff now appeals.
DISCUSSION
I. Standards of Review
On an appeal from a grant of summary judgment, we examine the record de novo to determine whether triable issues of material fact exist. (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 767; Avila v. Continental Airlines, Inc. (2008) 165 Cal.App.4th 1237, 1245–1246.) We view the evidence in a light favorable to, and resolve any evidentiary doubts or ambiguities in favor of, the nonmoving party. (Saelzler, at pp. 768–769.) The moving party bears the burden to demonstrate “that there is no triable issue of material fact and that [it] is entitled to judgment as a matter of law.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) If the moving party makes a prima facie showing, the burden shifts to the party opposing summary judgment “to make [its own] prima facie showing of the existence of a triable issue of material fact.” (Ibid.) “There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.” (Ibid.)
Contract interpretation on undisputed facts is a question of law that we review de novo. (Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 866; Employers Mutual Casualty Co. v. Philadelphia Indemnity Ins. Co. (2008) 169 Cal.App.4th 340, 347.) The terms of a contract must be interpreted to give effect to the mutual intention of the parties. (Civ. Code, § 1636.) And where the terms of the contract are ambiguous or uncertain, determining the terms of the contract is a question of fact for the trier of fact (here, the trial court), based on “all credible evidence concerning the parties’ intentions.” (Winet v. Price (1992) 4 Cal.App.4th 1159, 1165.)
Statutory interpretation also is a question of law we review de novo. (Burden v. Snowden (1992) 2 Cal.4th 556, 562.) “Our primary duty when interpreting a statute is to ‘“determine and effectuate”’ the Legislature’s intent. [Citation.] To that end, our first task is to examine the words of the statute, giving them a commonsense meaning. [Citation.] If the language is clear and unambiguous, the inquiry ends. [Citation.] However, a statute’s language must be construed in context, and provisions relating to the same subject matter must be harmonized to the extent possible.” (Van Horn v. Watson (2008) 45 Cal.4th 322, 326, fn. omitted.)
II. The Trial Court Erred in Granting Summary Judgment
In his challenge to the trial court’s grant of summary judgment, Dethloff asserts that he held a duly issued contractor’s license at all relevant times because he “was issued sole owner license number 828398” and, thus, he cannot be barred under the CSLL from seeking to recover for work performed under the contract.
At most, Dethloff concedes, he committed a minor, technical violation of section 7117, when he “contracted out of name style” i.e., contracted in the name of Metco Engineering & Contracting, rather than Metco Engineering and this violation does not preclude his lawsuit.
Section 7117 states: “Acting in the capacity of a contractor under any license issued hereunder except: (a) in the name of the licensee as set forth upon the license, or (b) in accordance with the personnel of the licensee as set forth in the application for such license, or as later changed as provided in this chapter, constitutes a cause for disciplinary action.”
For the reasons we explain below, we agree.
A. The Statutory Licensing Scheme
The CSLL, section 7000 et seq., requires contractors to be licensed unless they are exempt from licensure. (§§ 7026 & 7040 et seq.) “The purpose of the licensing law is to protect the public from incompetence and dishonesty in those who provide building and construction services. [Citation.] The licensing requirements provide minimal assurance that all persons offering such services in California have the requisite skill and character, understand applicable local laws and codes, and know the rudiments of administering a contracting business.” (Hydrotech Systems, Ltd. v. Oasis Waterpark (1991) 52 Cal.3d 988, 995 (Hydrotech Systems).)
The term “contractor” is defined in section 7026 to include “any person who undertakes to or offers to undertake to, or purports to have the capacity to undertake to, or submits a bid to, or does himself or herself or by or through others, construct, alter, repair, add to, subtract from, [or] improve... any building... or other structure, project, development or improvement, or to do any part thereof” and “includes subcontractor and specialty contractor.” “‘Person’ as used in this chapter includes an individual, a firm, copartnership, corporation, association or other organization, or any combination of any thereof.” (§ 7025.)
Section 7031, subdivision (a) is the primary enforcement mechanism for the CSLL. It states: “Except as provided in subdivision (e), no person engaged in the business or acting in the capacity of a contractor, may bring or maintain any action, or recover in law or equity in any action, in any court of this state for the collection of compensation for the performance of any act or contract where a license is required by this chapter without alleging that he or she was a duly licensed contractor at all times during the performance of that act or contract, regardless of the merits of the cause of action brought by the person, except that this prohibition shall not apply to contractors who are each individually licensed under this chapter but who fail to comply with Section 7029.”
In MW Erectors, Inc. v. Niederhauser Ornamental & Metal Works Co., Inc. (2005) 36 Cal.4th 412, the Supreme Court held that the prohibition of section 7031, subdivision (a) effectively “bars a person from suing to recover compensation for any work he or she did under an agreement for services requiring a contractor’s license unless proper licensure was in place at all times during such contractual performance.” (MW Erectors, Inc., at p. 419.) Because the statute “‘“represents a legislative determination that the importance of deterring unlicensed persons from engaging in the contracting business outweighs any harshness between the parties”’” (id. at p. 423, italics omitted), courts for 50 years have held that they “may not resort to equitable considerations in defiance of section 7031” (Lewis & Queen v. N.M. Ball Sons (1957) 48 Cal.2d 141, 152) but must apply section 7031, subdivision (a) “[r]egardless of the equities.” (Hydrotech Systems, supra, 52 Cal.3d at p. 997.)
B. Krump Failed to Establish That Dethloff Was Not a Licensed Contractor
As the moving party, Krump bears the burden on summary judgment of establishing that Dethloff was not “a duly licensed contractor” at all relevant times, if it hopes to preclude Dethloff from maintaining this action to recover the value of work performed under the contract with Krump. (Code Civ. Proc., § 437c, subds. (c), (f); see Lyle v. Warner Brothers Television Productions (2006) 38 Cal.4th 264, 274.)
Krump cannot meet this burden because Dethloff is a licensed contractor: He is licensed to perform contracting work as Metco Engineering.
The license in the name of Metco Engineering states that it is a “sole ownership” entity, and Dethloff’s is the only name on the license, where he is listed as the owner. As the name under which Dethloff operates a sole proprietorship, Metco Engineering is legally indistinguishable from Dethloff. “A sole proprietorship is not a legal entity itself. Rather, the term refers to a natural person who directly owns the business....” (Friedman, Cal. Practice Guide: Corporations (The Rutter Group 2009) ¶ 2:3, p. 2-1.)
Thus, the designation “dba” or “doing business as” simply indicates that Dethloff operates his sole proprietorship under a fictitious business name. (§ 17900 et seq. [regulating use of fictitious business names].) “‘The designation “d/b/a” means “doing business as” but is merely descriptive of the person or corporation who does business under some other name. Doing business under another name does not create an entity distinct from the person operating the business.’ [Citation.] The business name is a fiction, and so too is any implication that the business is a legal entity separate from its owner.” (Providence Washington Ins. Co. v. Valley Forge Ins. Co. (1996) 42 Cal.App.4th 1194, 1200; see also Century Surety Co. v. Polisso (2006) 139 Cal.App.4th 922, 940; Pinkerton's, Inc. v. Superior Court (1996) 49 Cal.App.4th 1342, 1348.)
As a sole proprietorship, Metco Engineering does not, and cannot, hold a contractor’s license independent of Dethloff. Not only is Metco Engineering not a distinct legal entity, it is not among the categories of “persons” defined by the CSLL to whom a contractor’s license may issue. (§§ 7065 [“Contractors’ licenses are to be issued to individual owners, copartnerships, and corporations”], 7068, subd. (b), 7076, 7096.)
Thus, although the name “Metco Engineering” appears on the license, it is Dethloff, an individual, who is the licensee. That license entitles him, as the owner of Metco Engineering, to perform contracting work under the fictitious business name of Metco Engineering.
Turning to the contract at issue here, Dethloff signed that agreement in the name of Metco Engineering & Construction. But, Krump knew when the contract was signed it was actually contracting with Dethloff as an individual, and that Metco Engineering & Construction is a sole proprietorship of Dethloff, and another fictitious business name he uses for his subcontracting business. This stipulation acknowledges the legal reality: that (like Metco Engineering) Metco Engineering & Construction is legally indistinguishable from Dethloff. (See Century Surety Co. v. Polisso, supra,139 Cal.App.4th at p. 940.)
Under these circumstances, Krump cannot show that “the claims of Dethloff and Metco Engineering & Construction are legally barred because neither was a licensed contractor during the pertinent time period.” Dethloff was licensed. And Metco Engineering & Construction was Dethloff’s sole proprietorship, from which Dethloff is legally indistinguishable.
What, then, is the effect of Dethloff’s failure to contract with Krump in the name of Metco Engineering, the name on his contractor’s license?
Dethloff asserts that, at most, he committed a minor, technical violation of section 7117 when he entered into the contract as Metco Engineering & Construction. He further argues that violating section 7117 does not bar him from recovering amounts owed under the contract.
We agree with both assertions. A violation of section 7117 occurs where a licensed contractor provides services using a name different from “the name of the licensee as set forth upon the license.” (§ 7117, subd. (a); see Handyman Connection of Sacramento, Inc. v. Sands (2004) 123 Cal.App.4th 867, 886-888 (Handyman).) The effect of such a violation is a minor fine. (Ibid.)
By contracting as Metco Engineering & Construction, rather than as Metco Engineering, Dethloff essentially worked “out of namestyle.” (Handyman, supra,123 Cal.App.4th at pp. 887-888.) We described this phenomenon in Handyman, in which the plaintiff contractor challenged an administrative finding that it had violated the CSLL by, among other things, using an “improper business name (Handyman Connection, rather than Handyman Connection of Sacramento, Inc., the name in which the license is issued).” (Id. at p. 872.) The contract in that case listed the corporation’s address, telephone number, and license number. (Id. at pp. 887-888.) We concluded in that case that no discipline was warranted for the contractor’s failure to use its full name on the contract: “The name on the contract ‘Handyman Connection’ was not a departure from but was rather an abbreviation of the contractor's full legal name. It was as if a contract had said ‘Sears’ rather than ‘Sears Roebuck and Company, Inc.’ A customer checking on Handyman’s legal status and qualifications would not have been misled by this information.” (Id. at p. 888.)
Although we are not asked here to construe the provision of the CSLL that permits discipline of a contractor’s license for “[a]cting in the capacity of a contractor under any license issued hereunder except... in the name of the licensee as set forth upon the license” (§ 7117, subd. (a)), the analysis we employed in Handyman, supra,123 Cal.App.4th 867,provides guidance here. Notwithstanding that Krump characterizes Dethloff’s use of “Metco Engineering & Construction” on the contract rather than “Metco Engineering” as “misleading conduct,” the undisputed facts show that it was not misled in the least. Krump knew exactly with whom it was contracting.
We are unpersuaded by the authorities upon which Krump relies to argue that Dethloff should be barred from recovering under the contract because he was licensed to work under the name of another, slightly differently named, sole proprietorship.
For example, in Opp v. St. Paul Fire & Marine Ins. Co. (2007) 154 Cal.App.4th 71, the plaintiff, a licensed building contractor, inserted his individual California contractor’s license number into contract documents he signed on behalf of a valid Montana corporation of which he was the president (id. at pp. 72-73, 75). Unlike the plaintiff in Opp, Dethloff signed the contract on behalf of his sole proprietorship, not on behalf of a separate legal entity that could, and should, have obtained its own contractor’s license before it performed under the contract if it wished to be able to enforce that contract in California. (Cf. id. at pp. 76, 79.)
Krump also cites WSS Industrial Construction, Inc. v. Great West Contractors, Inc. (2008) 162 Cal.App.4th 581, for the proposition that a corporation cannot “co-opt” the contractor’s license of another entity or individual to overcome its own lack of licensure. The facts of Great West render it distinguishable from those before us. The plaintiff, WSS, had applied for, but not yet obtained, its corporate contractor’s license at the time of the contract (id. at p. 586), and the court rejected its later argument that the fact that its president held valid individual licenses constituted substantial compliance with the licensing statutes (id. at pp. 586-587). Here, as we have explained, Dethloff did not lend his license to a corporate entity that needed its own license: He held a license entitling him to work in the name of one sole proprietorship but used the name of another, similarly named sole proprietorship on the contract.
Because Krump cannot establish that Dethloff was not properly licensed at the time he performed work under the contract, it was not entitled to summary judgment.
DISPOSITION
The judgment is reversed. Respondent Krump shall reimburse appellant Dethloff for his costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1)-(2).)
We concur: SCOTLAND, P. J., RAYE, J.