Complaint

Cal. Super. - 3rd Dist.June 10, 2021

PORTER LAW GROUP, INC. Jason A. Rose [271139] 2 11335 Gold Express Drive, Suite 100 3 Gold River, California 95670 Telephone: 916-381-7868 4 Facsimile: 916-381-7880 irosc(knortcrlaw.corn 5 Attorney for Plaintiff PATRICK JAMES BAIRD 7 SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF PLACER 10 -ooOoo- PATRICK JAMES BAIRD, an individual, CASK NO 12 Plaintiff, 13 V. 14 COMPLAINT FOR: 15 16 17 18 19 20 MICHAEL POTTS, an individual doing business as CAPITOL CITY CONCRETE; WESTERN SURETY COMPANY, a South Dakota Corporation, and DOES 1-100 Defendants. (1) DISGORGEMENT (2) BREACH OF CONTRACTS (3) BREACH OF THE IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING (4) FRAUD BY MISREPRESENTATION (5) CONVERSION (6) SURETY BOND LIABILITY Plaintiff, Patrick James Baird, individually alleges and complains as follows: 22 1. Plaintiff it and at all times mentioned herein, an individual residing in Placer 23 County, Californi. 24 2. Plaintiff is informed and believes and, on that basis, alleges that Defendant 25 Michael Potts is and at all times mentioned herein, does business as a general building and 26 specialty contractor under the name Capitol City Concrete ("Defendant" or "Potts")). The 27 Defendant holds a license with a classification of B - General Building Contractor and specialty classification C-8 - Concrete. The license was and is listed as active. The license number is 747804. 1 COMPLAINT 3. Plaintiff is informed and believes and based thereon alleges that Defendant, THE WESTERN SURETY COMPANY, a South Dakota Corporation ("WESTERN") and is now, and 4 at all times mentioned herein, authorized to conduct business in the State of California. 5 4. The true names or capacities, whether individual, associate, corporate, or 6 otherwise of those Defendants charged in this Complaint as DOES 1 through 100, inclusive, and 7 each of them, are unknown to the Plaintiff, who therefore sue said Defendants by such fictitious 8 names. As soon as their respective true names and/or capacities have been ascertained, Plaintiff 9 will seek leave of Court to amend this Complaint to show the same. 10 5. Plaintiff is informed and believes, and based thereon alleges that each of said fictitiously named Defendants is responsible in some manner for the occurrences herein alleged 12 and the Plaintiff's injuries herein alleged were proximately caused by each of said Defendants, 13 acts or omissions. 14 6. Plaintiff is informed and believes, and based thereon alleges that at all times 15 herein mentioned, each of the Defendants were the agent, employee and/or representative of each 16 of the other Defendants and were acting within the purposes and scope of such agency, employment, contract and/or representation, in acting or failing to act as hereinafter set forth. 18 JURISDICTION AND VENUE 19 7. The Subject Property and work performed, which is the subject matter of this action, is located in the County of Placer, State of California with a common street address 21 located at 4910 Lexington Circle, Loomis, California 95650. ("Subject Residence") The 22 construction project at the Subject Residence was for a concrete patio and steps. 23 8. The contract between Plaintiff and Defendant was entered into in the County of 24 Placer, State of California, and was to be performed in the County of Placer, State of California. 25 GENERAL ALLEGATIONS 26 9. On or about January 15, 2021, Plaintiff met with Defendant concerning the 27 installation of a concrete patio and steps at the Subject Residence. The Defendant Potts 28 represented he was a properly licensed contractor, an expert in concrete work, qualified to perform the work, and the ability to perform the necessary construction and complete the work 2 COMPLAINT for $ 10,000. 3 10. The representations were made by Defendant Potts to Plaintiff for the purpose of 4 convincing and inducing Plaintiff to hire the Defendant and to utilize his services for the concrete work at the Subject Residence. 6 11. In reliance on the explicit oral representations and promises made by the 7 Defendant, Plaintiff agreed to hire Defendant to perform the construction work. Based on 8 Defendant's representations, Plaintiff also paid the $ 10,000 up front and prior to the Defendant 9 beginning the work at the Subject Residence. 10 12. The Defendant started working at the Subject Residence. On the second day of 11 work, Plaintiff again inquired if the Defendant held a valid contractor's license. Upon this 12 inquiry, the Defendant abandoned the Project. 13 13. Plaintiff demanded repayment of the $ 8,000. Defendant promised he would repay 14 the $8,000. The Defendant, however, has only returned $ 1,000 to Plaintiff. The balance remains 15 due, owed, and unpaid. 16 14. Plaintiff had to hire and pay another licensed contractor to complete the Project. 17 15. Plaintiff is informed and believes, and based thereon alleges that the 18 representations made by the Defendant were in fact, false. Plaintiff is informed and believes, 19 and based thereon alleges that Defendant had no intention of completing the work. Defendant 20 billed Plaintiff and was paid for work. Defendant abandoned the project after only two days and 21 failed to complete the work. 22 16. Plaintiff is informed and believes, and based thereon alleges that the 23 representations made by the Defendant about holding a valid license were in fact, false. Plaintift 24 is informed and believes, and based thereon alleges that Defendant did not have Workers Compensation insurance at the time the Defendant and his employees were working at the Subject Residence. California Business and Professions Code Section 7125.2 states "[t]he 27 failure of a licensee to obtain or maintain workers'omp insurance coverage, if required, shall result in the automatic suspension of the license by operation of law[.]" The moment an 3 COMPLAINT uninsured employee begins work on a project, the contractor is unlicensed by operation of law. (Wright v. Issak(2007)149 Cal.App. 4th 1116.) The suspension of a contractor's license is effective on the day they fail to obtain Workers Compensation insurance or on the day they did 4 not maintain the insurance at the level that is required by the law. The Defendant did not have 5 Workers Compensation irisurance between September 8, 2018 through April 20, 2021 or when Potts made representations that he held a valid Contractor's license. 7 FIRST CAUSE OF ACTION (For Disgorgement of Compensation Paid to an Unlicensed Contractor 9 [Bus. & Prof. Code @7031, 7031(b)] Against Potts and DOES 1-20) 10 17. Plaintiff re-alleges the paragraphs above as if fully set forth herein. 11 18. Pursuant to Business and Professions Code 7031(b), "A person who utilizes the l2 services of an unlicensed contractor may bring an action in any court of competent jurisdiction in 13 this state to recover all compensation paid to the unlicensed contractor for performance of any 14 act or contract." 15 19. Unbeknownst to Plaintiff, Defendant acted as an unlicensed contractor for the 16 period of time during his performance of the work on the Subject Residence described herein. 17 Defendant either failed to maintain, or failed to properly maintain, Workers'ompensation 18 coverage during the relevant times mentioned herein, resulting in the automatic suspension of 19 said license by operation of law. Defendant employed workers without workers compensation 20 coverage or failed to accurately report the correct number of employees. These actions result in 21 the automatic suspension by law of Defendant's contractor's license. Defendant performed contracting work on the Subject Residence while his license was suspended. 23 20. Plaintiff brings this action to recover all compensation paid to Defendant for services to be rendered under their agreement, as authorized by California Business and Professions Code Sections 7031 and 7031(b), in the amount of $9,000 representing those sums paid by Plaintiff to Defendant in relation to the work performed in violation of Business and 27 Professions Code Sections 703 1 and 703 1(b). 28 /// 4 COMPLAINT SECOND CAUSE OF ACTION (Breach of Contracts Against Potts and DOES 21-40) 21. Plaintiff re-alleges the paragraphs above as if fully set forth herein. 22. On or about January 2021, Plaintiff and Defendant entered into one or more oral 5 agreements to construct improvements and repairs on the Subject Residence ("Agreement"). 6 Under this agreement, Defendant was to perform concrete work, including, but not limited to 7 construction of a patio and steps. Plaintiff paid Defendant $ 10,000 prior to Defendant starting 8 the work. 9 23. Defendant materially breached the Agreement. Among other things, Defendant 10 failed to maintain a valid contractor's license at times throughout the duration of the work 11 performed on the Subject Properties; failed to perform the work; failed to complete the agreed- 12 upon work; and employed persons without workers compensation coverage. 13 24. Plaintiff performed, to the extent it has not otherwise been excused from 14 performing, all the terms, obligations and conditions on its part to be performed under the 15 Agreement. 16 25. Plaintiff has been damaged by the Defendant for work that he was not licensed to 17 perform. As a result, Plaintiff is entitled to treble damages up to $ 10,000 and all attorney's fees 18 and cost pursuant to Code of Civil Procedure $ 1029.8. 19 26. As a direct and proximate result of said Defendants'reach of the contract, 20 Plaintiff has suffered damages in the minimum sum of $7,000, treble damages up to $ 10,000, 21 together with interest thereon at the legal rate, plus attorney's fees and costs. 22 THIRD CAUSE OF ACTION 23 (Breach of the Implied Covenant of Good Faith and Fair Dealing Against Potts and DOES 41-60) 27. Plaintiff re-alleges the paragraphs above as if fully set forth herein. 28. Plaintiff entered in to an oral contract with Defendant for construction of worksol'mprovementat the Subject Residence. 29. The contract was subject to an implied covenant of good faith and fair dealing that all parties would act in good faith and with reasonable efforts to perform their contractual 5 COMPLAINT duties-both explicit and fairly implied-and not to impair the rights of other parties to receive the rights, benefits, and reasonable expectations under the contracts. These included the covenant that the Defendant would act fairly and in good faith in carrying out his contractual 4 obligations, that Potts held proper licenses, complied with all laws, and would complete the agreed upon work. 6 30. The Defendant breached the implied covenant of good faith and fair dealing by failing to maintain a valid contractor's license at times throughout the duration of the work 8 performed on the Subject Residence; to perform the work; to complete the agreed-upon work; 9 and/or return the money paid up front. Defendant also employed employees without workers 10 compensation coverage. Such acts have compelled Plaintiff initiate litigation to recover the 11 damages to which it is entitled. Defendant*s failure to act in good faith has denied Plaintiff the 12 benefit of its bargain. 13 31. Plaintiff met all or substantially all of its contractual obligations, including paying 14 for the materials, labor, and other work to construct and install a patio and steps. 15 32. Accordingly, Plaintiff has been injured as a result of the Defendant's breach of the 16 covenant of good faith and fair dealing and is entitled to damages in an amount to be proven at 17 trial. 18 19 FOURTH CAUSE OF ACTION (Fraud by Misrepresentation Against Potts and DOES 61-SO) 20 33. Plaintiff re-alleges the paragraphs above as if fully set forth herein. 21 34. A number of intentional misrepresentations were made to Plaintiff regarding Defendant's: (1) licensure; (2) ability to perform the necessary construction work on the Subject 23 Property; (3) ability to timely commence and complete the work on the Subject Property; and (4) 24 the full amount was required and necessary perform Defendants commenced their work. 25 35. These representations were made by Defendant Capitol City, through its owner, President and agent Michael Potts, to Plaintiff for the purpose of convincing, and inducing 27 Plaintiff, to utilize his services for the concrete work at the Subject Residence. 28 36. When Potts made the representations, he knew them to be false and made it with the intent to defraud and deceive Plaintiff and to induce Plaintiff to accept Defendant's improper 6 COMPLAINT demand to pay $ 10,000 up front, and utilize the services of the Defendant in connection with the work on the Subject Residence. 3 37. These representations were made by Defendant Capitol City Concrete, through its 4 owner, President and agent Defendant Michael Potts, to Plaintiff for the purpose of convincing, and inducing Plaintiff to agree to enter into a construction contract with Defendant for the work 6 at the Subject Property, where Plaintiff was the owner. 7 38. At the time these misrepresentations were made, Plaintiff was ignorant of the 8 falsity of these misrepresentations and reasonably believed them to be true. In reliance on the 9 misrepresentations of Potts, Plaintiff was induced to, and did, enter into the subject contract with 10 an unlicensed contractor, pay $ 10,000 up front and utilize the services of Defendant as a 11 contractor. Had Plaintiff known the actual facts, Plaintiff would not have taken such actions. 12 39. Plaintiff s reliance on the misrepresentations of Defendant Capitol City Concrete, 13 through its owner, President and agent Defendant Michael Potts, was justified since the 14 Defendant represented that he was properly licensed, uustworthy and honest, and capable of 15 completing the work. 16 40. Instead of performing the work as represented to Plaintiff, Defendant failed and 17 refused to adequately perform the work under the subject contract. The work was not completed. 18 Defendant abandoned the Project and submitted misleading statements to Plaintiff that the 19 money would be returned. 20 41. As a proximate and direct result of the intentional misrepresentations or omissions 21 by Potts, Plaintiff has been damaged in ways including, but not limited to the following, namely 22 the cost and expenditure involved in completing work that was not performed by the Defendant 23 and by causing Plaintiff to incur additional expenditures as detailed above, and based upon Defendant's failure to return the money advanced by Plaintiff. 25 26 27 28 FIFTH CAUSE OF ACTION (Conversion Against Potts and DOES 81-90) 42. Plaintiff re-alleges the paragraphs above as if fully set forth herein. 43. Conversion is a strict liability tort. Therefore, questions of the Defendant's good 7 COMPLAINT faith, lack of knowledge, and motive are ordinarily immaterial. The basis of a conversion action rests upon the unwarranted interference by Defendant with the dominion over the property of the Plaintiff from which injury to the latter results. Therefore, neither good nor bad faith, neither care 4 nor negligence, neither knowledge nor ignorance, are the gist of the action. (Los Angeles Federal Credit Union v. Madatyan (2012) 209 Cal.App.4th 1383, 1387.) 6 44. Plaintiff owned and possessed $ 10,000 before he negotiated an agreement with 7 Defendant Potts doing business as Capitol City Concrete. 8 45. Defendant substantially interfered with Plaintiff s property by knowingly and/or 9 intentionally taking possession of the $ 10,000 with no intention to perform the work and refusing 10 to return the property after Plaintiff demanded its return. 11 46. Plaintiff did not consent to Defendant keeping the money without completing the 12 work or to Defendant keeping it after Plaintiff demanded return of the property. 13 47. Plaintiff was harmed by Defendant's interference with his property. 14 48. The Defendant's conduct was a substantial factor in causing the Plaintiff s harm. 15 SIXTH CAUSE OF ACTION 16 (Surety Bond Liability Against Western Surety Company and DOES 91-100) 17 49. Plaintiff re-alleges the paragraphs above as if fully set forth herein. 18 50. At all times herein mentioned, Defendant had a surety bond during the time that 19 the damages alleged herein were incurred. Defendant Potts and Capitol City Concrete had a bond 20 with Western Surety Company, Bond ¹ 64490087. Effective date May 3, 2019 -May 3, 2021. 21 51. In the event of a violation by Defendants of applicable provisions of the 22 California Business & Professions Code governing contractors, the bonds guarantee the payment 23 of any judgment left unpaid by Defendants. As such, the bond is in favor and for the benefit of 24 Plaintiff who was damaged by the conduct of Defendants, in violating such statute. 25 52. Plaintiff is informed and believes and thereon alleges that Defendants, and each ol 26 them, violated California Business & Professions Code governing the conduct of contractors 27 licensed by the State of California, including but not limited to: 28 a. Defendants violated California Business & Professions Code $ 7107 by abandoning the construction project without any legal excuse. 8 COMPLAINT 1 b. Defendants violated California Business &, Professions Code tj 7108 by failing to apply the funds received towards the completion of the project. 3 c. Defendants violated California Business & Professions Code $ 7113 for failing to 4 complete the construction project as agreed for the contract price. 5 d. Defendants violated California Business & Professions Code jj 7116 by forming 6 and participating in a plan and scheme to defraud Plaintiff through the intentional 7 misrepresentation of material facts. 8 e. Defendants violated California Business & Professions Code tj 7119 for failing to 9 complete the construction project as agreed and prosecute work diligently. 10 f. Defendants violated California Business and Professions Code tj 7125.2 by failing 11 to maintain Workers'ompensation insurance. 12 g. Defendants violated California Business & Professions Code $ 7159 by failing to 13 provide a written contract, including the specific information and notices required by the 14 Business & Professions Code. 15 h. Defendants violated California Business & Professions Code ) 7159(d)(8)(A)-(C) 16 by taking a down payment in excess of $ 1,000 or ten percent, whichever is less. 17 i. Defendants violated California Business & Professions Code $ 7159(d)(9) (C) by 18 collecting payment for work not yet completed and for materials not yet delivered. 19 53. As a direct and proximate result of such violation, Plaintiff suffered damages in 20 an amount to be proven at time of trial. 21 PRAYER FOR RELIEF 22 WHEREFORE, Plaintiff prays for judgment against All Defendants and Does 1-50, and 23 each of them, as follows: 24 1. For disgorgement of the amounts paid to Defendants; 25 2. For general and compensatory damages according to proof; 26 28 3. For special damages according to proof; 4. For treble damages of $ 10,000 under Code of Civil Procedure $ 1029.8; 5. For an award of all costs and attorney's fees under Code of Civil Procedure f 1029.8 or if otherwise permitted by statute or contract; 9 COMPLAINT 1 6. For costs of suit incurred herein; and 7. For such other and further relief as the Court deems just and proper. 3 Dated: June $,2021 4 orney for Plaintiff PATRICK JAMES BAIRD 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 COMPLAINT