Unlicensed Contractors Beware!
These days, good residential contractors are usually booked out for months. Many handy folks are performing remodels as side jobs, or even working full-time, without obtaining a contractor’s license. Washington state law prevents someone who does work as a contractor from suing a customer for breach of contract, unless that worker is licensed with the state as a contractor. RCW 18.27.080. In its February 9 decision in Dobson v. Archibald, the Washington Supreme Court tackled the following question: Who needs to register with the Washington Department of Licensing as a “contractor” in order to maintain the ability to sue a customer for breach of contract?
In Dobson, homeowner Trefan Archibald hired Gina Dobson to redo his floors. Mr. Archibald then refused to pay her, claiming her work was performed poorly. Ms. Dobson sued Mr. Archibald for breach, but the trial court dismissed her lawsuit because she was not a licensed contractor. She appealed, and the Court of Appeals agreed with the dismissal. The Supreme Court then took up the review. The Court set forth the following 5-part test for determining “whether or not an individual is a contractor in the pursuit of an independent business,” and thus subject to the contractor-registration requirement before suing a customer for breach of contract:
(1) the nature of the relationship with the client, (2) the time of performance, (3) the agreed-upon price for performance and whether it is substantially below the going rate for similar work, (4) the public perception of the individual’s role in performing such work, and (5) which party solicits the contract.
In Dobson, the Supreme Court found factors 1, 3 and 4 weighed in favor of defining Ms. Dobson as a “contractor:” Mr. Archibald and Ms. Dobson did not know each other – they were introduced by a former customer of Ms. Dobson. Her work was in the range of fair-market value, i.e. she was not giving a big discount as a favor. And she routinely performed remodeling work for residential customers for pay. But the Court also found factors 2 and 5 weighed in favor of defining Ms. Dobson as not a contractor: She did the work during her off hours, and Mr. Archibald solicited the contract, not Ms. Dobson.
On balance, the Supreme Court found Ms. Dobson was a contractor, and was therefore required to register as a contractor. Since she did not, she was barred from suing Mr. Archibald for failing to pay, regardless of the merits of her case.
The moral for workers – know whether you need to be licensed. And for landowners, know whether your contractor is licensed. The lawyers at Beresford Booth regularly litigate contractor disputes on behalf of both contractors and landowners.
To learn more about Unlicensed Contractors, please contact Beresford Booth at info@beresfordlaw.com or by phone at (425) 776-4100.