American Rural Cellular, Inc. v. Systems Communication Corp.

890 P.2d 1035, 258 Utah Adv. Rep. 13, 1995 Utah App. LEXIS 10, 1995 WL 72435
CourtCourt of Appeals of Utah
DecidedFebruary 21, 1995
Docket930415-CA
StatusPublished
Cited by5 cases

This text of 890 P.2d 1035 (American Rural Cellular, Inc. v. Systems Communication Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals of Utah primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Rural Cellular, Inc. v. Systems Communication Corp., 890 P.2d 1035, 258 Utah Adv. Rep. 13, 1995 Utah App. LEXIS 10, 1995 WL 72435 (Utah Ct. App. 1995).

Opinion

OPINION

BILLINGS, Judge.

American Rural Cellular, Inc. (Cellcom) appeals the trial court’s determination that Systems Communication Corporation (Sys-com) was not prohibited from maintaining construction-related actions. We remand.

FACTS

In 1990, Cellcom and Syscom entered into an agreement for the construction and management of a cellular telephone system to serve eastern Utah. As the system neared completion, Cellcom questioned Syscom’s performance under the contract. Syscom responded by filing mechanics’ liens on the three Cellcom properties that Syscom had improved. Cellcom brought suit, seeking to terminate the contract and to have Syscom’s mechanics’ liens declared illegal. Syscom counterclaimed, seeking foreclosure of its mechanics’ liens and damages for breach of contract. In its response to Syscom’s counterclaim, Cellcom argued that Syscom was barred from maintaining its action by Utah Code Ann. § 58-55-17 (1990), which prohibits unlicensed contractors from recovering on their contracts.

After a two-day trial, the trial court determined that Cellcom had validly terminated the contract. The trial court also found that Syscom was not barred from recovering by section 58-55-17, that Cellcom had breached the contract by failing to pay Syscom the amount it expended to build the system, and that the mechanics’ liens were valid. The court awarded Syscom its attorney fees and a judgment for $116,040.96. This appeal followed.

*1036 I. FAILURE TO COMPLY WITH LICENSING REQUIREMENTS

Cellcom argues on appeal that Syscom’s failure to comply with the licensing requirements of the Utah Construction Trades Licensing Act (the Act), Utah Code Ann. tit. 58, ch. 55, precludes Syscom from recovering for materials and services provided under the contract.

Section 58-55-6(1) of the Act provides:

Any person engaged in the construction trades licensed under this chapter, or as a contractor regulated under this chapter, must apply for and be licensed under this chapter before engaging in that trade or contracting activity in this state unless specifically exempted from licensure under this section.

Utah Code Ann. § 58-55-6(1) (1990). Section 58-55-17 provides:

No contractor may act as agent or com7 menee or maintain any action in any court of the state for collection of compensation for performing any act for which a license is required by this chapter without alleging and proving that he was a properly licensed contractor when the contract sued upon was entered into, and when the alleged cause of action arose.

Id. § 58-55-17. Because Syscom has not alleged or proved that it was licensed at the relevant times, sections 58-55-6(1) and 58-55-17 bar its counterclaim unless (1) Syscom was not engaged as a contractor within the statutory definition, or (2) Syscom qualifies for a statutory or common law exception to the statutory bar.

A. Whether Syscom Was Engaged as a Contractor Under the Act

Cellcom claims that Syscom comes within two of the Act’s delineated definitions of contractor, namely: (1) “any person who represents himself to be a contractor by advertising or any other means;” Utah Code Ann. § 58-55-2(5)(b) (1990), and (2) “a construction manager who performs management and counseling services on a construction project for a fee.” Id. § 58-55-2(5)(e). Syscom, on the other hand, argues that it is not subject to the prohibitions of section 58-55-17 be-

cause Syscom was not engaged as a contractor as that term is defined by the Act.

The trial court made no express findings on this crucial threshold issue of whether Syscom is a contractor under the Act. The court, however, made the following somewhat relevant findings of fact and conclusions of law:

4. The agreement of the parties provided for a $10,000.00 per month management fee to be paid by Plaintiff, American Rural Cellular Inc. to Systems Communication Corporation, which although called a fee, in fact is substantially an engineering fee and paid for services which improved and is chargeable and allocable to the three locations which were liened by Systems Communication Corporation.
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15. The management agreement under which American Rural Cellular Inc. and Systems Communication Corporation worked provided in effect a joint venture relationship to accomplish a common goal of having the cellular system constructed and operating for the mutual advantage and benefit of both parties.
16. The Defendant, Systems Communication Corporation!,] sincerely pursued the construction and management of the system in anticipation of and reliance on future expectations of profit.
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18. The services performed by Defendant, Systems Communication Corporation, improved the liened properties and were reasonable and the charges for work performed both by outside contractors and employees of Systems Communication Corporation are properly chargeable against Plaintiff in addition to the $10,000 per month agreed upon fee.
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Based on the Findings of Fact the Court enters the following Conclusions of Law.
1. The Defendant is exempt from the requirement of obtaining a contractor’s license on the basis that the parties were joint venturers. Also, the Defen-danVCounter-Claimant hired licensed contractors and the enterprise entered upon *1037 by the parties is exempt from licensing requirements because the enterprise was a public utility.

Because the trial court’s written findings and conclusions are ambiguous or incomplete on the question of whether Syscom was engaged as a contractor within the statutory definition, they may be interpreted by reference to the trial court’s memorandum of decision. See Bill Nay & Sons Excavating v. Neeley Constr. Co., 677 P.2d 1120, 1121 (Utah 1984); Sprague v. Boyles Bros. Drilling Co., 4 Utah 2d 344, 351 & n. 5, 294 P.2d 689, 693 & n. 5 (1956). In its memorandum decision, the court set forth the following conclusions of law:

1. The Defendant is exempt regarding the obtaining of a contractor’s license because the parties, regardless of their own characterization, were joint venturers with a common goal of getting the system on line for their future and mutual advantage.

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890 P.2d 1035, 258 Utah Adv. Rep. 13, 1995 Utah App. LEXIS 10, 1995 WL 72435, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-rural-cellular-inc-v-systems-communication-corp-utahctapp-1995.