Northwest Cascade Construction, Inc. v. Custom Component Structures, Inc.

508 P.2d 623, 8 Wash. App. 581, 1973 Wash. App. LEXIS 1478
CourtCourt of Appeals of Washington
DecidedApril 2, 1973
DocketNo. 1366-1
StatusPublished
Cited by2 cases

This text of 508 P.2d 623 (Northwest Cascade Construction, Inc. v. Custom Component Structures, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Northwest Cascade Construction, Inc. v. Custom Component Structures, Inc., 508 P.2d 623, 8 Wash. App. 581, 1973 Wash. App. LEXIS 1478 (Wash. Ct. App. 1973).

Opinion

Horowitz, J.

The principal question here is whether two of the three plaintiffs who recovered the judgment appealed from are precluded from recovery because they were not registered under RCW 18.27.020, the contractor’s registration statute. The trial court held that two of the plaintiffs, in performing the construction work, did not do so “in the pursuit of an independent business” as required by RCW 18.27.010 and entered judgment in favor of all three plaintiffs. Defendant Custom Component Structures, Inc., appeals.

The facts of the case as the court found or could have found them are these. In October, 1968, Custom and Northwest Cascade Construction, Inc., a contractor registered under RCW 18.27, orally agreed that the latter, as subcontractor, would erect walls in 12 apartment houses in what was known as the Aero Kenyon Job Project in Seattle, Washington. Northwest completed its work on the first four apartment houses under the direction of its stockholder and vice-president, Paul Box. During the period of. that performance, plaintiff Kuipers worked for Northwest as a superintendent, and plaintiff Mowry kept Northwest’s books as its accountant. Custom paid Northwest’s billings as prepared by Mowry from time to time, covering both the principal compensation called for by the oral subcontract, and for extras incident thereto.

[583]*583In November, 1968, Northwest decided to work on a new job in Olympia, Washington. It was thereupon orally agreed by Northwest, Kuipers and Mowry on the one hand, and Custom on the other, that Messrs. Kuipers and Mowry, with the assistance of Northwest, would complete performance of Northwest’s oral subcontract. Custom did not release Northwest of the latter’s subcontract obligation to complete performance. Kuipers and Mowry, with Northwest’s knowledge and consent, agreed that because they were not registered contractors they would utilize Northwest’s registration, including the bond, under the Washington contractor’s registration law, and would file various state and federal reports required to be filed by the contractor in the name of Northwest. Custom was informed of the arrangement and raised no objection.

Plaintiffs Kuipers and Mowry and Northwest, acting through Paul Box, completed the performance of Northwest’s subcontract, including the performance of extras incident thereto. During performance, Kuipers and Mowry adopted the trade name of M-K Construction Co. and made billings in that name to Custom. They also signed certain certificates that Messrs. Kuipers and Mowry were the only persons interested in the M-K Construction Co. Paul Box, who was Northwest’s vice-president, took an active part in completing the contract. He was in almost daily contact with Custom’s president concerning progress in completing the subcontract work on the last eight buildings of the project. Northwest’s equipment was left on the project for the use of Mowry and Kuipers in completing the project, and they made payments on part of that equipment. Paul Box’s salary was on the payroll account of Messrs. Mowry and Kuipers.

About March or April, 1969, a dispute arose concerning the performance of the work. Messrs. Mowry and Kuipers filed a lien. Custom insisted that the lien be released before they discussed payment of the balance owing. Mowry thereupon released the lien. About a month later Northwest, by letter signed by Mowry as its secretary, formally [584]*584notified Custom that Northwest was involved in the job. Custom refused to pay the amounts owing on the last eight buildings, including payment for extras. Custom contended that neither Mowry nor Kuipers were registered contractors under RCW 18.27 and were not entitled to payment of the balance owing. The trial court held that RCW 18.27 was not a defense because plaintiffs Mowry and Kuipers were not engaged “in the pursuit of an independent business.” RCW 18.27.010. It accordingly entered judgment for all three plaintiffs, both on the oral contract and for extras. Custom appeals.

RCW 18.27, it has been held, was enacted for the protection of “a defenseless public” against being victimized “by unreliable, fraudulent and incompetent contractors, many of whom operated a transient business from the relative safety of neighboring states.” Stewart v. Hammond, 78 Wn.2d 216, 219, 471 P.2d 90 (1970). RCW 18.27.020 makes it “unlawful for any person to submit any bid or do any work as a contractor until such person shall have been issued a certificate of registration by the state department of licenses.” RCW 18.27.080 makes registration prerequisite to suit for compensation or for breach of a construction contract. Registration may be obtained, inter alia, upon application and compliance with the bond and insurance requirements set forth in the statutes. RCW 18.27.030, .040, .050. Even though the construction work done by a nonregistered contractor enriches the owner, the contractor cannot recover. Vedder v. Spellman, 78 Wn.2d 834, 480 P.2d 207 (1971); Stewart v. Hammond, supra; Suburban Fuel Co. v. Lamoreaux, 4 Wn. App. 179, 480 P.2d 216 (1971). Nevertheless, substantial compliance with the statute is sufficient, lest the statute become an “ ‘unwarranted shield for the avoidance of a just obligation.’ ” H.O. Meyer Drilling Co. v. Alton V. Phillips Co., 2 Wn. App. 600, 607, 468 P.2d 1008 (1970), aff’d, 79 Wn.2d 431, 486 P.2d 1071 (1971).

RCW 18.27.010 defines the kind of a contract to which RCW 18.27 applies. The contractor is

[585]*585any person, firm or corporation who or which, in the pursuit of an independent business undertakes to . . . construct . . . any building ... or other structure ... or improvement attached to real estate

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Related

Askin v. Crown Zellerbach, Inc.
509 P.2d 379 (Court of Appeals of Washington, 1973)

Cite This Page — Counsel Stack

Bluebook (online)
508 P.2d 623, 8 Wash. App. 581, 1973 Wash. App. LEXIS 1478, Counsel Stack Legal Research, https://law.counselstack.com/opinion/northwest-cascade-construction-inc-v-custom-component-structures-inc-washctapp-1973.