Chavira v. Armor , 238 Ariz. 48 ( 2015 )

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
MARCO ANTONIO CHAVIRA, doing business as ADD ON POWER,
a sole proprietorship, Plaintiff/Appellant,
v.
ARMOR DESIGNS OF DELAWARE, INC., a Delaware corporation, dba
ARMOR DESIGNS, INC.; and ARMOR DESIGNS, LLC, a Delaware
limited liability company, Defendants/Appellees.
No. 1 CA-CV 14-0344
FILED 8-13-2015
Appeal from the Superior Court in Maricopa County
No. CV2012-006204
The Honorable Arthur T. Anderson, Judge
VACATED AND REMANDED
COUNSEL
Marco Antonio Chavira, Phoenix
Plaintiff/Appellant
Udall Shumway PLC, Mesa
By Joel E. Sannes
Counsel for Defendants/Appellees
CHAVIRA v. ARMOR
Opinion of the Court
OPINION
Presiding Judge Maurice Portley delivered the Opinion of the Court, in
which Judge John C. Gemmill and Judge Michael J. Brown joined.
P O R T L E Y, Judge:
¶1 Plaintiff Marco Antonio Chavira, doing business as Add On
Power, challenges the summary judgment granted in favor of Armor
Designs of Delaware, Inc., and Armor Designs, LLC (collectively,
“Armor”). He contends the superior court erred by precluding him from
attempting to collect for any of the work he completed for Armor. Because
Chavira is a licensed contractor, he had the right to maintain an action to
recover payment for the work he performed for Armor pursuant to his
license. Accordingly, we vacate the judgment and remand for further
proceedings.
FACTUAL AND PROCEDURAL BACKGROUND
¶2 Chavira, a licensed and bonded electrical contractor,
registered with the Arizona Registrar of Contractors,1 was hired by Armor
to disassemble equipment located at its Phoenix manufacturing plant and
was paid in full. Shortly thereafter, Armor hired Chavira to reinstall the
same equipment at its new manufacturing facility. Chavira performed the
work.
¶3 Chavira sought payment, but Armor refused to pay for any of
the installation work. Chavira subsequently filed a lawsuit alleging breach
of contract, quantum meruit, negligent misrepresentation, and bad faith.
After discovery, Armor moved for summary judgment, arguing that
Chavira was barred from maintaining a lawsuit by Arizona Revised
1 Chavira holds a K-11 electrical license, which “allows the scope of work
permitted by the commercial L-11 Electrical and residential C-11 Electrical
licenses.” Ariz. Admin. Code (“A.A.C.”) R4-9-104(B) (1999) (amended by
Ariz. Reg. 340721 (2014)). The scope of the commercial L-11 electrical
license is defined in A.A.C. R4-9-102(B) (1999) (amended by Ariz. Reg.
340721 (2014)).
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CHAVIRA v. ARMOR
Opinion of the Court
Statutes (“A.R.S.”) section 32-1153,2 because he had performed “significant
work for which [he] had no license.”
¶4 The superior court granted Armor’s motion and dismissed
Chavira’s complaint with prejudice. This appeal followed.
DISCUSSION
¶5 The sole issue is whether § 32-1153 bars Chavira from
maintaining an action to recover any payment for work he performed if
some of the work fell outside the scope of his license.
¶6 We independently review the grant of summary judgment to
determine if there is no genuine issue of material fact and the moving party
is entitled to judgment as a matter of law. Blevins v. Gov’t Emps. Ins. Co., 227
Ariz. 456, 458, ¶ 5, 258 P.3d 274, 276 (App. 2011). We construe the evidence
and all reasonable inferences in favor of the opposing party; however, if we
find that a reasonable jury could only find for one party, we will uphold the
grant of summary judgment. Id.; see also Orme Sch. v. Reeves, 166 Ariz. 301,
309, 802 P.2d 1000, 1008 (1990). We will also independently review whether
the court properly construed § 32-1153. See Blevins, 227 Ariz. at 459, ¶ 13,
258 P.3d at 277; Indus. Comm’n v. Old Republic Ins. Co., 223 Ariz. 75, 77-78,
¶¶ 6-8, 219 P.3d 285, 287-88 (App. 2009). In interpreting the statute, we
primarily rely on its language and interpret the terms according to their
common meaning to give effect to the legislative intent. Id. at ¶ 7.
¶7 Chavira contends that because he was a licensed electrical
contractor when he entered into the contract with Armor, § 32-1153 permits
him to maintain his action against Armor to recover payment for, at least,
his licensed electrical work. Although Armor does not challenge the fact
that Chavira has an electrical license, Armor argues that because Chavira
“did not have a license to perform all of the work he claims to have
performed,” § 32-1153 bars him from recovering for any of his work.3
2 We cite the current version of a statute unless otherwise noted.
3 Armor alleges that eighteen of the seventy-seven invoiced tasks from
Chavira fell outside of the license. Although Chavira challenges the
numbers, if Armor’s allegations are correct, then the vast majority of the
tasks Chavira performed fell within the scope of his electrical contracting
license. Consequently, there is a genuine issue of material fact about the
value of licensed services Armor owes to Chavira.
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CHAVIRA v. ARMOR
Opinion of the Court
¶8 Section 32-1153 provides that:
No contractor as defined in § 32-1101 shall act
as agent or commence or maintain any action in
any court of the state for collection of
compensation for the performance of any act for
which a license is required by this chapter
without alleging and proving that the
contracting party whose contract gives rise to
the claim was a duly licensed contractor when
the contract sued upon was entered into and
when the alleged cause of action arose.
¶9 The plain language of § 32-1153 prohibits an unlicensed
contractor from bringing an action to recover payment for unlicensed acts.
The purpose of the statute, as has been long held, is to protect the public.
See Sobel v. Jones, 96 Ariz. 297, 300-01, 394 P.2d 415, 417 (1964); B & P
Concrete, Inc. v. Turnbow, 114 Ariz. 408, 410, 561 P.2d 329, 331 (App. 1977).
We have also held that the court cannot use concepts of equity to allow an
unlicensed contractor to sue to collect payment. See Crowe v. Hickman’s Egg
Ranch, Inc., 202 Ariz. 113, 117, ¶ 18, 41 P.3d 651, 655 (App. 2002) (citing
Northen v. Elledge, 72 Ariz. 166, 173, 232 P.2d 111, 116 (1951)).
¶10 However, we have also stated that the plain language of the
statute allows a licensed contractor, or one who has substantially complied
with the licensing requirements, see WB, The Building Co. v. El Destino, LP,
227 Ariz. 302, 309, ¶ 18, 257 P.3d 1182, 1189 (App. 2011), to sue for payment
for work performed under the license. See Aesthetic Prop. Maint. Inc. v.
Capitol Indem. Corp., 183 Ariz. 74, 77-78, 900 P.2d 1210, 1213-14 (1995)
(stating that substantial compliance may be adequate when it does not
defeat the statute’s general policy or purpose); Love v. Double “AA”
Constructors, Inc., 117 Ariz. 41, 46, 570 P.2d 812, 817 (App. 1977) (finding
that § 32-1153 “was not intended to injure licensed contractors”). In fact,
we have stated the statute “should not be given an overbroad construction
so as to preclude partial recovery as to a valid portion of the contract.”
Miller v. Superior Court In & For Pima Cnty., 8 Ariz. App. 420, 423, 446 P.2d
699, 702 (1968). Thus, we have long held that if the contract value can be
apportioned between licensed and unlicensed work, then “each item of a
contract will be treated as a separate unit.” Id.¶11 Here, there is no dispute that Chavira is a licensed electrical
contractor. He performed work for Armor; some portion of the work was
covered by his license, but some apparently was not. Consequently,
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CHAVIRA v. ARMOR
Opinion of the Court
§ 32-1153 is “not a sword” that can be used to prevent Chavira from
recovering for at least that portion of the work he performed for Armor that
was covered by his license. See Crowe, 202 Ariz. at 118, 41 P.3d at 656 (Voss,
J., dissenting).
¶12 Armor argues, however, that our decision in City of Phoenix v.
Superior Court In & For County of Maricopa, 184 Ariz. 435, 909 P.2d 502 (App.
1995), bars Chavira’s action. There, an unsuccessful bidder for a city
construction project relied on A.R.S. § 32-1151 to unseat, by special action
to the superior court, the successful bidder. Id. We recognized that while
§ 32-1151 required a bidder on a construction contract to have “all licenses
required for the entire project at the time it submits a bid,” following
Aesthetic Property Maintenance, we held that the successful bidder, who had
a license, substantially complied with the statute by getting the additional
required licenses after the Registrar of Contractors opined that other
licenses were required. See City of Phoenix, 184 Ariz. at 437-38, 909 P.2d at
504-05. As a result, we granted the successful bidder relief by vacating the
superior court’s order. Id. at 438, 909 P.2d at 505.
¶13 The question here, however, is different than that posed in
City of Phoenix. We are not asked to decide whether Chavira violated
§ 32-1151,4 but whether he should be precluded as a matter of law from
seeking to recover for the work performed for Armor covered by his license
even though he performed some work outside the scope of his license. As
a result, City of Phoenix does not support summary judgment for Armor or
help inform our decision.
4 Section 32-1151 provides:
It is unlawful for any person, firm, partnership, corporation,
association or other organization . . . to engage in the business
of, submit a bid or respond to a request for qualification or a
request for proposals for construction services as, act or offer
to act in the capacity of or purport to have the capacity of a
contractor without having a contractor’s license in good
standing . . . .
The statute makes it “unlawful” for a contractor to engage in business
without a license but does not establish a penalty. See In re Spanish Trails
Lanes, Inc., 16 B.R. 304, 307 (Bankr. D. Ariz. 1981). Section 32-1153 sets the
penalty. See id.5
CHAVIRA v. ARMOR
Opinion of the Court
¶14 We find support for our analysis that § 32-1153 allows
Chavira to sue Armor for the value of the work performed under his
electrical license in Shultz v. Lujan, 948 P.2d 558 (Haw. Ct. App. 1997).
There, the Hawaii Court of Appeals interpreted a Hawaiian statute similar
to § 32-1153 and addressed whether a person who was only partially
licensed could “bring an action to recover payment for the licensed portion
of the work.” Schultz, 948 P.2d at 561. After considering the statute, the
court stated:
If a person contracts to perform the work of a
contractor and, at the time of contracting, the
person is not licensed to do any of the work,
then that person cannot bring a civil action to
recover payment for any of the work he has
done; however, if the person, at the time of
contracting, is licensed to perform some of the
work contracted for, then that person can bring
a civil action to recover payment for the licensed
work he has done, while payment for the
unlicensed work remains unrecoverable.
Id. at 563.
¶15 Given the plain language of § 32-1153, Chavira can pursue his
breach of contract claim against Armor for the value of the work that was
completed under his license. Consequently, we vacate the judgment
dismissing the complaint with prejudice.
¶16 Although § 32-1153 allows Chavira to pursue his breach of
contract claim for the value of the licensed work, he will still have to prove
as a factual matter that the licensed work can be bifurcated from the
unlicensed work. He will also have to prove the value of the licensed work
completed because that is a dispute between the parties. 5
¶17 Armor requests an award of attorneys’ fees and costs on
appeal pursuant to A.R.S. § 12-341.01. Because Armor did not prevail on
appeal, we deny its request. We award Chavira his costs on appeal as the
5Chavira also alleges that Armor is in possession of rented steel plates used
to install the equipment. On remand, the superior court can determine if
the claim is alleged in the amended complaint, whether the allegation can
be added, if need be, and related relevant issues.
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CHAVIRA v. ARMOR
Opinion of the Court
successful party upon compliance with Arizona Rule of Civil Appellate
Procedure 21.
CONCLUSION
¶18 We vacate the judgment and remand this case for further
proceedings.
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