Abacus Fine Carpentry v. Russel D & Vivian H. Wilson ( 2021 )

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
ABACUS FINE CARPENTRY, LLC, ) No. 80324-7-I
)
Respondent, ) DIVISION ONE
)
v. ) PUBLISHED OPINION
)
VIVIAN H. WILSON and RUSSELL D. )
WILSON, )
)
Petitioners. )
)
HAZELRIGG, J. — Abacus Fine Carpentry, LLC brought suit against Vivian
and Russell Wilson for collection of payment based on a cabinet installation project
in the Wilsons’ home for which the parties had contracted. The Wilsons filed a
motion for summary judgment arguing Abacus was statutorily barred from bringing
suit because it was not bonded at the time of the project. Abacus does not dispute
its bond had lapsed. The trial court denied the motion and the Wilsons now appeal,
arguing RCW 18.27.040(1) suspends a contractor’s registration by operation of
law when a contractor’s bond lapses. We agree with the plain language
interpretation of the statute advanced by the Wilsons and reverse for dismissal.
FACTS
Abacus Fine Carpentry, LLC (Abacus) is a construction contractor that has
been engaged in business in Washington since 2006. In April 2016, Vivian and
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Russell Wilson (collectively, the Wilsons) hired Abacus to install cabinet doors,
drawers, and appliance panels to preexisting custom-built cabinets at their
residence. Abacus held itself out as a licensed construction professional.
Abacus’ bond was cancelled effective June 17, 2010 for nonpayment of the
premium. Nationwide Mutual Insurance Company (Nationwide) sent written notice
of the bond cancellation to the Department of Labor and Industries (Department),
Abacus, and A.L. Insurance Group, Inc. Four years prior to the cancellation of the
bond, Nationwide issued a rider changing the number of Abacus’ contractor bond.
The Department apparently did not update its records to reflect the changed bond
number. The Department received the notice of bond cancellation in 2010, but did
not timely update its records to note the cancellation, likely because of its prior
failure to recognize the changed bond number. Abacus admits it did not maintain
a valid contractor’s bond during the years 2010 to 2019.
In October 2018, Abacus filed a complaint in King County Superior Court
claiming the Wilsons owed payment for the cabinet project. In December, the
Wilsons filed their answer, affirmative defenses, counterclaims, and a third-party
complaint against Nationwide as the issuer of the bond. In their counterclaims and
third-party complaint, the Wilsons asserted a claim and sought judgment against
Abacus’ registration bond pursuant to RCW 18.27.040. In March 2019, however,
counsel for Abacus advised the Wilsons that Nationwide had cancelled Abacus’
bond effective June 17, 2010. This prompted the Wilsons to dismiss their third-
party complaint against Nationwide. The Wilsons filed their amended answer and
counterclaims pursuant to a CR 15(a) stipulation.
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In May 2019, the Wilsons filed a motion for summary judgment seeking
dismissal of all claims asserted by Abacus. They asserted Abacus was barred
from pursuing collection based on RCW 18.27, given its failure to maintain a
contractor’s registration bond. Abacus opposed the motion, arguing its failure to
maintain the bond during the project was unwitting and unintentional. Abacus did
not deny that Nationwide sent notice of the bond’s cancellation. In June 2019, the
Wilsons’ motion was denied after a hearing on the merits. Following the ruling, the
Wilsons filed an unsuccessful motion for reconsideration. In August 2019, the
Wilsons filed a notice of discretionary review, and all parties approved a stipulation
for that purpose. This court granted review.
ANALYSIS
Our state law is clear that in order for a contractor to bring a claim in
Washington, they must be registered at the time the contract for the project in
question was entered.
No person engaged in the business or acting in the capacity of a
contractor may bring or maintain any action in any court of this state
for the collection of compensation for the performance of any work
or for breach of any contract for which registration is required under
this chapter without alleging and proving that he or she was a duly
registered contractor and held a current and valid certificate of
registration at the time he or she contracted for the performance of
such work or entered into such contract.
RCW 18.27.080. As such, the status of Abacus’ bond and registration are
foundational questions for our review. If a contractor’s bond lapses or is cancelled,
the contractor’s registration is suspended via RCW 18.27.040(1). There is no
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dispute that Abacus was without a valid bond for nearly a decade while contracting
for various projects, including the one with the Wilsons.
The primary question presented to this court is one of statutory
interpretation involving this language contained within RCW 18.27.040(1):
A cancellation or revocation of the bond or withdrawal of the surety
from the bond automatically suspends the registration issued to the
contractor until a new bond or reinstatement notice has been filed
and approved as provided in this section.
Specifically, this case requires us to determine the meaning of “automatic” as used
in this passage. The Wilsons assert that the proper interpretation is that, without
a valid bond, a contractor automatically loses their registration through operation
of law, meaning no action by the Department is required. Abacus avers that
“automatic” as used in the statute simply means the Department has no discretion
in suspending the contractor’s registration, but that Department action is still
required before a suspension becomes effective against the contractor.
This appeal seeks review of the order denying summary judgment which is
reviewed de novo. Miller v. Likins, 109 Wn. App. 140, 144, 34 P.3d 835 (2001).
Similarly, this court also utilizes a de novo standard as to questions of statutory
interpretation. Cockle v. Dep’t of Labor and Indus., 142 Wn.2d 801, 807, 16 P.3d
583 (2001). “The primary goal of statutory construction is to carry out legislative
intent.” Id. The best evidence of the legislature’s intent is the statute’s language.
In re Marriage of Schneider, 173 Wn.2d 353, 363, 268 P.3d 215 (2011). When
“the statute’s meaning is plain on its face, then the court must give effect to the
plain meaning as an expression of legislative intent.” Dep’t of Ecology v. Campbell
& Gwynn, LLC, 146 Wn.2d 1, 9-10, 43 P.3d 4 (2002). A statute’s plain meaning is
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to be discerned from the ordinary meaning of the language under scrutiny, in
addition to the context of the statute in which the language is found, related
provisions, and the statutory scheme as a whole. State v. Jacobs, 154 Wn.2d 596,
600, 115 P.3d 281 (2005), superseded by statute, State v. Conover, 183 Wn.2d
706, 355 P.3d 1093 (2015). If multiple reasonable interpretations of a statute’s
plain meaning exist, it is ambiguous. Cerrillo v. Esparza, 158 Wn.2d 194, 201, 142
P.3d 155 (2006). However, a statute is not ambiguous because numerous
interpretations are merely conceivable. Id. If a statute is ambiguous, this court
relies on principles of statutory construction, legislative history, and relevant case
law to decipher the legislative intent. State v. Manuel, 14 Wn. App. 2d 455, 461,
471 P.3d 265 (2020).
The plain meaning of RCW 18.27.040(1) is sufficient to resolve the question
presented in this case. As the Wilsons advance, the statute suspends a
contractor’s license by operation of law when they no longer have a bond. The
relevant language of RCW 18.27.040(1) states:
The bond shall be continuous and may be canceled by the surety
upon the surety giving written notice to the director. A cancellation or
revocation of the bond or withdrawal of the surety from the bond
automatically suspends the registration issued to the contractor until
a new bond or reinstatement notice has been filed and approved as
provided in this section.
The Wilsons’ interpretation would require no action or notice by the Department to
officially suspend a contractor’s registration. This position is reinforced by the
definition of “registration suspension” as used in the chapter, which means:
[E]ither an automatic suspension as provided in this chapter, or a
written notice from the department that a contractor’s action is a
violation of this chapter and that the contractor’s registration has
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been suspended for a specified time, or until the contractor shows
evidence of compliance with this chapter.
RCW 18.27.010(9). This definition indicates that an automatic suspension is
distinct from written notice by the Department that suspension has occurred.
The definition of registration suspension from RCW 18.27.010 undercuts
Abacus’ interpretation by which the Department would be required to take some
form of affirmative action to suspend registration. It posits that “automatic” is
merely an indicator that the Department has no discretion. However, Abacus
provides no basis for where such a process or affirmative action is discussed or
could be derived in the chapter on Registration of Contractors. See RCW 18.27.
The reading Abacus advances for this portion of the statute fails because if the
Department was still required to take action in an “automatic” way, the clause
“either an automatic suspension as provided in this chapter” would be superfluous.
According to their interpretation, all automatic suspensions contained within the
chapter would still be subject to the following clause, “a written notice from the
department that a contractor’s action is a violation of this chapter and that the
contractor’s registration has been suspended for a specified time, or until the
contractor shows evidence of compliance with this chapter.” RCW 18.27.10(9). A
statute’s “drafters are presumed to have used no superfluous words and we must
accord meaning, if possible, to every word in a statute.” Metcalf v. Dep’t. of Motor
Vehicles, 11 Wn. App. 819, 822, 525 P.2 819 (1974).
While the interpretation of RCW 18.27.040 can be resolved through the
plain meaning of the statute, particularly in light of the definitions used elsewhere
in the chapter, a brief review of the purpose of the chapter on Registration of
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Contractors as a whole may offer further clarification for trial courts, practitioners,
and contractors. The clear public policy underlying this statute reinforces our
conclusion that automatic suspension does not require any action by the
Department since the goal is to protect the public from the potential risks that exist
with unlicensed/unbonded contractors. RCW 18.27.140 states that the purpose of
contractor registration is: “to afford protection to the public including all persons,
firms, and corporations furnishing labor, materials, or equipment to a contractor
from unreliable, fraudulent, financially irresponsible, or incompetent contractors.”
With such a clear purpose provided in the chapter regarding contractor
registration, it is difficult to grasp how Abacus’ proposed interpretation would
further that stated goal. The facts of this case reinforce the Wilsons’ interpretation
that the suspension of registration is automatic, as Abacus was unbonded for
nearly a decade, potentially putting all of their clients during that period at risk.
Understanding the suspension of the registration to be automatic when a bond is
cancelled furthers the stated purpose of the act by motivating a contractor to
ensure they are bonded and registered at all times. Promoting due diligence on
the part of the contractor grants the public further assurances against potential
issues that could arise with contractors.
Abacus argues that the lapse of their bond was “an honest mistake,” but
even if this court accepts that assertion, it still means that Abacus did not assess
or otherwise confirm their bond status to any degree sufficient to discover their
bond’s cancellation for nearly a decade, including missing or disregarding the
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notice of cancellation that Nationwide sent to them.1 The facts of this case highlight
the reason that the proper reading of the statutory language is one that requires
no further action by the Department in order to promote the purpose of the act. As
such Abacus’ claims against the Wilsons were barred by RCW 18.27.080.
RCW 18.27.040(1) establishes by the plain meaning of “automatic” that no
action was required by the Department to suspend Abacus’ registration. By virtue
of automatic suspension of its registration, RCW 18.27.080 bars Abacus from
pursuing a claim for work in which it engaged while unregistered. We reverse the
trial court order denying the Wilsons’ motion for summary judgment and remand
for entry of dismissal of Abacus’ suit.
WE CONCUR:
1 Abacus argues against the Wilsons’ proffered interpretation of the statute by detailing
several dramatic, but purely speculative, scenarios regarding consequences that could occur
should we accept that interpretation. In doing so, Abacus repeatedly raises the issue of reliance
upon information as to the status of licenses, judgment creditors, and other details available on the
Department of Labor and Industries website. However, as the Wilsons point out, the website
contains an explicit and expansive disclaimer as to the accuracy of the information contained
therein, including a warning that “portions of such information may be incorrect or not current.”
It is reasonable, and consistent with the express purpose of the RCW chapter on
Registration of Contractors, to hold these business professionals to a standard that may require
more effort than merely relying on a website to confirm the status of their own bond and license.
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