Title: TAURMAN v TOWN OF CASCADE

State: montana

Issuer: Montana Supreme Court

Document:

N o . 80-372 I N T H E SUPREME C O U R T O F T H E STATE O F M O N T A N A 1981 JACK TAURMAN and LON WOCASEK, d/b/a T & W CONSTRUCTION, P l a i n t i f f s and Appellants, TOWN O F CASCADE, Defendant , Respondent & Cross-Appellant., Appeal from: D i s t r i c t Court o f t h e Eighth J u d i c i a l D i s t r i c t , I n and f o r t h e County o f Cascade, The Honorable H. William Coder, Judge p r e s i d i n g . Counsel of Record: For Appellant: Dzivi, Conklin & Nybo, Great F a l l s Richard Dzivi and Susan Rebeck argued, Great F a l l s , Montana For Respondents: Cure & Borer, Great F a l l s , Montana Maxon X. Davis argued, Great F a l l s , Montana F i l e d :JUN Submitted: Aprib&3, 1981 jbjji 4 Decided : Clerk Mr. J u s t i c e John Conway H a r r i s o n d e l i v e r e d t h e Opinion of t h e Court. T h i s is an appeal from t h e D i s t r i c t Court of t h e Eighth J u d i c i a l D i s t r i c t of t h e S t a t e of Montana, i n and f o r t h e County of Cascade. A p p e l l a n t , T & W C o n s t r u c t i o n , sued on c o n t r a c t f o r t h e performance of s t r e e t c o n s t r u c t i o n i n t h e Town of Cascade. Respondent, t h e Town of Cascade, counterclaimed a l l e g i n g t h a t a p p e l l a n t breached t h e c o n t r a c t and f a i l e d t o f u l l y perform t h e c o n t r a c t and r a i s e d a s a d e f e n s e t h e i l l e g a l i t y of t h e c o n t r a c t . Respondent moved f o r summary judgment, and t h e motion was g r a n t e d . The D i s t r i c t Court a l s o dismissed r e s p o n d e n t ' s c o u n t e r c l a i m . A p p e l l a n t a p p e a l s from t h e summary judgment o r d e r . Respondent a p p e a l s from t h e d i s m i s s a l of t h e c o u n t e r c l a i m . Jack Taurman and Lon Wocasek a r e a p a r t n e r s h i p doing b u s i n e s s i n Cascade County a s T & W C o n s t r u c t i o n . On o r a b o u t J u l y 24, 1 9 7 9 , f o l l o w i n g c o m p e t i t i v e b i d d i n g , respondent Town of Cascade awarded a c o n t r a c t t o a p p e l l a n t T & W C o n s t r u c t i o n f o r s t r e e t c o n s t r u c t i o n and improvement work. Appellant began work on t h e s t r e e t p r o j e c t on August 7 , 1979. On August 1 5 , 1979, an a g e n t of respondent advised a p p e l l a n t t o c e a s e and d e s i s t from any f u r t h e r work on t h e c o n s t r u c t i o n p r o j e c t because of r e s p o n d e n t ' s u n c e r t a i n t y about o b t a i n i n g funding f o r t h e p r o j e c t . A p p e l l a n t stopped work. On September 25, 1979, a p p e l l a n t , a t t h e d i r e c t i o n of respondent, resumed work on t h e s t r e e t p r o j e c t . A p p e l l a n t was unable t o complete t h e c o n s t r u c t i o n c o n t r a c t d u r i n g t h e 1979 construction season because of the forty-day work stoppage ordered by respondent. Appellant alleged it had completed the grading and graveling portion of the contract. This portion of the work had a reasonable value of $25,857. Respondent refused to pay appellant for the work performed. On January 30, 1980, appellant filed its complaint in the District Court seeking to recover from respondent the value of the work performed under the contract and related damages. On May 8, 1980, appellant applied for and on May 20, 1980, obtained a valid and retroactive 1979 Montana Public Contractor's License, No. 1717B. On May 9, 1980, respondent moved the District Court for summary judgment. On August 20, 1980, the District Court entered summary judgment against appellant. Specifically, in its Conclusion of Law No. 3, the District Court found: "In light of plaintiffs' failure to possess a public contractor's license in 1979, their alleged contract with the Town of Cascade for the performance of that public construction work was illegal pursuant to Section 15-50-201, MCA." We address the following issue in this appeal: Can a contractor collect payment for work performed under a contract with a municipality, if the contractor does not obtain a public contractor's license until after the work has been performed? Section 15-50-101(l)(a), MCA, states: "A 'public contractor' within the meaning of this chapter shall include any person who submits a proposal to or enters into a c o n t r a c t f o r p e r f o r m i n g a l l p u b l i c c o n s t r u c t i o n work i n t h e s t a t e w i t h t h e f e d e r a l government, s t a t e of Montana, o r w i t h any board, commission, or department t h e r e o f o r w i t h any board of county commissioners o r w i t h any c i t y o r town c o u n c i l o r w i t h any agency of any t h e r e o f o r w i t h any o t h e r p u b l i c board, body, commission, o r agency a u t h o r i z e d t o l e t o r award c o n t r a c t s f o r any p u b l i c work when t h e c o n t r a c t c o s t , v a l u e , or p r i c e t h e r e o f exceeds t h e sum of $1,000." S e c t i o n 15-50-201, MCA, p r o v i d e s : " I t s h a l l be unlawful f o r any person o r any c o m b i n a t i o n o f p e r s o n s t o e n g a g e i n t h e b u s i n e s s or a c t i n t h e c a p a c i t y of p u b l i c c o n t r a c t o r a s h e r e i n d e f i n e d w i t h i n t h e s t a t e of Montana w i t h o u t having a l i c e n s e t h e r e f o r a s h e r e i n provided." The D i s t r i c t Court e r r e d i n concluding t h a t t h e c o n t r a c t e n t e r e d i n t o between t h e p a r t i e s was i l l e g a l and, t h e r e f o r e , void. A p p e l l a n t admits t h a t it d i d n o t have a p u b l i c c o n t r a c t o r ' s l i c e n s e a s r e q u i r e d by s t a t u t e when it accepted t h e bid p r o p o s a l . I t admits t h a t it may have v i o l a t e d t h e law and may be a s s e s s e d a misdemeanor f i n e . Nowhere i n t h e s t a t u t e s is it d e c l a r e d t h a t a c o n t r a c t made w i t h o u t a l i c e n s e is unenforceable or v o i d . Nowhere i n t h e s t a t u t e does it e x p r e s s l y p r o h i b i t t h e making of a c o n t r a c t o r recovery o u t s i d e of t h e c o n t r a c t . See McManus v . F u l t o n ( 1 9 2 9 ) , 85 Mont. 170, 278 P. 126. I t is n o t t h e c o n t r a c t which t h e s t a t u t e made i l l e g a l . I t is "unlawful" t o " a c t i n t h e c a p a c i t y of a p u b l i c c o n t r a c t o r . " The c o n t r a c t i t s e l f was l e g a l and, t h e r e f o r e , e n f o r c e a b l e . See V i t e k , I n c . v. Alvarado I c e P a l a c e ( 1 9 7 4 ) , 34 Cal.App.3d 586, 110 Cal.Rptr. The l i c e n s i n g law should n o t be used a s a s h i e l d f o r t h e avoidance of a j u s t o b l i g a t i o n o r t o p r o h i b i t a. c l a i m for just compensation. We reverse the District Court's summary judgment and dismissal of respondent's counterclaim and order that further proceedings be conducted consistent with this opinion. We concur: Chief Justice